1.  TRIM DEAD TREE LIMBS.  A fall or winter storm may cause an already strained branch to give way.  Hire a professional to remove any large or high branches that pose a risk.

2.  MAKE OUTDOOR STRUCTURAL REPAIRS.  Faulty handrails, uneven steps and cracked walkways may lead to injury to you or visitors.  Inspect exterior fixtures for loose or missing pieces and repair as needed.

3.  FIX ROOF LEAKS.  Rotted or missing shingles or flashing are a top cause of interior ceiling and wall leaks.  If necessary, hire a professional to inspect the roof for you.  Replace broken or damaged roofing and touch up loose flashing.

4.  CLEAN YOUR DRYER VENT.  A buildup of lint equals blocked airflow and an increased fire risk for your clothes dryer.  Twice a year, unplug the dryer, vacuum out the duct and then reattach it securely.

5.  VACUUM REFRIGERATOR COILS.  Boost your fridge’s energy efficiency by scheduling this task both in fall and spring.  Unplug the fridge, locate the coils on the bottom or back of the refrigerator and use the long nozzle on a vacuum to do away with dirt and dust.

6.  CLEAR GUTTERS AND DOWNSPOUTS.  Debris-clogged gutters combined with water or ice can lead to foundation flooding, roof leaks and structural damage.  Use thick gloves and a trowel (if necessary) to thoroughly clean gutters.  Inspect for cracks or segments that have pulled away from your house.  Also ensure that downspouts direct water away from your foundation.

7.  INSPECT YOUR CHIMNEY.  Hire a professional to remove animal nests, debris and creosote buildup, all which can cause a home fire.

If you have any regular maintenance tips, please leave them here as a comment and I’ll add them to my next post!

If you’re sprucing up your home before you sell it, visit my website at http://www.SuperHooper.com for more free tips on low cost remodels that will get you top dollar.

3.8% Real Estate Sales Tax – True or False?

You may have received an email or heard something on Twitter about the 3.8% real estate sales tax that has recently been brought up as an issue with the Health Care Bill (HR 3200).  In the emails, the tax is railed against and brought up as an absolute for all Americans selling their homes.

But wait…maybe we should dig further.  Is it true?  Is it kind of true?  Is it blatantly false?  Does it lie somewhere in between?  Seems this is just another case of email first, tell the truth later.

There is indeed a 3.8% tax in the Health Care Bill.  It, however, is incorrectly labeled as a sales tax.  It is called a Medicare tax in the legislation and I know we’re splitting hairs here, but I think it’s important to mention as the use of specific words like this are calculated and planned by people to manipulate people’s emotions.

This tax however, does not single out real estate, rather it is a tax on investment income.  The key to everything is how the numbers are calculated on whether or not the tax applies to you.  The 3.8% Medicare tax is designed to only affect so-called “high earners” and not everyone will pay the tax upon the sale of their home.

The Tax Facts

• There is a new 3.8% tax in the bill.
• It is not a “sales tax” on all real estate transactions.
• It is a Medicare tax.
• Many people will not have to pay this tax.
• It is going to affect so-called “high earners.”
• It is not going affect many people.
• The tax comes into effect in 2013.

“High Earners” – Who are they?

The income requirement for so-called “high earners” are spelled out in the new law: $250,000 for married couples filed jointly, $125,000 for couples filing separately, and $200,000 for all others.  If you earn more than these benchmarks, you are a “high earner” and therefor subject to the new 3.8% tax, but what you are taxed on helps further eliminate many people.

How is the tax calculated?

One of the emails I’ve seen states that on the sale of a $400,000 home, you would pay $15,200 as a real estate sales tax (3.8% x $400,000).  This is incorrect.  There are two incorrect assumptions by the authors of the email; a) that the Medicare tax is based off of sales price alone and b) it applies to everyone (which we know to be false based on the “high earner” income requirement).

The incorrect assumption that the real estate sales tax (aka the Medicare tax) is calculated based on the sales price of the home makes a huge difference.  Instead, the tax is calculated based on profit.  As investment income, the profit is the sale price minus the initial investment.  Going back to the $400,000 home mentioned earlier, let’s assume you paid $350,000 for it.  You profited $50,000.  Based on that, your tax would be $1,900 (3.8% x $50,000).  Much better than $15,200, right?

But wait, there’s one more piece of the puzzle.

Okay, so you owe $1,900, which isn’t that bad in the overall scheme of things.  But wait…do you owe $1,900?  The answer is a resounding no.  Why?  Because of the capital gains threshold that is included in the language.  You are only charged the 3.8% Medicare tax if your investment income passes the capital gains threshold.  How much is that?  The capital gains threshold is $250,000 for individuals and $500,000 for married couples filing jointly.

This means that profit over the $500,000 or $250,000 (depending on your marital status) would be taxed at the 3.8% rate (you would still need to be classified a “high earner”).  In our $400,000 example above, where you walked away with $50,000 in profit, you would not be taxed.  The $50,000 is below the capital gains threshold.

Thanks to Matt Stigliano for shedding some light on this subject!

The announcement came Thursday, immediately after Utah offered the California-based Fortune 500 company a $40.2 million incentive to expand in the state.

The expansion involves Adobe’s Orem-based Omniture business unit that it acquired last October. Adobe makes design and graphic arts-oriented software tools; Omniture is a provider of Web software that tracks and analyzes Web page traffic.

“We’re hiring right now,” said Mark Garrett, Adobe executive vice president and chief financial officer. He said the jobs being added involve a mix of software technology, sales, marketing, engineering and administrative positions. Adobe already employs 620 people in Utah who work at the Omniture business unit; worldwide Adobe employs nearly 8,500.

Industry and state officials say the decisions by companies like Adobe to invest in Utah give even more weight to the critical mass of high-tech companies whose presence helps the state attract a skilled work force. In turn, more companies are attracted here to access that work force.

Companies such as Microsoft, IM Flash, Oracle, eBay and Disney— and social networking site Twitter, which just announced it would build a huge data center here — contribute to that momentum.

To get the state’s incentive money, Adobe agreed to pay at least 75 percent more than the average county wage in which it expands. That would work out to an average wage of at least $60,000 annually, not including benefits, if it builds a facility in Utah County, state officials say.

If the facility is located in Salt Lake County, the average wage would need to be nearly $75,000, not including benefits.

The incentive was approved Thursday morning by the Governor’s Office of Economic Development board, which is comprised of private-sector business people who review requests by corporations for incentive money.

Adobe will not receive the money it was offered all at once; the incentive is payable over 20 years in the form of a tax credit on corporate, payroll and sales taxes. The incentive allows the company to pay less taxes over 20 years — as long it keeps the Utah facility in operation and maintains the work force as agreed with the state.

Whether Adobe — or any other company receiving taxpayer money — would have expanded in Utah without an incentive, may never be known. But state-offered multimillion-dollar incentive packages for corporations are fairly commonplace. Most states offer sizable incentive packages to lure employers, especially during recessions.

Adobe CFO Garrett wouldn’t directly comment on whether it would have expanded here without the $40.2 million, and he wouldn’t say whether the company was even looking at locating in any other states.

He would only say the company had plenty of “options” and that the incentive was part of what swayed it toward expanding in Utah. Other factors he cited include the state’s pool of technology talent and the fact that the Omniture business unit already was located here.

GOED board officials said the incentive — among the larger of state-offered amounts — is justified given the quality of the company, the sizable $100 million investment in a new facility scheduled to open in 2012 and the large number of jobs being added. Board member Jerry Oldroyd, a Salt Lake City attorney, said the capital investment and high paying jobs will greatly benefit a state battered by recession.

Currently, the Omniture business unit operates out of leased space in Orem. As part of the expansion, the company will break ground on a new facility next year in either Salt Lake County or Utah County and consolidate operations there. Adobe officials said they haven’t yet finalized a land purchase and had no additional information to provide about the facility they plan to build.

(By Lesley Mitchell with The Salt Lake Tribune)

The Basics

Believe it or not, a housing shortage

By SmartMoney

With all the talk of excess inventory and a flood of foreclosures, the idea of a looming housing shortage sounds unrealistic, if not downright fanciful.

After all, data from the National Association of Realtors showed a 5.1% decline in existing-home sales in June. Meanwhile, total housing inventory increased 2.5%, to 4 million homes available for sale — an 8.9-month supply, up from an 8.3-month supply in May.

Foreclosures, too, are an issue, with a vast backlog of distressed properties and “underwater” loans sitting just below the surface, according to RealtyTrac, an online foreclosure marketplace. The company forecasts that more than 3 million properties will get hit with foreclosure filings by the end of the year.

But if you step back from the doom and gloom of foreclosures and declining sales and focus on the low construction levels of the past few years, some economists say a housing shortage might be in the offing. A 2009 report by Massachusetts Institute of Technology economics professor William Wheaton says that despite the glut of existing homes, with current depressed levels of construction, there might be “excess demand” for new homes.

How could there be too few?

In the past seven years, housing starts first exceeded — but then fell short of — the historical norm of 1.6 million, according to the National Association of Realtors, with a deficit expected to grow into 2011. The chief economist of the Realtors group said last month that the big drop in home construction suggests a shortage could become an issue later.

Longer-term demographics support this theory, says Ross DeVol, the executive director of economic research at the Milken Institute, an independent think tank in Santa Monica, Calif. The U.S. is adding only about 600,000 housing units a year now, and the long-term growth in new households is 1.3 million to 1.4 million per year, DeVol says.

That household formation rate has fallen off somewhat because of the recession. But that decline is misleading because many college graduates have chosen to live with their parents while they find their financial footing, and some couples have deferred getting married.

But long term, that household growth says that “if we build substantially less than that amount, which we’re doing now, in four, five or six years, if we don’t ramp up housing starts, we could see a shortage,” DeVol says.

We’re still growing

There’s a tendency in any market that when you overshoot on the upside — which the U.S. did through 2007 in real estate — you undershoot on the downside, DeVol says. But underlying growth in population demographics — namely, how many people will enter the work force — is somewhere in that range of 1.3 million to 1.4 million, he says. One risk is that so many homebuilders will leave the field during the current downturn that there could be “capacity constraints” in the long term as the U.S. population continues to grow, says John Vogel, a professor of real estate at the Tuck School of Business at Dartmouth.

Consider that at the peak of the housing bubble, in 2005, nearly 2.1 million new housing units were built. In 2006, that number dropped to 1.81 million; in 2007, as the bubble deflated, new units fell to 1.34 million. By 2009, only 550,000 new units were built, DeVol says.

There won’t likely be constraints in overbuilt places such as Las Vegas, Phoenix, Miami or Riverside, Calif. But if the pace of home construction doesn’t pick up, “we are going to begin to see some tightness in some areas of the country that didn’t have the boom and bust occur,” DeVol says.

This article was reported by Lisa Scherzer for SmartMoney.

1202 E. TIGER EYE DRIVE

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1202 E. TIGER EYE DRIVE (9825 S.)

$265,950

Ideal 4 bedroom, 3 bathroom family home in a perfect location within walking distance to schools, parks, Quarry Bend shopping & ampitheater!  Home is in great shape & offers hardwood & tile floors, vaulted ceilings, window seats in bedrooms, and Master suite w/walk-in closet, double deck & patio, & gorgeous valley and mountain views!

Virtual tour link:  http://www.spotlighthometours.com/tours/tour.cfm?mls=94877

If you’d like to see this home, please call Michael Hooper anytime at 801-856-4667

Forbes released an article on Feb 7, 2008 naming the top cities for buying a home in 2008. These are “…markets where job growth is strong, foreclosures are relatively low and inventory is high. With these factors in place, buyers can still dictate terms of sale and negotiate prices, but aren’t as exposed to the economic and lending risk problems that have sunk many markets around the country.”

Salt Lake City tops the list, again, as being the #1 place to buy a home this year, saying, “Of the major metros in the U.S., Salt Lake City is adding jobs faster than anywhere. The economic boom in SLC has drawn residents from all over the country, and more than a few home builders trying to make a profit in these otherwise woeful times. Housing supply has gone up quickly, and there hasn’t been a high rate of foreclosure.”

But some of the other cities might surprise you.

For example, the article places Phoenix at #5, saying, “Phoenix has a very high foreclosure rate; there’s no way around that. Based on RealtyTrac’s estimates, there is one foreclosure for every 87 households in Phoenix. Still, our data suggest that strong job and economic growth in many non-housing sectors of the local economy is enough to offset it, and people are still moving to the Valley of the Sun at a quick rate.”

And Las Vegas at #7, saying”Las Vegas is a market hammered by foreclosures, due largely to extremely high speculation in both residential communities and the condo market. Though the housing slowdown has hurt jobs in the construction sector, Vegas continues to attract businesses and job seekers to its growing economy, making its excess inventory (and there’s a ton) less toxic than in other places. “

The complete top ten cities are

1 Salt Lake City, UT

2 Raleigh, NC

3 Orlando, FL

4 Charlotte, NC

5 Phoenix, AZ

6 Seattle, WA

7 Las Vegas, NV

8 Jacksonville, FL

9 Richmond, VA

10 Houston, TX

Usually I’m pretty skeptical about ‘miracle’ inventions, so I bought The Furminator with some hesitation. The price tag of $50 especially made me a little nervous. Well, I can say after it’s first use today that it’s worth every penny.

This is my 2-year old German Shepherd, Bailey (or The Beast as we affectionately call her). She’s an awesome dog, great with the kids, super smart – the only downside is that she is a shedding machine. We’ve tried slicker brushes, undercoat rakes, professional grooming, etc. with no luck. The Furminator was my last resort before we resolved ourselves to a hair-covered house. Now there’s hope! I watched all of the demo videos on The Furminator website, and figured they must have brought in dogs off of the street that had never been groomed. I can honestly say that I got at least this much hair off of Bailey and probably could have gotten more if I had kept going. The instructions say not to brush too long or you’ll irritate the dog’s skin, so I’ll give it another go next week.

I’m happy to add The Furminator as the first post in my ‘Cool Stuff’ category. From a real estate standpoint, I think it’s a great tool if you have a dog and plan to sell a house. I see a lot of homes that are covered in dog hair and the owners were having the same predicament that I was. I will definitely recommend The Furminator to all of my clients, family and friends.

The US economy will avoid recession as the housing market begins to recover this spring, according to billionaire investor Sam Zell.

As reported on CNBC.com:

Speaking on “Squawk Box” this morning, Zell attributed much of the current economic troubles to fear-mongering and politicking by Democratic presidential contenders Hillary Rodham Clinton and Barack Obama.

“Obviously what we have going on is an attempt to create a self-fulfilling prophecy,” said Zell, chairman of Equity Investments Group and owner of the Chicago Cubs, Chicago Tribune, Los Angeles Times and other companies. “We have two Democratic candidates who are vying with each other to describe the economic situation worse.

“The reality is that if you live on Wall Street and you’re in the credit markets the world couldn’t be worse. If you’re a farmer and you’re getting $25 for your wheat, you’re having a great time. If you’re a CEO and you’ve got a balance sheet that’s bullet-proof, you’re in a great position. This whole thing is way out of control, way out of hand.”

Zell said that although he doesn’t try to pick bottoms in markets he believes housing has hit its nadir and will turn around this spring as inventory clears out.

As for the credit situation, he projected that once markdowns are out of the way banks will begin to regain their footing.

In the wide-ranging interview, Zell also voiced support for Federal Reserve Chairman Ben Bernanke.

“I think he should be renewed when his term is up. I think one of the positives of the United States is having people in the position of the Federal Reserve (chairman) for long periods of time,” Zell said.

“I think Bernanke’s reduction in interest rates has been spot-on, because basically we’re going to fix the credit markets by creating a big enough spread between the risk-free cost of capital and what’s available so that greed overtakes fear and the game begins again.”

Here’s a video news report that ran on KUTV Channel 2 News on January 23, 2008.

CLICK HERE TO SEE THE VIDEO

Wells Fargo held it’s annual economic forecast for the Salt Lake Board of Realtors, and it looks like we’re in a very interesting market. Home prices are holding steady (for the homes that are selling), but the total inventory of homes on the market is growing every day and the total number of sold properties is down.

The recommendation to home sellers is to focus on getting their home SOLD by confronting the reality of the market and adjusting prices to reflect current conditions. Homes will still sell if they are priced correctly and competitively, and the marketwide forecast is that prices may have to adjust down 7% to 10% to get things moving again.

Please call or email me anytime with questions or comments about the current real estate market and what it means to your home’s value.