Posts Tagged as homeowners

The real estate industry and homeowners have benefited from substantial tax deductions for decades. However in the latest real estate news, changes to these deductions are coming into the light now that the proposed tax plan has been signed into law. What will the fallout to the industry and home ownership be?

The Proposed Tax Change and Potential Impact to Home Buyers

The real estate industry and homeowners have benefited from substantial tax deductions for decades. However in the latest real estate news, changes to these deductions are coming into the light now that the proposed tax plan has been signed into law. What will the fallout to the industry and home ownership be?

Introducing ‘The Realtor Party’
In efforts to ‘save home ownership’ and leave homeowners as a favored class in the tax code, realtors nationwide protested, lobbied legislators, and warned clients about the threat of unfavorable real estate market impacts under the new tax law.

How the Changing Tax Codes Could Reduce Home Prices
According to real estate news, the new tax law could make home ownership less attractive, raising the cost and potentially depressing property values. What tax changes could bring this to pass?

– Property Taxes
The new law places a cap on the combined state and local income/property taxes with a single deduction limited to $10,000.

– Mortgage Interest
Under the new law, the standard deduction is almost doubled, so fewer homeowners will itemize, losing the full benefit of the mortgage interest deduction.

– Capital Gains
The qualification time for capital gains exclusions could increase, likely reducing transaction volume as sellers wait longer to list.

– Mortgage Rates
The $1-trillion+ the new law may add to the federal deficit could result in more rapidly rising mortgage rates according to economic theory, raising the cost of financing.

Big Winners… & Big Losers
According to some economists, smaller markets could feel little-to-no effect, while those in high-cost, high-tax areas like NY and NJ could see significant declines in home values: As much as 14% by 2019. Other real estate news analysts expect little effect, however, as many households already choose not to itemize. Rising demand/limited supply are expected to continue to drive the market upwards.

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Real Estate Agents Gain Favor with Home Sellers

A recent poll conducted by an online marketing solutions provider HomeGain revealed that home sellers are better able to sell their home using a real estate agent than by selling on their own – by 120 percent!

400 homeowners responded to the poll, with some 79% stating they had used an agent and 21% having attempted to sell on their own.

Further results showed that approximately 66% of surveyed homeowners who used the services of an agent managed to sell their home, while only 30 percent of those who attempted the FSBO (for sale by owner) route were successful.

Among those unsuccessful selling on their own, 22% eventually hired a real estate agent, with 55% of those homes eventually selling.

In the 20 years between 1991 and 2011, the percentage of home sellers who choose an agentover FSBO has increased 10% (from 77% to 87%). Additionally, the typical FSBO home sold for approximately $65,000 less than an agent-assisted home sale. And that is good news for agents.