Local Wineries Show Their Stuff

It's Passport Week-end here in Gilroy. Many local wineries are on the ticket. Hope to see you out and about tasting our award-winning local wineries.

Make Sure Your Rental Security Deposit Is Safe

For those of you considering moving out of your rental, securing your security deposit can be a make-it-or-break it moment for your finances, as you will most likely need a security deposit for wherever you’re headed. Unfortunately, many renters never see their security deposit again. Recently, Rent.com surveyed 1,000 U.S. renters, and the results were startling:

More than a quarter (26 percent) of all renters have lost their security deposit at some point

37 percent of men and 44 percent of 18-24 year olds said they did not get their deposits back because they moved out early

More women (9 percent than men (3 percent) lost a deposit due to pet damage

36 percent of renters who did not get their deposits back said the landlord gave no explanation. This is likely illegal although tenant/landlord laws vary by state but according to several state law sites (ag.ny.gov, ca.gov, oag.state.tx.us, illinoisattorneygeneral.gov, mass.gov) the landlord must return the deposit less any lawful deduction.

If you’re renting, review the following tips—provided by rent.com–for maintaining your apartment and your relationship with your landlord:

• “It’s better to beg forgiveness than ask for permission” does not apply here. When renting, it is always best to get written permission from your landlord before doing any renovations, changing paint color, etc.
• Read your lease. Many renters miss the specific guidelines laid out by their landlord regarding the return of their deposit. A list should be made and agreed upon regarding the conditions of the apartment at the end of the lease BEFORE you sign it.
• Snap a photo. It’s always a good idea to take some photos of the apartment when you first move in. Make sure they are time/date-stamped! Then repeat the process on move out day. This way pre-existing damage is documented and the blame cannot fall on you!
• Be reasonable and your landlord might be too. There is no guarantee that a landlord will negotiate you breaking your lease but maybe there is a compromise that can be met. For instance, you could help find a replacement tenant, agree to pay rent for an additional number of months or until a new tenant is found.

Why Higher Interest Rates Aren’t Scary

 

 

By Gino Blefari, President & CEO, Intero Real Estate Services, Inc.

To be clear: no one is advocating for higher interest rates. But we’re about to venture down a path of thinking about what the world looks like with rates that will be higher than the lows we’ve come to expect these past few years.

In today’s market, borrowers with 5% interest rates are running to refinance – and saving thousands of dollars in the process. When put in historical context, this is astonishing. Many of us have worked through markets with double-digit rates in decades past. 3.75% on a long-term mortgage did not exist.

But experience shows us markets are cyclical. There is a bottom. We all know it’s coming. And although the Fed hasn’t indicated it will sharply raise the key short-term rates that are tied to
mortgages any time soon, it will raise those rates at some point as the economy improves.
Maybe that’s not such a scary thing.

An article in CNNMoney this week argues why higher mortgage rates will help the housing
market rather than hurt it.

I think it depends on the market you’re talking about – as with all things real estate, generalizations are rarely unflappable.
But mortgage rates indeed have been rising – the latest average on the 30-year fixed was 3.63%, the highest its been since the week of August 23, according to Freddie Mac. Let’s think about what that means for current markets.

In many markets, recovery over the last year has turned to growth mode. In Silicon Valley, many of our local markets are already back at peak pre-recession levels. What’s driving it? Job growth and demand.

Sure, low rates have been great. But they’re not the sole driver.

In our markets and others including Washington, D.C. and several other California markets, the bigger obstacle would be in supply. There just aren’t enough homes on the market to serve new buyers or spur move-up activity from existing owners.

Upward movement in interest rates may actually incite even more demand in these markets as buyers start to feel pressure to move quickly. In these cases, higher rates may actually be an incentive that fuels market activity and growth.

We’ll find out soon enough how higher rates will impact our markets. In the meantime, if your credit is good it’s still incredibly cheap to borrow money for housing. If you want to take advantage, it’s time to get moving.

How To Prepare Your Home For The Photo Shoot

You’ve heard it before, you only have one chance to make a first impression. A prospective buyers 1st, 2nd and sometimes 3rd impression of your home is online, so the photos taken of your home really set the tone for your sale. The photos need to rock and should always showcase your home in the best light possible. No matter how picture perfect your house might look to you, you should consider the following tips before having your home photographed:



Home Exterior – walk across the street to your neighbor’s house and take a look at your home. Do you like what you see?

1. Remove cars from the driveway, front of house and garage.
2. Hide recycling and trash receptacles, garden tools and hoses.
3. Have lawn cut, mulched and add flowers if weather permits; remove dead anything.
4. Have windows washed and remove screens if possible.
5. Power wash walkways, patios, siding if necessary.
6. Neatly arrange patio furniture, uncover barbecue so scene is set.

Home Interior – take your time and go room to room to enhance the look and feel of each room.

1. Replace all burned out light bulbs.
2. Clean and neaten all closets including removal of all items from the floor.
3. Set the scene in each room by arranging furniture and accessories; remove excess (you may need a stager) to make rooms look open and large. Remember less is more!
4. Have carpets cleaned and/or stretched if needed. Replace capret if needed.
5. Touch up paint.
6. Remove excess art and photos, but not all. You are living in the house after all!
7. Clean off counters in kitchen and baths; add fresh looking towel sets to bathrooms.
8. Make sure all beds are made, clothing and personal items are put away neatly.

What have you noticed at open houses you have visited? What did you notice that left you with a negative feeling? Be sure to take care of that in your own home.

Calling All Local Youth Artists

Here’s an APPLICATION

 

9 Mistakes Homeowners Make on their Taxes

As you calculate your tax returns, consider each home tax deduction and credit you are — and are not — entitled to. Running afoul of any of these 9 home-related tax mistakes — which tax pros say are especially common — can cost you money or draw the IRS to your doorstep.

Sin #1: Deducting the wrong year for property taxes
You take a tax deduction for property taxes in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind — that is, you’re not billed for 2013 property taxes until 2014. But that’s irrelevant to the feds.
Enter on your federal forms whatever amount you actually paid in 2013, no matter what the date is on your tax bill. Dave Hampton, CPA, tax manager at the Cincinnati accounting firm of Burke & Schindler, has seen home owners confuse payments for different years and claim the incorrect amount.

Sin #2: Confusing escrow amount for actual taxes paid
If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed, says Bob Meighan, CPA and vice president at TurboTax in San Diego. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property tax bill. Your lender will adjust the amount every year or so to realign the two.

For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments.

Sin #3: Deducting points paid to refinance
Deduct points you paid your lender to secure your mortgage in full for the year you bought your home. However, when you refinance, says Meighan, you must deduct points over the life of your new loan. If you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $133 per year.

Sin #4: Misjudging the home office tax deduction
This deduction may not be as good as it seems. It’s complicated, often doesn’t amount to much of a deduction, has to be recaptured if you turn a profit when you sell your home, and can pique the IRS’s interest in your return. Hampton’s advice: Claim it only if it’s worth those drawbacks. If so, here’s what to know about what you can write off.

Sin #5: Failing to repay the first-time home buyer tax credit
If you used the original home buyer tax credit in 2008, you must repay 1/15th of the credit over 15 years. If you used the tax credit in 2009 or 2010 and then sold your house or stopped using it as your primary residence, within 36 months of the purchase date, you also have to pay back the credit.
The IRS has a tool you can use to help figure out what you owe.

Sin #6: Failing to track home-related expenses
If the IRS comes a-knockin’, don’t be scrambling to compile your records. Many people forget to track home office and home maintenance and repair expenses, says Meighan. File away documents as you go. For example, save each manufacturer’s certification statement for energy tax credits and lender or government statements to confirm property taxes paid.

Sin #7: Forgetting to keep track of capital gains
If you sold your main home last year, don’t forget to pay capital gains taxes on any profit. You can exclude $250,000 (or $500,000 if you’re a married couple) of any profits from taxes. So if your cost basis for your home is $100,000 (what you paid for it plus any improvements) and you sold it for $400,000, your capital gains are $300,000. If you’re single, you owe taxes on $50,000 of gains. However, there are minimum time limits for holding property to take advantage of the exclusions, and other details. Consult IRS Publication 523.

Sin #8: Filing incorrectly for energy tax credits
If you made any eligible improvements in 2012 — or will in 2013 — such as installing energy-efficient windows and doors, you may be able to take a 10% tax credit (up to $500; with some systems your cap is even lower than $500). But keep in mind, it’s a lifetime credit. If you claimed the credit in any recent years, you’re done. Fill out Form 5695.

The first part of the form, which covers systems eligible for a larger tax credit through 2016, such as geothermal heat pumps, can be complex and involves crosschecking with half a dozen other IRS forms. Read the instructions carefully.

Sin #9: Claiming too much for the mortgage interest tax deduction
You can deduct mortgage interest only up to $1 million of mortgage debt, says Meighan. If you have $1.2 million in mortgage debt, for example, deduct only the mortgage interest attributable to the first $1 million.

This article provides general information about tax laws and consequences, but shouldn’t be relied upon as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice.

Home Improvements – Some Pay Off, Some Don’t

Before you find yourself saying, “What was I thinking?” see what five home upgrades topped last year’s list of loss leaders.

Then take a look at an infographic just published by CAR – California Association of Realtors, with home improvements that do pay off.

 

Celebrate Pi Day

Celebrate Pi Day with, what else, a piece of pie.

 

Extreme Exterior Paint – Be Careful

Check out these extreme exteriors to learn how your home’s fresh coat can look good and preserve the worth of your home and neighborhood.

Monday Morning Special

Having a latte this morning? If you were at SXSW (Annual music, film, and interactive conference and festival held in Austin, Texas) you could get one with your portrait on it. If you wanted.