Is this the most dreaded day of the year?  Many US residents mark April 15th as D-Day – the day to file their income tax returns to the Internal Revenue Service (IRS). 

History of Tax Day

Income tax was first introduced in the United States in 1861, while Abraham Lincoln was President.  The rate was 3% and levied on incomes above $800 per year . The resulting revenue was used to help fund the American Civil War.  In 1872 the income tax was seen as unconstitutional and the law was repealed.  It was hard to take back a tax once it was in place so the idea of a tax on personal income, at a rate of 2%, was reintroduced in the Revenue Act of 1894 even though the legal status of this kind of tax was still unclear.

In 1913, the “Sixteenth Amendment” to the Constitution was ratified which allows Congress to levy an income tax without apportioning it among the states or basing it on the US Census. The amendment was adopted on February 3, 1913.

The details of the income tax system have changed greatly since 1913. The top rates of tax have varied enormously and were particularly high during the First and Second World Wars and the Great Depression. Individuals and families with very low levels of income do not have to pay income tax and may even receive subsidies.

In 1913 Tax Day, or the filing deadline, was March 1. However, it was moved to March 15 in 1918 and April 15 in 1955, where it has remained.  If April 15 falls on a Saturday, Sunday or a civil holiday, such as Patriot’s Day, the deadline is extended to the next working day. An extension due to a holiday may only affect certain states. In 2007, the residents of some states were granted an extension due to the disruption to public life in many areas caused by a huge Nor’easter.  In 2007, the observance of Emancipation Day in Washington DC extended the 2006 income tax filing deadline from April 16 to April 17, for the entire nation.

What do people do?

The majority of residents in the US file tax returns to the IRS of all income that they received in the previous fiscal year. Some groups, particularly veterans, pensioners and some low-income families, do not have to file a tax return unless they wish to qualify for certain types of income subsidy. Others may wait until the last moment to file their return and pay any money they owe. As with everything, some people find filing a tax return to be complicated, while others feel they should not have to pay income tax at all. Income tax returns may be filed on paper or electronically. Today, people are encouraged to file a return via the Internet since it is felt to be more efficient and reduces the risk of mistakes being made or documents being lost in the post.

The Day Itself

Tax Day is not a federal public holiday in the United States. Schools, post offices, stores and other businesses and organizations are open as usual. Public transportation runs on its usual schedule and no extra congestion is expected on highways, however, most post offices are open late to accommodate taxpayers who wait til the last minute to mail their returns.

So, whether you file on time, wait til the last minute or file an extension – there’s no escaping it, taxes are one of the 2 things that are guaranteed in life.

The income tax has made more liars out of the American people than golf has. Even when you make a tax form out on the level, you don’t know when it’s through if you are a crook or a martyr. ~Will Rogers

Winter is still rearing it’s ugly head here in lower Fairfield County, but patches of green are starting to peek through.  As the weather warms up so is the housing market.  Spring is one of the busiest times of year  for real estate, and homeowners planning to put their homes up for sale shouldn’t wait for the flowers to bloom.   If you’re thinking of selling, here are some tips that you can use to prepare your home to sell this spring:

Improve Curb Appeal

If potential buyers are turned off by the outside condition of your home, there’s only a slim chance they’ll be interested in looking inside.  Do a semi-spring clean up by picking up fallen tree limbs and getting rid of last fall’s leaves that may have found their way back onto your lawn. Trim back bushes and branches so the house can be seen and brighten up the yard with some colorful flowers or planter boxes.  Adding window boxes or front door flower containers is easy, looks fresh and can provide an uplifting ambiance as you walk past them into your home. You might also consider pressure washing the driveway, sidewalk, and patio. If you really want to go all out consider a fresh coat of exterior paint to give your home an instant facelift, (but wait until the weather dries out a bit or the paint won’t adhere).  Just make sure the color pairs well with the rest of the exterior.  Finally, repair anything that’s showing wear and tear.  Remember, the outside of your home is the first impression – you should do your best to make it a great one! 

Start Packing

Before you even get an offer? Yes!  This isn’t as crazy as it sounds.  Potential buyers want to see the space they may be buying, which means you need to pack away your excess furniture and clutter to show a room’s full potential.  You’ll also want to box up your winter wardrobe. Bulky winter clothes take up lots of space, so move them out as you de-clutter your closets. You’ll impress buyers with all that room.

Clean Your Drapes, Blinds, and Carpets & Infuse Spring Scents into Your Home 

Send your drapes or curtains to the dry cleaners or wash them in your own washing machine if possible. Toss blinds into a soapy bathtub for a quick wash.  If you have a pet, you’ll want to clean your carpets to remove any odor or stains.  Spring is not only a colorful season, but a fragrant one, too. Bring the aroma indoors. Scents have a profound effect on mood, so infusing scent into your decor with diffusers, candles, or fresh cut plants/flowers can change the overall feeling of a space. Just be careful not to go overboard and be mindful that people have allergies this time of year so a little can go a long way.

Accessorize with Pillows, Towels, and Throws  

Consider spring colors – yellows, pinks, lavenders, or pale blues. These items are inexpensive accents that can do a lot to spruce up the interior of your home. Soft spring colors will light up any room.  Tuck away the heavy, winter flannel comforter and pull out crisp linens with coverlets for color.

Make the House Sparkle!

An old fashioned “spring cleaning” can go a long way!

• Wash windows inside and out
• Clean out cobwebs. Re-caulk tubs, showers and sinks.
• Polish chrome faucets and mirrors.
• Clean out the refrigerator.
• Vacuum daily.
• Wax floors.
• Dust furniture, ceiling fan blades and light fixtures.
• Bleach dingy grout.
• Replace worn rugs, If your welcome mat is covered with winter dirt, pick up a new one. A clean, pretty doorway will help set the tone for the entire showing.

If you are thinking of selling your home or need more advice on how to prepare your home for sale, please contact me today!

1) Agents Will Say Anything to Make the Sale

False.  Top producing agents, those who enjoy a solid reputation in the community and practice real estate honestly and truthfully, are very careful to uphold a client’s trust.  Making misrepresentations or a false statement is against the law. Agents who break fiduciary relationships or fail to disclose material facts are subject to prosecution and a loss of their license to sell real estate.

2) Agents Get Kickbacks from Lenders/Inspectors

False. Since 1974, agents have been prevented from receiving any kind of kickback or favor from real estate vendors. It’s against the law. It’s against RESPA: the Real Estate Settlement Procedures Act. Some agents are slower than others to realize how the law affects them, but most have heard of RESPA and would not jeopardize their license, regardless of the temptation.

3) Real Estate Agents are Always Late for Appointments

False. There is no excuse for habitual tardiness among professionals.  Every person deserves respect, and respect is earned by providing what is promised and being on time. If your agent has a god-like, self-deluded impression of her or his own importance, find another.  Clients who listen to agents’ excuses allow tardiness to happen.  Don’t let a few bad apples give the entire industry a perception it doesn’t deserve.

4) The More You Pay for a House, The More an Agent Makes

False. Ever hear a friend say this: “Every dime more you pay for that house makes the agent more money, so don’t trust that agent.” That’s a misunderstanding. The difference between $300,000 and $310,000 is about $150 to an agent. Do you really think the agent pays any attention to the commission difference of a $10,000 spread?

5) Agents Must Show You Homes On Demand           

False. Unless you have a signed representation contract with an agent or that agent represents the seller, that agent you call doesn’t have to show you anything. You can’t call a local real estate office and demand service or demand to be shown homes, because agents don’t work for free.

If you aren’t planning on writing an offer with the agent you call, be upfront or don’t waste that agent’s time. But don’t expect that agent — who is likely to earn nothing — to be too excited about jumping in the car with you. That agent is not obligated to show you anything.  Nor is the listing agent obligated to show you a listing if you are represented by another Realtor.

6) All Real Estate Agents Make Too Much Money

False. An agent’s average annual salary is less than $36,000 a year. You will find that about half the agents in any large brokerage close less than four deals a year.  That is very tough to live on, especially once office fees are paid, MLS fees and lockbox fees are deducted, overhead and expenses for the agent are deducted, errors & omissions insurance and office supplies are paid.

7) An Agent’s Home Inspector Will Always Favor the Agent

Any agent worth her salt wants disclosure. Why? Because she wants what is best for her client but also, and this is not to be taken lightly, because she does not want to be sued.  Agents must disclose material facts. A buyer is always, without fail, better off knowing the truth about a house. Good agents care that a buyer receives full disclosure and are willing to fight for repairs on the buyer’s behalf or help the buyer cancel the transaction.

8) The Less Commission You Pay to Sell, The More you Make

False. Discount brokers like to propel this myth. They claim to save sellers money by charging less. The truth is agents who are top producers and excel in this business do not discount services. Why? Because they don’t have to.

Less-than-full-service agents can’t afford all the bells & whistles paid for by full-service agents, who tend to draw higher offers. It boils down to you get what you pay for. A 2% commission reduction doesn’t amount to much when your price is discounted 10% or more because your agent couldn’t afford full market exposure.

9) Agents Sell Their Own Homes for More Money Than Yours

False. Busy agents and top producers don’t have the luxury of time to waste when selling their own home. They also understand the market better than your average home seller, which means if a home isn’t selling within a reasonable period of time, it means it is priced too high.

If the agent needs to sell, they might even cut the buyer a better deal than the buyer can get on the open market. After all, the person most likely to be persuaded by a sales pitch is a person who sells for a living.

10) Agents Should Tell You About Crime, Schools & Ethnic Make-up of Neighborhoods

False. Federal Fair Housing laws prevent a real estate agent from discriminating against a number of protected classes, which automatically prohibits an agent from disclosing anything remotely relating to the protected classes.  Therefore, it may come as a shock to many people that agents cannot disclose crime rates, school stats or ethnic mixes of neighborhoods. If that kind of information is important to you, an agent can tell you where to find it but cannot provide it.  Those who tell you otherwise are misinformed.

If you are looking for a professional REALTOR, call me today!

Besides an upscale kitchen and plenty of space, what are new-home buyers’ looking for these days when house hunting? Here are  just a few of the latest in-demand amenities.

1. Walk-in closets: Large closets, particularly in the master bedroom, is among one of home shoppers’ top priorities. Many home owners have said they’d sacrifice another household feature in order to have his-and-hers closets in the master bedroom.

2. Luxurious laundry rooms: Buyers are looking for more than just a place to stick their washer and dryer. They want upgraded laundry rooms – complete with skylights, built-in ironing boards, space for folding clothes, extra storage, and upgraded appliances.

3. Energy efficiency: Home buyers are looking to cut utility costs, and energy efficiency appliances and products can be one way to do that. Low e-windows, Energy Star appliances, and programmable thermostats are more in demand than ever.

4. Great rooms: These large open spaces that often merge dining rooms, living rooms, and kitchens continue to be in high-demand among home shoppers. “Great rooms are wonderful places where everyone in the family can sit around, or where the kids can do their homework while you get dinner ready. Today’s great rooms are large, bright and just make you feel good being there.

5. Taller first-floor ceilings: Morse home buyers want the first floor to stretch beyond the typical  eight-foot ceiling. They’re asking builders for 9ft ceiling heights. The taller ceilings can open up living rooms, dining rooms, and other spaces on the first floor. But home shoppers say they can do without the cathedral ceiling in the family room, which can be too costly to heat and cool. Also, they aren’t preferring the higher ceilings on the second floor, which many home buyers say they want to feel more cozy.

Call me today and let’s chat about what you might be looking for in your new home!

So everything is negotiated, all terms have been agreed to, the mortgage commitment is in, now what?

It’s time to start packing.  Sometimes this can be the most daunting task.  If you’re not sure what you are taking with you, it’s best to sort things into three categories…keep, donate and discard.  Charitable entities have become very picky in what they will accept as donations, so make sure you check with them before assuming they will take your items.  Transferring utilities such as electric and heating (whether gas or oil) should be arranged up to two weeks prior to closing.  At this time you should return your cable box and if you still have a hardwired phone arrange for service to be terminated.  If you have city water the attorney will take care of the account transfer.

Your home should be left in “broom clean” condition after the movers have left and the house has been emptied.  This includes wiping out cabinets, cleaning appliances and bathrooms.  Don’t forget to check your attic and basement for stray items.  As you are packing you should put all appliance and house related paperwork in one spot for your buyers.

The day of the closing the buyers and their agent will schedule a “walk-through” just prior to attending the closing.  They will be checking that the house is in the same condition as it was prior to your move out.  They will check appliances, make sure there are no gauges from furniture being moved and that everything that was supposed to be included in the sale is still at the house with no additional personal items remaining.

Lastly, you will meet with your lawyer to sign papers and hand over your keys and garage door openers.  Sometimes you can pre-sign the paperwork because most attorneys schedule closings when the buyers money is wired and received (the timing of this is sometimes hard to predict).

Now your done and onto the next chapter in your lives!

You’ve successfully negotiated the terms and accepted an offer, now what ?

Well, in short, everything that has been contractually agreed upon between buyer and seller now begins playing out. First, the home is put in a “Continue to Show” (CTS) status alerting agents that while the home can still be shown, there is an accepted offer.  The 1% check that accompanied the Binder (accepted offer) is placed in the buyer’s agent’s escrow account until the point where contracts are signed.

Now we need to fulfill the contingencies, negotiated up-front between buyer and seller, include the following points:

Property Inspection:

Depending on the systems in your house,  the buyer customarily has 7 business days to complete all inspections which can include:

* Building/Engineering Inspection – conducted by a licensed property inspector — from the roof to the foundation-and everything in between. This usually also includes a termite and pest inspection. Other inspections performed can also include a lead test and water test. The test can run 3-4 hours depending on the size of the home.

* Radon Test – radon is a gas that occurs underground and when a house is built it can be “trapped” in the structure.  The buyer will most likely do a test which consists of putting a monitoring system in the lowest living level of the house and letting it run for 48-72 hours.  The test is then read and in CT, a radon level found under 4.0 picocuries is considered ok.

* Septic Inspection – if your house has a septic system the buyer will hire a licensed septic inspector to check the integrity of the tank (no cracks), and the capacity left on the leaching system.

An inspection that turns up items of concern to the buyers in the home can be grounds for further negotiation or worst case, nullifying the purchase agreement.

Contracts:

In lower Fairfield County, CT we use attorneys to draw contracts. Your REALTOR will forward the negotiated accepted offer to the real estate attorney of your choosing and they will draw a contract and send it to the buyer’s attorney.  Both attorneys will then discuss any terms that need to be discussed, add in any inspection items or credits that arise and the buyer’s attorney will have their client come in and sign the contract-usually within 10 business days of the accepted offer.  The contract will then be returned with the remainder of the deposit money (up to an additional 9%) that will be held in your attorney’s escrow account.  The buyer’s agent will also send the good faith 1% deposit they are holding to your attorney.  You will go in, review the contract and make sure everything is as it should be, and then sign.

 Financing:

The buyer must secure mortgage approval and the clock starts ticking as soon as the offer is accepted.  The buyer needs to continue the application process they have already started.  The signed contract is usually necessary for the appraisal to be ordered, but everything else can get moving right away. The loan will have to be “packaged” when completed and then passed on to the underwriting department for review and approval. This process takes approximately 6-8 weeks.

Property Appraisal:

If a loan is to be considered for approval, the lending institution usually wants to see that the property is valued at the sale price or higher. They will hire an independent licensed appraiser to do an in-depth assessment of your home – square footage, acreage, condition and upgrades. They will then research sales up to 6 months old that they find as comparable, making adjustments as necessary. They will file their report with the buyer’s lender. This is a major part of the mortgage approval process and why it is so important to price your property reasonably. If the appraisal comes in lower than the sale price, one of three things can happen: 1. a renegotiation can take place. 2. the buyer has to come up with more cash or 3. the deal falls apart.

  Title:

The property must have a clear title for a clean exchange of ownership. Your attorney will handle hiring a firm to do a title search. Things that can effect title are outstanding liens on the property or a mechanics lien from a disgruntled past worker. Municipal searches are also being done to make sure all permits have been properly closed out, some of which can date back prior to your ownership. Unfortunately, you are still responsible for putting all permits to rest.

If these contingencies (or any others listed in the purchase contract) are not met, the deal can be nullified and the good faith money returned to the buyer.

Tie Up Loose Ends:

During the escrow period, the buyer should be busy tying up loose ends that might stall or prevent the transfer of property. Homeowner’s insurance, required by the lending institution, must be purchased, local and state regulations pertaining to property transfer must be met.

Time to pack!

So you’ve made it through getting the house ready to go on the market and having to leave the house for showings, and now – you’ve received an offer! Ideally the potential buyers have offered you full price or more and the perfect terms for the sale. However, just on the off chance this isn’t this case, you want to look carefully at all aspects of the offer (not just the price) and begin a negotiation with the buyers and their agent.

Your agent will be your partner and help you evaluate the terms of the offer.  Just as you did when determining the asking price of your home, you’ll want to see what the market is doing in terms of the offer you have just received.

What are the different parts of the offer?

What does the offer consist of? Generally the following: purchase price; pre-approval letter for the mortgage amount showing that the buyer is indeed qualified to go through with the purchase; dollar amounts of down payments and dates associated with them; dates outlining contingencies such as inspections, contracts & mortgage approval; what’s included with and excluded from the sale, all required disclosures signed by the buyer; the name of their attorney (in Lower Fairfield County, CT we use attorneys to draw contracts), a copy of the good faith deposit check (usually 1% of the offer to be held in the buyer’s agent’s escrow account) and the proposed closing date.

One of the most important aspects of the offer is whether the buyer can fulfill the terms of the contract with financing. Your REALTOR can check on the pre-approval letter that should be included with any offer by consulting with the buyer’s agent and the buyer’s lender.

What Factors Should You Consider in a Purchase Offer?   Before you offer a counter offer here are the  questions you’ll want to consider:

• How close is the offer to your asking price?
• Will your home appraise for the contract price?
• How large is the earnest money deposit that accompanied the offer?
• Has the buyer asked for assistance with closing costs?
• Has the buyer asked you to make repairs or to give a credit for home improvements? (This usually occurs after the building inspection & we will talk more about this in the next blog.)
• Is the requested settlement date appropriate for your needs?

At this point it is important to decide what your “bottom line” is and then start working towards meeting that through negotiations. Other things to consider are:

• Are there other offers?
• Is it smart to wait for more offers to come in?
• How will you handle it if no other offers come in after a particular deadline?
• What will you do if you accept this offer and something that sounds more appealing comes in?

Making a Counteroffer

As a seller, you have the option of accepting the offer as is, declining the offer, or making a counteroffer. Your agent can give you specific advice about your negotiating stance based on your home and your market, but generally you will need to be prepared to compromise on some aspect of your home sale.  It’s always smart to have a dialogue with a potential buyer and see where it can lead.

Your negotiations can go more smoothly if you have a clear sense of your own priorities, such as a particular settlement date, the ability to rent-back your home from your buyers, or a minimum price that is realistic to put the deal together. Your agent should have prepared a document showing you net proceeds at different sales prices that can make it easier to understand the value of different offers.

Negotiations proceed best when both you and your buyer respect each other’s needs and interests and come to an appropriate compromise with the help of your agents.

Flowers, candy, red hearts and romance… that’s what Valentine’s Day is all about, right? Well, maybe not. The origin of this holiday for the expression of love really isn’t romantic at all — at least not in the traditional sense.  Instead crime, imprisonment and execution are at the genesis of our modern day love fest, dating back to the man whose martyrdom may have inspired the holiday. There were reportedly three early Christian saints named Valentine, but the one the holiday is likely named after was a Roman priest during the 3rd century A.D. under Emperor Claudius II.  The Roman Empire was experiencing massive turmoil at the time. Dubbed the “Crisis of the Third Century” by scholars, this period saw the empire divide into three competing states, with the threat of invasion all around.  Claudius II made the unpopular decision to ban marriage among young people, believing that unmarried soldiers fought better than married soldiers. With the Roman Empire hanging by a thread, Claudius needed all the brazen war power he could get.

This is where Valentine comes in; the pesky priest who believed marriage to be a God-given sacrament. Valentine began officiating marriages in secret but was eventually found out and imprisoned. The advent of the Valentine’s Day love note may have come about from young children passing Valentine notes through the prison bars, but this may be embellishment to an otherwise tragic story.

In the year 269 AD, Valentine was sentenced to a three part execution of a beating, stoning, and finally decapitation all because of his stand for Christian marriage. The story goes that the last words he wrote were in a note (professing his love?). He inspired today’s romantic missives by signing it, “from your Valentine.” The priest was named a martyr by the Church because he gave up his life to perform the sacrament of marriage: for love of love and love of God.

At the end of the 5th century, Pope Gelasius I declared February 14th to be St. Valentine’s Day, and centuries later romantic authors like Geoffrey Chaucer and Shakespeare helped seal the deal with references to the day in their works.

Selling your house can be a lot like remodeling: It usually takes longer, costs more and is more emotionally draining than you thought it would be, but in the end it was worth it! Unless you’re the rare home owner who gets multiple offers above the asking price days after listing, the sales process can be emotionally challenging.  Knowing what’s ahead helps ease some of the anxiety that goes along with the process.  Generally, you can expect a three-step process: Getting the house ready, showing it off and responding to the marketplace.

First Things First:
One of the first things your agent will do is place your home in the local Multiple Listing Service (MLS). This notifies all other agents in the area that your home is for sale. Your house will also appear on numerous websites such as Raveis.com; Realtor.com; and so many more.

The for-sale sign will appear in the front yard and a lockbox will be attached to your house, most likely on the front door. The lockbox allows agents access to your house for showings and also alerts your listing agent who is entering your house through satellite communication.  You may think it would be easier for you to be home & let the agents in, but it is best if you are out of the house during showings (see below), and a lockbox allows a secure way for the agents to gain access.  Showing instructions can be set up to work with your life style, especially if you have small children or pets.

Open Houses:
The most important activity, right out of the starting gate, is the Broker Open House.  This is set up on specific days with time frames relating to different geographic areas. Most active agents use open house days to keep current on the housing inventory as it comes on the market. Usually your agent will serve refreshments and use this time to encourage other agents to share their thoughts on how the house shows and how accurate the pricing is as compared to other homes their buyer clients may be looking at, allowing for many perspectives. This is why when you go “live” you should make sure you’re completely ready for showings – “you only have once chance to make a first impression”. You’ll probably be swamped with last-minute touch-ups and clean-ups to get the house ready but it is worth every minute of time you spend!

Next, if you and your agent agree this is something you are comfortable with, there will be a public open house traditionally held on a Sunday afternoon. These are advertised both in the newspaper and most importantly, on the internet. This allows buyers to search for properties in their price range and visit, (or re-visit), on their own time frame.

It is best if you are not present during showings and open houses. Buyers want the freedom to look around and make comments. If you are home when potential buyers come for a viewing, try to step outside while they tour your house.  Many sellers incorrectly think that multiple open houses are needed to sell a house. In fact, few homes are sold at open houses, but there are many good reasons to have them.

Traffic Patterns:
You will get the most traffic in the first two to three weeks after your house is listed. Anyone looking for a house like yours has probably viewed all of your competition and will be anxious to see your home since it is a new consideration. Don’t fret when the traffic dies down.  The average days on market (DOM) can be 60-90 days in a normal cycle, depending on the area, price range and current inventory. In a slower market, buyers can take their time and usually do. If you have buyers come back a second or third time, it’s usually a good sign.  Any offers — even ones you consider to be “lowball offers” —  have a chance of being negotiated and potentially leading to a sale, so always be open to discussion.

Marketing Your Home:

Your agent should have a multi-dimensional approach for the marketing of your home.  A widespread internet presence with quality pictures and an enticing description are some of the most important aspects of the marketing plan. The reach on the internet should be through multiple avenues – websites and MLS search sites just to name a few.  The marketing should not however only focus on the internet. Potential buyers are everywhere and your agent’s specific plan for your home should hit multiple arenas – print, mail, social networks, visual tours, and the list goes on & on!

According to the  Employee Relocation Council – Moving is the third most stressful event in life, following death and divorce. It is important to be partnered with an agent you trust, who can help make the process go as smoothly as possible. Let me know how I can help, I would love to chat!