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The Worker, Homeownership and Business Assistance Act of 2009 was signed into law on November 6, 2009.  This extends and expands the previously passed first-time homeowners tax credit.  There are three major categories to review.


  • The first-time homeowner tax credit is now available for those eligible taxpayers who enter a binding home buying contract for a principal residence on or before April 30, 2010 (previous credit was to expire on November 30, 2009).
  • The taxpayer must close on the purchase by June 30, 2010.
  • The amount of the credit remains at 10% of the purchase price up to $8,000.
  • This credit must be taken on either their 2009 or 2010 tax return using form 5405.
  • The tax credit remains fully refundable, meaning the credit will be paid out to the homeowner even if their tax obligation is less than the amount of the credit.
  • The homeowner does not have to repay this credit unless the home ceases to be their principal residence within 36 months of closing.
  • If the home has been purchased from a close relative including spouse, parent, grandparent, child, or grandchild, the tax payer is not eligible for the credit.  Also, if the tax payer has owned a home any time during the three years prior to this purchase, they are not eligible for the credit.


  • The new law authorizes a tax credit for those homeowners who have owned their principal residence for at least five consecutive years (out of an 8 year period) and purchased a new principal residence.
  • The credit has a maximum of $6,500.

Raising the Income Limitation:

  • The new income provision only applies to those people who have purchased homes after November 6, 2009.
  • The credit phases out for individuals with a modified adjusted gross income between $125,000 and $145,000.
  • For joint filers the credit phases out with a modified adjusted gross income between $225,000 and $245,000.
  • For those purchasing a home prior to November 6, 2009 the original phase out schedule applies.  Individuals were phased out between $75,000 and $95,000.  Joint filers were phased out between $150,000 and $170,000.

There are some restrictions that apply to homes purchased after November 6, 2009:

  • Purchasers must attach a properly executed settlement statement to their return.
  • No credit is available if the purchase price of the home exceeds $800,000.
  • The purchaser must be at least 18 years of age on the date of the purchase.  For a married couple, only one spouse needs to be 18.
  • A dependent is not eligible for the credit.
  • The new law gives the IRS broader authority to deny first-time homebuyer credit claims, without having to first audit the taxpayer’s return.


Properly preparing your home for winter will not only save on energy costs, but may also prevent some major damages and expensive repairs.  The following are a list of suggestions.

  • Winterize your sprinkler system by having the lines blown out. 
  • Insulate water pipes in the crawl space under the house to prevent freezing and bursting.
  • When lowering the thermostat do not lower below 55 degrees.
  • Clean gutters and downspouts.  Spray water down them to clear out debris.  You may also consider installing gutter screens.
  • Remove snow and ice from the roof  to prevent ice and water damage.
  • Keep driveways cleared of snow and ice in case an emergency vehicle may need access.
  • Clean fireplace and woodstove chimneys to prevent fire damage.
  • Change the filter on your furnace to enhance its operation.
  • Unplug electric heaters when not in use.
  • To avoid potential fire damage and termite invasion keep firewood away from the house.
  • When leaving for an extended period shut off the water to the house from the main water meter.
  • Update weather stripping around the doors and windows.

This is not a complete list, but it will be important for you to follow up with these items.  You may also think of other ways to winterize your home while accomplishing what is on this list.


Friday I attended the inspection of a property in the older part of town.  The inspector found extensive damage in the crawl space of the home caused by termites.  Everything about the environment of the home pointed to an invitation to these destructive creatures.  There is no ventilation to the crawl space.  The furnace and water heater are located in the crawl space making it nice and warm even in the winter.  There were scraps of wood left on the ground in the crawl space and the exterior siding was touching the ground all around the foundation.  The National Pest Management Foundation estimates that termites cause an estimated $5 billion in property damage a year.  That beats the threat of fire, flood, or wind damage to wood-based structures. 

The owner of this home that was inspected had no idea that termites were present.  Usually termites go unnoticed until the damage is extensive.  Termites can take up residence in a home for years eating away at the structure from the inside out until the damage finally shows itself (hence the name “silent destroyers).  It is estimated that a subterranean termite colony can eat a two by four in a year.  Imagine sitting on a toilet and all of sudden having it fall through the floorboards of your bathroom!

Termites can get through the smallest crack in a foundation or footing.  Windows, vents, and roof joints are also entry points.  Older homes are more inclined to be at risk, but new homes can also have the problem if the wood is not pretreated correctly.

What can you do to prevent an infestation of these destructive bugs?  Here are some suggestions:

  • Keep moisture out of the crawl space by diverting water from rain and sprinklers away from the foundation.  Be sure you have gutters and down spouts to help with this.
  • Store firewood, wood chips, and mulch away from the home.
  • Don’t plant shrubs or other plants too close to the house.
  • Ventilate the crawl space sufficiently to reduce potential moisture.
  • Fill in gaps in attic vents, window joints, and soffits.
  • Remove old tree stumps and roots near the foundation of the house.
  • Schedule periodic inspections by a termite specialist.  They can provide wood treatments and repellants to help prevent any infestation.

Finally, you may want to research the areas of the country where termite damage is most prevalent.  The U.S. Department of Housing and Urban Development has a web site that would provide such information.  The address of the site is:


The deadline for the first-time homebuyer tax credit is November 30th.  If you are one of those first time buyers, who has not bought a home yet, it’s getting to be crunch time.  You need to find a home, secure an offer, get the mortgage process going, and close before the deadline to get the $8000 federal tax credit.

The current administration is evaluating whether to extend the deadline, but unless the extension is granted experts say that you have about two to three weeks to get it done.  The challenge is that there will be many trying to meet the deadline and the process could get over loaded.  Getting the inspection done, the appraisal completed, and the underwriting accomplished can take 45-60 days.  That means you can’t delay any longer.  Make your housing choice and offer now.  The market is unusually busy for this time of year.  Normally the market begins to slow down, but recently it has heated up.  The demand has been created by this stimulus.

The tax credit is good for 10% of the home’s value up to $8000.  The income limit for single taxpayers is $75,000.  The limit for married taxpayers filing jointly is $150,000.  You can go to the IRS web site for more information.

It was predicted that 300,000 sales would occur due to this program.  The National Association of Realtors estimates that 1.1 million first-time homebuyers had taken advantage of the credit as of August 31st.  The momentum has been building each successive month.  So it’s not surprising that there could be a system over load in the next 45-60 days.  Give yourself at least six weeks to process the loan and close on your new home.

Keep in close contact with your Realtor and follow their guidance.  They will be invaluable in helping you get this accomplished.


I am not an appraiser, but in the thirty plus years working with them in my real estate business I have learned that there are some factors considered by appraisers in valuing properties that are important for clients to understand in selling or buying.  Understanding how an appraiser views a property should help in determining what to do to enhance the value of your home or if you are buying a home what amenities to look for that are of value.

When considering comparable properties that have sold an appraiser will be given a time frame.  The lender or relocation company may give a period of 90 to 180 days in which a home has sold.  If a home sold 9 or 10 months ago, the price may be irrelevant.  In a declining market the time frame may be shortened to 60 days.  So if your neighbor’s house sold a year ago for a higher price it will not be considered if the appraiser may only choose from homes that sold within the past 60 days.

Incentives and concessions are also factored into the value.  If the seller pays $5000 towards the buyer’s closing costs, that will be taken into account when determining the final price.

Condition and curb appeal will also be considered and this is where you can have an impact if you are selling.  The condition of the interior and exterior will be evaluated.  A beautiful yard, well- maintained interior, updated colors, carpet, countertops, and appliances will affect value.  If you have kept the roof and siding in good repair that is also considered in the appraiser’s evaluation as well.

The home’s total square footage and functional floor plan will also be considered.  If you have plans to add a room or two onto your home, be sure it fits into the current floor plan.  You don’t want your addition to be too obvious an addition or out of place with your current floor plan.  You also don’t want to over build for the neighborhood.  If the size of your home far exceeds anything else in the neighborhood, that could bring your value down.

When using comparables the appraiser will generally look for similar floor plans.  A single level compared to a single level or a two story compared with a two story are typical.  A general rule of thumb is that the main floor square footage is usually the most expensive.

Homes that are within newer neighborhoods tend to appreciate in value faster than older neighborhoods.  Again, your improvements need to fit within the value of  the neighborhood.  Location is important.  If the neighborhood is located close to schools, shopping, etc., it will have a positive influence on value.  Also, if the neighborhood has an association and amenities such as a park or swimming pool that will also have an impact on value.

Improvements such as a well maintained garden and yard, automatic sprinklers, fence, covered patio, hot tub, pool, and play area will be considered.  A large garage and a shop will also impact the value.

You would be wise to consult with your real estate agent before attempting any improvements.  Ask them what would bring the most value to a future appraisal.  Looking at your home from the perspective of an appraiser will give you some good insight as to what is of most worth.


Having observed many home inspections over the past 30 years, I know that there are simple things that can be done in your home to save energy.  Quality windows, proper insulation, and the right heating and cooling systems are important in constructing or in remodeling a home, but that should be left for another day and another article.  These tips are simple and inexpensive things that can be done to save money as well as energy.

  • Clean or change filters in the furnace at least every 90 days.  Do it regularly and on a schedule.  This will keep the heating and cooling systems working efficiently and help to keep the air in your home cleaner.
  • Set your thermostat at settings that will conserve the usage of your AC and furnace.  Invest in a thermostat that can be set for different temperatures during different times of the day.  There is no need to heat or cool a vacant home at the same temperatures that are needed when it’s occupied.  The recommendations for maximum savings are 78 degrees during the summer months and 68 degrees during the winter.  Every degree above 78 in the summer and below 68 in the winter can potentially save between 2-10 percent on costs.
  • Do not block vents with furniture.  Allow air to flow through the house as it was designed to do.
  • Keep the blinds/drapes closed during the hot part of the day in summer and open during the winter to allow the sun to shine in.
  • Be sure each of the windows that open and close has screens.  In good weather open those windows to allow outside air to circulate through the home.
  • Unplug appliances and electronics that are not used frequently.
  • Turn off lights, lamps, and fans when the room is not being used.
  • Replace incandescent bulbs with the new Energy Star rated compact fluorescents.  They are more expensive to purchase, but they last longer and use less energy.  Also, dust the bulbs regularly to improve the light output.
  • Clean the coils on the back of your refrigerator.
  • A full refrigerator is more efficient.  If necessary, fill the fridge with water bottles to keep it full.  Proper settings for the refrigerator are 37 degrees and 0 for the freezer (verify with a thermometer).
  • For doors and windows that don’t fit tight put some weather stripping around them.
  • Fix water leaks immediately.  Small leaks can add up to big energy wasters.
  • Use cold water for washing and rinsing clothing.  They get just as clean as in hot water.
  • Lower the temperature on your water heater.  The factory sets them at 140 degrees, which is more than you need.  122 degrees is adequate.

Reducing energy costs can be simple and inexpensive.  The key is to focus on the opportunities and follow through with them.


One of the least expensive improvements you can make to your home is the painting of its’ interior walls and ceilings.  It’s a quick and easy way to liven up the decor.  However, there are some tips in preparation that can make a huge difference in the quality of the results.

  • Properly prepare the surface so the paint will go on smoothly.  Be sure the surface is clean.  Remove handprints, dirt, and scuff marks.  Lightly sand glossy spots to avoid streaking.
  • Select the proper paint sheen and color.  Higher sheen paints tend to offer more durability than flat paints.  Use the higher sheen in high-traffic areas.  Stain or low-luster finishes offer more warmth than a flat paint.  You may want to consider a high sheen paint on the ceiling to offer better reflection in the room.  Paint stores will usually offer small trial sizes so you can test the color and sheen at home.  You want to look for any variations in daylight as well as in the evening light.
  • Choose a good quality of paint.  You may save money on the cheaper paint, but the results of your hard work may not be what you want.  The paint store can help you choose the better quality.  It is often recommended that a top-quality acrylic latex interior paint will go on smoother and allow for easy clean up with soap and water.
  • Choosing the right paint tools will enhance the results.  If you will be using a roller to paint,  select the right length of roller nap cover for proper coverage.  The smoother the surface, the shorter the nap should be used.  Use a synthetic brush (nylon or polyester) when applying latex or any water-based paint.

Painting is the least expensive improvement that provides the most return on appearance and investment than anything else you do to your home.  It’s a must when preparing to sell your home.   Remember these tips and it will help to make your project go smoother.


If you are considering a remodeling project on your home, there are some important things that should be included in any contract you enter into with a contractor who will be doing the remodel.  The essence of any contract is to ensure that all parties have the same vision and scope of what is to be done.  The National Association of the Remodeling Industry spells out some key elements that should be included in any contract to remodel.

  • The contractor’s name, address, phone number, and license number
  • Details on what the contractor will and will not do.
  • A list of materials for the project.  This includes information about the size, color, model, brand name, and product.
  • The approximate start date and completion date.
  • All required plans.  Those plans must receive your approval before any work begins.
  • Written notice of your right to cancel a contract within 3 business days of signing it (without penalty).
  • Financial terms including the total price, payment schedule, and cancellation or change order penalties.
  • A binding arbitration clause in case of any disagreements.
  • Everything you have requested must be in writing.  If a specific item is not included in the contract, then it will not be included in the project.
  • A warranty covering materials and workmanship for at least one year.  The warranty must be identified as either “full” or “limited”.  The name and address of the party who will honor the warranty must be identified (this could be the contractor, distributor, or manufacturer).  Make sure there is a time period for the warranty written into the contract.

There may be other items you wish to include such as identifying the contractor’s liability coverage.  You may also want to consult an attorney if you have questions or concerns.  The National Association of the Remodeling Industry has a website: that may be helpful as well.


The American Recovery and Reinvestment Act of 2009 authorizes a federal tax credit for up to $8000 when you purchase a home before December 1, 2009.  Whether the buyer is an individual or a married couple, they qualify for the same amount.  One exception to that is if the buyer is married and buying a home as an individual.  In this case the individual only receives a $4000 tax credit.

Couples qualify for the tax credit if they have income of $150000 or less.  A single individual has to have income of $75000 or less.  If in either case their income is greater than the amounts shown, they get only a percentage of the $8000 tax credit.

There are other provisions in the Act to be aware of.  You have to be a first time buyer.  If you haven’t owned a home in three years, you qualify as a first time buyer.  The amount of your credit depends on the price you pay for the home.  The credit is 10% of the price up to $80000.  If you purchase a home for $50000 you would receive a tax credit of $5000 not $8000.  If you buy a home for more than $80000, you will only receive the $8000 tax credit and not 10% of the purchase price.

Some lenders are allowing you an opportunity to use the tax credit to help pay for closing costs or buy down the interest rate.  A personal loan or bridge loan is set up at the beginning with the buyer using the tax credit to repay the borrowed funds.

There are many reasons to consider purchasing a home now.  Contact your real estate agent to get good information on buying a home before December 1st.


Many homeowners often are so focused on the decor and the interior appeal of their home that they overlook the curb appeal (appearance) of the exterior.  The outside condition of the house is where a good or poor first impression is made.  Once that impression is given it’s not soon forgotten.  By making simple cosmetic changes to the overall visual appearance of the home’s exterior and landscaping, you not only make a better first impression, but you also improve it’s value.

Pride of ownership shows when attention is paid to the home’s outside condition.  Here are some tips for increasing your home’s curb appeal:

  • A fresh coat of paint on the body and trim of the house
  • Clean the windows
  • Power-wash the driveway and walks
  • Prune and trim shrubs
  • Keep the lawn well manicured
  • Get rid of clutter
  • Plant mature flowers around the base of trees and beds
  • Consider window boxes with flowers to add depth
  • Inexpensive vinyl shutters will add dimension to the windows
  • Patch cracks in the driveway and sidewalks

For you who are planning on selling your home, what you do to improve the outside appearance will make it much more inviting to a prospective buyer.  The investment of time and money on the home’s exterior will give you a great return and will  improve it’s curb appeal and overall value.