Tips to maintain a healthier home

Now that spring has sprung, a lot of you have started spring cleaning.  Warmer weather means more open windows and fresh air through homes.  It can also lead to mold, dust, and other airborne particles that can make you sick.  Here are some tips to maintain a healthy home while you begin spring cleaning.

1. Use fans.  Especially in the bathroom, it’s important for warm air to circulate out of the house to prevent mold in your bathroom.  Make sure exhaust fans send air outside and not into the attic or another room.  A range hood above your stove keeps carbon dioxide and carbon monoxide out of the air when using a gas stove.  And you can save money on air conditioning when you use a ceiling fan to circulate air in a bedroom or family room.

2. Use an air filter.  You’d be surprised to find out that indoor air pollution can be 5x worse than outdoor air pollution!  Aside from controlling odors, an air purifier removes pollutants from the air.

3. Make sure you have a ventilation system.  With a lot of new homes built, the homes are sealed very tightly in the name of energy efficiency.  It’s essential to allow fresh air in and stale air out.  If you are buying new construction, check to see what kind of ventilation system is going in.

4. Clean!  Make sure sponges are sanitized, cutting boards and utensils are thoroughly washed after using them for raw meat and fish.  Clean showers after each use to prevent inhalation of bacteria.

5. Upgrade your vacuum.  And make sure bags (if you don’t have a bagless vacuum) are removed as soon as they’re full or they’ll release dust in to the air.  Vacuums now come with high-filtration filters and can help rid the house of allergens.

6. Be careful when remodeling.  It creates A LOT of dust.  So make sure that your duct system is thoroughly cleaned out (by a certified company if necessary) after a remodeling project.

7. Install carbon monoxide detectors.  It’s now Illinois law that these are located within 15 feet of a bedroom.  For little money, these can go a long way to save lives.

More great tips can be found here. I can be reached online through my Web site.

Forgiven debt can send IRS calling

I felt that this is important to write about because so many people don’t realize that forgiven debt is taxable income.  So what is forgiven debt and how does it relate to real estate?  Let’s say that you short sale your home in order because you have to move and the house isn’t worth as much as it used to be and you can’t get for it what you still owe on the loan.  Say you owe $250,000 and you do a short sale for $200,000.  That $50,000 difference is forgiven debt.  You don’t owe it anymore and the bank has taken the loss for you.  Well, in walks the IRS.  They believe that forgiven debt is taxable income.  Whoa!  You lost money, you’re out of your house, and now you owe the IRS?

Yes.  It’s that simple.  However, in 2007, Congress created legislation to avoid this in some circumstances.  As long as the loan was used to purchase or improve the home owner’s primary residence, the IRS had to exclude up to $2 million of that forgiven debt from taxes.  So that’s the good news.  But beware: This legislation is currently set to expire in 2012.  So if now begins the time that you’re starting to fall behind on payments, unless the legislation is renewed, you could owe on it in 2012 or further into the future.  And if the bank sends you a tax form 1099-C because of forgiven debt, it’s crucial that you inform the IRS that you’re eligible for this Congress-enacted exclusion.  Otherwise, they can tax you for it.

It’s also important to realize what else is considered taxable debt and IS NOT included in the exclusion.  This debt will be taxable:

1. Credit card debt.  If you negotiate with your card company to reduce the amount you owe, any amount that gets forgiven is taxable.

2. Mortgage debt from a second home.  The exclusion only applies to your primary residence.  If you lose a vacation house, income property, or second home because of foreclosure, the difference is taxable.

If you’re really in a bind, you can choose to file for bankruptcy.  Any debt that’s forgiven that stems from a bankruptcy is not taxable.  If you have further questions, please contact a CPA to guide you through that and any other tax process.  I can be reached via my Web site.

Foreclosure delays help underwater owners

It’s good news for those who are underwater on paying their mortgages.  Because of the volume of defaulted mortgages, it’s taking banks and lenders a lot longer to complete the foreclosure process.  On average last year, it was about 12 months from the first missed payment until the bank took over and evicted the homeowners.  These days the average is 17 months that a payment hasn’t been made.

Aside from the volume that’s causing the delay, banks that are trying to do home modifications for borrowers is taking up time as well as incomplete paperwork that courts have ruled in favor of borrowers.

So now experts are saying that these delays might push price points of foreclosed homes up a bit because inventory will be declining.  And this would only be true of foreclosed homes.

Diane Pendley, managing director of Fitch Ratings, a bank researcher, estimates that delinquent borrowers now stay in their homes an average of 19 to 20 months without paying before they’re forced to leave. By year end, the average will rise to 22 to 23 months, the longest on record, she says.  So this is good news for those who are having trouble paying.  It gives them more time to find alternative living or to try to complete a loan modification.

The bad news is this is going to delay the return of a good housing market in that it’s going to take longer to get rid of this inventory since it’s taking longer to process.  This is why credit checks and loans are harder to come by, so this doesn’t happen in the future.

More information can be found in this USA Today article. I can be reached online.

Remodeling mistakes to avoid

I opened up yesterday’s Chicago Tribune and found a great article on the cover of the Money & Real Estate section.  There were some great points that I wanted to share with you.  I’ve talked multiple times before about what’s important when remodeling and where you can get the most bang for your buck.  But this article talks about mistakes to avoid so that you don’t lose money and a potential buyer.  Here’s some mistakes not to make when choosing to remodel:

1. My favorite.  Really bad colors.  I’m not kidding when I tell you that I’ve seen a house like this.  I’ve actually seen several homes like this.  Walls painted bright orange, neon green.  I’ve seen homes with fake grass in the living room.  Avoid  It’s not pretty.  If you’re going to paint, stay as neutral as possible.  If you’re selling your home and your house looks like this picture, paint the walls beige.  It’s only going to help you.

2. Dysfunctional floor plans.  So you want to convert your family room to a garage.  That won’t quite work if the family room is adjacent to the kitchen.  Think things through first.  It might make more sense to add a garage to the front of the home if that’s where the family room is.  But if not, choose another option.  Tandem rooms (where you have to enter one room to get to another) don’t work well.  You don’t want any room accessible only by entering another room first.  Every room should be accessible from a common hallway.

3. Too few baths to match bedrooms.  Some people need more space and decide to split a large bedroom into two smaller ones.  If you’re going to do this, make sure you have enough bathrooms to match.  Homes with 5 or 6 bedrooms and 1 shared bath are hard to sell.  And make sure bathrooms are accessible to bedrooms.  I’ve shown homes where the only bath was right near the front door and the three upstairs bedrooms were in the back of the house.  That’s a long walk in the middle of the night …

These tips should help you understand what buyers are looking for in their home.  And it’s worth talking to an experienced Realtor before any big home improvement project.  You can find out where to best spend your money.  I’m here to help!  Visit me online.