It's amazing to me how quickly the year is flying by, so I thought I would revisit topics that are important to be addressed sooner than later.  Before you know it, it will be New Years Eve again (a funny statement to be making in July....), and the regrets of tasks that we procrastinated on will be upon us if we don't take action now.  This can apply to so many things, but since I am your Real Estate Consultant, I'll stick to some changes that are coming up that are applicable to real estate...

Now that the health care law has been declared constitutional, the remaining provisions will be going into effect. One little known provision is a new 3.8% investment income surtax, also called the health care surtax or the Medicare tax; it will go into effect on January 1, 2013.

This new surtax will be assessed on the lesser of a) net investment income or b) the excess of modified adjusted gross income (MAGI) over the “threshold amount.” For married taxpayers filing jointly, the threshold amount is $250,000; married filing separately, $125,000; all other individual taxpayers, $200,000. For trusts and estates, it is the beginning of the top income tax bracket ($11,650 in 2012).   What this means is: 1) If your modified adjusted gross income (MAGI) is less than or equal to the threshold amount that applies to you, you will not pay this tax. 2) If your modified adjusted gross income (MAGI) is greater than the threshold amount that applies to you, you will pay the 3.8% tax on the lesser of a) your net investment income or b) the amount of your MAGI over the threshold amount.

Note that the surtax liability is determined on income before any tax deductions are considered. That means your deductions could put you in the lowest income tax bracket, yet you could still have investment income that is subject to the surtax.  Also, the capital gains rate is scheduled to increase for high-income taxpayers to 20% in 2013, so the total tax on capital gains (with the surtax) could be 23.8% in 2013 and beyond.

The good news is that there may be some steps you can take this year to help you avoid or reduce the amount of surtax beginning in 2013.   Also, 2012 is an exceptional year for estate planning in general. The federal estate tax exemption is $5.12 million, which allows a married couple to transfer as much as $10.24 million from their estate with no estate tax. Under current law, this exemption is scheduled to shrink to $1 million in 2013. Other tax cuts, including income and capital gains taxes, are set to expire at the end of 2012.  With the new 3.8% surtax becoming effective in January, 2013 is on track to have the highest tax rates we have seen in many years.

Another change in the tax laws regarding real estate that we have coming up is the expiration of the Mortgage Debt Forgiveness Relief Act, which gives tax relief to homeowners that sell their primary residence through short sale.  The difference between selling your primary residence in 2012 via a short sale versus 2013 could be a considerable amount of tax.  Note that the transaction has to actually close escrow by December 31, 2012 to qualify, and that a short sale can take many months to close.  Please contact me if you have questions about short sales, or if you would like for us to mail or email you a free brochure about the process.  Even if you don't need or want to do a short sale, there may be some very legitimate reasons for not postponing the sale of a property, so it's worth investigating your options.  The consulation is free, and I will always give you an honest, direct answer.

Now, more than ever, you need the assistance of qualified professionals to advise you and help you implement the best plan for you and your family.  This is something that many people put off, and don't think about seriously until it's too late.  There are many aspects to estate planning other than the real estate aspect, so this advice is not just for investment property owners - everyone can benefit from proper estate planning, regardless of age or financial status.    Today is the first day of the rest of your life, what better time could there be to put your best foot forward?

Make the Most of Your Realtor!

The common perception is that Realtors “just sell houses”.  And while that is partially correct, there is so much more your Realtor can do for you.  Here are just a few of the additional services that the Worthington Hatcher Harbison Team offers free of charge:

Determine the value of your home.  Laura Harbison will tell you even if you're not a client.  She is happy to help homeowners figure out how much their homes are really worth.  Often, she has prepared a comparative market assessment for homeowners that purchased their home during the peak of the market a few years ago and they were able to use Laura’s assessment as proof to get a county tax break.

Find some help around the house.  Laura maintains a Preferred Vendor List, available to anyone who would like a copy.  Whether you need to be qualified for a loan, have your lawn mowed, your taxes prepared or your trim re-painted, Laura has compiled a list of reputable vendors to meet your needs.*

Be a friend for life.  A top-notch agent doesn't stop helping once the ink dries on the sales contract, but stays in touch with clients and their needs.  For Laura, selling the house is only part of it.  She is always there for her clients when they need her.

* The Worthington Hatcher Harbison Team, Laura Harbison LTD & Realty Executives of Nevada cannot be held responsible for any work of service provided by these businesses. It is suggested that you thoroughly investigate and business before contracting their services.

BEAT THE HEAT

As the temperature rises, so does the cost of cooling your home, especially if you use an air conditioner.  Here are some extra tips to stay cool in the hot summer weather:

1.       Stay hydrated with lots of water.  Avoid caffeine and alcohol as these promote dehydration.

2.      Close your blinds and curtains during the day to block the sun’s heat.  Open the windows at night to let the cooler air inside.

3.      Cool your house down with fans.

4.      When possible, avoid using heat sources such as the oven, stove and dishwasher.  The most common sources of internal heat are appliances, electronic devices, and lighting.

5.      Take advantage of the shade.  Daytime air temperatures can be 3 to 6 degrees cooler in tree-shaded  neighborhoods.

6.      Check window and door frames for any hot air leaking in and seal them with caulk or weather stripping.

7.      Replace you’re A/C unit’s intake filter once a month to allow for greater airflow.

8.      Use the exhaust fan in the bathroom when showering to remove the humid air.

9.      During peak heat hours, find a cool spot to run some errands or catch up with friends.  Go to the mall, coffee shop, library, community pool or movie theater.

10.   Don’t forget your pets!  Our furry friends can suffer from dehydration, heat stroke and sunburns too.  Make sure they always have fresh water and shade.  Don’t over-exercise them and never leave them alone in a parked vehicle. 

STAY COOL AND HAVE A GREAT SUMMER!

Be a Good Neighbor!

Your neighbors see the coming and going at your house and are probably more familiar with your schedule than you think.  They know when your in-laws are visiting from out of town, when your dog barks at the UPS delivery person and when your sprinklers are running off schedule.  You probably know the same things about your neighbors without even realizing it.  Most of us don’t even think about it until we see something out of the ordinary in our neighborhood.  This is why it is so important to be a good neighbor.  We can help our neighbors by taking in the paper when they are out of town, letting them borrow that cup of sugar or notifying them of any suspicious activities.  The benefits of being a good neighbor are numerous.  Not only will you feel good about what you are doing by setting a good example, but your community will be friendlier and your neighborhood safer.  You may even inspire your neighbors to be good neighbors too!

Spring Cleaning and You!

As Spring Cleaning time approaches, there are always a few important things that frequently get forgotten…

Ceiling Fans:  Change the direction of your ceiling fans.  The counterclockwise direction provides a refreshing breeze during warm months, while the clockwise position creates an upward draft, which redistributes warm air.  Most ceiling fans have a switch on the base to adjust the rotation.

Bed:  Turn over and rotate your mattress to distribute wear evenly.

Medical:  Update your first aid kit. 

Refrigerator:  Remove all the contents of the refrigerator and wipe down the sides and shelves.  Throw out all expired food and condiments.  Put the food back, wiping off jars and containers thoroughly. 

Smoke Detector/Air Filter:  Replace the batteries in your smoke detectors and carbon monoxide detectors.  Replace your air filter.

Plants:  Give your dusty house plants a bath.  Wash small plants in lukewarm water in a sink and larger plants in a shower.  Let them drip-dry before placing them in the sun.

Recipe Book:  Update your recipe book by adding your new favorites and throwing out anything you have had but haven’t used in 1 year.

Filing Cabinet:  Clean out any documents that you no longer need and bring them to the WORTHINGTON HATCHER HARBISON TEAM’S FREE SHREDDING EVENT on April 21^st from 10:00 am – 2:00 pm.  We will have a shredding truck on site to destroy your documents while you watch.  Call (702) 777-1234 for more details!

Cut Winter Heating Costs

Now is the optimum time to start thinking about preparing your home for winter. Here are some things you can do:

Take advantage of heat that’s there anyway. There are plenty of activities you do around the house that generate warmth, such as cooking a meal or taking a shower. When you shower, keep the bathroom door open so steam spreads to other rooms, and don’t turn a ventilation fan on; it will rapidly remove the warm air you’re hoping to keep around.

Lower your thermostat. You likely won’t notice a huge difference if you turn it down just a few degrees, a move that can shave 5 to 10 percent off of your heating bill. It’s especially wise to turn down the heat whenever you leave your home for several hours.

Consider a programmable thermostat. They cost between $30 and $100, but that’s money you’re sure to make back over the course of a year due to your heating bills being reduced. A programmable thermostat allows you to adjust the heat on a predetermined schedule, so you can lower the heat when you’re not home or when you’re sleeping.

Watch that water heater. It’s also not likely to be noticeable if you turn down the thermostat on your water heater to a recommended 120 degrees from about 140 degrees.  Consider installing an insulating water heater jacket. Be careful to follow manufacturer's recommendations and don't cover the thermostat.

Don’t let heat escape unnecessarily. Keep your doors and windows shut when the heat is on. If your home has a fireplace that you aren’t using, be sure the flue is closed and glass doors are in place to minimize heat loss.

Call for a checkup. Proper maintenance will help your heating unit run more efficiently. Electric and oil heaters should get professional attention at least once a year and gas heaters every other year. Also, here’s a step you can take all on your own: Remember to check the filters in your heating system and make sure they’re clean and clear. Dirty filters lead to higher heating costs.

Keep windows covered when it’s dark outside. This will help you reduce heat loss and keep cold air at bay, especially if you have older windows. Be sure to let in the light during the daytime — those rays of sun will help heat your home.

Explore outside. Check the exterior of your heating unit. Avoid stacking anything against the heat pump or draping anything over it. Hose the outside unit down to clear it of dirt, leaves and grass clippings. If your indoor unit appears to have excess water around it, see whether the condensate drain and pan are blocked.

Check and replace weather stripping on doors and windows.

Air leaks around faulty weather stripping on doors and windows contribute to making interior spaces of your home uncomfortable and increase heating costs. Check for drafts and repair or replace worn stripping.

The Value of Investing in a Monitored Home Alarm System

The safety of your family and home should always be your number one concern.  Much like our cell phones, home alarm systems have come a long way.  In addition to “scaring away the bad guys”, a monitored alarm system can also call emergency personnel, flash your homes lights in an emergency, be controlled from your cell phone, turn off your air conditioning, turn on the porch light before you arrive at home, detect carbon monoxide and much more.  Alarm systems are most commonly thought of as a way to ward off intruders.  While they still serve that purpose in many cases, they also come with several other benefits. 

·         One touch emergency call – Most systems come with a one touch button for fire, ambulance or police.  This is an incredible feature if you need to leave quickly, tend to someone else in home.  Alarm companies will send emergency personnel after a few minutes of non-response once an alarm is sounded.

·         Deter intruders – The visual signs of an alarm sticker on your window or a sign in your front yard will be enough to make an intruder think twice.

·         Insurance Discount - If you own your home, you may be eligible to receive a discount on your home owner’s insurance policy.  Homes with an alarm system are a lower liability for insurance companies. 

·         Mobile operation - Many alarm systems allow operation from your mobile device.  You have the capacity to arm or disarm your security alarm, turn your air conditioning system on or off as well as operate interior and exterior lighting controls all from your phone.

·         Smoke detector - An alarm system has the capacity to detect both carbon monoxide and smoke, alerting you to danger.

·         Adds value to your home – In this competitive real estate market, an alarm system will add value to your home. 

Most importantly, a home alarm system can give you and your family peace of mind.  If you are considering an alarm system, most companies will offer you a free estimate.  It is wise to obtain three bids and thoroughly investigate any service provider before signing a contract.  In the Las Vegas and Henderson area, our preferred vendor is Total Safety, Inc. 

Glen Valiquette

Total Safety, Inc.

(702) 501-2487

www.tsivegas.com

*The Worthington Hatcher Harbison Team, Laura Harbison LTD and Realty Executives of Nevada cannot be held responsible for any work or service provided by this business.  It is suggested that you thoroughly investigate any business before contracting their services.