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WHAT THE NEW TAX LAW MEANS TO REAL ESTATE

By: Karen Behfar



There are many changes to the GOP tax bill. Some are good for real estate, some are not. Overall, people are going to be able to start saving more money. For example, renters and people who do not own homes will start making money, and this will spur the market. The main reason why people do not buy homes is not necessarily because of income, because they can get co-signers. The main reason is that people do not have enough money to pay for the down payment of the house.

Changes That Will Affect Homeowners:

Mortgage Interest Deduction -It used to be that you can deduct up to one million dollars from your income. For example, if you made $100,000 a year and you paid $15,000 worth of interest, you were able to deduct it and net $85,000.Now that
interestdeduction is capped at $750,000. If you buy a house for $1.3 million, and you have a $1 million mortgage, you can only deduct up to $750,000 worth of interest on that mortgage.
This means that prices on the higher end homes may drop a little. 

Tax Deduction Capped at $10K - It used to be that you were able to deduct state, local, and property taxes from your income. Now you can only deduct up to $10,000 of all those taxes. This means that in high property tax areas you can only deduct that and nothing else. So, that might bring down housing prices. (This will not affect the Brooklyn market as much, as taxes are generally under 10k or slightly more.)

Deductions That Will Benefit
and Boost the Real Estate Market:

Standard Deduction -Tax fair used tobe that married people could deduct $12,000 from their income. Now that sum has been doubled to $24,000.

Child Tax Credit - A credit on your taxes doubled. If you were able to get a credit of $1,000 per child, now you can get $2,000, even if you don't have any income.

roperty Viewig / Showing Etiquette

Some Do's and Don'ts For …

House Hunters:

• Be punctual.

• Remove shoes. (This depends on the weather. If it's snowing outside, don't trek black slush through the house.)

•Ask permission before snapping photos. Many times, homeowners don’t appreciate having the pictures on their walls "out there."

• Be mindful of the people in the home. (Say, “Hi,” “Thank you”…)

Homeowners:

• When you leave the house before the agent shows it, take your pets with you (think: allergies, fearful buyers…).

• If possible, keep a parking spot available for the buyers. Circling around can be a major turnoff even before viewing the house.

• Leave the home, if possible. This allows buyers the freedom to walk around with the agent and feel comfortable asking questions and not be worried that the homeowners will intrude.

• Be patient waiting for feedback.

• Keep the house organized and smelling clean
(baked apple pie, anyone?).

Agents:

Whether you’re talking with another new agent or the “biggest” agent in town (or the craziest, lol) remember that you will never know when you may need to work with that agent again. Personal experience shows that behaving thoughtfully toward agents isn’t only the proper thing to do; it can also be good for business. This is particularly important in an industry where professionals must constantly cooperate with each other. Acting professionally towards other agents can “pay big dividends down the road.”
I have received referrals from other agents’ clients because I was courteous and respectful during the process.