Real Estate Investing

In following the national news, it looks like President Barack Obama is hoping to lower mortgage costs through the newly passed $700 billion funding bill that just passed Congress.  Not to get too political here, but isn’t it a gamble for the Republicans to vote against it… especially if it works?  Nevertheless, the gamble may also be fairly safe because the problems are so huge that perhaps just this first effort won’t be enough to pull us out of the crisis.

Lowering mortgage costs is just one step of many that need to be taken.  For example, finding ways to bring jobs back will be a huge component.  So many of our manufacturing jobs have gone to other countries in an effort for the big boys to save money on salaries and other expenses.  Whoduthunkit that years later so many have left that now unemployment is so high no one can buy anything.  If that’s not the biggest backfire ever, I don’t know what else is.

In any case, new Treasury Secretary Geithner is working on a plan to steady the economy,

Obama said Geithner soon would announce a new strategy “for reviving our financial system that gets credit flowing to businesses and families. We’ll help lower mortgage costs and extend loans to small businesses so they can create jobs. We’ll ensure that CEOs are not draining funds that should be advancing our recovery.”

His administration “will insist on unprecedented transparency, rigorous oversight and clear accountability so taxpayers know how their money is being spent and whether it is achieving results.”

Unlike some talk-radio hosts, for the sake of our families and our communities I hope that President Obama SUCCEEDS in his efforts to help restore our nation to economic, job, and financial health.  That’s like the old movie where the guy running for president says, “God Bless America and no one else.” and the other candidate says, “God Bless America and EVERYONE else.”  Seriously.

Cartoon by the very talented Beth Cravens, of Cravens World.  She is a cartoonist/illustrator for the Weakley County Press in Tennessee and happens to have illustrated the covers of two books I published, found on Lulu.com.

That loud creak you’re hearing isn’t necessarily limbs falling off ice-encased trees; it’s the sound of new homes sales skidding to a stop. According to MSNBC.com, the U.S. Department of Commerce has reported,

… New home sales fell 14.7 percent in December to a seasonally adjusted annual rate of 331,000, from a downwardly revised November figure of 388,000.

The downward spiral is nearly out of control because builders can’t slow down enough to steady the prices - which also keep falling.

Builders have been forced to slash production during a prolonged and severe slump in housing that has seen sales and prices plummet. December’s sales activity was depressed by the worst financial crisis in seven decades, which has made it harder for potential buyers to get mortgage loans.

I heard vocalized on the news for the first time this morning that we are at or near Depression-era job loss.  Job loss - of course - is the hinge of the door closing on retail sales which means that this winter may not be the only thing on ice… consumer confidence is a bit chilly as well.

Let’s hope the chances of obtaining home mortgages improve before the freeze settles into an Ice Age,

Builders have been forced to slash production during a prolonged and severe slump in housing that has seen sales and prices plummet. December’s sales activity was depressed by the worst financial crisis in seven decades, which has made it harder for potential buyers to get mortgage loans.

The last time I wrote about taxes, it was on behalf of homeowners.  Today I’m writing it for Realtors with the disclaimer that I am NOT a tax attorney, a tax expert, or an accountant.  What I do have gripped in my hands is a sheet of paper that a fellow agent handed me earlier today from a tax company that lists “Realtor Deductions”.

The sheet says when completing the form, do not include expenses for which you have been reimbursed, expect to be reimbursed, or are reimbursable.  Here are deductions for Realtors:

• Advertising
• Appraisal Fees
• Business Cards
• Bank Charges
• Clerical
• Client Gifts
• Courier Service
• Fees (including commissions paid, escrow/loan fees, and referrals)
• Film/Processing (Really? Do agents still process film?  If you do, go here.)
•  Flowers/cards
• Keys/locksmith
• Lock Boxes
• Map Books
• Office Expense
• Open House
• Rent
• Sales Assistants
• Repairs
• Signs, Flags, Banners
• Food (For open houses, maybe?)
• Software
• Photocopying
• Printing
• Tools
• Stationery

Professionally, agents can deduct dues, Errors & Omissions insurance (E&O), legal fees, licenses, memberships, MLS fees, and publications.  In addition, seminars, continuing education, and resumes are also allowable. The equipment category includes briefcase, calculator, desk, camera, chair, filing cabinet, cell phone, tape recorder, telephone, answering service, long distance faxes, pay phone, and beeper/pager.

Tax time can be very tricky, so when in doubt consult a tax adviser. I save my receipts throughout the year in one big file, but another agent had a better idea than me.  At the end of each month, he filled out his spreadsheet and then stapled all the receipts by month.  When he turned in his paperwork to his tax guy, all the hard work was already done.

Maybe my New Year’s resolution should’ve been organizing my taxes better.