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What the Proposed Tax Reform Plan Means for Homeowners

Both the House and Senate are currently working on a “Tax Cuts and Job Acts” tax reform plan. The House and the Senate each have a version they are trying to enact and there are many similarities, but also some important differences in these proposals. If you are a homeowner, you should be aware of what is being proposed in these plans. Let’s start with the Senate’s version of tax reform as it relates to homeowners. The proposed legislation retains the current mortgage interest deduction level and doubles the standard deduction. It limits the Capital gains Exemption on the sale of a primary residence and would require a homeowner to live in the property 5 out of 8 years to qualify for the exemption. The current rules only require 2 out of 5 years. This would have a significant impact on anyone who would need to move within 5 years of a purchase. This proposal also would eliminate the interest deduction on home equity loans, all state and local taxes (including property taxes) and moving expenses (unless they are related to the military). The current version of the House’s plan has many things in common with the Senate’s plan: the same change in the Capital Gains Exemption from 2 out of 5 years to 5 out of 8 years, increases the standard deduction, eliminates the deduction for state and local taxes but keeps the property tax deduction limited to $10,000 and eliminates the deduction for moving expenses. In addition, this version seeks to cap the mortgage interest deduction at $500,000 for new mortgages, eliminates the mortgage interest deduction entirely...

Residential Enterprise Zone Approved for Freeport

For the past year and a half, we have been working on getting an extension of the existing enterprise zone in Freeport. The extension is for a residential enterprise zone in a designated area of Freeport which allows benefits for both builders and buyers of new construction. As most of you know that live in Freeport, there has not been any new “spec” residential construction in almost 10 years. As most of you also know, new construction is generally seen as a sign of growth and health in the overall economy of the area- something that has been missing in Freeport. The process was long and required the approval of many. The application process is very involved and dependent on the approval of the taxing bodies involved. Over the past year, presentations were made to the City Council, the County Board, the School Board, the Park District Board and the Board at Highland College. These boards along with Carroll & Jo Daviess counties had to vote to approve the expansion before we could send the application to the State of Illinois for approval. On October 11 we received the final approval from the State for our residential enterprise zone in Freeport! So what exactly does that mean for our area? The enterprise zone allows benefits to be offered to both the builders and the buyers of new homes in the designated area. The builders’ benefits include lower or waived permit fees and sales tax exemptions on certain building materials. The benefit to the home buyer is a property tax abatement on the majority of their property taxes through 2020....

Open House Do’s & Don’ts

Almost everyone has been to an open house at some time in their life. To some people, it is free entertainment on a Sunday afternoon. Other people want to see what the inside of their neighbor’s house looks like or the inside one of those beautiful houses that they can’t afford. And to some people who are looking to buy a home, it is an opportunity to go through several houses in one day and see what might work for them. As a Realtor, I know that everyone that comes to an open house isn’t looking to buy-and that’s ok. An open house is just that-open to the public- but there are still some rules of etiquette that open house attendees should keep in mind. When you are planning on going to see an open house I would ask you to keep two things in mind. First, the Realtor who is holding the open house is working. This is their job. They are taking their Sunday afternoon to market their client’s listing to the public and possibly find a buyer or client in the process. Usually, the Realtor will greet you and introduce himself or herself and ask you to sign in. We are responsible for our clients’ property during an open house and we need to know who is coming and going from the property for security reasons and to be able to tell our owner who came through their home that day. If you do not wish to be contacted, you can say that but please still sign in. If you don’t want to be contacted, make...

Outdoor Remodeling Projects That Pay Off

Now that fall is almost here you may be thinking of tackling some exterior remodeling jobs before winter. If you are thinking of selling your home in the future, which projects pay off the most to potential home buyers should be of interest. Certain remodeling projects can up the appeal of your property to potential buyers and some projects can give you a bigger return on your investment. What is the outdoor project that has both the biggest appeal to potential buyers and offers the best return on investment? According to a survey done by the National Association of Realtors, upgrading your landscape and/or using a professional lawn care service. It is estimated that you can recover 300% of the cost of a lawn service and up to 100% of upgrading your landscape when selling your home. Realtors know the value of curb appeal to potential buyers and often suggest sellers put some money in to upgrading their landscaping before putting their house on the market. The first impression a buyer gets from your home is the exterior. If it has no curb appeal, a buyer won’t be as anxious to see the interior. Next in line for value added for potential buyers is adding a new patio or deck. Potential buyers will see a new patio or deck as additional living space and added value for entertaining. This project not only increases the appeal to buyers, it also adds to the current homeowners’ satisfaction with their home and 51% of home owners say it has increased the enjoyment of their current home. The estimated return on a $10,000...

What You Should Know About Flood Insurance

What You Should Know About Flood Insurance by Anne Sadler If you were among the lucky ones not affected by the recent flooding then you probably can’t understand how devastating the aftermath of a flood can be on your property and your finances. If you were affected and don’t already have flood insurance, you need to know if you can qualify for flood insurance in the future and what it does and doesn’t cover. Did you know that no home is safe from the potential of a flood and that homeowner’s insurance typically doesn’t cover damage from flooding? If your home is located in a flood zone your mortgage holder will probably require you obtain flood insurance as a condition of your loan. If you don’t have a mortgage and you live in a flood zone you should still have flood insurance. You can only purchase flood insurance through an insurance agent, you can’t buy it directly from the government. To find out if you live in a qualifying area you can visit the FEMA (Federal Emergency Management Agency) website at: https://msc.fema.gov/portal/search type in your address and choose interactive map. You need to ask your insurance agent what is and is not covered by flood insurance. The contents of your home are not usually covered by flood insurance, you will need a separate policy to cover your belongings. There is also a 30 day waiting period between when you initially buy flood insurance and when it goes into effect. If you live in an area where flooding occurs you may be under the assumption that you can just get...

Things You Shouldn’t Overlook When House Hunting

Looking for a house can be an exciting time full of possibilities. You have your list of needs and wants and you are hoping to find your dream home that checks all the boxes. When you are touring potential options, whether at an open house or at a showing with your Realtor, don’t forget to look past the beautiful décor and focus on some important things that are often overlooked. When a home is on the market, the seller tries to present it in the best possible light. Hopefully, it has been well cleaned and decluttered; sometimes freshly painted and even professionally staged. It is easy to be distracted by the furniture and décor that probably won’t stay with the home anyway and forget to look at the “bones” of the property. If you are having a home inspection, many of these issues will probably be covered during the inspection. If they are visible at the time you make an offer, a home inspection is not the time to negotiate items you could already see were problems. These things should be addressed at the time you make the offer. If you aren’t having a home inspection, then you really need to pay attention to these areas before you make an offer. The first red flag during a home tour is heavy air freshener scent. Some people just like heavily scented home fragrances but it may be covering up an underlying problem. The two biggest offenders are stale cigarette smoke and pet odors. Both of which can be very hard to remove. If the problem is extensive you may have...

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