Archive for February, 2013

Protected: Real Estate Marketing Proposal

Written by Mark T Fiedler - The Mark and Sheila Team
February 16th, 2013

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Ask Mark & Sheila: How Will HP Layoffs Impact Local Housing Market?

Written by Mark T Fiedler - The Mark and Sheila Team
February 15th, 2013

Q: My house has been for sale for a couple months. I’m worried that with the layoff of 200 Hewlett Packard employees the local real estate market will be flooded with competition for me. Am I right to be concerned? Nicki in Northern Meadows.

A: First let us say that our hearts go out to the HP employees that have been laid off or who soon will be. Unfortunately, whenever a large employer has to adjust its workforce, people’s lives change, and sometimes their home will too.

We’ve had some experience with this situation in the past with Intel layoffs of up to 1,000 people. Here’s what happened then: Many of the families where someone was laid off were two income households. Though it may have been tough, there was still income to the family while the laid off party looked for another job locally. In a high percentage of cases, the family stayed in their home. Where a decision was made to sell and move away, it sometimes took a long time to decide, further stretching out the process and lessening the impact on the market.

Some employees were renters on 12 month leases, with others on a month to month basis. They were free to move if necessary when their lease was up. Perhaps a few properties went back on the rental market as a result.
In the case of HP, the layoffs may take until the end of October 2013, so the effect on the real estate market will be spread out. Some employees may move with their jobs, but that number has not been disclosed.

The HP facility in Rio Rancho opened in late 2009. Since home prices in the Rio Rancho area have steadily declined since then, employees who purchased a home then and who did not make a substantial down payment are likely to be upside down (owe more on their mortgage than their home is worth). This could result in some homes being marketed as short sales, some homes being lost to foreclosure, and others being rented to cover the mortgage while the owner moves on.

There are just over 600 single family homes for sale currently in Rio Rancho. Because there are multiple paths people will be taking in dealing with the layoff, and their timetables will de different, our best guess is that the number of homes on the market will potentially increase at most 5% at any one time. This is not a big change and should not impact your sale.

Ask Mark & Sheila: Obamacare Home Sale Tax

Written by Mark T Fiedler - The Mark and Sheila Team
February 15th, 2013

Q: My husband and I are considering selling our home in 2013. We are concerned about the 3.8% “home sales tax” which was buried in the ObamaCare bill. Our home is worth about $200,000 and we’ve lived in it for five years. A tax of $7600 would probably take almost half the profit from our sale. Is there a way to keep more of our profits? Marie in Rio Rancho

A: We have good news for you. You should get to keep all the profits from your home sales! There has been a lot of misinformation disseminated about this tax. Although we are not CPAís, the National Association of Realtors has produced several publications explaining it. We will use an example from their materials.

First, the tax is not on home sales, but on investment income – interest, dividends, rents (after expenses) and capital gains (less losses). There are also exclusions and income limits before the tax is applied. For instance: If your adjusted gross income as a couple is under $250,000 (or $200,000 for an individual) the tax would not apply. If you don’t make this much money, you can stop reading now. For the 3% of the population nationally that does earn this much, let’s go on. Say you sold your primary residence for $825,000. If you purchased it for $300,000 ten years ago your taxable capital gain after taking your $500,000 couple’s personal residence exclusion would be $25,000. ($825,000 – $300,000 = $525,000 – $500,000 exclusion = $25,000 capital gain.) The 3.8% tax would apply to this amount and you would pay $950. That’s not too bad after a $525,000 profit, right? These calculations get a little trickier when dealing with rental income from investment real estate, so we won’t go into that. This is why you have a CPA!

Bottom line, only a small percentage of people make enough income to even consider this tax law. Even those only need look at their investment income, not their earned income, or income from employment. Good luck on your home sale.

3606 Oakmount Dr in Rio Rancho, NM

Written by Mark T Fiedler - The Mark and Sheila Team
February 15th, 2013

3 Bedrooms, 2 Bathrooms, 1416 Square Feet, 2 Car Garage

Cute, Cute, Cute! That is what we hear every time we show this house. New Carpet was just installed, Feb ’13, New Pella Impervia Windows were installed just a few years ago. Large Spanish Porcelain Tile was added in the entry and around the fireplace hearth. Enjoy the large back yard from the shade of the covered patio. Both baths have been updated, with tile tub surrounds. This home has character to spare, plus updates for comfort and elegance. You will love the Southwestern touches throughout!