If you thought you no longer qualified for tax savings on improvements done in 2011 or 2012, you’ve had a reprieve. The American Taxpayer Relief Act of 2012 extended residential energy tax credits for existing energy efficient homes retroactively, meaning that certain improvements made on your home since the former expiration date of 2011 now can be applied.

In fact, the extension actually gives you an extra year if you are still working on a project or would like to start one, since the wording has been changed requiring that the improvement must be started by December, 31, 2013 to qualify.  Not all energy-efficient measures and appliances are approved, so if you installed or are thinking of installing a biomass stove, HVAC system, insulation or roofing, non-solar water heater, or windows, doors, and skylights in your home in 2011, 2012, or 2013, you should take a more detailed look at the credit outlined in the Taxpayer Relief Act.

Residential tax credit information is found on the Internal Revenue Service form 5695 relating to items that qualify for a 10% credit of up to a lifetime limit of $500. Please note that window replacement in your home can only represent up to $200 of that credit. If you purchase or purchased a geothermal heat pump, solar energy system, wind energy system, or fuel cell, you may be entitled to credits of up to 30% of their cost until 2016, as well.

In addition, the American Taxpayer Relief Act of 2012 also extended contractors of non-manufactured energy efficient new homes a $2,000 credit and a $1,000 credit for manufactured energy efficient new homes, providing incentive for more energy-efficient homes to continue to be built.

As always, please consult with a qualified tax consultant for details on how these extension can affect you and your home or visit energy.gov for updates.

If you have been considering a short sale for your home, you’ll be excited to know that the Mortgage Forgiveness Debt Relief Act of 2007 was extended through the end of 2013.

The Mortgage Forgiveness Debt Relief Act extends mortgage cancellation relief for home owners and sellers through disallowing taxes on the portion of their mortgage debt forgiven by their lender.

As short sales have represented a large sector in the housing market of late, the extension is seen by many as key to a continued recovering housing market. According to the U.S. Foreclosure & Short Sales Report™ complied by RealtyTrac, the last quarter of 2012, showed short sales as representing 19 percent of residential home sales in the United States. See the full report by clicking here.

According to RealtyTrac Vice President Daren Blomquist, the increase in short sales and distressed properties showed that “both lenders and at-risk homeowners are realizing that short sales are often a better alternative than foreclosure.” Blomquist went on to explain that had the Mortgage Forgiveness Debt Relief Act expired, homeowners would have seen their income tax increase since the unpaid loan balance created by the short sale would have been considered taxable income for many home sellers.

With this recent extension, if you are a home owner interested in a short sale for your home, you now have until December 31, 2013 to benefit from the reduced taxes provided by Mortgage Forgiveness Debt Relief Act.

On Saturday, President Obama and House Speaker John Boehner spoke on the phone as we head into the fiscal cliff deadline in January of tax increases. Obama and Boehner are considered key players in the negotiations. Neither the White House nor congressional leaders would comment on the conversation or the negotiations. It is said that the combination of $500 billion in tax increases and spending cuts now since January could tip the country back into recession.

Republicans are trying to get Democrats to be persuaded into larger cuts on entitlements. Democrats would like to raise taxes for the top income earners. The White House wants to allow the Bush-era tax cuts to expire, but Republicans don’t.

Without a follow up meeting scheduled, financial markets have been uneasy as well. Some say though that the elements of the deal are at hand.

To see the full article click HERE

2012 has seen consistently low mortgage rates, but according to the Primary Mortgage Market Survey® (PMMS®) recently released, those rates have gotten even lower this week!

With the 30 year fixed averaging at 3.31% and the 15 year fixed averaging at 2.63%, qualifying home buyers have increased opportunity to purchase the home of their dreams, possibly even your home. These rate averages include points (.7 on a 30 year loan and .6 on a 15 year loan), but are still lower than any other week compiled this year by Freddie Mac. Lower rates mean that a home buyer can buy the same amount of home for a smaller monthly mortgage payment and/or possibly qualify for more home than previously expected.

According to Frank Nothaft, vice president and chief economist at Freddie Mac,”Fixed mortgage rates continued to ease somewhat this week to record lows and should help the ongoing housing recovery.” Nothaft continued, “Already, new construction on homes was up 3.6 percent in October to the strongest pace since July 2008. In November, homebuilder confidence rose for the sixth straight month to its highest reading since June 2006 according to the NAHB/Wells Fargo Housing Market Index. And existing home sales increased 2.1 percent in October to an annualized pace of 4.79 million, exceeding the market consensus forecast.”

When home buyers have more buying capacity and inventory is low due to increased home sales, home sellers are likely to see increases in home prices and multiple offers. If you are interested in selling your home, these trends make it worth your while to contact a real estate professional to learn specifics on selling your home. Read more about mortgage rate trends by clicking here.

Where can I find out about energy-related grants or tax credits for my home or business?

The U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy is a source of information on financial assistance for the purchase of renewable energy equipment and energy-efficient appliances.

Click HERE or Found at:

http://www1.eere.energy.gov/financing/index.html

Energy Star’s website lists credits you can obtain:

Click HERE or Found at:

http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

What does Energy Star mean?

ENERGY STAR is a voluntary labeling program brought about by the partnership of the US Environmental Protection Agency (EPA) and the US Department of Energy. The program is designed to identify and promote energy-efficient products to reduce greenhouse gas emissions. The ENERGY STAR label is now on major appliances, office equipment, lighting, home electronics, and more. EPA has also extended the label to cover new homes and commercial and industrial buildings.

Results are already adding up. Americans, with the help of ENERGY STAR, saved enough energy in 2010 alone to avoid greenhouse gas emissions equivalent to those from 33 million cars — all while saving nearly $18 billion on their utility bills.

Click HERE to be re-directed to Energy Star’s website

http://www.energystar.gov/index.cfm?c=about.ab_history

Ways to Save on Your Energy Bill:

• Fresh Filter: Most central heating and air conditioning units have a filter at the air intake that needs to be changed or cleaned every 1-3 months.
o When the filter gets dirty or dusty, it’s harder for your system to pull air through which means your system is working harder.
o A dirty air filter makes your fan work harder
o Changing the filter will also help with anyone family member who suffers from allergies.
o You can even choose an air filter that’s designed to trap allergens
o You can see immediate, short-term results savings when you replace your air filter

• Regulating the temperature of your thermostat: Lower the temperature when you are not at home and/or at night
o Better yet, buy an energy-efficient programmable thermostat to program it to automatically shut down heating or air conditioning when you leave the house and to turn it back on 20-30 minutes before you return.
o Program the thermostat so you reduce the temperature 30-60 minutes after you normally go to bed since you don’t need as much heating under the bed covers
o For every degree you lower your thermostat, you can save approximately 3 percent on your heating bill. Generally, lowering your thermostat by five degrees will make an impact on your energy bill.

Kitchen—

• Refrigerator: In a typical house, the fridge is the single biggest energy-consuming appliance in the whole house, using up to 25 percent of the energy in most homes.
o Leaks in door seals and using the anti-sweat setting on the fridge will use more energy
• Anti-Sweat Heater: Used to prevent condensation and frost, but is not needed in CA’s climate
o Make sure air can circulate around the condenser coils
o Once or twice a year, unplug the fridge and clean the coils, which are either on the back or front, behind a kick plate. You can just use warm, soapy water if they’re greasy or grimy.
o Cleaning the coils enables the fridge to work more efficiently
o Chest freezers use 9-22% less energy than upright models since they allow less air in through the door. Side by side fridges are the least efficient
o If your fridge is more than 15 years old, buy an Energy Star one, since it’s probably wasting more energy than it’s using.
o When designing a kitchen, keep fridge away from stove or dishwasher and out of direct sunlight and other heat sources
o Remove rarely used extra fridges. If a second fridge is used occasionally, empty and unplug the refrigerator (leaving the door slightly open to prevent mold) until it’s being used

• Water Heater: The water heater is the second most largest energy user in most homes.
o A water heater purchased before 1994 is probably no longer cost effective. Modern water heaters are more efficient and provide better insulation, so replacing it can dramatically help you save money.
o If your water heater is warm to the touch, wrapping it can save 10% of water heating costs. Newer gas units have built-in insulation and can save significant energy.
o Use the VACATION or pilot setting when on vacation
o For electric water heaters, install a timer to turn off the heater at night.
o Water heaters should be strapped to a wall stud for earthquakes.

Other Options: Tankless Water Heaters (also known as on-demand)—
• Tankless (Demand) water heaters provide hot water only as it’s needed. Tankless water heaters don’t produce standby energy to heat water.

• Demand water heaters can be 24%–34% more energy efficient than conventional storage tank water heaters. Even greater energy savings of 27%–50% can be achieved if you install a demand water heater at each hot water outlet.

Laundry: Ways to Save

• Washer:
o Wash full loads in cold water with shortest cycles
o An ENERGY STAR qualified appliance uses 14 gallons of water per load, compared to a standard machine which uses 27 gallons of water. Over a lifetime, that’s 43,000 gallons of water saved.
o Pre-soak heavily soiled garments rather than using heavy-duty setting

• Dryer: Typically the second highest energy appliance in the house:
o Energy Star does not label clothes dryers since most dryers use similar amounts of energy
o The most efficient way to dry clothes is to hang dry them on a drying rack or a clothesline outside. We get so much sunshine in California, why not use it to our advantage?
o On your dryer, use Moisture Sensor which shuts off the dryer the moment clothes are dry. This saves on your utility bill and prolongs the quality of your clothes.
o If your dryer has spin options, chose a high spin speed to reduce the amount of remaining moisture
o Make sure you clean the lint filter before using the dryer every time. This helps the dryer efficiently dry, as much as 30%, and prevents a fire hazard.
o Keep your dryer’s exhaust clean. A clogged exhaust lengthens drying time and increases the energy.

The real estate industry, like most others, uses jargon that is sometimes difficult to understand. Consider this a primer to learning a few of those terms!  Below you have a step by step definition that will make you sound “in the know” when buying or selling a home.

“CLOSING” - Closing refers to the final steps in securing a home purchase.  When a property is sold, it is referred to as “closed.”

“OFFER” - Buyers “offer” a contracted rate on a home for sale. A seller may receive many “offers” and is not required to accept any.  This is why when a home buyer finds their dream home, it is important to get the “offer” in quickly.  Full price “offers” are looked upon favorably, but even “offers” of up to ten percent beneath the asking price may be an acceptable practice, too.   There are several variables to discuss with a knowledgeable real estate agent before submitting a low “offer,” however, so do your homework.  Comparing a home to others in the local market and recognizing the length other homes have been listed are helpful to consider prior to submitting or accepting any “offer” in real estate.

“DEPOSIT” - The “deposit” or earnest money pledged with an “offer,” illustrates a commitment from the buyer to the seller.  Generally the “deposit” amount is determined based on a percent of the home’s purchase price and applies to the final purchase price of the home for sale. This deposit is held “in trust” until the purchase is completed. As a potential home buyer, your “deposit” will only be accepted if your “offer” is accepted. Occasionally a home buyer decides not to move forward with the home sale which can result in the loss of the “deposit.”

“CONTINGENCIES” - Contingencies are requirements outlined in the contract that must be fulfilled prior to “closing,” often relating to financing or the house inspection. Contingencies generally last for 30 days, although the time frame depends greatly on market conditions.

“CONTRACT” - When a home seller accepts an “offer,”  the “contract” is then created.  A legal and binding document which guarantees the buyer will purchase the property when all contingencies are met. Transaction details are included in the contract, such as the property selling price and description, any important dates and contingency clauses.

“CLOSING STATEMENT” - Required by the Department of Housing and Urban Development to ensure accountability of all finances relating to the sale and purchase of a home.  Real estate commission,  escrow  securities and deposits, and any other fees must be outlined in this document. The buyer and seller will each receive a copy of the “Closing Statement” per the Real Estate Settlement Procedures Act prior to “closing.”

“CLOSING COSTS” - These are the actual costs of “closing” and include securing title, loans, appraisals, credit reports, inspections,brokers, taxes and document preparation.

Hopefully this tutorial has helped you feel a little more familiar with real estate terms, so that whether you are buying or selling a home, you can feel a bit more at ease.

Tonight Obama gave the State of the Union address and remarked upon issues within the housing and mortgage markets. The President aims to expand last year’s Home Affordable Refinance Program so that homeowners who are current on their loans can refinance at the current historically low interest rates and therefore save on their monthly mortgage payments. (Mortgage rates dropped to another historic low again this week– currently 3.88% on a 30 year loan.)

Additionally, the President wants to create a new unit within his Financial Fraud Enforcement Task Force to probe misconduct and deceptive practices committed by mortgage lenders.