How a Coat of Paint Can Determine Your Home’s Sale Price

An inexpensive can of paint holds a lot more power than you think.

From the time of year to the neighborhood, a lot of factors come into play when you’re selling a home. But here’s one variable you might not have considered — color.

During open houses and online searches, the colors of your home are constantly working for or against you. That’s according to Zillow, a real estate and rental marketplace, which examined over 32,000 photos from sold homes around the country to see how certain paint colors impacted their average sale price compared to homes of similar value with white walls. Here’s what they found.

A Change of Trends

The colors that added value to your home just a year ago can now be hurting its sale price. In 2016, painting your kitchen a shade of yellow could help your home sell for $1,100 to $1,300 more. However, this year, a yellow kitchen could lower your home’s value by an estimated $820, according to Zillow.

Some color preferences remained consistent, with terracotta walls still devaluing a home. Just last year, homes with terracotta walls sold for $793 less than Zillow’s predicted selling price. This year, that number more than doubled, with homes with terracotta walls selling for $2,031 less.

The takeaway: If you’re looking to sell your home, you may want to avoid a terracotta shade. Also be cautious in general when choosing dark and bold colors.

Keep it Light

“Painting walls in fresh, natural-looking colors, particularly in shades of blue and pale gray, not only make a home feel larger but also are neutral enough to help future buyers envision themselves living in the space,” said Svenja Gudell, Zillow’s chief economist, in a statement.

In fact, homes with blue bathrooms, including lighter shades of blue or periwinkle, sold for $5,440 more than expected, Zillow found. Kitchens with light blue-gray walls sold for $1,809 more than expected, and walls with cool, natural tones like soft oatmeal and pale gray also had top-performing listings.

Light, simple walls performed best among sellers, however, walls with no color had the most negative impact on sales price. Homes with white bathrooms or no paint color, for instance, sold for an average of $4,035 less than similar homes, Zillow noted.

Head Outside

As if it isn’t stressful enough worrying about your rooms’ colors, your home’s exterior color can also impact its sale price.

To that end, buyers typically enjoyed a pop of color, with homes featuring dark navy blue or slate gray front doors selling for $1,514 more. Buyers also responded positively to trendy mixes of light gray and beige, or “greige,” exteriors versus basic tan stucco and medium-brown shades.

If you’re trying to sell your home, a can of paint can be a wise investment — so long as you choose the right color. Keep these findings in mind before you head to the paint store. Likewise, just as color impacts sale price, know that selling your home can impact your credit. Don’t forget to check your credit report card before you start picking out paint chips.

Image: andresr

The post How a Coat of Paint Can Determine Your Home’s Sale Price appeared first on Credit.com.

8 Tax Breaks Most Homeowners Don’t Realize They Can Get

Whether you're a new homeowner or you've been in your house for years, you may want to find out if you qualify for these tax deductions for 2016.

It’s tax season again, and if you bought a new home in 2016, you want to be sure you don’t miss out on one of the numerous tax deductions you could be eligible for. Even if you aren’t a new homeowner, there could be some deductions you might not be aware of that can help you maximize your tax refund.

We spoke with Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting. He reviewed some of the tax deductions home owners should be aware of as they begin working on their tax returns.

1. Mortgage Interest

“In 2016, the IRS acquiesced in the Ninth Circuit Voss case, which changes the way the mortgage interest deduction is calculated,” Luscombe said. “The IRS now says it is allowed on a per taxpayer rather than a per residence basis.”

That means that, if you own a home with an unrelated taxpayer, you are now each entitled to a mortgage interest deduction of up to $1 million of mortgage principal for funds used to purchase, construct or improve a home and an additional $100,000 of principal for a loan secured by the home but where the funds are used for other purposes.

“This also creates another marriage penalty in the Tax Code since, if the two taxpayers get married, then they are just entitled to a mortgage interest deduction up to the $1.1 million limit,” Luscombe added.

2. Mortgage Insurance Premiums & Debt Forgiveness

The deduction for mortgage insurance premiums expired at the end of 2016 but is still available for 2016 tax returns. Likewise, the exclusion for mortgage debt forgiveness also expired at the end of 2016 but is still available for 2016 tax returns.

“In order to try to better determine if taxpayers are claiming the proper amount of mortgage interest deduction, mortgage lenders are now required to report on Form 1098 not only the mortgage interest received for the year but also now the principal amount of the mortgage, the date the mortgage originated, and the address of the property,” Luscombe said. So be sure to download or request a copy of your Form 1098 if you haven’t already received one in the mail.

3. Energy-Related Tax Deductions

There are two energy-related tax breaks that homeowners can qualify for.

  • The nonbusiness energy property credit expired at the end of 2016 but is available for 2016 tax returns.  This credit is a $500 lifetime credit for improvements such as energy-efficient windows, doors, insulation and roofs, as well as certain home systems.
  • There is also a residential energy efficient property credit for items such as solar and wind installations that currently extends through 2021 but is subject to phase-downs over its final years.

4. Capital Gains Exclusion

If you’ve owned and lived in your principal residence for at least two of the last five years, then the exclusion for gain on its sale remains available. The exclusion is up to $250,000 of gain for a single taxpayer and up to $500,000 of gain for joint filers, Luscombe said.

5. Inheritance of Property

When you inherit an asset, the cost basis of the asset is “stepped up to value” on the date of death, which helps you avoid capital gains taxes on that property. Here’s how it works: Let’s say your grandfather just died, leaving a home to you and your siblings. The home is valued at $500,000 at the time of your grandfather’s death, but the original price paid for the home, the basis, when he bought it 30 years ago was $100,000. While you and your siblings may have to pay estate or inheritance taxes depending on the size of the estate, you won’t have to pay capital gains taxes on $400,000 in gains on the house.

“Stepped-up basis on death remains available for a principal residence, as well as other taxpayer assets on death,” Luscombe said. “However, with discussions about eliminating the estate tax and shifting to carryover basis, it is not clear how much longer current law will remain in effect. Stepped-up basis means that the inheritor of the residence who then sells the residence would likely have minimal taxable gain because their basis would be stepped-up to the date of death value of the residence.”

6. Property Taxes

Currently, real estate taxes with respect to a residence may also be deducted, although tax reform proposals being discussed in Congress would eliminate that deduction.

7. Home Office Expenses

If you use part of your home for business operations, you may be able to deduct some of your business expenses. The home office deduction is available for homeowners and renters, and applies to all types of homes, according to the Internal Revenue Service, which provides details and a full explanation of the requirements to claim this deduction on its website.

8. Moving Expenses

If you moved because you changed jobs or your business relocated, or if you started a new job or business, you may be eligible to deduct your moving expenses. The IRS explains that you must meet the following criteria in order to qualify.

  • Your move closely relates to the start of work
  • You meet the distance test
  • You meet the time test

Again, you can find a full explanation of these criteria on the IRS website. And for more answers to all those question bound to pop up between now and April 15, check out our tax learning center.

Image: Portra

The post 8 Tax Breaks Most Homeowners Don’t Realize They Can Get appeared first on Credit.com.

10 States With the Happiest Homeowners

happiesthomeowners

Image: Justin Horrocks

The post 10 States With the Happiest Homeowners appeared first on Credit.com.