Karen Monshaugen’s Blog

Let’s look at several interest deductions that can save you money while preparing your 2007 income tax return:

1. If you are unable — or unwilling — to put down a lot of money and want a larger loan, there are two things that lenders can do.  They can require that you put down only 5 or 10 percent and give you two loans: one for 80 percent and a second for the 10 or 15 percent difference.

Or, they can require that you obtain private mortgage insurance.  This is coverage — which the homeowner pays for — to compensate the lender should there be a shortfall between the amount of the money received at a foreclosure sale and the loan balance.  There is also mortgage insurance provided by the Federal Housing Administration (FHA); the Veteran’s Administration (VA), called a funding fee; and the Rural Housing Service’s guarantee fee.

If you entered into a transaction after Jan. 1, 2007 that included some form of mortgage insurance, you may have the right to deduct these insurance payments like home mortgage interest.  However, there are some restrictions.  First, the loan must be secured either by your principal residence or a vacation home that is not rented out for more than 14 days a year.

The insurance contract must have been issued after Jan. 1, 2007.  The deduction is reduced by 10 percent for each $1,000 that the adjusted gross income (AGI) exceeds $100,000 (or $50,000 if you file an individual tax return).  If your AGI is more than $109,000 ($54,500 if filing separately), you cannot take advantage of this deduction.

2. Mortgage interest: Interest on mortgage loans on a first or second home is fully deductible, subject to the following limitations: acquisition loans up to $1 million, and home-equity loans up to $100,000.  If you are married, but file separately, the limits are split in half.

To qualify for an “acquisition loan,” you must buy, construct or substantially improve your home.  If you refinance for more than the outstanding indebtedness, the excess amount does not qualify as an acquisition loan unless you use all of the excess to improve your home or treat it as a home-equity loan.

The Internal Revenue Service has ruled that one does not have to take out a separate home-equity loan to qualify for this aspect of the tax deduction.  The remaining interest is treated as personal interest and is not deductible.

3. Seller-paid points: Here’s an area often overlooked by buyers.  Points paid to a mortgage lender will reduce interest rates.  Each point is 1 percent of the loan.  And typically, for every point that you pay a lender, the interest rate will be reduced by one-eighth of a percent.

When negotiating a real estate sales contract, buyers will often ask the seller to make certain financial concessions so that a deal can be reached.  Such concessions include (1) the seller paying some or all of the buyer’s closing costs, (2) the seller giving a cash credit at settlement, or (3) the seller paying some or all of the buyer’s points.

The IRS has ruled that points paid by a seller can be deducted by the purchaser; you should be able to fully deduct the entire payment from your income tax that you file for this year.

There is one drawback to deducting seller-paid points: The amount of the points paid by the seller will be used to reduce the purchaser’s tax basis — the number that will eventually be used to calculate whether a sale results in taxable capital gains.  If you pay $450,000 for the property and deduct $7,200 of seller-paid points, your tax basis in the property becomes $442,800 ($450,000 minus $7,200).

Under current tax law, taxpayers who live in their house for at least two years can fully exclude from taxable income up to $250,000 of gain ($500,000 for married couples filing a joint return) on the sale of their principal residence.  Thus, the lower tax basis may not be significant — unless the taxpayer makes a profit that exceeds these amounts.

Two useful IRS documents are Publication 936, entitled “Home Mortgage Interest Deductions,” and Publication 910, “IRS Guide to Free Tax Service.”

By: Benny L. Kass, www.inman.com

Students in grades nine through 12 each autographed a scale of the four-part Dragon, the school’s mascot, that will be auctioned off at the event.
The “Gala in the Garden” begins at 7 p.m. at The Woodlands Waterway Marriott Hotel and Convention Center, located at 1601 Lake Robbins Drive in The Woodlands.
New to the gala this year is an Online Auction that will open Wednesday and end at midnight on March 5. Among the biggest items kicking off the online auction are eight tickets and a limo ride to the Hannah Montana concert as well as spa packages, tickets to sporting events, electronics and much more.
The online gala auction can be accessed at www.johncoopergala.cmarket.com.
Individual tickets for “Gala in the Garden” are $250 and table sponsorships are available for $3,000-$10,000.
For more information , contact the school’s development office at (281) 367-0900, ext. 441 or e-mail development@johncooper.org.

The Lake Conroe, Conroe, Willis, and The Woodlands areas are a hot place for investment opportunities. With prices around the United Sates falling Montgomery County Texas is statistically right on tract.

Lake Conroe Texas is a fast growing community build around a 22,000-acre lake. New developments are spring up everywhere.

The Woodlands Texas is a fast growing community build around business and lifestyle.

The first step to finding an investment flip house is finding a neighborhood with opportunity.

Step One.

Neighborhood Search

1.      Is the neighborhood close to your home, work, business partner, or relative?

2.      What are the selling price for homes in the neighborhood?

3.      What is the neighborhood turnover (how fast are the homes selling)?

4.      How old are the homes in the neighborhood?

5.      What is the neighborhoods reputation?

If you are an out of state investor or even a local resident your best tool is going to be an experienced and knowledgeable Realtor that specialized in the area. They will be able to help you find the right house with the most potential.

Stay tuned for the next step!

For more information about the North Houston area:  Lake Conroe, Conroe, Willis, The Woodlands, and Montgomery TX, please visit www.LakeConroeFineLiving.com or call 935-525-3222 to speak to Tamarah Courtright  for all of your real estate investment needs!

WISD approves new 2008-09 attendance zones By Kassia Micek, Courier staff02/14/2008 WILLIS - Several Willis Independent School District students will go to different schools starting in August. The WISD school board decided in a 4-3 vote Wednesday to approve new elementary school attendance zones effective in August when a fifth elementary school (Meador) opens to alleviate growth in the district.
However, the three board members who voted against the new zones - Rebecca Broussard, Eddie Ruth Lagway and Christen Arnold - did not agree with WISD Superintendent Brian Zemlicka’s recommendation to the board.
“I appreciate the hard work that has gone into the zoning … working to get the best zone for our district,” Arnold said before the vote. “I’m still concerned with the equability between the Anglo and Hispanic students at A.R. Turner.
“I just wish there would have been a zone for us to choose where the numbers would have been more equal.”
Under the newly approved zones, Turner will have 353 white students, 80 Hispanic students, 47 black students, 12 Asian students and four Native American students. However, bilingual Hispanic students will be bused to C.C. Hardy Elementary, which is one of three schools to have a bilingual program. The two others are Cannan and Meador elementary schools. Parmley Elementary bilingual students will be bused to Cannan.
With the new elementary attendance zones, most of those living south of FM 830 and south of FM 2432 east of I-45 are zoned for Turner, while most residents between FM 830 and FM 1097 west and a portion of residents east of Texas 75 and south of downtown are zoned for Meador.
Cannan will mostly school students living south of FM 1097 east and north of FM 2432. Most students immediately east and north of downtown, north of FM 1097 east and north of Calvary Road are zoned for Parmley.
C.C. Hardy will be zoned to residents mostly between FM 1097 west and Calvary Road, south of Coal Town Road and some residents west of Rogers Road.
The district will have two public information meetings on the new zones from 5:30-7:30 p.m. Feb. 27 at Brabham Middle School, located at 10000 FM 830 W. in Willis, and Feb. 28 at Lynn Lucas Middle School, located at 1304 Campbell St. in Willis.
To view the 2008-09 elementary school attendance zones, visit www.willisisd.org.
Kassia Micek can be reached at kmicek@hcnonline.com.
©Houston Community Newspapers Online 2008  

* Copyright Houston Business Journal - by Danny Signorelli

Valuations are on the rise for property on Houston’s most popular recreation lake — Lake Conroe, a 21,000-acre man-made lake located 45 miles north of Houston.

Supply and demand have long been the underlying factors in establishing the basis of value for any product bought or sold. In the real estate market, supply of waterfront property on Lake Conroe is running scarce, and demand has never been higher.

Constructed in 1973, the lake has long been known as Houston’s playground. For water sports, fishing and lakefront living at a slower pace, Lake Conroe has provided an escape from big city life.

Now, almost 30 years later, investors are paying a premium for waterfront property. Many families are acquiring homesites and plan to build in the future when they are financially prepared.

 Hyper-appreciation       During the early 1970s, people paid as little as $7,500 for a waterfront homesite. Today, the average waterfront lot sells for $100,000 to $200,000 and continues on up to the $500,000s.

Although there has been a strong appreciation in value over the past 30 years, hyper-appreciation on waterfront valuations is still not expected for several years.

When the few remaining waterfront homesites on the lake are gone, those desiring a new home on the water will have to purchase 30-year-old homes in the $400,000 range as teardowns. At this time, $100,000 homesites will reach the hyper-appreciation stage, and it will cost an estimated $1 million for land and home to live on Lake Conroe.

Diminishing opportunities         Lake Conroe is entering a mature stage in its life that has been anticipated by developers and investors for decades. The writing is on the wall. The first wave of baby boomers is moving to the lake. This migration will also be further enhanced by the expanded highway infrastructure of Interstate 45 and the growth in the north Houston area, including The Woodlands. It is only a matter of time before the land will be totally absorbed by high-income executives and retirees.

The short supply of homesites is due to the lack of raw land remaining to be developed. An estimated 35 percent of the shoreline along Lake Conroe is occupied by the Sam Houston National Forest, and the remaining two-thirds is almost completely developed, leaving less than a handful of small acreage parcels.

Large lake communities such as Bentwater, Walden, Del Lago and April Sound absorbed much of the available land and, of recent, smaller, private communities have been developed, such as Pebble Glen and Falcon Sound. With the shortage of new developments coming on line, the current supply of waterfront homesites will be absorbed over the next few years.

The increase in land values and in the number of high-end homes being built is good news for Montgomery County, which has benefited by having a growing tax base. It is not such good news, however, for builders and developers looking for waterfront sites or for prospective buyers who are faced with diminishing opportunities for waterfront property on Lake Conroe at affordable prices.

REAL ESTATE

Where Housing Is Headed

A look at fundamental indicators in 28 major real-estate markets. (See related article)   — Compiled by James R. Hagerty, 01/24/08 Overall Strength of Each Metro Area      Strong: Good job-growth prospects and moderate housing inventory in relation to sales  Moderate: Less buoyant job growth and/or high inventories  Weak: High inventories and job growth prospects no better than average

Metro area   ↓	Overall Strength of Metro Area	Change in housing inventory*	Months supply**	Price change***	Employment outlook****	Loan payments overdue*****
Atlanta	Moderate	13%	11	-.7%	Strong	5.21%
Boston	Moderate	-8.3%	5	-3.6%	Weak	3.53%
Charlotte, N.C.	Moderate	19%	7.8	4.3%	Strong	3.69%
Chicago	Weak	3.3%	10	-3.2%	Weak	3.47%
Dallas	Strong	0%	5.9	-.1%	Strong	4.53%
Denver	Moderate	-3.8%	5.7	-1.8%	Average	3.71%
Detroit	Weak	12%	19	-11.2%	Very Weak	5.3%
Houston	Strong	12%	6	N/A	Strong	4.60%
Jacksonville, Fla.	Weak	11%	12	N/A	Average	4.49%
Las Vegas	Weak	21%	18	-10.7%	Average	6.38%
Los Angeles	Weak	33%	N/A	-8.8%	Weak	4.06%
Miami-Ft. Laud.	Weak	20%	29	-12.4%	Average	7.15%
Mpls-St. Paul	Moderate	17%	8	-5.5%	Average	3.57%
Nashville	Moderate	26%	5.9	N/A	Average	3.62%
New York	Moderate	6.2%	N/A	-4.1%	Very Weak	3.71%
Orange County, Calif.	Weak	28%	9.2	N/A	Weak	3.26%
Orlando	Moderate	24%	17.5	N/A	Strong	5.44%
Philadelphia	Weak	3.8%	8.7	N/A	Weak	3.24%
Phoenix	Weak	23%	12	-10.6%	Weak	4.29%
Portland, Ore.	Moderate	36%	5.7	1.9%	Average	2.33%
Raleigh-Durham, N.C.	Moderate	24%	5.6	N/A	N/A	N/A
Sacramento	Weak	26%	10	N/A	Average	4.94%
San Diego	Weak	20%	N/A	-11.1%	Weak	3.99%
San Francisco	Moderate	42%	6.6	-6.2%	Average	2.91%
Seattle	Moderate	50%	4.9	3.3%	Average	2.13%
St. Louis	Weak	17%	7.5	N/A	Weak	3.63%
Tampa	Weak	13%	16	-11.8%	Average	5.31%
Washington, D.C.	Moderate	26%	7.5	-7%	Average	3.91%

* Change from a year ago in the number of single-family homes, condos, townhouses and co-ops offered in multiple-listing services at the end of December 2007.

** Number of months that homes listed at year end would last at the average 2007 sales rate. Listings normally decline for seasonal reasons in December and rebound in January.

*** Average price level in October compared with a year earlier based on S&P/Case-Shiller index.

**** Job growth projections by Moody’s Economy.com for the two years ending Dec. 31, 2009. Characterization is in relation to the growth consistent with a stable national unemployment rate.

***** Percentage of mortgage loans 30 days or more delinquent in latest quarter, based on data from Equifax and Moody’s Economy.com. U.S. average is 3.98%.

Sources for inventory: Otteau Valuation Group, ZipRealty, Smart Numbers, Prudential California Realty, MLS Property Information Network, MLS of Northern Illinois, Real Estate One, Esslinger-Wooten-Maxwell, Corcoran Group, Consolidated MLS, Prudential Fox & Roach, Arizona Regional MLS, Trendgraphix, Northwest MLS, RE/MAX Real Estate Services, Aliso Viejo, Calif. and local Realtor associations

Write to the Online Journal’s editors at newseditors@wsj.com

Coypright Wall Street Journal 2008

For more information about the North Houston area:  Lake Conroe, Conroe, Willis, The Woodlands, and Montgomery TX, please visit www.LakeConroeFineLiving.com or call 935-525-3220 for all of your real estate needs!

Repricing often caused by unrealistic expectations, not defects

Monday, January 21, 2008

By Dian Hymer
Inman News

Several years ago, a home listed for sale developed a stigma if it didn’t sell within a month or two. Today, many sellers have homes listed that have been on the market for six months or longer. In fact, it’s so commonplace for it to take a significant time to sell a house that it is no longer a disgrace if a listing doesn’t sell right away.

It’s an irony of the current market that with all the homes offered for sale, many serious buyers can’t find a home to buy. There are often certain types of homes, in certain areas, that just aren’t on the market. These are usually prime properties in excellent condition that have broad-based appeal. When these listings come on the market, they are usually snapped up quickly, despite the otherwise slow housing market.

 Many buyers are sitting on the fence at this point, watching the market and waiting for a better time to buy. It’s impossible to time the housing market, so you won’t know precisely when the market will next correct until that correction has already occurred. A market correction can be verified only through hindsight.  

Although most buyers feel more comfortable buying in a hot market — even though it may mean paying more — there are some buyers who see a slow market as a good buying opportunity. If you are one of these buyers and you’re having difficulty finding a home to buy, consider the following options.

HOUSE HUNTING TIP: Get to know the inventory of homes available in your target area. Some of these listings will never work for you, either because they aren’t large enough or because they have defects you might not be able to live with, like a lot of stairs to the front door. You can drop these listings from your radar.

Find an agent who specializes locally and who will keep you well informed on local market conditions. Ask your agent to sign you up for a listing alert program that will send you information directly from the multiple listing service when new listings come on the market or when the status of a listing changes.

Of particular interest are listings that are back on the market, and ones that have had a price reduction. If a house that’s back on the market is one you were interested in, find out why the deal fell apart. In the past, it was commonly assumed that if a transaction failed it was due to inspection-related issues, not financing. Today, we’re seeing more transactions fall apart because the buyers were unable to secure financing. A seller who just lost a deal because the buyer couldn’t perform could be receptive to a reasonable offer from a better-qualified buyer.

Don’t assume there’s something wrong with the house if it’s back on the market, or if it has been unsold and on the market for a long time. In a changing market, it’s often difficult to select a list price that will bring about a speedy sale. Keep an open mind about listings that have had price reductions. These could have been mispriced to begin with. If the sellers are motivated, they will reduce the price until it is in line with the market.

Some unsold listings haven’t moved because they need too much work. In today’s market, the most salable listings are those that are in move-in condition. Properties that need work should be priced to account for the work that will need to be done.

THE CLOSING: Fixer homes may be more difficult to sell in the current market. But, at the right price, a buyer with vision will step up to the plate

.Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.

*Copyright 2008 Dian Hymer

For more information about the North Houston area:  Lake Conroe, Conroe, Willis, The Woodlands, and Montgomery TX, please visit www.LakeConroeFineLiving.com or call 935-525-3220 for all of your real estate needs!

Rates as of January 16, 2008

Every mortgage company is not alike. Ask your personal Realtor whom he or she may recommend! Experience Realtors always have a tight network of professional they know and trust.  If you or anyone you may know is looking to buy, sell, or invest in real estate in the Lake Conroe, Conroe, Montgomery, Willis, Magnolia, and/or The Woodlands we can assist you! Please visit www.LakeConroeFineLiving.com or call 936-525-3220 for all of your real estate needs!