DEAR BOB: I love your column and hope you can help us getour home sold. It has been listed for sale more than five months. The localmarket is very slow now. The listing agent has the house on her Web site andoccasionally holds a weekend open house. What can we do to get our house soldso we can buy another home near my husband’s new job site? –Kendra S.
DEAR KENDRA: The primary reason a house doesn’t sell is itis overpriced. If your home has been listed for sale more than five months,something is seriously wrong.
Purchase Bob Bruss reports online.
Ask the listing agent to prepare a new CMA (comparativemarket analysis). This form shows recent sales prices of similar nearby homes,the asking prices of competitive neighborhood homes (your competition), and theasking prices of recently expired comparable listings (usually overpriced).
The CMA should also show your listing agent’s recommendedasking price. If your home is overpriced, it’s time to face reality and reducethe asking price.
Equally important, be certain your home is correctly listedin the local MLS (multiple listing service) and on the local MLS Web site, thelisting agent’s most powerful marketing tool. Also, check your home’s listingat www.Realtor.com where more than 75percent of today’s home buyers begin their search.
In addition, ask the listing agent to explain what she hasdone — and is doing — to properly market your home in a slow market.How often does she advertise your home in the newspapers and in local homesales magazines? She should be holding a well-advertised open house at leastonce a month.
In addition, she should “network” among the MLSmember agents who sell homes like yours to be certain they are aware of yourhome. Lastly, ask the listing agent if she recommends “staging” yourhome to show at its best, such as by removing old-fashioned furniture andsprucing up the interior to make it appear more attractive.
DON’T BUY A VACATION HOME AS AN INVESTMENT
DEAR BOB: I am thinking of buying a vacation home at awell-known resort area to use as a rental. I have a large equity in my primaryresidence, enough to buy the second home. Should I refinance my first home topay for the second home? If not, is the mortgage interest deductible on thesecond home along with the depreciation? –Kerry H.
DEAR KERRY: Why do you want to buy a second, or vacation,home? Vacation rentals are among the worst real estate investments, especiallywhen they are vacant.
The mortgage interest secured by a second or vacation homeis tax deductible. However, if you borrow against your principal residence,although the IRS rarely enforces the rule, the interest on a refinancedmortgage not used for home improvements is not tax deductible.
Unless you are independently wealthy, it sounds like you areabout to make a major mistake if you buy that vacation home thinking it will bea sound investment.
REPAIRS AND IMPROVEMENTS ON PRIMARY HOME ARE NEVER TAXDEDUCTIBLE
DEAR BOB: Last October we had a new roof installed on ourhome. It cost $23,000. A friend told me the new roof can be depreciated overthe 20-year expected life of the roof. Is this true? –Marge H.
DEAR MARGE: No. Home repair and improvement costs for yourpersonal residence are never tax deductible. However, you can add the cost ofthat new roof, which extends the useful life of your home, to your residence’sadjusted cost basis.
When you eventually sell the home, the result should be toreduce the amount of your capital gain. For more details, please consult yourtax adviser.
The new Robert Bruss special report, “When It’s Smartto Prepay or Refinance Your Mortgage,” is now available for $5 from RobertBruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736or instant Internet delivery at www.BobBruss.com.Questions for this column are welcome at either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2007 Inman News