3.8% TAX TO GO INTO EFFECT IN 2013

The health care legislation enacted in 2013 included a new tax that was designed to affect upper income taxpayers. Understand this tax will not be imposed exclusively on real estate transactions. The tax is NOT a transfer tax on real estate sales and similar transactions.

Rather, when the legislation becomes effective it may entail a 3.8% tax on some (but not all) income from interest, dividends, rents (less expenses) and capital gains (less capital losses). These items are all included in an individual's adjusted gross income (AGI). The tax will fall only on individuals with an AGI above $200,000 and couples filing a joint return with more than $250,000 AGI

The new tax does NOT eliminate the benefits of the $250,000/$500,000 exclusion on the sale of a principal residence. Thus, ONLY that portion of a gain above those thresholds is included in AGI and could be subject to the tax.

Tax payers should familiarize themselves with the tax. The amount of tax will vary from individual to individual because the elements that comprise AGI differ from taxpayer to taxpayer. Contact me today for a referral to a licensed tax professional.

Find the Right Neighbohood for your Nest

There is no substitute for the feeling you get when you walk through the perfect neighborhood. Depending on your own particular needs and tastes, some of the following factors may be more important considerations than others. Sitting down and determining if a particular community is going to meet your needs is the first step on the path to finding the perfect place for you to call home. Determine if an area meets your requirements for the following factors:

Schools
Property Values
Traffic
Crime Rates
Proximity to your daily routine:
• Work • Gym • Parks • Grocery Stores

Buying a home in the right neighborhood is also an important investment. We can look at the neighborhood demand by finding out whether multiple offers are being made, whether the gap between the list price and sale price is decreasing, and whether there is active community involvement. You may also want to look for communities that are likely to become “hot spots” in the near future.

Once you pick your perfect community, you can track listing activity at johnlscott.com with the Neighborhood Tracker feature. Be the first to know when there are:
• Newly listed properties | Listing price decreases (or increases)
• Status changes such as when listings change to pending or sold or come back on market.
• Scheduled open houses

You can also track listing activity in your desired neighborhood on the go, with the John L. Scott Mobile App, which can be downloaded from the johnlscott.com site, the Andriod Google Play Market or through the iTunes store. Staying on top of the latest listing activity will help ensure you are “buyer ready” when your dream home, comes on the market.

2012 Fishing Derby at Lake Wilderness

2012 Hooked on Fishing Derby was a huge success!

A big Thank You to all our volunteers: Ping Chen, Pam McCain, Bo Burridge, Mary Easton, Berthy Carson, Marney Hadley, Jack and Kim Emmons!!

Low-Maintenance Lawn Alternatives: Ground Cover

If you want a yard that demands less time, money, and water, consider ground cover rather than a traditional lawn.
By: Laura Fisher Kaiser

Americans have long had a soft spot for lawns. Turf grass covers nearly 47 million acres in the U.S., according to the Lawn Institute. But there’s plenty that’s not green about all that green. For starters, the average household dumps 60 gallons of water a day on conventional lawns. Toxic lawn herbicides and pesticides run off into lakes and streams. Gas-powered mowers spew pollution into the air. And then there’s all that time spent watering, weeding, seeding, sodding, thatching, and mulching.

If you’re looking for an alternative, consider replacing some or all of your high-maintenance turf with ground covers that form walkable “carpets,” and innovative grasses that require little or no water or mowing once established.

In turn, you’ll reduce the need for irrigation, stop washing harmful chemicals into the watershed, add depth and texture to your landscape, and spend your spare time enjoying your yard instead of manicuring it.

Creeping perennials, clover, and other ground covers

There’s a ground cover to meet most needs, whether you’re planting a pathway, a hedge, or a broad swath of green. They run the gamut of foliage textures and colors, and many have wonderful flowers. Some varieties are ground-hugging and feel delicious under bare feet. Others grow up to two feet tall, making them ideal as barriers or landscape punctuation.

Look for attributes that meet your needs: child-durable, deer-resistant, drought-tolerant, shade-loving. Mixing them up is not only aesthetically pleasing, it’s also good for the landscape: Diversity increases resistance to pests and disease and reduces the need for fertilizer and pesticides. Here are some popular choices.

Creeping perennials: Tight to the ground, these plants are especially good for cushy green carpets. They keep out weeds and allow air, water, and nutrients to get to plant roots. Many work equally well in rock gardens or in crevices between stepping stones, in full or partial sun. These include mat-forming New Zealand Brass Buttons (Cotula squalida) and Scotch or Irish Moss (Sagina subulata), which isn’t a moss at all but a perennial that forms a cushiony blooming carpet.

Some, like Blue Star Creeper (Laurentia fluviatilis), which has tiny green foliage, bear up to heavy foot traffic. Creeping Jenny (Convolvulus arvensis) has an extensive root system that makes it quick to spread and tough to kill. That’s a good thing if you’re looking for a tough turf alternative but a problem if it creeps into beds where you don’t want it.

Besides being good creepers, many ground-hugging perennial herbs are often nicely scented, hardy under foot traffic, and even edible. These include chamomile (Chamaemelum nobile), which has fern-like foliage and white flowers with yellow centers; Corsican mint (Mentha requienii), which thrives in shade, exudes a minty smell when trod upon, and is edible; and various thymes (Woolly, Red, Prostrate), which feature dainty flowers and work well between pavers or as a low mounding carpet.

Creeping perennials cost $6 to $10 per plant. A 15-by-20-foot area with plants 2 inches apart (for instant density) requires 300 plants. But if you’re patient enough to wait a year or so for them to spread, you can buy fewer plants and space them 12 inches apart.

Clover: Although clover has gotten a bad rap as a weed, it’s actually not a weed at all. In fact, a clover lawn (or, for high-traffic areas, a clover-grass mix) has many advantages. Sweet-scented, inexpensive, and quite durable, white clover (Trifolium repens) grows in any kind of soil, stays green even during low-water periods, and feels lovely underfoot.

Low-growing clover doesn’t need regular cutting, nor does it need fertilizer, but an occasional mow will encourage new growth and discourage bees. If you don’t mind the bees, consider letting your clover bloom, which benefits the bees and the environment. Clover is one of the least expensive groundcover options, costing about $4 to seed 4,000 square feet.

Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

Scoring Big with Good Credit

If the idea of getting up close and personal with your credit score leaves you feeling overwhelmed, take a deep breath and take heart in the famous words of Sir Frances Bacon: “Knowledge is power.” The more you know about what goes into your credit score, the easier it will be to maintain a good one. A good score can translate into powerful savings on everything from insurance to the purchase or refinancing of your home. Here are a few tips to build and maintain a healthy credit score.

Make timely payments
Lenders are looking for a consistent pattern of on time payments. Making timely payments for all your bills, not just your credit cards and loans, will help you maintain a good credit score.

Keep old credit card accounts open
Even after you have paid off a credit card, don’t be too hasty in closing the account, because the credit scoring formula places less weight on inactive accounts.

Keep your balances and debts low
Having too much debt can cost credit score points. The higher your credit card balance is, the worse your credit score will be. Your credit card balance should be within 30% of your credit limit to maintain a good credit score.

Open new credit sparingly
As tempting as those 5000 bonus points or 20% discounts seem, try to limit the number of applications you submit for new credit cards. Each time you apply for credit, or a loan, the credit inquiry negatively impacts your credit score. Maintaining the cards and lines of credit that you have already established is the better way to go.

Monitor your credit report
Take advantage of your right to get all three of your credit reports. You can visit www.annualcreditreport.com to order your free credit report from each of these three major bureaus.

A GREAT COACH ONCE TOLD ME, “ALWAYS BE READY TO WIN”

In today’s real estate market of low interest rates and opposing offers on well priced housing inventory, prospective home buyers must be “ready to win” when they find the right home. The best way to be “ready to win,” as a buyer, is to get pre-approved by a reputable mortgage lender.

To shed some light on the pre-approval process, when you speak with a lender to get pre-approved for financing, your home mortgage consultant will discuss where you have resided and been employed for the past two years. They will also review your income, assets and credit report with you. In preparation you may want to review your bank statements and decide how much you want to spend on the down payment, closing costs and how much of your savings you would like to retain after closing. Be thorough with your lender and include retirement account savings which can help to solidify a mortgage application even if they are not utilized for a down payment.

Ask questions of your lender to find the loan program that is most beneficial to you. For instance what kind of low down payment options are available? Which loan programs allow gifted funds for down payment?

Luxury home buyers may want to discuss conforming versus non-conforming loan options to evaluate monthly payment options between the two. The length of time you plan on owning the home can also factor into your ultimate mortgage decision

There have been numerous articles written lately about the difficulty of getting approved for a mortgage in today’s market. While mortgage underwriting standards have tightened over the past few years, there are plenty of buyers who have been able to obtain financing and take advantage of today’s remarkably low interest rates.

My hope for you, is that armed with the information above, you will feel confident in pursuing a pre-approval to ensure you are “ready to win” when you find the right home. I can connect you with a Home Mortgage Consultant who can suggest the best loan for you and help you to get pre-approved.