Still Recovering from a Motorcycle Accident

I haven't blogged much here because I've been stuck in a hospital recovering from a motorcycle accident I incurred on January 21. I was discharged home yesterday.

Long story short, I have a kidney contusion, fractured right wrist, a black & blue big toe, and scrapes along one side of my face. They put a cast on my wrist, which makes it difficult to type, and to make matters worse, I developed a really nasty allergic reaction to the cast. Go figure!

If you want more details, read the full story on my corporate blog.

I hope you check back more often, I'm gonna start blogging again, though it'll be slower for awhile.

Two4One Enters California Market

Last August we announced the launch of a new real estate franchise system called Two4One Real Estate, that sells your home for free, if you agree to use them to buy a new home.

The company, which is based in Arizona, announced today that it's expanding operations into California, with its first successful property sale.

The company expressed there has been great interest in its services after having been featured in Inman news.

"The response has been nothing short of phenomenal," according to Two4One President Dan Pool. "We knew from our experience that if we could control the buyer we would control the business. And by creating a system that rewards loyalty, we've been able to do just that." Dan and wife Kelly started the franchise based on their success and have seen it grow dramatically over the past six months.

Buy a House, Get a Free Dog

Brubaker-Culton, a broker in Hemet, California, is giving away free dogs and cats to any family that buys or sells a home through their firm.

Actually, according to their press release, families will receive a voucher good for the adoption of a pet at the Ramona Humane Society. The voucher is also good for a free spaying or neutering.

Collette Blanchette, an agent with Brubaker-Culton recently lost two Yorkshire Terriers just before last Halloween. In hopes of finding them she made several trips a day to the Ramona shelter. Blanchette couldn't help but notice so many homeless dogs and cats, that she came up the idea and presented it to her broker.

They liked the idea, feeling that a house is not a home without a dog or cat, and that it would be a great way to help alleviate the problem of dog and cat overcrowding.

Mortgage Industry Sees Growth in Electronic Signatures

Electronic signatures seem to be finding their niche in the mortgage and real estate industry, according to DocuSign.

The company reports that it's seeing broad adoption and expanded usage of online signatures in the home loan world.

DocuSign offers a web-portal for loan officers to facilitate electronic signatures. When a loan officer needs to obtain signatures from the applicant, they post a digitized version of the document on DocuSign's website. An e-mail is sent to the applicant informing them to log-in, and give their approval.

Applicants simply need to set up an electronic signature once, and then use that signature however many times as needed. The electronic signature is a legally binding signature.

The process saves time from having to mail, fax, overnight, or hand deliver documents. Ultimately, the consumer wins by getting their loan approved more quickly, or perhaps finishing escrow in a shorter time.

Real Estate Agent Gets Raped on the Job

ABC 7 News in Denver, Colorado reports that a real estate agent was raped by her client while showing him a house.

It happened in rural Weld County.

Apparently a similar assault occured a couple years ago in Denver.

That offense, combined with this latest one, has several realtors in the area taking steps to protect themselves, such as showing properties only with a partner, and getting a permit to carry concealed weapon.

Authorities apprehended the attacker last Monday.

Search the MLS Through Text Messaging

QWASI Inc. is launching a new service called SMS/MLS.

It allows a homebuyer to search an entire MLS on their cell phone by sending text messaging commands. They cannot search all MLS databases in the country, however. Rather, a specific broker gives the homebuyer access to search whatever MLS' they are subscribed to.

QWASI is the same company that created CellSigns. Users can search for listings by address, neighborhood, MLS# or CellSigns ID.

SMS/MLS will be introduced at Inman News' Real Estate Connect NYC Conference on January 11-13, 2006, Marriott Marquis, New York.

Fire Sprinklers Increase Home Value

Nonprofit group Home Fire Sprinkler Coalition (HFSC) released the findings of a new Harris Interactive poll that said 69% of homeowners believe that having a fire sprinkler system increases the value of a home.

45% of respondents said that a sprinklered home is more desirable than an unsprinklered home, most often because of the added safety provided by the sprinklers (51%).

38% percent said they would be more likely to purchase a new home with sprinklers than one without.

HFSC commissioned the December 2005 survey of 1,019 U.S. adults (620 of whom own a house) in order to measure awareness of residential fire sprinkler systems and gauge feelings toward builders who install fire sprinklers as a standard feature of a new home.

Northern California MLS Merger

Business Journal is reporting that a group of six Bay Area multiple listing services, including the region's largest in the South Bay, has tentatively agreed to merge operations and listings databases to create a single entity with nearly 50,000 subscribers.

The new organization would be one of the largest MLSs in the country and would cover a territory stretching from the Central Valley across the East Bay to San Francisco and Silicon Valley all the way to Monterey and San Benito counties.

The goal is to complete the consolidation by late 2007 or early 2008.

Read the full article.

StrollAway Announces Property Listings Database for Hurricane Affected Areas

StrollAway announced today the availability of its searchable property database specifically designed to help investors and sellers affected by the September 2005 hurricanes.

StrollAway's database connects distressed homeowners with investors who are eager to invest in the future of the South. The service is free to homeowners, eliminates the need to pay real estate commissions, and donates 10 percent of profits gained from a small fee to investors to the American Red Cross.

With StrollAway's searchable database, investors can search on financial ratios that are valuable to the real estate investor. Unlike competitors with typical search criteria that only focus on residential information, investors can conduct free searches on StrollAway's web site to find properties that are appealing to them.

The UK Housing Act of 2004

The United Kingdom passed a law known as The Housing Act of 2004. Among its provisions is something known as "Home Information Packs" (HIPs).

Previously, the home buying/selling process was painfully slow due to unforseen problems that arose. Most of these problems were due to insufficient information about the property before a buyer made an offer. Historically, buyers were not privy the details of a property until after an offer was made.

To reduce this problem, the Housing Act of 2004 required all home sellers to prepare a HIP before putting their property on the market. The HIP includes such as information as...

• Evidence of title


• Standard searches including possible environmental problems like contamination or subsidence


• Planning consents, agreements, building control certificates etc.


• Seller's information form to include details of any taxes or service charges payable in relation to the property


• All Warranties and guarantees for items such as damp proofing, boiler maintenance, double glazing etc.


• A Home Condition Report


• An energy efficiency assessment

The law doesn't go into effect until 2007, and as it stands right now, the government hasn't fully identified what pieces of information are required in a HIP.

But the creation of the HIP requirement has many independent agents worried. Obviously, homeowners don't have the resources or expertise to obtain all this information on their own. Hence, the listing agent will be assume this task.

Obtaining this information could take weeks, since much of the information is divided up amongst various organizations. It therefore stands to reason that the large brokerages, who plenty of resources in funding and personnel, will be able to assemble these HIPs quickly, whereas independent agents may need weeks to get this done. The agents able to produce HIPs more quickly will eventually enjoy the lion's share of properties.

One particular agent, Rob Hailstone, started a group called Home Information Pack Action Group (HIPAG). With a membership fee, agents can ally themselves with HIPAG, and HIPAG will dedicate itself to assembling HIPs for them.

Animals on For Sale Signs

An interesting article published by Norwich Evening News discusses a real estate agent that placed pictures of animals on For Sale signs.

The move by Abbotts estate agents to put the creatures on its for sale signs proved so popular some families specified which animals they wanted to help sell their home.

"The most requested animals for the signs have been tigers and pandas. "Grizzly bears were quite popular for a while but I think the pandas took over in the end, probably because they looked a bit more cute."

No word on whether pictures of animals actually helped sales. However, the company recently decided to change the look of their signs to a newer style, one that doesn't have room for the animals. So, it looks like the cute furries were popular only with sellers.

Housing Bubble Burst is a Conspiracy!

News reports that the housing bubble has burst is being discussed as a conspiracy of the main stream media on Political Dogs, a political blog.

Paul Krugman, a liberal columnist for the New York Times, says that home prices have lost touch with reality, and that America is in for a "nasty correction".

Krugman attempts to educate not only the Times' and Moody's real estate journalists, but also you poor slobs who believe their report indicating that housing prices have never been more affordable. He does so by enlightening us with his mastery of the history of housing prices and historical economic conditions but misses quite a few facts which cause his entire analysis to fall on its butt.

With so much of the main stream media having a liberal bias, are they rooting for a collapse of the real estate industry? I for one don't believe there's even a housing bubble, let alone an imminent collapse. I think this analysis from Political Dogs sheds light on what I've suspected, the liberal media over-reporting on a mythical housing bubble, in hopes of creating panic, and realizing a self-fulfilling prophecy, ultimately making the Republican controlled government look bad.

The Home Office Tax Deduction

As a realtor, you may often be asked about the home office rules. Tax law changes in recent years have made it easier and more beneficial for your clients to claim this deduction.

Andrew D. Schwartz, CPA, who is the editor and major contributor to Real Estate Pro Taxes, a website that provides income tax and financial planning information geared towards real estate professionals, provides us with some information on claiming the Home Office deduction...

The risk of claiming the home office deduction on your tax return remains an issue of debate. Many taxpayers and tax preparers believe the home office raises a red flag with the IRS. Even so, you should make an informed decision about whether to claim this valuable deduction, as many of the recent tax law changes involving the home office rules have benefited the taxpayer.

Two Beneficial Changes

Prior to 1999, many people did not qualify for the home office deduction. That's because you were required to perform the "income producing activity" within the home office to be eligible. Doctors had to see patients, lawyers had to meet with clients, and realtors could only make their sales over the phone.

Everything changed, effective in 1999. As long as you use a portion of your home, regularly and exclusively in connection with your trade or business, you now qualify to claim the home office deduction.

For renters, this was great news. Since rent isn't otherwise deductible on your federal tax return, being able to claim the home office deduction made a portion of your rent tax deductible.

For homeowners, however, there was a potential pitfall when you sold your home. Assuming you sold your home for a gain, you would generally be taxed on the portion of your home that you claimed as your home office. This pitfall caused many homeowners to forego this deduction.

A recent tax law change eliminated this pitfall. Under the current rules, if the office is located within your home (and not a separate structure on your property), you will no longer be taxed on the portion of the gain attributable to your home office when you sell your home. All you need to do is pay taxes on the depreciation you claimed over the years.

Additional Tax Breaks

Claiming a home office also limits the impact of the dreaded Alternative Minimum Tax (AMT). While your real estate taxes are allowable as an itemized deduction when calculating your "regular" tax liability, they don't count when calculating the AMT. However, the portion of your real estate taxes allocated to your home office are not limited by the AMT if you're self-employed.

And if you have more than $1.1 million of total mortgage debt outstanding on your principal residence and vacation home, your mortgage interest deduction is capped. By claiming the home office deduction, you'll deduct a portion of the excess interest as part of this deduction.

Are You Eligible?

To claim the home office deduction, a portion of your home must be used regularly and exclusively in connection with your trade or business. According to the IRS, "to qualify under the exclusive use test, you must use a specific area of your home only for your trade or business (including for managerial and administrative tasks). And to qualify under the regular use test, you must use a specific area of your home for business on a continuing basis."

If your home office is used for any non-business purpose during the year, or only sporadically in connection with your business, no deduction is allowed.

How To Claim This Deduction

To claim the home office deduction, you need to complete and attach a Form 8829, Expenses for Business Use of Your Home, to your federal income tax return. On that tax form, you'll prorate your allowable household costs by the percentage of your home that is used in connection with your business. You make this calculation by dividing the square footage of your office by the total square footage of your home.

Allowable costs include mortgage interest, real estate taxes, utilities, repairs and maintenance, and insurance. You'll also include the rent you pay, or depreciation based on the amount you paid for the home (reduced by the value of the land), plus improvements.

You'll then deduct those costs directly against net self-employment income on the Schedule C or as a miscellaneous itemized deduction on the Schedule A, if you're compensated as an employee.

Are you self-employed? If so, the home office deduction also reduces the self-employment taxes you pay.

More Information

More information about the home office deduction can be found at the IRS' website, where you can download Form 8829 along with instructions, as well as IRS Publication 587, Business Use of Your Home.

- Andrew D. Schwartz, CPA

Andrew D. Schwartz, CPA is the editor and a major contributor to Real Estate Pro Taxes, a website that provides income tax and financial planning information geared towards real estate professionals. Schwartz has provided financial planning advice in interviews with various media, including the Washington Post and Wall Street Journal. He is available for interviews.

PowerSites Online Marketing

A company called AgencyLogic offers a web-based real estate marketing service called PowerSites.

PowerSites is a website creation tool allowing agents to create a professional looking website for a specific property. It allows agents to help win sales contracts from sellers by offering them to create a unique website just for their property.

PowerSites allows agents to create a free account, and actually create a website for free. Agents only pay PowerSites when they take the website live. The website provides all the usual features, such as virtual tours, downloadable brochures, mortgage calculator, area schools, etc. But it also provides consumer-focused tutorials that people often search the Internet for.

Last August, AgencyLogic issued a press release stating that PowerSites helped sell over $1 billion in property sales over the previous 10 months.

Create Property Virtual Tours for Free

MyDirectOffice, a real estate technology company, announced the launch of Flyinside.com, a service that allows agents to create property virtual tours for free.

The new do-it-yourself service allows anyone to create and publish property virtual tours online in minutes without paying a cent. The company expects to attract many agents, brokers, owners and property managers, on the idea that creating these virtual tours have historically been a costly and burdensome experience.

Users take their own property photos, then upload them, write descriptions, select music, and publish their virtual tours online. The virtual tour is kept on Flyinside's website, though agents and brokers have the option to upload the virtual tour to the Realtor.com website.

If a lead is generated through a virtual tour, the agent or broker has the option to purchase that lead for one dollar.

Denise Madan's 4-Wheeled Promotion

Realtor Denise Madan has probably one of the most colorful cars advertising her services.

Madan, who's affiliated withPrudential Florida WCI Realty, selected local artist Tony Mendoza to paint her car, after having seen one of his paintings.

"To be a 'driving force' in today's marketplace, you must be both customer and competitor oriented," says Madan. "The art car makes the introduction for me, my service and expertise seal the deal."

If you have a really eye-catching "realtor car", send us a photo and we'll blog it.

Real Estate Agent Sued Over Lead Contamination

In January 2003, Jim Parcesepe and his family bought a house contaminated with lead-based paint. They didn't know about the paint. It was never disclosed to them.

The former owner, Mitchell Chlasta, who has since died, knew about the lead contamination. According to RIS Media...

The city had ordered the Chlastas to abate the lead problem and the house had been declared "lead safe" before it was sold. But the Chlastas were under a lead-management plan, meaning that the house had to be inspected at least annually and that specific precautions -- vacuums with special filters, workers wearing protective garb and respirators -- would be required before renovations like those undertaken by the Parcesepes and May could proceed.

The lead-management plan was supposed to be transferred to the new owners, but it never was.

Richard Maloney, head of trade practices for the state Department of Consumer Protection says that real estate agents who represent sellers and buyers have an obligation to make sure that relevant information about the safety of a house is fully revealed.

The Parcesepe family has sued the agents representing the former owner.

Real Estate is Like Porn

Lorraine Bracco, actress on the cable television show "Sopranos", said that investing in real estate "is like porn for me".

Not really sure what she meant by that. But she went on to explain that when it comes to investing her money, she sticks to real estate. Bracco also said that she never bought of share of stock in her life, and doesn't understand it. But as for real estate? Well, that's just downright X-rated!

"Listen, if I am going to get in a cab to go home, and I see a sign for an open house, I will go in. I like property because I am the boss," she said in Sunday's New York Times.

Colorado's Fingerprint Law Puts Thousands of Agents on Inactive Status

Last July, the State of Colorado required all real estate agents and brokers to submit their fingerprints to State and federal law enforcement officials, as part of their new background checks.

If they failed to do so by December 31, 2005, their licenses would be put on "inactive status", and would be barred from taking listings and receiving commissions.

Between 4,000 to 8,000 agents failed to do so.

Read more about this on MSNBC.