Keepin’ it REAL Estate

Many times while I’m showing houses this question comes up; “What’s a tax abatement?”  Many people don’t know what it is, yet its one of those terms we throw around assuming that everyone knows.  Essentially its a reduction of taxes or an exemption from taxes granted by a local government on a piece of real property for a specified length of time.

In Cincinnati we have a great tax abatement program for not only new construction but for renovations of an existing property.  Why would Cincinnati want to do this?  Well, programs like these stimulate revitalization, retains residents, and attracts new homeowners to our city.  The program also provides a benefit for residents who improve their homes and encourages home shoppers to buy in the City of Cincinnati.  Along with the reinstatement of the HIP loan program, this really sparks renovations all around town.

So what’s the 411 on Cincinnati’s tax abatement incentive program?

Who:  Any homeowner in the City may be eligible for property tax abatement if they have renovated their home or purchased a newly constructed home. 

What:The home must be either a condominium or a one, two, or three unit residential structure. For multi-family units that are four units or greater, see  Commercial CRA Tax Abatement.

Renovations:  Improvements made to your property resulting in an increased property valuation qualify for tax abatement.  However, you’ve got to be careful on what increases the value and what is actually just normal maintenance of the property.  See my post on improvements vs. maintenance for some clarification.  For example if you bought a house at 100,000 and made 50,000 worth of improvements.  You won’t have to pay taxes on the increased value of the home at 150,000 for the next 10 years!  You are only responsible for paying taxes on the 100,000 amount.  That a great incentive to improve your existing property, especially since home sales have been a bit sluggish the past few years.

New Construction:  This pertains to new construction of structures containing a condominium or a one, two, or three unit residential structure and are eligible for a 10-year abatement up to a maximum $275,000 market value.  You will pay tax only on the land and the value above $275,000.  Here is a good example of the estimated tax savings:

     Total Investment Eligible for Abatement (fair market value): $275,000
     Assessed Value/Taxable Value is 35% of fair market value: $96,250
     Assessed Value Multiplied by Tax Rate (.05694): $5,480.48
     10% Rollback: $548.05
     Estimated tax abated for one year: $4,932.43

GREEN Construction:a longer tax abatement is awarded for those going green.  Those that are eligible are one, two, and three-unit residential structures, including condominiums.  This abatement is for 15 years (if newly constructed) and 10 years (if renovated).  There is also a 100% tax abatement for residential buildings valued up to $500,000 that are constructed to LEED standards within the City of Cincinnati. Homeowners will pay tax on the land.  WOW Cincinnati really is going green fast.  This is one of the most aggressive tax abatment incentives in the country.  For more information on green building in Cincinnati visit my environmental blog at: www.encorecincinnati.com

To see if you’re elidgable for a tax abatement or for more information visit the city of cincinnati’s website.

An Article appeared in the NY Times today with Cincinnati as the main city of focus for streetcars!  Wow what great press for our city.  To show the world that we are hip and moving along with the rest of the country.

For those who are already familiar with the street car debate, there wasn’t much new information as to why cities all across the country are opting for this mode of city transport.  Of course there are the critics of the system as there are with any other major city building project needing this amount of public funding.  But there is one thing all Cincinnatians can agree on, is that we do need some form of non bus public transport to get people moving around our downtown area. 

I’m just happy to see such positive press for our city in the NY Times!

Now only if I can get the street cars to come all the way up to Norwood….

We Cincinnatian’s love our food!  We’ve got so many local flavors and restaurants that I almost can’t keep up!  Each part of town has their own special restaurant or dish.  Dow town is bursting with new restaurants every time I turn around.  Sometimes my love of food over takes me that I think maybe I should have been a food critic.  However, I quickly extinguish that thought and turn myself back to food and the joy of trying new flavors and cuisines.

This got me thinking about our local food rivalries. 

If you’ve spent anytime in Cincinnati you know them and you know them well.

In the Ice Cream corner we’ve got:

Aglamesis vs. Graeters

Aglamesis Ice Cream is celebrating its 100 year anniversary this year!  You can visit their 2 store locations (Oakley Square and Montgomery).  Once you step foot into them you feel instantly transported back to an old fashioned ice cream parlor.  I love the quaint shops with the pink & black motif and the smell of homemade candy and ice cream.  I highly suggest their ice cream soda’s.  My dad who grew up going to the store in Oakley turned me on to these and I simply can’t resist!

Graeters upon first glance seems more popular than Aglamesis.  Sure Oprah named it her favorite ice cream, but I still wonder if it really is her FAVORITE.  They’ve got stores located all over the tri-state region.  They are known for their rich and cream ice cream with their mega big chocolate chunks inside.  It definitely can’t be for the weak of heart. 

And as far as Cincinnati style chili goes you’ve got:

Skyline Chili vs. Gold Star Chili

For my friends who have never had it, they’re very curious as to why you would put chili on spaghetti!  “Its a Greek style chili,” I tell them, “just try it.”  Quickly they fall in love.  I even had regular “Chili dog Coney days” in college (I went to school down south), so that my friends down there could enjoy the taste!

While each restaurant has a very similar menu and to an outsider they’ll think they’re one in the same.  We native Cincinnatians know they’re not.  You could ask anyone who has lived here for a while which one they like better and why and I bet they could tell you.

But to truly make up your mind, you’ve got to try them all for yourself… 

Any other food rivalries I’m missing?

Sometimes the hardest part of my job is actually getting buyers and sellers to agree. I’m constantly amazed at what happens “behind the scenes” and how if buyers and sellers actually talked to each other during negotiations, many deals would never take place. True there are the “easy ones” that come together without much effort, but those are the ones that we agents dream and hope for.  Those are few and far between.  Much of the time buyers and sellers are so emotionally charged and involved that its hard for them to see the bigger picture.  Thats where agents come in.  We aren’t emotionally involved with your house, we aren’t selling the home of the past 10 years where we raised our children, nor are we purchasing our first house after the wedding and are planning on starting our lives together in it.  We are simply helping people achieve these dreams. 

So what do you do if you’re having trouble disconnecting yourself from your home?  Listen to your agent - assuming that you have a good one.  They’re your voice of reason.  They can help you figure out if the deal that you’re presented with is a good one or a bad one.  If its a price issue - look at what the comparables say.  What was the price range your agent gave you when they first listed your house?  Most of the time when I go and list a house, I give a range of where I think it will sell based on the current data.  Am I right all of the time?  No, but most of the time we fall within that range.

If you’re presented with an offer, my number one advise is to ALWAYS COUNTER.  If you’re a seller and your presented with a “low ball” offer; COUNTER IT.  Don’t reject it.  You never know where it will lead.  You should be happy you have an offer on the table right now.  Although homes are selling in Cincinnati, you will never know when the next offer will come along.  Don’t get offended by a low offer, its business.  Even if you know that “you’re right” and the other side is wrong.  Come up with ways to make the deal work.  Afterall, its your goal to either sell your house or buy a house.  I’ve seen too many deals lost over small things during inspections or over a couple thousand dollars.  Where in the grand scheme of things they didn’t really matter.

Negotiations can be tough for everyone involved.  Make sure you’ve got an agent who does at least 10 deals a year.  There are a lot of part time agents out there and when it comes to your biggest investment you want someone who has experience on their side.

ABSOLUTELY you can over improve.  I’m so scared of over improving, I almost don’t do anything!  But I may just be neurotic because I see so many people over improve their homes and then expect to make every penny back out of the house.  I’m kidding of course, but it brings up a valid point.  You CAN over improve.

First things first: Improvements are not equal to Maintenance.  Many people get these things confused.  They think that they spent 10,000 on a new roof 2 years ago that their home is now worth 10,000 more.  WRONG.  This is called maintaining your property.  If a new roof is needed, its your obligation to put one on; if the outside needs painting, you’ve got to paint it.  Improvements are upgrades to kitchens or baths, adding a deck or an addition, etc…

When it comes to improvements lets get one thing straight; We fix our homes up the way we want to because we want to make our living spaces more enjoyable.  If you want to deck out your kitchen in the latest and greatest, you do it because you want to.  Not because you think, I’ll make ALL of this back when I go to sell.  Will you make some of it back? Most likely yes, but it depends on when you go to sell.  If you spend 20k on a new kitchen and then try to sell a year later, you probably won’t get it all back.  I sold a home last year where the seller put almost 10,000 into their only full bathroom.  Mind you this was a modest 2 bed home where none of the competition had baths like this.  It truly was spectacular.  Almost home-a-rama like.  Did it allow me to command a bit of a higher asking price.  You bet.  Did the seller reclaim all that was put into the bath originally? No.  My question to them when we went to price the house was; Would you have put the bath in last year knowing you were going to sell this year?  They said yes, they enjoyed every minute of the bath.  Then I said “you got your money out of it.”  You did it because you enjoyed it, not because you thought it would increase your home value by 10K.  Of course you always hope, but the reality isn’t always so.

When it comes to your home and recouping money out of it, you never want to be the biggest and best on the block.

I read an interesting article in a back issue of the New York Times.  Its about buyers and sellers writing each other letters to try and justify why their making the offer they’re making.  I have often seen & heard of buyers writing letters to sellers letting them know how much they love the sellers house in hopes of getting an accepted offer.  I’ve even had a few of my buyers do this in the case of multiple offers where we know we are coming in lower than the other (using this to maybe tip the scales in our favor).  Does it work?  Maybe.  I’m a sucker for emotion so if it came to a letter vs. no letter then I’d probably choose the letter.  My husband just laughs, that stuff would never work on him.

The NY Times article mentions a “new” kind of buyer/seller letter.  This one justifying why the offer is so low and even a sellers rebuttal.  Yes, even though the majority of Cincinnati real estate has adjusted their prices for today’s market, there are some sellers who still haven’t come to terms with where the market is and therefore there are some offers that buyers make that are much lower than the asking price.  I’ve actually had buyers do this as well.  We’ve put in letters indicating all of the work that needs to be done and therefore we couldn’t possibly pay the asking price.  However, I’ve never have I had a seller respond to my letters sent.

So, I’m curious, would an “emotionally charged” letter work for you?  Or would you just scoff at it?

This Just IN:

The Hamilton County Board of Commissioners voted on May 28, 2008 to reinstate HIP.

 The Hamilton County Home Improvement Program (HIP) is an initiative of the Hamilton County Commissioners and the Hamilton County Treasurer. The “HIP” loan allows homeowners in Hamilton County communities to borrow money to repair or remodel their homes or rental property at interest rates 3% below the lowest rate a bank would normally offer. Loans may be used for:

Contact Information

Patrick Hanrahan, “HIP” Coordinator
Hamilton County Department of Community Development
138 East Court Street, Room 1002
Cincinnati, OH 45202

Phone: 513.946.8234
Fax: 513.946.8240

Click here for details.

This is very exciting news for all of us who have older homes and want/need to fix them up.  This is a great thing that they have brought back! I’m very excited.  Now maybe I can redo my kitchen after all

Seeing that I have a large Norwood following, I thought I’d send this out to see if anyone would like to get involved in our citys relay for life?

Whether it’s a friend, a family member, or the neighbor down the street, we all know someone who has been touched by cancer. Many of us are concerned about this disease and want to do something to make a difference. That’s why I’ve decided to take part in the American Cancer Society Relay For Life® . It’s an event that brings together the whole community and helps raise funds for the fight against this disease. I know you care about cancer, too, and I’d love for you to join me as part of my Relay team.

At the event, we’ll camp out overnight, walk around the track, and meet lots of new people. There is an incredible tribute to cancer survivors and caregivers that starts off the night and a moving ceremony honoring those who have fought the disease. I can truly say Relay is unlike anything else you’ll ever do. It’s a night full of fun, hope, and remembrance.

You can get more information about Relay For Life and the American Cancer Society by clicking the link below. Won’t you join me in this fight?  As a member of the Norwood Young Professionals, we have a team we have set up and we’d love to have you on our team!  Or if you don’t want to walk, come out and support us while we do all the work!

Click here to visit my personal page.
If the text above does not appear as a clickable link, you can visit the web address:
http://main.acsevents.org/site/TR/RelayForLife/RelayForLifeOhioDivision?px=7214757&pg=personal&fr_id=7373&et=LZ7hB1a5ZtVCnbpPL6dHww..&s_tafId=112185
Click here to view the team page for Norwood Young Professionals
If the text above does not appear as a clickable link, you can visit the web address:
http://main.acsevents.org/site/TR/RelayForLife/RelayForLifeOhioDivision?team_id=297729&pg=team&fr_id=7373&et=FVKzV0rv4C8d0jZgPjl6TQ..&s_tafId=112185
 

Things are moving along quite nicely for our beloved surrey square.  They’ve completely torn down the old McDonald’s (on a side note, the new McDonald’s is probably the nicest McDonalds I’ve ever seen, they even have WiFi!) and the old Media Play.  Its now just a big pile of rubbish.  In place of the mound of dirt that now sits, is to be a great big brand new Krogers!  I’m so excited, maybe I won’t have to go to Oakley anymore to do my grocery shopping.  It’s not that I hate the Krogers that there now, it’s a huge improvement from the Thriftway that was there years ago, I’m just excited to be able to purchase grocery items that the current, smaller Krogers has now. 

On the other end of the complex (I didn’t get pictures of that) things are also shaping up nicely.  Gone is the ugly pink and turquoise facade.  This is the end where Chipolte is rumored to be going in (which has been a huge selling point for people I take around Norwood).  I’m super excited about this revamping of Surrey Square.  Its definitely been a great selling point for Norwood.  As the T-Shirt says: “Norwood Happens.”

Norwood sales continue to climb.  My last 3 sales have been in Norwood, all in the past month!  If you’re looking for a place to invest and a place where the city is growing, look no further than Norwood.  I’d love to talk to you about all that is happening around town!

The spring market is in FULL swing around here.  If you’re even remotly keeping up with what’s happening in your area, you might notice a lot of houses are quickly coming under contract.  I went to go and talk with some sellers today who have a great home on a fantastic little street in Pleasant Ridge.  In less than 1.5 months 3 houses have come on the market and gone into contract on their street alone.  Whats the change you may ask?  Why are the new houses coming under contract faster?

I have a few theories:

1. Spring Time - Spring makes everyone feel good about home shopping!  No one likes to move in the winter unless they have to.

2. New inventory - the current buyers were getting tired of what had been and stayed on the market over the winter months.  They wanted new blood and new they’ve gotten.  There have been some fantastic homes come on the market these past couple of months.

2. More realistic Sellers and Agents - Pricing things correctly for the market.  Last year it seemed as though sellers were still fighting the downward market.  They wanted to price things higher than what the market was allowing.  Then they watched their homes sit on the market month after month.  This new market savy seller has taken the hint from their agents and listened to what is actually happening around them.  They’re pricing their homes right for what today’s buyer is willing to pay.  As a seller you can’t go by what sold a few years ago.  That won’t fly in today’s market.  You’ve got to look at what has recently sold around you to get a clear cut picture of how to price your home.  You’ve got to enlist the help of someone who trained and knowledgeable on where the market it is, where it was and can see where its going.   If you want that kind of help.  Give me a call.