Proposed legislation may affect home owners and buyers

Now that the 112th Congress is in session, hundreds of bills have already been introduced. During the course of any Congressional session, hundreds (and sometimes thousands) of bills can be introduced; however, as you may already know, most bills don’t see the light of day as they are destined to die somewhere in the legislative process. Here are a select few bills that are currently making their way through Congress, which may be of interest to home owners and buyers,.

Not much has been said about the now defunct home buyer tax credit since it expired last year. Even though some were happy that it expired and pointed to data that indicated that the credit distorted home sales, along comes H.R. 330: “Homebuyer Tax Credit Renewal Act of 2011.” The bill, introduced January 19, 2011 by Rep. Bob Filner (D-CA), calls for a one year extension (from the date of enactment) of the home buyer tax credit [that expired last year]. So, if you kicked yourself for missing it, you may get another chance to take advantage of the home buyer tax credit.

If you’re unaware of the ongoing debate about the mortgage interest tax deduction (MID), your annual MID may become a thing of the past. As some real estate related issues continue to be a hot topic on the hill, this bipartisan House resolution was introduced to express the sentiment of not only numerous Representatives in the House, but also mimics the attitude of many housing industry groups and some constituents. Introduced by Rep. Gary Miller (R-CA) and cosponsored by 41 of his colleagues, H. Res. 25: “Expressing the sense of the Congress that the current Federal income tax deduction for interest paid on debt secured by a first or second home should not be further restricted;” not only expresses a need for the MID, but also enumerates the value and virtues of home ownership.

Home energy audits are an invaluable tool that provides information about a home’s energy efficiency. Obviously, home owners could use the information when upgrading or making improvements to their home. However, the controversy over who and when energy audits should be conducted continues to be sharply debated. Once part of last year’s legislation, H.R. 2454: “American Clean Energy and Security Act of 2009” (colloquially known as “cap and trade”); the requirement for home energy audits reappear in H.R. 627: “Home Energy Loss Prevention Act” (introduced February 10, 2011). If this bill is enacted into law, it will require a home seller to conduct a home energy audit and provide the data to a buyer, who is purchasing the home with a “federally related housing loan;” as well as creating and maintaining a database of the reports.

Additional legislation of interest includes: S. 22: “Homeowner Tax Fairness Act of 2011,” introduced by Sen. Kirsten Gillibrand (D-NY) would allow home owners who do not itemize to claim a standard deduction for real property tax; and H.R. 769: “Fair Access to Credit Scores Act of 2011,” introduced by Rep. Steve Cohen (D-TN) would require all free credit reports to also provide credit scores.

Legislation can be proper and necessary, while sometimes it can be “well intentioned” but with unintended consequences. Of course, the transformation and alteration of bills as they go through the legislative process; as well as voicing your opinion is all part of a bill’s life.

By Dan Krell
Copyright © 2011

This article is not intended to provide nor should it be relied upon for legal and financial advice.

Remodel instead of Move?

Moving up has been a right of passage for families for years. Families have been moving up for one reason or another, usually because of the need for space or just to move to a new neighborhood. However, spiraling home prices made many to rethink the usual move up, and instead make improvements on their homes. Rather than buying the four bedroom colonial they need due to a growing family, homeowners are adding rooms and enlarging the spaces they already inhabit. They’re thinking remodel instead of moving.

If you are unsure of making improvements or selling your home, there are some factors to consider. RemodelorMove.com (www.remodelormove.com) lists the top reasons for remodeling instead of moving includes: you like remodeling; you like your home floor plan; you like your neighbors; you like your yard; you have a great location; you will get exactly what you want; and you feel that it can enhance the value of your home. If you’re trying to decide whether remodel or move, you may find some of the reasons to remodel resonate.

If you decide to remodel rather than move, there are some considerations. According to RemodelorMove.com you should consider how long you are going to be in your home, the costs involved, and the timing of the remodeling before you move.

If you are planning to stay in your home less than a year, you should consider the actual cost of the improvements against the return you may get on your upcoming sale. However, if you plan to be in your home for a few more years or longer consider the factors of personal pleasure and comfort.

If you are concerned with cost vs. value, a great resource that every turns to for their annual report is Remodeling Magazine (remodeling.hw.net). According to Remodeling Magazine, return on investment depends on the value of the house itself, the value of similar homes in the immediate area, and the rate property values are changing in the surrounding neighborhoods. Some projects will recoup more than 100% of the original investment, however overall in 2004 the return of investment was 80.3%.

The following are the top improvements listed listed in this year’s Remodeling Magazine annual report in order of return on investment: minor kitchen remodeling -92.9%; siding replacement-92.8%; midrange bathroom remodeling- 90.1%; deck addition- 86.7%; upscale bathroom remodeling- 85.6%; and window replacement- 84.5%. You can view the rest of the 2004 report on the website.

Both selling and remodeling can be large propositions that can bring a lot of joy. There are many resources available to help make your decision. But you should verify the information you get, especially from the internet. Additionally, you should consult a local contractor and a Realtor to assist with costs of improvements and neighborhood home values.

By Dan Krell © 2005.