Want to defer capital gains taxes on the sale of commercial or investment real estate?  You should know about and take advantage of one of the most important tools in the real estate business, 1031 like-kind exchanges (also known as a Starker Exchange).  . Working with a competent Realtor who can identify real estate opportunities and who knows the steps crucial to consummating a 1031 exchange.

    On April 25, 1991, the IRS issued deferred exchange regulation-Reg 1.1031(k)-, that allows taxpayers to defer all of the capital gains taxes resulting from the sale of investment property.  1031 exchanges are incredibly powerful tools a real estate investor can use to avoid capital gains taxes.   The concept is simple; you defer capital gains recognition rather than paying Uncle Sam now by trading an existing property for a like-kind replacement real estate property.  Although the concept is simple, the specifics of doing so are a bit complex.

Prior to the Starker court settlement, the IRS disallowed tax-deferred exchanges unless all 1031 exchange real estate involved were transferred "simultaneously."  IRS said there could be no time between the transfer of the relinquished property and replacement property in an exchange.

    1031 exchangers need to seek the assistance of a competent real estate professional who is familiar with the 1031 program as well as competent legal and tax advisors.

    To defer 100% of the capital gain on the past proerty, the follwoing conditions must be met by the exchange:

• Both the property to be transferred (sold) and the property to be acquired must be held for rental or investment purposes or for use in a business or trade.
• The exchange must be for either an equal or greater fair market value real estate property.  In other words, in most cases, you avoid paying the capital gains tax on real estate you now own by using those monies to "trade up" to a more expensive real estate property.
• The exchanger must reinvest all of the equity in the old property in the new property
• The excahnged must not get any immediate cash out of the deal
• Title to the new real estate investment property must be held in the same way as it was held in the old property.
• An "exchange agreement" (not necessarily, the purchase of the new property) must be executed with a "qualified intermediary" by the date of the closing of the sold property.

    By definition a 1031 "Qualified Intermediary" is an independent and professional facilitator who receives the funds from the first sale and who holds the funds until they are need to purchase the new exchanged real estate property.  The Qualified Intermediary then directly delivers the money to the closing agent who then delivers the deed directly to the real estate investor.

    The 1031 Exchange is a tax-deferral tool, not a tax evasion tool.  When the new property is eventually sold (not exchanged into yet another property), the original deferred capital gains plus any additional capital gains on the new property will be combined and subject to taxation.

    The assistance of a professional Realtor knowledgable in 1031 real estate exchanges, as well as competent tax and legal counsel can make employing a 1031 like-property real estate exchange a very valuable tool in building your real estate investment portfolio.

Here is one of the most important things you need to know about Buyer Representation:  we get paid by the seller at closing.
Our service is 100% free of charge to the buyer!

Purchasing property without representation can be complicated, and can even be risky.  The market is constantly changing.  An experienced Realtor can help you avoid costly mistakes, find you the best home value, and make your home buying or relocation experience an enjoyable, stress-free process. 

Although at no cost to the buyer - there are tremendous benefits of working with a Buyers Agent.  Here are just a few of those benefits:

• The Buyer's Agency works exclusively for the Buyer
• Access to all properties for sale
• The Buyer's Agent negotiates the best price and terms for the Buyer, and not the seller
• Access to the latest up-to-date market trends and information
• Access to the best home inspectors, lenders, and contractors
• A full time Real Estate professional agent working for YOU!  The first-time home buyer especially, will appreciate our thorough and easily understandable explanations as each step of the process is encountered.  With Pride of Texas guiding your way, you will always know exactly what's going on, and be provided the professional advice and information with which to make informed decisions.

Here are some of the steps we take to help you find and purchase the home of your dreams:

• We will work with you to help you get pre-approved for a mortgage if need be.  Sellers and their agents know that a pre-approved buyer is serious and prepared to close on a property quickly.
• Provide immediate access to any new listing that meets your specific search criteria.
• E-mail your specific home requirements to top producing agents in the area, alerting them that we have a qualified purchaser.
• Preview all New listings, Internet listings, Open Houses, and For Sale
  By Owners that suit your home requirements.
• Provide a comprehensive market evaluation of all properties you choose to view.
• Offer step-by-step communication and detailed explanation of all processes leading to the transaction closing.
• Provide consultation and recommendations of the written offer to purchase, with terms approved by you.
• And perhaps most importantly of all - Negotiate the right price for you.

Many clients in the marketplace are seeing a reduction of inventory.  Rates are at a all time low with mortgage money available to those who qualify.  Our lender of choice is Dolphin Mortgage.  The 30 year fixed rate of 4.75% is an estimate.  Homeowners insurance rates have stabilized and county taxes have dropped recently as home prices declined.  These conditions are favorable at his time while we are still in a buyers market!

Happy New Year!  Welcome Phil Riek to the Dennis Patrick Smith Team!  Call Phil at 727-656-0011

EXIT REALTY SUNCOAST INC.

14581 Walsingham Road

Largo Florida,33774

Not many people can buy a home without a mortgage. When it comes to financing your new home, there are a number of options available to fit a wide range of financial needs. Below you can read about some of the most popular today. You can also learn lots of other valuable facts about mortgages.

How Much Can You Afford?

You can save yourself a good bit of time by figuring out up front how much mortgage you can afford. As a general rule, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income.

Getting Prequalified or Preapproved

It's important to know how much home you can afford, especially for first-time home buyers. That means that prospective buyers should consider getting prequalified or preapproved before they begin house hunting. What's the difference between prequalification and preapproval?

Prequalification. The mortgage lender reviews your income, assets, and liabilities to determine an appropriate loan amount. With prequalification prior to beginning the home search, you'll narrow your search to those properties in your price range. This service is often provided free by mortgage lenders.

Preapproval. The mortgage lender reviews your credit and commits to a specific loan amount. Although you'll usually have to pay some basic fee for this service, the process will likely lead to increased buying power by making you ready to make an offer.

Types of Mortgages

Some of the most common mortgages available today include fixed rate, adjustable rate, and balloon.

Fixed-rate mortgage. One of the most common mortgages is the fixed rate. It lets a homeowner know exactly what the payments will be during the length of the loan, often 30 years, but sometimes 25, 20, or 15. The fixed-rate is a good choice when interest rates are low and if you expect to live in the house for at least several years. Because the interest rate never changes, the monthly principal and interest payment never changes either.

Adjustable-rate mortgage. The adjustable-rate mortgage (ARM) is geared to homeowners who want to start with relatively low monthly payments. ARMs come with interest rates that fluctuate over the life of the loan. They begin with a relatively low interest rate, then the interest rate is readjusted at agreed upon intervals, typically increasing no more than a maximum of 2% in any one year and 6% over the length of the loan.

Balloon mortgage. This type of mortgage may be a good choice for homebuyers who don't expect to own their home past the maturity date of the balloon note -- five or seven years. Monthly mortgage payments are based on a 30-year schedule, but the entire mortgage balance becomes due at the end of the five or seven year term. If you decide to stay, however, you may be able to reset your interest rate for the remainder of the mortgage period.

There are many advantages to buying a home instead of renting. In many cases, the amount of money a person spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit available to homeowners, the savings can be significant. There are pitfalls too. The following chart shows you the benefits and drawbacks of both options.

Pros and Cons of Buying vs. Renting

There's No Single Answer

As you can see, there are numerous pros and cons on each side of the decision. For many, it comes down to emotional considerations as well as financial ones. Do you want to feel that you are part of a community? Do you want stability and the experience of what many consider to be the American dream?

Then again, are you ready to give up the freedom of being able to move to a different neighborhood or city? Only you can decide if buying a home is a smarter decision than renting.

4 steps to peak home-heating performance

"Out of sight, out of mind" is a phrase that can certainly be applied to the heat duct system that runs under your floor or through your attic. But just because you can't see the ducts - and there still seems to be heat coming out of the registers - doesn't mean that your heating system is working as well as it could. And since your heating system is typically the single biggest energy user in your home, small problems with the duct system have the potential to translate into big dollars being wasted each month.

There are four basic steps that you'll want to undertake in this order: inspect, repair, insulate and clean. Any or all of these steps can be taken by the ambitious do-it-yourselfer, or can be hired out to the pros.

Inspect: The first step in the process is to inspect the system, which is going to mean some crawling around. With a strong light source - preferably a cordless one so you don't have to worry about dragging cords behind you - work your way along each of the ducts. Look for areas where joints have come loose, or where support straps are missing, sagging or otherwise not providing adequate support for the ducts. This is especially important with flexible ducts, as large sags or kinks in the ducts can impede air flow.

Pay particular attention to the joints where the ducts come together - the tape used to seal the joints can come loose over time, allowing air leaks to occur that waste heat. Since the joints may be partially or completely covered with insulation, it's a good idea to have the heat on while you're making your inspection. Feel along the ducts for air leaks, and also listen for any sounds of escaping air.

Repair: The next step in the process is to repair any problems you discovered with the system, which typically means resecuring and resealing joints, and repairing or replacing duct strapping.

In hard ducting - solid sheet metal as opposed to flexible ducts - the joints can be secured using sheet metal screws or pop rivets. After the joints have been secured, seal them up using a foil HVAC (Heating, Ventilating and Air Conditioning ) tape that is specifically made for this purpose - despite its name, do not use standard cloth-back duct tape, which loses its grip over time and comes loose, leaving you right back where you started. Foil HVAC tape has a tough silver aluminum face and an aggressive, heat- and water-resistant adhesive that's designed for long life.

Flex ducts typically use a clamp system to secure the flex duct to a hard duct. If a flex duct joint has come loose, check to see if you can reuse the original clamp. If you can't, you can typically use a large worm-drive clamp or flexible plastic clamp to secure the joint. After resecuring, wrap the duct's inner insulation blanket and outer shell back into place to cover and seal the joint.

If ducts need to be resupported, use duct support strapping that is made for this purpose. Attach the strapping to a joist, girder or other solid support, using nails or screws. Do not use wire or string for this purpose, as it does not provide adequate, long-term support and can also kink flex ducts.

Insulate: Since the ducts are running through an unheated space, duct insulation is a huge part of the system's ability to retain heated air within the ducts until it gets delivered into the house. So as part of your inspection, carefully check the insulation as well. See if the ducts are completely wrapped without any gaps, and that the insulation is of sufficient thickness to provide good insulating value. Look for a level of about R-8 for your ducts, which is approximately 2 1/2 inches of fiberglass.

Clean: When all of the ducts have been repaired and insulated, the final step in ensuring a healthy and efficient system is to clean them. This is a process that is best left to the pros, who have equipment with sufficient vacuum pressure to suck dust and debris from the system. At the time of the cleaning, they can also inspect the condition of the furnace itself and replace the filter.

Professional duct cleaning should typically be done every couple of years - more if you live a very dusty environment, have a lot of pets, or have other factors that might contribute to a buildup in the system. Between professional cleanings, regular maintenance should include removing the registers and vacuuming out the first foot or two of the duct with a shop vacuum, and changing the filters in the spring and fall.

All of the materials you need for making repairs and insulating the system are available from retailers that sell HVAC equipment supplies, as well as from many home centers and hardware stores.