Prevent New Tax Burdens on Real Estate

Congress is considering changes to the tax code in order to pay for a number of tax provisions expiring in 2010. Two of these provisions would impact real estate. The first would require all owners of rental properties to file IRS 1099 forms for all contractors they do business with if they pay that contractor $600 or more in any given year. This onerous provision would apply to even the smallest landlord.

In addition, Congress is considering taxing "carried interest" at ordinary income rates instead of capital gains. Carried interest rules govern how general partners in real estate investments pay taxes when the investment is sold.

These new tax burdens will further delay the real estate market recovery. These proposals are ill-advised, inopportune and potentially destructive. Please tell Congress to oppose them today.

The University of Colorado Hospital is planning a $400 million expansion on the Anschutz Medical Campus.

The hospital plans to announce Wednesday that it will break ground on a 12-story tower in early 2011, according to a news advisory sent this afternoon.

The project will allow the hospital and its faculty and staff to meet an ever-growing demand for their services throughout the Rocky Mountain region, according to the advisory

Colorado Gov. Bill Ritter, Aurora Mayor Ed Tauer and hospital President and Chief Executive Bruce Schroffel will make the announcement Wednesday on the site of the new tower at the Anschutz Medical Campus.

http://www.denverpost.com/realestate/ci_15159716

New Green Construction Code Unveiled - The International Code Council announced the release of Public Version 1.0 of the International Green Construction Code (IGCC) to regulate construction of new and existing commercial buildings.  The IGCC aims to significantly reduce energy usage and greenhouse gasses.  It addresses site development and land use, including preservation of natural and material resources.  Enforcement of the code will improve indoor air quality and support the use of energy-efficient appliances, renewable energy systems, water resource conservation, rainwater collection and distribution systems, and the recovery of used water (graywater).  Read full article:   
http://realtytimes.com/rtpages/20100526_green.htm

Mortgage Rates Decline - International money is flowing into the U.S. as result of the financial turmoil in Europe, pushing domestic mortgage rates to the lowest levels of the year and back near 50-year lows.  Falling mortgage rates could lift the U.S. housing market.   The housing industry had been bracing for months for a period of rising mortgage rates, triggered by the end of the Federal Reserve's $1.25 trillion mortgage-securities purchase program.  Instead, many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.  Read full article:
http://online.wsj.com/article/SB10001424052748704904604575262713807080890.html?mod=WSJ_Real+Estate_LeftTopNews

Denver has nation’s 6th best quality of life, Portfolio.com reports - A report on the quality of life in 67 U.S. metro areas rates Denver sixth best in the nation.  The report by G. Scott Thomas for Portfolio.com uses 20 different factors — most of them economic — to gauge quality of life in major cities.  Those factors include rate of population growth, education level, rate of homeownership, mortgage and rent affordability, percentage of newer and larger houses, home value, median household income, shortest commute times, and unemployment rates.  Read full article:
http://www.bizjournals.com/denver/stories/2010/05/24/daily15.html?s=industry&i=resi_real_estate

Understanding the Home Appraisal Process

Consumers are often baffled by the home appraisal process. They may feel their home is worth a certain dollar amount, and therefore, the appraised value doesn't make sense to them. It is important to know that appraisal guidelines are dictated by the lenders. In many states, the lenders must disclose the purpose of the appraisal, as each situation carries its own set of rules.

In essence, lender guidelines force appraisers to put a fair market value on a home based upon comparable sales in the area where the home is located, as the home must be bracketed according to size and value. For example, there is no set amount associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, and the local marketplace supports the value of a pool at $15,000, that item will be bracketed as [$15,000] on the appraisal.

Upgrades can usually be expressed at full value in newer homes since they required investing additional money onto the cost of building the home. On the other hand, the amount invested in upgrading or remodeling an older home is rarely reflected in full in the final appraisal. The reason is the home had value in its original condition, and again, the value of the upgrades must be supported by comparable examples within the same marketplace.

These comparisons must be drawn from current market activity within the last six months. Some lenders may want to look at both closed and pending sales to see if there is any room for negotiation. This is a safeguard to prevent appraisers from over-valuing the home in question. It is further stated in the guidelines that appraisers can only place a value on homes that have closed escrow. However, when property values rapidly increase within a marketplace, appraisers are generally permitted to make concessions and put more weight on the evidence provided by comparisons to pending sales and listings. This allows for a "real time" appraisal.

Although there is no formal standard to speak of, most lenders give the appraiser a 5% margin of error. If the file is reviewed and the appraiser is off by 8%, there is a good chance the value will be cut by the full 8%. It is in the best interest of both the appraiser and the homeowner not to push the value up higher than the market will support, otherwise the property evaluation may be exposed to a strict appraisal review.

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When considering adding value to a home, you consistently hear from the real estate industry that updated bathrooms and quality kitchens stand out in a home sale. Those are proven sale closers. There are certain other improvements you can make to your home that will beautify it or create convenience for your family. When it comes time to selling, however, those improvements may do nothing to increase the value of the property and may even turn off potential homebuyers.

http://www.brokeragentsocial.com/article/761/five-bad-home-improvement-ideas