The Secrets to Real Estate Success
The Santa Cruz Sentinel published an article today featuring the testimonies of Santa Cruz's most successful Realtors.
Frank's secret? "I love helping people."
by Jondi Gumz, Santa Cruz Sentinel
Homebuyers are scarce. Sales are down 50 percent compared to the peak of 2005.
Yet some real estate agents closed a deal a month -- or more -- last year, the slowest year of the past decade. How did they do it?
About 90 people showed up Wednesday at a luncheon organized by the local chapter of the Women's Council of Realtors to hear six top agents share their secrets.
Quipped moderator Robert Bailey, president of Bailey Properties, "This could be the new cast of 'Survivor.' "
When Sally Bookman started in real estate in 1974, she made it a habit to write notes to the prospective buyers she met at open houses. She didn't procrastinate; she started writing notes before the open house ended. Now she has a huge referral business.
Bookman, originally from London, bought a house while studying at UC Berkeley. She filled the house with students, then bought the lot next door, and then another house.
"I never lost at Monopoly," she said.
She said she uses her doctorate in social anthropology to figure out what clients want.
"If you drive that car and the way you dress, I know what kind of house you want," she said.
Frank Murphy made only one deal in 1998, his first year in real estate. He had expected his new career would mean lots of free time, but he worked 70-80 hours a week.
He uses his 15 years of experience as a building contractor to help buyers solve problems.
"I love helping people," he said.
Audrey Tennant, who's been in the business for 20 years, stays in touch with clients. She uses seasonal marketing campaigns. Working in human resources and marketing for a food and wine company over the hill, she learned patience during union negotiations.
Real estate, she said, is "a give and take business not a push and shove business."
Michael O'Boy initially didn't want to follow in the footsteps of his dad, who was a broker. He became a therapist instead. Then he traded that profession for real estate in 1995 when he decided he wanted to become a homeowner. He found his background as a therapist helpful.
"You listen more and say less," he said.
Lela Willet taught kindergarten until she had a second child. Then she left the classroom to work with her husband, a builder. She sets aside time once a week to call every one of her clients. She does it away from the office, so she doesn't get interrupted.
Being with 5-year-olds, she learned patience and listening, valuable skills in real estate.
Pat Simmons made connections in construction working as a masonry contractor with his father.
"I can recommend folks I would use," he said.
He also can advise clients how much to offer when they tell him the kitchen has to be updated.
One lesson he learned from his father: Ask yourself: "Are you proud to put your name on your work?" Ask that question every day.
So what do they all have in common?
It's not high-tech gadgets.
In fact, only Murphy and O'Boy like technology. All of the others outsource computer tasks.
Experience counts, certainly, but that's not enough by itself.
For each of these agents, the key is helping people. It's finding out what their clients need and helping them get what they need.
As Simmons put it, "It's about success for the client, not you and the commission."
Well said.
Lessons from survivors
Audrey Tennant
Firm: David Lyng Real Estate
'07 escrows: 14
Started in: 1987
Was in: Human resources/marketing
Relaxes by: Spending time with grandchildren.
Quote: Look for opportunities. Remember buyers turn into sellers.
Frank Murphy
Firm: Keller Williams Realty
'07 Escrows: 19
Started in: 1998
Was: Building contractor
Relaxes by: Traveling
Quote: Instead of trying to make a buck, I have an opportunity to help people solve a problem.
Mike O'Boy
Firm: Coldwell Banker
'07 Escrows: 25
Started in: 1995
Was: Therapist at Dominican Hospital
Relaxes by: Coaching
Quote: Don't take for granted where your business will come from. An open house three years ago could result in a client. Return every phone call.
Friday, February 29, 2008
IRS Stimulus Payments To Be Sent AutomaticallyWASHINGTON — The Internal Revenue Service today advised taxpayers that in most cases they will not have to do anything extra this year to get the economic stimulus payments beginning in May. “If you are eligible for a payment, all you have to do is file a 2007 tax return and the IRS will do the rest,” said Acting IRS Commissioner Linda Stiff.
The IRS will use information on the 2007 tax return filed by the taxpayer to determine eligibility and calculate the amount of the stimulus payments. The IRS will begin sending taxpayers their payments in early May after the current tax season concludes. Payments to more than 130 million taxpayers will continue over several weeks during the spring and summer. A payment schedule for taxpayers will be announced in the near future.
Stimulus payments will be direct deposited for taxpayers selecting that option when filing their 2007 tax returns. Taxpayers who have already filed with direct deposit won't need to do anything else to receive the stimulus payment. For taxpayers who haven't filed their 2007 returns yet, the IRS reminds them that direct deposit is the fastest way to get both regular refunds and stimulus payments.
Most taxpayers just need to file a 2007 tax return as usual. No other action, extra form or call is necessary.
This Web site http://www.irs.gov/newsroom/article/0,,id=179094,00.html will be the best information source for all updates and taxpayer questions. In most cases, the payment will equal the amount of tax liability on the tax return, with a maximum amount of $600 for individuals ($1,200 for taxpayers who file a joint return).
The law also allows for payments for select taxpayers who have no tax liability, such as low-income workers or those who receive Social Security benefits or veterans’ disability compensation, pension or survivors’ benefits received from the Department of Veterans Affairs in 2007. These taxpayers will be eligible to receive a payment of $300 ($600 on a joint return) if they had at least $3,000 of qualifying income.
Qualifying income includes Social Security benefits, certain Railroad Retirement benefits, certain veterans’ benefits and earned income, such as income from wages, salaries, tips and self-employment. While these people may not be normally required to file a tax return because they do not meet the filing requirement, the IRS emphasizes they must file a 2007 return in order to receive a payment.
Recipients of Social Security, certain Railroad Retirement and certain veterans’ benefits should report their 2007 benefits on Line 14a of Form 1040A or Line 20a of Form 1040. Taxpayers who already have filed but failed to report these benefits can file an amended return by using Form 1040X. The IRS is working with the Social Security Administration and Department of Veterans Affairs to ensure that recipients are aware of this issue.
“Some people receiving Social Security and veterans’ benefits may not realize they will need to file a tax return to get the stimulus payment,” Stiff said. “To reach these people, the IRS and Treasury will work closely with the Department of Veterans Affairs, the Social Security Administration and key beneficiary groups on outreach efforts.”
Eligible taxpayers who qualify for a payment will receive an additional $300 for each child who qualifies for the child tax credit.
Payments to higher income taxpayers will be reduced by 5 percent of the amount of adjusted gross income above $75,000 for individuals and $150,000 for those filing jointly.
Taxpayers must have valid Social Security Numbers to qualify for the stimulus payment. If married filing jointly, both taxpayers must have a valid Social Security Number. And, children must have valid Social Security Numbers to be eligible as qualifying children.
Taxpayers who file their tax returns using an Individual Taxpayer Identification Number issued by the IRS or any number issued by the IRS are ineligible. Also ineligible are individuals who can be claimed as dependents on someone else’s return, or taxpayers who file Form 1040-NR, 1040-PR or 1040-SS.
To accommodate taxpayers who file tax returns later in the year, the IRS will continue sending payments until December 31, 2008. The IRS also cautions taxpayers that if they file their 2007 tax return and then move their residence that they should file a change of address card with the U.S. Postal Service.
The IRS will mail two informational notices to taxpayers advising them of the stimulus payments. However, taxpayers should be alert for tax rebate scams such as telephone calls or e-mails claiming to be from the IRS and asking for sensitive financial information. The IRS will not call or e-mail taxpayers about these payments nor will it ask for financial information. Scam e-mails and information about scam calls should be forwarded to phishing@irs.gov
courtesy of the Santa Cruz Association of Realtors (SCAOR)
Tuesday, February 26, 2008
IRS Guidance on Exchanging Vacation Homes
Finally! — IRS Guidance on Exchanging Vacation Homes
Vacation Home as Relinquished Property
For a vacation home to qualify as relinquished property, it must meet the following criteria:
• It is owned by the taxpayer for at least 24 months immediately before the exchange ("qualifying use period"); and
• Within the qualifying use period, in each of the two 12 month periods, (1) the taxpayer rents the dwelling unit at fair rental to another person for 14 days or more and (2) the taxpayer’s personal use of the dwelling unit does not exceed the greater of 14 days or 10 percent of the number of days during the 12 month period that the dwelling unit was rented at fair rental value.
The first 12 month period immediately preceding the exchange ends on the day before the exchange takes place (and begins 12 months prior to that day). The second 12 month period ends on the day before the first 12 month period begins (and begins 12 months prior to that day).
Vacation Home as Replacement Property
For a vacation home to qualify as replacement property, it must meet the following criteria:
• It is owned by the taxpayer for at least 24 months immediately following the exchange ("qualifying use period"); and
• Within the qualifying use period, in each of the two 12 month periods, (1) the taxpayer rents the dwelling unit to another person at fair rental for 14 days or more and (2) the taxpayer’s personal use of the dwelling unit does not exceed the greater of 14 days or 10 percent of the number of days during the 12 month period that the dwelling unit was rented at fair rental.
The 12 month period immediately after the exchange begins on the day after the exchange takes place and the second 12 month period begins on the day after the first 12 month period ends.
Personal use is defined broadly. Use by the taxpayer or other person having an interest in the dwelling unit and any family member1 will be considered "personal use" by the taxpayer. Also, any arrangement whereby fair market rent is not paid will be considered "personal use" by the taxpayer. Notwithstanding the foregoing, use by family members will not be considered "personal use" by the taxpayer only if the dwelling unit is rented at fair market rent and the family member uses it as his principal residence.
Fair rental is based upon all of the facts and circumstances that exist when the rental agreement is entered into. All rights and obligations of the rental agreement are taken into account.
Note special rule for replacement property. If the taxpayer files a return reporting a transaction under §1031 based on the expectation that the dwelling unit will meet the qualifying use standards and subsequently determines that the dwelling unit does not meet the qualifying use standards, the taxpayer, if necessary, should file an amended return.
Exchanges of vacation homes outside the Rev. Proc. 2008-16 safe harbor. An exchange of a vacation home may still qualify under §1031 even though it falls outside the parameters of Rev. Proc. 2008-16. Any such circumstance will be subject to greater scrutiny and therefore should be carefully planned and reviewed by the taxpayer’s tax advisor.
Finally! — IRS Guidance on Exchanging Vacation Homes
Revenue Procedure 2008-16 Provides Safe Harbor
courtesy of Old Republic Exchange Company
Until now, the issue of whether a vacation home qualifies for tax deferral treatment under IRC §1031 was the subject of much scrutiny and uncertainty. To the delight of many tax practitioners, on February 15, 2008, the IRS eliminated that uncertainty by issuing Revenue Procedure ("Rev. Proc.") 2008-16, effective March 10, 2008, which provides a safe harbor for exchanges of vacation homes (defined as "dwelling unit" in the Rev. Proc.). Now taxpayers can have a clear understanding of the circumstances under which the IRS will not challenge whether a vacation home will qualify as property "held for investment" under §1031.
Vacation Home as Relinquished Property
For a vacation home to qualify as relinquished property, it must meet the following criteria:
• It is owned by the taxpayer for at least 24 months immediately before the exchange ("qualifying use period"); and
• Within the qualifying use period, in each of the two 12 month periods, (1) the taxpayer rents the dwelling unit at fair rental to another person for 14 days or more and (2) the taxpayer’s personal use of the dwelling unit does not exceed the greater of 14 days or 10 percent of the number of days during the 12 month period that the dwelling unit was rented at fair rental value.
The first 12 month period immediately preceding the exchange ends on the day before the exchange takes place (and begins 12 months prior to that day). The second 12 month period ends on the day before the first 12 month period begins (and begins 12 months prior to that day).
Vacation Home as Replacement Property
For a vacation home to qualify as replacement property, it must meet the following criteria:
• It is owned by the taxpayer for at least 24 months immediately following the exchange ("qualifying use period"); and
• Within the qualifying use period, in each of the two 12 month periods, (1) the taxpayer rents the dwelling unit to another person at fair rental for 14 days or more and (2) the taxpayer’s personal use of the dwelling unit does not exceed the greater of 14 days or 10 percent of the number of days during the 12 month period that the dwelling unit was rented at fair rental.
The 12 month period immediately after the exchange begins on the day after the exchange takes place and the second 12 month period begins on the day after the first 12 month period ends.
Personal use is defined broadly. Use by the taxpayer or other person having an interest in the dwelling unit and any family member1 will be considered "personal use" by the taxpayer. Also, any arrangement whereby fair market rent is not paid will be considered "personal use" by the taxpayer. Notwithstanding the foregoing, use by family members will not be considered "personal use" by the taxpayer only if the dwelling unit is rented at fair market rent and the family member uses it as his principal residence.
Fair rental is based upon all of the facts and circumstances that exist when the rental agreement is entered into. All rights and obligations of the rental agreement are taken into account.
Note special rule for replacement property. If the taxpayer files a return reporting a transaction under §1031 based on the expectation that the dwelling unit will meet the qualifying use standards and subsequently determines that the dwelling unit does not meet the qualifying use standards, the taxpayer, if necessary, should file an amended return.
Exchanges of vacation homes outside the Rev. Proc. 2008-16 safe harbor. An exchange of a vacation home may still qualify under §1031 even though it falls outside the parameters of Rev. Proc. 2008-16. Any such circumstance will be subject to greater scrutiny and therefore should be carefully planned and reviewed by the taxpayer’s tax advisor.
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