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Charity Deduction Faces Same Tax Reform Risk as MID

Of all the itemized deductions, the one for charitable contributions might seem to come out the best under tax reform. That’s because it’s the only deduction under both the House and the Senate versions of the bill that is largely undiminished. And yet charities complain donations will dry up under tax reform. What gives?

b“Provisions in the tax bill the House and Senate are considering would make the situation worse” for charities, Ray Madoff, director of the Boston College Law School Forum on Philanthropy and the Public Good, says in a Nov. 27 New York Times opinion piece.

The problem, Madoff says, is the near doubling of the standard deduction. With all of the other itemized deductions either going away or constrained by new caps, most households will opt for the standard deduction rather than continue to itemize. That renders the tax deduction for charitable giving nearly meaningless. As Madoff puts it, “A vast majority of American taxpayers would no longer itemize and therefore would receive no benefits for their charitable giving.”

That argument might sound familiar. It’s the same one NAR is making about homeownership. Under the Senate bill, the mortgage interest deduction would be left intact, but the deduction for state and local taxes would go away. In the House, MID would be limited to mortgages of $500,000 and the deductions for property taxes would be capped at $10,000, while the deduction for state and local income and sales taxes would be entirely repealed. So, while MID is preserved, either entirely or in part, very few households that itemize today would continue to do so. As a result, MID would continue to be a benefit only for the wealthiest households.

Given the structural changes to the tax code lawmakers have before them, preserving the deduction for charitable contributions is mostly meaningless. This is exactly the same thing REALTORS® are saying about tax incentives for homeownership. They’re meaningless for most households if tax reform passes in its current form in both the House and the Senate.

More on tax reform’s impact on homeowners in The Voice for Real Estate.

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Don’t Just Sell a Home; Market a Lifestyle

Kevin Tengan told attendees at the REALTORS® Conference & Expo to remember that home buyers are looking for "a place for their life to happen."

Kevin Tengan told attendees at the REALTORS® Conference & Expo to remember that home buyers are looking for “a place for their life to happen.”

To help your listing stand out from the competition, focus on the lifestyle the property will help buyers achieve, in addition to common details such as square footage and number of bedrooms.

That’s the advice of visual effects specialist Kevin Tengan, who has turned his experience working on Hollywood productions into the foundation for a real estate business that reflects his love for imagery and storytelling. A buyer might say they want a four-bedroom, three-bath house with a sunny kitchen and a backyard, but what they’re really looking for is “a place for their life to happen,” he said during a session at the REALTORS® Conference & Expo in Chicago earlier this month.

“A lot of what we communicate is ‘what’ and ‘how,’ but few talk about ‘why,’” said Tengan, CRS, chief operating officer of RE/MAX Prestige in Honolulu. “Start with the why.”

As you develop marketing campaigns, remember that saying a home is in a great neighborhood isn’t as powerful as showing why that is the case, said Tengan. For example, if you produce a video property tour, include footage of nearby attractions such as beaches, museums, shopping districts, and other aspects of a community that can inspire a buyer to want to live in the area—not just in the home. Anything you can do to tie your listing to the lifestyle buyers want will attract more traffic, Tengan said.

One of the keys to developing marketing materials that will resonate with buyers looking for a certain lifestyle is understanding the trends that characterize the people you are trying to reach, said Emily Line, vice president of commercial services for Realtors Property Resource®. As a real estate professional, you have access to an enormous amount of data about what consumers are looking for. There are services that can sift through the information and create reports to help you develop an effective pitch, Line said.

The data can help you tune in to trends that reflect the kind of buyers you want to reach. You can identify people in certain kinds of occupations, where they like to shop, and what they like to do for entertainment, Line said. This information can help you connect with buyers in your area, as well as investors who want to purchase commercial or residential properties that will attract certain types of tenants, she said.

Turn the information you collect into a marketing tool by incorporating it into a story that connects the property to the goals and lifestyle of those who would buy it, Tengan said. “At the end of the day, the story is all that matters. A great story evokes a reaction.”

‘This is Our Moment. Own it.’

“Are you ready to own it with me?”  asked Elizabeth Mendenhall, a sixth-generation REALTOR® and the sixth woman to become president of the National Association of REALTORS® in the past 110 years. “We absolutely have the power to make a difference.”

Mendenhall was sworn into office by her father Richard Mendenhall, who was 2001 NAR president. “There is nothing more powerful in this journey than sharing it with others,” she said addressing thousands of REALTORS® at the Inaugural gala during the REALTORS® Conference & Expo in Chicago.

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Mendenhall ended her inaugural festivities with a group rendition of “REALTORS® Own It”—the vibrant tune that she co-wrote for her presidency. The song evokes the pride and power embodied in dedicated real estate pros who strive each day to meet the complex needs of their clients and keep the industry strong.

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To Whom it may concern: --- Joani is our one and only Realtor in Sun City. She helped us find our perfect 'first house' in Sun City and after our first year we love this area so much we are becoming 'year rounders'. So we called Joani to help us list this house and to find a new one. After several weeks of searching (patiently by Joani) we found our new home, we then listed our current Sun City house and with Joani's 'staging' recommendations we sold it in 10 days for full price and with two offers! We love Joani and would certainly recommend her for anyone considering Sun City or Sun City West areas. Richard & Yolanda Hobbs March 2016
Joani Frankel, a realtor with Realty One Group, asked me for a reference regarding the professional services she provided to my wife and me when we were searching for real estate properties in the Phoenix, Arizona, area. I was a client of Ms. Frankel in the spring of 2009, when my wife and I were searching for a home after our move to the Phoenix area, and in the fall of 20 IO when we were looking for a home for our daughter and her family. When it crune to purchasing our home, Ms. Frankel's role was critically important. We were new to Arizona and unfamiliru; with the many neighborhoods in this sprawling metropolis. We were uncertain as to where we could find the best neighborhood within our price range in which to purchase a home and the best value for a home. Based on her incredible knowledge of the area, she immediately started us in the right direction and we were quickly able to find the perfect home. Once we did, she stayed with us throughout the entire process from negotiating the contract to accompanying us during the walk-through where she was most helpful in bringing to our attention any issues with the home. She anticipated our every need and was readily available whenever we required her services. When we were back in the market searching for a home for our daughter and her family, because of the outstanding service she had earlier provided us, we again called upon Ms. Frankel to assist us. Working with both us and our daughter and son-in-law, she once again showed her professionalism in helping us locate and make an offer on a home. This home was a foreclosure so it required that she draw upon her experience and knowledge regarding such sales to lead us in making the proper offer. As a result of her efforts, we were able to obtain the home at an extremely good value. Our daughter and her family thoroughly enjoy their new home. Perhaps the best indication of Ms. Frankel's efforts on our part is the fact that even though the Phoenix market at the time of our purchases was going through a most difficult time and housing values here were still in decline throughout the area, the homes she directed us towards not only retained their value but have actually increased in value. We have and will continue to recommend Ms. Frankel to others we come across who are in the market for a home. If we reenter the housing market for any reason, she will be the one we will use. She will get us the best value for our money and fully protect our interests throughout the process. Sincerely, Kenneth L. Smith
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