Real Estate Information Archive


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How to Shift Debt to a Tax Deduction

by Stone Realty Services®

The Mortgage Interest Deduction is available to homeowners for up to $1,000,000 of acquisition debt on the combination of their first and second home. They can also deduct interest on up to an additional $100,000 of Home Equity debt.

While Acquisition Debt is used to buy, build or improve a principal residence, the Home Equity Debt can be used for any purpose. It can be used for educational or medical expenses, to purchase a personal car or boat, consolidate debts or pay off credit cards.

A homeowner with $15,000 of credit card debt at 19% and sufficient equity in their home could replace it with a home equity loan at much lower interest rate. Not only would the interest rate on the home equity loan be about 1/3 of the rate paid on the credit card, it’s would now be tax deductible.

If the taxpayer was in the 28% bracket, the net interest on a 6.5% loan would be 4.68% after tax benefits are considered.

Shifting personal debt to Home Equity debt can result in an interest deduction and probably, a lower interest rate. For more information see and go to page 10.  Remember to consult your tax professional before proceeding to ensure this is the best course of action for your specific financial situation.

How To Get Your Offer Accepted!

by Stone Realty Services®

I thought that I'd share Pat Zaby's post as it is especially relevant in today's market. We are seeing multiple offers, escalation clauses and buyers are removing contingencies and appraisals, like they were in 2005.

A great agent will guide you through the process but it is critical to keep calm and rational during the offering phase. When there are multiple offers, it is a highly emotional, fast paced, demanding environment. It is easy to get caught up in the frenzy. Remember that these contingencies are put in place to protect YOU, the buyer. Before removing them from your offer to strengthen the chance to 'win' the right to buy that property, consider if that is the wisest course of action. You could be stuck with a home that you paid too much for, had to use your cash reserves to cover the delta between the appraised and ratified value as well as overwhelmed with the repairs that you were not aware of until you moved-in since the home inspection was waived or you bought the home 'as-is'.

If you have any questions, I am always available to answer questions and assist buyers getting the information that they need to make well informed and rational decisions.

From Pat Zaby:
As the market shifts from a buyer's market, it's good to know how to improve your chances to have the seller accept your offer.

Once you decide on a home, don't waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you'd expect. Multiple offers are a seller's advantage but here are some tips to level the playing field:

Realistic offer - don't give the impression you're trying to "steal" the property. Submit comparable sales that justify your offer.

  • Pre-approval letter - this satisfies seller's biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
  • More earnest money - it shows you're serious and makes the seller feel like the contract will actually close.
  • Minimize contingencies - from a seller's standpoint, each contingency is one more reason why the sale won't go through. They feel the home is "off the market" and they're in limbo.
  • Shorten inspection period - your agent can help you set a reasonable date but let the seller know you're willing to close prior to that if possible.
  • Write a personal letter to the seller telling them why you want their home - this can be the emotional connection to the seller that makes the difference in you getting the home.
A seller wants to feel confident that the offer they accept will actually close so they can plan for their next move. Following tips like these can definitely affect negotiations and help put together an offer that is more likely to be accepted.

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Contact Information

Stone Wood Team
EXP Realty
2165 Jamieson Avenue
Alexandria VA 22314
Office: (703) 739-4663
Office: (703) 739-HOME
Fax: 703-683-9692