What’s That Smell?! What to do When Your Home Stinks

Smells are a funny thing. A particular smell or scent is so closely tied to our memory bank, and can instantly conjure up memories and images. We all strive to have a nice-smelling home, especially when we’re placing our home on the market or hosting a party. The problem with smells is that a person can actually become “blind” to a scent, unable to actually smell their home the way other people do. If you are concerned that your home has a certain odor, consider following these tips.

Smells: the worst offenders

You can probably guess the most offensive smells in the home: cigarette or cigar smoke, pet urine or general pet odors, mold and mildew, unappetizing foods, and bacterial types of smells like body odor. Unfortunately, many of the smells can permeate every corner of the home like the carpeting, drapery and furniture, making it difficult and laborious to remove. Getting rid of these strong odors is important, as they could indicate unhealthy or toxic things in the home. Mold and mildew smells, for example, not only indicate a potential water problem in the home, the spores can lead to a toxic environment for people and pets inside the home (read more about this here). Smoke from an accidental fire is another terrible and pervasive smell and can be difficult to remove. Usually homeowners contact a professional rebuilding and restoration services company – this is not only to rebuild and fix damaged areas but also to replace smoke-filled components within the home.

Masking the smell can make it worse

Often we reach for the air freshener or scented candle to mask strong odors and smells in our home. While this can work for small odors (like chopped onions or stinky shoes) or for short periods of time, it’s nearly impossible to completely mask large odors. Keep in mind that some room sprays and air fresheners contain toxic volatile organic compounds (VOCs) that are hazardous to your health. You can make your own air freshers quite easily with non-toxic ingredients (try these here) but remember that really strong and foul home odors will come back after your air freshener fades.

How to get rid of the smells

When you’ve found the source of your worst smells you’ll need to remove them with deep cleaning or removal. It’s usually easiest to focus on one room at a time, as well as one feature at a time (like carpeting). This will make your cleaning time more efficient and thorough.  Unfortunately, most of the worst odors will probably permeate the whole home as air ducts and heating systems can spread the scent into every room. Here are some common smell “traps” and how to tackle them.

Carpeting and area rugs: Hiring a professional carpet cleaning service is usually more effective than a do-it-yourself steam cleaning. This is because the industrial machines can heat up the water much higher and suck up more water. The pros might also have more experience with your particular stains and smells and can give expert advice as to what their machine will remove or not remove. Serious pet urine, for example, may have been soaking into the carpet pad and sub-flooring – this smell source will be impossible to remove in the carpet layer. It may be necessary for you to replace particular sections of your carpeting to ensure a clean underlayment. Area rugs can generally be cleaned as well, either at home or at an off-site cleaning facility.

  • Upholstery and furniture: Cigarette smoke and food smells easily cling to fabric and textiles. Drapery can be sent to the dry cleaners or look for a company that can remove drapery, clean it, and hang it up again. Many carpet cleaning companies will also clean upholstery like dining chairs and sofas. Like your carpeting, you’ll want to assess how deep the smell is: is it in the top layer of the upholstery or within the cushion? Mattresses can also harbor bad smells. Consider replacing it and make sure you purchase good quality mattress pads and protectors.
  • Closets and drawers: Wood and plastic furniture, as well as closets, can generally be cleaned and disinfected but first you’ll want to empty the contents. Sort through your closets and drawers, remove the objects that might be causing bad smells and clean them separately. Even if the source of the smell was from one object, it may have affected your other items. Once the closet or drawers is empty, start at the top and clean down to the bottom. While cleaning, inspect this storage area for water damage, mold, mildew or any other potential sources of the smell. You may need to make repairs, repaint or replace to ensure you’re starting with a clean slate. Cedar planks can be added to closets and drawers – they inherently smell amazing, absorb moisture, and can protect your valuables. To remove “musty” or mothball smells from wood storage pieces, you can place a bowl of baking soda inside each drawer, which will absorb smells. A bowl of vinegar will also work. You can often do a light cleaning using a mixture of diluted vinegar and water (I like to add several drops of lemon essential oil as well) to gently wipe down interior surfaces. Just be sure to test out an area first as water may damage your wood surfaces.
  • Basements and attics: Entire rooms like the basement or attic should be treated like other rooms in the home. If either of these rooms have become major storage areas this might take you awhile to empty them out and find the source of the smell. The reason these two places are extra important is that bad smells could be an indication of a more serious problem like a leaking roof, leaking foundation, leaking plumbing or a pest infestation. Not only can these issues ruin your belongings, they can ruin the structural integrity of your home.
  • Appliances, sinks, toilets: Appliances and fixtures can quickly turn smelly if not properly maintained or regularly cleaned. Fortunately, most of these can be cleaned pretty easily and the smell will dissipate. Kitchen sinks with in-sink garbage disposals can give off foul food smells. You can eliminate food odors by sprinkling baking soda down the drain and flushing it with water. A few small lemon or orange peels thrown in the disposal can also give a fresh scent. Be sure you always run the water when using the garbage disposal and don’t use your disposal as a garbage can. Appliances that use a lot of water, like dishwashers and washing machines, can have odors due to mold or food. Baking soda can also be sprinkled in both, just use a little at a time. After using these machines try wiping them clean with an all-purpose spray or plain vinegar. Toilets can become smelly for obvious reasons. Regular cleaning will help immensely, so will using your toilet properly and keeping it maintained. To read more cleaning tips, click here.
  • Garbage cans: The best way to keep the smell of garbage from filling up your home is to use a garbage can liner and empty it regularly. When you remove the smelly items, the smell usually goes away. If garbage has leaked inside the can you’ll want to clean it out thoroughly (it’s easiest if you take the cans outside and wash with soap and water). Compost bins inside the home can also smell so be sure to empty them on a regular basis and keep them clean as well.

When you can’t find the source of the smell

Some smells are obvious, some are not. It might be due to nose “blindness” or possibly just an odd combination of too many smells that make it difficult to determine. You might actually want a person living outside of your home help you out with this. They may be able to pick up on where the smell is coming from easier than you can. But if that’s not an option, you can actually hire professional cleaning services that provide deep cleaning services. They will probably recommend cleaning the basics like kitchens and bathrooms and carpeting, but might also recommend air duct cleaning or cleaning behind and underneath appliances. A dead pest can also be difficult to track down as they sometimes perish between walls or underneath the house. A pest control professional will be able to make an expert assessment and help figure out next steps. Always get an in-home consultation from a professional who will walk through the entire home and give recommendations for service as well as an accurate estimate. Find a cleaning professional on Porch.

This article originally appeared on Porch.com

Written by Anne Reagan

 

 

 Porch.com is the free home network that connects homeowners and renters with the right home service professionals.

Outdoor Living Inspiration

Can you believe that it’s already the middle of April? Summer is just around the corner and there is no better way to prepare than indulging in some exciting backyard inspiration. This year, turn your backyard or patio into the ultimate hangout. We’re talkin’ friends-never-want-to-leave kind of spot. Here are some ways to make that happen:

Sunken Hot Tub

We know what you’re thinking; hot tubs are so 80s. Not anymore! Consider adding a sunken hot tub to your backyard with a deck of natural stone, tall grasses, and outdoor curtains for privacy. Include pillar candles and some twinkling lights for added ambiance.-

Outdoor Kitchen

If you entertain a lot, an outdoor kitchen is the ideal space for summer entertaining. Bring out your inner Tom Douglas with a cooking station that includes a high-end grill, refrigerator, wine chiller, and elegant washbasin. Round this all out with a concrete counter, bluestone tile floor, and stainless steel.

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Outdoor Theater

Nothing says summer like outdoor movies, so why not create your own personal drive-in? All you need is a projector to watch your favorite movies, some dangling lights in the trees, blankets, and pillows. You could also watch it from a hanging bench or a floating bed. Get über creative and buy an inflatable flat screen for your pool area and turn it into a full-fledged theater, inflatable lounge chairs and all. This way you’ll never have to choose between movies and precious pool time.

12-thefancy-outdoor

Tiki Bar 

Before you say no, say yes. Tiki Bars are entirely underrated; we think they’re the quintessential piece to any stay-cation. If you’re going for a tropical retreat feel, this is the place to start. Just don’t forget the hanging lanterns, bamboo, and ice-cold margaritas.

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Fire Pit

Is your ideal summer situated by a campfire? Then add a fire pit and enjoy s’mores in the comfort of your own backyard. It’s easy to make your own. Use an old wine barrel, bricks, stones, or a concrete bowl. A lowered fire pit is great if you want to use sand for a beachy atmosphere. On a chilly summer night a campfire sets just the right mood for outdoor fun.

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To enhance your space with little to no cost, add dangling vines or twinkling lights. And a splash of color here and there immediately changes the vibe. Choose one or all of the ideas above and start planning your debut party!

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For more outdoor living ideas, follow our Pinterest board.

Windermere Foundation Infographic

If you've bought or sold a home through Windermere Real Estate, you're a part of the Windermere Foundation, and you've helped make a positive difference in the lives of your neighbors in need. The following infographic shows the types of services funded by the Windermere Foundation, and illustrates how even a small amount can make a big difference for low-income children and their families.

The Windermere Foundation’s goal is to reach $30 million in total donations by the end of 2015 – and we’re well on our way. Thanks to the generosity of Windermere owners, agents, staff, and our community partners, last year we passed the $28 million mark. Less than $2 million to go!

http://www.windermere.com/uploads/ckeditor_assets/2/pictures/2305/content_Donate.jpgVisit http://www.windermere.com/foundation to learn more about the Windermere Foundation. And if you’d like to help us reach our goal, please click the Donate button.

 

Windermere Foundation Infographic

If you've bought or sold a home through Windermere Real Estate, you're a part of the Windermere Foundation, and you've helped make a positive difference in the lives of your neighbors in need. The following infographic shows the types of services funded by the Windermere Foundation, and illustrates how even a small amount can make a big difference for low-income children and their families.

The Windermere Foundation’s goal is to reach $30 million in total donations by the end of 2015 – and we’re well on our way. Thanks to the generosity of Windermere owners, agents, staff, and our community partners, last year we passed the $28 million mark. Less than $2 million to go!

http://www.windermere.com/uploads/ckeditor_assets/2/pictures/2305/content_Donate.jpgVisit http://www.windermere.com/foundation to learn more about the Windermere Foundation. And if you’d like to help us reach our goal, please click the Donate button.

 

What Makes a Home Luxury?

We wanted to find out different perspectives on what truly makes a home luxury, so we went straight to the source: Our agents who are a part of Windermere’s Premier luxury marketing program. Through their eyes we can see that “luxury” doesn’t have an absolute interpretation.

 

Rick Franz – Bellevue South

When asked what he thinks makes a home luxury he told us it “stands out above rest. It could be exquisite finishes, a dazzling location, breathtaking views, but it's really the quality of the construction and how it presents itself to the public. And that the public perceives it's a special property.”

 

 

 

 

Deirdre Doyle – Capitol Hill

“To me it's underrated elegance. I don't think ‘flash’. Bigger isn't better, better is better.” When she thinks of luxury two words come to mind: “quality and integrity.”

 

 

 

 

 

Ty Evans – Bainbridge Island

Ty said that the quality of the home, where it's located, how it's presented, and the caliber of construction are what make a home luxury. “It’s like a small Tiffany box versus a big jewelry store; quality not quantity.”

 

 

 

 

 

Karl Lindor – Bellevue South

“Lux starts with a special and unique setting. Lux is materials that are unique and have a wonderful look and color. Luxury is anything but ordinary. It creates an emotional connection. It’s as simple as a well-engineered appliance or a unique granite counter top.”

 

 

 

 

Jennings Doyle – Lakeview

“Luxury homes offer clients ease of living through thoughtful and deliberate architectural strokes, grand geographic appointment, and elevated quality in finishes and design elements.”  

 

 

 

 

Stephanie Pfeffer Anton, Executive VP of Luxury Portfolio, spoke at Windermere’s most recent Premier networking breakfast about luxury and how it has evolved in the past few years. For starters, according to Luxury Portfolio, Mercedes Benz’s sales were up 14 percent last year and luxury fashion brand, Bottega Veneta, was up 47 percent. Ladies and gentleman, it is clear luxury is back. Not only that, but what matters to luxury consumers have changed. Instead of associating luxury with words like “exclusive” and “glamorous,” luxury now means “artisanal,” “educated,” and “healthy.” Luxury items are now taking a back seat to lifestyle. However, one aspect that is guaranteed to never change is that there's an emotional component of any luxury purchase.

 

 

Thanks to our Premier agents who took the time to give us their two cents on this topic. People aren’t necessarily buying luxury items just because anymore. They want to be educated before they purchase, knowing it has reliability, whether a product or a home.  

 

Check out photos from our latest Premier networking breakfast here.

Clear the Clutter and Help Others in Need!

It’s springtime, which means spring cleaning for many households. It’s also a time to declutter and purge all those worn out, unwanted, outdated, unused and unneeded items from our closets, garages and other storage spaces.

But what do you do with all that stuff once you’ve decided to get rid of it? First, you’ll want to sort it all into various piles (sell, dump, or donate). For items that you can easily sell to get some extra cash, you can advertise on online sites such as eBay or craigslist, or take to a local consignment store. And many of your items can be donated to be reused by someone else. Your junk could be someone else’s treasure or be resold to provide funding for programs that help people in need. And some places will even take items that would normally go in the trash as long as it’s not wet, moldy or contains hazardous materials.

Thrift stores are probably the first places that come to mind, but there are a lot of other non-profit, charitable organizations in your area that would be more than willing to take your spring-cleaning discards. Here is a list of some organizations to give you an idea of the many possibilities.

 

NW Furniture Bank

NW Furniture Bank in Tacoma, Washington serves victims of domestic abuse, people suffering loss from fire and natural disasters, foster homes and especially families coming from transitional housing who are trying to rebuild their lives. NWFB relies on furniture donations from the community to help furnish the homes of families and individuals in need. They only accept new or gently-used items. View accepted donation items.

 

Threadcycle

In King County, Washington, there is actually a place that accepts damaged clothes, shoes and linens for reuse or recycling. Even torn, badly worn or even stained items are now being taken by most large collectors in the area, as long as they’re not wet, mildewed, or contaminated with hazardous materials. Many other items, including stuffed animals, purses, belts, and other accessories can be donated in any condition—even single shoes, socks and gloves! Choose from several drop off or pick up organizations at www.kingcounty.gov/threadcycle.

 

Eastside Baby Corner

Eastside Baby Corner in Issaquah, Washington gives to eastside families struggling with job loss, homelessness, medical crisis, and poverty. Bringing EBC the clothes, toys or furniture that your child has outgrown is an easy way to recycle and help a deserving child. When you donate new or gently-used goods, you can be confident that they will be in the hands of a local child—at no cost to the family or to one of their qualified partner agencies—almost immediately.

 

Bags of Love

Bags of Love in Eugene, Oregon provides necessities and comfort items to children who are in crisis due to neglect, abuse, poverty or homelessness. They appreciate donations of new or gently used items for children ages birth through 17. Your donation will immediately be in the hands of a local child at no cost to the family or to our qualified partner agencies.

 

Sunshine Division

The Portland Police Bureau Sunshine Division in Portland, Oregon has been providing food and clothing relief to Portland families and individuals in need since 1923. They accept food donations, as well as donations of new and gently used clothing items. Most needed items in all sizes are: men’s clothes, women’s plus-sized clothes, adult and children’s shoes, and new children’s socks and underwear.

 

Habitat for Humanity

Habitat for Humanity has ReStores all over the U.S. and Canada where you can donate building materials, furniture, and/or appliances. Habitat for Humanity ReStores are nonprofit home improvement stores and donation centers that sell new and gently used furniture, home accessories, building materials, and appliances to the public at a fraction of the retail price. Habitat for Humanity ReStores are proudly owned and operated by local Habitat for Humanity affiliates, and proceeds are used to build homes, community, and hope locally and around the world.

 

Goodwill

There are Goodwill locations across the U.S. Donations to Goodwill has helped to create training and job opportunities for those in our communities. Plus, over the past few years, it has kept billions of pounds of clothing and household items out of landfills. They accept most clothing and household items, but don’t drop off items that have been recalled, banned or do not meet current safety standards. For specialty items such as computers, vehicles or mattresses, it’s best to give your local Goodwill agency a call first to find out any rules or restrictions around these items.

 

Donation Bins

Another option would be to just take your items to a donation bin. While it may be more convenient for you to drop off your items at a nearby donation bin, unfortunately, many goods that wind up in donation bins end up supporting for-profit groups, rather than aiding non-profit, charitable organizations. To help you make informed donation decisions, you can use this handy guide created by Goodwill.

 

Clear the Clutter and Help Others in Need!

It’s springtime, which means spring cleaning for many households. It’s also a time to declutter and purge all those worn out, unwanted, outdated, unused and unneeded items from our closets, garages and other storage spaces.

But what do you do with all that stuff once you’ve decided to get rid of it? First, you’ll want to sort it all into various piles (sell, dump, or donate). For items that you can easily sell to get some extra cash, you can advertise on online sites such as eBay or craigslist, or take to a local consignment store. And many of your items can be donated to be reused by someone else. Your junk could be someone else’s treasure or be resold to provide funding for programs that help people in need. And some places will even take items that would normally go in the trash as long as it’s not wet, moldy or contains hazardous materials.

Thrift stores are probably the first places that come to mind, but there are a lot of other non-profit, charitable organizations in your area that would be more than willing to take your spring-cleaning discards. Here is a list of some organizations to give you an idea of the many possibilities.

 

NW Furniture Bank

NW Furniture Bank in Tacoma, Washington serves victims of domestic abuse, people suffering loss from fire and natural disasters, foster homes and especially families coming from transitional housing who are trying to rebuild their lives. NWFB relies on furniture donations from the community to help furnish the homes of families and individuals in need. They only accept new or gently-used items. View accepted donation items.

 

Threadcycle

In King County, Washington, there is actually a place that accepts damaged clothes, shoes and linens for reuse or recycling. Even torn, badly worn or even stained items are now being taken by most large collectors in the area, as long as they’re not wet, mildewed, or contaminated with hazardous materials. Many other items, including stuffed animals, purses, belts, and other accessories can be donated in any condition—even single shoes, socks and gloves! Choose from several drop off or pick up organizations at www.kingcounty.gov/threadcycle.

 

Eastside Baby Corner

Eastside Baby Corner in Issaquah, Washington gives to eastside families struggling with job loss, homelessness, medical crisis, and poverty. Bringing EBC the clothes, toys or furniture that your child has outgrown is an easy way to recycle and help a deserving child. When you donate new or gently-used goods, you can be confident that they will be in the hands of a local child—at no cost to the family or to one of their qualified partner agencies—almost immediately.

 

Bags of Love

Bags of Love in Eugene, Oregon provides necessities and comfort items to children who are in crisis due to neglect, abuse, poverty or homelessness. They appreciate donations of new or gently used items for children ages birth through 17. Your donation will immediately be in the hands of a local child at no cost to the family or to our qualified partner agencies.

 

Sunshine Division

The Portland Police Bureau Sunshine Division in Portland, Oregon has been providing food and clothing relief to Portland families and individuals in need since 1923. They accept food donations, as well as donations of new and gently used clothing items. Most needed items in all sizes are: men’s clothes, women’s plus-sized clothes, adult and children’s shoes, and new children’s socks and underwear.

 

Habitat for Humanity

Habitat for Humanity has ReStores all over the U.S. and Canada where you can donate building materials, furniture, and/or appliances. Habitat for Humanity ReStores are nonprofit home improvement stores and donation centers that sell new and gently used furniture, home accessories, building materials, and appliances to the public at a fraction of the retail price. Habitat for Humanity ReStores are proudly owned and operated by local Habitat for Humanity affiliates, and proceeds are used to build homes, community, and hope locally and around the world.

 

Goodwill

There are Goodwill locations across the U.S. Donations to Goodwill has helped to create training and job opportunities for those in our communities. Plus, over the past few years, it has kept billions of pounds of clothing and household items out of landfills. They accept most clothing and household items, but don’t drop off items that have been recalled, banned or do not meet current safety standards. For specialty items such as computers, vehicles or mattresses, it’s best to give your local Goodwill agency a call first to find out any rules or restrictions around these items.

 

Donation Bins

Another option would be to just take your items to a donation bin. While it may be more convenient for you to drop off your items at a nearby donation bin, unfortunately, many goods that wind up in donation bins end up supporting for-profit groups, rather than aiding non-profit, charitable organizations. To help you make informed donation decisions, you can use this handy guide created by Goodwill.

 

Nine Ways to Landscape for Maximum Curb Appeal

Photo courtesy of : Darren Patt Construction

This article originally appeared on Porch.com

Written by Jacqui Adams

 

There are a million and one ways to add curb appeal, but your home’s landscaping is one of the most important.

Home sale price data shows that you’ll get double your investment back on landscaping when you’re trying to sell your home. But it doesn’t take a scientist to see that a drab lawn and an overgrown tree can ruin even the most beautiful home’s mojo.

Don’t let bad landscaping ruin your home’s appearance. These 10 tips will help you get your landscaping gorgeous and maximize your curb appeal so you can sell your home for what it’s really worth, or just enjoy a lovely home year round.

 

1.  Play to Your Strengths

Don’t plant haphazardly. Take a look at the colors of your home, and choose plantings that make those colors pop.

Photo courtesy of Gelotte Hommas

 

2. Add Some Color

If you can’t find plants that tie in with the colors of your home’s exterior, then place large-scale glazed planters that pick out the same tones and make even mismatched plantings look intentional.

 

Photo courtesy of Grouparchitect

 

3. Lead the Way

Curb appeal starts at the curb, so make sure the path to your door is clearly defined. Decorative urns or colorful border plantings are two high-impact ways to do the job.

Photo courtesy of Edmund D. Hollander Architect Landscape Design

 

4. Make it Shine

Landscaping features such as paths, walls, and other hardscaping get dirty over time, making the home’s whole exterior look dingy and dark. Make sure to have your landscaped features professionally pressure-washed, so they can shine.

Photo courtesy of Phil Kean Designs

 

5. Tailor Border Plantings

Large, scraggly, or random-looking plants can overwhelm new eyes and obscure features of your home that you should be playing up. Make sure your border plantings are tidy, grouped by color, and just large enough to cover up foundations and external vents, without covering windows or impinging on paths.

Photo courtesy of Ag-Trac Enterprises LC

 

6. Brighten House Numbers

Small details like your house numbers can make a big difference in the overall effect of your landscaping and curb appeal. Replace or paint house numbers so they pop–you could even coordinate them with your door color or the accent color you’ve chosen for your landscape plantings.

Photo courtesy of Darren Patt Construction

 

7. Trim Trees

Cutting down trees is one landscaping rule of thumb that’s no longer completely necessary. Trees can add charm and character, particularly in rustic-styled properties–just make sure trees are trimmed to complement the house’s best qualities. Light and sightlines should be able to reach the house easily.

Photo courtesy of Seaside Construction

 

8. Light the Path

If you haven’t invested in landscape lighting, consider it: it can seriously boost your curb appeal. Lighting under steps, on path borders, and trained on trees and water features will allow your landscaping’s best features to shine even on gloomy days.

Photo courtesy of Advanced Renovations, Inc.

 

9. Create a Soft Landing

Draw buyers and visitors in by softening the transition between your home and the street. Potted plantings on a porch, green wreaths on the door, and a path that meanders through your landscape instead of going straight to the door are three great tricks to try.

Photo courtesy of Wentworth, Inc.

 

Could your curb appeal use some help? What’s the first change you’ll make once the weather gets warm?

 

Jacqui Adams

Content Marketing Specialist, Porch.com. Jacqui Adams is a writer and editor living in Seattle. She shares a cozy midcentury fixer-upper with her fiancé, her cat, and approximately eight bazillion books. Follow Jacqui on Twitter at @JacquiLeeLu.

 

Update: A Legislative Effort Is Now Underway In Congress To Extend The Mortgage Forgiveness Debt Relief Act

UPDATE: Senators Dean Heller (R-Nev.) and Debbie Stabenow (D-Mich.) have introduced a bipartisan bill that would extend the Mortgage Forgiveness Debt Relief Act through 2015 and all of 2016. Heller is an influential member of the Senate Finance Committee and has pledged to attach the bill to a larger piece of legislation that is moving through his committee. We will keep you posted on the progress of the extension as the process moves forward.

 

 

 

 

 

Originally posted in Short Sales on December 22, 2014
 

Mortgage Forgiveness Debt Relief Act Extended Retroactively for 2014:
Future of Mortgage Debt Relief Uncertain in 2015

On December 16, 2014, President Obama signed a bill that extended the Mortgage Forgiveness Debt Relief Act retroactively to cover mortgage debt cancelled in 2014. The Mortgage Forgiveness Debt Relief Act (MFDRA) prevents homeowners who went through a short sale from being taxed on the amount of their home mortgage debt that had been forgiven. For homeowners to qualify for a tax break in 2014, their short sale must close by December 31, 2014.

The Act has only been extended through 2014. Congress is expected to debate further extension of the Act as part of a larger tax package in 2015. In the meantime, mortgage debt forgiven by a lender in 2015 might count as taxable income.

According to a brief from the National Association of Realtors (NAR), about 5.3 million homes are still under water. In addition, there are still more than 1 million homes in the process of foreclosure. If the Mortgage Forgiveness Debt Relief Act is not extended further, hundreds of thousands of American families who did the right thing by short-selling their home will have to pay income tax on income they never received.

IRS “Insolvency Clause” Offers Tax-Saving Alternative

Short sale sellers can still be exempt from tax liability under the “insolvency clause” of the Internal Revenue Code. The clause states that a seller is exempt from paying tax on any forgiven debt to the extent that they are insolvent. In other words, if the seller’s debts and liabilities exceed their assets by more than the amount of debt forgiven, they do not have to pay taxes on the forgiven debt.

Here’s an example of how the Insolvency Clause works:

A seller has a home valued at $300,000, but the mortgage debt is $400,000. We short sell the property for $300K and the bank elects to forgive the debt on the $100,000 shortfall amount. Since debt that has been forgiven counts as taxable income, the IRS would treat the $100,000 of forgiven debt as income.

MORTGAGE DEBT

$400,000

SALE PRICE

-$300,000

FORGIVEN DEBT
(Taxable income)

$100,000

 

This is where the insolvency clause formula comes in. Begin by adding up all of your debts/liabilities in one column and all of your assets in another. For this formula, the IRS wants you to include the mortgage debt as a liability, and the fair market value of your house as an asset. Let’s say you have $600,000 in assets and $700,000 in debts/liabilities. You are insolvent by $100,000.

ASSETS

$600,000

LIABILITIES

-$700,000

INSOLVENCY

[$100,000]

 

Since your insolvency amount of $100,000 equals the forgiven debt amount of $100,000, it’s a wash and you will not have to pay taxes on that forgiven debt. You are shielded dollar-for-dollar on the amount of forgiven debt up to your insolvency number. Let’s say you were only insolvent by $80,000. In that case, you would still have to pay income tax on the remaining $20,000 of forgiven debt.

INSOLVENCY

[$100,000]

FORGIVEN DEBT

-$100,000

TAXABLE INCOME

-0-

 

It is critical that homeowners considering a short sale meet with a professional to review their options and discuss the potential legal and tax implications.

 

Richard Eastern is a Windermere broker in Bellevue, WA and co-founder of Washington Property Solutions, a short sales negotiating company. Since 2003 he has helped more than 900 homeowners sell their homes. A Bellevue native and a University of Washington grad, Richard is an avid sports fan and a devoted Little League and basketball coach. You can learn more about Richard h

How to Hire a Home Inspector

Is this year you make the leap to buy your first home?

A home is a major investment and, for many people, the greatest financial asset they have. With so much at stake, it makes sense to do what you can to protect your financial interest. Getting a home inspection is a smart, simple way to do just that.

When you make a written offer on a home, insist that the offer provide that your contract is contingent on a home inspection conducted by a qualified inspector. You’ll have to pay for the inspection yourself, but an investment of a few hundred dollars could save you thousands of dollars and years of headaches. If you’re satisfied with the results of the inspection and are assured that the home you’re purchasing is in good shape, you can proceed with your transaction, confident that you are making a smart purchase.

 

Hire a professional

When you are ready to hire a home inspector, be sure they’re licensed in your state. They should be able to provide you with their license number, which you can use to verify their status with the appropriate government agency. The best way to find an inspector is to ask your real estate agent for a recommendation. Even among licensed and qualified home inspectors, there can be a difference in knowledge, performance, and communication skills, so l it’s a good idea to do some research to ensure that you get the type of inspection you need.

 

What to ask your home inspector

Ask the right questions to make sure you are hiring the right professional for the job.

 

What does your inspection cover?

Insist that you get this information in writing. Then make sure that it’s in compliance with state requirements and includes the items you want inspected.

 

How long have you been in the business?

Ask for referrals, especially with newer inspectors.

 

Are you experienced in residential inspections?

Residential inspection in a unique discipline with specific challenges, so it’s important to make sure the inspector is experienced in this area.

 

Do you make repairs or make improvements based on inspection?

Some states and/or professional associations allow the inspector to perform repair work on problems uncovered in an inspection. If you’re considering engaging your inspector to do repairs, be sure to get referrals.

 

How long will the inspection take?

A typical single-family dwelling takes two to three hours.

 

How much will it cost?

Costs can vary depending upon a variety of things, such as the square footage, age, and foundation of the house.

 

What type of report will you provide and when will I get it?

Ask to see samples to make sure you understand his or her reporting style. Also make sure the timeline works for you.

 

Can I be there for the inspection?

This could be a valuable learning opportunity. If your inspector refuses, this should raise a red flag.

 

Are you a member of a professional home inspector association? What other credentials do you hold?

Ask to see their membership ID; it provides some assurance.

 

Do you keep your skills up to date through continuing education?

An inspector’s interest in continuing education shows a genuine commitment to performing at the highest level. It’s especially important with older homes or homes with unique elements.

 

What doesn’t a home inspection cover?

For a variety of reasons, some homes will require specialty inspections that are not covered by a typical home inspection. A specialty inspection might include such items as your home’s sewer scope, septic system, geotechnical conditions (for homes perched on steep slopes or where there are concerns regarding soil stability) or underground oil storage tank. If you have any questions about whether or not your home needs a specialty inspection, talk to your real estate agent.