A real estate broker is a term in the United States which describes a party who acts as an intermediary between sellers and buyers of real estate (or real property as it known elsewhere) and attempts to find sellers who wish to sell and buyers who wish to buy. In the United States, the relationship was originally established by reference to the English common law of agency with the broker having a fiduciary relationship with his clients.

Estate agent is the term used in the United Kingdom to describe a person or organization whose business is to market real estate on behalf of clients, but there are significant differences between the actions and liabilities of brokers and estate agents in each country. Beyond the US, other countries take markedly different approaches to the marketing and selling of real property.

In the US, real estate brokers and their salespersons (commonly called “real estate agents” or, in some states, “brokers”) assist sellers in marketing their property and selling it for the highest possible price under the best terms. When acting as a Buyer’s agent with a signed agreement (or, in many cases, verbal agreement, although a broker may not be legally entitled to his commission unless the agreement is in writing), they assist buyers by helping them purchase property for the lowest possible price under the best terms. Without a signed agreement, brokers may assist buyers in the acquisition of property but still represent the seller and the seller’s interests.

In most jurisdictions in the United States, a person is required to have a license in order to receive remuneration for services rendered as a real estate broker. Unlicensed activity is illegal, but buyers and sellers acting as principals in the sale or purchase of real estate are not required to be licensed. In some states, lawyers are allowed to handle real estate sales for compensation without being licensed as brokers or agents.

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Whenever you are to close a deal, both the parties should meet up together with the rest of the gang: the realtor, the lender and the closing agent (all should be present!). Normally, the meet up is done either at the agent’s office or at the bank if you are mortgaging the house. Final touches should be done. In this final meeting, you should be critical about things. Review the contents of the contract. In today’s world, there are a lot of people who would rather inflict bad things to others. Be cautious about things. You don’t want to be fooled by these bad brokers, do you?

Photo taken from http://www.bfsfloors.com

When buying a house, you have to consider the time when the house was first placed into listing. Sometimes, the buyers are too careless when it comes to this because they don’t double check. Having a house for sale listed for about 200 days already means something. You can’t just presume that nobody has seen the house in any auction or for sale site, or perhaps the seller probably has been picky when it comes to his buyers (personal reason maybe?). You have to know the history by researching more. You can also do a meet up with the seller just know what type of person he or she is. Who knows? She might have issues herself.

Photo taken from http://www.optimumrealestate.co.uk

Fetching front porch

After

1. Porch: An airy pergola runs almost the length of the facade, adding square footage and symmetry.
2. Entry: Shifting the opening towards the center and adding a wider door with sidelights make the front door more proportional and inviting.
3. Siding and windows: Varying the type, shade, and direction of the new taupe-colored cedar siding adds visual interest. The vertical boards on top also complement the muntins in the new, historically accurate windows.
4. Landscape and lighting: A stone wall framed by lush greenery creates a terraced front garden, and corrects what had been an awkwardly sloping lawn. Prairie-style lanterns brighten the front walk and portico.

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Fetching front porch

Before

• The entry – and what surrounds it – are key to making a home welcoming. So the “Grey Poupon” yellow aluminum siding and tiny off-kilter portico on this Clarendon Hills, Illinois, house had to go.
• In fact, such “updating” had left the 1909 four-square looking like a shell of its former self. Relying on a vintage photograph, the homeowner set about restoring the facade’s original charm.
• Architect David Raino-Ogden drafted the plan for the facade, and a landscape-design course helped the homeowner devise her own plan and hardscape scheme.

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One asset of urban homes is the nearby commercial communities. This provides easier access to schools, dining places, shopping malls, churches and even hospitals. Almost everything that a family needs would be within close range. Also, amenities such as clubhouse, swimming pool, playground, etc. are provided by some urban homes. Although this feature may not be available to all, it gives an option of making a little amusement available for the children, especially in the absence of the working parents

An installment sale is a sale of property where you receive at least one payment after the tax year of the sale. If you dispose of property in an installment sale, you report part of your gain when you receive each installment payment. You cannot use the installment method to report a loss.

General Rules

If a sale qualifies as an installment sale, the gain must be reported under the installment method unless:

• You elect out of using the installment method

• You are not a qualified accrual method taxpayer

References/Related Topics

• Form 6252, Installment Sale Income (PDF)

• Publication 537 , Installment Sales

• Tax Tips – Real Estate

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Real Estate Tips
Some handy advice for those buying property.

With the main traditional buying season approaching, here are some tips for those of you on the house hunting trail.

1. Don’t be put off by bad weather. It’s a good time to check the potential property for leaks and poor drainage.
2. Visit the area to check out the proximity of schools, nightlife, transport, shopping centres, etc. These can have an effect on your lifestyle, both now and in the future (ie.children).
3. Contact local agents to research recent sale values in the area.
4. Always obtain building and pest reports on any property in which you are seriously interested.
5. Before you buy, get in touch with your potential neighbours, to ascertain suitability and see if there are underlying disputes or problems.

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You may qualify to exclude from your income all or part of any gain from the sale of your main home. Your main home is the one in which you live most of the time.

Ownership and Use Tests

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

* Owned the home for at least two years (the ownership test)
* Lived in the home as your main home for at least two years (the use test)

Gain

If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

* If you can exclude all of the gain, you do not need to report the sale on your tax return
* If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040)

Loss

You cannot deduct a loss from the sale of your main home.

Worksheets

Worksheets are included in Publication 523, Selling Your Home, to help you figure the:

* Adjusted basis of the home you sold
* Gain (or loss) on the sale
* Gain that you can exclude

Reporting the Sale

Do not report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable. Report any taxable gain on Schedule D (Form 1040).

More Than One Home

If you have more than one home, you can exclude gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

Example One:

You own and live in a house in the city. You also own a beach house, which you use during the summer months. The house in the city is your main home; the beach house is not.

Example Two:

You own a house, but you live in another house that you rent. The rented house is your main home.

Business Use or Rental of Home

You may be able to exclude your gain from the sale of a home that you have used for business or to produce rental income. But you must meet the ownership and use tests.

Example:

On May 30, 1997, Amy bought a house. She moved in on that date and lived in it until May 31, 1999, when she moved out of the house and put it up for rent. The house was rented from June 1, 1999, to March 31, 2001. Amy moved back into the house on April 1, 2001, and lived there until she sold it on January 31, 2003. During the 5-year period ending on the date of the sale (February 1, 1998 – January 31, 2003), Amy owned and lived in the house for more than 2 years as shown in the table below.

Five Year Period — Used as Home — Used as Rental
2/1/98-5/31/99 — 16 months
6/1/99-3/31/01 — 22 months
4/1/01-1/31/03 — 22 months
38 months 22 months

Amy can exclude gain up to $250,000. However, she cannot exclude the part of the gain equal to the depreciation she claimed for renting the house.

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The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your “Gross Estate.” The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your “Taxable Estate.” These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2 percent of all Americans.

Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) with a total value under $1,000,000 do not require the filing of an estate tax return. The amount was $1,500,000 in 2004 and 2005. For 2006 through 2008, the amount is raised to $2,000,000.

For additional information, refer to Instructions for Form 706.

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