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Nov

12

Who knows what will really happen with the new administration, but it seems that taxes will go up, or previous tax cuts will be allowed to expire.  So, if you want to defer taxes, this is a great way to do it, BUT you need to know the rules and have the right help.

 In a nutshell, under this section of the Internal Revenue Code, you can exchange a property you own for another property or properties (with no gain or loss incurred).  The key issues with this exchange are the TIMING.  Once you sell the relinquished property, you have 45 days to identify the replacement property or properties.  The property or properties designated must be closed upon within 180 days from the date that the relinquished property sold OR the date the taxpayer’s tax return is due with automatic extensions included, whichever comes first.

 You must show the entire exchange on one year’s tax return.  To see the reporting form, go to www.IRS.gov and reference Form 8824.

 There are a number of other rules that apply, such as exchanging Like Kind properties and how you treat the properties you purchase.  For instance, if you sell an investment property and trade it for investment property, you must treat the new property as an investment, which means holding it long enough to be considered an investment.  Most experts say you need to hold it for a year and a day at least.

Many title companies have departments that perform exchanges for a flat fee.  It is definitely worth using a service to do your exchange since there are many fuzzy areas of the code that have been defined by court cases over the years.

Oct

7

Sell Low & Buy Lower

Posted by Michael Hickman under For Buyers, General Information

With the current amount of inventory (including a larger than normal amount of pre-foreclosure and foreclosure properties), I’m telling my clients that they need to “Sell Low & Buy Lower” to create a net positive in their transaction.  I don’t mean that they should give their home away, but writing a check at closing instead of receiving a check at closing will become more and more prevalent as it was in the mid-80’s.  Of course, the home they are selling still needs to be in peak condition, as buyers are still not interested in “fixer uppers”.  On the other hand, buyers need not to overlook “fixer uppers” that can be increased in value very quickly wth a little improvement or sweat equity.  The idea is to think a little longer term than we have thought in the past.  The 7 and 10% appreciation we saw in 2004 - 2007 probably won’t be back in quite a while.  I expect the average time an owner stays in a home to increase from the current statistic of 7 years.

Apr

16

Current Real Estate Math

Posted by Michael Hickman under For Buyers, General Information

I have several clients who want to move, but are worried about “taking it in the shorts” on their sale.  Here’s what I’m telling them.  If your home is in marketable condition (which means it is appealing) and priced correctly (at market price), then it should sell quickly (45 days).  Yes, you might take 5% less than what should be market value, due to the number of foreclosures that have pulled the price down.  But, if you are smart on your purchase, you may be able to get 10 - 15% below what should be market price on a new home or a foreclosure.  It’s not as likely with resales because properties that have been on the market for a while as resales are either priced too high or in too poor condition (or both).  So, the idea is to sell a little low and then buy a lot low.  The net equity equation comes out in your favor!

Apr

3

I wanted to relate a little of my life experiences as they relate to real estate.  I grew up in the plumbing & electrical supply business.  I started stocking shelves when I was 7.  As a teenager, I installed heating & air conditioning systems as residents of the Southeast began adding these central systems to their homes in the late 70’s and early 80’s.  After graduating from high school, I attended the Georgia Institute of Technology where I earned a Bachelors in Civil Engineering.  For the next several years (and even occasionally today) I provided consulting engineering services in the civil, geotechnical and environmental specialties.  Much of this work was done for residential and commercial developers all over the state of Georgia, but mainly centered in the Metro Atlanta Area.  I was offerred the opportunity to begin the development of the Georgia Tech Club in Alpharetta, Georgia.  I helped with a little of the engineering (with respect to water capacity to water the golf course) and handled both golf membership and real estate sales.  This 620+ acre super-luxury development now has the toughest golf course in the state.  The community itself is called Echelon.  It is one of the most picturesque pieces of property I have ever seen.  The rolling hills & hardwoods are spectacular.  Again, an opportunity arose through a Georgia Tech connection, to work with Keller Williams Realty.  After 5 months of studying Keller Williams and other real estate companies, I came aboard KW.  It was one of the best decisions of my life.  I’m blessed to work with a company, top to bottom, that has the best interests of it’s agents in mind at all times.  So, that’s how I got into the real estate sales business.  By the way, in the middle of all the consulting, I also helped grow a small telecommunications company called Hickman Communications, Inc.  That’s where I learned all of my sales, negotiation and marketing.  At one time, we were billing over $500,00/month.  Unfortunately, the small fry can’t compete long term with the likes of Bellsouth, AT&T, etc.  I’m glad for the experience, because it has been a huge help with my real estate business.

As a former consulting engineeer (civil, geotechnical & environmental), I’ve been around the construction and development business for quite a while.  In fact, my parents owned a plumbing, electrical & HVAC supply store, in which I worked while growing up.  I’m one of the youngest people to plumb DWV with Oakum & a Lead Pot (if you know what that is, it shows your age).

In my opinion, the rush by national builders to snatch up land & lots in Forsyth County was terribly overzealous.  Now, we are in a situation where these national builders have backed off, sold lots, sold whole subdivisions, or have put production almost on hold.  This is a good thing for sellers with an existing home to sell, especially in the $250k - $400k price range, because some of the new-home competition isn’t there.  In fact, I expect it to get even better since these national builders will be slow to react back into the market.  It will also be good for quality, local home builders.  They can react a little quicker and get product built to coincide with the thousands that are going to move to our area in the coming years.

Welcome to Michael Hickman’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Cumming, Forsyth County, Georgia.