Indianapolis Home Builder CP Morgan goes out of business effective today!

Citing untenable market conditions, homebuilder C. P. Morgan Homes Inc. announced today that it is closing its doors and ceasing operations effective Friday, February 27.

One of Central Indiana’s most dominant builders of single-family homes for more than two decades, the Morgan firm said the collapse of the real estate industry “makes it impossible for us to serve our customers effectively and remain viable.”

“This is one of the most difficult decisions I’ve ever had to make,” said Charles P. (Chuck) Morgan, the company’s founder and chairman.  “With home prices dropping precipitously, resulting in millions of foreclosures, we believe our industry will be in trouble for many months to come,” said Morgan.  “Unfortunately, I believe it’s a crisis that will swallow up many companies like ours all across the nation.”

Morgan said all homes under construction have been completed.  Applicable warranties on all Morgan homes will continue to be honored by a residential warranty company as outlined in each homeowner’s warranty manual.

“This definitely is not what I contemplated when I started the company in 1983,” said Morgan, “but this is the worst catastrophe I’ve seen in our industry in my lifetime.  I could never have imagined this outcome, even as recently as six months ago.  We have done everything possible to prevent this from happening.  From the very beginning, our goal was to provide more people with more home than they ever dreamed possible.  I believe we achieved that goal.”

In its 26-year-existence, the company has built more than 25,000 homes in some 200 Indianapolis and Lafayette, Ind., neighborhoods, plus the Charlotte and Piedmont Triad areas of North Carolina.  The firm marketed mostly to first-time homebuyers, with homes ranging in size from 1,000 square feet to 4,000 square feet and ranging in price from $80,000 to $200,000.

Honored many times, the company most recently received the 2007 Innovation in Workforce Housing Award from the National Association of Home Builders.  That same year it was selected among thousands of homebuilding companies for an APEX Award for innovation in homebuilding practices.

The company was given the National Housing Quality Silver Award in 2006, the industry’s highest recognition for quality achievement and world class business practices.

Morgan said he is especially proud the company has been recognized by Indianapolis Monthly magazine for good employee relations, being named one of the Top 12 businesses to work for the Indianapolis metropolitan area.

“The hardest part of this decision for me has been our associates who have worked tirelessly over the last several months to prevent this from happening,” said Morgan.  “I’m extremely grateful for their exceptional commitment to our company, which only adds to the sadness I feel about closing our doors.”

FAQ: First Time Home Buyer Tax Credit

Lee’s notes: I received this document in an email and went to the source to share with you folks.. Good information.

1. Who is eligible to claim the tax credit?
   First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
2. What is the definition of a first-time home buyer?
   The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

   For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.

3. How is the amount of the tax credit determined?
   The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
4. Are there any income limits for claiming the tax credit?
   The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
5. What is “modified adjusted gross income”?
   Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income” or AGI. AGI is total income for a year minus certain deductions (known as “adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

   To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.

6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
   Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.
7. Can you give me an example of how the partial tax credit is determined?
   Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

   Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

   Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
   The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous “credit” was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
9. How do I claim the tax credit? Do I need to complete a form or application?
   Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.
10. What types of homes will qualify for the tax credit?
    Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
11. I read that the tax credit is “refundable.” What does that mean?
    The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.

    For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).

12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
    Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
    Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been “purchased” on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.

    In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
    Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
    No. You can claim only one.
16. I am not a U.S. citizen. Can I claim the tax credit?
    Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of “nonresident alien” in IRS Publication 519.
17. Is a tax credit the same as a tax deduction?
    No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.

    A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.

18. I bought a home in 2008. Do I qualify for this credit?
    No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit.
19. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
    Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.

    Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.

    Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.

20. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
    Yes. The law allows taxpayers to choose (“elect”) to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

    Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.

21. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
    Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

How to get rid of Cigarette Smoke Smell!

Lee’s Notes: I have a listing currently that has a very strong smell of smoke. So I did a little digging to make some recommendations to my client. Figured i would share with all of you as well. Article stolen from here.

Ex-smokers and non-smokers alike will understand the necessity of getting rid of smoke smells and smoke odors. Whether the smell of smoke is in your home or in your car, you know it’s one of the worst odors imaginable. Cigarette smoke isn’t a quaint smell like a wood furnace or a fireplace; it gets into everything: your carpets, your walls, your sheets, your clothes, your jackets, even in your hand bags. I think we’ve all known or have heard about that one aunt who smokes like a chimney and no one wants to visit her because her house smells like death—and now, thanks to her habit, she’s dead and it’s up to you to deodorize her house before your family puts it on the market. Or perhaps it’s up to you to get the smoke odor out of the ’89 Buick Century she managed to drive only on church days or when she ran out of smokes. Well, hopefully the suggestions below will help you get the smell of cigarette smoke out of whatever it is you need to get it out of.

There’s something about vinegar that gets rid of smoke smell. Because the smell of smoke is caused by the leftover resins and tars, vinegar (an acid that cuts through resin and tar) is a great way to clean those surfaces that aren’t made of fabric, and perhaps, some that are fabric. I know what you’re thinking; vinegar doesn’t smell much better than smoke. Well, that’s true, but the smell of vinegar eventually diminishes, cigarette smoke doesn’t.

The carpets need to be shampooed if you want to remove smoke smell. You have a couple of options here; you can either go to your local hardware store and rent a carpet steam cleaner and shampoo the carpets yourself, or you can hire a professional to bring in a big truck and do the dirty work for you. If you want to save money, the choice is obvious, and the guarantees some businesses will make these days smell funnier than the smoke odor you want them to remove.

Baking soda is a good way to get rid of smoke odor. Now, this takes time because what you want to do is get a box of Arm & Hammer, dust the furniture and the carpets (if they haven’t been shampooed), and leave the baking soda to settle for a day or so. That will give it time to absorb some of the smoke smell and moisture around it. Then, vacuum it up and repeat the process a few more times over the course of a week. Use scented baking soda if you like.

Shades, curtains, and fixtures need to be cleaned to get rid of smoke odor. A lot of people forget to clean things like shades, chandeliers, curtains, and wall hangings, but these things have probably collected quite a bit of tar and resin from years of hanging smoke. Do yourself a favor and put the curtains in the washer, buy new shades, and wipe down the chandelier with a good dose of ammonia, just to make sure that smell is gone.

Fresh air is probably the best way to remove smoke smell and odor from a home. It turns out that opening the windows and doors every couple of days for a whole day will help get the stink of cigarettes out of a home. Lord knows why, but I imagine the air flow allows tar and resin particles to escape, leaving the house smelling more like a house than a tar pit.

Smoke Smell and Odor Removal Products

Don’t be fooled by the claims of odor removal products. If it doesn’t have a cleaning agent in it, you’re not going to get rid of the smoke smell. Scent-generating deodorizers only serve to mask the smell. Once you take them out of the house, you’ll notice the smell of old cigarettes again. Of course, we’ve all heard of Febreze, and wonder why it works. Well, Febreze uses a chemical compound called cyclodextrin that has been used in household and custodial cleaning products for quite some time. The sugar-like substance doesn’t necessarily “clean” the odors out, but acts as an absorbent like baking soda or charcoal, to help soak the odor out. Yes, Febreze does work, but let’s be honest with ourselves. Spraying everything down with Febreze isn’t the answer to years and years of built up cigarette tars and resins. There is one thing I would suggest in an odor removal product and that is activated charcoal. Charcoal is used not only to filter water and other things, but is also used to soak up odors, just like baking soda. If you see charcoal in an odor removing product, it’s likely to succeed at removing odors.

More Smoke Smell Removal

Washing the walls and ceilings is a good idea if nothing else has worked. Try mixing up one gallon of warm water, one half cup of ammonia, one quarter cup of vinegar, and one quarter cup of washing soda. Work your way up from the baseboards to the ceiling while you clean, making sure to change the solution often.

An ozone generator will, apparently, get rid of any odor you can think of if it’s left on long enough in a closed house/apartment. I don’t know about the specifics of this procedure, but if you’re getting desperate it might be worth a shot. I can’t take any responsibility for what this might do to your home or your health. Just be sure to air out the home thoroughly after doing this because ozone is bad for your lungs.

Natural cleaners and odor removing products are a good idea. I don’t know about you, but I care about my environment. So, if you want to get rid of that smoke odor in an eco-friendly manner, I would suggest using some of the cleaning products found in the organic and natural foods section of your local grocery store. Often times these products work just as well as the brand name chemicals.

USNews 15 companies(1 real estate) that might not survive 2009!

Lee’s notes: I was sent this article from USNews.com… It details 15 companies that MIGHT go out of business in 2009 and why they may go under.  Among the big hitters(Chrysler, Blockbuster, Krispy Kremes, etc) one of them(Realogy) owns several real estate brokerages including Coldwell Banker, and ERA. I found the article interesting and worthy of linking.  I’ll also just post the rationale for why Realogy makes the list… For the record, I’m not really trying to rain on anyones parade, I just think people should go into listing transactions with eye wide open. Working with these brokerages should not affect buyers, but could be a hassle for sellers(switching transaction midstream, etc).

Realogy Corp. (Privately owned; about 13,000 employees). It’s the biggest real-estate brokerage firm in the country, but that’s a bad thing when there are double-digit declines in both sales and prices, as there were in 2008. Realogy, which includes the Coldwell Banker, ERA, and Sotheby’s franchises, also carries a high debt load, dating to its purchase by the Apollo Management in 2007 – the very moment when the housing market was starting to invert from a soaring ride into a sickening nosedive. Realogy has been trying to refinance much of its debt, prompting lawsuits. One deal was denied by a judge in December, reducing the firm’s already tight wiggle room

Can you paint vinyl siding?

Lee’s Notes: I have a flip house, and the exterior is this hideous mustart yellow. Not the bright yellow of  French’s, but the nasty yellow of Grey Poupon.. Yeah, it’s bad.. of course, it’s winter now, and we cant paint the house if I wanted to, but I digress.. Found this QnA session about paints for vinyl siding, and thought it might be interesting to others.

DEAR TIM: My house has a combination of wood and vinyl siding. The wood siding needs a fresh coat of paint, but I want the color of the two sidings to be consistent. My wife wants a new color that is different than what we have now. Can I successfully paint vinyl siding? If it is possible, are there special paints and techniques that I must use? Donald N., Scranton, PA

DEAR DONALD: If you had asked this question several years ago, I don’t think you would have liked the answer. But fortunately, there have been some major breakthroughs in the paint and coatings industry. Several new exterior paints are available that have been formulated to stick to vinyl siding. They perform so well that the paint manufacturers
offer a long term warranty so long as you follow the paint label instructions.

Painting vinyl siding is challenging for several reasons. Vinyl siding has a very high expansion/contraction coefficient. This simply means that it expands and contracts significantly as it experiences periods of exposure to sunlight and then periods of shade or darkness. This movement of the siding caused traditional exterior paints to fail in short order as the bond between the paint and the siding was severed by this constant back and forth movement.

Vinyl siding also soaks up heat to a great degree. If it gets too hot, it can buckle and distort. This is why many vinyl products are offered in lighter colors. Because of this fact, you can actually damage your vinyl siding if you paint it a color that is too dark. The paint manufacturers highly recommend that you paint the vinyl siding a color that is no darker than the current shade of your vinyl siding.
Installing vinyl siding on your house? Find the best professionals by using my Vinyl Siding Checklist. I offer a 100% Money Back Guarantee.

For example, if your siding is currently a light shade of beige, you can paint it a light shade of green, blue, tan, etc. The trick is to use paint store color chip cards to guide you. Locate a color that is as close as possible to your existing vinyl siding. Use that color chip card as a benchmark and find complimentary paint chip cards that have the same depth of color as your card. You can then select a color that is equal to or less in color richness and depth as your existing vinyl siding color.

You must use the right paint to achieve victory. The ones that seem to work best with vinyl siding are ones that have a blend of urethane and acrylic resins. Water based urethanes mixed with high grade acrylic resins produce a user-friendly paint that has extraordinary adhesive qualities. This is exactly what one needs to combat the daily movement of the vinyl siding. Exterior latex paints that contain urethane are readily available. Simply look for the word urethane on the label of the paint can.

To get the absolute best results from this paint job you need to do a few other things. I feel that a clean, dry surface is very important. If you clean your house like your own body or your car, you will have a great head start. This means using soap and water and some good old fashioned elbow grease. You must mechanically remove the dirt film from the existing painted surfaces with soapy sponges, rags or brushes. Do not count on pressure washers to clean your existing surfaces. Not only do they not get all the dirt off the surfaces, but they also can inject massive amounts of water into and behind the siding. This hidden water can cause big problems as you begin to apply the new paint.

If mildew is present on the existing surfaces, use an oxygen bleach solution to remove it. Oxygen bleach will not harm the vinyl siding nor any vegetation near your home. Avoid chlorine bleach as it is highly toxic to vegetation. Oxygen bleach can be found easily on the Internet.

Painting in direct sunlight is also not the best idea. If you can paint your home in cooler weather and preferably on overcast days, the paint will have excellent conditions in which to dry and bond to the vinyl siding and existing wood siding. Windy, hot and sunny weather is not the best time to paint contrary to what many people believe.