From HVAC to roofing products, the American Recovery and Reinvestment and Act (ARRA) initiated tax credits for a range of energy-efficient home improvements, mostly related to a home’s mechanicals or building envelope. With the legislation focusing on reducing the biggest aspects of a home’s energy use, other product categories were not addressed in the Act, despite being classified as sustainable products.
One such area is kitchen cabinetry, which the Kitchen Cabinet Manufacturers Association (KCMA) has worked hard to “green” with its Environmental Stewardship Program (ESP). But with the proposed legislation, cabinetry, carpeting, countertops, flooring, and other home furnishings may also become eligible for tax deductions and credits.
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CHICAGO (MarketWatch) — A federal tax credit of up to $8,000 is nudging many Americans into buying a home for the first time, good news for those trying to sell one.
Still, selling a home isn’t easy in most markets today. To get the typical first-time buyer to bite and submit an offer, a house has to stand apart from the competition — and there’s a lot of it, including foreclosure homes that are selling at hefty discounts.
One big thing working in favor of the traditional seller: A lived-in, maintained home is easier for buyers to imagine themselves living in than a vacant foreclosure. That has great appeal for someone buying a home for the first time, for practical and financial reasons.
“First-time buyers are skeptical of buying homes that need improvement. Sellers certainly don’t need to remodel the kitchen, but they want to make sure that their home showcases very well,” said Eric Mangan, a spokesman for ForSaleByOwner.com.
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According to the poll, the most popular remodeling projects for homeowners are kitchens (19%) and bathrooms (17%). In another survey, Consumer Reports asked 6,000 readers to reveal what went wrong when they remodeled their kitchens and baths and how much those mistakes added to the overall cost of their projects. Here’s how to avoid their mistakes and save:
Don’t rush in. Changing plans is the most common, but costliest remodeling gaffe, adding $1,500 to kitchen projects and $650 to bath remodels. Be sure to leave time for research and create a comprehensive plan, listing every product.
Prepare for the unexpected. There’s a lot going on behind the walls. Unexpected water damage was an issue with 17 percent of bathroom remodels, while structural problems caused headaches for 10 percent of kitchen projects. A good contractor will be able to anticipate, allowing the homeowner to budget accordingly.
Don’t chase the low ball. Contractors are lowering their profit margins due to the tight market, but they often make up their costs in labor or other areas. Readers who went for the lowball ended up spending a median of $1,500 extra for labor on their kitchens and $1,000 extra on their bathrooms. Don’t sign a contract with a lot of open-ended amounts for products and materials — these are called “allowances,” in contractor speak.
Get the paperwork in order. Have the contractor attach copies of his up-to-date license, insurance, and workers’ compensation policies to the written contract. He should also get permits and provide a lien waiver when the job is done; this will keep suppliers from contacting the homeowner for unpaid bills.
Focus on the boring bits. Specifying lighting and placement of trash cans are not much fun, but are critical to the process. For example, the proper exhaust fan will prevent mildew in baths and vent odors in kitchens.
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