Showing posts with label houses. Show all posts
Showing posts with label houses. Show all posts
Tuesday, November 27, 2012
Lending Gets Even Tighter for Borrowers
The average FICO score for first-lien loans reached 750 in October, a rise from 741 in August, according to Ellie Mae, an analysis that encompasses about 20 percent of all loan applications in the U.S.
Meanwhile, the average FICO score on applications that were denied by lenders was 706. That is up from 700 compared to year ago levels and 697 in September 2011.
Last week, Federal Reserve Chairman Ben Bernanke said that tighter lending conditions are contributing to a housing slowdown. He said that some tightening in mortgage lending was necessary following the housing crisis. But, he added, “it seems at this point the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes."
Source: “Average FICO Score Getting higher for Approved Mortgages,” HousingWire (Nov. 19. 2012)
Wednesday, September 19, 2012
The Market is Competitive for Home Buyers
More home buyers are finding they’re losing their power position in the real estate market and that when they submit an offer for a home, they are not alone in the bidding. In fact, buyers who submit low offers may not even get a courtesy of a callback nowadays.
Money Magazine recently offered potential buyers the following tips if they want to get the winning bid on a home:
Get pre-approved, not prequalified: Pre-approval for a loan based on a buyer's credit, income, and assets is viewed as better than getting pre-qualified, which is just an estimate of how much that buyer may be able to borrow.
Find an experienced REALTOR®: Money Magazine advised home buyers to find a real estate professional who knows how to handle multiple-offer situations and can advise how much to offer and help buyers determine if they’re getting a home at a fair price.
Watch the contingencies: “The best offer isn't always the one with the best price," says George Miller, a Sarasota, Fla., real estate agent. Buyers who put in too many contingencies with their offer may lose out.
Source: “Winning in a Seller's Housing Market,” Money Magazine (Sept. 12, 2012)
Friday, March 25, 2011
Increase Your Home's Value
It is no secret. 2010 was a hard year for home values. While you cannot
protect yourself against market corrections, you can take small steps to help
increase your home's value and make it more marketable. The following tips
are meant to inspire and motivate you to treat your home like the investment it
was meant to be.
1. Make Repairs: Homes require regular maintenance and repairs are a
necessary component of home ownership. Procrastination gets you nowhere
when it comes to home value. Stay on top of repairs as they are needed. And
be sure to address large projects before placing your home on the market. For
example, roofs are expensive to replace or repair. Many buyers will pass up
your otherwise wonderful home when faced with roof issues.
2. Curb Appeal: Curb appeal is about first impressions. It is also about
neighborhood values. Drive down a street lined with manicured lawns and well maintained
homes and the values are sure to reflect the care their owners take.
On the other hand, streets with overgrown trees, junky yards, and chipped and
faded paint are fighting an uphill battle in the values game.
3. Community Involvement: The classic quote from Chinese philosopher
Lao-tzu says, "A journey of 1,000 miles begins with a single step." This is
especially true for improving the health and wealth of a community. Change
starts with yourself. By becoming an active member of your community, you
can inspire the change you desire. Family, friends, and neighbors will follow
your lead of civic duty. How can you get involved? Run for city council, join the
PTA, volunteer, and help organize fund raisers and events that inspire
community togetherness.
4. Updated Kitchen: Kitchens are a real selling point. Outdated cabinets,
counters, and appliances will stick out like a sore thumb to buyers. Be sure,
however, that you research your comparables before beginning a remodel. You
do not want to price yourself out of the running. This means if you love granite
and travertine, but other homes in your area are selling with laminate, you will
probably not be able to ask for a drastically higher price that covers the price of
the granite.
5. Updated Bath: Bathrooms also hold much of a home's value. New lowflush
toilets cost as little as $100. And tubs and showers can be easily replaced
or resurfaced. Be sure, above all else, that your bathrooms are clean for
showings.
6. Energy Savers: Buyers are looking for homes that are energy efficient.
Low-flush toilets, solar panels, water filtration systems, and insulated windows
are all inexpensive fixes for energy zappers.
Consider these simple tips and decide for yourself what may help your home retain its value.
protect yourself against market corrections, you can take small steps to help
increase your home's value and make it more marketable. The following tips
are meant to inspire and motivate you to treat your home like the investment it
was meant to be.
1. Make Repairs: Homes require regular maintenance and repairs are a
necessary component of home ownership. Procrastination gets you nowhere
when it comes to home value. Stay on top of repairs as they are needed. And
be sure to address large projects before placing your home on the market. For
example, roofs are expensive to replace or repair. Many buyers will pass up
your otherwise wonderful home when faced with roof issues.
2. Curb Appeal: Curb appeal is about first impressions. It is also about
neighborhood values. Drive down a street lined with manicured lawns and well maintained
homes and the values are sure to reflect the care their owners take.
On the other hand, streets with overgrown trees, junky yards, and chipped and
faded paint are fighting an uphill battle in the values game.
3. Community Involvement: The classic quote from Chinese philosopher
Lao-tzu says, "A journey of 1,000 miles begins with a single step." This is
especially true for improving the health and wealth of a community. Change
starts with yourself. By becoming an active member of your community, you
can inspire the change you desire. Family, friends, and neighbors will follow
your lead of civic duty. How can you get involved? Run for city council, join the
PTA, volunteer, and help organize fund raisers and events that inspire
community togetherness.
4. Updated Kitchen: Kitchens are a real selling point. Outdated cabinets,
counters, and appliances will stick out like a sore thumb to buyers. Be sure,
however, that you research your comparables before beginning a remodel. You
do not want to price yourself out of the running. This means if you love granite
and travertine, but other homes in your area are selling with laminate, you will
probably not be able to ask for a drastically higher price that covers the price of
the granite.
5. Updated Bath: Bathrooms also hold much of a home's value. New lowflush
toilets cost as little as $100. And tubs and showers can be easily replaced
or resurfaced. Be sure, above all else, that your bathrooms are clean for
showings.
6. Energy Savers: Buyers are looking for homes that are energy efficient.
Low-flush toilets, solar panels, water filtration systems, and insulated windows
are all inexpensive fixes for energy zappers.
Consider these simple tips and decide for yourself what may help your home retain its value.
Tuesday, October 12, 2010
The Homeowner Tax Credit– What It Is and Where It Is Headed
The Taxpayer Relief Act was a huge break for sellers of real estate back in 1997. Basically, Congress changed the tax laws so that a homeowner could exempt $250,000 in gains from the sale of the owner’s primary residence. This had outstanding tax benefits for sellers over the last ten years as properties seemed to exponentially increase in value and homeowners routinely sold homes for a profit. In fact, prior to the Taxpayer Relief Act of 1997, homeowners had little incentive to move out of their home into a smaller place because it would cost them too much money in capital gains tax.
However, the President and Congress have recently began hinting that they might roll back or repeal some of the tax benefits within The Taxpayer Relief Act of 1997. This talk stays somewhat under the radar because, presently, people are not routinely selling their homes for a profit. But my question is: “What happens when the market ticks up and this benefit is repealed or rolled back?” How will that affect our business?
The Taxpayer Relief Act
The rules are pretty simple and any good realtor should know them well. Essentially, a homeowner can sell a “primary residence” and keep the first $250,000 of profit tax free. If the homeowners are married and filing a joint tax return, the couple can keep the first $500,000 of profit tax free.
In order to be deemed a “primary residence” the home must 1) have been lived in by the seller for at least two of the last five years, 2) the seller and his/her spouse must not have collected this tax benefit within the last two years on a different home sale, and 3) the property must be residential (commercial properties are not eligible for this tax exemption). The seller need not have lived in the home for two consecutive years. Also, as long as a seller has not sold a “primary home” and taken this tax benefit within the last two years, the tax exemption can be claimed over and over again.
The rules were made more lenient in 2004 for sellers who have been deployed by the military, have had a major change in health, have been forced to move for work, or can demonstrate insurmountable hardship. In these special circumstances, the sellers do not have to show that they lived in the primary residence for two of the last five years. However, they still cannot collect the benefit if they already have done so on a different sale within the last two years.
The Proposed Change
Most business attorneys are aware that the current capital gains tax that individuals and businesses pay on “personal property” sales will rise in 2011 because of a “sunset provision” that was placed in the Tax Increase Prevention and Reconciliation Act of 2006. This means that the Act terminates on its own on January 1, 2011, and without an additional act of Congress, individuals and businesses will have to pay higher taxes on profits that they earn for selling certain assets next year. Generally, real estate sales are not included in this capital gains tax increase. However, as the debate has heated up about whether to save the current “personal property” capital gains tax rate, the President and many in Congress have taken a firm stand that they want “fairness” in tax paying. This has lead to a discussion about revisiting the capital gains tax structure, including a tax increase on the profits that individuals earn when they sell their real estate holdings.
In his 2008 debates with Hilary Clinton, then Senator Obama proposed changing the entire capital gains tax structure back to where it was prior to The Taxpayer Relief Act of 1997. This would have numerous affects. Most notably, the homeowner tax benefit would be rolled back and virtually eliminated. Prior to 1997, sellers were only entitled to a $125,000 capital gains credit – and that was only if the seller was 55 years old or older at the time of sale.
Some on Capitol Hill have recently argued that the homeowner tax credit should be reduced from a $250,000 credit for one seller and a $500,000 credit for married sellers to a blanket $125,000 credit regardless of whether the couple files jointly or separately. The White House has not taken an official stand since Mr. Obama became President. However, some notable leaders in Congress, including Chairman of the House Financial Services Committee Barney Frank and Senate Majority Whip Richard Durbin (both voted against the Taxpayer Relief Act of 1997), have recently suggested that the homeowner tax credit of 1997 should be on the table along with all other capital gains.
By Chris Moles
Brokerage Counsel
Intero Real Estate, Inc.
However, the President and Congress have recently began hinting that they might roll back or repeal some of the tax benefits within The Taxpayer Relief Act of 1997. This talk stays somewhat under the radar because, presently, people are not routinely selling their homes for a profit. But my question is: “What happens when the market ticks up and this benefit is repealed or rolled back?” How will that affect our business?
The Taxpayer Relief Act
The rules are pretty simple and any good realtor should know them well. Essentially, a homeowner can sell a “primary residence” and keep the first $250,000 of profit tax free. If the homeowners are married and filing a joint tax return, the couple can keep the first $500,000 of profit tax free.
In order to be deemed a “primary residence” the home must 1) have been lived in by the seller for at least two of the last five years, 2) the seller and his/her spouse must not have collected this tax benefit within the last two years on a different home sale, and 3) the property must be residential (commercial properties are not eligible for this tax exemption). The seller need not have lived in the home for two consecutive years. Also, as long as a seller has not sold a “primary home” and taken this tax benefit within the last two years, the tax exemption can be claimed over and over again.
The rules were made more lenient in 2004 for sellers who have been deployed by the military, have had a major change in health, have been forced to move for work, or can demonstrate insurmountable hardship. In these special circumstances, the sellers do not have to show that they lived in the primary residence for two of the last five years. However, they still cannot collect the benefit if they already have done so on a different sale within the last two years.
The Proposed Change
Most business attorneys are aware that the current capital gains tax that individuals and businesses pay on “personal property” sales will rise in 2011 because of a “sunset provision” that was placed in the Tax Increase Prevention and Reconciliation Act of 2006. This means that the Act terminates on its own on January 1, 2011, and without an additional act of Congress, individuals and businesses will have to pay higher taxes on profits that they earn for selling certain assets next year. Generally, real estate sales are not included in this capital gains tax increase. However, as the debate has heated up about whether to save the current “personal property” capital gains tax rate, the President and many in Congress have taken a firm stand that they want “fairness” in tax paying. This has lead to a discussion about revisiting the capital gains tax structure, including a tax increase on the profits that individuals earn when they sell their real estate holdings.
In his 2008 debates with Hilary Clinton, then Senator Obama proposed changing the entire capital gains tax structure back to where it was prior to The Taxpayer Relief Act of 1997. This would have numerous affects. Most notably, the homeowner tax benefit would be rolled back and virtually eliminated. Prior to 1997, sellers were only entitled to a $125,000 capital gains credit – and that was only if the seller was 55 years old or older at the time of sale.
Some on Capitol Hill have recently argued that the homeowner tax credit should be reduced from a $250,000 credit for one seller and a $500,000 credit for married sellers to a blanket $125,000 credit regardless of whether the couple files jointly or separately. The White House has not taken an official stand since Mr. Obama became President. However, some notable leaders in Congress, including Chairman of the House Financial Services Committee Barney Frank and Senate Majority Whip Richard Durbin (both voted against the Taxpayer Relief Act of 1997), have recently suggested that the homeowner tax credit of 1997 should be on the table along with all other capital gains.
By Chris Moles
Brokerage Counsel
Intero Real Estate, Inc.
Wednesday, September 8, 2010
Google Says Hello to Real Estate
Google is an economic force to be reckoned with here in the Bay Area – and especially in Silicon Valley. The Internet pioneer employs more than 20,000 people, and they would seem to be among the happiest employees on earth.
The company’s latest news to hit the streets: it has jumped into real estate.
This news, however, is probably not what you’d expect. Google did not release an all-encompassing super-powered Internet search experience for home listings. Rather, the Mountain View-based giant is creating an $86-million Low-Income Housing Tax Credit (LIHTC) fund that will subsidize the construction and operation of 480 affordable rental units in seven communities in the West and Midwest for seniors and low-income families.
Google must have realized that there is no shortage of ways to help in the real estate arena offline. The fund apparently is not the first effort – Google recently invested in two other low-income housing projects for seniors in the San Francisco Bay Area and Los Angeles County.
So far, none of the projects have been in Google’s backyard in Mountain View, but it’s not really Google picking and choosing where the money goes. For that, they rely on the fund manager.
It’s nice to see philanthropic efforts by major U.S. corporations hit home like this. Affordable housing indeed is a problem in many areas and may get worse if the economy continues to disappoint.
Google’s investment comes at a time when many developers of low-income housing projects face huge financial hurdles and lack of funds. It is unusual for a technology company to fund projects like this. This move shows how the investor base for affordable housing is expanding beyond traditional means like banks.
It will be really interesting to see whether other large companies follow suit. As I mentioned, there are certainly a lot of projects needing funding and affordable housing is a social issue that is easy to get behind.
By Gino Blefari
President & CEO
Intero Real Estate Services, Inc.
The company’s latest news to hit the streets: it has jumped into real estate.
This news, however, is probably not what you’d expect. Google did not release an all-encompassing super-powered Internet search experience for home listings. Rather, the Mountain View-based giant is creating an $86-million Low-Income Housing Tax Credit (LIHTC) fund that will subsidize the construction and operation of 480 affordable rental units in seven communities in the West and Midwest for seniors and low-income families.
Google must have realized that there is no shortage of ways to help in the real estate arena offline. The fund apparently is not the first effort – Google recently invested in two other low-income housing projects for seniors in the San Francisco Bay Area and Los Angeles County.
So far, none of the projects have been in Google’s backyard in Mountain View, but it’s not really Google picking and choosing where the money goes. For that, they rely on the fund manager.
It’s nice to see philanthropic efforts by major U.S. corporations hit home like this. Affordable housing indeed is a problem in many areas and may get worse if the economy continues to disappoint.
Google’s investment comes at a time when many developers of low-income housing projects face huge financial hurdles and lack of funds. It is unusual for a technology company to fund projects like this. This move shows how the investor base for affordable housing is expanding beyond traditional means like banks.
It will be really interesting to see whether other large companies follow suit. As I mentioned, there are certainly a lot of projects needing funding and affordable housing is a social issue that is easy to get behind.
By Gino Blefari
President & CEO
Intero Real Estate Services, Inc.
Wednesday, February 17, 2010
Selling Short? Keep Track of Everything
Selling Short? Keep Track of Everything
By Gino Blefari
President and CEO
Intero Real Estate Services, Inc.
It’s that time of year again. The Winter Holidays are behind us, we’ve cheered a new Super Bowl champion and exchanged boxes of chocolates for Valentine’s Day. That can only mean one thing: Tax Season is upon us.
When it comes to your home, there is plenty of documentation of which you need to keep track when it comes time to file your annual return. For those of you filing “standard” income tax returns, this is all fairly clear and straightforward.
With the current real estate climate, however, there are scores situations, like having lost a home to foreclosure, or staring personal bankruptcy in the face, in which many never thought they’d find themselves. Situations like these can make filing taxes a bit trickier.
There’s one circumstance in particular on which I’d like to focus today:
Short sales.
If you’ve gone through the short sale process (where you can no longer afford the payments on your home, but your lender allows you to sell the home at loss, rather than go through with foreclosure), then you know it’s long, it’s arduous, and it’s one in which things have the potential to be very murky.
When completing the reams and reams of paperwork required by your lender to complete the short sale process, it’s likely that you signed a promissory note, or other like document, granting the lender the right to take action against you to collect the deficient amount. This is pretty standard. It’s possible, though, that you also got a copy of a document with the heading 1099-C, which the lender has filed with the IRS, indicating that the unpaid portion of the loan has been canceled. This is a trigger for the IRS to assess taxes against the forgiven debt.
Wait. What?
“How is that possible?” you might ask. Good question. It doesn’t stand to reason that a lender can pursue you for unpaid debt and that the IRS can assess taxes, as well. Logic would dictate that one or the other is reasonable, but not both.
Keep copies of everything having to do with anything related to the transaction.
If you signed paperwork indicating that the lender can take collection action against you, but you’ve also received a 1099-C for the uncollected debt, you’ll have plenty of documented proof to show the IRS that you don’t owe taxes on that amount. Similarly, if there is nothing in your sale paperwork that gives the bank the right to collect the debt, nor is there any other reference to it, the 1099-C will serve as evidence should the bank, at some point, decide to take action against you.
They can’t have it both ways.
I’m not a tax professional. I’m not certified to give that sort of advice. But I can advise you to seek the counsel of a tax professional, so that negotiating the maze of tax ramifications that come with a short sale is made somewhat easier
By Gino Blefari
President and CEO
Intero Real Estate Services, Inc.
It’s that time of year again. The Winter Holidays are behind us, we’ve cheered a new Super Bowl champion and exchanged boxes of chocolates for Valentine’s Day. That can only mean one thing: Tax Season is upon us.
When it comes to your home, there is plenty of documentation of which you need to keep track when it comes time to file your annual return. For those of you filing “standard” income tax returns, this is all fairly clear and straightforward.
With the current real estate climate, however, there are scores situations, like having lost a home to foreclosure, or staring personal bankruptcy in the face, in which many never thought they’d find themselves. Situations like these can make filing taxes a bit trickier.
There’s one circumstance in particular on which I’d like to focus today:
Short sales.
If you’ve gone through the short sale process (where you can no longer afford the payments on your home, but your lender allows you to sell the home at loss, rather than go through with foreclosure), then you know it’s long, it’s arduous, and it’s one in which things have the potential to be very murky.
When completing the reams and reams of paperwork required by your lender to complete the short sale process, it’s likely that you signed a promissory note, or other like document, granting the lender the right to take action against you to collect the deficient amount. This is pretty standard. It’s possible, though, that you also got a copy of a document with the heading 1099-C, which the lender has filed with the IRS, indicating that the unpaid portion of the loan has been canceled. This is a trigger for the IRS to assess taxes against the forgiven debt.
Wait. What?
“How is that possible?” you might ask. Good question. It doesn’t stand to reason that a lender can pursue you for unpaid debt and that the IRS can assess taxes, as well. Logic would dictate that one or the other is reasonable, but not both.
Keep copies of everything having to do with anything related to the transaction.
If you signed paperwork indicating that the lender can take collection action against you, but you’ve also received a 1099-C for the uncollected debt, you’ll have plenty of documented proof to show the IRS that you don’t owe taxes on that amount. Similarly, if there is nothing in your sale paperwork that gives the bank the right to collect the debt, nor is there any other reference to it, the 1099-C will serve as evidence should the bank, at some point, decide to take action against you.
They can’t have it both ways.
I’m not a tax professional. I’m not certified to give that sort of advice. But I can advise you to seek the counsel of a tax professional, so that negotiating the maze of tax ramifications that come with a short sale is made somewhat easier
By Gino Blefari
President and CEO
Intero Real Estate Services, Inc.
It’s that time of year again. The Winter Holidays are behind us, we’ve cheered a new Super Bowl champion and exchanged boxes of chocolates for Valentine’s Day. That can only mean one thing: Tax Season is upon us.
When it comes to your home, there is plenty of documentation of which you need to keep track when it comes time to file your annual return. For those of you filing “standard” income tax returns, this is all fairly clear and straightforward.
With the current real estate climate, however, there are scores situations, like having lost a home to foreclosure, or staring personal bankruptcy in the face, in which many never thought they’d find themselves. Situations like these can make filing taxes a bit trickier.
There’s one circumstance in particular on which I’d like to focus today:
Short sales.
If you’ve gone through the short sale process (where you can no longer afford the payments on your home, but your lender allows you to sell the home at loss, rather than go through with foreclosure), then you know it’s long, it’s arduous, and it’s one in which things have the potential to be very murky.
When completing the reams and reams of paperwork required by your lender to complete the short sale process, it’s likely that you signed a promissory note, or other like document, granting the lender the right to take action against you to collect the deficient amount. This is pretty standard. It’s possible, though, that you also got a copy of a document with the heading 1099-C, which the lender has filed with the IRS, indicating that the unpaid portion of the loan has been canceled. This is a trigger for the IRS to assess taxes against the forgiven debt.
Wait. What?
“How is that possible?” you might ask. Good question. It doesn’t stand to reason that a lender can pursue you for unpaid debt and that the IRS can assess taxes, as well. Logic would dictate that one or the other is reasonable, but not both.
Keep copies of everything having to do with anything related to the transaction.
If you signed paperwork indicating that the lender can take collection action against you, but you’ve also received a 1099-C for the uncollected debt, you’ll have plenty of documented proof to show the IRS that you don’t owe taxes on that amount. Similarly, if there is nothing in your sale paperwork that gives the bank the right to collect the debt, nor is there any other reference to it, the 1099-C will serve as evidence should the bank, at some point, decide to take action against you.
They can’t have it both ways.
I’m not a tax professional. I’m not certified to give that sort of advice. But I can advise you to seek the counsel of a tax professional, so that negotiating the maze of tax ramifications that come with a short sale is made somewhat easier
By Gino Blefari
President and CEO
Intero Real Estate Services, Inc.
It’s that time of year again. The Winter Holidays are behind us, we’ve cheered a new Super Bowl champion and exchanged boxes of chocolates for Valentine’s Day. That can only mean one thing: Tax Season is upon us.
When it comes to your home, there is plenty of documentation of which you need to keep track when it comes time to file your annual return. For those of you filing “standard” income tax returns, this is all fairly clear and straightforward.
With the current real estate climate, however, there are scores situations, like having lost a home to foreclosure, or staring personal bankruptcy in the face, in which many never thought they’d find themselves. Situations like these can make filing taxes a bit trickier.
There’s one circumstance in particular on which I’d like to focus today:
Short sales.
If you’ve gone through the short sale process (where you can no longer afford the payments on your home, but your lender allows you to sell the home at loss, rather than go through with foreclosure), then you know it’s long, it’s arduous, and it’s one in which things have the potential to be very murky.
When completing the reams and reams of paperwork required by your lender to complete the short sale process, it’s likely that you signed a promissory note, or other like document, granting the lender the right to take action against you to collect the deficient amount. This is pretty standard. It’s possible, though, that you also got a copy of a document with the heading 1099-C, which the lender has filed with the IRS, indicating that the unpaid portion of the loan has been canceled. This is a trigger for the IRS to assess taxes against the forgiven debt.
Wait. What?
“How is that possible?” you might ask. Good question. It doesn’t stand to reason that a lender can pursue you for unpaid debt and that the IRS can assess taxes, as well. Logic would dictate that one or the other is reasonable, but not both.
Keep copies of everything having to do with anything related to the transaction.
If you signed paperwork indicating that the lender can take collection action against you, but you’ve also received a 1099-C for the uncollected debt, you’ll have plenty of documented proof to show the IRS that you don’t owe taxes on that amount. Similarly, if there is nothing in your sale paperwork that gives the bank the right to collect the debt, nor is there any other reference to it, the 1099-C will serve as evidence should the bank, at some point, decide to take action against you.
They can’t have it both ways.
I’m not a tax professional. I’m not certified to give that sort of advice. But I can advise you to seek the counsel of a tax professional, so that negotiating the maze of tax ramifications that come with a short sale is made somewhat easier
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