Real Estate

Despite Market Reports…

Despite what the media is reporting about the real estate market, homes are getting offers!

There are a lot of homes on the market that already have offers (some multiple offers) pending bank approval. While these short sale homes sit in line waiting (sometimes up to 6 months) to get approved or rejected by the bank, they still show up as active on the market. Some of the buyers do give up waiting it out. That’s another reason why they allow more than one offer.  However, this waiting game can give a false illusion that there are more houses available than there really are. When the bank finally responds, the short sale homes will finally drop from the active list, but remember, the activity was generated months before.

Bottom line, all the pending short sale home activity isn’t showing up as pending sales. So the market appears to have less activity then it really does.

When shopping for a house in this market, verify if the house you are looking at has any offers already pending with the seller or the bank (if a short sale).

Most public home searches will include these homes. This is just another reason why it’s good to have a trusted Realtor. They can screen these homes out of your search results based on your criteria, which can save you time in the long run.

Contact me for a FREE, customized real estate market search!

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Buyers · Real Estate · Selling Real Estate

Rumors…

The information out there is confusing. I’ve read you can and you can’t use the $8000 tax credit as a down payment when buying a house.

I recommend a buyer talk to their trusted lender to find out what programs are available to buy a home. Most likely, if it sounds too good to be true, it is. If you don’t have a trusted lender, ask for a referal from someone you know. When dealing with someone you don’t know, check references, look up their business license, look up their company name on the Better Business Bureau, check with your local Chamber of Commerce or Angie’s List.

I’ve heard credit scores are vital when purchasing a home today. Apparently credit scores are more important than how much money you have for a down. You could have a large down, but if your credit score isn’t adequate, you may have trouble getting a loan. An idealistic credit score is 720 and above, although FHA and VA are more liberal regarding credit scores. I’ve heard lenders are requiring higher credit score standards when lending for investment property.

I’ve also been told several stories about people that put large amounts of money down on homes during the housing boom and later, when their home value dropped, they walked away expecting the bank to take their loss. Since banks are in business for a profit, it is now harder to get the banks to forgive a debt when they release the home (as collateral) on a loan if there is still a balance owned. Today, some banks are leaving themselves a window (in the small print) to allow them to continue to pursue any balance owed after a home is sold to the next buyer in a short sale (sold for less than is owed).  More banks are unwilling to absorb all the real estate losses, so they are going after the person that didn’t pay off their loan they promised to pay at closing (all buyers sign a promissary note promising to pay their loan back).

Remember, when in doubt, consult with a real estate attorney to find out what the small print means.

News · Real Estate

Big Improvement to First-Time Buyer Tax Credit Proposed

According to the National Association of Realtors:

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday, May 12, 2009, said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

More details are expected this week!  If you’d like more information about this program as it unfolds, contact me.

Buyers · Law/Regulations · Real Estate

Is There Capital Gains if Selling Your Home Short Sale?

I recently overheard a couple that were selling their home mention they were giving their house away at a very low price because they didn’t want to have to pay capital gains tax if they were foreclosed on by their mortgage company.

These particular people were not my customers, so it is not right for me to engage in conversation with them. I didn’t know their entire story, including the condition their home, nor it’s location.  That didn’t stop me from wondering why they thought they had to “give their home away.”

You see, the Mortgage Debt Relief Act of 2007 excludes this capital gains loss from 2007 – 2012 on the short sale of a primary residence. Now Realtors are not required to be experts in all things.  They aren’t CPA’s, nor do they work for the IRS; however, this particular information has been big news for the real estate market. A knowledgeable Realtor can inform their customers of valuable information like this.  http://www.irs.gov/individuals/article/0,,id=179414,00.html

Sellers should be informed of the facts before they price their home for sale. Generally, most Realtors provide sellers with a FREE Comparative Market Analysis (CMA) when meeting with potential sellers. During the CMA presentation, information is exchanged between the Realtor and the seller so both can make a decision.

Both make a decision? Why both? Because the seller and the Realtor need to determine if they can work together.

Pricing a house right can be the difference between selling and not selling. If a house is overpriced, it may age on the market. The longer it’s on the market, the more likely buyers will think something is wrong with the house because no one has bought it.

I strongly recommend a seller get more than one Realtor’s opinion before listing their house for sale. Know that a CMA is an “opinion” and that the seller has the final say on the asking price of their home. Sellers need to be aware that pricing their home should be based on what a buyer would be willing to pay, not what they think their house is worth.

If you are thinking about selling your home in the Clark County real estate market, I’d like the opportunity to provide you with a free CMA.

Preferably, I’d like to be the last Realtor you meet with!