A Reason Why I am in Real Estate

There are many reasons why I chose to work in the real estate industry, but today I was reminded of my #1 reason. After forty-five grueling days of contract negotiations, inspections, signing disclosures, and coordinating movers, I delivered my Seller's house keys to their new owners - The Chillous'. While I don't know anything about the buyers, other than they have three beautiful children, work in the Air Force, and are purchasing their first property, I was overcome with joy, watching their children eagerly rush up the front stairs and screaming at the top of their lungs calling out each of their rooms. On top of that, seeing the wife's smile (ear to ear) as she tried calming her children down was also gratifying. However, the moment that put me over the top was seeing a note left behind by my Seller to the new homeowners. The note read, "Thank you for your service" and it was posted on a flat screen TV and surround sound stereo system he left behind for the new buyers. The new homeowners looked like they had just won the lottery and couldn't even enunciate "Thank you" because they were so overcome with happiness and surprise. I, too, was overcome with happiness; as I not only helped my Seller, sell his home in less than a month and a half (and for over asking), but I know that I chose the right buyers for this home, who will thoroughly enjoy living there and appreciate all that was given to them.

Thank you, Craig, for allowing me to sell your home. And thank you, Chillous', for reminding me why I love what I do!

In case you were wondering, here is the old virtual tour of the property: www.2018Tsushima.com

Four Tips for Setting the right price

It’s a difficult disconnect that makes selling properties a challenge. Successfully marketing a home requires that the price be set carefully -- or it will languish on the market. Among the considerations:

* How many homes are for sale in the neighborhood? The more homes on the market, the more important it is to list at the lower end of the scale. "I want buyers to ask why is this house priced so competitively," said NAR President-elect Ron Phipps of Phipps Realty in Warwick, R.I. "I want the answer to be an offer."

* Take short sales and foreclosures into consideration when pricing. If the competing properties are in lousy condition, they are less of an issue, but if they are well taken care of, yet priced 25 percent below market, they can be a serious factor.

* Negotiate decisively. "Buyers are not interested in back-and-forth negotiations these days," Phipps said. "They are less emotional and more disciplined. They will walk away."

* Cut the price when you have to. If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. That means it's time to make a meaningful price cut.


Source: The Washington Post, Associated Press (09/18/2010)

Seller Financing Can Have Tax Advantages

Offering to hold either a second mortgage or a primary mortgage in either a residential or a commercial sale can be a good deal for the seller.

The primary advantage is deferral of taxes due. Sellers are normally taxed as the principal is received, spreading the tax bill over several years, explains Richard Schank, a financial planner with PTS Brokerage in Mt. Laurel, N.J.

Other advantages can include:

· Support for a higher-than-average price.
· An interest rate that provides a relatively high return on investment.

The safest arrangement includes obtaining a deed in lieu of foreclosure from the buyer, which allows the seller to take back the property if the note isn’t paid in a timely fashion.

Source: Investor’s Business Daily, Jeff Schnepper (07/15/2010)

100 Dollars Can Go a Long Way for a Great Looking Yard

Got a hundred bucks and a free weekend? Then you've got what it takes to invest in some yard care improvements.

"Some of the best upgrades to your yard can be done with a few dollars and a few hours," says Trey Rogers, Ph.D., the Briggs & Stratton Yard Doctor. "When budgets are tight, get creative and do it yourself."

For those who'd like one-on-one advice from Rogers, enter the Yard Smarts Boot Camp. Attendees will learn how to easily take care of their yard, tour amazing green spaces and win a new lawn mower and more. Visit www.yardsmarts.com to enter.

What can you do for $100 right now?

-- Mow the right way. Don't scalp your lawn. Instead, let it grow a little longer, which is healthy for the lawn. When you mow, cut only one-third the length of the grass blade. Cost: About $3.00 for a month of mowing.

-- Apply bark mulch. Few things dress up a yard more than mulch around flowerbeds and trees. Cost: About $3.00 per bag.

-- Fertilize naturally. When you mow, leave a light layer of grass clippings on the lawn as a natural fertilizer. Cost: $0.

-- Maintain your mower. Once a year, change the oil, replace the spark plug and change the filter. Tune-up kits are available and make it easy. Cost: $10-14 for a walk-behind mower.

-- Let nature water your lawn. If water is costly where you live, let nature handle irrigation. If too little rain falls, your lawn may go dormant, but unless you are in a drought situation, it will green up again when the rain falls. Cost: $0.

With the rest of your $100 bill, splurge on some annual flowers to dress up your front doorway, patio or deck.

Source: RISMEDIA, June 29, 2010

Renting Can Be a Good Option for Sellers

Home owners who have been trying to sell their properties for a year or more might consider lease or a rent-to-own option.

A lease option agreement gives the tenant the option to buy at a predetermined price for a rent that is slightly higher than market. In a lease purchase, a buyer commits to buying the property. In exchange, the seller credits a percentage of each payment toward the purchase price.

Either arrangement is likely to attract serious renters who would like to buy the property if they can. In exchange, they’ll take good care of it.

Negotiating these agreements can be tricky, and the owner should always get help from a real estate attorney.

Source: The Wall Street Journal, June Fletcher (06/16/2010)

Service Members Get Extra Year for Tax Credit

Members of the U.S. military, foreign service and intelligence communities have another year to purchase a home and claim the home buyer tax credit.

Any service member who is or has been on extended duty for 90 days or more between Jan. 1, 2009 to April 30, 2010, has until April 30, 2011, to sign a sales contract and until June 30, 2011, to close on the property. Both the $8,000 first-time and the $6,500 repeat home buyer tax credits are included in the extension.

The rule that requires buyers to repay the credit if they move out of their home within three years has also been waived for qualified service members if they receive government orders to move.

Source: The National Association of Home Builders (04/26/2010)

No More State Tax on Forgiving Debt

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

5 Signs a Home has Potential

The best deals on homes these days are often on properties that aren’t perfect.

Home shoppers looking for a great deal should keep these factors in mind when they are looking for a place with potential:

· Location, location, location. It’s still true that you get a better deal when you buy the worst house in a great neighborhood than you do when you buy a fancy house in a not-so terrific neighborhood.

· Less than 50 years old. Properties older than a half decade are likely to have more fundamental problems — like aging wiring, inadequate plumbing and sagging foundations.

· Livable floor plan. Buyers should select a home with a basic design they can live with. Once they start moving walls, they’re into big money.

· Light. Houses with the most potential have plenty of natural light.

· Good storage. Adding storage isn’t cheap, so it’s smart to choose a property that already has it.

Source: MSN.com, Marilyn Lewis (04/12/2010)

Why You Should Buy a Home Now...

Here is a great article from Duane Gomer on "Why You Should Buy a Home Now"

Let’s discuss two California families and the real estate market. We’ll call them Able and Baker.

Able sold a home at the top of the real estate market for $500,000 and bought a new home for $800,000, paying 10% down and getting a new adjustable rate mortgage for the remainder. Baker stayed in their existing $500,000 home and we all applauded Able for selling at the top of the market.

There are many different opinions on the amount of the drop in prices but we can all agree prices have dropped, more in some areas than others. For our example, we will use a simplified 35% drop on all homes.

Today, Able is in their home with a loan still around $720,000 and can’t refinance because their value is $520,000. Their property taxes are still hovering around $8,000 per year. This is called being underwater, and they could be facing tax problems because of forgiveness of debt, etc.

Baker decides to sell today and finally move up to a bigger home. Their home has dropped in value and they think they have suffered a loss of $175,000 as the home is worth only $325,000. They sell and buy the former $800,000 home for $520,000. They get a loan for $468,000 at the current rate of under 5% and their taxes will be about $5,200 per year.

They might also qualify for a $8,000 tax credit and other inducements in today’s market. Also, there could be appreciation as the market recovers and would you rather have appreciation start now on a $325,000 home or a $520,000 home? Plus they’re living in their move-up home and the family is happy. So, who is better off now. Able or Baker?

Remember the old real estate advantage. Sell when everyone is greedy and buy when everyone is needy. Yes, I know the really smart thing to do would have been to sell three years ago and rent until now. Did many people do that? I don’t think so.

We can go back in time only in the movies and it’s too late for could’ve, should’ve or would’ve. Hey, we all misread the economy then so let’s move now and not misread it again. If you want to move up to a better home and can afford it, consider doing it now. Remember the $8,000 tax credit sunsets December 1^st.


Source: Duane Gomer