FSBO or Agent, Which Is Best For Selling Your Home in the St. Louis Market?
By Frank Helderle
With the growth of the Internet, the prospect of 'going' FSBO — For Sale By Owner — as a method for selling your St. Louis, Missouri home is more attractive than ever.
One of the largest expenses involved in selling a property is the payment of an agent's commission — often in the 6% range. But agents do earn their money, by providing expertise on the market and sales process, by advertising widely and by assisting in the negotiation and closing phases of a sale.
Still, 6% of $200,000 is $12,000 and many find the prospect of keeping that money for themselves irresistible. Here are some things to consider when deciding whether to use an agent or 'go' FSBO.
In order to sell a property quickly and profitably, you have to know the market. If your listed price is even 1% off the St. Louis, MO., real estate market average you will either sit on the property for a long time or fail to make as much as you could have on the sale.
Beyond the need to get an accurate, professional appraisal — required whether FSBO'ing or using an agent — agents can provide 'comps' listing the recent sale price of comparable properties. They also know the market and can often tell you whether your price is reasonable.
However, with the increasing availability of similar information on the Internet, FSBO is becoming a more realistic option. If you can access and analyze the data, FSBO may be for you.
Agents put your property in a database called an MLS, a Multiple Listing Service, to which other agents as well as potential buyers — through the agent — have access. MLS data is more difficult for the average person to gain access to and in some states you need a license to obtain the data. Almost in every case, one is required to be a member of the MLS service and pay a fee.
This is only the first step toward advertising your property far and wide to potential buyers. But, again, with the growth of Internet sites advertising homes for sale, along with other traditional options, you may find you no longer need the service once provided almost exclusively by agents.
Some individuals are natural negotiators and some have learned through long experience how to attract buyers and get the best deal. Some, though, will always be on the losing end of a proposition. Only you can decide how effective you can be in negotiating a fair, acceptable price and whether that process is enjoyable or torture.
Once you've listed the property, advertised it widely enough to attract buyers and negotiated a price one will accept, the most difficult part of the process begins. Every state and country including St. Louis has a long and complex list of laws about how a real estate transaction has to be carried out.
Deposits have to be made of the right amounts and at the right times in an escrow account, and insurance regulations have to be met. Title history is investigated and a hundred other details completed before ownership can be transferred and profits (if any) gained. If you don't have the knowledge or temperament for this sort of thing, FSBO is not for you.
But, on the bright side, there are dozens of books, Internet sites such as this, and low-cost 'seller assistance' businesses that can guide you through the process.
Investigate before you decide, and best of luck. There is a lot of free information available to you about buying, selling or investing in St. Louis real estate. For complete information about the St. Louis, MO., real estate market including current homes for sale, property values and more please visit the most complete website online dedicated to everything St. Louis real estate. So please feel free to contact me with any of your mortgage questions and I will me more than glad to answer you queries. Call me on my cell at 314 267-4841 or email me at stlouishomes@yahoo.com or visit www.realestatetrio.com to view the entire St. Louis, MO., MLS..
Showing posts with label real estate home for sale. Show all posts
Showing posts with label real estate home for sale. Show all posts
Tuesday, April 28, 2009
Monday, April 20, 2009
How to Check Quality in Your New Home
The Quality of Homes
The H Team
There are houses and there are houses. Just like anything that is produced in our world from cars to clothing, there is a high quality manufacturing and there is poor to medium workmanship.
In her book "The Fearless Home Buyer" Elizabeth Razzi gives those telltale signs of a well built home.
Windows are an easily-spotted signal of quality. They're one of the most expensive components of a home. You can determine the brand used by looking for the name in the corner of the glass. Look for neatly mitered and whether the window is double panned which offers good insulation in both summer and winter. Look at the windowsill and the wall below to see if there are any water stains or softness in the wall-a sign that there could be a condensation or leakage problem with the windows.
Bathrooms are another area where the quality of the workmanship is important. Pay special attention to the floors and walls around (and downstairs from) a shower stall Look for signs of recent painting, a spongy feel or mold. Water that leaks from a tub or shower over time can rot sub flooring, a common problem in homes built with inferior materials and workmanship.
When you expect the exterior of the home, note the kind of siding that is used. Wood siding is beautiful but requires routine re-painting. Vinyl or aluminum siding is economical and long-lasting, but check it for dings, tears and fading.
As always, if you are uncomfortable about the quality of a home you are interested in purchasing, it's a good idea to hire a professional inspector to confirm or allay your fears.
As Real Estate professionals, we look forward to working for you and answering any questions you might have about quality and workmanship of any home you may be interested in. Call us anytime.
Wednesday, April 15, 2009
Buying Your First Home
Buying Your First Home
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider.
Before You Start Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
Ask family and friends if they can recommend experts, like a lawyer, a Realtor and an inspector, who can help with the home buying process.
Think about your lifestyle and how it might affect your choice of home and neighborhood.
Do a little research on current home prices in the neighborhoods you plan to target.
To begin your search visit The H Team at http://www.realestatetrio.com for more information.
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider.
Before You Start Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
Ask family and friends if they can recommend experts, like a lawyer, a Realtor and an inspector, who can help with the home buying process.
Think about your lifestyle and how it might affect your choice of home and neighborhood.
Do a little research on current home prices in the neighborhoods you plan to target.
To begin your search visit The H Team at http://www.realestatetrio.com for more information.
Friday, April 10, 2009
Why Determine the Value of Your Home
What's it Worth?
As a stock holder many Americans check the stock market everyday, looking at TV, online and the newspaper. But fail to take stock of their own home. Up to 95% of today's home owners do not know the value of their largest investment, their home.
A comparative market analysis (CMA) provided by a Real Estate Professional can bring you up to speed.
The CMA is normally used as a way of measuring value. When you are buying or selling or even refinancing, a CMA is essential in setting a price and in choosing the proper time to sell.
There are numerous other reasons to run a CMA including your net worth or to provide adequate replacement insurance or to leverage your equity.
Get your free CMA today by contacting The H Team.
Tuesday, April 07, 2009
Thinking Of Buying A Foreclosure Property
Six Questions You Must Ask
Is Now A Good Time To Buy A Foreclosure?
Because local market conditions vary the answer is going to be different. Buyers should be asking questions before they make an offer on any foreclosure property.
What's The First Step A Buyer Needs To Make?
Get pre-approved for a loan before you begin shopping.
How Can You Tell A Bad Foreclosure From A Good One?
There are lots of great deals out there. Make sure you work with a Realtor who can guide you through the potential problems associated with buying a foreclosure.
I'm A Qualified Borrower Can I Appeal To Banks For Better Terms?
Lenders have lots of defaulted mortgages, many of them will offer a below-market loan on a bank owned property.
What Are The Costs Of Buying A Foreclosure?
Figure commissions, closing costs, repair costs and upgrade costs and add at least 10% to that figure as a "surprise" fund.
How Does Choice Of Neighborhood Affect Foreclosure Investments?
Avoid areas overrun with foreclosures, particularly newer subdivisions in overbuilt suburban areas. Choose established neighborhoods with good schools and transportation.
For additional information, questions or a list of local foreclosures please contact The H Team today.
Sunday, March 22, 2009
DOGTOWN USA 3 BR 2.5 Baths Under $90K
Three bedroom, 2.5 bath ranch home has much to offer. Vinyl siding, hardwood floors in all 3 bedrooms, Livingroom and breakfast room, Master bedroom suite with updated half bath. Breakfastroom walks out to very large covered deck and privacy fenced yard. Lower level is partially finished with family room, rec room with large bar, full bath and additional room with closets that could be 4th bedroom. There is also a laundry room and stotage room. Covered carport and off street parking. Home needs a little updating but well worth the price for this home.
Contact The H Team for a tour or view the entire MLS with no sign-up required
Thursday, March 12, 2009
Why You Should Buy A Home Now
WHY YOU SHOULD BUY ANEW HOME NOW
You’re renting a home and beginning to wonder if you should maybe buy a home, consider what author, David Bach, tells us, "Most average homeowner’s are worth up to 35 times more than the average renter."
His advice is for renters to take action immediately and start saving part of their paycheck every month to help accumulate a down payment. He also encourages renters to borrow 10-20 percent less than what the bank is willing to lend; that way you’re only buying as much home as you can afford.
The longer you rent, the longer it may take you to eventually get into homeownership. If the market conditions have scared you, perhaps you're not looking at the other side of the coin. Owning a home becomes part of your investment portfolio, provides tax benefits, allows you to build equity (it still exists), and, if you buy now, you may get an excellent deal.
According to Market Watch , buying a home now can provide some real negotiating power to request improvements, price reductions, help with closing costs, and more. People can get almost everything they need and most of what they want today.
While poor market conditions have created a tough situation for homeowners across the country , the downturn has made the buying market ripe for buyers.. The affordability of homes is better than ever. The National Association of Realtors' housing affordability index concluded that homes in December of 2008 were more affordable than at any other point since 1970 (the start of the index). And with numerous foreclosures on the market and prices dropping in many areas, now is a good time to buy. But in order to make your purchase profitable, here are some things you should consider.
How long will you be in the home? Some experts advise that if you are planning to move within a year, buying may not be the best option because of the expenses associated with moving. However, if you're searching for a place to live for, at least, five years, buying now could be a good choice for you.
How much you can afford. Don't let tighter lending regulations scare you off from making a purchase. Instead, understand what you truly can afford. Don't get caught up in buying too much home. In fact, these days, the trend is moving toward smaller homes.
Mortgage rates have dropped to historical lows. How much home you can afford is affected by mortgage interest rates that, right now, are very attractive. Good credit, documenting your income, and a substantial down payment will make you a better candidate for better rates.
Freedom to choose. Now, unlike several years ago, the market has a large inventory in many areas. The market time to sell a home has increased which creates a large inventory of homes, everything including new, existing, and foreclosures properties. Buyers can search he market and have the freedom to select the home they really want. If you're interest is in a new home, know that many developers are getting more competitive with their pricing because they also have taken a hit by the ailing economy, and some offer special rates the first year or are offering closing cost assistance.
Quality of life. Buying a home can create a higher quality of life, giving you pride of homeownership, and something to enjoy over the years.
Tax credit benefit. The American Recovery and Reinvestment Act of 2009 provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Wondering What Your Home Is Worth? Let Us Show You
You’re renting a home and beginning to wonder if you should maybe buy a home, consider what author, David Bach, tells us, "Most average homeowner’s are worth up to 35 times more than the average renter."
His advice is for renters to take action immediately and start saving part of their paycheck every month to help accumulate a down payment. He also encourages renters to borrow 10-20 percent less than what the bank is willing to lend; that way you’re only buying as much home as you can afford.
The longer you rent, the longer it may take you to eventually get into homeownership. If the market conditions have scared you, perhaps you're not looking at the other side of the coin. Owning a home becomes part of your investment portfolio, provides tax benefits, allows you to build equity (it still exists), and, if you buy now, you may get an excellent deal.
According to Market Watch , buying a home now can provide some real negotiating power to request improvements, price reductions, help with closing costs, and more. People can get almost everything they need and most of what they want today.
While poor market conditions have created a tough situation for homeowners across the country , the downturn has made the buying market ripe for buyers.. The affordability of homes is better than ever. The National Association of Realtors' housing affordability index concluded that homes in December of 2008 were more affordable than at any other point since 1970 (the start of the index). And with numerous foreclosures on the market and prices dropping in many areas, now is a good time to buy. But in order to make your purchase profitable, here are some things you should consider.
How long will you be in the home? Some experts advise that if you are planning to move within a year, buying may not be the best option because of the expenses associated with moving. However, if you're searching for a place to live for, at least, five years, buying now could be a good choice for you.
How much you can afford. Don't let tighter lending regulations scare you off from making a purchase. Instead, understand what you truly can afford. Don't get caught up in buying too much home. In fact, these days, the trend is moving toward smaller homes.
Mortgage rates have dropped to historical lows. How much home you can afford is affected by mortgage interest rates that, right now, are very attractive. Good credit, documenting your income, and a substantial down payment will make you a better candidate for better rates.
Freedom to choose. Now, unlike several years ago, the market has a large inventory in many areas. The market time to sell a home has increased which creates a large inventory of homes, everything including new, existing, and foreclosures properties. Buyers can search he market and have the freedom to select the home they really want. If you're interest is in a new home, know that many developers are getting more competitive with their pricing because they also have taken a hit by the ailing economy, and some offer special rates the first year or are offering closing cost assistance.
Quality of life. Buying a home can create a higher quality of life, giving you pride of homeownership, and something to enjoy over the years.
Tax credit benefit. The American Recovery and Reinvestment Act of 2009 provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Wondering What Your Home Is Worth? Let Us Show You
Monday, March 02, 2009
Webster Groves Victorian Home High On A Hill For Sale
Amazing architectural detailing throughout. Spacious rooms with 10 foot ceilings. Lovely refinished hardwoods, stain glass windows with 2 bay windows and original moulding throughout. Kitchen offers 42 inch wood cabinets and opens to family room. Even offers a main floor laundry. Master offers a 8x10 sitting room with cedar lined walk in closet. Zoned HVAC and updated plumbing. Welcome your friends and family to the large 25 x 19 front porch. This foreclosure only needs very little to be move in ready. contact The H Team today for your tour.
Thursday, February 19, 2009
St Louis Association of Realtors Update
Pending Home Sales Show Healthy Gain
Reprint from SLAR News You Can Use
Pending home sales increased as more buyers took advantage of improved affordability conditions, according to the National Association of Realtors®. Big gains in the South and Midwest offset modest declines in other regions. The Pending Home Sales Index rose 6.3 percent to 87.7 from an upwardly revised reading of 82.5 in November, and is 2.1 percent higher than December 2007 when it was 85.9. Lawrence Yun, NAR chief economist, said the index shows a modest rebound. "The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month," he said. "The biggest gains were in areas with the biggest improvements in affordability."
To begin your search for your new home or to sell your current home contact The H Team today.
Reprint from SLAR News You Can Use
Pending home sales increased as more buyers took advantage of improved affordability conditions, according to the National Association of Realtors®. Big gains in the South and Midwest offset modest declines in other regions. The Pending Home Sales Index rose 6.3 percent to 87.7 from an upwardly revised reading of 82.5 in November, and is 2.1 percent higher than December 2007 when it was 85.9. Lawrence Yun, NAR chief economist, said the index shows a modest rebound. "The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month," he said. "The biggest gains were in areas with the biggest improvements in affordability."
To begin your search for your new home or to sell your current home contact The H Team today.
Tuesday, January 13, 2009
A Unique Way To Get Your Home Sold
A Unique Way To Get Your Home Sold
Frank J. Helderle
With today’s market being what it is and buyers being in control, sometimes a real estate agent has to become creative, aggressive and think “outside the box.”
After being on the market for 120 days with tons of showings, we couldn’t get anything to happen on our listing. It was a nice listing, only 3 years new in a very upscale subdivision. It offered every builder option available, and was priced $20,000 under what the seller paid. Why, it wouldn’t sell was beyond me.
Finally another agent called who had a re-location client who was looking for a quick closing and was a cash buyer. I held my breath and crossed my fingers, nothing happened. The agent called the next day and said they liked it but that they were trying to decide which property they liked the most of the ones they had toured and wanted to go back in for another look. I asked which properties they were comparing our listing to and did some quick comparisons and even visited and toured the other two homes.
The next day the other agent called and said they really liked our listing but had decided to write an offer on one of the other properties. Since that property was about $15,000 less than ours with fewer amenities I asked the agent to give me a couple of hours to discuss some possibilities with my seller.
I immediately got on the phone with my seller. Since this seller had transferred out of town and purchased another home already he very much wanted this home to sell. In some of our previous discussions my client had confided in me that he was prepared to reduce the price lower but only if we had a qualified buyer who was ready.
I suggested he reduce his price to the point he was willing to go and that we write a reverse offer.
We wrote the offer and presented to the buyer’s agent, who after a brief education on reverse offers, presented the offer to his buyers. The buyers were elated and accepted the offer. The seller was able to get his home sold with a minimal reduction in his asking price.
There are just too many choices out there for buyers today and by offering an incentive to them it should make them take notice. Sellers have to become more aggressive and let the buyers know they are serious.
Frank J. Helderle
With today’s market being what it is and buyers being in control, sometimes a real estate agent has to become creative, aggressive and think “outside the box.”
After being on the market for 120 days with tons of showings, we couldn’t get anything to happen on our listing. It was a nice listing, only 3 years new in a very upscale subdivision. It offered every builder option available, and was priced $20,000 under what the seller paid. Why, it wouldn’t sell was beyond me.
Finally another agent called who had a re-location client who was looking for a quick closing and was a cash buyer. I held my breath and crossed my fingers, nothing happened. The agent called the next day and said they liked it but that they were trying to decide which property they liked the most of the ones they had toured and wanted to go back in for another look. I asked which properties they were comparing our listing to and did some quick comparisons and even visited and toured the other two homes.
The next day the other agent called and said they really liked our listing but had decided to write an offer on one of the other properties. Since that property was about $15,000 less than ours with fewer amenities I asked the agent to give me a couple of hours to discuss some possibilities with my seller.
I immediately got on the phone with my seller. Since this seller had transferred out of town and purchased another home already he very much wanted this home to sell. In some of our previous discussions my client had confided in me that he was prepared to reduce the price lower but only if we had a qualified buyer who was ready.
I suggested he reduce his price to the point he was willing to go and that we write a reverse offer.
We wrote the offer and presented to the buyer’s agent, who after a brief education on reverse offers, presented the offer to his buyers. The buyers were elated and accepted the offer. The seller was able to get his home sold with a minimal reduction in his asking price.
There are just too many choices out there for buyers today and by offering an incentive to them it should make them take notice. Sellers have to become more aggressive and let the buyers know they are serious.
Friday, January 09, 2009
Is 2009 The Year To Buy A New Home
Is 2009 the Year To Purchase A Home?
Frank J. Helderle
As a buyer in 2009 the decision lays entirely in your court. With low interest rates, an over supply of homes for sale and the lower prices 2009 is a great time to purchase a new home, with a few items to consider;
Buying Too Aggressively So you’ve located a few houses you’re interested in, make sure it’s something you can easily afford. Everything you read today about the economy tells us that our current recession will last longer than a year or so and that unemployment could hit over 8% which means trying to stretch your income just won’t work. Most lenders will tell you how much of a home you can afford, but by buying a home that costs 50% of your take home pay is just inviting problems. Consider what happens if you get laid off or your company shuts down? It can happen, so buy conservatively.
Purchasing A Foreclosure Yes a foreclosure can be a real bargain, with deep discounts, these properties can come with a great deal of baggage. After a home sits vacant for months or years things begin to deteriorate, such as no water running through the stacks, dishwasher pumps tend to dry out, carpet and vinyl begin to get loose when the house has no heat or cooling. Always know what you’re getting into. Before you begin looking at foreclosures hire an expereienced real estate agent and a certified building inspector. Make sure all utilities are on, even if you have to arrange for them to be turned on..By spending a few dollars in the beginning will save you much more in the long run.
Search For The Best Deal Home prices are expected to continue to fall most of 2009, those people considering buying a home are in the driver’s seat and should be looking for the very best deal. Since it is such a buyers market look for the deal and low ball the offer, you never know, you may get lucky. While low balling is common in today’s market don’t go overboard. Making an insulting low offer may upset the seller which may result in any offer you make on the property unacceptable
Understand The Local Market It’s really easy to listen to all the doom and gloom about the Real Estate market but savvy buyers need to be paying attention to the market area they are considering making a purchase. What’s happening in one area may be the total opposite in another. Remember, an individual market is not the same as a national market. Again hiring an experience local Real Estate Agent will insure you’re well educated about the market you’re shopping.
Buy For The Long Term As home prices continue to decline 2009 will not be the year to make a return on your investment. Actually your new home may continue to loose value throughout 2009. But, eventually home prices will rebound. Any home you purchase in 2009 you should plan on living in for at least 3 years
2009 is the year to purchase a new home if you know where to look, how to look and when to look. Contact The H Team today to begin looking for your new home
Monday, December 29, 2008
Is it time to Move Up?
These 6 questions will help you decide whether you’re ready for a home that’s larger or moving to a more desirable location. If you answer yes to most of the questions, it’s a sign that you may be ready to move.
1. Have you built substantial equity in your current home? Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.
2. Has your income or financial situation improved? If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving.
3. Have you outgrown your neighborhood? The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job or live in a better school district.
4. Are there reasons why you can’t remodel or add on? Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.
5. Are you comfortable moving in the current housing market? If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.
6. Are interest rates attractive? A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.
If you think it may be time to move up or move out contact The H Team today for a free review.
Thursday, December 11, 2008
In A Buyer's Market Values Are Determined By Buyer's
While speaking with a new client yesterday, who is considering selling his house, a question/comment came up. As we were discussing com parables in the neighborhood he produced a print out of what he thought his home was worth.
I tried to explain to him the value of his home is determined by what a buyer is willing to pay in TODAY’s housing market, based on the comparison of the home in question with all of the others on the market, in the same neighborhood and others that had been sold that were comparable to his. I continued to explain what things did not affect the value of his home. After spending an hour with this gentleman I decided to make a list of items that do not effect the value of a home and create a list to include in my pre-listing packet;
What you paid for the house
Your remodeling costs
The amount of cash you need to buy your new house
What you want for your house
What I say your house is worth
What other real estate agents say your house is worth
What an appraiser says your house is worth
What the tax assessor said your house was worth
What Zillow says your home is worth
What Trulia says your home is worth
Your home is only worth what a buyer is willing to pay for it.
Since this fellows home was in a market area with a lot of foreclosures his potential price prohibited him from placing it on the market at this time.
I tried to explain to him the value of his home is determined by what a buyer is willing to pay in TODAY’s housing market, based on the comparison of the home in question with all of the others on the market, in the same neighborhood and others that had been sold that were comparable to his. I continued to explain what things did not affect the value of his home. After spending an hour with this gentleman I decided to make a list of items that do not effect the value of a home and create a list to include in my pre-listing packet;
What you paid for the house
Your remodeling costs
The amount of cash you need to buy your new house
What you want for your house
What I say your house is worth
What other real estate agents say your house is worth
What an appraiser says your house is worth
What the tax assessor said your house was worth
What Zillow says your home is worth
What Trulia says your home is worth
Your home is only worth what a buyer is willing to pay for it.
Since this fellows home was in a market area with a lot of foreclosures his potential price prohibited him from placing it on the market at this time.
Tuesday, December 09, 2008
How the Tax Credit Works
The First-Time Home Buyer Tax Credit was passed this year as part of the Housing and Economic Recovery Act (H.R. 3221) on july 30, 2008 and targets any individual that hasn't owned a home for at least three years. Taxpayers can take the credit on their 2008 tax return if the purchase was made after April 9, 2008
It's worth up to $7,500 and can be taken in a single tax year.Authorization for the tax credit ends July 1, 2009 so if you wait to buy until after the first of the year you can take the tax credit on your 2009 return.
The actual credit amount is set as a percentage of the home purchase amount. That perccentage amount 10 percent of the purchase price credited against your tax liability up to the $7,500.
Income levels are $75,000 for individuals and $150,000 for households. Individuals who income exceeds the $75,000 limit but isn't more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000.
Any house is eligible as long as it's a primary residence and is in the USA.
Contact your professional tax advisior as to your eligibility. The H Team can help you find a new home.
It's worth up to $7,500 and can be taken in a single tax year.Authorization for the tax credit ends July 1, 2009 so if you wait to buy until after the first of the year you can take the tax credit on your 2009 return.
The actual credit amount is set as a percentage of the home purchase amount. That perccentage amount 10 percent of the purchase price credited against your tax liability up to the $7,500.
Income levels are $75,000 for individuals and $150,000 for households. Individuals who income exceeds the $75,000 limit but isn't more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000.
Any house is eligible as long as it's a primary residence and is in the USA.
Contact your professional tax advisior as to your eligibility. The H Team can help you find a new home.
Friday, December 05, 2008
First-Time Home Buyer Tax Credit
Frequently Asked Questions
About the First-Time Home Buyer Tax Credit
The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the $7,500 tax credit?
What is the definition of a first-time home buyer?
How do I claim the tax credit? Do I need to complete a form or application?
What types of homes will qualify for the tax credit?
Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
What is "modified adjusted gross income"?
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Can you give me an example of how the partial tax credit is determined?
Does the credit amount differ based on tax filing status?
Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
I heard that the tax credit is refundable. What does that mean?
What is the difference between a tax credit and a tax deduction?
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
I am not a U.S. citizen. Can I claim the tax credit?
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Why must the money be repaid?
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
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?
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?
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Who is eligible to claim the $7,500 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 April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
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. 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.
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. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.
What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.
Instead of buying a new home from a home builder, I have 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 April 9, 2008 and before July 1, 2009.
In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
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.
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 $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
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 $7,500 by 0.5. The result is $3,750.
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 $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.
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.
Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
I heard 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 taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
What is the difference between a tax credit and a tax deduction?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 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 $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
No. The tax credit cannot be combined with the MRB home buyer program.
I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
No. You can claim only one.
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.
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
Why must the money be repaid?
Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
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.
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.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 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 future home 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.
About the First-Time Home Buyer Tax Credit
The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.
Who is eligible to claim the $7,500 tax credit?
What is the definition of a first-time home buyer?
How do I claim the tax credit? Do I need to complete a form or application?
What types of homes will qualify for the tax credit?
Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
What is "modified adjusted gross income"?
If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Can you give me an example of how the partial tax credit is determined?
Does the credit amount differ based on tax filing status?
Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
I heard that the tax credit is refundable. What does that mean?
What is the difference between a tax credit and a tax deduction?
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
I am not a U.S. citizen. Can I claim the tax credit?
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Why must the money be repaid?
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
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?
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?
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 tax return?
Who is eligible to claim the $7,500 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 April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
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. 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.
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. No other applications or forms are required. No pre-approval is necessary; however, prospective home buyers will want to be sure they qualify for the credit under the income limits and first-time home buyer tests.
What types of homes will qualify for the tax credit?
Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats.
Instead of buying a new home from a home builder, I have 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 April 9, 2008 and before July 1, 2009.
In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
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.
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 $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
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 $7,500 by 0.5. The result is $3,750.
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 $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.
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.
Does the credit amount differ based on tax filing status?
No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
I heard 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 taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
What is the difference between a tax credit and a tax deduction?
A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 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 $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
No. The tax credit cannot be combined with the MRB home buyer program.
I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
No. You can claim only one.
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.
Does the credit have to be paid back to the government? If so, what are the payback provisions?
Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
Why must the money be repaid?
Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
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.
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.
Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2008 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 future home 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.
Thursday, December 04, 2008
10 Tips to Avoid Foreclosure
As everyone knows foreclosure rates are up all across the US. Each month more than 250 families are foreclosed on. There is help, but most families are not acting fast enough. It is imperative that you ask for help as soon as you see trouble. These tips are provided to educate homeowners who are facing foreclosure.
Should you find yourself getting behind on your mortgage payment ACT NOW
1. Don't Ignore The Problem The further you fall behind the tougher it will become to reinstate your loan and the higher the chance of losing your home.
2. Contact Your Bank/Lender As soon as you realize you have a problem. The bank/lender does not want your house. They have options to help borrowers through tough times.
3. Open And Respond To All Mail From Your Lender Normally, the first notices contain good information about foreclosure prevention options to help get you through a tough financial period. later mail may include information about impending legal actions. Failure to open your mail is not an acceptable excuse in foreclosure court.
4. Know Your Mortgage Rights Locate your mortgage documents and read them so you know what your lender can do if you can't make your mortgage payments. Learn about foreclosure laws and time frames in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand Foreclosure Prevention Options Valuable information about foreclosure (also called loss mitigation) can be found on the Internet at www.fha.gov
6. Contact A Non Profit Housing Counselor The Us Department of Housing Urban Development funds free or very low cost housing counselors nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need assistance.
7. Prioritize Your Spending After health care keeping your home should be your main priority. Review your spending and see what you can cut spending to make your mortgage payment. Look for optional expenses, like cable, health club memberships, entertainment you can eliminate. Delay payments on unsecured debt such as credit cards until you have your mortgage paid.
8. Use Your Assets Do you have a second car? Whole Life insurance with cash value? Items you can sell to help reinstate your loan. Can a member of the household get a second job? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices in order to keep your home.
9. Avoid Foreclosure Prevention Companies for-profit companies will contact you promising to negotiate with your lender a plan to work out your loan. While these may be legitimate business' they will charge you a hefty fee (up to 3 months of your monthly mortgage) for providing information and services your lender or a HUD approved housing counselor will provide for free if you contact them. You don't need to pay money for help- use that money towards your mortgage instead.
10. Don't Lose Your Home To A Foreclosure Recovery Scandal If any firm claims they can stop foreclosure immediately if you sign a document appointing them to act on your behalf, you could be signing your home over to them and becoming a renter in your own home. Never sign a legal document without reading it or understanding it. Always get professional legal advice from an attorney, a HUD approved housing counselor or a trusted real estate professional.
To find out more about HUD approved housing agencies and their services go to www.hud.gov or call toll free 1 800 569-4287 weekdays between 9 AM and 5 PM Eastern Standard Time. You can receive the three closest housing counselors nearest you.
Good Luck. This information provided by The H Team a professional team of Realtors serving the St. Louis area. Experienced Loss Mitigation and Short Sale specialists.
Monday, November 24, 2008
Considering "Rent To Own" Things to Know
In today's Real Estate market some sellers are considering "Rent To Own. Is it for you? Here are some thoughts if you are the buyer or if you are the seller. As with any other contractural agreement consult a licensed professional.
Rent-to-Own Deals: Smart Questions to Ask...
For Sellers:
Who will tend to the property and pay for routine maintenance?
Who pays for major repairs?
What are the costs of setting up and managing an escrow account for the portion of rent allotted to the down payment?
Will you manage the property yourself, or hire an agent?
What if the renters change their minds? Who keeps the money in the escrow account?
If the buyers change their minds, what will be required to put the property back on the market?
For Buyers:
How much of the rent is going to the down payment?
How locked in are you if you change your mind?
What will it cost you to get out of the deal?
How long will it take to accumulate enough of a down payment that you are likely to qualify for a mortgage?
Need an agent experienced in Rent To Own? Contact The H Team today.
Rent-to-Own Deals: Smart Questions to Ask...
For Sellers:
Who will tend to the property and pay for routine maintenance?
Who pays for major repairs?
What are the costs of setting up and managing an escrow account for the portion of rent allotted to the down payment?
Will you manage the property yourself, or hire an agent?
What if the renters change their minds? Who keeps the money in the escrow account?
If the buyers change their minds, what will be required to put the property back on the market?
For Buyers:
How much of the rent is going to the down payment?
How locked in are you if you change your mind?
What will it cost you to get out of the deal?
How long will it take to accumulate enough of a down payment that you are likely to qualify for a mortgage?
Need an agent experienced in Rent To Own? Contact The H Team today.
Thursday, November 20, 2008
Mortgage Foreclosure Debt Relief
Today’s Home Owners are facing a lot of stress due to changing market conditions that are forcing foreclosure or a short sale of their home..
As the government takes action to stabilize the housing market, homeowners must understand the potential tax implications and new rules regarding these often once in a lifetime transactions.
“It’s hard to believe, but prior to December of 2007, if a homeowner lost his house due to a bank foreclosure, and the bank forgave any difference between the price it was sold for and what was owed, the homeowner would owe additional income tax on that portion,” said Chris Kaucnik, Director of Marketing for HWA.
Michael J. Greenen, CPA and Certified Financial Planner offers an example, “Let’s say the homeowner owed $300,000 on the mortgage, but the foreclosure sale only brought in $200,000. Then the bank forgave the $100,000 shortfall, called cancellation of debt. The homeowner would have been liable for the income tax on the $100,000 debt forgiveness from the bank.”
“Now, because of the unique stresses in the housing industry lately and on our whole economy, last December Congress stepped in to provide temporary relief in the form of forgiving this debt, but only for the 2007, 2008 and 2009 tax years. After that, the old rule applies again,” adds Greenen.
There are conditions that apply to this tax relief:
– To be eligible, the mortgage must be for the principal residence, not vacation, investment or other properties.
– No more than $2,000,000 of forgiven debt can be excluded from taxable income.
– When part of the debt is from a home equity loan, it cannot have been used for purposes other than to build, buy or substantially improve the property otherwise that portion used for other purposes is still taxable.
– When a short sale occurs*, the portion of the mortgage the bank may forgive, including any commission expenses and other selling costs are taxable other than for 2007, 2008 and 2009.
– When the lender agrees to reduce a mortgage payment for a homeowner to keep them in their home, the amount it is reduced by is taxable other than for these relief years.**
– This Act also extended mortgage insurance as an itemized deduction through 2010 on mortgage contracts entered into between 12/31/06 and 1/1/11.
* A short sale is when a borrower is behind on the mortgage payments and the lender agrees the house can be sold for less than what is owed on the mortgage. But all proceeds must be turned over to the bank.
** This does effect eventual capital gain exclusions when the homeowner decides to sell the home. Consult with a professional tax accountant or attorney for advice and information as soon as possible.
Information provided from HWA.
Determine your Homes current value and possible sale price by contacting The H Team today.
As the government takes action to stabilize the housing market, homeowners must understand the potential tax implications and new rules regarding these often once in a lifetime transactions.
“It’s hard to believe, but prior to December of 2007, if a homeowner lost his house due to a bank foreclosure, and the bank forgave any difference between the price it was sold for and what was owed, the homeowner would owe additional income tax on that portion,” said Chris Kaucnik, Director of Marketing for HWA.
Michael J. Greenen, CPA and Certified Financial Planner offers an example, “Let’s say the homeowner owed $300,000 on the mortgage, but the foreclosure sale only brought in $200,000. Then the bank forgave the $100,000 shortfall, called cancellation of debt. The homeowner would have been liable for the income tax on the $100,000 debt forgiveness from the bank.”
“Now, because of the unique stresses in the housing industry lately and on our whole economy, last December Congress stepped in to provide temporary relief in the form of forgiving this debt, but only for the 2007, 2008 and 2009 tax years. After that, the old rule applies again,” adds Greenen.
There are conditions that apply to this tax relief:
– To be eligible, the mortgage must be for the principal residence, not vacation, investment or other properties.
– No more than $2,000,000 of forgiven debt can be excluded from taxable income.
– When part of the debt is from a home equity loan, it cannot have been used for purposes other than to build, buy or substantially improve the property otherwise that portion used for other purposes is still taxable.
– When a short sale occurs*, the portion of the mortgage the bank may forgive, including any commission expenses and other selling costs are taxable other than for 2007, 2008 and 2009.
– When the lender agrees to reduce a mortgage payment for a homeowner to keep them in their home, the amount it is reduced by is taxable other than for these relief years.**
– This Act also extended mortgage insurance as an itemized deduction through 2010 on mortgage contracts entered into between 12/31/06 and 1/1/11.
* A short sale is when a borrower is behind on the mortgage payments and the lender agrees the house can be sold for less than what is owed on the mortgage. But all proceeds must be turned over to the bank.
** This does effect eventual capital gain exclusions when the homeowner decides to sell the home. Consult with a professional tax accountant or attorney for advice and information as soon as possible.
Information provided from HWA.
Determine your Homes current value and possible sale price by contacting The H Team today.
Monday, November 10, 2008
November is Home Staging Awarness Month
STOCKTON, Calif., Oct 31, 2008 (BUSINESS WIRE) -- The Real Estate Staging Association (RESA), the Trade Association for Professional Home Stagers, has announced that November is Home Staging Awareness Month. RESA's goals are to facilitate positive interactions within the home staging industry, provide support to professional stagers in addition to promoting the benefits of home staging to the consumer. The Interior Redesign Industry Specialists (IRIS), and American Society of Home Stagers and Redesigners (ASHSR) are also partnering with RESA as National Co-Sponsors of Home Staging Awareness Month in a unified effort to bring industry professionals together. All professional stagers are invited to attend and participate in this ground breaking event.
These leading Staging Professional Organizations have partnered with members of "Stage it Forward" (SIF) a powerful internet blogging community that is hosted by the Real Estate Blogging website called Active Rain. ( www.ActiveRain.com) SIF is conducting "Home Staging Round Table Discussions" throughout North America during the month of November, "Home Staging Awareness" month, in order to bring home stagers together to discuss vital industry issues. If you would like to attend a Round Table Visit www.RealEstateStagingAssociation.com and click on the event calendar to find a location near you.
Other industry partners such as BEKINS PODS, IKEA, THE PLANT ATRIUM, CORT FURNITURE RENTAL, BROOK FURNITURE RENTAL, KELLER WILLIAMS and THE ENERGIZED SELLER, are sponsoring the events. For a full list of industry partners and sponsors please visit www.RealEstateStagingAssociation.com and click on the SIF button on the menu.
RESA has released "The Consumers Guide To Real Estate Staging", free publication that explains the benefits of staging and how to choose a professional stager. The publication is available to homeowners and Real Estate Professional. To download a free copy visit www.RealEstateStagingAssociation.com.
For more information on home staging, or to join a Round Table, find a professional stager, or sponsor a future event, please contact one of these organizations: RESA -The Real Estate Staging Association visit www.RealEstateStagingAssociation.com or call 888-201-8687 speak to Shell Brodnax; IRIS - Interior Redesign Industry Specialists www.WeReDesign.com or call 877-674-8667 speak to Sandy Dixon; ASHSR - American Society of Home Stagers and Redesigners www.ASHSR.com or call 888-563-9271 and speak to Audra Slinkey.
Should you desire a local staging company contact The H Team
SOURCE: Real Estate Staging Association
These leading Staging Professional Organizations have partnered with members of "Stage it Forward" (SIF) a powerful internet blogging community that is hosted by the Real Estate Blogging website called Active Rain. ( www.ActiveRain.com) SIF is conducting "Home Staging Round Table Discussions" throughout North America during the month of November, "Home Staging Awareness" month, in order to bring home stagers together to discuss vital industry issues. If you would like to attend a Round Table Visit www.RealEstateStagingAssociation.com and click on the event calendar to find a location near you.
Other industry partners such as BEKINS PODS, IKEA, THE PLANT ATRIUM, CORT FURNITURE RENTAL, BROOK FURNITURE RENTAL, KELLER WILLIAMS and THE ENERGIZED SELLER, are sponsoring the events. For a full list of industry partners and sponsors please visit www.RealEstateStagingAssociation.com and click on the SIF button on the menu.
RESA has released "The Consumers Guide To Real Estate Staging", free publication that explains the benefits of staging and how to choose a professional stager. The publication is available to homeowners and Real Estate Professional. To download a free copy visit www.RealEstateStagingAssociation.com.
For more information on home staging, or to join a Round Table, find a professional stager, or sponsor a future event, please contact one of these organizations: RESA -The Real Estate Staging Association visit www.RealEstateStagingAssociation.com or call 888-201-8687 speak to Shell Brodnax; IRIS - Interior Redesign Industry Specialists www.WeReDesign.com or call 877-674-8667 speak to Sandy Dixon; ASHSR - American Society of Home Stagers and Redesigners www.ASHSR.com or call 888-563-9271 and speak to Audra Slinkey.
Should you desire a local staging company contact The H Team
SOURCE: Real Estate Staging Association
Tuesday, November 04, 2008
Understanding Your Relationship With A Realtor
It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transaction. Ask what type of agency relationship your agent has with you:
Seller's representative (also known as a listing agent or seller's agent)
A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
Buyer's representative (also known as a buyer’s agent)
A buyer’s agent is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or through a commission split with the seller’s agent. Free Seller Representation
Subagent
A subagent owes the same fiduciary duties to the agent's customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.
Disclosed dual agent
Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states.
Designated agent (also called appointed agent)
This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
Nonagency relationship (called, among other things, a transaction broker or facilitator)
Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
**Adapted with permission from REALTOR Magazine consumer handout.
Seller's representative (also known as a listing agent or seller's agent)
A seller's agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.
Buyer's representative (also known as a buyer’s agent)
A buyer’s agent is hired by prospective buyers to represent them in a real estate transaction. The buyer's rep works in the buyer's best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer's rep may be paid by the seller or through a commission split with the seller’s agent. Free Seller Representation
Subagent
A subagent owes the same fiduciary duties to the agent's customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.
Disclosed dual agent
Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it's vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states.
Designated agent (also called appointed agent)
This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.
Nonagency relationship (called, among other things, a transaction broker or facilitator)
Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
**Adapted with permission from REALTOR Magazine consumer handout.
Subscribe to:
Posts (Atom)