Shorts Sale and Foreclosure SOLD in 2013 Could Owe Federal Income Taxes

Posted by Duke Rountree on

Are You Thinking About Trying to Sell Your Home via Short Sale or Considering Walking Away?

Uncle Sam is still giving homeowners until Dec. 31st 2012, to go through the short sale or foreclosure without tax consequences-AS LONG AS THE LENDER RELEASES THE DEBT. But on January 1, 2013 the rules change: The amount the lender forgives, for either short sale or foreclosure, on primary residence will be taxable on federal income taxes.

Example: If a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section. Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: THE BANKS MUST OFFICIALLY SIGN OFF IN WRITING BEFORE DEC. 31, 2012

Homeowners declaring bankruptcy could escape paying income taxes on any cancellation of debt income if the debt is forgiven in the bankruptcy even if the debtor is solvent, said Nick Jovanovich, a board certified tax attorney in Fort Lauderdale, FL..

In Short…

Homeowners should decided sooner than later this year to begin whichever process they chose to avoid the tax law changes coming in 2013. Short sales can takes months to years depending on lender, type of mortgage, market activity and many other variables. Contact a local REALTOR for more information on the services they can provide to assist in your decision.

Some major lenders are offering quicker short sale programs as an alternative to foreclosure. Owners benefit from reduced documentation and smoother processing.

In some cases, owners may be eligible for cash incentives from a couple thousand dollars to upwards of $30,000.

“Until Next Time”

What are “The Code of Ethics” for REALTORS?

Posted by Duke Rountree on

The NATIONAL ASSOCIATION OF REALTORS Code of Ethics:

What Does it Mean for Consumers?

 

How does the Code of Ethics affect everyday real estate practices? 

If a REALTOR® represents you, whether you are buying or selling a home, you can count on that REALTOR® to:

1. Be honest with all parties in the transaction – not just with you, as his or her client, but also with the other real estate practitioner and his or her clients.
For example, if REALTORS® represent a buyer with a spotty credit history, they can’t be dishonest with sellers about this fact. At the same time, REALTORS® can help their buyer clients collect and assemble information, such as credit reports and audited tax returns, to demonstrate that the buyer has addressed the problem and improved their situation.

2. Put your interests ahead of his or her own, at all times. 
A REALTOR® makes every effort to understand the housing needs of his or her client, thoroughly researches available inventory, and shares all relevant information with the buyer so that he or she can make an informed decision. This service is provided regardless of the compensation available.

3. Disclose all pertinent facts regarding the property and the transaction to both buyer and seller.
If a REALTOR® believes information provided by a seller is questionable, the REALTOR® is obligated to investigate. REALTORS®should recommend that buyers consult their own experts, such as home inspectors, to address concerns. For example, if a home seller asks his or her REALTOR® to conceal the fact that the roof leaks, the REALTOR® cannot comply; if the seller insists, the REALTOR®should end the business relationship with that seller. 

4. Be truthful in all communications with the public.
When REALTORS® distribute newsletters, create Web sites, or place advertisements, they must be careful not to represent other real estate professionals’ work product as their own. If recently sold or listed properties in the community are publicized, it must be clear whether the REALTOR® was actually involved in the transaction, or whether that data came from the local multiple listing service or other source. This ensures that the public understands the REALTOR®’s experience and can make an informed decision when choosing real estate representation.

As a REALTOR I live by this code in every day of my career and my life. Our morals and ethics are all we have to assure we provide the education and services our buyers and sellers deserve. If you would like the full version of the “Code of Ethics” please visit http://www.realtor.org/realtororg.nsf/files/R_COE-Pledge-of-Performance.pdf/$FILE/R_COE-Pledge-of-Performance.pdf

 

“Until Next Time”

Florida Housing Market Bouncing Back….

Posted by Duke Rountree on

Florida Housing Market Bouncing Back….

Florida’s real estate market is entering 2012 on an upward trend, according to three leading U.S. economists. Florida Realtors Chief Economist Dr. John Tuccillo says, “Our sate is in a mini-recovery” and “sales are trending up, listing inventories have fallen, the supply of lender-related properties has stabalized, and we are seeing multiple offers on home in some local markets.”

In Fact…

Dr. Tuccillo says homes in Florida may be undervalued. “That may sound like a drastic statement,” he said. ” But a buyer who plans to own the home for 5-7 years can get some great bargains today.” Interesting statistic from South Florida I heard yesterday said at one point Miami had 9 years worth of inventory, now with decreased number of homes on the market and high buyer activity has dropped that number to less than one year. The South Florida economy is growing  based on relationships with Latin America and the Carribbean. Dr. Lawrence Yun says, “Don’t be surprised to see a gain in home prices in the Miami and Naples markets in the next 18 months.””From there, the recovery is likely to roll northward to Central Florida and then North Florida.”International buyers are driving the market in South Florida and other areas of the state.”

What about Ocala….

We are seeing positive signs locally including a drop in unemployment and reduced housing inventory. Banks are slowly releasing foreclosed/REO homes on the market and this is creating a negotiating competition between buyers. Many of the more inexpensive homes are only on the market for 1-2 weeks. We are still facing challenges getting buyers qualified for financing, however with the USDA loan programs and FHA there is great opportunity. Another key factor is the high price for rentals and availability. In todays market you can buy a home for the same or lower than you can rent. The benefits of buying to renting can create tax benefits, provide stability because there is no landlord who can ever raise your rent or sell the home without your approval.

If you are interested in receiving a monthly “Market Trend Report” please call, text, or email me anytime.

“Until Next Time”

Mortgage Applications Soar / December 2011

Posted by Duke Rountree on

12.8 % Increase in Mortgage Applications

There is large jump for 2 reasons. The first is consumers are taking advantage of historically low interest rates hovering in the 4% range. Second is the affordability of residential homes in Ocala, Belleview, Dunnellon, Salt Spring, Fort McCoy, Sparr, Anthony, Citra and several other areas.  Mortgage application can be a future gauge of home buying reported by Mortgage Bankers Association report for the week ending Dec. 2. Applications jumped 8. % from a week earlier while refinance soared to 15.3 %.

The reports  states 85.5 % were for fixed-rate 30 year loans.

“Coming out of the Thanksgiving holiday, applications increased significantly as mortgage rates dropped to their lowest levels in about two months,” Michael Fratantoni, MBA vice president of research and economics, said in a statement. “In particular, refinance applications increased sharply, with some lenders seeing refinance volume double. Despite this surge, aggregate refinance activity is still below levels reported two weeks ago. Some lenders indicated they are beginning to see an increase in HARP loans, but that increase is still a small portion of the move this week.”

Source: “Mortgage Applications Jump 12.8% as Refinancing Volume Soars,” HousingWire (Dec. 7, 2011)

“Until Next Time”

Ocala, Florida Area Local Market Report 2011 – 3rd Quarter

Posted by Duke Rountree on

TODAYS MARKET…. Median Price and Existing home Sales

All real estate is local and every market is unique. Remember that when you hear reports from the major new networks. We are seeing some positive signs in the Ocala / Marion County Market with the Median Home Price now at $80,900 with 1-year Appreciation at -1.6% and a 3 year Appreciation of a whooping -40.1%. This relatively recent correction in local home prices wiped out most of the equity gained over the last 7 years. State Existing Home Sales(2011 Q3 vs 2010 Q3) is at +10.6% for Florida and Nationally 17%.

FORECLOSURE info by type…

The market share of Foreclosures by type is 88.3% are Prime Loans, 5.1% are Sub-Prime Loans and 6.6% are Alt-A Loans. There has been a decline of both 60 and 90 day delinquency rates over the most recent 6-month period suggests a decline in local foreclosure rates in the near future.

AFFORDABILITY….

Based on Ratio of Local Mortgage Servicing Cost to Income, Ocala has typically been more affordable than most markets. For example the Monthly Mortgage Payment to Income for Ocala is 6.6% compared to 15.5% in the United States for 2010 and 5.7% locally for 2011 and 13.9% nationally with the historical average at 11.3% locally and 22% nationally. The price to income ratio has fallen as well and is below the historical average.

So what does this all mean?

Well it could mean we are close to reaching the bottom of the housing value slide. But it will take a strong economy and more local jobs for the housing market to continue gaining traction. There is less inventory on the market with an increase in buyer activity, compared to the same time last year. We are a long way from seeing appreciation in our homes but hopefully close to reaching the bottom and no more depreciation of value.

“Until Next Time”

3 Keys to Buying in Ocala Housing Market

Posted by Duke Rountree on

3 Keys to Buying in Ocala’s Housing Market

Buying a new or existing home can be a challenge for 1st time homebuyers and even for the experienced homebuyer. However, if you take a few steps and learn the process it can help ease some of the stresses that go along with your home purchase.

NUMBER 1 – REALTOR

Find a good, NO Great REALTOR! First, ask for a referral from a friend or family member. Word of mouth is the best way to find a REALTOR in your area to assist with the process. It can be simple(internet) or difficult(print advertising) to sit at your home, office or restaurant and search for hours looking at property listings. A local REALTOR will have the insight, knowledge and tools to make searching easier.

Example: How can 2 similar homes, one located in Silver Springs Shores(Under $100k) and another in the Magnolia Pointe(Under $200k) have such different price. It could be features, supply or most importantly LOCATION.

 NUMBER 2 – LOCATION

This is the first thing they teach you in real estate school. It determines everything! You can have the nicest house in all of Central Florida, but if the location is bad it will have a huge negative effect including lower price and overall salability of the property. Are your interested in certain schools, being close to work or recreation. Many REALTOR programs can be set-up to do auto searches for particular areas, price ranges and any other features you desire.

NUMBER 3 – LENDER

Interest rates are at an all time low with many 30 year mortgages hovering around 4% for those with great credit history. Here are a few loan products to chose from; USDA, Rural loan allows for up to 102% of appraised value to be financed; FHA is 3.5% Down with approx. another 3% in closing cost which can be paid by seller; VA is 0% down for active or retired military with funding fee paid at closing. There are many more options and loan products and finding a GREAT Mortgage Broker with years of experience can save you lots of time and money.

IN CONCLUSION

Finding a team of professionals to help in buying your next home, and finding them early can save you TIME and MONEY! If you need a GREAT REALTOR, please contact me at 352-572-1739 or duke@ocalarealtyonline.com. Looking for a GREAT LENDER? Contact me too.

 

“Until Next Time”

 

Homeowners Monthly Payments Down Almost 40%

Posted by Duke Rountree on

Monthly median-priced single family home today is $700

Inexpensive homes for sale in Florida and United States, plus historically low interest rates mean homeowners are paying less per month and that is great. Thats a 40% less than the $1,140 monthly average payed in 2006 according to Fiserv.

Here in Ocala, Florida homes sales prices have dropped a whooping 50% since the peaks in 2006. In rural areas such as Fort McCoy, Sparr, Anthony, Citra, Orange Spings, Williston, Belleview, Summerfield and many more the values have dropped even farther. In many other areas of the state and country values have only dropped around 35%. That means there is some great value in Marion County and we are poised to see a future rebound of the housing market. We are slowly starting to see home prices level off in the area but we are still not there yet.

Just as an example, let’s say you are borrowing $85,000.00 for 30 years with an interest rate of 5.000%. If the value of your home is $300,000.00, your property taxes $1,500.00 per year and your insurance is $1,200.00 per year, you can expect to be making a total payment of $681.30. This is because you need to pay $456.30 toward the actual loan, plus $125.00 for real estate taxes and $100.00 toward insurance.

Source: “Monthly Mortgage Payment Almost 40% Cheaper Than 2006,” HousingWire (Nov. 9, 2011) and Fiserv

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

“Until Next Time”

 

Thinking About Buying A Foreclosure, Short Sale or Auction Property?

Posted by Duke Rountree on

Before Buying a Foreclosure, Short Sale, or Auction Property: 3 Things to Think About

There can be great bargains in buying a foreclosure, short sale, or auction property but buyers need to proceed with caution. Many of these types of homes can be purchased at 20-40% less than traditional reseller prices, however consider these tips before proceeding;

#1 First consider buying an REO(Real Estate Owned) bank owned property before considering a short sale or auction property. WHY? Because short sale can be lengthy to negotiate and auction properties often require an all cash purchase. REO/ bank owned properties do not have an emotional connection but simply want to recoup as much money as possible.

#2 HAVE AN INSPECTION DONE! Did you notice this is in caps w/ exclamation point. In my opinion you should have an inspection done on any home purchase. Over 12 years of experience and thousands of homes viewed has proven to me even new construction can have issues and buyers need to protect their largest investment and make sure the home is operational & most importantly safe.

#3 Don’t expect appreciation right away. I caution buyers who buy properties at big discounts from thinking they will see appreciation right away. We are still in a depressed market and probably not going to see appreciation in the near future. Finding a good REALTOR to educate you about the local market and trends .

Thank you for taking the time to read my blog post and I hope you will sign up for future post.

“Until Next Time”

 

 

5 Homebuying Myths / Survey Results

Posted by Duke Rountree on
Survey: 5 homebuying myths

SEATTLE – Oct. 31, 2011 – Overall, today’s homebuyers tend to be fairly knowledgeable about the real estate market, but there are still a few points of confusion in the process, especially for buyers just entering the market. Here are the five main areas of confusion found in a survey by Zillow:

• Appreciation: About 42 percent of homebuyers believe home values will appreciate by 7 percent a year. Reality: Historically, home values in a normal market appreciate by 2 to 5 percent in a year.

• Appraisals: 56 percent of the buyers said the purpose of the appraisal was to determine if a home was in good condition. Reality: That’s the purpose of a home inspection; an appraisal estimates fair market value.

• Homeowner’s insurance: 37 percent of homebuyers think that buying homeowner’s insurance is optional. Reality: Lenders require homebuyers to purchase homeowner’s insurance if they carry a mortgage.

• Ownership: 47 percent of homebuyers said a prospective buyer owns a home after the purchase contract is signed by the seller – when the two parties reach agreement. Reality: The purchase and sales agreement is the beginning of the closing phase, but it can be a long process until they finally take ownership.

• Mortgage insurance: 41 percent of buyers think they must purchase private mortgage insurance, regardless of the amount of their downpayment. Reality: Buyers only need to purchase PMI if their downpayment is less than 20 percent of the home’s purchase price.

Source: Zillow Inc.

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

HELP for Struggling Home Owners?

Posted by Duke Rountree on

The HARP(Home Affordable Refinance Program) simply has not worked in helping many homeowners and President Obama is expected on Monday to announce “new policies” to help struggling homeowners, including a move that would allow borrowers to refinance their mortgage at current lower rates no matter how much their home values have dropped.

Fannie Mae and Freddie Mac are also expected to end a cap that excluded home owners from HARP who had mortgages that were higher than 125% of the homes value. This cap left many homeowners with little option because they simply do not have enough equity in their properties. The plan is expected to eliminate ” appraisals and extensive underwriting for most borrowers” whpo are up to date on their mortgages and want to refinance at lower rates.

Obama is also expected to announce a reduction in Fannie and Freddie loan fees. Lenders could start refinancing as soon as December 1st, however some may have to wait until early next year due to their loan-to-value limit.

Housing experts believe that allowing underwater home owners to refinance at current lower rates could be a savings of hundreds of dollars from their monthly mortgage bills and possibly help avoid foreclosure and free up household cash, helping spur economic growth.

Source: http://realtormag.realtor.org/daily-news/2011/10/24/obama-expected-unveil-housing-aid REALTORS.org article October 25,2011