For Sale!!!
Why $10k ABOVE list price wasn’t enough for a Foreclosure
One of my customers recently offered almost $10k ABOVE list price on a foreclosure, and they didn’t get it because they were out offered!
This article sheds some light on what many Buyer’s are starting to experience in this Buyer’s Market …
Low-ball offers don’t work anymore
WASHINGTON – April 23, 2012 – When the number of home sellers grossly outpaces the number of buyers, no offer can be ignored, even if it’s 25 percent or more off the asking price. But in today’s rebounding market, those low-ball offers don’t often work. Many times, the potential buyer finds that they don’t get a counter-offer. And, in many cases, another more realistic buyer gets the home.
A low-ball offer – generally 25 or more off the asking price – allows buyers to see if they can land a great deal, even if they’re willing to pay more. In a survey last year conducted by the National Association of Realtors® (NAR), one in 10 respondents cited low-ball offers as a concern. According to real estate columnist Kenneth Harney, a NAR survey conducted in March and not yet released found that almost no one complained about low offers.
When the number of listings outpaced the number of buyers, many potential homeowners submitted a shockingly low offer on the theory that they had nothing to lose. If the seller balked, most would still counter with something below their asking price. Today, however, offers close to the asking price – or even beating it – will probably come in fairly quickly from someone else if a home is priced correctly in the first place.
Even buyers who still want to low-ball an offer on a home many times switch tactics after they lose a property or two to a more aggressive buyer.
Florida Realtor Marnie Matarese works with J Wood Realty in Sarasota. She told Harney that fewer buyers want to low-ball an offer in her area, but they still come in – mainly from out-of-state or out-of-the-country people who have read about the state’s foreclosures and short sales. That news, however, is old – it has not kept up with reality in many areas.
Matarese says some people still insist on making a low-ball offer, but that she doesn’t mind. “You can’t blame a buyer for trying to get a good deal,” she says.
In some cases, a seller isn’t offended by a low-ball offer, but their counter-offer shaves only a little bit off their original asking price. An Olympia, Wash., real estate agent had a $150,000 offer for a $250,000 listing, according to Harney. But after the dust settled and the seller shook off his irritation, he and the buyer agreed to $230,000.
Harney closed his column with this advice: “Rolling low-balls at sellers may have been an effective approach between 2008 and early 2011. But in 2012’s environment – at least in rebounding markets – it could be counterproductive if you truly want to buy.”
Source: Ken Harney. Distributed by Washington Post Writers Group.
© 2012 Florida Realtors®
Bill could help short sale sellers in 2013
WASHINGTON – April 2, 2012 – Under U.S. law, a homeowner with an underwater mortgage who goes through a short sale has part of his or her debt forgiven by a bank. The amount forgiven is legally considered income, as if the lender gave the owner a monetary gift by saying, “You no longer have to pay this.”
As a gift, that money is income and taxable by the IRS when the homeowner fills out his yearly income taxes. However, a temporary law effective through Dec. 31, 2012, nixes that amount as homeowner income, making the debt forgiveness tax-free. A short sale in 2012, then, allows a homeowner to walk away free of debt.
As it stands now, that rule expires next year, and underwater homeowners who go through a short sale could be taxed on the amount forgiven.
However, a bipartisan bill introduced late last week by U.S. Senators Debbie Stabenow (D-MI) and Dean Heller (R-NV) – the Mortgage Relief Act – would extend that rule past Dec. 31 if approved by both the House and Senate and signed by President Obama. Senators Robert Menendez (D-NJ), Sherrod Brown (D-OH) and Jeff Merkley (D-OR) cosponsored the legislation.
“It is bad enough that so many families are faced with mortgages that now exceed the value of their home,” says Stabenow. “But to add insult to injury, without this bill, the IRS would once again require these families to pay hundreds or thousands of dollars in additional income tax when they sell or refinance their home. That’s just wrong.”
Stabenow championed the original Mortgage Relief Act of 2007 designed to fix the problem that now expires at the end of 2012. Stabenow and Heller’s new bill will extend this tax protection for underwater homeowners through 2015.
Approximately, 20 to 25 percent of American homeowners are currently underwater on their mortgages.
© 2012 Florida Realtors®
You may owe federal income taxes in 2013 if you have a short sale, foreclosure
IMPORTANT ARTICLE!!!
WASHINGTON – Jan. 9, 2012 – You may owe federal income taxes in 2013 if you have a short sale, foreclosure after this year. Now is the time to make the hard decision: Are you going to walk away from your underwater home?
Uncle Sam is still giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences – as long as the lender officially releases the debt.
But on Jan. 1, 2013, the rules change: The amount a lender forgives, ether in a short sale or foreclosure, on a primary residence will be taxable on federal income taxes.
So 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.
“It’s a huge issue – it will be a shock to many taxpayers after 2012,” said Mark Steber, the Florida-based chief tax officer for Jackson Hewitt Tax Service.
The law first came into affect five years ago as the housing market went bust nationwide.
The Mortgage Debt Relief Act of 2007 “generally allows taxpayers to exclude income from the discharge of debt on their principal residence,” according to the Internal Revenue Service. “Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.”
Up to $2 million of forgiven debt can be forgiven this year, $1 million if married and filing separately, according to the IRS.
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, Fla.
“Bankruptcy trumps everything,” he said.
Or homeowners might not have to pay income taxes on any cancellation of debt income to the extent that they are insolvent immediately before the cancellation – that is, their debts exceed the value of their assets, Jovanovich added.
Steber and Jovanovich said homeowners should decide now what they are going to do – to give themselves time.
Short sales can take a long time, said Timothy Singer of Coldwell Banker in Fort Lauderdale.
He said he knows of one that had been pending for three years.
But lenders “have been gearing up” and speeding up the process, Singer added.
But even if banks quickly approve a short sale, the would-be buyer may get cold feet and the deal fall through, Singer said.
Then the sellers have to begin again, he said.
Copyright © 2012 the Sun Sentinel (Fort Lauderdale, Fla.), Donna Gehrke-White. Distributed by McClatchy-Tribune News Service.
Builder mag: 8 Healthiest Housing Markets
Builder mag: 8 Healthiest Housing Markets
JACKSONVILLE, Fla. – Nov. 8, 2011 – The construction industry thinks two Fla. metropolitan areas – Jacksonville and South Florida – are poised for a rebound, according to an analysis by Builder Magazine.
To find the cities with the greatest potential for growth, Builder Magazine as Hanley Wood Market Intelligence to consider local factors, such as major universities, military bases, and the strength of businesses in the private sector. The study also considered Economy.com’s housing projections, expected price appreciation, and estimated employment and income growth.
Under those criteria, two Florida cities made the top eight nationwide. Jacksonville came in at No. 4, and South Florida (Miami-Fort Lauderdale-Pompano Beach) ranked No. 5.
In Jacksonville, surveyors expect the number of building permits to almost double between 2011 and 2012, rising from 2,284 to a forecast of 4,363. The number of jobs will grow, the financial businesses will grow, and a military base will continue to call Jacksonville home. The builders believe housing prices will rise 5 percent in 2012.
In South Florida, surveyors believe building permits will skyrocket 178 percent: from 2,708 in 2011 to 7,522 in 2012. Unemployment will, according to forecasts, stop declining and rise 2.7 percent next year. Builders say the rosy picture is driven in large part by two big projects that will add over 10,000 jobs: the CitiCentre and Resorts World Miami.
The complete list of cities in the top eight include:
1. Minneapolis-St. Paul-Bloomington Minn.-Wis.
2. Fort Collins-Loveland, Colo.
3. Salt Lake City, Utah
4. Jacksonville, Fla.
5. Miami-Fort Lauderdale-Pompano Beach, Fla.
6. Charlottesville, Va.
7. Colorado Springs, Colo.
8. Oklahoma City, Okla.Source: “Healthiest Housing Markets: Mid-2011 Update,” Builder Magazine, Boyce Thompson
Homeowners’ monthly mortgage down about 40%
WASHINGTON – Nov. 14, 2011 – Improving housing affordability mixed with low mortgage rates means that homeowners are paying a lot less for their monthly mortgage payment than they did just a few years ago. In fact, they’re paying nearly 40 percent less on their monthly mortgage payment than homeowners paid in 2006.
According to Fiserv, the monthly mortgage payment for a median-priced single-family home today is $700 – a drop of close to 40 percent from 2006, when it was $1,140.
“Housing affordability has improved dramatically because of declines in both prices and mortgage interest rates,” David Stiff, chief economist at Fiserv, said in a statement. “Nationally, purchase mortgage payments now account for only 13 percent of monthly median family income, the lowest percentage on record (since 1971), and compared to 23 percent in the first quarter of 2006.”
Source: “Monthly Mortgage Payment Almost 40% Cheaper Than 2006,” HousingWire (Nov. 9, 2011) and Fiserv
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Renters spend 5% more than homeowners
Check the facts!!!
NEW YORK – Oct. 27, 2011 –
Rising rents are forcing renters to outspend homeowners on housing costs, according to a new study.
Since 2005, homeowners’ housing expenses have climbed from 31.9 percent of their household budget to 33.2 percent. In that same time period, renters’ expenses have jumped from 35.6 percent to 38.4 percent, according to the October CoreLogic U.S. Housing and Mortgage Trends.
In the last 26 years, homeowners have increased the amount they spend on household expenses by 12 percent while renters have increased it by 22 percent, according to the study.
Earlier this month, Capital Economics economists noted that for the first time in 30 years the median monthly mortgage payment is about the same – or less – than the median rental payment.
Yet, with the bleak job market, homeownership rates continue to fall in many parts of the country, particularly among younger generations. CoreLogic found in its report that the homeownership rate for the 25-to-34 age group dropped from 51.6 percent in 1980 to 42 percent in 2010. For the 35-to-44 age group, homeownership rates fell from 71.2 percent to 62.3 percent over that period.
Source: “Renters Outspend Owners on Housing,” RISMedia (Oct. 25, 2011) and Capital Economics
© Copyright 2011 INFORMATION, INC. Bethesda, MD
Growth picture enjoys uptick
Positive Article
WASHINGTON – Oct. 25, 2011 – Economists have significantly raised their estimates of third-quarter economic growth ahead of the government’s official report Thursday, easing near-term fears of another recession.
A consensus of economists surveyed by Bloomberg News estimates the economy grew at a still-modest 2.5 percent annual pace last quarter, up from their 1.8 percent projection less than two weeks ago. The brighter picture follows better-than-expected data on retail sales, manufacturing, jobs and business investment.
“We should take some comfort that the economy isn’t hurtling into recession,” says Capital Economics’ Paul Ashworth. Ashworth estimates third-quarter growth was 3.2 percent.
That’s not robust, but it beats the anemic expansion of less than 1 percent the first half of 2011. Amid last summer’s debt battle in Congress, the downgrade of the U.S. credit rating and financial turmoil in Europe, many analysts thought the U.S. was on the verge of another downturn.
Since Oct. 3, 10-year Treasury yields have risen nearly half a percentage point, indicating growth prospects are prompting a shift of money to higher-risk assets, says market strategist Anthony Valeri of LPL Financial.
Many experts say the third-quarter upturn was due to temporary factors, particularly the end of supply disruptions after the Japanese earthquake, and the decline in oil prices. The Commerce Department said last week that retail sales jumped 1.1 percent in September, partly because of a 3.6 percent rise in auto sales as Japanese bottlenecks eased.
Meanwhile, manufacturing grew at a 4.3 percent annualized rate in the third quarter. And business investment in equipment and software has rebounded. Both measures were buoyed by the unclogging of Japanese supply channels and lower oil prices.
Many economists say growth will slow to a sluggish 2 percent rate over the next year. Unemployment, at 9.1 percent, is high and consumer confidence is shaken.
Yet a recession appears less likely. New jobless claims have been falling since summer. “You would be seeing claims shooting up” if a downturn were imminent, says chief economist James O’Sullivan of MF Global.
Some say growth could beat estimates. Excluding autos, retail sales rose 0.6 percent last month. Consumer stock prices, often a leading job indicator, are at a record premium relative to stocks overall, says economist James Paulsen of Wells Capital Management.
But Bernard Baumohl of the Economic Outlook Group notes consumers have been borrowing more and saving less to finance their increased spending – which he says can’t continue.
© Copyright 2011 USA TODAY, a division of Gannett Co. Inc., Paul Davidson
Luxury home foreclosures a deal for well-heeled
Interesting article
“There are $4 million estates in Lutz and the Riverview area that are now less than $1 million,” said Keller Williams real estate agent Rande Friedman. “There’s a condo in Channelside that was $1.5 million, and now it’s $700,000.”
Most homeowners have seen values drop, but these prices are so low because the homes are owned by a bank. And the bank wants to get rid of them.
There are so many foreclosed luxury homes that Friedman created a website to list them. In three weeks, PoshForeclosures.com already has about 400 local listings.
The Tampa Bay area and Florida are among the hardest-hit by foreclosures in the country. Friedman has a theory on why the foreclosure crisis finally caught up to the rich.
“A lot of the people who got into the luxury market in 2005, 2006 were making their money from real estate,” he said. When the market crashed, so did their incomes.
Plus, just like the rest of the population, many luxury buyers took out adjustable-rate mortgages. Many of them have come due recently. That, combined with job loss and sinking home prices, led to an uptick in foreclosures of luxury homes.
That means hundreds of high-end homes sit abandoned. But that could be good news for those ready to buy. Homes and condos along the beaches and downtown condos are among the most popular luxury foreclosures, Friedman said.
Potential buyers of luxury foreclosures also don’t have to worry about trashed homes as much as buyers of lower-end houses. That’s because banks usually take better care of them, Friedman said.
“People are still living in them, maintaining them, so they’re not the deserted, desolate foreclosure feeling,” Friedman said. “They really are truly nice properties.”
That’s true, said Daren Blomquist, spokesman for RealtyTrac, which tracks foreclosure activity nationwide.
“It’s in the bank’s best interest to fix up the home and get in the best shape possible before trying to sell it,” Blomquist said. “That way, they may get a better price.”
Getting the best price matters even more, he said, when the homes are expensive. That’s why lenders often give owners of luxury homes more time to work something out.
“We find that with mortgages of more than $1 million, lenders wait longer to file for foreclosure,” he said. “By the time they foreclose, the mortgages are much deeper in default.”
That said, Blomquist said he’s noticed lenders of these million-dollar homes acting to foreclosure much more quickly this year.
“While this category of mortgages still has a low foreclosure rate, this category is also seeing the largest increase in initial foreclosure filings, compared to less expensive mortgages,” Blomquist said.
PoshForeclosure.com currently lists foreclosed homes that are for sale in Hillsborough, Pasco and Pinellas counties.
On the website there are estates that were listed at $1.5 million in 2006 and are now being sold for $500,000.
“All buyers are expecting great deals these days, and upper-end buyers are especially savvy,” Friedman said.
Copyright © 2011 the Tampa Tribune, Tampa, Fla., Shannon Behnken. Distributed by MCT Information Services.
Housing expected to improve over last year
WASHINGTON – July 19, 2011 –
The U.S. housing market, aided by a recovering rental sector, is unlikely to experience a “double-dip” setback, Freddie Mac said Monday.In its U.S. Economic and Housing Market Outlook for July, the Federal Home Loan Mortgage Corp. said housing likely will follow the performance of the overall economy for the rest of 2011. Additionally, home sales are projected to be above last year’s numbers by 3- to 5 percent.
The report also indicated that despite record levels of homebuyer affordability and historically low mortgage rates, households were concerned about their financial futures and were holding off making major purchases, notably homes.
The rental housing market showed the clearest signs of a turnaround with the apartment property price index showing a 15.2 percent gain over the year through the first quarter of 2011.
“Following June’s labor market report, households are naturally concerned about their financial futures, which is being reflected in the housing market,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “Yet, the single-family market will likely improve over the balance of 2011, in keeping with positive [gross domestic product] forecasts for the United States.”
Copyright © 2011 United Press International Inc.