Tax Credit Extension…

Seal of the United States Senate.

Hellooooo My Beautiful Wonderful Bay Area!!…  Happy Day to You!!… You may or may not have heard… but its Happy Hallelujah Day for all First Time Homebuyers who have ratified contracts in place as of  April 30, 2010!!… As of last nite the Senate passed the bill and the House of Representatives passed the same bill earlier this week to EXTEND the closing deadline for Homebuyer Tax Credit Eligibility from June 30, 2010 to the new date of September 30, 2010… The bill now goes to the President for his signature..

To be clear… the extension applies only to transactions with ratified contracts by April 30, 2010 that have not yet closed?  (Nearly 180,000 homebuyers would have missed out on the tax credit had Congress not taken action to extend the deadline to close escrow… Estimates from the National Association of Realtors show as many as 17,700 home buyers in California would not have received the tax credit without this extension…)

Will keep you posted… Thanks for checking in…

Cheers Everyone!…

Isi

Isi Wu… the realtor for you…

Serving Clients All Over the Eastbay!

 

Enhanced by Zemanta

Taxes Due IRS… Short Sales and even Foreclosures…

Seal of the United States Internal Revenue Ser...
Image via Wikipedia

 

Greetings My Wonderful Beautiful Bay Area!!…  Today I want to revisit what can happen to you if you enter into a Short Sale or if the Bank Forecloses on your property and sells it.

There is NO FREE LUNCH when it comes to the IRS… whenever your home is sold… whether by regular conventional means or if you sold your home at a loss and you paid the difference or by short sale approved by the Bank or involuntarily by foreclosure… be warned you may be subject to taxes!

It doesn’t seem fair and what’s worse… you may not even find out that you owe taxes until the day you open your mail and find a 1099.

The IRS has tax rules for foreclosures or repossessions by lenders of homes belonging to owners who have fallen behind on their mortgage payments.  There can be severe and unexpected tax consequences for any owner who simply walks away just because he or she has little or no equity and the lender takes over and sells the property.  When a mortgaged property is foreclosed or repossessed and the bank re-acquires it or the bank knows the owner abandoned the property… the bank will send Form 1099 to the owner and the IRS… it will include the foreclosed bid price, the actual debt (loan) amount and the amount short of the debt amount… that amount will be taxed as ordinary income… the same as for your salary.

Sellers of residences acquired within the past two years or so are going to incur losses.  Even assuming no price declines, losses will result because of expenses for real estate brokers, lawyers and the like.  Sellers will not be able to deduct those losses… it makes no difference that they are forced to sell because of ie)… job changes or health reasons.

**  There’s also information floating around that Banks where distressed properties have overtaken the area in certain markets…are taking steps where even after they approve and close a property for short sale… they will be actively tracking the owner of that short saled property over the next 6 years… during that time if their credit rating goes up and if they attempt to purchase another home they will be pursuing them for the  “short amount” they lost when they approved that person’s short sale 6 years prior… This bit of information is not fact – as of yet here in California… yet people… Everyone please do everything you can to protect yourselves BEFORE A FORECLOSURE OR SELLING… PLAN AHEAD… especially before attempting to sell on a short sale or going through a foreclosure… please get legal and tax advice… do the planning BEFORE ITS TOO LATE!!…

Thanks for checking in…

Isi

Isi Wu… the realtor for you

Serving Clients All Over the Eastbay!

Enhanced by Zemanta

More Help for First Time Homebuyers!

Good Morning My Wonderful Beautiful Bay Area!!….  There’s just something to be said about working with clients who pay attention to their purchase and any legislation that might affect their transaction…

First thing this morning received a call from a client in escrow… he just heard on the news that there may be another $10,000 tax credit for 1st x homebuyers specific to the State of California… was this true and could we get included??…

Personally I hadn’t heard so after checking with my local board, CAR, other sources including CAR Legal… IN CASE YOU HAVENT HEARD  … there is indeed an extension that will go into effect sometime in May of this year which will give first time homebuyers an additional $10,000 tax credit from our great state of California! In addition to the $8,000 tax credit from the federal government…  if your buyers are in contract by April 30… This piece of legislation is very very good news !!… we’re advised to wait a few days for the details to come out…

Keep checking in… Will post updates as more details roll out…

 Hope this news comes in handy for you… It’s a bright sunny day… Cheers Everyone!!

 Your comments are always welcome!!…

Isi

Isi Wu… the realtor for you

Serving Clients All Over the Eastbay…

Reblog this post [with Zemanta]

Sometimes it’s a Good Thing for Rules to Change..

 

I know we all try to stay up to date on what is happening in the world of real estate… here’s abit of information about real estate you might not have heard about on TV , the internet or newspapers…

AB957 is known as the “Buyers Choice” act… If passed, it will require that the buyers of property be able to select the closing escrow company, not the bank (REO or short sale transactions), as they do now.

Thousands of owners are losing their property in short sales and foreclosures (REO properties), the banks have been dictating to the buyers who they are to use for the escrow company… (at the buyer’s own expense).

This may be a good bill because in some cases, the banks are writing their own rules in the sale and closing of their REO and short sale properties… It’s true that the banks are losing millions of dollars in all of these sales of distressed properties which are all upside down (or under water)… Rules are rules… We’ve abided with the rules of real estate for many years and now we have a few banks dictating all NEW rules to buyers, sellers and real estate brokers… NOT Good… it’ll be good if this one passes…

LOAN MODIFICATION ATTORNEYS UNDER INVESTIGATION

I’m sure the thought has entered our minds… just when the “bad guys” were going to pop into the picture… in the rush to save their homes and reaching out to those “legal eagles” who have made themselves available to the homeowner in trouble… Consumers Beware…


The State Bar of California has recently launched numerous investigations against attorneys for misconduct related to loan modifications. In a rare move, the State Bar has released the names of 16 attorneys under investigation, by opting to waive investigation confidentiality in favor of public protection. These attorneys have allegedly taken fees for promised services, but failed to perform those services or even communicate with their clients who face the possible loss of their homes. Their non-attorney staff may also be under investigation for unlawfully practicing law.
Not all attorneys engaged in loan modifications are unscrupulous. However, this announcement from the State Bar serves as a good reminder for REALTORS® and their clients to be careful when dealing with attorneys and others for loan modifications. Scam artists may intentionally associate or affiliate themselves with attorneys in an attempt to lend credence to their fraudulent schemes. The list of attorneys currently under investigation is available at http://calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10144&n=96395

Changing Title Under Spouse’s Nose

I’m sure we all want to think that once married we’ll live happily ever after… Life sometimes doesnt work out the way you intend… things happen… just wanted to pass along the following article for you to think about….

 

(Article By Real Estate Attorney & Syndicated Columnist Bob Bruss)

 DEAR BOB: My mother, now divorced, owned a house with her former husband. But before the divorce papers were finalized, without my mother’s knowledge he changed his title to the house from joint tenancy with right of survivorship to tenants in common. He passed away recently. Now his nephew is claiming the house under his will. My mother is still on the title and loan papers. Can a joint tenancy title be changed without permission of the other joint tenant, and is my mother entitled to all or half of the property? –Leslie LeB.

DEAR LESLIE: For simplicity, I presume the house is not in a state allowing a married couple to hold title as tenants by the entireties (a special form of joint tenancy that cannot be terminated by one spouse alone). If the divorce settlement papers didn’t specify what was to happen to the house title after the divorce, each still owned half of the house after the divorce.

Unfortunately for your mother, a joint tenant with right of survivorship does not need permission from another joint tenant to change the ownership method to “tenants in common.” Also, her ex-husband could have sold his half-interest in the property or given it away without her permission.

Presuming the ex-husband executed and recorded a valid quitclaim deed from himself as a joint tenant to himself as a tenant in common, that broke up the joint tenancy without notifying your mother. The result is the ex-husband’s half of the house became subject to his will, which apparently left his half of the house to the nephew.

Under the law of virtually every state, your mother still owns her half of the house, but as a tenant in common and not as a joint tenant with right of survivorship. The fact her name is on the mortgage papers is irrelevant to the title.

Perhaps she should offer to buy out the nephew’s inherited half. Or maybe she should ask him to buy her out. Better yet, perhaps they should try to get along as tenant-in-common co-owners. For more details, she should consult a local real estate attorney.

Watch Out!!… Con Artists Out in Force!!…

Arm yourselves with information!!.. Knowledge is key to every success… Please pay attention to who you do business with!!…

Like sharks circling blood in the water, con artists have been out in force preying on desparate homeowners with offers to help get their mortgages modified so they can stave off foreclosure ~ for a Fee, sometimes a very big one!!…

Now California Attorney General – Jerry Brown is requiring “foreclosure consultants” to register with his office and post a $100,000 bond by July 1.  The intent is to help consumers avoid the shady characters who don’t deliver.  As the foreclosure crisis has grown, so has the number of desparate people who fall prey to scams.

“This arms California consumers with information so they can determine whether or not the person they’re working with is a fly-by-night operator”, said Scott Gerber for the AG.

Consumers can check out loan modification companies by calling the Attorney General at 800-952.5225.

Jury Finds Realtor Not to Blame for Purchase Price

A jury sided Thursday with Carlsbad real estate broker Mike Little in a closely watched lawsuit that pitted a local couple against the agent that helped them buy a home. The couple, Vern and Marty Ummel, claimed that Little neglected to mention recent sales in their neighborhood, leading them to overpay by about $150,000 for their home in July 2005.The case attracted national attention as it posed a hot question: What are the responsibilities of a real estate agent? The real estate camp was concerned that if the plaintiffs won Thursday, it would catalyze and focus a growing urge around the country to find someone to blame — and to hold financially responsible — when houses aren’t worth as much as their buyers once paid. Those who sided with the Ummels worried their case would be chalked up to rich people problems, a matter of a measly $150,000 in the scope of a million-dollar tract home near a golf course in North County.

With an enthusiastic and unanimous response, the jury found that Little had executed a reasonable standard of care when he showed his clients, Vern and Marty Ummel, more than 80 homes in a house hunt that began in May 2005, ultimately leaving them to their decision to pay $1.2 million for their house two months later.

In arguments delivered Thursday morning to conclude the jury trial that began last week, attorney David Bright said his client, Little, was being unfairly blamed for the Ummels’ house dropping in value.

“The Ummels want to own the most desirable house and pay for the least desirable house and have Mr. Little make up the difference,” he told the jury.

At a time when

housing market trouble has rocked the global economy, the individual roles of people involved in the basic housing transaction have come under fire. A soaring market this decade hid a multitude of mistakes, a plethora of cut corners and fudged appraisals, because buyers could sell for a profit, nearly no matter what.

But now that the value of housing has come unhitched from what once propelled it upward by double-digit percentages year after year, a spotlight has become trained on the topic of ethics in real estate. Scores of fraud cases, underpinned by inflated appraisals and collusion between buyers’ and sellers’ agents, have landed in national headlines and aggravated bank losses in a major nationwide housing slump.

And arguments in this two-week trial attempted to answer some of those questions: What right did the Ummels have to expect Little to know and tell them about all of the other nearby homes? What duty do buyers have to do their own research, to challenge what their agents and appraisers and mortgage brokers tell them?

At least in this specific case, the Realtor was found to have exercised sufficient care in helping the Ummels find their house, including helping them negotiate other offers they made on houses before they settled on this one. That made an important part of the case Vern Ummel’s admission on the stand that after looking at so many homes, he had a good sense of value in the neighborhood.As for the buyers’ responsibilities, juror after juror gushed praise for Little and heaped criticism on the Ummels’ failure to research the comparable sales themselves.

Bright argued the trial had illuminated the hard work that responsible real estate professionals, those that have been in the industry for a while, do for their clients.

“I think Realtors are scapegoats for a declining market,” Bright said after the verdict was reached Thursday afternoon.

“There are always people out there who will blame someone for something that is beyond their control.”But Marty Ummel, “devastated” by the conclusion of the case, said the jury’s decision enables real estate agents to skimp on information they provide to their clients.

“I think it sends a bad message to people about the real estate industry,” she said. “Evidently there is not the relationship of trust that I would’ve expected.

“The verdict marked an end of a battle that began soon after the Ummels bought a house on Amante Court in Carlsbad for $1.2 million in late July 2005. They were still unpacking when Marty found on their doorstep one day a flyer from another real estate agent, touting a recent sale of a similar-sized home down the street from the Ummels’. What caught Marty’s eye: that house sold six weeks earlier for $105,000 less than they’d paid.

When they received a paper copy of their appraisal after they bought their house, the Ummels noticed the comparable sales in the neighborhood had not just lower prices, but, in their view, better amenities and larger lot sizes. A few months later, they saw another flier for a house down the street that sold for $175,000 less.

The Ummels contended their agent had misrepresented a reasonable value to pay for their house and had breached his fiduciary duty to them, acting to protect his commission instead of their best interest. They filed suits in July 2006 to that effect against their agent, Mike Little, and Re/Max Associates, the parent franchise of 14 affiliated offices in San Diego County.

The Ummels picketed, carrying signs that exclaimed “Caution, Beware: All Re/Max offices are independently owned,” and “It’s our money; we want justice” to Re/Max offices around the county and even to the Greenwood Hills, Colo., national headquarters of Re/Max.

The original lawsuit named the appraiser and the mortgage broker, who each settled with the Ummels for $10,000.And though the case was decided in his favor Thursday, the impact of the picketing and the media attention over the last 18 months was significant for Little, Bright said.

“It’s been extremely hard,” Bright said. “Now, when he looks at a client, he’s got to wonder, what’s going to happen? Are these people going to second-guess me?”Marty Ummel said her efforts weren’t in vain. The jury spoke and the Ummels lost, but she said she was proud of herself for “doing what I thought was right.””The fact that there’s dialogue on what Realtors need to do, the fact that it looks like the Realtors don’t need to do as much,” she named as aspects she was happy the case brought to the public consciousness.

Todd Lackner, a real estate appraiser not associated with the case, said the Ummels had “lost the battle but won the war” when it came to raising questions and delivering a hit to the reputation of real estate agents.

“I think it’s scaring Realtors more than anything else,” he said. “[Little] won the court case, but there’s a lot of other Realtors out there that are very concerned. Not just in San Diego. It’s got to be nationwide.

“I think people are a little bit more skeptical, more concerned, and rightly so,” he said. “If you don’t think this is the right value, don’t do it.”