Friday, December 14, 2012

2013 Tax Reprocutions - What every Real Estate Agent needs to know!

Short Sales4U
Short Sales 4U is happy to take the “I don’t know” out of one of the BIGGEST questions for next year… “What is going to happen to homeowner’s tax benefits that we have now, next year when they expire?”
 2013 TAX REPROCUTIONS are important for all agents to know about. 
It’s urgent information NEEDED FOR ALL HOMEOWNERS to understand nationally.
We don’t need to put the fear of God in people’s minds about still doing short sales next year.  We do need to educate ourselves and your clients for next years sales.
When push comes to shove, the fiscal Cliff must be met by relief from the taxpayers of America.
Selling homes and the taxation of them is a major way for Congress to meet a need that has not been met for quite some time.  Recovery needs to happen on both sides of the board.  The taxpayers need relief and so does the Government.
Many homeowners are trying to close before the end of the year to take advantage of some major tax relief programs that are set to expire December 31st 2012 which is important because quite frankly, I don’t believe they will be there next year.
Real estate brokers who deal in high-end properties have been reporting an upsurge in listings. Some sellers are desperate to sell their homes before Jan. 1, 2013, when they could be subject to much higher tax rates on capital gains.
Are these sellers right to be worried?
The short answer is "yes," some sellers should be concerned about higher taxes on capital gains in 2013. If the Bush tax cuts are allowed to expire at the end of 2012, some taxpayers will see an increase of 8.8 percent on their taxes on long-term capital gains, including gains on home sales.
Currently, the maximum tax rate on long-term capital gains is 15 percent. If the Bush tax cuts expire, this will go up to 20 percent on Jan. 1, 2013.
Also on Jan. 1, the new Medicare tax enacted as part of Obamacare will take effect. This will impose a 3.8 percent tax on investment income of individuals earning more than $200,000 and couples earning more than $250,000. Together, these result in a 23.8 percent tax on long-term individual capital gains -- an increase of 8.8 percentage points compared with the current 15 percent rate.
However, while the 20 percent capital gains rate would apply to all long-term capital gains, the 3.8 percent Medicare tax will, at most, apply only to the amount a taxpayer's income exceeds the applicable income threshold ($200,000 or $250,000).
More importantly, homeowners will still be eligible for the $250,000/$500,000 exclusion on capital gains from home sales. This means that the 3.8 percent Medicare tax will affect relatively few homeowners. Nevertheless, it will be a hit on homeowners who have substantial equity and income.
For example, an individual with a $500,000 in income would have to pay the 3.8 percent tax on up to $300,000 of his investment income in 2013. If this individual owned a home with $750,000 in equity and qualified for the $250,000 exclusion, he would be left with $500,000 in investment income, $300,000 of which would be subject to the 3.8 percent tax -- an additional tax of $11,400.
If the Bush tax cuts expired, this person would also have to pay an additional 5 percent in capital gains tax on his home sale profit (20 percent instead of 15 percent), which would result in $25,000 in additional tax.
Altogether, this person would owe an additional $36,400 in taxes if he sold his home in 2013 instead of 2012.
Any person with substantial income and equity should perform this simple calculation to determine how much tax they could have to pay if they wait until 2013 to sell.
We can help investors still purchase homes and distressed homeowners still sell their homes.  This tax change will not force our real estate market to cease to recover in this volatile economy, but it will effect some of our short term investors who were just trying to jump in and get right out of a good deal.
I can tell that this next year will be exciting and still very productive for everyone trying to help homeowners and investors alike understand really what Is happening with the changing real estate market today.  
Its important for every real estate agent working today to understand not only how to sell your listings, but give sound real estate advise that can affect your homeowner directly good or bad.
Thank you and I wish you all the best real estate sales you have had in a long time in 2013!
Your friendly Short Sale expert!!  At Short Seles4U- Stacie MacDonald
*some tax information was use from the Tim Inman website*

Tuesday, October 30, 2012

Should you be concerned if you have a Bank of America Short Sale?

Bank of America Short Sales might not close...

Many agents that have listings in Equator and are dealing with Bank of America short sales have been notified of their listing being "service released" or (SR) in "So many days".  These events have sky rocketed over the past few months for many agents and negotiators.  
Many of Bank of America's loans have been "Service Released"  which in short sale terminology means that this short sale is no longer going to be able to close with your current servicer such as "Bank of America" or any other lender that you may have been given this notice from.  
If you have been one of the chosen loans that have been serviced released then you need to find out who the homeowners new servicer is, and the new applicable information from your homeowner pertaining to that new loan.  You should be asking your homeowner to be looking out for any new Bank of America letters that they have been sent.  Especially recently. 
It can be a real hurdle when one cannot use the systems that they may be used to when working in short sales.  Many of the new servicing company's cant wait to get a hold of your offer and tear it up with their new investors guidelines and timelines.   Do not be afraid of turning that stalling short sale over to an experienced company that knows how to navigate through all of the short sale systems,  and companies guidelines that can stop any good short sale in its tracks.  
This notice is to help agents and homeowners be more prepared in what you may be either experiencing right now or may experience in the near future.  Its not the end of the world if that short sale is put to a halt.  It is a real pain in the rear end!  But many short sales are still salvageable if the homeowner doesn't have an upcoming sale date in the next 7 business days.  Many banks require at least 10 business days before an auction date in order to review and possibly suspend or delay an upcoming sales or auction date.  The most important thing to know is that "time is of the essence".  It is important to get your short sale package ready as soon as possible.  The better you are prepared for your seller, the better your outcome will be.  Its important to inform your seller about timelines that they may have to deal with.  Being honest about getting the same information out to everyone, so that no one is surprised will be invaluable.
Our question is, Why are so many of Bank of America loans being service released lately?  Now it could be a coincidence, but it could also mean something very different.   It could be sign for greater things to come.  Bank of America lead the County in Short Sales over the last three years.  Maybe this fast liquidation of non-performing assets has turned out moving their own assets in the wrong direction for them... Or did it? Remember that many of these banks have made money during this economic downturn.  They were bailed out and then started selling off their assets. Shortly thereafter  they realized that getting very big wasn't such a bad thing if they had possibly mismanaged their own credit or money. They knew and still know that being too big to fail isn't something that our government will stand for.  
Some of these banks may want to merge with another big bank and if they do, it may not necessarily be a good thing.  This Country cannot afford to bail out another bank or major investment company.  There simply is not enough transparency within our Banking institutions no matter what they say about 'Dodd-Frank".
I just hope that no matter what these big banks decide to do which one another, that they do it with integrity and to preserve the institution of banking. Not to continue to manipulate each other or the people that use their systems.  
I trust that we will continue to be very busy in short sales for the next 10 years or more.  There are many homeowners that need your help and assistance in guiding them in the right direction.  I know that it will continue to evolve and agents will continue to help homeowners buy and sell real estate, just as they have for over a hundred years now. 
 Sincerely, your short sale expert and friend, Stacie MacDonald

Sunday, September 16, 2012


Cash at Closing? Who can get this? Will you get it?

Only Some Banks across America are offering homeowners CASH at closing.  Anywhere from 2,500- 35,000!  Who gets this incentive?  WHY?

     Now Bank of America has publicly offered homeowners between $3-$30,000.  Chase Bank is also giving sellers incentives up to $35,000 for qualified short sales.

Why do banks give this much money to homeowners?  Because believe it or not it is cheaper for them to give them an incentive to sell quickly, than drawing out a non-performing loan for months or even years.
     So many banks have gone under because they would not work with homeowners soon enough or did not have the assets to lean on for long term losses.   Banks finally got the message that it was far better to work with a distressed homeowner than to just take the non-performing asset back.  Now they are sending homeowners pre-qualification letters to short sale and incentives have reached homeowners at closing. This program seems to be very successful at the moment.   I am looking back seeing how far we have come in the short sale business and banks are catching on to the recovery bug.  Recovery always starts with the homeowner and their needs.  When the American homeowner starts recovering, then AMERICA starts recovering.
     Many homeowners and agents are wondering how much they will receive at closing and the answer is: "it varies from home to homeowner"  It really depends on the amount the home appraises for and compared to the loss from the investor.   The less the investor loses the more the homeowner gets at closing.
     Can you qualify even if you had a bankruptcy in the past.  Yes you can still qualify for a co-operative short sale or Cash incentive short sale from either bank.
     Wells Fargo, First Horizon, Citi Mortgage and other banks still do not participate in these pre-approved short sale programs, but i would guess that Wells Fargo would be the next one on board to start that same type of program in the near future since the hold on bank owned homes will be for some time still.
     My opinion is if your bank is offering it to you, take it and run with it!  It will not be there forever, just like anything else the government has ever offered.  Its here today and gone tomorrow!

     Your Short Sale Specialist- Stacie MacDonald

How much power does the Bank have?

How much power does the bank have?

Recently I ran into a short sale that took me by surprise. I was handling a short sale for a successful real estate agent in California.  This short sale lien was owned by the Lien holder *&^%Man*&$% bank.  There was a bonafide offer presented to the Lien holder in a timely manner .  The bank then reviewed the package and ordered the BPO .  After the values came back we were notified by the bank that the value came in $70,000 higher than the offer amount .  The buyer then chose To purchase a FHA appraisal.  After the appraisal came in, we were notified that The FHA appraisal came in at the same value as the offer amount!  Terrific news for our client! We then contested that value at the bank and were quite confident that the bank would then have to accept our FHA appraisal amount as valid and true market value and of course submit our approval letter to us???  We submitted our appraisal along with the offer and ask to have the value contested .  When that review came back , The value by the bank was determined to be the same as their BPO value which was $70,000.00 higher than our appraisal value.  After their re-review of our documents, including the offer and FHA appraisal, the buyers offer again, was denied- Due to an "Insufficient Offer"
     Now many agents would assume that this deal was done and nothing else would help them in obtaining an approval letter, let alone a closing and paycheck.  After submitting complaints to the Office of Comptroller of the Currency, the FTC and the US attorney Generals office and Federal Housing Authority also known as HUD our bargaining position increases each time we make a legitimate complaint against the mortgagor.   
It certainly is the most beneficial thing to do for your client, yourself and your career.  especially if its a legitimate complaint!   You should know why and when to keep pressure on a bank.  It is important in every transaction.
     In this case the homeowner did not have a auction date pending and we had plenty of time to contest their values and contest their methodology.  Unfortunately in many cases their isn't the time or place to contest values.  In that case you should just try to get the highest and best offer instead of continuing on a fight that may end up in foreclosure instead.
    Having the right package to submit for your offer is important.  You should always try to meet your BPO agent at the property for their valuation.  This is not to influence the BPO agents mind.  This is simply to show the BPO agent why you came up with the listing price that incurred the current offer on the table. It is always important to show the actual sold properties to the BPO agent so they can get an idea of where or why  you have what you have on the table.  Remember, they work for the bank.  Many times I have seen BPO agents send in higher than market value reports.  Some agents think its because they want the listing if it goes to auction.  I think its just because they don't have the correct data and are busy themselves to get to their next task.  The easier you make it for them to do their job, the better your results!
     Take care of yourself and your REAL ESTATE!
Your Short Sale Expert at- Short Sales4u
Stacie MacDonald- CEO of Short Sales4U

Tuesday, June 26, 2012

Shadow Boxing with Real Estate

Have you ever heard of the term "Shadow Boxing"?  Its what a boxer will do to train to become a quicker, faster and better opponent.  The boxer will stand in front of  a lighted background to see his shadow in front of him which he will use like an opponent to bob and weave through the shadows of strikes he makes himself.
What on earth could this have to do with real estate?  In real estate we have shadow markets to make our real estate market look faster, quicker and better.  Unfortunately the view of real estate is again being built on false foundations.  We have what you would call "Shadow Inventory"  It is inventory the banks have on their books as assets, but are "non performing assets" . They have these homes on their books as inventory, but are frozen out from selling them because of a government moratorium on bank owned properties now.
As of today there are over 7 million homes on that list.  1 million were released to sell across the nation a month ago or so, but NOT MANY have been release to listing agents across America to put up for sale.  Actually you are going to be looking for a while for bank owned properties if you want to buy one now.  They just aren't out there. Just on the west coast alone there are over 650,000 bank owned condominiums.  I have heard rumors we wont see them for up to 18 more months!    Now i am sure that after the election is over we will see some of the bank owned properties being released, but why not release what should be out there for sale right now?
     A new bulletin came across my desk stating that Short Sales have surpassed Bank Owned properties for the first time. Shadow Inventory, what a concept! There is inventory out there, it's just not on the market now.... The election year has had a bigger part to play in it than i had anticipated.  I had anticipated seeing at least some bank owned properties for sale over the year.  But not the extreme void of bank owned homes that we seem to have right now.  Going from one extreme to the other isn't what we need to recover.  We need a balanced market.  We need lenders to loosen  up their guidelines for home owner occupied buyers a LITTLE so that more people could qualify for a new home sooner than later.
     Forcing the market to look good is one thing, but flat out ruining it is another.  I believe that once the banks shadow inventory is released, it will again flood the housing market with too many bank owned listings. Without the needed amount of buyers out there making "owner occupied" offers the housing market is sure to flop again.  Sure there are the investor (wolves) gobbling up the auctioned up houses across America, and offering up anything under 200k, but that will not be what helps Americans recover financially.
     The fact of the matter is that without a future of homeowners buying houses because they feel confident in the housing market and know it will be a good investment, we will not have real recovery across America.
      I am not too sure about trusting the government to protect us against the next Sr. V.P. of "Sally's Bank" to take us for another real estate ride.  I am not sure that they haven't already tried since Chase just lost over 2 billion dollars in another botched investment scheme.  Its this kind of greed and recklessness that has the big guys ignoring all of the red flags out there saying DON'T DO THAT AGAIN,  IT HURT TOO MUCH THE FIRST TIME AROUND FOR TOO MANY AMERICANS!
     I say write to your congressman out there and tell them to get real with real estate.  Let recovery take place now by giving buyers the chance to buy with not so perfect credit, but with a 10 year commitment to live and take care of their new home.  Give the home BUYER a CASH incentive to REHAB the home instead of giving the seller ALL of the incentive money.  Release the bank owned homes in a steady stream throughout the year and replace every closed home with a new bank owned home on the market..  There could be so many more ideas for recovery and if you have one, i would love to hear your ideas of what you think the government should do better to help Americans across the board.  Take care, your helpful Short Sale expert in real estate,
Stacie MacDonald