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Real Estate and Goverment Write-off’s to Remember

Write-offs to Remember

Write-offs are the government’s way of rewarding taxpayers when they’ve done something the government likes. And to judge by the write-offs, the government likes it when people borrow money to buy a house. There are write-offs aplenty, many of which people often forget.

Make sure you take advantage of every break the IRS will give. Here are a few tax breaks you might forget:

Points:
According to the IRS, origination fees charged as points must be paid for the use of money, (for example, to obtain a lower interest rate) in order to be tax deductible. Origination fees that constitute a “service fee” are not tax deductible. The question must be asked, “Does the fee apply to the use of money, or is it a service charge?”

Pre-payment penalties:
Unforeseen circumstances often cause borrowers to pull out of their mortgages sooner than expected. Fortunately, pre-payment penalties are tax deductible, which helps ease the pain.

Pro-rated real estate taxes:
Even if the seller sent the tax collector the check, chances are the buyer paid a pro-rated portion of the taxes for the year at closing. Be sure they know to deduct their fair share.

Pro-rated mortgage interest:
Depending on when in the month the home sale closes, buyers pay either a hefty or a tiny amount of pro-rated mortgage interest for that month. Big or small, they can write that off. The Final Closing/Settlement Statement will show just how much they’re due.

Home construction loan interest:
As long as the construction period doesn’t last more than two years before they make the new place their “principal residence,” they can write off the interest for that construction loan.

It pays to pay attention – all these write-offs can add up to some serious savings when tax time comes around.

How to buy a REO Property

8 REO Tips for Buying Foreclosures

 

1) Get the Property History

Ask your Realtor to find out the bank’s purchase price on the deed/how much is owed. Compare that price to the price the bank is asking. Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept, if the home is under-priced.

2) Determine Comparable Sales

In many cases, the list price has little bearing on the value of the home. The market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.

 

• Look at the last three months of comparable sales, a mini (CMA), for that neighborhood to determine how much this REO is worth. Try to use only those homes that most closely match the REO regarding square footage, number of bedrooms, baths, amenities and condition. Pending and Sold Active and Contingent properties will give you a good idea of what the market is doing in that area.

3) Analyze Listing Agent’s REO Sold

Most REO agents work for one or two banks. Some listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings.

 

• Ask your buyer’s agent to look up the listing agent in MLS.  
• Run a search using that listing agent’s name to find the last three to six months of that agent’s listings. 
• Pull the history of those listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 5% over list price, then you may need to offer 6% over list price, and vice versa.
• Ask about Number of Offers, If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.If there are 20 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.

5) Submit Preapproval Letter

It goes without saying that you do not want a prequal letter. You want a pre approval letter. Get preapproved from your choice of lender in advance.

Don’t Ask for Repairs / Inspections

Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted. This all depends on if it is AS IS, an if they will have written in the contract they will help with repairs. Most REO’s and Foreclosures are AS IS. NO REPAIRS.

7) Shorten the Inspection Period

If other buyers ask for 17 days, for example, to conduct inspections, and you ask for 10, you will be deemed the more serious buyer.

Offer to Split Fees

Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more accepting to the offer. Same thing for escrow fees. The more you give them the more they will consider your offer.

 

 

 

Cash for Caulkers could seal $12,000 a home

Under President’s proposal, homeowners would be reimbursed for energy-efficient appliances and insulation.

NEW YORK (CNNMoney.com) — President Obama proposed a new program Tuesday that would reimburse homeowners for energy-efficient appliances and insulation, part of a broader plan to stimulate the economy.

The administration didn’t provide immediate details, but said it would work with Congress on crafting legislation. Steve Nadel, director at the American Council for an Energy-Efficient Economy, who’s helping write the bill, said a homeowner could receive up to $12,000 in rebates.

The proposal is part of the President’s larger spending plan, which also includes money for small businesses, renewable energy manufacturing, and infrastructure.

We know energy efficiency “creates jobs, saves money for families, and reduces the pollution that threatens our environment,” Obama said. “With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs.”

The program contains two parts: money for homeowners for efficiency projects, and money for companies in the renewable energy and efficiency space.

The plan will likely create a new program where private contractors conduct home energy audits, buy the necessary gear and install it, according to a staffer on the Senate Energy Committee and Nadel at the American Council for an Energy-Efficient Economy.

Big-ticket items like air conditioners, heating systems, washing machines, refrigerators, windows and insulation would likely be covered, Nadel said.

http://money.cnn.com/2009/12/08/news/economy/president_energy/index.htm

 

posted by Christina Portz

Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink

Driven by the first-time buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, while inventories continue to decline, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate¹ of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

http://www.realtor.org/press_room/news_releases/2009/11/record_big

Posted by Christina Portz

Beware Of Walking Away From Your Home/Mortgage!

A comment that I am hearing more and more often is…”Why shouldn’t I just walk away from my home?” “I have friends/family that have walked away and the bank did nothing”.

I would say to you that just hearing through the grapevine can be very detrimental to you without doing your homework first.

It is always best to seek a professional’s advice whether it is a Realtor, Certified Public Accountant or Attorney. Don’t take your neighbor’s word for it! This can be very dangerous.

A bank may have the right to seek the deficiency of your mortgage in the future.

When you commit to a mortgage you have legal documents that are drafted between you and your lender (Mortgage Company). These documents stipulate what happens in the event of default. If you have your closing documents from when you purchased the home, read it line by line. If you have questions seek the advice of an experienced professional, like the agents at Take Action Properties. 

The next statement that comes from clients is, “My mortgage company is not the same one I started with so those documents I signed at closing do matter anymore”. This statement is incorrect. What happens is that your original lender sold your mortgage to another lender. The documents you signed will still stand with the new lender. Read your documents they will state that you agree to honor the documents if it changes lenders.

There are many options for you and the lenders are coming up with more and more incentives to work with them. Certain lenders will offer you money for moving expenses if you assist them with a short sale. Others will help you to qualify for a loan modification if you want to stay in the home. There are many new solutions with mortgage problems that affect much of the nation. Your not alone in this, we are here to help you.

The mortgage company wants to know what your hardship is. Have you lost a job, had a reduction of hours, divorce, death…there are many more “catastrophes” that may qualify you for many different mortgage options that lenders have.

One of the other statements is “I don’t have money to have you help me with selling my home!” If your home qualifies for a “short sale” the bank pays for all the agents commissions and if negotiated right, all the closing costs.

The agents at Take Action Properties, LLC have helped many families sell, rent or stay in their homes by negotiating with your lender on your behalf. We are well aware of how emotional this can be and we would love for you to be freed from the undue stress of understanding what to do next.

Please don’t feel hopeless with your situation, call us and we will make sure you have all the information to make an informed decision on what could be a solution to your mortgage problems.

Call Take Action Properties for options that are available!  386.569.6947

 

Written by Christina Portz

Tax Credit Extension Passed And It Includes Current Homeowners!

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010. 
• Call Take Action Properties today for a list of homes for purchase in your area!

http://www.realtor.org/home_buyers_and_sellers/2009_first_time_home_buyer_tax_credit

Posted by Christina Portz

How to file for the First-Time Homebuyer Tax Credit

The credit is claimed using Form 5405  Which you file with your original or amended tax return. I have added a link to the IRS.GOV site for additional information below. Feel free to click the link above to have a printable form to file.

For full information on the $8000 First time  home buyers tax credit click the link below to be directed to IRS.GOV for information on how you qualify and how to stay qualified.

http://www.irs.gov/newsroom/article/0,,id=204671,00.html

Thank you and call Take Action Properties for any additional information you may need.

Best Wishes,

Take Action Properties, LLC

386-569-6947

What tax form do I need for the energy efficiency tax credits?

To claim the tax credit for energy efficient products ” placed in service” in 2009, you will need to file the 2009 IRS Form 5695 and submit it with your 2009 taxes (by April 15, 2010). Currently, only a DRAFT version of the 2009 IRS Form 5695 is available (without the instructions section). For products “placed in service” in 2010, you would take the tax credit on your 2010 taxes.

For more details on what quailifies for energy efficient tax crdit click the link below. Don’t forget to hit the back browser to come back and check out more infomation on our website.

http://energystar.custhelp.com/cgi- bin/energystar.cfg/php/enduser/std_adp.php?p_faqid=2928

Why you SHOULD sell your Home NOW!

Big Rebound in Existing-Home

Sales Shows First-Time Buyer

 Momentum!

Washington, October 23, 2009

Local Band (Pirates) Matanza’s High School

http://www.flagleronline.com/adserver/banners/ussba-leader.jpg”

 

Help support our local schools by showing up for our main events.

I have a soft spot for the Matanzas band as my Freshman son is a drummer for this event. Please come out and help support, I will be working at the high school from 10-3. Happy Halloween!  Come have some fun!

 

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