A sad reality in today’s real estate market, lots of folks loosing their home to foreclosure, and with foreclosure filing activity on the rise over the last couple of months it is only going to get worse. The best advice I can give any of my friends facing this situation is to ACT QUICKLY! A foreclosure will not go away by ignoring it, your options for a workout with your lender will only diminish as time goes by. If you want more information on how to handle this situation visit www.simplifyingshortsales.com.

www.realestatesalestrends.com

Our market is adjusting, (Again!) foreclosure inventory has substantially decreased, short sales are on the rise but also normal,  non-distressed sales have also increased in price and number.

If you were looking to sell or your previous listing expired, maybe it’s time to reassess your situation. There are tremendous incentives for all types of buyers in our market today; prices are still very affordable, interest rates are down to historical lows, but most importantly for a home seller inventory is low, low, low. With so many less options on the market as well as the short sale delays and the bidding wars on the few “bank owned” properties coming on the market, if you need to sell the least you can do is to obtain and analyze the current market data.

We provide with a free, no-hassle, no-obligation way of doing this by just visiting www.realestatesalestrends.com, oh! before I forget, there’s also no need to speak to an agent.

Once again we can see an overall improvement in the market conditions in the Orlando Area, some of the most relevant statistics are:

• Median Home Price has risen 18.8% since January 2011
• Home inventory is the lowest since 2005, with only a 4.8 month supply of homes
• Foreclosure sales are down 38.5% and the median price of a foreclosure rose up to 13.5 relieving some of the downward pull on home prices.

There's a high cost of having to replace defective Chinese drywall

IRS Allows Tax Break for Homeowners

Good news for thousands of homeowners burdened with Chinese drywall in their homes. The Internal Revenue Service announced on Thursday, Sept. 30, 2010 that it would allow taxpayers with Chinese drywall in their homes to deduct the cost of repairs and replacement of damaged appliances.

Chinese drywall emits sulfur compounds in much higher quantities than regular drywall, corroding metal, causing damage to air conditioners, wiring and other appliances. The fumes have also been known to present a health hazard for those living in the home.

According to federal tax law, a casualty loss can generally be claimed when a property is damaged by sudden, unexpected or unusual event.  Under the new rule, taxpayers can deduct “casualty losses” in the year in which the loss occurs, as long the losses are not compensated by insurance or other parties.

Other considerations are:

• Taxpayers must itemize their federal returns to claim the deduction
• Deductions are allowed only on amounts that exceed $500.00,  and on amounts that exceed 10% of the taxpayer’s adjusted gross income for the year.
• Taxpayers who do not have pending claims for reimbursement (and who do not intend to file a claim) can claim the full tax break.
• Taxpayers with pending claims for reimbursement may claim only a loss for 75% of the unreimbursed amount paid for damages.
• Taxpayers can file for an additional deduction or report the income received from a claim in subsequent years depending on how much they actually received

Even though this measure will only benefit those homeowners with the financial means to afford the costly repairs, it is a step in the right direction. After all, most insurance companies have been extremely slow in paying out claims and only a few home builders have voluntarily come forward to replace the bad drywall.

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 Wow! Incredible stats! Did you ever think this was possible? Housing has historically been the conerstone of the American Dream, it’s been the well from where we drew the funds for college, medical expenses, and so much more. What a tremendous blow it is to find out you owe more than your home is worth!

In course of conducting my business I usually find myself in the not very pleasant situation of breaking the news to the homeowners, who in most cases look at me in either absolute bewilderment or anger. Sadly, there’s not much I as a humble real estate agent can do to ease their pain, I can only provide them with the facts generated by the market, so that they can make an informed decision as to the sale of their property.

Today is probably the worst time to try to sell a home, however if you are in a situation where you must sell, due to a job tranfer, job loss, medical reasons, divorce, etc.  There are different avenues we can take to successfully sell your home fast and for top dollar. If this is your case please don’t hesitate to contact me for a professional, no-cost, no-obligation consultation, or visit any of my websites posted on the links section of this blog.

If you are in a must sell situation hesitating and waiting is probably not the best option at this time,even in today’s market, keep in mind that even though homes are begining to move, more homes are coming on the market everyday, with large number of them being distressed sales (Bank Owned and Short Sales) prices are likely to keep going down or at best remain a current levels for a while.  If you must sell waiting will only cost you more at the end.

Selling your home in todays market requires a collaborative effort between the homeowner and their real estate agent, communication, feedback and most importantly realistic expectations from all parties involved will determine the success of your home sale.

 A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.

WHO IS ELIGIBLE?  Any First Time Homebuyer – defined as someone who has not owned in the previous three years.  Purchasing new or resale.  Must purchase on or after January 1, 2009 and close on or before December 1, 2009.  If married both must be First Time Homebuyers.  If unmarried joint purchasers –you may allocate the credit to the qualified First Time Buyer – such as in the case of a parent purchasing with a son or daughter.

ARE THERE ANY INCOME LIMITS?  $75,000 for Single taxpayers and $150,000 for married taxpayers filing a joint return.  The tax credit amount is reduced to zero for those single taxpayers making over $75,000 and couples making over $150,000 the credit is proportionately reduced as incomes approach $95,000 and $170,000 respectively.  So if a couple makes $165,000, the excess amount is used to create a fraction 15,000/20,000 (.75) times the credit amount.  75% or $6,000 of the credit would be disallowed.  They would still get a $2,000 credit.

HOW TO CLAIM?  Home buyers should complete IRS form 5405 to determine their tax credit amount, and then claim this amount on Line 60 of their 1040 income tax return.  No other applications or forms are required.  You can either claim on your 2008 return and amend if needed or claim on the 2009 return.

 HOW IS THIS DIFFERENT FROM THE 2008 CREDIT?  The 2008 tax credit was $7500, was an interest free loan, and had to be re-paid over a 15 year period.  The new credit is $8,000, refundable, and does not have to be repaid as long as you live in the home 3 years. 

 WHAT KIND OF HOMES QUALIFY FOR THE CREDIT?  Any home that will be used as primary residence will qualify.  This includes single family detached homes, attached homes like town houses and condominiums, manufactured homes, (mobile homes) and houseboats.  The definition of a principal residence is identical to the one used to determine whether you may qualify for the $250,000 /$500,000 capital gain tax exclusion for principal residences.

IF I PURCHASED IN EARLY 2009 AND CLAIMED THE $7500 TAX CREDIT – HOW CAN I CLAIM THE $8000?  You can file an amended 2008 return with a 1040X form.  Please consult your tax advisor. 

WHO CANNOT TAKE THE CREDIT?  You cannot take the credit if you buy from a relative unless there is a taxable gain to the seller  – i.e., spouse, parent, grandparent, child or grandchild.  You stop using your home as your main home.  You sell your home before the end of three years.  You are a nonresident alien.  You have owned a home in the last three years at the time of closing on the new home.

IF I BOUGHT IN 2008 DO I QUALIFY FOR THIS CREDIT?  No, but if you purchased between April 8, 2008 and January 1, 2009 you may qualify for the $7500 tax credit.   

TAX CREDIT IS REFUNDABLE? WHAT DOES THIS MEAN?  The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. For instance, if you are in a position to get a refund from the government already, you would get the entire tax credit refunded as well.  If, however, you had a tax liability of $1,000 owing you would get $8000 less $1,000 owed = $7,000 refunded.

 HOME LOCATION?  United States and District of Columbia.  Vacation homes and rental homes are not eligible.  Principal residence defined as where you spend 50% or more of your time.

 IS A TAX CREDIT THE SAME AS A TAX DEDUCTION?  No, a tax credit is a dollar for dollar reduction in what the taxpayer owes.  That means that a taxpayer who owes $8,000 in income taxes and who received an $8,000 tax credit would owe nothing to the IRSA tax deduction is subtracted from the amount of income that is taxed.  Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes,  If the tax payer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15% of $8,000) or lowered from $8,000 to $6,800.00

If you have any further questions please don’t hesitate to contact me at Manny@yusrealty.com. Remember this unbelievable program will expire December 1, 2009. With low prices, interest rates and probably the widest array of choices ever buying is the logical choice.

My ultimate goal for this blog is to serve as an educational resource for learning about the basics of real estate, as a forum that addresses the pressing issues in real estate, a collection tips and guides for my clients and friends, a way to access monthly market updates for the cities I work in, a place to share client success stories, and a platform to present specific properties and real estate opportunities like up and coming Four Corners homes for sale, that are not yet on the market. I would also like to use this platform for our overseas friends that own vacation homes in the area to air their questions, experiences (good or bad) so that we can all benefit from the collective knowledge.

I am always happy to receive to comments, suggestions, and requests no matter how small or large, so please email them to me at Manny@yusrealty.com