Uniform Process for Short Sales Will Help

Struggling Homeowners, Say Realtors®

NATIONAL ASSOCIATION of REALTORS® presented on Realtor.org

WASHINGTON, May 14, 2009

Help is on the way for many homeowners who are facing foreclosure, thanks to new details under the Making Home Affordable Program announced today by the U.S. Treasury and the U.S. Department of Housing and Urban Development.

The Making Home Affordable Program is designed to help homeowners obtain modifications to their loan so they can afford to stay in their home. Where a modification is not possible, new incentives encourage the “quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future,” according to U.S. Treasury Secretary Timothy Geithner. The National Association of Realtors® expects that a uniform process for handling short sales and financial incentives will facilitate this process. View a summary of the incentives and process (PDF)

“NAR is pleased that the government is stepping in to help prevent foreclosures by streamlining the short-sale and deeds-in-lieu process,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “NAR has been calling for uniform short sales procedures and other initiatives that will help today’s homeowners in challenging economy.”

Short sales occur when a bank agrees to let homeowners who have fallen behind on their mortgage to sell their home for less than they owe on their mortgage. Visit www.treasury.gov for detailed information on the program changes.

“Many families are finding themselves with a mortgage that is higher than their current home value, and they are struggling,” said McMillan. “As Secretary Geithner noted, and as NAR has been advocating for many months, stemming the foreclosure crisis and stabilizing the housing market are critical to our economic recovery.”

“We have heard from Realtors® that the extensive delay in the short sale process had caused many buyers to go elsewhere and have left many would-be sellers with no option but foreclosure. We are all pleased that the government has stepped in to help homeowners and those wishing to buy a home,” McMillan said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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This news could potentially help many of Alabama’s Baldwin County homeowners with selling their real estate in the coastal area. Short sales have been a lengthy process where the purchaser often gives up and selects another home due to the delay in communications from the lending bank of the seller.   

Practitioners Say Homes Prices Have Hit Bottom
Real estate professionals are optimistic that home prices will hit bottom in the next six months, according to a survey from listing and home-pricing site HomeGain.com.

About half of practitioners surveyed expect home prices to stay the same in the next six months, 29 percent expect them to drop, and 22 percent believe they will increase.

More than 84 percent of practitioners believe their clients’ homes lost value in the last year, while 12 percent say values had stayed the same. Only 3 percent believe homes had gained value.

Meanwhile, sellers were skeptical of their real estate professional’s analysis, with 69 percent believing their homes were worth more than the practitioner recommended. About 35 percent of home sellers thought their home was worth 10 percent to 20 percent more, and 10 percent thought their home was worth at least 21 percent more than their real estate professional suggested.

Source: Inman News (05/18/2009)

No Registering to Search all Local Foreclosures, Short Sales, Lease to Own,
and Owner Financed Homes by Town.
http://www.BaldwinForeclosedHomes.com
Teresa King with RE/MAX By The Bay - Local Agent
All Listings By All Companies Included 

February saw an increase in residential sales in Baldwin County Alabama.  A few agents are reporting ‘double headers’ where they have sold a listing for their seller and then that seller closed on a local new purchase on the same day.  Hopefully, we will continue to see this trend in Fairhope, Daphne, Spanish Fort, Foley and the surrounding areas of Baldwin County. 

The domino effect of selling your home and purchasing another local home, where in turn that allows the seller of your new home to purchase another replacement, well, you get the idea. Powerful possibilities!

The key is getting our first time home buyers into their first home, and the cycle can begin.

If you are considering buying Baldwin County Alabama Foreclosed Property, check out this search tool for all foreclosure listings: www.BaldwinForeclosedHomes.com

Wow,  things are much different now than during the end of 2008!  I have buyers coming out of the woodwork, so to speak, and we are writing contracts getting some awesome deals around Foley, Fairhope, Spanish Fort and Daphne, Alabama right now.

Foreclosed homes are on everyone’s mind, and buyers are grabbing up the best deals within a day of the best priced ones hitting the market.  In fact, I have been in some multiple offer situations with my buyers beating out the competition for these homes!

VERY Important:  You MUST get a pre-approval letter and I need to have it on file for you to take advantage of these very fast paced deals that come across my desk.  In the last few weeks, I have had three buyers miss out on bottom priced homes, because they had not contacted a lender who faxed me the pre-approval letter in time, and other buyers snatched up those homes.  If you need proof, I could have any of those three buyers call you today to verify this reality.

Yes, it is a buyer’s market, BUT hundreds of other buyers are out there looking along with you and the competition is becoming fierce for the best priced deals.  If you hesitate at all, the home is placed under contract with another buyer.

If you are in the market to buy a home in Baldwin County Alabama, please call on me and visit my website for Foreclosed Homes at www.BaldwinForeclosedHomes.com

If you are comparing mortgage rates to purchase real estate in the Daphne, Fairhope, Spanish Fort Alabama area of greater Mobile, Alabama, you may be interested in the following email I received from a local lender.  Of course not all consumers will qualify for this low, low rate, but it’s worth a phone call to see!

Here’s the Email content from lender, Sharon Thompson with Mortgage America:

I have an update since this mornings economic report.  I actually have a rate of 4.75% showing on 30 year fixed right now for the right client!!!!

It’s YOUR home! You may only need mortgage financing a few times in your life.  It is my profession and passion and my sole focus every day.

Sharon Thompson

Branch Manager

6576 Airport Blvd Ste C100

Mobile, AL 36608

Direct line 251-300-3156

Cell - 251-379-6854

Fax 251-300-3334

Email: sharont@mortgageamerica.com

Website: www.thompsondynamics.com

Two Separate Boards of Realtors?

If you have searched online for homes and real estate in the Mobile and Baldwin County areas of Alabama, you probably did not realize that we have two separate Multiple Listing Services (MLS) that are not connected. We have the Mobile MLS System and the Baldwin County MLS System, and each has its own Board of Realtor Association. Most agents are not members of both, because of the additional cost to the agents. I believe that to best serve clients, a membership in both Associations is needed, so I choose to be a member of both boards.

Why is it Important for Your Realtor to Belong to Both Boards and MLS’s?

Both MLS Systems have listings for both counties by cities. The MLS listings are also uploaded to numerous participating websites that broadcast the listings worldwide for maximum exposure. When a buyer is searching for properties from either MLS, many homes and listings are not represented and cannot be found even though they are for sale. A seller’s best interest is not being served, if a buyer cannot easily locate the property for sale when a local agent subscribes to only one MLS.

Both MLS Listings Combined

MLS Access to Both Mobile and Baldwin Counties

To make the searching easier and more streamlined, I have created a website which enables you to do what the two MLS systems don’t. This link combines BOTH MLS systems into one easy to use website for a customer’s benefit. Feel free to email this link to friends and family who happen to be in the market to either buy or sell property in Mobile or Baldwin Counties.

Whether you are looking for homes in Fairhope or Foley, Daphne or Dauphin Island, Summerdale or Satsuma, Silverhill or Saraland, Mobile or Magnolia Springs, Bayou la Batre or Bay Minette or any town in between, you’ll find them represented.

I was recently asked to provide information to a potential seller about what today’s buyer is willing to pay for homes in the Lake Forest area of Daphne, Alabama. I thought after my research that I would post this timely information as others may benefit from it, as it does apply to all areas and subdivisions in Baldwin County as well.

As you have probably noticed in your neighborhood, many nice homes are sitting on the market and are not selling. Why is that? Because buyers are not willing to pay top dollar in this market we are now in. You may be wondering what is selling, what buyers are looking for today, and what prices homes will bring.

Today, there are 139 homes for sale in the MLS in Lake Forest alone, with 9 of these pending. In addition, there are a few dozen for sale by owner homes in the subdivision. Many other homes have expired from the MLS without selling.

These following statistics are staggering:

In the last three months, only 16 homes out of over 180 homes up for sale have sold in Lake Forest in Daphne. If no other homes entered the market for sale, it would take THREE YEARS to reduce the inventory of available homes at this rate. 

From these numbers, you can see that competition is very tough for sellers to attract the few buyers that are out there. What this translates to is that PRICE is what will sell a home in this market. The lowest priced homes for the size are selling, and buyers can afford to be choosey with so many to look at.

The lowest price house, in the best condition is getting offers, while other equally or even more desireable homes just sit on the market and aren’t getting offers.

From this you can see that PRICE is indeed what it will take to sell a home today. So, if you are taking the approach of , “Let’s price it high because we can always come down”, you may just have three years to see if your idea will work to attract your buyer.

I’ve just sold a Single-family property at 713 Holly Drive in Fairhope, Alabama. Come and visit my site to see other properties in the Fairhope, Daphne, Spanish Fort area. If you are interested in looking for or selling your Mobile, Alabama area home, please Contact Me.

Read the entire article at  http://www.federalhousingtaxcredit.com/index.html

Opportunity of a Lifetime for First-Time Buyers

For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime.

But like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible. Use the links below to learn more about the tax credit.

Frequently Asked Questions
About the First-Time Home Buyer Tax Credit

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. The following questions and answers provide basic information about the tax credit.

1. Who is eligible to claim the $7,500 tax credit?
   First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
2. What is the definition of a first-time home buyer?
   The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
3. What types of homes will qualify for the tax credit?
   Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.
4. Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
   Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been “purchased” on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.

5. What is “modified adjusted gross income”?
   Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income” or AGI. AGI is total income for a year minus certain deductions (known as “adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.

6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
   Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
7. Can you give me an example of how the partial tax credit is determined?
   Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625.

   Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.

8. Does the credit amount differ based on tax filing status?
   No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as “married filing separately” (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
9. Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?
   In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
10. I heard that the tax credit is refundable. What does that 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. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).

11. What is the difference between a tax credit and a tax deduction?
    A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.A 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 $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.

12. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
    No. The tax credit cannot be combined with the MRB home buyer program.
13. I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?
    No. You can claim only one.
14. I am not a U.S. citizen. Can I claim the tax credit?
    Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of “nonresident alien” in IRS Publication 519.
15. Does the credit have to be paid back to the government? If so, what are the payback provisions?
    Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
16. Why must the money be repaid?
    Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
17. Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?
    Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
18. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
    Yes. The law allows taxpayers to choose (”elect”) to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
19. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
    Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.