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Friday, March 20. 2009
I have been asked many questions on what is better or should I say worse, a short sale or a foreclosure on the forgiveness of debt and the tax's that might due on the forgiveness. Now, as a Real Estate agent I would and will always say to consult a Certified Public Accountant for your specific situation but I do have some insight in this matter. There is some "forgiveness" on the debt forgiven in a home sale, loan modification, credit card debt forgiven, car loan debt forgiven, deed in leau of foreclosure, and other debts forgiven. I would like to focus though on the "short sale" part. When a home is sold and the proceeds of the sale are less then what is owed on the home this is considered a short sale. In a short sale the lien holders (banks) will typically forgive less than what the amount owed on the lien. When this amount is forgiven will typically be considered as income to the seller and taxed at the seller's tax braket. But in 2007 The Mortgage Forgiveness Debt Relief Act and Debt Cancellation will help. There is some relief either in solvency or what the purpose of the liens are on your home. This for more complicated than a one time blog and I will leave the details to the professionals but I did want to make it aware to all. So, please click on the link and educate yourself on this matter, it could save you money on your tax's!!!
Wednesday, March 11. 2009
You have probaly heard that now is great time to buy and many have shrugged this off due to the all the negetive press going on in today's real estate market. First off, today's real estate market in Snohomish County is not a bad market! Yes, the market is slower than years past, yes home values have dropped (for the better), and yes there are foreclosures and short sales (opportunities for buyers) but this is still a great time to invest in Real Estate! Let me explain why with some financial stastics- Snohomish County 2005- - Average Household income $62,080
- Highest median home value $315,000
- Averate interest rate 5.87%
Snohomish County 2006- - Average Household income $63,313
- Highest median home value $355,000
- Average interest rate 6.41%
Snohomish County 2007- - Average Household income $65,394
- Highest median home value $376,000
- Average interest rate 6.34%
Snohomish County 2008- - Average Household income $70,167
- Average median home value down to $325,000
- Average interest rate 6.03%
Snohomish County current- - Average Household income TBD but should be equal or higher
- Average median home value- below $325,000
- Average interest rate 5.25%
So, what do I see- incomes have continued to go up on a average per household, home values are now in or near the 2005 year price ranges, BUT interest rates are at a all time low allowing buyer's to pay less for a home on a higher income level with home values at a all time low in comparison. Higher wages, lower interest rates, lower home values, and opportunities due to "urgent or distressed" home owners makes for a great opportunity to invest in real estate as a first home buyer or invester. These interest rates will come and go and will more than likely not come again. Will home values continue to drop, yeah more than likely but as a long term investment they will go back up! Don't try to "time it right", if you have a stable income, with good credit, now is great time to look into buying a home!!!
Thursday, March 5. 2009
The Housing and Recovery Act of 2008 states that a "First Time Home Buyer" is a buyer who has not owned a principal residence during the 3 year period prior to the purchase. For married taxpayers, the Law tests homeownership of both the home buyers and his/her spouse. For example, if you have not owned a home in the past 3 years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the First Time Home Buyer tax credit. Visit the website by NAHB at: www.federalhousingtaxcredit.com for more information. Credits as of July 2008:
The following applies to all qualified purchases on or after April 9, 2008 but before January 1, 2009.
Repayment begins for 2010 tax year. | Credits as of January 2009: The following applies to all qualified purchases on or after January 1, 2009. | | Credit Amount= Lesser of 10% of the cost of the home or $7,500. | Credit Amount=Lesser of 10% of the cost of the home or $8,000. | | All principle residences eligible. | Same as July 2008 features. | | Credit can be claimed on tax return to reduce income tax liability; refund received for unused amount when tax return is filed. | Same as July 2008 features. | | Income limits apply- Full amount of credit available for those with adjusted gross income less than $75K ($150K joint). Phase out about those caps $95K & $170K. | Same as July 2008 features. | | No credit allowed if home financed with state/local bond funding. | Eligible for credit if revenue bond financing was used. | | 6.67% of the credit or $500.00 would be repaid each year for 15 years starting with 2010 tax filing. | There is no repayment for purchases on our after January 1, 2009 and before December 1, 2009. | | If home is sold before 15 year repayment ends, the outstanding balance is recaptured upon sale. | If home is purchased in 2009 and sold within 3 years the entire amount is recaptured on sale. | | Program ends July 1, 2009 | Program ends December 1, 2009 |
Sunday, March 1. 2009
| Snohomish County Stat Comparison | February | January | December | November | Residential Home Sales | 242 | 224 | 288 | 241 | | Residential Homes Pending Sale | 549* | 488 | 465 | 459 | | Active Residential Listings | 4,465 | 4,398 | 4,049 | 5,019 |
*241 went pending in the month of February. We are now entering the historically busiest months in Real Estate, and the numbers are starting to indicate this. I believe the numbers will continue to indicate this due to current government actions, interest rates, and the time of year. We are seeing homes go pending for a much longer period of time (over half of the homes showing as pending went pending in January and are still not closed) due to the large amount of refinances, surge in FHA loans, and the slow process of bank or short sale approvals. For buyers with job stability and decent credit, now is a great opportunity to buy a first home (for a long term investment). Give me a call if you or someone you know is thinking about buying or selling a home!! Interest rates continue to hang around 5.325% with no points.
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