Buyers Wonder, Are Short Sales Worth It?

You're all ready to househunt, and of course everyone is talking foreclosures being the way to go. Hard to avoid them really! But what about short sales. Are they worth the trouble? And what IS a short sale anyway?

Short sales - a real estate transaction in which the homeowner needs to sell the property, but owes more on the mortgage than the home currently is worth.

These sales dominate the housing market. But they aren't for everyone. What you should know:

1. Typically the homeowner is underwater and has experienced a financial hardship such as a job loss. In order to limit the damage to his credit rating, the homeowner may attempt to work with his lender to negotiate a short sale. Not only must the bank approve of the short sale itself, it also must agree to the price, since the bank will accept the difference as a loss.

2. Unlike foreclosures, in which the owner has walked away and the bank is looking to unload a vacant - and sometimes vandalized - property, a short sale isn't a distressed home that will sell it at an extremely low price. According to the data from RealtyTrac, short sales typically sold for nearly 10% less than the market price in the first quarter of 2011, whereas foreclosures sold at an average discount of 35%.

3. Home buyers wanting to purchase a short sale must have patience! In most cases, when a buyer makes an offer on a house, he receives a response from the seller within a few days, or even hours. With a short sale, the bank must approve of the sale and bank representatives are overloaded with cases. It may take 30 days or longer for a buyer to receive a response from the bank.

4. Even with the challenges associated with short sales, buyers should not avoid these transactions. Being prepared ahead of the time and working with an experienced REALTOR can help buyers avoid frustration and surprises down the line.

I have been trained as a Certified Distressed Property Expert and have experience in both short sales and foreclosures. Let me know if you have any questions about purchasing short sales or foreclosures!

To read more about short sales:

http://realestate.aol.com/blog/2011/08/11/short-sales-are-they-worth-the-trouble/

Selling Your Home? The IRS Wants (to help) YOU!

The friendly IRS has come out with their Summertime Tax Tip for 2011! Read and learn...

"Ten Tax Tips for Individuals Selling Their Home"

1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of this sale.

2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

4. If you can exclude all of the gain, you do not need to report the sale on your tax return.

5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.

6. You cannot deduct a loss from the sale of your main home.

7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.

8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

9. If you received the first-time homebuyer credit and within 36 months of the date of purchase the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home cased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year's tax return.

10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

Whew! Did you get all of that? No sweat ... Well, for more information about selling your home, see IRS Publication 523, Selling Your Home. This publication is available at www.irs.gov or by calling 800-TAX-FORM (800-829-3676).

Would YOU Sell By Owner? You Gotta Read THIS!

When we first got into the real estate business, For Sale By Owner was really popular. There were several competing For Sale By Owner type brokers, and it seemed that a new one was popping up every week or so! Where have they gone? I was thinking about that the other day ... You just don't see much of those professional For Sale By Owner companies around anymore.

I just read an article that I have to share with you. The founder of ForSaleByOwner.com used a real estate agent to sell his New York apartment after he was unable to sell it by owner for six months. The agent came in, raised the price, and got multiple offers!

This is such an unusual story. For one thing, when owners put their homes up for sale themselves they typicall ask too MUCH, not too little! Even at the height of the home sales frenzy, many, many For-Sale-By-Owner sellers priced themselves out of the market. But that is not the point of this story.

The point of this story is that a good real estate agent knows the market! I have always loved real estate and I thought I kept a good eye on home prices when I wasn't selling real estate full time. I really figured I knew pretty well what was going on. Since being in real estate full time for nearly 10 years, I have learned just how wrong I was! The actual value of a home has so many variables that it was next to impossible for a lay person - even a lay person as crazy about real estate as I was, to have a pulse on the home market!

Only a full time professional has the "luxury" of spending hour upon hour, day after day, month after month and year after year studying and searching the multiple listings (which change daily) and reading every article about real estate, construction and lending that hits his inbox. I do it because it's my job, and because I LOVE IT!

So I say, "Good for you, Mr. inventor of forsalebyowner.com!" I am truly glad you sold your apartment and got a fair market price for it as well. That is what us professional REALTORs wake up to do each day!

To read the entire article, click here

http://realtormag.realtor.org/daily-news/2011/08/09/forsalebyownercom-founder-uses-agent-sell-home?cid=WR08092011:26043&ed_rid=230212