Archive for August 2011
The 1099-C And Cancellation Of Debt From A Short Sale
August 27, 2011 | 
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Do you know about the 1099-C and cancellation of debt?
When a home owner sells his or her property using a short sale a 1099-C is generated.The IRS issued a news release on Sept 17, 2007 trying to clarify the 1099-C in regards to foreclosures. Many homeowners are unaware of this situation and feel once the property is gone all financial obligations are wiped out. That may or not be a correct assumption.
This will illustrate how the IRS determines your potential liability in a short sale or a foreclosure.
How to figure cancellation of debt income
1. Enter the total amount of the debt canceled/forgiven. ____________________
2. Enter the fair market value of the property from Form 1099-C, box 7. ____________________
3. Subtract line 2 from line 1. If less than zero, enter zero. ____________________
Keep in mind that #1 will differ between a foreclosure and a short sale. The short sale amount is the amount the lender has agreed to forgive from the sale of your home prior to being foreclosed on and sold at auction or thereafter. If #3 is zero or less than zero than there is not a taxable amount.
If we take a look at particular numbers for an example. Let’s say Mr. and Mrs. John Q. Homeowner, owed $300,000 on their mortgage balance and the lender agreed to a short sale of $250,000, the forgiven amount is $50,000 not $300,000, the fair market value of the property is $360,000. If you enter the numbers above you’ll see that #3 is a negative number being less than zero therefore, not a taxable amount. Now, if you look at this example without having sold via a short sale than you would have a taxable amount as the debt canceled/forgiven would have been $300,000 subtract the FMV of $360,000 and that leaves $60,000 in taxable income.
Amazingly what is so critical is in how the lender reports on the 1099C. The IRS is urging borrowers to look closely at the amount of debt forgiven and what value is listed for their home. If a 1099C is received from the lender and it is in error, the homeowner must contact their lender for corrections. It is important to review the 1099C to determine accuracy.
If you are not diligent it may cost you money!
By: Ray Caran
Posted in Real Estate | 
Tags: 1099c, Borrowers, Cancellation Of Debt, Correct Assumption, Financial Obligations, Fmv, Foreclosure, Foreclosures, Form 1099, Irs, John Q, Lender Reports, Line 1, Mortgage Balance, Mortgage Lender, Mr And Mrs, Mrs John, News Release, Potential Liability, Taxable Income | 
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Save Money by Selling Your Own Home
In a difficult real estate market, sellers are looking to recoup as much money as possible. It’s well known that using a real estate agent can often cut into profits because they take a significant commission out of the sale price. While having a real estate agent take care of all the work is a nice convenience, what if there was a way to eliminate paying thousands of dollars in commission?
The best way to save money is to become your own real estate agent. Sell your own home. If you’ve driven around any neighborhood there’s no doubt you’ve seen the ubiquitous “For sale by owner” signs popping up in front yards around the country. While it may seem a bit intimidating at first, there are plenty of people who’ve successful sold their homes. There are many resources available that make selling your own home a simple and relatively painless endeavor.
There are a few steps any potential seller must take before selling their home.
Appraise your property
Normally, a realtor would be the one to assess your property value and set a fair market price on your home. When selling your own home, you need to separate any emotions (good and bad) or sentimentality you may have for your home. It’s important to be as objective as possible. You can get a good idea of your home’s value by pulling the comparable real estate prices in your area. This information is readily available in an online database called an MLS system. If you want to ensure you are correctly valuing your home, you can also hire a professional home appraiser. You need to be aware of the market and remember that a number of factors that have nothing to do with your home can also influence how much a person may be willing to pay for it.
Choose the right time
Selling a home is no small undertaking. You should be readily available for open houses and showings and to respond to buyers’ questions and offers. Make sure that when you decide to put your house on the market, it’s a good time for you personally and you will be available to devote a significant amount of time and energy to closing a deal. Timing in the real estate market is very important. There are ebbs and flows and figuring out when your home is most likely to sell is key if before you decide to put it on the market.
Stage and prepare your home
Once you know what your home is worth and have decided when to put it on the market, it’s time to make it look presentable to buyers. Remember, it’s important for potential buyers to see themselves living in your home. Does your home have curb appeal? This might be the time to take on a few quick and easy gardening projects. Spruce up the walls with a few fresh coats of paint. If your carpet shows wear, it may be worth the investment to replace it. Keep the rooms presentable by clearing the clutter and using neutral decor. Ensure the home is clean from top to bottom. Nothing scares buyers away like a dirty house. If there are any major repair issues present in your home, complete them so they don’t deter buyers.
Market and highlight your home
Sometimes it’s not enough to just list your home for sale. You need to spread the word and attract buyers. Thankfully, there are some relatively inexpensive ways to do this. Utilize the Internet as much as possible. There are numerous free classified postings and real estate websites that allow you to post for-sale information. Consider placing ads in your neighborhood papers. Print up one-sheets with a nice color photo of your home, the sale price and the real estate specifications. What are the characteristics that are unique about your home? What makes this property so special? Is it the location? The view? Is it the school district or the home improvements? You need to find the angle from which you want buyers to view your home. A well marketed home will command its asking price.
Understand financing
There is no real estate agent to advise you about the financial aspects of this deal. Utilize your resources and do your homework so you know exactly what you’re walking into. Consider aligning yourself with a local mortgage company as your preferred lender. A mortgage broker should be able to give you a good idea of what attractive options you can offer buyers like no closing costs or zero money down options.
Know the law
It may be worthwhile to seek out a little legal advice when it comes to closing the deal. You want to ensure you have filed all the correct paperwork and that the deal is legal and well documented. You also don’t want to be held liable if there are any subsequent issues with the property. Property disclosure laws often mandate that sellers list any flaws in the property. This is definitely an area where you want to be a stickler about details.
While selling your own home is a bit more work than using a real estate agent, the work you do on the front end will most certainly pay off in the end. Consider the ability to gain thousands of dollars for all your hard work. After your home is sold, you’ll think it was all well worth it!
By: Jason Kay
Posted in Real Estate | Tags: Best Way To Save Money, Convenience, Emotions, Endeavor, Good Time, Home Appraiser, Mls System, No Doubt, Open Houses, Owner Signs, Profits, Real Estate Agent, Realtor, Right Time, Selling A Home, Selling Your Own Home, Sentimentality, Showings, Thousands Of Dollars, Undertaking | No Comments »
Bulk REO Investing
With the record number of foreclosures announced in the media, the opportunities are endless. One of the areas with great potential for profit is buying and selling bulk REO real estate owned foreclosure property. You may wonder what that is, let me break it down a little. Bulk means that the property is not a single piece, but a package of multiple properties.
These properties may consist of a block or even a neighborhood. Buying in bulk means saving, weather it is nuts and bolts or real estate, bulk usually means savings. REO stands for real estate owned. This property is still unsold after going through a foreclosure auction, a bank or mortgage company owns it.Understanding what bulk REO real estate owned foreclosure property is one thing, but why should you be interested in investing? Let me give you a few reasons.
1. Price – The price of these properties is much lower than the average market values. This provides an great opportunity for profit!
2. Lien-free – The sellers of the bulk REO real estate owned foreclosure property tries to make it as attractive as possible, which means the removal of existing lien from the property. This also lowers an investors risk in purchasing.
3. Less Work – Because these properties have already been through the foreclosure process and auction, they have already been appraised. This is one less task that needs to be done, saving both time and money. Often to lure buyers that bank or mortgage company will have already done needed repairs and improvements to the property prior to the failed auction, which less work for you as an investor. REO have also already been through the messy and time-consuming process of evicting the previous residents. There is also no auction to deal with as an investor can make an offer at any time. That means following your own investment schedule.
4. Less Competition – The fact that most people are unaware of bulk REO real estate owned foreclosure property provides for very little competition. Fewer competitors mean better prices and opportunity to obtain attractive and lucrative properties.
5. Inspection – Unlike many other foreclosure properties sales, bulk REO real estate owned foreclosure property provides an opportunity for inspection before you invest. This is an important feature because you have good intimate knowledge of the properties before you invest you money.
There is money to be made in this exciting field of investing.
By: Jason Phan
Posted in Real Estate | Tags: Buying In Bulk, Fact That Most People, Foreclosure Auction, Foreclosure Property, Foreclosures, Great Potential, Improvements, Investing, Investment Schedule, Investor, Investors, Market Values, Mortgage Company, Neighborhood, Nuts And Bolts, Real Estate, Reo, Risk, Time And Money, Weather | No Comments »
Market Penetration Pricing – A Quick Market Entry Pricing Strategy
Market penetration pricing is a quick-entry price strategy that assumes low price will gain high sales volume which, in turn, will result in lowering costs. This strategy is used in price sensitive markets. For example, consider the market for DVD players; it is a high volume market, it has a high number of competitors, the costs to produce DVD players have fallen, and new and/or changing technology allow businesses to rapidly introduce new features and benefits on new models. The businesses that introduce DVD players quickly, sell high volume at low or reasonable prices, are following a market penetration strategy.
Businesses using market penetration pricing are usually trying to penetrate the market by growing their share of the market. They assume that the lowest price will win market share. Make sure that if you use this pricing strategy that you test your market, your price sensitivity and your price elasticity or in-elasticity first. Also be sure to do your market research to gain an understanding of how your competitors will react to this penetration pricing strategy. For example, your low price may cause your competition to lower price, then you will lower your price again, and so on – no one wins with a strategy like this.
But your market penetration pricing strategy can also be a deterrent for new competitors who are considering entering the market. When they see how low your pricing is and realize that their margins will be low and the risk of gaining market share for new entrants is high, they might choose not to enter the market. For your business to be successful with this strategy, it must have the capability to enjoy the economies of scale that high volume will bring and be the low cost provider in the market.
If you are an existing business and your competitor is following a market penetration strategy, do a thorough market research assessment of your capabilities:
Can you drive your costs down? Can you produce high volume? Do you want to sell your product at a low price (and hope volume sales will get you both the market share and the profitability you want)?
If you answer no to any of these questions, don’t follow this penetration strategy (or at least, consider this strategy very carefully). However, if you are a new business considering this strategy in a new, or scarcely populated, market, focus on how to drive your costs down and your efficiencies up.
Whatever pricing strategy you use, make sure that you specify it in your marketing mix plan and write down the reasons you chose that strategy. Then, at least on an annual basis at the time of your business plan update, review your chosen marketing strategy (including your pricing strategy) and ensure it is the right strategy for the product life cycle, for the market conditions, for your buyers, and for the competitive environment at that time.
By: Kris Bovay
Posted in Business | Tags: Capabilities, Capability, Changing Technology, Competitor, Dvd Players, Economies Of Scale, High Volume, Margins, Market Penetration Strategy, Market Research, Market Share, New Features, Price Elasticity, Price Sensitivity, Price Strategy, Pricing Strategy, Research Assessment, Sales Volume, Sensitive Markets, Volume Market | No Comments »
What’s My House Worth? – Figuring Value in Today’s Market
What’s my house worth?? That’s a question I’m asked every time I meet with a home seller for the first time.? My immediate thought is, “Whatever a buyer is willing to spend and whatever you’re willing to sell it for.”? Of course, I would never say it like that even though it’s the best answer anyone can give.
Instead, I’ll answer with something like this, “I’m not really sure yet.? Let’s take a look at the data and let’s see what a reasonable buyer would pay based on current market conditions.”?
I’ll explain the steps I suggest to price homes correctly the first time in any market condition so you’ll never have to ask yourself the question ‘What’s My House Worth’ again.
STEP 1: IDENTIFYING IMMEDIATE COMPETITION
The first step in determining value is to see what homes are for sale in your subdivision or immediate area.? Home buyers drive by neighborhoods and subdivisions that they are interested in.? If you’re in a subdivision with six other homes for sale you need to know which ones they are and how much they’re asking.
How do you get this information? That’s easy.? Get in your car or go for a walk and see for yourself.? If there are no flyers available, take down the numbers on the For Sale sign and make a few calls.
Why is your competition important?? It’s important because a buyer that is interested in your subdivision is going to get information on all the homes for sale in your subdivision and make a decision on which ones to see.? Buyers are already starting to get an idea of home values.
STEP 2: IDENTIFYING THE REMAINING COMPETITION
I’m sorry to have to break the news but most buyers do not really care about your specific neighborhood or subdivision.? In most cases it’s the general location that is more important; not the subdivision.? For example, a buyer might want to live in your town because of the schools, or because of the proximity to major highways or transportation and there are several subdivisions to choose from.
In any event, if a buyer is interested in your city you can assume they are going to look at other neighborhoods and subdivisions as well.? These houses outside your subdivision are still your competition.
In a nutshell, any other home a buyer looks at besides yours is considered competition.?
STEP 3: IDENTIFYING RECENTLY SOLD PROPERTIES
The first two steps talked about your competition, or other current homes for sale.? While this is extremely important it doesn’t tell us what the market value is.? Anyone can ask whatever they want for their home but it doesn’t automatically mean that’s what the market will bare.? Market value can only be determined by what has previously closed.
For example, let’s say there are six homes for sale with a price range from $200,000 to $225,000. This is your competition.? Let’s also say that four similar homes sold in the last six months with a range from $185,000 to $210,000.
Right now, the market will only bare a price of $210,000.?
But what about the guy listed at $225,000?? How is he going to get that much??
Well, the chances are, he won’t.? Any buyer working with a realtor will find out what the market will allow before submitting an offer.? If an offer is substantially higher than $210,000 there is a good chance the home will not appraise. (Note: homes do increase in value and appraisers take that into consideration when appraising homes. A home sold at $212,000 should have little problem appraising in a growing market.)
At this point it probably doesn’t make much sense to price your home more than $210,000 unless it’s a sellers market.? A buyer will realize they’d have to pay top dollar and it might not appraise.
STEP 4:? RESEARCH MARKETING TIME
Ok, you found out there is plenty of competition and the market will only allow up to $210,000. So, you should price your home at $210,000 beating half of your competition and not worry about the whole appraisal issue, right?
Well, not quite yet.
Now it’s important to add the next element which is finding out how long it takes for a home to sell.? What if we found out that all of the homes priced over $200,000 took eight months to sell and all of the homes priced under $200,000 took less than 30 days to sell??
Time is money.? Every month you’ll keep writing mortgage checks until your home sells. In an appreciating market it’s not so bad but in a depreciating market it’s not so good.
Do you want to price your home at $210,000 and wait an average of eight months or would you rather price it around the $200,000 range for a quicker sale.
STEP 5: PUTTING IT ALL TOGETHER
At this point we know what the competition is. We also know what the established market value determined by recently closed homes along with how long these homes were on the market.
The key is to put your self in the buyer’s shoes.? If you were a buyer and knew the top of the market is set at $210,000 would you want to pay more? Probably not.?
If you were a buyer you’d also know that you’re probably going to need to spend something very close to $200,000 because it’s the lowest price among all of the homes for sale.
Will an offer of $190,000 do the trick?? You’d be hard pressed, in a normal market, to find a seller who will take that price when the lowest competitor is above $200,000.
So what is the home worth?? In this example a seller can expect anywhere between just under $200,000 to just over $210,000 depending on if it’s a sellers or buyer’s market.
The bottom line is once you know what your competition is, what homes have sold for and how long it takes for a home to sell, you’ll have all of the information to answer the question, “what’s my home worth?”
By: Steven Hattan
Posted in Real Estate | Tags: Current Conditions, Current Market, Easy Car, Flyers, General Location, Highways, Home Buyers, Home Values, Homes For Sale, Homes Sale, House Value, House Worth, Market Condition, Neighborhood, Proximity, S Market, Step 1, Step 2 | No Comments »
Houston Neighborhood Guide – Bunker Hill
Bunker Hill Village is part of the Memorial Villages (Bunker Hill Village, Hunter’s Creek Village, Piney Point Village, Hedwig Village, Spring Valley Village, and Hilshire Village), an area that extends roughly from the 610 loop to Gessner in the vicinity of Memorial Drive. It is a very desirable area because it is heavily wooded and provides plenty of room for families to grow, yet it is close to all of the conveniences the city has to offer.
When the village was first established back in the 1950′s, it was considered to be in the country, just like the Memorial area in general since it was considered to be quite far from the city center. That is no longer the case as Houston continues to expand. Most areas within Bunker Hill Village have a minimum lot size of 20,000 square feet, which is ideal for those with growing families or a desire for a country feel within the city. The area is home to both newer, posh mansions and more modest family homes, most of which were originally built in the 1950′s and 1960′s, though you will find that the vast majority have been renovated.
In addition to the tranquil setting and strict zoning ordinances, one of the main benefits of living in Bunker Hill Village is the fact that it is zoned to some of the best schools in the highly-regarded Spring Branch Independent School District, including the highly sought-after Memorial High School. All in all, Bunker Hill Village makes for a fabulous place to live! It features close proximity to some of Houston’s best shopping and dining establishments and medical facilities, is zoned to some of the best public schools in the Houston area, and is filled with beautiful homes and towering trees.
By: Paloma Contreras
Posted in Real Estate | Tags: Best Shopping, Branch Independent School District, Bunker Hill Village, Close Proximity, Desirable Area, Growing Families, Hedwig Village, Hilshire Village, Houston Area, Houston Neighborhood, Independent School District, Medical Facilities, Memorial High School, Neighborhood Guide, Piney Point Village, S Creek, Spring Branch Independent School, Spring Branch Independent School District, Towering Trees, Zoning Ordinances | No Comments »
Buying a Home in Today’s Market
Buying homes today is a difficult task. There are always many houses for sale, all that may seem to meet your requirements and desires. So how to choose a good house for you and your family is the hard decision. Often times, the decision comes down to about three or four houses. Location, school systems, and the size of the house are the deciding factors when purchasing a house. When it comes down to the final decisions it is helpful to have a successful person to help make your decision. Telluride Colorado Real Estate is known for having great employees and personnel. The Telluride Real Estate Agents are helpful and knowledgeable when it comes to buying a home, especially your first home. When buying a home out West, consider this company, because they are reliable and intelligent.
Often times, people think that taking virtual tours online and looking through pictures and researching figures on certain houses is a useful task. However, sometimes it is not always factual. A lot of times, seeing the house helps make the decision better because you are actually witnessing what you may be purchasing. It is, however, useful to search houses that are in your price range before looking at a house that is appealing to you. That is another important thing, you must choose a price that you are looking to spend before starting your research because if you do not have those guidelines then you will never narrow down your search and it will end up taking you a very long time to find a house right for you.
The next step in finding a house is going on tours. Times for open houses are often listed on the website that the house is listed on along with the price, size, etc. If you are not able to access this, then you can usually find listings and open houses in your local newspaper. Make sure to keep your eye out for appealing houses and then take tours of those houses. Keep physical lists of the houses you like and what you like about them. This will help you eliminate the ones that really didn’t work for you. When you go on tours, take a notepad and keep two columns. One titled “Likes” and one titled “Dislikes”.
This will help you balance out what you like and what you didn’t like and will ultimately help you decide whether you truly like it or not. If you liked it, the like column will outweigh the dislike column. If the house isn’t a good fit, then the dislike column will outweigh the like column. This is a good system in helping you narrow down your list.
Finally, is making offers. I think that it is safe to say when you are down to about three houses you would be equally happy in you need to make an offer on how much you will pay. Many times, your offers will be beaten out but this way you will have more than one house with an offer and chances are, you will get one of your top choices.
By: Chuck R Stewart
Real Estate Marketing – Tips on How To Generate New Business When the Real Estate Market Is Down
Selling real estate can be difficult when the market is in a slump. That is the best time to begin or increase your marketing efforts. What you do now will keep your phone ringing for months to come. Here are some tips for boosting your real estate business.
Become a resource to people before you are a vendor. What this means is that you need to give of yourself to prospective clients before you ask them for business. Start a neighborhood blog for the area you farm, or your own neighborhood, if that is the area you specialize in. Talk about what is going on in the neighborhood that is of importance to the people who live there. You can put in relevant real estate facts and figures, but keep it interesting to everyone. People can easily subscribe to your blog and receive an email update when you write something new. This will keep your name in front of your prospects. Hold a teleseminar. Bridge lines are available for free, and you can record yourself talking about an area of real estate that you are knowledgeable about, such as preparing a home to sell or choosing the neighborhood that is right for you and your family. Keep the call short; no more than thirty to forty-five minutes. You can burn it on a CD to give to prospects or post it on your blog for people to listen to. Be sure to give your name, phone number and any other contact information at the beginning of the call, during the middle, and at the end. Put up a page on MySpace. The average age on MySpace is now over thirty-five. You will be surprised how many people are there to do business. Also, the link from MySpace back to your website or blog is valuable because it is such as highly ranked site. These are methods that do not take much time or money to get started and will pay off handsomely over the coming months.
By: Connie Ragen Green
Posted in Real Estate | Tags: Best Time, Bridge, Connie, Estate Business, Five Minutes, Interesting People, Marketing Efforts, Marketing Tips, Myspace, Neighborhood, New Business, Phone Number, Prospective Clients, Prospects, Ragen, Real Estate Market, Real Estate Marketing, Selling Real Estate, Slump, What This Means | No Comments »
Why Appeal Property Taxes For Your Home?
Property taxes are one of the single largest expenses faced by homeowners next to the mortgage itself. Many people get in trouble with their mortgage companies or wind up facing foreclosures because they are unable to pay their property taxes. Yet, most Americans do nothing to attempt to get these taxes lowered.
It is estimated that up to 70% of all property tax appeals are granted, still only 7% of all homeowners make an appeal to get their property taxes lowered. In this day and age, with property values plummeting all over the country, you might have your best chance yet to file an appeal on your property taxes.
So, why should you appeal your property tax assessment? Well consider an appeal on a $150,000 property. Let’s say that you win and your property tax is reduced by 5%. This means the assessed value would be reduced by $7500 and the property taxes reduced by $225, based upon a 3% taxation rate.
If you think that your property is being valued too high, you can appeal to your tax authority. You will probably be granted an opportunity for a hearing, at which time you must be prepared to back up your claims with solid documentation. To do this, you can work with a real estate agent who can offer you information on comparable properties in the vicinity and you can check out what those properties are costing in taxes. You can even get your property appraised. This will cost around $300 to $500, but it may be worth it if you feel strongly that you are being over taxed. It is good to have this sort of compelling evidence because local governments are not likely to reduce property taxes unless you can make a very persuasive argument for them doing so.
Even so, most property tax appeals are resolved at the informal hearing which is generally the first step in the appeals process.
Figuring that a property tax hearing generally takes about an hour, it is time well invested. When faced with unfair taxes, it is best to become the squeaky wheel. Too many people believe that you cannot fight city hall or that it is not even worth trying. Yet, what does it cost you beyond a little time and effort to go there and fight for your hard earned money? No one is better at representing your interests than you. So, if you feel that your property taxes are too high, don’t just whine about it like everyone else, do something about it, instead.
By: Chintamani Abhyankar
Posted in Finance | Tags: Appeals Process, Comparable Properties, Compelling Evidence, Foreclosures, Local Governments, Mortgage Companies, Opportunity, Pay Taxes, Persuasive Argument, Property Assessment, Property Tax Appeals, Property Tax Assessment, Property Taxes, Property Values, Real Estate Agent, Reduce Taxes, Squeaky Wheel, Taxation Rate, Vicinity, Wheel | No Comments »
Term Papers Online in Cheap Price
When speaking about one of the things that can make students in school so frustrated, writing a term paper is probably it. There is nothing really easy when it comes to writing a term paper. What makes this obligatory task difficult is that the students need to do a lot of researches and they include reading a lot of books and probably doing some surveys. Those frustrated students need a help. There are a lot of writing services today that can be used as help. Students can even use the service on the internet so the students will receive their finished term papers online.
The students, when using a writing service, can provide the writer with the topic that wants to be talked about in the essay. Read the rest of this entry »
Posted in General | Tags: Essay, Free Consultation Service, Researches, Surveys, Term Papers, Writing A Term Paper, Writing Help, Writing Paper, Writing Service, Writing Services | No Comments »