Missed Payments

If an owner has missed one or more payments the lender will threaten to foreclose, If the borrower brings the loan current there’s no foreclosure, however there may be an assortment of legal fees because the lender has engaged a local law firm to process the foreclosure. The result is that in addition to the full cost of the mortgage and all penalties, the borrower will also have an additional cost for the work of attorneys selected by the lender.

Short Sale

With short sales the property is sold for less than the value of the mortgage balance. Example, a buyer offers $250,000 for a property with $300,000 still owed to the lender. The lender is asked to take a loss by the purchaser and to release the debt even though the entire amount is not being paid.

With short sales everything is up for negotiation. Since the lender is the “seller” it might be expected to pay some or all of the brokerage fee. In addition to the mortgage there might also be costs for foreclosure attorneys,late fees and various penalties. Who pays what is a matter of negotiation between the the buyer, the owner and the lender.

Money owed to the lender after the transaction may be seen as a debt from the owner. In most states the lender has the right to go after that debt by seeking a deficiency judgment. In the case above the buyer paid $250,000 for a property with a $300,000 loan balance, so the deficiency would be $50,000 plus costs, fees and penalties. However, in some states and in some situations a deficiency claim is not allowed. Also, the elimination of a deficiency claim can sometimes be negotiated as part of a short sale. For specifics in your jurisdiction please speak with an attorney or legal clinic.

Foreclosure Sale

With a foreclosure the property is bought at auction. The terms of the auction are disclosed in advance. By bidding on the property buyers accept the bidding terms, which can include a variety of fees and charges in addition to the basic cost of the property.

Real Estate Owned (REOs)

When a property is sold at auction the lender will typically bid an amount sufficient to repay all of the debt and related foreclosure costs. However, in severe foreclosure markets, the lender may bid less than the mortgage balance which means a buyer can purchase the property for an amount which is below the outstanding debt.

However, if no one meets the lender’s bid it means that the lender gets title to the property. It now owns the home and its “costs” include the price of acquisition, the expense of foreclosure, and the money required to maintain the property, pay taxes, etc. The property becomes “real estate owned” by the lender, or a REO.

Buyers can now approach the lender to purchase the property. The price of the property and the expense of various fees and charges are all negotiable. For specifics, speak local brokers with experience buying REOs for client purchasers.

Buyer Brokers

Foreclosure and REO purchasers who use the services of a buyer broker typically shift the cost to the lender when possible. However, if the broker is owed $12,000 and the lender will only pay $10,000 the buyer can be responsible for the rest.

Many savvy buyers avoid the potential liability from brokerage fees by negotiating the listing agreement to say that the purchaser is not responsible for the payment of any brokerage fee above the amount paid by the lender or the lender’s broker.

Who Pays Foreclosure Fees? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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But for those with real estate the load is made lighter by tax rules which encourage the ownership of homes and investment property. Such rules are not only good for homeowners, they’re also good for the country: About 20 percent of all economic activity nationwide is related to real estate, so policies which encourage real estate activity help everyone.

It seems that almost every year changes to the tax code require the production of new forms and a re-education process. That said, the real estate basics remain in place and they’re good news for buyers, sellers, borrowers and owners.

Mortgage interest is generally deductible.

The IRS says there are three categories of deductible home mortgage interest:

1. Mortgages you took out on or before October 13, 1987 (called grandfathered debt).
2. Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2005 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately).
3. Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if throughout 2005 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2).

Substantial profits can be sheltered when a prime residence is sold.

When a prime residence is sold, up to $500,000 in profits can be sheltered from federal taxes if married, $250,000 if single, providing the home has been used as a prime residence for two of the past five years. Generally this deduction cannot be used more than once every two years, according to the IRS.

There are also provisions which may be helpful to individuals who must sell a prime residence in less than two years. Under the 2004

safe harbor rules, individuals may be able to get some capital gains relief under certain circumstances, such as being forced to move because a job has been relocated at least 50 miles or a home that must be sold because of multiple births resulting from the same pregnancy.

Also, individuals in the Armed Forces and the Foreign Service may be entitled to special consideration under the Military Family Tax Relief Act of 2003 (MFTRA). For instance, you may have longer to take a capital gains deduction or to amend a tax return. There are other provisions under MFTRA that also may be helpful, so check with a tax professional for specifics.

Lastly, please see the information below regarding the new tax credit of up to $6,500 which is available to certain owners who obtain a contract to buy their current residence before April 30, 2010 and close before June 30, 2010.

Points may be deducible by both buyers and sellers.

Picture a situation where a home is sold for $500,000 and the owner — to help close the sale — offers to pay 1 point for the buyer. If the property was financed with a $350,000 mortgage, a point would be worth $3,500. According to the IRS, “the seller cannot deduct these fees as interest. But they are a selling expense that reduces the amount realized by the seller.”

Interestingly, in this situation the buyer can also deduct the points when the home is sold.

“The buyer,” says the IRS, “reduces the basis of the home by the amount of the seller-paid points and treats the points as if he or she had paid them.”

In effect, the seller gets to write-off the $3,500 cost by reducing any profit from the sale. The buyer essentially lowers the purchase price of the property when the home is sold at some point in the future — thus increasing the size of any profit. However, since up to $500,000 in sale profits may be untaxed, most buyers will effectively never pay a tax on the seller’s contribution for points.

If a prime residence is refinanced then the deal with points is different: The expense of a point must deducted over the life of the loan. If the home is sold before the loan term ends, then any cost not deducted for points can be used to reduce owner’s profit from the sale.

Home offices may be deductible.

If a portion of your home is used regularly and exclusively as your principal place of business or for the convenience of your employer it may be possible to write off a portion of such costs as mortgage interest, property taxes and utilities. There are a number of tests which must be met to take this deduction, see IRS Publication 587, Business Use of Your Home for details.

In some cases there may be tax advantages associated with not deducting your home office in the year or two before you move. Speak with a tax professional for specifics.

Mortgage insurance premiums may be deductible.

Mortgage insurance premiums should be deductible. The catch? Not all premiums are deductible by all borrowers. In general, the rules look like this:

• The deduction applies to loans made after January 1st, 2007.
• The deduction applies to both private mortgage insurance (MI) as well as mortgage insurance through the Federal Housing Administration (FHA), the Veterans Department (VA) and the Rural Housing Administration.
• The deduction applies to acquisition indebtedness, meaning debt used to acquire a home.
• If you refinance remaining “acquisition indebtedness” then you can write off mortgage insurance on the new debt.
• You can take the deduction if you’re married, file jointly and have a gross adjusted income of $100,000 or less. If you’re single or married and filing separately the income limit is $50,000.
• The deduction phases out once income limits are passed. For married couples, the deduction is reduced by 10 percent for each $1,000 in income over $100,000. This means there is no deduction for incomes above $110,000. For singles and those married and filing separately, the deduction is reduced by 10 percent for each $500 in additional income — this means there is no deduction above $55,000.
• The mortgage premium write-off begins January 1, 2007 and is scheduled to end December 31st, 2010. However, the program is likely to be extended.
• Speak with a tax professional for specifics.

Natural Disasters

The Katrina Emergency Tax Relief Act of 2005 provides extensive tax benefits and assistance to those who were victims of hurricanes Katrina, Rita and Wilma. For details, go to the IRS Katrina relief page or call 1-866-562-5227.

If you have been in a natural disaster — a flood, hurricane, tornado, etc., contact your local congressional office to see if special tax help is available. Links to congressional offices can be found by pressing here.

Mortgage Forgiveness Act

Traditionally if you do not pay a mortgage in full any money not paid is regarded as “imputed” income — income which is taxable. However, with the passage of the Mortgage Forgiveness Debt Relief Act of 2007, a bill sponsored by Rep. Charles Rangel (D-NY), if you can negotiate a partial pay-off with a lender, the amount forgiven will not be taxed by the federal government.

This legislation makes sense because people who have lost their homes, been foreclosed or gone bankrupt have no money to pay. However, the maximum write-off is limited to forgiveness worth no more than $2 million (not a problem for most folks) and — more importantly — the rule applies only to a principal residence.

Some questions to ask: When does this law end? Are home equity loans covered? What about state rules?

$8,000 Tax Credit For First Time Buyers Extended Until April 30, 2010

Under the FHA reform package passed by the Congress during the summer of 2008, first-time home buyers could be entitled to a tax credit equal to 10 percent of the purchase price of the residence. This credit is limited to $7,500 for married couples and single taxpayers but can be no more than $3,750 for married individuals filing separately.

Since most homes are valued at more than $75,000 the credit will likely be used up with the purchase of a home or condo. The property must be occupied after April 9, 2008 but before July 1, 2009 to qualify. Also, a “first-time” buyer is defined as someone who has not held title to real estate for at least three years. The credit phases out for married couples earning above $150,000 a year and for singles earning more than $75,000.

The catch.

The $7,500 is a credit against taxes due to Uncle Sam. If you owe $10,000 to the IRS you can deduct up to $7,500. But, when you sell the property the $7,500 must be repaid over 15 years — that’s just $500 a year at some point in the future.

Okay, it’s really a $7,500 loan — without interest and when you really need it.

2009 First-Time Homebuyer Credit (Part 1)

In 2009 the deal changed. Under the American Recovery and Reinvestment Act of 2009 the credit amount was raised to $8,000 and NO repayment is required if a first-time homebuyer purchases a residence before December 1, 2009. There is still an income phase out and buyers must own their homes for at least three years.

2009 First-Time Homebuyer Credit (Part 2)

In November 2009 the deadline for the first-time homebuyer credit was extended under the Worker, Homeownership, and Business Assistance Act of 2009 from December 1, 2009 to include contracts made before April 30, 2010 and closed before June 30th.

Also, the income cap to get the full credit was raised from $75,000 if single or $150,000 if married to $125,000 for singles and $225,000 for joint filers. Above the $125,000/$225,000 levels the credit phases out to nothing at $145,000 for singles and $245,000 for couples.

New Credit for Existing Home Sellers

The November 2009 legislation also created a new tax credit for existing home sellers. In basic terms, if you have owned your home for five consecutive years out of the last eight you can get a tax credit for as much as $6,500. The contract to sell your replacement residence must be signed before April 30, 2010 and the deal must be closed before June 30, 2010.

For specifics regarding the November 2009 changes, speak with a tax professional and get a copy of IRS Form 5405. Also, see the IRS first-time homebuyer site for details regarding the new legislation.

Investment real estate can generate substantial write-offs.

If you own rental property you must seek a fair market rental for your property. You may generally deduct mortgage interest, property taxes, repair costs, management by an outside party, depreciation, advertising, insurance, utilities, legal services and other expenses.

It’s possible with rental properties to have both a positive cashflow and a loss for tax purposes. However, the ability to use real estate losses to reduce overall taxes may be phased out as income rises above $100,000.

If a rental involves relatives special rules and restrictions may apply. Check with a tax pro for details.

A 1031 exchange may allow investors to defer all capital gains taxes.

With a 1031 transaction, investment property is exchanged for “like” real estate. The basic requirements are that within 45 days after the “relinquished” property has been sold, a “replacement” property must be identified. The identified replacement property must then be acquired within 180 days after the sale of the relinquished property.

What’s important about a 1031 exchange is that the capital gains tax on the relinquished property is deferred — but it does not disappear. What really happens is that the basis for the new property (the “replacement property”) is reduced by the adjusted value of the “relinquished property” (the old property).

A 1031 exchange is complex and requires the services of a “qualified intermediary.” Among other tasks, a qualified intermediary holds the money from the sale of the relinquished property and applies it to the purchase of the replacement real estate. This must be done because under the rules for 1031 exchanges, the seller of a relinquished property cannot touch money from the sale — it must be held by the qualified intermediary.

Accounting for a 1031 exchange is also complex. Essentially there is a need to figure out the sale value of the relinquished property, add back depreciation and account for financing. Ed Horan, a well-known exchange authority and the author of How To Do a Like Kind Exchange of Real Estate, has posted a free 13-page exchanging guide with an accounting worksheet that’s well worth reviewing before meeting with a tax pro.

Death of a Spouse

The capital gains write-off for the sale of a home is $500,000 if married and $250,000 if single. But what happens if a spouse dies?

For years the rule has been that if the couple’s home was not sold by December 31, 2007 then the surviving spouse would be treated as a single home seller. In other words, the maximum write-off would go from $500,000 to $250,000.

There is a certain logic to this approach — and also a certain cruelty. If a spouse dies on November 30th the surviving spouse would have about four weeks to sell the home. This hardly seems right but now the rule has been changed.

Under new legislation passed by Congress, after December 31, 2007 surviving spouses will now have two years from the date of passing to sell the property and still qualify for the $500,000 write-off.

Gifts

For 2009 you can give someone as much as $13,000 per year, tax free. This is up from $12,000 in 2008. For gift information from the IRS, press here.

Sources and Publications

You can be certain that the information presented here is not a substitute for professional advice. As always with taxes, nothing is ever simple or easy. Speak with a qualified tax professional for specific advice — an enrolled agent, a CPA or an attorney who specializes in tax issues.

Also, the IRS itself has excellent information at its website, www.irs.gov, by phone at 1-800-829-1040 and with specialized publications such as those below:

• Publication 523, Selling Your Home
• Publication 527, Residential Rental Property
• Publication 530, Tax Information for First-Time Homeowners
• Publication 535, Business Expenses
• Publication 587, Business Use of Your Home
• Publication 936, Home Mortgage Interest Deduction
• Publication 946, How To Depreciate Property

A Basic Guide To Real Estate, Mortgages & Taxes is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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For a number of years appraisers have reported being pressured to meet certain price points when evaluating a home, pressure placed on them by lenders and loan officers who need appraisals to justify loans. Of course, the bigger the loan the bigger the fees, points and commissions involved. Since lenders — not buyers — select appraisers, appraisers who didn’t go along sometimes found that they no longer received business or that payments were delayed.

Homebuyers

The losers in this mess were, of course, appraisers. But they were not alone — another set of losers were homebuyers who relied on appraisers to establish fair market valuations. Why? Because many real estate purchase offers say that a home must have a certain value otherwise the buyer can walk away without penalty. In practice if an appraisal comes in below the sale price then buyer and seller usually negotiate to a lower value or the deal is off. If an appraisal above fair market value is created then a buyer is paying too much for the property, borrowing too much and paying too much each month for years on end.

The Code is not entirely wonderful. For instance, it provides that “the lender shall ensure that the borrower is provided a copy of any appraisal report concerning the borrower’s subject property promptly upon completion at no additional cost to the borrower, and in any event no less than three days prior to the closing of the loan. The borrower may waive this three-day requirement. The lender may require the borrower to reimburse the lender for the cost of the appraisal.”

I don’t want an appraisal three days before closing, I want it 10 days after the sale agreement has been created so there is time renegotiate the price and terms of the sale if necessary — or to end the purchase.

The code also has a lengthy list of rules which essentially allow lenders to use in-house appraisers. A better idea would be to have no in-house appraisers, just use licensed independent appraisers who have no stake in the lender’s success or failure.

Below is the full Home Valuation Code of Conduct.

I. Appraiser Independence Safeguards

A. An “appraiser — must be, at a minimum, licensed or certified by the state in which the property to be appraised is located.

B. No employee, director, officer, or agent of the lender, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner including but not limited to:

(1) withholding or threatening to withhold timely payment or partial payment for an appraisal report;

(2) withholding or threatening to withhold future business for an appraiser, or demoting or terminating or threatening to demote or terminate an appraiser;

(3) expressly or impliedly promising future business, promotions, or increased compensation for an appraiser;

(4) conditioning the ordering of an appraisal report or the payment of an appraisal fee or salary or bonus on the opinion, conclusion, or valuation to be reached, or on a preliminary value estimate requested from an appraiser;

(5) requesting that an appraiser provide an estimated, predetermined, or desired valuation in an appraisal report prior to the completion of the appraisal report, or requesting that an appraiser provide estimated values or comparable sales at any time prior to the appraiser’s completion of an appraisal report;

(6) providing to an appraiser an anticipated, estimated, encouraged, or desired value for a subject property or a proposed or target amount to be loaned to the borrower, except that a copy of the sales contract for purchase transactions may be provided;

(7) providing to an appraiser, appraisal company, appraisal management company, or any entity or person related to the appraiser, appraisal company, or appraisal management company, stock or other financial or non-financial benefits;

(8) allowing the removal of an appraiser from a list of qualified appraisers, or the addition of an appraiser to an exclusionary list of disapproved appraisers, used by any entity, without prompt written notice to such appraiser, which notice shall include written evidence of the appraiser’s illegal conduct, a violation of the Uniform Standards of Professional Appraisal Practice (USPAP) or state licensing standards, substandard performance, improper or unprofessional behavior or other substantive reason for removal (except that this prohibition will not preclude the management of appraiser lists for bona fide administrative reasons based on written, management-approved policies);

(9) ordering, obtaining, using, or paying for a second or subsequent appraisal or automated valuation model (AVM) in connection with a mortgage financing transaction unless: (i) there is a reasonable basis to believe that the initial appraisal was flawed or tainted and such basis is clearly and appropriately noted in the loan file, or (ii) unless such appraisal or automated valuation model is done pursuant to written, pre-established bona fide pre- or post-funding appraisal review or quality control process or underwriting guidelines, and so long as the lender adheres to a policy of selecting the most reliable appraisal, rather than the appraisal that states the highest value; or

(10) any other act or practice that impairs or attempts to impair an appraiser’s independence, objectivity, or impartiality or violates law or regulation, including, but not limited to, the Truth in Lending Act (TILA) and Regulation Z, or the USPAP.

C. Nothing in this section shall be construed as prohibiting the lender (or any third party acting on behalf of the lender) from requesting that an appraiser (i) provide additional information or explanation about the basis for a valuation, or (ii) correct objective factual errors in an appraisal report.

II. Borrower Receipt of Appraisal

The lender shall ensure that the borrower is provided a copy of any appraisal report concerning the borrower’s subject property promptly upon completion at no additional cost to the borrower, and in any event no less than three days prior to the closing of the loan. The borrower may waive this three-day requirement. The lender may require the borrower to reimburse the lender for the cost of the appraisal.

III.
Appraiser Engagement

A. The lender or any third party specifically authorized by the lender (including, but not limited to, appraisal companies, appraisal management companies, and correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third party (including mortgage brokers and real estate agents). The lender may accept an appraisal prepared by an appraiser for a different lender, including where a mortgage broker has facilitated the mortgage application (but not ordered the appraisal), provided the lender: (1) obtains written assurances that such other lender follows this Code of Conduct in connection with the loan being originated; and (2) determines that such appraisal conforms to its requirements for appraisals and is otherwise acceptable.

B. All members of the lender’s loan production staff, as well as any person (i) who is compensated on a commission basis upon the successful completion of a loan or (ii) who reports, ultimately, to any officer of the lender not independent of the loan production staff and process, shall be forbidden from (1) selecting, retaining, recommending, or influencing the selection of any appraiser for a particular appraisal assignment or for inclusion on a list or panel of appraisers approved to perform appraisals for the lender or forbidden from performing such work; and (2) having any substantive communications with an appraiser or appraisal management company relating to or having an impact on valuation, including ordering or managing an appraisal assignment. If absolute lines of independence cannot be achieved as a result of the lender’s small size and limited staff, the lender must be able to clearly demonstrate that it has prudent safeguards to isolate its collateral evaluation process from influence or interference from its loan production process.

C. Any employee of the lender (or if the lender retains an appraisal company or appraisal management company, any employee of that company) tasked with selecting appraisers for an approved panel or substantive appraisal review must be (1) appropriately trained and qualified in the area of real estate appraisals, and (2) in the case of an employee of the lender, wholly independent of the loan production staff and process.

IV. Prevention of Improper Influences on Appraisers

A. In underwriting a loan, the lender shall not utilize any appraisal report:

(1) prepared by an appraiser employed by:
(a) the lender;
(b) an affiliate of the lender;
(c) an entity that is owned, in whole or in part, by the lender; or
(d) an entity that owns, in whole or in part, the lender.

(2) prepared by an appraiser
(a) employed,
(b) engaged as an independent contractor, or

(c) otherwise retained by any appraisal company or any appraisal management company affiliated with, or that owns or is owned, in whole or in part by, the lender or an affiliate of the lender.

B. Section IV.A. shall apply unless:

(1) the appraiser or, if an affiliate, the company for which the appraiser works, reports to a function of the lender independent of sales or loan production;

(2) employees in the sales or loan production functions of the lender have no involvement in the operations of the appraisal functions and play no role in selecting, retaining, recommending, or influencing the selection of any appraiser for any particular appraisal assignment or for inclusion on a list or panel of appraisers approved to perform appraisals for the lender or forbidden from performing such work;

(3) employees in the sales or loan production functions of the lender are not allowed to have any substantive communications with an appraiser, appraisal company, or appraisal management company relating to or having an impact on valuation or to be provided information about which appraiser has been given a particular appraisal assignment before completion of that assignment;

(4) the lender, or its agents, and any appraisal company or appraisal management company providing the appraisal to the lender do not provide the appraiser any estimated or target value of the property or the loan amount applied for (except that a copy of the sales contract for purchase transactions may be provided);

(5) the appraiser’s compensation does not depend in any way on the value arrived at in any appraisal or upon the closing of the loan for which the appraisal was completed;

(6) the lender and any appraisal company or any appraisal management company providing the appraisal to the lender has adopted written policies and procedures implementing this Code of Conduct, including, but not limited to, adequate training and disciplinary rules on appraiser independence (including the principles detailed in Part I of this Code of Conduct) and has mechanisms in place to report and discipline anyone who violates these policies and procedures;

(7) the lender’s appraisal functions are either annually audited by an external auditor or are subject to federal or state regulatory examination, and, unless prohibited by law, the lender promptly provides to Fannie Mae or Freddie Mac the results of any adverse, negative, or irregular findings of such audits and examinations indicating non-compliance with any provision of this Code of Conduct, whether or not the examination was conducted for the purpose of determining compliance with this Code of Conduct; and

(8) the lender and any entity described in section IV.A. providing the appraisal to the lender recognize that, once the Independent Valuation Protection Institute is established, the Institute will receive complaints for review and referral regarding non-compliance with the Code of Conduct. Referrals and reports shall be made to Fannie Mae and/or Freddie Mac regarding such complaints and the Institute will provide information on the results of complaint reviews to Fannie Mae and/or Freddie Mac and make them available to the other parties to the Home Value Protection Program and Cooperation Agreement.

C. In underwriting a loan, the lender shall not use an appraisal report prepared by an entity that is affiliated with, or that owns or is owned, in whole or in part by, another entity that is engaged by the lender to provide other settlement services, as that term is defined in the Real Estate Settlement Procedures Act, 12 U.S.C.? 2601 et seq., for the same transaction, unless the entity that provides the appraisal:

(1) has adopted written policies and procedures implementing this Code of Conduct, including, but not limited to, adequate training and disciplinary rules on appraiser independence (including the principles detailed in this Code of Conduct) and has mechanisms in place to report and discipline anyone who violates these policies and procedures;

(2) recognizes that, once the Independent Valuation Protection Institute is established, the Institute will receive complaints for review and referral regarding non-compliance with the Code of Conduct. Referrals and reports shall be made to Fannie Mae and/or Freddie Mac regarding such complaints and the Institute will provide information on the results of its review of such complaints to Fannie Mae and/or Freddie Mac and make them available to the other parties to the Home Value Protection Program and Cooperation Agreement.

D. Notwithstanding the requirements herein, the lender also may use in-house staff appraisers to (i) order appraisals, (ii) conduct appraisal reviews or other quality control, whether pre-funding or post-funding, (iii) develop, deploy, or use internal automated valuation models, or (iv) prepare appraisals in connection with transactions other than mortgage origination transactions (e.g. loan workouts), if it complies with the terms of this Code of Conduct.

E. The provisions of this section do not apply to institutions (including non-banking institutions) that meet the definition of a “small bank– as set forth in 12 U.S.C. ? 2908, and which Freddie Mae or Fannie Mae determines would suffer hardship due to the provisions, and which otherwise adhere to this Code of Conduct.

V. The Independent Valuation Protection Institute

An Independent Valuation Protection Institute (Institute) shall be created as approved by the parties. Subject to section IX, when the Institute is established, the lender will provide information to appraisers and borrowers regarding the availability of the Institute’s services, which are expected to include: (1) a telephone hotline and email address to receive any complaints of Code of Conduct non-compliance, including complaints from appraisers, individuals, or other entities concerning the improper influencing or attempted improper influencing of appraisers or the appraisal process, which the Institute will review and report as provided in IV.B(8) and IV.C(2) of this Code of Conduct; and (2) the publication and promotion of best practices for independent valuation. The lender shall not retaliate, in any manner or method, against the person or entity that makes a complaint to the Institute.

VI. Appraisal Quality Control Testing

The lender agrees that it shall quality control test, by use of retroactive or additional appraisal reports or other appropriate method, a randomly selected 10 percent (or other bona fide statistically
significant percentage) of the appraisals or valuations that are used by the lender, including the results of automated valuation models, broker’s price opinions, or “desktop– evaluations. The lender shall provide to Fannie Mae or Freddie Mac a report of any adverse, negative, or irregular findings of such quality control testing, and any findings indicating non-compliance with any provision of this Code of Conduct, with respect to loans sold to Fannie Mae and Freddie Mac respectively, and the Enterprise may enforce all applicable rights and remedies, including requiring the lender to repurchase mortgages or the Enterprise’s participation interest in mortgages.

VII. Referrals of Appraisal Misconduct Reports

Any lender that has a reasonable basis to believe an appraiser or appraisal management company is violating applicable laws, or is otherwise engaging in unethical conduct, shall promptly refer the matter to the applicable State appraiser certifying and licensing agency or other relevant regulatory bodies.

VIII. Representations and Warranties

A lender shall certify, warrant, and represent that the appraisal report was obtained in a manner in compliance with this Code of Conduct. If the Enterprise determines, on its own or from a referral made by the Institute, that a lender is in breach of a material aspect of this Code of Conduct or in violation of a provision of the Code by a complaint referred from the Institute, the Enterprise will enforce all applicable rights and remedies, including suspension or termination of the lender’s eligibility to sell loans to the Enterprise, if the lender fails to remediate.

IX. Scope of Code

Nothing in this Code of Conduct shall be construed to establish new requirements or obligations that: (1) require a lender to obtain a property valuation, or to use any particular method for property valuation (such as an appraisal or automated valuation model) in connection with any mortgage loan or mortgage financing transaction; (2) affect the acceptable scope of work for an appraiser in connection with a particular assignment; or (3) require the lender or any third party acting on behalf of the lender to take any action prohibited by federal or state law or regulation.

New appraisal code should help home buyers is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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Prices

Typical existing homes sold for $165,400 in February, but rose to $175,200 in March, a 4.2 percent increase. However, some of the sale price increase is a seasonal change and it should be said that March sale prices were down 12.4 percent from a year ago.

First-Time Buyers

An NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available.

Total housing inventory at the end of March fell 1.6 percent to 3.74 million existing homes available for sale, which represents a 9.8-month supply at the current sales pace, compared with a 9.7-month supply in February.

Inventory

Single-family home sales slipped 2.8 percent to a seasonally adjusted annual rate of 4.10 million in March from a pace of 4.22 million in February, and are 5.7 percent below the 4.35 million-unit pace in March 2008. The median existing single-family home price was $174,900 in March, which is 11.5 percent lower than a year ago.

Condos

Existing condominium and co-op sales fell 4.1 percent to a seasonally adjusted annual rate of 470,000 units in March from 490,000 in February, and are 17.8 percent below the 572,000-unit pace a year ago. The median existing condo price4 was $177,600 in March, down 18.7 percent from March 2008.

Northeast

Regionally, existing-home sales in the Northeast fell 8.0 percent to an annual pace of 690,000 in March, and are 22.5 percent below a year ago. The median price in the Northeast was $231,700, down 18.4 percent from March 2008.

Midwest

Existing-home sales in the Midwest were unchanged in March at a pace of 1.04 million but are 11.1 percent lower than March 2008. The median price in the Midwest was $141,300, which is 6.1 percent below a year ago.

South

In the South, existing-home sales slipped 1.7 percent to an annual pace of 1.71 million in March and are 10.9 percent below a year ago. The median price in the South was $146,900, down 12.2 percent from March 2008.

West

Existing-home sales in the West declined 4.2 percent to an annual rate of 1.13 million in March but are 18.9 percent higher than a year earlier. The median price in the West was $252,400, which is 11.1 percent below March 2008.

Existing Home Prices Rose In March, Says NAR is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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But for those with real estate the load is made lighter by tax rules which encourage the ownership of homes and investment property. Such rules are not only good for homeowners, they’re also good for the country: About 20 percent of all economic activity nationwide is related to real estate, so policies which encourage real estate activity help everyone.

It seems that almost every year changes to the tax code require the production of new forms and a re-education process. That said, the real estate basics remain in place and they’re good news for buyers, sellers, borrowers and owners.

Mortgage interest is generally deductible.

The IRS says there are three categories of deductible home mortgage interest:

1. Mortgages you took out on or before October 13, 1987 (called grandfathered debt).
2. Mortgages you took out after October 13, 1987, to buy, build, or improve your home (called home acquisition debt), but only if throughout 2005 these mortgages plus any grandfathered debt totaled $1 million or less ($500,000 or less if married filing separately).
3. Mortgages you took out after October 13, 1987, other than to buy, build, or improve your home (called home equity debt), but only if throughout 2005 these mortgages totaled $100,000 or less ($50,000 or less if married filing separately) and totaled no more than the fair market value of your home reduced by (1) and (2).

Substantial profits can be sheltered when a prime residence is sold.

When a prime residence is sold, up to $500,000 in profits can be sheltered from federal taxes if married, $250,000 if single, providing the home has been used as a prime residence for two of the past five years. Generally this deduction cannot be used more than once every two years, according to the IRS.

There are also provisions which may be helpful to individuals who must sell a prime residence in less than two years. Under the 2004
safe harbor rules, individuals may be able to get some capital gains relief under certain circumstances, such as being forced to move because a job has been relocated at least 50 miles or a home that must be sold because of multiple births resulting from the same pregnancy.

Also, individuals in the Armed Forces and the Foreign Service may be entitled to special consideration under the Military Family Tax Relief Act of 2003 (MFTRA). For instance, you may have longer to take a capital gains deduction or to amend a tax return. There are other provisions under MFTRA that also may be helpful, so check with a tax professional for specifics.

Points may be deducible by both buyers and sellers.

Picture a situation where a home is sold for $500,000 and the owner — to help close the sale — offers to pay 1 point for the buyer. If the property was financed with a $350,000 mortgage, a point would be worth $3,500. According to the IRS, “the seller cannot deduct these fees as interest. But they are a selling expense that reduces the amount realized by the seller.”

Interestingly, in this situation the buyer can also deduct the points when the home is sold.

“The buyer,” says the IRS, “reduces the basis of the home by the amount of the seller-paid points and treats the points as if he or she had paid them.”

In effect, the seller gets to write-off the $3,500 cost by reducing any profit from the sale. The buyer essentially lowers the purchase price of the property when the home is sold at some point in the future — thus increasing the size of any profit. However, since up to $500,000 in sale profits may be untaxed, most buyers will effectively never pay a tax on the seller’s contribution for points.

If a prime residence is refinanced then the deal with points is different: The expense of a point must deducted over the life of the loan. If the home is sold before the loan term ends, then any cost not deducted for points can be used to reduce owner’s profit from the sale.

Home offices may be deductible.

If a portion of your home is used regularly and exclusively as your principal place of business or for the convenience of your employer it may be possible to write off a portion of such costs as mortgage interest, property taxes and utilities. There are a number of tests which must be met to take this deduction, see IRS Publication 587, Business Use of Your Home for details.

In some cases there may be tax advantages associated with not deducting your home office in the year or two before you move. Speak with a tax professional for specifics.

Mortgage insurance premiums may be deductible.

Mortgage insurance premiums should be deductible. The catch? Not all premiums are deductible by all borrowers. In general, the rules look like this:

• The deduction applies to loans made after January 1st, 2007.
• The deduction applies to both private mortgage insurance (MI) as well as mortgage insurance through the Federal Housing Administration (FHA), the Veterans Department (VA) and the Rural Housing Administration.
• The deduction applies to acquisition indebtedness, meaning debt used to acquire a home.
• If you refinance remaining “acquisition indebtedness” then you can write off mortgage insurance on the new debt.
• You can take the deduction if you’re married, file jointly and have a gross adjusted income of $100,000 or less. If you’re single or married and filing separately the income limit is $50,000.
• The deduction phases out once income limits are passed. For married couples, the deduction is reduced by 10 percent for each $1,000 in income over $100,000. This means there is no deduction for incomes above $110,000. For singles and those married and filing separately, the deduction is reduced by 10 percent for each $500 in additional income — this means there is no deduction above $55,000.
• The mortgage premium write-off begins January 1, 2007 and is scheduled to end December 31st, 2010. However, the program is likely to be extended.
• Speak with a tax professional for specifics.

Natural Disasters

The Katrina Emergency Tax Relief Act of 2005 provides extensive tax benefits and assistance to those who were victims of hurricanes Katrina, Rita and Wilma. For details, go to the IRS Katrina relief page or call 1-866-562-5227.

If you have been in a natural disaster — a flood, hurricane, tornado, etc., contact your local congressional office to see if special tax help is available. Links to congressional offices can be found by pressing here.

Mortgage Forgiveness Act

Traditionally if you do not pay a mortgage in full any money not paid is regarded as “imputed” income — income which is taxable. However, with the passage of the Mortgage Forgiveness Debt Relief Act of 2007, a bill sponsored by Rep. Charles Rangel (D-NY), if you can negotiate a partial pay-off with a lender, the amount forgiven will not be taxed by the federal government.

This legislation makes sense because people who have lost their homes, been foreclosed or gone bankrupt have no money to pay. However, the maximum write-off is limited to forgiveness worth no more than $2 million (not a problem for most folks) and — more importantly — the rule applies only to a principal residence.

Some questions to ask: When does this law end? Are home equity loans covered? What about state rules?

$8,000 Tax Credit For First Time Buyers

Under the FHA reform package passed by the Congress during the summer of 2008, first-time home buyers may be entitled to a tax credit equal to 10 percent of the purchase price of the residence. This credit is limited to $7,500 for married couples and single taxpayers but can be no more than $3,750 for married individuals filing separately.

Since most homes are valued at more than $75,000 the credit will likely be used up with the purchase of a home or condo. The property must be occupied after April 9, 2008 but before July 1, 2009 to qualify. Also, a “first-time” buyer is defined as someone who has not held title to real estate for at least three years. The credit phases out for married couples earning above $150,000 a year and for singles earning more than $75,000.

The catch.

The $7,500 is a credit against taxes due to Uncle Sam. If you owe $10,000 to the IRS you can deduct up to $7,500. But, when you sell the property the $7,500 must be repaid over 15 years — that’s just $500 a year at some point in the future.

Okay, it’s really a $7,500 loan — without interest and when you really need it.

In 2009 the deal changed. Under the American Recovery and Reinvestment Act of 2009 the credit amount was raised to $8,000 and NO repayment is required if a first-time homebuyer purchases a residence before December 1, 2009. There is still an income phase out and buyers must own their homes for at least three years.

For specifics, speak with a tax professional before you go house hunting.

Investment real estate can generate substantial write-offs.

If you own rental property you must seek a fair market rental for your property. You may generally deduct mortgage interest, property taxes, repair costs, management by an outside party, depreciation, advertising, insurance, utilities, legal services and other expenses.

It’s possible with rental properties to have both a positive cashflow and a loss for tax purposes. However, the ability to use real estate losses to reduce overall taxes may be phased out as income rises above $100,000.

If a rental involves relatives special rules and restrictions may apply. Check with a tax pro for details.

A 1031 exchange may allow investors to defer all capital gains taxes.

With a 1031 transaction, investment property is exchanged for “like” real estate. The basic requirements are that within 45 days after the “relinquished” property has been sold, a “replacement” property must be identified. The identified replacement property must then be acquired within 180 days after the sale of the relinquished property.

What’s important about a 1031 exchange is that the capital gains tax on the relinquished property is deferred — but it does not disappear. What really happens is that the basis for the new property (the “replacement property”) is reduced by the adjusted value of the “relinquished property” (the old property).

A 1031 exchange is complex and requires the services of a “qualified intermediary.” Among other tasks, a qualified intermediary holds the money from the sale of the relinquished property and applies it to the purchase of the replacement real estate. This must be done because under the rules for 1031 exchanges, the seller of a relinquished property cannot touch money from the sale — it must be held by the qualified intermediary.

Accounting for a 1031 exchange is also complex. Essentially there is a need to figure out the sale value of the relinquished property, add back depreciation and account for financing. Ed Horan, a well-known exchange authority and the author of How To Do a Like Kind Exchange of Real Estate, has posted a free 13-page exchanging guide with an accounting worksheet that’s well worth reviewing before meeting with a tax pro.

Death of a Spouse

The capital gains write-off for the sale of a home is $500,000 if married and $250,000 if single. But what happens if a spouse dies?

For years the rule has been that if the couple’s home was not sold by December 31, 2007 then the surviving spouse would be treated as a single home seller. In other words, the maximum write-off would go from $500,000 to $250,000.

There is a certain logic to this approach — and also a certain cruelty. If a spouse dies on November 30th the surviving spouse would have about four weeks to sell the home. This hardly seems right but now the rule has been changed.

Under new legislation passed by Congress, after December 31, 2007 surviving spouses will now have two years from the date of passing to sell the property and still qualify for the $500,000 write-off.

Gifts

For 2009 you can give someone as much as $13,000 per year, tax free. This is up from $12,000 in 2008. For gift information from the IRS, press here.

Sources and Publications

You can be certain that the information presented here is not a substitute for professional advice. As always with taxes, nothing is ever simple or easy. Speak with a qualified tax professional for specific advice — an enrolled agent, a CPA or an attorney who specializes in tax issues.

Also, the IRS itself has excellent information at its website, www.irs.gov, by phone at 1-800-829-1040 and with specialized publications such as those below:

• Publication 523, Selling Your Home
• Publication 527, Residential Rental Property
• Publication 530, Tax Information for First-Time Homeowners
• Publication 535, Business Expenses
• Publication 587, Business Use of Your Home
• Publication 936, Home Mortgage Interest Deduction
• Publication 946, How To Depreciate Property

2009 Real Estate, Mortgages & Taxes is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: 2008, 2009, Buyers, capital gains, credit, interest, investors, limits, points, sale, sell, Sellers, shelter, tax, taxes

These owners truly believe that somehow their property is unique and different, a home so wonderful that general sales trends are irrelevant

Compared with last August, in my area we have evolved from a strong seller’s market to something which has more balance. Prices are up a touch, but not up insanely. Days on the market have doubled, unit sales are down 20 percent and instead of paying premiums, some buyers are getting “seller contributions” at closing.

How can you spot a marathon seller? Here are some clues:

• The home has been on the market 400 days while local properties typically take 88 days to sell.
• A look at the MLS in August shows a home with snow.
• The property has fewer visitors than a forgotten cemetery.

When the listing expires no broker steps forward to instantly re-list the property.

When finally re-listed, the property has a higher price — even though it could not be sold at a lower value.

Much of what we’re seeing in today’s marketplace has no relation to reality. Immovable prices seem designed more to enhance throbbing egos and party-talk bragging rights rather than produce sale results.

Surely it makes sense for sellers to test the market, to select the highest possible price they realistically think they can get. But marketing tests should not continue eternally. After a reasonable time on the market — the term “reasonable” being different for different markets and different properties — owners should have some sense of what’s real and what isn’t.

Unrealistic prices not only lead to marathon selling periods, they also produce excess costs. There are mortgage and utility payments to be made each month as a home languishes on the market, plus the tax bill grows.

Worse, if a replacement home has been purchased and the first property remains unsold, there may well be two mortgages and two sets of taxes and utilities.

Given that many households can barely tolerate one set of ownership costs, doubling such expenses hardly seems attractive. A house with expenses of $3,000 of month that stays on the markets for months on end means the eventual sale price has been effectively cut by thousands of dollars.

Longer selling times also change broker economics. The old expression is that brokers who are not careful “can list themselves into bankruptcy” by taking on too many homes that do not sell — or do not sell within a reasonable period. Why? Because each property must be advertised and marketed and such things are not cheap.

Owners, having once established in their minds what a property is worth, sometimes see any lower price proposal as a “loss” when that’s not the case.

For instance, imagine a home that will not sell for $750,000 — but it might sell for $700,000. To the owners who dreamed of the first price, this is a $50,000 “loss” even though they never had a sale at $750,000.

In an environment where prices are rapidly rising you see buyers more willing to take a chance because there’s some certainty that replacement buyers can be found if necessary. But slow the market and both the math and philosophy of home buying changes. Buying is more risky because a quick re-sale at a good price is less assured.

Slower markets also change the math and thinking needed to be a successful seller. Alas, some sellers have yet to understand that when the marketplace slows it slows for everyone.

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Published originally by Realty Times on August 29, 2006 and posted with permission.

Marathon Home Sellers Race Reality is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: Buyers, down, market, mortgage, perma-listings, real estate, Sellers

In many areas across the country it’s often paid to buy new homes at the earliest point in the construction cycle because as projects are built out prices tend to rise — sometimes by hundreds of thousands of dollars.

As an example, last Fall the New York Times Magazine said at one New Jersey development, houses “that were selling for $560,000 when they first hit the market 24 months earlier were now going for at least $935,000.” (See: Chasing Ground, October, 16, 2005)

But if builders are now offering discounts, then several thoughts emerge.

First, why offer price cuts unless demand is weakening? This is not a hideous thing to admit, it makes no sense to believe that each and every year will set a new sales record. What we have to this point is not a pricing collapse or evidence of a broken bubble, but rather moderation in the marketplace. On Wall Street they would call this a “correction” or “profit taking.”

Second, price reductions do not mean builders are losing money. The basic cost to construct a house remains largely unchanged as projects are built out — even though asking prices may increase substantially. Thus builders can drop prices and still profit, especially with established projects.

Third, if you’re a builder you want to maintain unit volume because continuing sales allow you to retain skilled construction crews, a prized commodity.

If builders are openly discounting prices, it means they’re competing with recent buyers who now wish to sell. While most owner-occupants tend to hold homes for a number of years, short-term owners include a large percentage of investors hoping to buy-and-sell as soon as possible.

The growing number of new-home contract cancellations may well be evidence of entrepreneurial discontent. Speculators may prefer to lose a deposit than to close on a home that costs money to hold each month and can only be re-sold in the short term with a minimal profit or no profit at all.

The appearance of builder discounts drives a fat wooden stake into the hearts of short-term speculators, but reduced speculation is not necessarily good for builders. If fewer short-term investors are looking for new homes, then discounts become a self-fulling prophecy — discounts lead to fewer investors, there’s less buzz, fewer investors result in less demand, less overall demand requires additional price cutting and so forth.

Traditionally builders have avoided price discounts because they wanted to maintain their pricing structure to protect past buyers and themselves. Rather than a reduced price, builders would rather throw in a finished basement, gourmet kitchen, fancy bathroom or some other upgrade that does not show up in price reports. Other approaches including paying some or all closing costs, buying down the mortgage and paying points.

Now that price reductions are appearing publicly, only builders with the most demand will be able to resist the discount trend. Just look at what happened with U.S. auto manufacturers: When one offered employee discounts to the public, others were forced to follow.

Someone buying socks from Wal-Mart and Target doesn’t care about the price next week because the purchase is being made for reasons of comfort and utility and not much is at stake. With real estate the deal is different: Speculators in the past few years have routinely thought of new homes as sure-fire investments. If discounts mean the flames have gone out, then a lot of builders — and a lot of speculators — will have a tough time ahead.

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Published originally by Realty Times on March 7, 2006 and posted with permission.

Speculator Risk Soars With Home Builder Discounts is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: builders, Buyers, discount, homes, mortgage, new, price, real estate, reduce, reduction

“Yes,” say the buyers, “we want this house.”

“Fine,” say the owners, “here’s our seller disclosure form written by our state government which requires that we tell you all we know about the property.”

Should not the purchasers feel a wave of confidence at this moment? After all, the owners are providing a state-mandated disclosure form which surely covers every possible issue regarding the property’s condition.

Right….

Let us assume that the owners in this instance are utterly honest people who want to assure that the buyers fully understand the property and it’s condition. And so, as the sellers explain above, they have surely told all they know about the property.

And therein lies the problem. The owners are great people, totally honest, but they may not know too much — or anything — about the property, or at least anything about the stuff that counts.

You ask the owners: “Have you been in attic during the recent rain storms?”

They say, “huh.”

To the best of their knowledge — and these are entirely honest people — the roof does not leak. But you have to wonder, how can they possibly know if the roof leaks if they have not been in the attic?

You look at the form prepared by your friendly and ever-helpful state government and you ask: Can anyone answer such questions?

My favorite question comes from Virginia.

“Are there any substances, materials, or environmental hazards (including but not limited to asbestos, radon gas, lead-based paint, underground storage tanks, or other contamination) on or affecting the property?”

One phrase which interests me is the one about conditions “on or affecting” the property. How are owners to determine if an underground storage tank is buried in a neighbor’s yard. Is it okay to drill? Do you need the neighbor’s permission? Is it okay to ask neighbors if basement radon accounts for those additional fingers? Can an owner be liable for not knowing what they cannot know?

And what about the expression “but not limited to.” Is there any end to the possible liabilities represented by this phrase? For instance, is it the owner’s responsibility to detect a spot of mold behind the built-in dishwasher? Must a home be disassembled before sale to check for deficiencies?

When mandated disclosure forms first began appearing a decade ago they were designed to protect three groups:

Owners — so there would be a written record showing that sellers had correctly disclosed information regarding the property’s condition.

Buyers — so they would better understand the property they were purchasing.

Brokers — so they would have paperwork to demonstrate that property disclosures had been made. In other words, liability protection.

In theory, property disclosures are a great idea, but state-mandated forms may not ask the right questions, the questions may be literally unanswerable, and owners may be wholly unqualified to respond.

I am not among those who believe that buyer abuse should be a marketplace reality or that caveat emptor is a fair standard for real estate dealings. And yet it is fair to say that the marketplace has changed since state-written seller disclosure forms were introduced.

For instance, professional home inspections are both common and widely available. Buyer brokers are available nationwide. The use of limited home warranties is widespread.

I have grudgingly and with considerable reservation come to the conclusion that the time has come to dump mandated seller disclosure statements.

Why?

Seller disclosure statements provide assurance where none is earned. They are incomplete at best, misleading at worst. Most disturbingly, buyers may see them as a cheap way to avoid a home inspection.

In terms of reducing broker liability, seller disclosure forms serve merely as checklists for attorneys, paperwork that can be used against brokers even though brokers are not the authors of such documents.

I am aware that anything called “consumer protection” immediately and instantly has widespread support, but seller disclosure forms need to be re-thought because ultimately consumers will be better off turning to the new protections which have emerged in the marketplace.

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Published originally by Realty Times on March 13, 2001 and posted with permission.

Is It Time To Dump Home Seller Disclosures? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: Buyers, disclosure, mandated, required, Sellers, state

Answer: It’s entirely common to feel uneasy after making a real estate purchase. Buying a property is a major decision. Not only is a lot of money involved, but there are also issues relating to lifestyle preferences, status and ego.

You need to take two steps. First, ask why you liked the property, if you have seen anything better, and whether there is any property that would not set off the same concerns. Second, imagine if the owners’ got “sellers remorse– and refused to go through with the transaction. How would
you feel?

If you think there is an objective, substantial problem with the transaction have your broker and attorney review your agreement. Among other questions, ask about opportunities to withdraw and possible penalties such as the loss of your deposit and the potential for other damages.

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Syndicated originally by Content That Works and posted with permission.

What Is “Buyer’s Remorse” in Real Estate? is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

Technorati Tags: buyer, Buyers, ego, home, performance, psychology, purchase, remorse, status

Answer: A “sellers’ market” typically refers to a community with strong real estate demand and rising prices. A “buyers’ market” can be seen as a situation where home prices are more “flexible,” an expression which means prices are actually falling relative to past sales, prices are steady, or prices are the same but buyers can get more concessions for the same money.

What makes such descriptions complex is that in every market you have exceptions, homes that do not rise in value as much as others or homes which sell for seemingly-high prices. Because all homes are unique — and because all transactions are different — it means buyers and sellers must have a really good knowledge of local real estate trends to get the best possible deal. In practice, this means working with brokers who are active in your neighborhood, ignoring general marketplace labels and looking for situations that best meet your needs.

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Syndicated originally by Content That Works and posted with permission.

Sellers’ Markets Vs. Buyers’ Markets is a post from: OurBroker.com -- Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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