MiamiRealEstateKing

Archive for the ‘IRS’ Category

Six Ways Investing in Real Estate Can Save You Money

In Buyers, Commercial Real Estate, florida, Investing, Investor, IRS, miami, miami beach, Miami-Dade County, Multi-Family Real Estate, real estate, Roth-IRA, Self-Directed IRA, Sellers, tax deductions, Tax Matters on May 10, 2013 at 1:28 pm

There are many investment vehicles. Stocks, bonds, art, coins, postage stamps, toys, commodities and real estate, among others.

Some economists even suggest that as long as you are disciplined and can comfortably pay for it, you should buy any investment you can. If you can finance the purchase, even better.

However, real estate is probably the only one against which you can borrow and have the asset pay itself off through rental income, EVEN as it pays YOU.

In fact, I have spoken to property owners who have managed to leverage a property two, even three times in their lifetime, by borrowing against the property they now own free and clear, to buy another.

What’s more, the income from the new property (let’s call it property B), paid with borrowed funds from say, property A, plus the income they still generate from that newly leveraged property A, can over time, pay back the loan on A from rent collections on A and B, while proving the owner with a boost in passive income. In other words, party money.

Even if you can purchase property in cash, many recommend you consider financing after the fact. Leveraging allows you to possibly, acquire two or more properties, update or fix them up and let themselves carry the burden of paying down the loans with rental income.

Over time, you would have the ability to acquire even more properties and eventually, when you are at the right stage in your life, own them all free and clear while enjoying all that income in retirement. The ultimate 401K or IRA.

Of course, you must buy right and be disciplined throughout. With every payment received in rents, you must set aside a portion every month to pay for licenses, taxes, insurance maintenance and miscellaneous repairs, improvements, etc. In short, you must budget as you would with any business.

Below, we examine some of the advantages for owning investment property and in particular, multi-family property.

1. Economies of Scale

When you buy a single family house or condo unit, small investors often feel they’re easy to manage. That may be true to some extend. On the other hand, consider that with a multi-family building, you only deal with one roof and/or one yard to mow, you are the board that approves tenants or how many times a year you rent your property and in one single trip, you can fumigate, inspect and have a punch list ready for your handyman, plumber and/or electrician to take care of, minimizing headaches.

2. Lower Taxes

There are several tax incentives for real estate investors. If you are employed, deductions from real estate investments may be used to offset wage income. In addition, there are a number of tax breaks for real estate investment which often allow property owners to turn a loss into a profit. Deductions can include any actual costs involved in financing, managing and operating the property, to include maintenance, repairs, property management fees, travel, advertising, and utilities. In addition, the IRS allows a depreciation deduction that accounts for a portion of the building (not the land portion of the property) over time, usually some 27 years.

3. Cash Flow

A property can generate negative or positive cash flow. Cash flow simply refers to the amount of money that flows in and out in pursuit of maintaining a property. Rents are an example of cash flowing in while taxes and insurance must be paid out, typically from a portion of the rents received. When the amount of income received exceeds the payments, it is said you have a positive cash flow. There are times when the amount of payments exceed your income and in these cases, you are said to have a negative cash flow. Regardless, when it comes to real estate investment, there are two more important concepts involved: pre-tax and after-tax. A pre-tax positive cash flow for instance, may also be said to occur when income received is greater than expenses before taxes are paid. However, even if your are experiencing a negative cash flow, you may end up with an after-tax positive income when your expenses are more than your collected income, but the tax breaks bring you back in the black. Depreciation can often help turn a negative into a positive.

4. Use Leverage

An old rule of thumb in real estate is to never spend a dime on your real estate investment unless you have to and/or unless it will save you money. Leverage is an important aspect of saving money through real estate investment because a real estate investor uses leverage to increase their assets without spending their own money. By taking advantage of your equity, you also improve your return on equity and it provides you with tax-free funds to help fund your next deal or improve the value of your existing property by making updates, upgrades or repairs that entice tenants (to come in or stay) and should allow you to raise rents and improve your bottom line.

5. Equity Growth

The best way to save money and earn money, is to build up equity from real estate investments. That way, with high equity you are able to save on your mortgage while earning a nice chunk of profit. However, idle equity is like idle funds in the bank. Ideally, you are always utilizing your equity to improve the value of the property and/or pursuing and acquiring new opportunities. Often, selling is a great way to take advantage of existing equity, which would allow you to reposition yourself in a potentially better property with better opportunities. For instance, you may own a building sitting on prime land which may allow you to build a much larger structure for more potential. However, you are not a builder and you’re not in the mood to start. Even if that property is making money, selling it may bring enough to allow you to purchase a more suitable property or properties.

6. The Benefits of Inflation

Generally speaking, inflation can help you save money on your real estate investment because as rent increases, your mortgage costs will remain static (assuming it is a fix-rate loan), which means you will improve your position with the increased cash flow from the rent and equity growth. Although inflation is quite low these days, there is a typical amount of appreciation properties experience as a result of even low inflation, which adds to your equity without a single penny out of pocket.

Of course, it is not all rosey with real estate investing. There are a LOT of factors that deter people from getting involved. It is scary, you could lose a lot if you engage from an emotional standpoint and there are headaches and horror stories borne from bad tenant situations to fill a few books.

Regardless, I reiterate that if you buy properly, budget properly and stay involved, you may never have to worry about money when it counts – throughout the live of the property and during your retirement. What could be more beautiful than that?

Most real estate professionals can help a buyer or seller make the right buy or sell decisions. Obviously, as you would listen to a quality attorney, doctor or accountant, listening to a quality real estate professional’s valuable information will go a long way in helping you achieve your buying or selling goal. Budgeting however, is a function of habit and here again, you must proactively seek qualified, quality, professional advise.

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I Can’t Pay My Mortgage and I Don’t Know What To Do :-/

In Distressed Sales, fannie mae, FHA, First Time Sellers, florida, forclosure, foreclosure, foreclosure moratorium, foreclosure prevention scam, Freddie Mac, government, HAFA, HAMP, home sellers, homeowner, HomePath, HomeSteps, HUD, Industry trends, IRS, Market Report, miami beach, Miami-Dade County, modification, mortgage, NAR, National, option-arm, real estate, REO, scams, Sellers, Short Sales, South Beach, Tax Matters, Trends, Wenceslao on December 22, 2010 at 4:05 pm

About 75% of folk who lose their home to foreclosure, do so because they either do not seek help, or they get the wrong kind of help.

I am often asked legal questions to which I must invariably reply…I am not an attorney. The best I can do is speak from personal experience and remind them that it is imperative to seek competent and relevant legal and tax advise from active professionals.

In real estate for example, not all real estate agents are even Realtors.  Realtors are agents who as members of the National Association of Realtors(c) (NAR), they must adhere to NAR’s strict Code of Ethics. In addition, many are no longer in the business full-time nor are they truly keeping up with all the industry changes.

Homeoners looking to sell must always seek the assistance of full-time professionals. When in distress, they must take extra precautions in order to avoid falling victims of scams and even, downright fraud.

Below are some of the most common Frequently Asked Questions (FAQs) about foreclosure avoidance.  If you have further questions not addressed below, or would like additional information and resources, feel free to Contact Us.

Do I qualify for a short sale?

The qualifications for a short sale include any or all of the following:

  1. Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
  2. Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
  3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

What is a mortgage modification?

A mortgage modification is a process through which your mortgage lender changes any or all of the following:

  • Your interest rate
  • Your principal balance (through a reduction)
  • Your loan terms (example: from an adjustable to a fixed rate)

This process can allow borrowers to stay in their property when they can no longer afford their current mortgage payments.

Why would a lender modify my mortgage?

Lenders have realized that in some cases it is better for them to work with current borrowers to lower payments or possibly improve terms in order to keep homeowners in their properties. The average foreclosure can cost a lender from 35-50% of the value of a property, so keeping borrowers in their homes is a good option for everyone.

What do I need to qualify for a mortgage modification?

According to the Making Home Affordable Web site (www.MakingHomeAffordable.gov), you will need the following information for your lender to consider a modification:

  • Information about your first mortgage, such as your monthly mortgage statement
  • Information about any second mortgage or home equity line of credit on the house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans and car loans
  • Your most recent income tax return
  • Information about your savings and other assets
  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources

If applicable, it may also be helpful to have a letter describing any circumstances that caused your income to reduce or expenses to increase (job loss, divorce, illness, etc.)

How do I qualify for a mortgage modification?

The first call you make should be to your lender, have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking, you can ask to be referred to one of the following departments (different lenders have different names for these departments):

Prior to contacting your mortgage lender you can quickly complete an eligibility test atwww.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP). For a list of mortgage lenders and servicers, visit www.HopeNow.com.

What if I don’t qualify for a mortgage modification, can’t afford my home, and owe more than it’s worth?

You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment, you may want to consider a short sale. Agents like me, with the Certified Distressed Property Expert® Designation, have undergone extensive training in how to process and negotiate short sales. A short sale allows you to sell your home for less than what you owe and avoid foreclosure. Speak to your market expert to see if you may qualify.

What is a Home Affordable Refinance?

If Fannie Mae or Freddie Mac owns your mortgage, you may be eligible for a Home Affordable Refinance. This will allow you to refinance your home and often lower your payments.

What are the qualifications for a Home Affordable Refinance?

According to the resources released by the government, following are a list of qualifications:

  • You are the owner occupant of a one- to four-unit home
  • The loan on your property is owned or securitized by Fannie Mae or Freddie Mac (see Useful Links)
  • At the time you apply, you are current on your mortgage payments (you haven’t been more than 30 days late on your mortgage payment in the last 12 months, or if you have had the loan for less than 12 months, you have never missed a payment)
  • You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house
  • You have income sufficient to support the new mortgage payments, and the refinance improves the long-term affordability or stability of your loan

Courtesy:  ©2009 Distressed Property Institute, LLC. | All Rights Reserved

The Distressed Property Institute LLC is behind the Certified Distressed Property Expert (CDPE) designation that over 29,000 professionals now hold.

Open Letter to Obama and Congress

In bank-owned properties, Buyers, credit, Distressed Sales, First Time Sellers, First-Time Buyer, florida, forclosure, foreclosure, foreclosure moratorium, government, Home Buyer, home sellers, homeowner, Industry trends, Investing, Investor, IRS, lenders, Loan Program, Market Report, miami, miami beach, Miami-Dade County, mortgage, NAR, National, new rules, Obama, real estate, REO, Sellers, Short Sales, South Beach, Wenceslao on October 15, 2010 at 11:08 am

With our economy draging (in spite of the recession being over according to “experts”), it is more important than ever to find common ground, leave politics aside, get comfortable, get friendly and come together to find answers, compromises and solutions.

The recent foreclosure fiasco is absolutely appalling. The government and oversight entities, failed; banks and investment houses, failed; borrowers failed and everyone in between, failed; while those who were never even interested and stayed in the sidelines,  are all paying for it.

Some title insurers are already issuing statements refusing to insure recently litigated foreclosure properties.

If we want to see this country come out of the ashes and be the beacon of financial opportunity for everyone again, we need to start coming up with ways to incentivise certain bahaviour and dis-incentivise other.

For instance…for prices to begin to stabilize, even increase, real estate needs to improve. For this to happen, we all agree that jobs must improve.

Looking at the stabilization of real estate, there are certain actions that can be taken with government policy/legislation that will motivate lenders to act in a way that will, in my view, improve market conditions.

The now on-going foreclosure fiasco, has investors/first-time buyers in the sidelines or competing for less properties. An unintended consequence of this may be that prices may begin to rise as buyers/investors compete over remaining inventories, raising the bottom to new highs during this period.

Temporarily, this may also drive investors across the proverbial fence if they insist in avoiding Short Sales and feel that they don’t want to compete at higher prices for the REO inventory now in play.

The higher prices go, the more diluted their returns can be if they feel that the increases are still unsustainable until the employment/ tax situation is sorted.

Lenders must be given a choice to either continue to pay more attention to the REO area of their business, rather than to actually begin to pay attention to short sales and to divert attention and resources that lead to the settlement and conclusion of these, less costly deals.

To continue to ignore this cheaper, friendlier and still competitive alternative that helps save money in legal and other REO related expenses and legal responsibilities and liabilities, while helping to stabilize neighborhoods further, would be a shame.

Worst still…for the government to continue to incentivise rather than dis-incentivise lenders to take the REO route with pain – pleasure oriented programs that help lenders “choose” to continue rather than to abandon the REO alternative (unless absolutely necessary), in favor of the short sale route, would be aweful.

Leadership, starts with our government and the policies they create on behalf of and to help the citizens they represent. If the policies implemented create an environment where sellers can get their property sold with dignity, while keeping a gleam of hope for some future chance of home ownership again, then we are helping multiply the blessings in the future.

Otherwise, foreclosed home owners loose their chance of buying again while required to answer whether they’ve ever had a property foreclosed on or gave it back to the bank in lieu of.  Lenders in the future will be reluctant to lend to these folks.

To create policy that “overlooks” the foreclosure / character side of the mortgage application process in the future as a patch to address the needs of these borrowers 10 years from now, will be in that future, a hindrance to good lending practices. Instead, those borrowers should be allowed to sell with dignity today so they can perhaps buy again tomorrow.

Diverting resources and creating policy that “encourages” lenders to make a deal in a short sale rather than foreclose, will help stabilize prices, will help buyers get into good properties, and will help those outgoing homeowners get their act together so they can consider buying again in 3 to 5 years.

In the meantime, investors will consider buying short sales (once expediently processed), so they can enjoy rental income and then sell to future home owners when things improve, or continue to repair and resell to end-users and other investors as they have. Again, only if they can avoid the pain of the current short sale process.

I’m not coming up with anything that hasn’t been thought of. However, it is time for simple, sensible leadership, NOW.

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OPINIONS WELCOMED

Americor / Vacation Finance Lunches New Lending Product

In Buyers, credit, Distressed Sales, florida, forclosure, foreclosure, government, Home Buyer, Industry trends, Investing, Investor, IRS, lenders, Loan Program, Market Report, miami, miami beach, Miami-Dade County, Military, mortgage, National, Qualified Retirement Plan, real estate, Roth-IRA, second home, Self-Directed IRA, South Beach, Tax Matters, Trends, vacation home, Wenceslao on October 13, 2010 at 7:51 am

Using your IRA to buy Investment Real Estate

Posted: 12 Oct 2010 09:35 AM PDT

Americor Mortgage is launching a new loan program for investors who are buying investment property with their self directed IRA. Our mortgages will be NON-RECOURSE, and the individual does not need to qualify, the property does.

So even borrowers with recent credit challenges, low or retirement income, can get a mortgage through their IRA.

IRAs can buy condos, single family residential, and commercial income producing properties.

Contact Americor-Vacation Finance for more info: info@vacation-finance.com

To learn more about Self-Directed IRA rules visit http://www.IRS.gov

You may also contact Jason DeBono at Entrust Florida (www.EntrustFl.com) at JDeBono@EntrustFl.com who are qualified administrators for Self-Directed IRAs

A sweeping change to affect home ownership is being considered

In government, homeowner, Industry trends, IRS, NAR, new rules, real estate, tax credit, tax deductions, Tax Matters, Trends on September 17, 2010 at 12:33 pm

Value of homeownership under fire WASHINGTON – Sept. 17, 2010 – Some people blame the recession on real estate problems, and are even suggesting ways to devalue homeownership and encourage rentals.

One suggestion: Nix the federal IRS tax break on mortgage interest.

The National Association of Realtors® established a webpage that responds to negative attacks in the media. Background material is on realtor.org (http://go-to.realtor.org/r/18QPH7/FDBUK/JVSQE/OK1Q6/9IO4L/HQ/h).

In a webinar scheduled for Sept. 28 at 3 p.m. – Standing Up for Homeownership: Know the Facts – NAR Chief Economist Lawrence Yun and independent policy analyst Howard Glaser will explain what the media is saying, and try to separate the myths from the facts. The webinar will last one hour.

Reprinted by Permission: © 2010 Florida Realtors®

What are investors looking for these days?

In Buyers, credit, Distressed Sales, FHA, First-Time Buyer, florida, forclosure, foreclosure, foreclosure prevention scam, government, Home Buyer, home sellers, homeowner, Investing, Investor, IRS, Lease-Option, Leasing, lenders, Market Report, miami, miami beach, mortgage, real estate, REO, Roth-IRA, Self-Directed IRA, Sellers, Short Sales, Tax Matters, Trends on September 10, 2010 at 10:58 am

I often argue with a great friend of mine about the potential for making money buying real estate today.  This person is no newbie or stranger to investing. He owns several multi-family buildings and recently sold one.

He feels this is no time to buy – though of course…he had no issue selling to this buyer, who I’m sure he was glad to see buying HIS building  🙂

My friend also feels it may not be time to buy for several months, possibly as many as 12 or 18 months, fearing that taxes and rental income are almost impossible to calculate in this environment.

This, in spite of the fact that he was recently able to successfully increase the rents of two of his units by 20%. He claims to be unsure whether he can continue to do this consistently moving forward and attributes his recent ability to raise these rents as a temporary and unexplainable blip.

However, he agrees with me that this may have been due to (at least in part), the number of REO properties that are ‘off’ the market and the still thousands of unsold units developers refuse to rent, plus the fact that so many of the ex-home owners are now unable to buy and must rent.

Don’t get me wrong…we’re looking at the possibility of partnering on deals so, there is most definitely a side of him that’s willing to put his theory to the test and either proof himself or me wrong.

I also argue with him that, although he feels the way he does, that most buyers today could not only finally enjoy positive cash flow from renting their property, but also gain with capital appreciation if they choose to hold the property for at least 3 to 5 years or longer.

Such people will not care whether the property suffers added “paper losses” while holding the property in the next 12-18 months or so, as long as the property recovers its lost value so that, five years from now, they can make a nice chunk of cash in addition to the passive, rental income collected during that time.

Yet, he still feels emotionally unable to feel good about the idea that he may buy something today that in 6 or 10 months could still be worth less than he paid today, regardless of the fact that, if held it for at least 3-5 years or longer, he agrees it would be worth much more.

It’s that sense of loss, albeit temporary, that he seems unable to get passed. I tell him that this loss, may even be more temporary than the ‘gains’ of recent years, and much less damaging to those still holding these properties in 3 years than it has been for those who bought at the top of the market and must wait 6-10 years for their ‘old’ inflated prices to level off.

Here are 4 additional concepts I subscribe to:

1) Conservatively speaking, most investors I know, know that money invested in real estate is made when you buy and realized when you sell.

Although appreciation is likely over time (as proven by historical fact … although the SEC would make you say as in any prospectus that…’past results are no guarantee of future performance’), it is difficult to calculate any appreciation going forward and probably better if ignored and considered a ‘bonus’ when you sell.

The difficulty in calculating the numbers mostly stem (or at least in part), from potential changes in tax and other laws plus uncertainty about the economy and how long it will remain weak, unemployment and how much worse will it get before it is overcome and vacancies potentially worsening as more properties are recycled by lenders dumping their REO inventory into the market.

Obviously, if you are buying a property for personal use (your  primary residence), memories built within those walls and the family’s enjoyment are often worth much more than anything else to the typical home buyer whereas, investors look at that cash flow and appreciation as a way of measuring whether to buy or not.

Still, the issues listed above continue to be, among others, the biggest handicaps in the minds of some investors.

2) A point I feel is helping investors today is that many buyers simply…cannot afford to buy.

Financing is tough on them and if they are buying a condo unit, its even tougher on the buildings.  For those investors able to pay cash or even get financing, the loan-to-value ratios can help them make a monthly profit.

Ideally, the total cost of the purchase, fees and repairs should be no more than 70 percent of the appraised value of the property in good condition. This leaves 30% equity plus whatever the property value grows to while tenants cover all costs with rent.

Typically…this is much better than a CD or today’s 401k or mutual fund performances. As a matter of fact, many investors are pledging their funds in roll over IRA and other similar accounts as private money that grows their nest egg with much better velocity of return.

Finally, a vehicle for many to compensate and get ahead of the curve as they accumulate wealth for retirement in this uncertain environment. of course, this is tightly regulated under strict IRS guidelines and only competent administrators (i.e.: Entrust and several others), should be used.

3) Investors can also finally look at property that allows them to maximize their annual return.

They can choose properties that can be rented for at least 1.5% to 3% of the purchase price so that, if you pay $100,000 for a property that can be rented for $1250 per month for instance, the mortgage at today’s extra-low rates, taxes, insurance and everything else should be easily covered  by the rent and even leave some money on the table for unexpected repairs, etc.  Remember of course that, there is that 30% proverbial equity still sitting there, waiting for an opportunity to cash out in a sale.

4) Just the same, every investor knows they must have alternate exit strategies.

By finding properties that have intrinsic value added at the time of purchase, then no matter what happens to the market, they are likely to gain.

Some of the strategies an investor should always have available are to:

  • rent the property,
  • sell to other investors,
  • sell to end-users (primary resident owners), who plans to live there and are able to buy using cash, conventional financing or more creative methods like lease purchase.

In short, there are many ways to invest and many reasons to feel positive about it. Being on the fence or fearful of the unknown never makes anyone any money.

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YOUR COMMENTS WELCOMED…

Homebuiyer Tax Credit NOT extended

In Buyers, closing, Distressed Sales, fannie mae, FHA, First-Time Buyer, flood insurance, florida, Florida Legislature, foreclosure, government, Home Buyer, home sellers, IRS, lenders, Market Report, miami, mortgage, new rules, real estate, REO, Sellers, tax credit, Tax Matters, Treasury on June 26, 2010 at 1:24 pm

Homebuyer Tax Credit Not Extended & Flood Insurance Still Pending

Contrary to so many of your calls and emails today, the homebuyer tax credit has not been extended. That provision has not passed the Senate or the House and is still part of the omnibus extenders package that remains very controversial. A vote on this bill has failed several times in the Senate. If/when the bill does pass, it will have to go back to the House for another vote, so PLEASE tell all your clients to proceed as if June 30 is still the final deadline.

As for the flood insurance extension, H.R. 5569, a bill to extend the authorization of the National Flood Insurance Program until September 30, 2010, passed the full US House of Representatives as a stand-alone bill earlier this week. This is the bill we need the Senate to now take up and pass so the President can sign it and get NFIP back on track. The NFIP has been shut down for 25 days. The National Association of REALTORS® is actively working with the Senate to take up and pass H.R. 5569 before the July 4th recess.

Congress has adjourned and will come back on Monday to once again try to tackle these important issues.

Danielle Blake
Vice President of Housing & Government Affairs
Realtor Assoc. of Greater Miami & the Beaches
700 S. Royal Poinciana Blvd.
Miami, Florida 33166
305-468-7000
===
Reprinted by Permission

Help For Homeowners – FREE Foreclosure Seminar in Miami Beach

In credit, Distressed Sales, fannie mae, FHA, florida, forclosure, foreclosure, government, HAFA, HAMP, home sellers, HomePath, HUD, IRS, mediation, miami, miami beach, Military, modification, mortgage, new rules, real estate, REO, Sellers, Short Sales, tax credit, Tax Matters, Treasury on June 9, 2010 at 8:42 pm

Local CDPE agent provides Free informational seminar to cover several alternatives homeowners can pursue.

Local Agent Hosts Foreclosure-Avoidance Seminar to Benefit Community

Wenceslao Fernandez Jr of Keller Williams Realty provides free valuable information and resources to help local-area homeowners who are struggling to make mortgage payments.

Miami Beach, Fl – May, 24 2010 – Top real estate agent and local Certified Distressed Property Expert®, Wenceslao Fernandez Jr with Keller Williams Realty Miami Beach*, will host a free seminar for local homeowners to educate and inform on foreclosure avoidance options. With more than 14 percent of mortgages currently delinquent, Fernandez has become a local resource for distressed homeowners.

“One in seven mortgages is not being paid, which means that most people in our community know of someone who is struggling,” Fernandez said. “This Foreclosure Avoidance Seminar will help our families, friends and neighbors find solutions to their financial challenges. Even luxury homeowners are finding themselves in need of help, given the current state of their businesses and the market.”

Unemployment nationwide currently stands at 9.9 percent, making it difficult for many unemployed or underemployed homeowners or business owners who have suffered a loss of business, to continue making mortgage payments. In addition, nearly one-quarter of all mortgages are underwater, which means that these homeowners owe more on the property than it is currently worth.

There are many options to foreclosure, including deeds-in-lieu, forbearance and short sales, in which the lender accepts the sale price of the home, even if that amount is less than what is owed by the homeowner.

“As a CDPE, Fernandez has received the training to provide solutions to homeowners facing the possibility of foreclosure”, Alex Charfen, CEO of the Distressed Property Institute and author of the CDPE designation, said. “Whether due to medical bills, relocation, job loss, divorce or other hardships, homeowners struggling to pay the mortgage should contact an educated real estate agent to learn about their options.”

The upcoming Foreclosure Avoidance Seminar is open to all who would like to attend. Following are details of the event:

Time: 6 pm
Date: June 26, 2010
Location: 1680 Meridian Ave., Suite 101, Miami Beach, Fl 33139 (Main Conference Room) – Keller Williams Realty Office (on Meridian Ave, between Lincoln Road and 17th St, across from Macy’s.
RSVP

For more information about the CDPE Designation, visit http://www.cdpe.com
For more information on the solutions to foreclosure now, visit http://www.DistressedBeachHomeSolutions.com or email your request for a complementary report to Wenceslao@DistressedBeachHomeSolutions.com.

For more information, please contact:
Wenceslao Fernandez Jr | 786-260-0735 | MiamiRESeminars@Gmail.com

*Each Office Independently Owned & Operated
To find out your home value visit: http://getmybeachhomevalue.com

18 Steps to take BEFORE you sell your home or condo

In Buyers, closing, florida, home sellers, HUD, IRS, miami, miami beach, Military, real estate, Sellers, Short Sales on June 3, 2010 at 1:43 pm

After twirling it in your mind for weeks, possibly months or even from time to time over years, you’ve decided to sell your house or condo. CONGRATS! This is a BIG decision.

If you’ve decided to sell on your own, below are a few important pointers to guide you. If you’ve decided to employ the services of a professional, the information below should help you formulate some questions for your agent and determine what to expect and how to contribute to the outcome.

Note that, whether you decide to sell on your own (For Sale By Owner or FSBO), or you choose to work with an agent, it is imperative that you actively participate and become an informed homeowner and fully cooperate with your agent. Yes, you are in control and choose the direction and often play a big role in the outcome. From the price you choose, to whether you choose to make the property accessible for showings even when is not convenient for you (but rather when is convenient to buyers), to whether you keep the home tidy and clean or choose to defer maintenance and upkeep will all play a roll and all are typically within YOUR control.

You need to understand what it will take to attractively price and actively market your home to successfully attract potential buyers in spite of market conditions.

To accomplish this let’s take a look at 18 things you must consider before you sell:

1. Be honest, objective and open minded about the process

Many sellers today think that selling their home is as simple as sticking a sign on the yard and/or running a couple of online or print ads. They feel that, their home is the best, that all those improvements made over time are valuable and will command top dollar, etc., while forgetting the process that went into finding and ultimately deciding to buy the very property they now call home or even that the improvements made all those years ago, may not be obsolete and require updating or upgrading.

They forget that, more likely than not, they did not just wake up one morning and out of the blue said…’I’m buying a home today’. In fact, this process may have started at a conversation, while reading an article or in some way, a thought was implanted in their mind. Much like your decision to sell today.

This thought probably lead to some research, looking around, reading, talking to friends and family and even others who their reticular activator (that part of your brain that suddenly makes you aware that you are not alone as a buyer or seller), has found for you and with whom you can suddenly speak to about their experiences and listen to their advice.

Buyers coming to your home today are probably going through or went through a similar process and are at different stages in the process. Some are more ready than others to pull the trigger today and you need to find the ‘one’.

The ‘one’, will make the purchasing decision on a number of levels, the first of which is probably emotional. They need to connect with the property, just like you did when you found it. If the place is outdated or run down and not priced accordingly, it will generate a logical answer to their emotions. PASS (unless they are an investor testing your motivation level), or make a LOW BALL offer to match the property condition as they see it. They may otherwise just be tire kickers or HGTV shoppers who’s ‘just looking’ and aren’t going to buy anyway.

For them to feel an emotional connection, the property has to start working for them from the moment they drive by and are lured by the curb appeal or call for more information from your ad and the way their called is handled, all of which will be considered next.

You then, need to know what kind of buyer do you want to attract? Do you want to attract the buyer who will make a visceral, emotional connection with your home and LOVE IT and make an offer accordingly or the bargain hunter looking for a ‘fixer-upper’ (who’s also going to make an offer accordingly)?

To find out how your home stacks up and what is worth in Miami / Miami Beach, visit: http://miamirealestateking.homeresearchsite.com or http://GetMyBeachHomeValue.Info.

2. Set the right price

Today’s buyers are much more sophisticated and savvy. They use the internet for information and research (these day’s version of ‘let your fingers do the walking’). and compare notes from many online sources before they begin spending time and gas driving around areas they either can’t afford or don’t like. Therefore, these buyers are more focused by the time they get in front of your house and so, your property condition and price needs to reflect that you’ve objectively looked at the sale of your hone and balanced what you want against what the market says you can sell for.

Take the time to do the research any savvy buyer will do by looking with ‘buyer’s eyes’ and reviewing the sold inventory, the active inventory, and the current market statistics in your area. This is probably the same exercise you will do when looking for your next home and will serve you well then too.

Use the web to your advantage, drive your own neighborhood, find out who is selling and who sold recently (within no more than 6 months), compare the curb appeal of your home to theirs and if possible, go to open houses in your neighborhood AND other similarly priced nearby areas and do all this OBJECTIVELY. If you are in a condominium, remember that units in one line are identical and may also be very similar or identical to units in another line with a different view. Buyers are often not willing to pay high premiums for improvements in condo units if the spread between yours and another can mean that the upgrades or updates they do after buying a cheaper unit can be done to their taste and still save them money. The same thing happens in certain neighborhoods with ‘cookie cutter’ type homes. Similar models may be improved and still save the buyer money if yours is priced too high.

3. Prepare your product

A typical buyer will view 10-15 homes before making a decision. As suggested above, this means you need to start from the curb and work your way inside. If possible, don’t do this alone, use the ‘honest’ input from people you know and don’t take their comments as negative criticism – but as recommendations and pointers of what buyers will see. Notice everything from the way the grass and landscape and lighting looks, fence condition, whether you have a new or worn mat and even if the doorbell works or the front door needs painting. These may all be potential red flags that a buyer may use to eliminate your home from consideration, often even subconsciously thinking that the exterior is a reflection of the interior. Some studies show that you have less than 30 seconds to impress a buyer when they arrive at your door and you may not get a second change to make a great first impression. Try exploring home improvement stores, websites or t.v. channels like HGTV to get ideas and address issues as inexpensively as you can while making sure to eliminate all the excuses for passing your house up versus keeping it on their short list of properties to consider or even making an offer.

4. Plan your marketing

If you decide to go solo and not hire a professional, you have given up a key component of a successful marketing plan – the exposure that a local Multiple Listing Service provides to bring your home to the attention of many agents across your town and often even nationwide and internationally. These agents may be working with several buyers each, one of whom may be your buyer. To overcome this handicap, try using online ads, FSBO dedicated websites, and local print media to attract attention. Remember that today’s buyers look online first over 90% of the time and they value the availability of more quality photos, virtual tours and detailed information. One site to explore for syndicated posting of your online ad is Postlets. Keep in mind that discount brokers that just place the property on the MLS provide no additional benefit to you and you must still ensure your marketing and property condition matches proper pricing, showings, etc.

5. Address problems now

It is highly recommended that you have your home pre-inspected. An argument for doing this is that the inspection will give you a ‘heads up’ to items the buyer’s inspector is likely to find anyway. This will allow you to address them early and once again, reduce reasons or excuses for passing up your house as a potential candidate. An argument against it by some is that, anything you learn about the home may need to be disclosed to the buyer even if you decide not to go ahead with the repairs. However, there are items that, if were to ever come to question in court, a judge may determine you should have known and find in favor of the buyer anyway. In my humble opinion, I would rather know than not know. It’s like not going to the doctor just because I don’t want to know what’s killing me, even if there is a cure that could save my live or help me reasonably live longer. You may visit the American Society of Home Inspectors website to find one near you or consult your local phone directory.

6. Address communications early and efficiently

Decide early on who and how calls or door knocks and call backs to notes left at the door will be handled. To avoid hesitating while responding to a call, keep your home details handy and a pre-typed and ready to cut and paste email ready to send at a moment’s notice. Remember that upon first contact, your goal is to generate a showing NOT to sell the house over the phone or email. A great way to avoid keeping your private email private is to set up a separate email account for buyer emails. Over the phone, use an answering machine to record general information about the house and elicit the buyer to leave their contact info. This ensures that your blurb sounds the same and is not influenced by your mood. By all means, respond quickly and in a friendly manner to all inquiries. You never know who they might tell about your home.

7. Identify financing options your buyers might consider

Interview at least three lenders in your market and ask them to consider interviewing and qualifying potential buyers and choose one you can work with. Even if the buyer claims to be working with a lender and insists on using their lender (which they are entitled to do), this may be a business or lead generation source to the lender in exchange for providing you a financing options matrix you can share with your buyers. This will help buyers see in dollars and cents how they can qualify to buy your home. This can be a great tool for converting a showing into a sale. Refer buyers to the US Department of Housing and Urban Development’s website (www.HUD.gov), for answers to financing questions.

8. Be creative

Consider creative ways to sell your home such as carrying a mortgage, accepting a trade or exchange (1031 – visit http://www.IRS.gov for more), a lease option agreement (consult an attorney and private lenders). How far you are willing to go to get your home sold and your willingness to think outside of the box may mean the difference between selling your home and having the home for sale, helping others get theirs sold first and wishing you had sold your home before they did.

9. Consider incentives

Incentives can include offering contributions for closing costs, buy down the buyer’s interest rate, paying for prepaid costs like maintenance fees or assessments, crediting money back for repairs like paint or carpet replacement, new appliances and even a home warranty. A home warranty is a service contract that protects buyers for up to one year for any major mechanical failures in the home like a/c, pool equipment and/or major appliances. Check out the American Home Shields website and research this option to stand above your competition.

10. Your For Sale sign

Many real estate firms attribute as many as 30% of buyer calls to their signs. Therefore, consider avoiding hand-made or cheap signs and order a professional sign instead, used in conjunction with properly done informational flyers. When placing your sign, set it perpendicular to the road for better visibility. Always check with local regulations and ordinances since some restrict the type and size of signs you can use. Consult your local government office and surf the net to find sign companies for ideas or to purchase yours.

11. Take safety seriously

Be careful when opening your home. We are in a recession and there are some scammers and down-right thieves lurking and looking for opportunities to strike. Before inviting someone over (specially if you have a big home), make sure you’re not alone so that someone can stay watchful while you show the home. Often FSBO shoppers may come in pairs or small groups, brake the group while one or more search for jewelry, cash or other valuables and maybe even figure out what protections if any (alarms, cameras, etc), you may or may not have in place. In other words, in a tough economy, there are some scouting for opportunities – just not the kind you want, which is a buyer for your home.

12. Differentiate between buyers and others

Consider that often, bargain hunters, looky-lous and investors seek out FSBO’s so, be prepared. While you should be friendly while firm every step of the way (entertaining the first phone call, making the appointment, receiving them and showing your pristine product, negotiating, addressing all legal issues, etc), remember that, although none of them may be the buyer for your home, one of them may tell someone who may.

13. Seek to hire critical team members

Consider the use of a good real estate attorney and/or title agent. Although the buyer is certainly entitled to use their own, you should have someone represent you at closing NO MATTER WHAT.

14. Improve your chances by cooperating with brokers

If you accept the suggestion to consider paying a buyer’s agent fee, also consider that, this agent is representing the buyer, not you. If you will concede to do this, then you should also consider that having a professional represent and look after YOUR best interest and free up your time do do all the chores required of the job of selling your home must be carefully considered.

15. Staging

Staging has been found to help sell homes faster. Staging is all about making your home appeal the the widest number of potential buyers possible. This goes with point number one above in many levels. From the way the house looks at the curb, to the way it or your condo looks the ‘second’ they step in the front door. Is it too cluttered or does it look spacious and allows potential buyers to ‘see themselves’ living there? Is it clean or dusty with hair and spiderwebs all around? Does it have smells of food, pets, sweaty/dirty laundry or dipers or does it smell fresh and clean? How is the lighting? Is it bright and well ventilated or is it dark and damp feeling? Is the temperature just right or is it too cold or hot? Is the color of cabinets, walls, carpet neutral and inviting or is it quite particular to YOUR taste?

Remember that selling a home is a bit like selling that precious car. You wash it, vacuum it, clean it thoroughly, polish it, buff it, clean the engine, change the oil and filter, check tire pressure, make sure the brakes and a/c works and are certain that it is in great working order as you show it with pride and often, even let prospective buyers ride it.

Selling a house or condo that was once your home and castle should be done with the same sense of pride and care to detail in order to stand above the competition, keeping in mind that what you are selling is no longer your home but a possession where you built memories in. Now, you must provide room for the potential buyers to see themselves building memories in a new place they want to call home.

16. Be Ready to execute

So, you did your homework, corrected issues, prepared your home, priced it right, took and handled the call and lured a potential buyer in, they knocked on your door, you graciously showed it, and you hit it off. Now what?! ASK FOR THE SALE. So…what if they say ‘OK’? Are you prepared? Do you have all the legal paperwork necessary to complete the sale? How do you address sensitive issues like financing, down payment and others? This is why you must be prepared and before you start…have the end in mind. This is the moment you were waiting for. Know what to do and how to ask for the sale, get the paperwork and disclosures properly completed and signed, know what to do with the down payment, when are inspections and appraisal necessary, what dates are important to remember under the contract, and what to do when things don’t go smoothly. This is when great team members typically earn their keep. A great attorney and professional Realtor usually worry about and handle all this on your behalf. Hiring the right professionals for this job is usually well worth the fees and often, may even help negotiate and net you more money in your pocket. Consider interviewing several professionals when determining whether you will sell on your own or allow a professional to represent you and choose.

17. Let go of ‘hangups’

Some sellers get hung up on price. They feel they must get a certain number or they just wont sell. This may be fine if your motivation to sell is not clear or not even there. You’re just fishing to see how it goes and you just want to test the waters. If someone bites, you might sell. If on the other hand you are ready to sell to be closer to family, job relocation, downsize, upsize or any other ‘real’ reason, then consider that the perceived money you may give up selling in a down market will also help you buy right…even at a more attractive price than you would if you wait. In the end, if you wait until home prices recover, you may get more for your home, but you are also likely to pay more for the home you buy. The net effect may be the same, or a smaller net difference between the price you sell and the price you buy. Therefore, let go of hangups and stay focused on the outcome and clear about ‘why’ you want to sell.

18. If you need help…GET IT

There is no shame in recognizing you need help or asking for help. 7 out of 10 homeowners facing foreclosure loose their home because they failed to seek the help they needed. If you are not ready, willing or able to handle the sale of your home on your own, you are typically better served by hiring a professional Realtor (c) (note that not all real estate agents are Realtors – members of the National Association of Realtors who adhere to a strict Code of Ethics). You may also be facing foreclosure due to serious consequences to a hardship situation like loss of your job, earning less due to less work hours or drop in business, health issues or death of a wage earner in the household or spouse, birth of a child, military and others. Know that there are several ways to avoid loosing your home to foreclosure and you can find more information by visiting http://DistressedBeachHomeSolutions.com.

If you follow the above suggestions, one of two things are likely to happen: You will have showings and sell or you won’t. Few or no showings often indicate that the market is rejecting your price. In addition, the National Association of Realtors also suggests that, 10 or more showings without an offer calls for a price adjustment.

There may be issues with the home as it compares to others in a number of ways. Perhaps it is too close to a busy street, railroad, airport landing or take-off traffic pattern, its functionality, level of repairs or updating or upgrading necessary, etc. If this is the case, revisit the advise provided above and make adjustments to create a successful sale. Listen to comments and don’t take negatives personal. Change what you can and find ways to play down the negatives and play up the positives.

To stay up to date on your competition, sign up for email alerts about your market area at http://GetMyBeachHomeValue.Info.

Selling your home can reap big rewards, but it does take commitment and a lot of hard work if you are selling on your own. Even when using a professional, this is a team effort and your cooperation by taking their advise, keeping the property clean, availability for showings, etc, will be critical in your success or failure.

Take the time to use these 18 tips to ensure that you are able sell your home fast and for top dollar.

Your comments or questions welcomed. Contact Wenceslao for more specifics.

PRESS RELEASE – SEMINAR INFORMATION

In credit, Distressed Sales, fannie mae, florida, forclosure, foreclosure, government, HAFA, HAMP, home sellers, IRS, mediation, miami, miami beach, modification, mortgage, new rules, real estate, Sellers, Short Sales, Tax Matters, Treasury on June 1, 2010 at 4:00 pm

FOR IMMEDIATE RELEASE

Local Agent Hosts Foreclosure-Avoidance Seminar to Benefit Community

Wenceslao Fernandez Jr of Keller Williams Realty provides free valuable information and resources to help local-area homeowners who are struggling to make mortgage payments.

Miami Beach, Fl – May, 24 2010 – Top real estate agent and local Certified Distressed Property Expert®, Wenceslao Fernandez Jr with Keller Williams Realty Miami Beach* will host a free seminar for local homeowners to educate and inform on foreclosure avoidance options. With more than 14 percent of mortgages currently delinquent, Fernandez has become a local resource for distressed homeowners.

“One in seven mortgages is not being paid, which means that most people in our community know of someone who is struggling,” Fernandez said. “This Foreclosure Avoidance Seminar will help our families, friends and neighbors find solutions to their financial challenges. Even luxury homeowners are finding themselves in need of help, given the current state of their businesses and the market.”

Unemployment nationwide currently stands at 9.9 percent, making it difficult for many unemployed or underemployed homeowners or business owners who have suffered a loss of business, to continue making mortgage payments. In addition, nearly one-quarter of all mortgages are underwater, which means that these homeowners owe more on the property than it is currently worth.

There are many options to foreclosure, including deeds-in-lieu, forbearance and short sales, in which the lender accepts the sale price of the home, even if that amount is less than what is owed by the homeowner.

“As a CDPE, Fernandez has received the training to provide solutions to homeowners facing the possibility of foreclosure”, Alex Charfen, CEO of the Distressed Property Institute and author of the CDPE designation, said. “Whether due to medical bills, relocation, job loss, divorce or other hardships, homeowners struggling to pay the mortgage should contact an educated real estate agent to learn about their options.”

The upcoming Foreclosure Avoidance Seminar is open to all who would like to attend. Following are details of the event:

Time: 6 pm
Date: Tuesday, June 29, 2010
Location: 1680 Meridian Ave., Suite 101, Miami Beach, Fl 33139 (Main Conference Room) – Keller Williams Realty Office (on Meridian Ave, between Lincoln Road and 17th St, across from Macy’s).
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> For more information about the CDPE Designation, visit http://www.cdpe.com.
> For more information on the solutions to foreclosure now, visit http://www.DistressedBeachHomeSolutions.com or email your request for a complementary report to Wenceslao@DistressedBeachHomeSolutions.com.
> You may also contact Wenceslao Fernandez Jr now at: 786-260-0735 | MiamiRESeminars@Gmail.com

*Each Office Independently Owned & Operated

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