MiamiRealEstateKing

Archive for the ‘Tax Matters’ 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.

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.

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

View from the Beaches Event coming up soon

In Buyers, florida, foreign nationals, Home Buyer, Industry trends, international buyers, Investing, Investor, lenders, miami, miami beach, mortgage, real estate, second home, tax deductions, Tax Matters, Trends, vacation home on September 19, 2010 at 2:42 pm

Upcoming event (Please forward to your colleagues, make sure to click imagebelow for RSVP and sign-up):

View from the Beaches

Condo/Vacation/Second Homes

The Real Estate Alumni & Affinity Council has a great event coming up called View from the Beaches. Our last event had 120+ individuals in attendance and was a definite success!

View from the Beaches is a yearly real estate event that is for individuals that work with international investors or that are interested in condos, vacation, and second homes which talks about data and trends in what brings people to Miami and purchase a vacation home.

Speakers:
Peter Zalewski – Principal of Condo Vultures, LLC
Craig Werley – President at Focus Real Estate Advisors, LLC
Bob Waun – CEO at Vacation Finance – Americor Mortgage, Inc.
w/ special guest – Dr Joyce Elam – Dean of the College of Business for FIU

When: Tuesday, September 28th, 2010 5pm SHARP! Followed by networking event 7-8pm
Where: Texas de Brazil, 300 Alton Rd, Miami Beach (by Monty’s)
Price: $40 prepay securely online

What you get:
1. Great talk
2. Great speakers
3. “All you can eat” dinner
4. Prizes including a very pricey condo report from Peter Zalewski
5. Network. See old friends again and meet new ones!!!

Sponsorship opportunities also available. More information and Sponsorship application may be found HERE

CLICK IMAGE OR THE LINK HERE TO RSVP!

And join us on facebook here!

This email may contain information that is confidential or attorney-client privileged and may constitute inside information. The contents of this email are intended only for the recipient(s) listed above. If you are not the intended recipient, you are directed not to read, disclose, distribute or otherwise use this transmission. If you have received this email in error, please notify the sender immediately and delete the transmission. Delivery of this message is not intended to waive any applicable privileges.

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.

—-

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

Pending Home Sales – A Forward Moving Indicator – Up for 3rd Consecutive Month

In Buyers, closing, Distressed Sales, fannie mae, FHA, First-Time Buyer, flood insurance, florida, foreclosure, government, HAFA, HAMP, Home Buyer, home sellers, HomePath, HUD, lenders, Loan Originator, miami, miami beach, Military, modification, mortgage, NAR, real estate, Self-Directed IRA, Sellers, Short Sales, tax credit, Tax Matters, Treasury on June 2, 2010 at 3:43 pm

Pending home sales surge continues

WASHINGTON – June 2, 2010 – Pending home sales have risen for three consecutive months, reflecting the impact of the homebuyer tax credit and favorable housing affordability conditions, according to the National Association of Realtors® (NAR).

The Pending Home Sales Index (PHSI), a forward-looking indicator, rose 6.0 percent to 110.9, based on contracts signed in April, from an upwardly revised 104.6 in March. It’s 22.4 percent higher than April 2009 when it was 90.6. The April increase follows gains of 7.1 percent in March and 8.3 percent in February.

The PHSI is at its highest level since last October when the index reached 112.4 and first-time buyers were rushing to beat the initial deadline for the tax credit. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, says this second round of surging sales from the tax credit extension looks as strong as the original tax credit. “There were concerns that only a small pool of buyers were left to take advantage of the tax credit extension,” Yun says. “But evidently the tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to surging sales. The housing market has to get back on its own feet and now appears to be in a good position to return to sustainable levels even without government stimulus, provided the economy continues to add jobs.

NAR expects a net of 1 million additional jobs in the second half of this year and about 2 million in 2011.

“The homebuyer tax credit brought close to 1 million additional buyers into the market, which is now helping the trade-up market and has significantly improved the inventory situation,” Yun says. “This stabilized home prices more quickly and has preserved about $900 billion in home equity; in turn, that is keeping additional households from going underwater and risking foreclosure.”

The PHSI in the Northeast jumped 29.5 percent to 97.9 in April and is 24.5 percent above a year ago. In the Midwest the index rose 4.1 percent to 104.2 and is 17.9 percent above April 2009. Pending home sales in the South slipped 0.6 percent to an index of 123.9, but is 31.3 percent higher than a year ago. In the West, the index rose 7.5 percent to 107.9 and is 12.0 percent higher than April 2009.

“A big concern surfacing recently is insufficient time to close the deal at the settlement table. Under normal circumstances, two months would be enough time from contract signing to settlement date,” Yun says. “However, the recent housing cycle has brought long delays related to the short sales approval process by banks, and from ongoing appraisal issues. There could be a sizable number of homebuyers who responded to tax credit incentives, but may encounter problems meeting the settlement deadline by June 30.”

Because of these market challenges, NAR has asked Congress to provide flexibility on the deadline for closing.

Reprinted by permission: © 2010 Florida Realtors®

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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