I have one client dealing with an Eagle Idaho Short Sale that recently received a 1099-C for over $125,000!  If you are familiar with 1099’s… this is not treated as ordinary income on your tax return.  Thankfully, a 1099-C (C standing for Cancellation of Debt) may not affect you at all.

You see, thanks to the Mortgage Forgiveness Act of 2007, the tax burden for cancelled mortgage debt for primary residences may save you!  This Act which has recently been extended through 2012 is a lifesaver for people going through Foreclosures and Short Sales!  This Act allows up to 2 Million dollars (1 Million if married filing separately) to be excluded.  The key is the primary residence – this doesn’t apply to rentals, 2^nd homes, or investors.  Read more here at the government’s website.

What is “Cancellation of Debt”?

If you are going through a foreclosure or short sale, your lender is going to receive less than what is owed on your mortgage(s).  For example;

Original Purchase Price:              $300,000
10% Down Payment:                        $30,000

1^st Mortgage:                                    $243,000
2^nd Mortgage:                                    $27,000

Mortgages combined:                 $270,000

Through either the foreclosure or short sale, let’s say the lender is able to recoup $225,000 on this home.  There would be an unpaid balance of $45,000.  Nearly all the 225,000 will go to pay the 1^st Mortgage, and a small portion ($3,000) will go to the 2^nd Mortgage.

Your lender(s) may 1099-C you for $45,000, which is referred to Cancellation of Debt.

Question? Does this mean you’re off the hook for the $45,000 (even though the lender approved the foreclosure or short sale??).

Answer! NO.  You are still liable (this may depend on your state and whether you loan is a “recourse or non-recourse” loan.  Often the 1^st will be settled in the transaction, but lenders are going after homeowners for the 2^nd, HELOC’s, and if you did a loan with Mortgage Insurance… they may try to get a deficiency judgment.

In Idaho, lenders currently have 90 days for the 1^st Mortgage, and 5 years for the 2^nd to seek a deficiency judgment.

New legislation has been written to help with deficiency judgments (Program is called “HAFA”).

Like with any large decision, the discussions with a licensed real estate agent can and should get a lot more in-depth.  I hope to have gotten the ball rolling in that direction for you!

If I did, please give me a call so we can talk more about this!!  I can be reached at  208-288-2976 or at paul@Idahorealtyinfo.com.

Follow me on Facebook: homes@idahorealtyinfo.com

I look forward to talking to you soon,

Paul Wallin

Idaho Realty Info at Group One

Boise Home Sales, Eagle Home Sales, Meridian Home Sales… it’s doesn’t matter where!

Let’s talk plain English here… as I think you’ll agree, it’s simple to see;

• A few years ago, loans were given out like candy… just ask and you could get it!  Too many people were allowed to purchase homes that were far beyond their means should life change.

• When the economy dipped many of those people either lost their job or had their salaries slashed.  Life changed.

• Home values continued to slide down, mainly because new homes coming on the market were “Short Sales and Foreclosures”.  The volume of clearance rack homes reduced the overall average… and home prices slid fast!

So these three big factors;  Bad Loans, Economy Dropped, and Home Values Sank created a correction, a much needed one (but not wanted!)

Here’s a fantastic graph that shows this to you visually.

Look at that graph (click on it to make it larger) and notice the Yellow Box.  This graph goes back to the 1890’s… but in recent times (we’ll say 1970 and forward), you can see that every 5 years there is a correction.  It’s very noticeable with the peaks in 1979, 1989, and obviously in 2006 (give or take a year there).

The economics behind making money is simple:  Buy Low, Sell High.

Real Estate over the course of time has been a solid investment! But, if you bought in 2005 and want to sell now… that’s the problem.  And if you can afford it now, even a bigger problem!

So ask yourself again.. What state are we in – in Idaho Real Estate??

I can tell you… WE ARE IN THE HOME BUYING MODE!!! The time to buy is now!!  Why?

• LOW Interest Rates
• TAX Credits
• Opportunities to purchase homes at reduced values with a selection of inventory to choose from!

If you’re a homeowner: In years to come you’ll make up the loss on the property you sell today, you’ll live in possibly a newer home, maybe a nicer home, and most likely will pay less which to me equals… you’ll make out better in the long run!!!

If you’re an investor: Take advantage of great properties in areas that have rebounded and I’ll show you the cash flow!!  For those who have the opportunity, now is the time to buy for your future retirement!

I buy and sell homes in Meridian, Eagle and Boise Idaho!  I’m a keen observer to trends , to analyzing values, and the especially paying attention to detail!!

Call me at 208-288-2976, or email me at paul@idahorealtyinfo.com to set-up a “REAL REVIEW” and let me help you find out where your next Real Estate opportunity lies!

The supply of homes in the Treasure Valley market is now the lowest it has been since mid-2006!!

Real Estate Professionals and builders would like to see the supply tighten even more.  But they say the market still has plenty of good deals for first-time buyers and for repeat buyers who want to “move up”.

For homeowners trying to sell, the latest news is good and bad.  Sales are increasing, and the average number of days properties sit on the market has dropped from the mid-90’s to the mid-80s.  But median prices in Ada County fell nearly $8,000 from September to a level not seen since 2003!

The increase home sales in part reflect opportunities for buyers like the $8,000 first-time home buyer tax credit, lowered home prices from short sales and foreclosures and low interest rates.

A new law signed last week will extend the temporary tax credit for first time home buyers, which was set to expire Nov. 30.  The extension should continue to spur consumers.  And, an additional tax credit of up to $6,500 for repeat buyers who have lived in their home for five of eight consecutive years should fuel additional sales.

The number of single-family homes listed for sale is down from two-year highs of 5,098 in June 2008 in Ada Count and 2,765 in July 2008 in Canyon County.  It’s in the range of the four-year lows of 3,195 homes in Ada and 1,373 home sin Canyon – both in May 2006, shortly before the Valley’s housing bubble began to burst.

There is an estimated seven-month supply of homes – the amount of time it would take to sell them if no new housing were added – while Canyon has about eight-months’ worth.  A normal supply is about four worth.

So… what does this mean to you and I??  With interest rates low – its making it a better time to sell your house!!!!  Do you know what your home is even worth in today’s market?  If not, contact Paul Wallin, Realtor for Idaho Realty Info at Group One (208-288-2976 or paul@idahorealtyinfo.com) and let him do a Market Analysis on your home.  You may be surprised that your home is worth more than you thought – and the opportunity to sell and move-up is a very viable option!!!

Door and window tracks have drain holes to let rainwater or condensation flow out. When these holes get plugged with debris, the water comes inside your house and can damage adjacent floors and walls. 

Cleaning the tracks unplugs blocked drain holes. While you’re at it, lubricate the tracks so doors and windows open and close more easily.

Steps

1. Slide all sections of the door or windows to one side or remove them entirely, if possible.
2. Vacuum the tracks.
3. Use a wire to clear the drain holes on the exterior walls of the tracks.
4. Rub a lubricant stick or candle back and forth along the tracks a few times.
5. If you did not remove the door/window, slide the door/window sections to the other side and then clean and lubricate the remaining section of the tracks.
6. If you removed the door or windows, put them back into place.

_____________________________________________________________
Green alternatives
To save energy, use a rag instead of a vacuum cleaner.

You just listed your house, listed it at the price the Realtor suggested, moved over half your belongings into storage at your Realtors urging, taken down photos, and cleaned up the house including painting (your home has never looked so good!).  You’ve held Open Houses, had a few showings, and… NO OFFERS.

When a home won’t sell – it’s usually one or a combination of several factors:

You just listed your house, listed it at the price the Realtor suggested, moved over half your belongings into storage at your Realtors urging, taken down photos, and cleaned up the house including painting (your home has never looked so good!).  You’ve held Open Houses, had a few showings, and… NO OFFERS.

When a home won’t sell – it’s usually one or a combination of several factors:
Price | Condition | Location | Accessibility | Marketing Efforts

Pricing is KEY!!
Most homes don’t sell, or get offers, because they are priced incorrectly.  Even in today’s market – well priced homes are selling!  There is often confusion about what a home is worth – and what it will sell for (two completely different figures).  Also, how much is your home?  Low cost homes are selling due to the First-Time Buyer Tax Credit.  Homes that are priced and require financing over and above the conforming loan limits are moving at a much slower pace.  The reason – The credit crunch (hard to get loans!).  According to Wikipedia, Fannie and Freddie currently own or have guaranteed about 50 percent of the U.S. $12 trillion mortgage market. Conforming loan guidelines include a maximum loan amount determined by geographical region as well as the requirements to meet certain downpayment, credit and debt-to-income requirements. In most areas, the maximum amount that you can obtain for a conforming loan is $417,000. Thus, if your property is priced more than $450,000, the reason it may not be selling is that buyers are unable to obtain financing to buy it. A second reason is that if your home is a “move-up” property rather than a first-time-buyer property, your potential buyers may be unable to sell their existing properties in order to buy your property. 

If your property is too expensive to fit into the conforming loan category and you have a considerable amount of equity in your home, some sellers have been able to sell by carrying some or all of the buyer’s financing. In fact, 35 percent of the properties in the U.S. are free and clear. 

This can be an excellent way to bridge the gap between a conforming loan and what you need to close the transaction. If you need the cash, there are investors who will purchase your loan at a discount. The longer the loan is in place (i.e., “seasoned”), the better the price you can obtain.

Condition
Does your house show like a model or is it a mess? How does the house look from the street? Is the landscaping attractive, grass cut and green? Is the exterior well maintained? Is the house cluttered with your personal belongings or have you cleared out as much as possible? As my listing agent said when we listed our house, “It’s not your house anymore.” Your goal is to help the buyer imagine that your house is their future home.

Location
“Location, Location, Location!!” – the old cliché is still true as the day it was first said!  There’s not much you can do about where the property is located. The only option is to make sure the price is adjusted accordingly and the house looks great!

Accessibility
Can a Realtor access the house easy?  Is there a lockbox?  Do you have animals inside the property that could keep people from showing it? Do everything in your power to make showing your house as easy as possible.

Marketing
How is your home being marketed??  Your Realtor should have a written marketing plan that they presented to you at the listing appointment.  Here are a few key items;

• Get professional photos taken
• Have your agent make a video tour, post it all over
• Did your agent list you on Realtor.com, the Multiple Listing Service, plus over 30 online portals (try googling your home address… what do you see??). 
• Did your agent secure a location specific URL for you (500EshoreDrEagle.com)
• Place an add on craigslist.com

If you are finding that your agent either has no idea how to do this, or hasn’t taken the initiative – when your listing expires search for someone who does.  If your home isn’t selling – go through these one-by-one and see where you may be having trouble.  If you find a challenge – bring it up to your agent today (don’t wait!!!).

And, if your listing has expired and you want help – call me,
Paul Wallin, Realtor at 208-288-2976.

A CMA, or Competitive Market Analysis is your best method to determine your home’s current value.  At one time, your home mirrored others nearby in your neighborhood (the builder may have rebuilt your model several times).  But over the course of time, your home became unique. You may have added to it, updated it, and increased its value as compared to others in your neighborhood.

If you’re starting to think about selling your home… you’ll want to start by reviewing a well thought out, properly researched CMA.  For most, a CMA is the single biggest factor in determining if they will sell their house or not.  As a potential seller, a CMA is free for you.  Do not ever pay to have one done. 

There are online sites you can play with to help value your home.  But these sites are only based on past sales… so if nothing has sold near you recently then the pricing may be skewed.  As you interview agents, you’ll be able to tell who is in touch with the market as the CMA presentation should speak for itself.

How is a CMA prepared?
First, an agent will walk through your home.  Don’t worry too much about the condition of your home at this stage.  Later on when your home is for sale… the condition is a huge factor.  Let the agent know of improvement items and other changes you have made to the house.

Next, the agent will research information about comparable properties in the area using the MLS (Real Estate industry resource call the Multiple Listing Service).  The agent will review and compare homes previously sold, active listings, pending sales, and expired or cancelled listings to your home.  By taking all these homes and the stages of being sold into account, along with changes made to your home – the agent will come up a report to present to you.  Often, you will find a “price range” rather than a set price in the CMA.  Also, the agent may write up a brief explaining differences in homes.

The ultimate goal of the CMA is to provide you research to better help you make an educated guess in pricing your home.  The agent will help with this (given their expertise in the local real estate market) but ultimately – it’s your money, it’s your decision!

Are you thinking about selling your home possibly?  Call or email me for a FREE CMA!! 

Paul Wallin, Realtor
208-288-2976
paul@idahorealtyinfo.com

Continue your summer watering schedule through this September. This month also begins the rebuilding season for Southern Idaho lawns. The cooler nights let the grass breathe a sigh of relief from the heat. This is the most important time of the season for fertilization. We recommend two end-of-season lawn feedings. The first in September and the second six weeks later in either October or November. Fall is the ideal time to also feed the trees in your yard. Long before the leaves change color they stop taking up nutrients and take in less water.

• Check for lawn thatch build up. If there is over ¾ inch, it is time to de-thatch.
• Reduce mowing height down to fall leaves and continue mowing frequently to recycle organic material back into the soil.
• Fall is also the best time to reseed grass. If you have bare spots from the summer, put down a seed mix that matches the yard during the first 15 days of September. Yards with crabgrass will notice the patches turn purple with the first frost. It is important to thoroughly seed and water those areas.
• During the first 10 days of October, take care of those pesky weeds and dandelions. Spray a liquid broadleaf herbicide over the yard. Weeds germinate in the fall, so by treating the problem in October, there will be fewer dandelions in the spring
• It’s important to get those leaves off the ground as to not suffocate the lawn. But a better option would be to grind up the leaves and mulch them back into the yard. Most lawnmowers have blades designed for mulching. This provides natural nutrients and can be an organic weed controller — particularly maple leaves, which are a natural herbicide toward dandelions.
• Play with the fall colors. Display potted mums. Think red. Dogwood bushes are cold-weather hardy and have red or yellow branches. Holly is another great way to decorate the outside of a home, where the bright red berries on the branches can standout.

Hiring a top-notch photographer can cost as much as $1,000, but a good amateur working slowly and thoughtfully can probably manage to do the job effectively.

Here are some suggestions:

• Take lots of shots. Unlike film, digital pictures have no individual cost, so shoot as many photos as possible from many different angles. The more you shoot, the more you increase the likelihood of getting some good ones.
• Avoid shooting empty rooms. While clutter isn’t good, having some furniture and even a few personal items makes the photos more interesting.
• Put away clutter. Dirty clothes on the floor and dishes in the sink are all turn-offs.
• Get the light right. Shoot an exterior when the sun illuminates it or it will look flat.
• Make sure the inside is well lit, ideally with some sunlight.
• Edit discreetly to get rid of extraneous distractions like wires.

Source: The Wall Street Journal, June Fletcher

Sales up, Inventory down.

The market continues to show an increase in activity as new sales (pendings) of homes in Ada County were 59% higher this August than in August of 2008.  Closings were up 11% while inventories have shrunk to 75% of last year’s level.  The absorption rate, based on the last 12 months of closings, is at 8.9 months, the lowest in over two years.

Pendings in Canyon County were 61% higher than the same month last year,while inventory is 74% of last year’s level.  The absorption rate is at 10.6 months.

90% of year-to-date closings in Ada and Canyon Counties were below $300,000.  The median price this year in Ada County is $178,000 and in Canyon County is $119,000.

35% of all closings this year in Ada County were listed as financially
distressed properties compared to 59% in Canyon County.

If you find yourself needing help in the Real Estate Market – please give me a call at 208-288-2976 or drop me an email at Paul@IdahoRealtyInfo.com.

The nation’s second-largest home insurer, Allstate Corp., says the number of homeowners converting their homeowners insurance to landlord policies rose 27 percent in the first quarter of 2009.

Recently I’ve started offering property-management services for all my absent owners, many of whom are convinced it will be easier to sell in a couple of years.

Holding on probably isn’t the best answer, says economist Edward Leamer, director of the UCLA Anderson Forecast. Leamer suggests negotiating a short sale instead. “Better to take your losses and move on.”

Another factor to consider is whether renting will reduce or eliminate the value of the capital-gains tax exclusion. Federal tax law requires living in the home at least two of the previous five years to qualify for the full capital-gains tax exclusion when the house is sold. Of course, if there is no profit to be had, then this isn’t a problem.

Source: The Wall Street Journal, M.P. McQueen