Watch out for falling home prices

“Foreclosure sales will pick up this spring as mortgage servicers figure out who can qualify for a modification and who can’t,” said Zandi.

He figures there are at least 4.5 million mortgage loans either in foreclosure or clearly headed in that direction. When that additional inventory hits the market, it will provide numerous choices for buyers and encourage sellers to drop their listing prices.         More

Tax Consequences of a “Short Sale” of Real Estate vs. Foreclosure

Excellent article from September 16, 2009 by Michael C. Gray, CPA

Miami Short Sales image

  • How are foreclosures (and deeds in lieu of foreclosure) taxed?

  • Tax relief enacted for recourse mortgage on principal residence debt forgiveness.

  • What happens with a “short sale”?

  • Considerations for rental real estate


Tax relief enacted for recourse mortgage on principal residence debt forgiveness.

Congress has passed and President Bush has approved H.R. 3648, the “Mortgage Forgiveness Debt Relief Act of 2007.” The legislation is effective for discharges of indebtedness on or after January 1, 2007 and before January 1, 2010. The Federal Bailout Legislation H.R. 1424, passed on October 3, 2008, extended this relief through December 31, 2012.

Under the new law, a discharge of “qualified principal residence indebtedness” is excluded from taxable income. “Qualified principal residence indebtedness” is acquisition indebtedness secured by the principal residence of a taxpayer………….. Also, the exclusion only applies to a mortgage secured by the principal residence of the taxpayer.

The election to exclude the income from discharge of principal residence indebtedness is made on Form 982

10 Must-Have Features


The kitchen is still king.

LAS VEGAS — Americans want smaller houses and they are willing to strip some of yesterday’s most popular rooms — such as home theaters — from them in order to accommodate changing lifestyles, consumer experts told audiences at the International Builders Show here this week.

Lenders pursue homeowners after foreclosure

cnnmoneyAs terrible as it is to lose your house to foreclosure, at least it’s a relief to put your biggest financial headache behind you, right?


Former homeowners may still be on the hook if there’s a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these “deficiency judgments” are ticking time bombs that can explode years after borrowers lose their homes.

It can even happen to people who got their bank to approve them selling their home for less than it is worth.

………………………….( click on MONEY icon for more )…………………………But even when lenders are willing, many borrowers may not be aware that they have to ask for release. So, if you are pursuing a short sale, be sure your attorney asks the bank to release you from any further obligation………………

“Banks are pulling credit reports to see if it’s a strategic default,” he said. “If you’re behind on all your other payments, you’re okay. But if you’re not, they’ll come after you.”

If borrowers have any doubts about their risks, they should seek legal advice. Or, at least, call non-profit organizations such as NeighborWorks for advice. According to Doug Robinson, a NeighborWorks spokesman, its counselors always try to negotiate away deficiencies when they facilitate short sales or deeds-in-lieu……………………………………..Robinson himself knows what can happen. He paid off a deficiency after his own New Jersey house went through foreclosure 11 years ago.

Pricing a listing

by Paula Hathawaay Southampton, NY   Prudential Douglas Elliman Real Estate

How are you handling sellers who want you to over-price their homes? It may seem that the owner who insists on a couple of hundred thousand more in their asking price should be accomodated, especially if you are not the only broker on the hunt. But pricing properties properly should be priority #1

As we all know, if a seller wants to sell their property sooner rather than later, you are really doing them no favor if you are not totally straight with them—things are not like they used to be in real estate. Most sellers have an idea of how the recession has affected real estate prices; most however, still believe their house is the best house in the neighborhood and should get more money than the next guy’s. This is not the time to acquiesce just to get the listing.


This is where we come in as professionals; it is first and foremost the priority of all of us to price properties properly. If we don’t inform the seller that his price has to be the most sharply priced in order to sell before his competitors, we have not done our job. Sellers should review:

  • Your comp search .
  • Get out drive past recently sold properties.
  • Understand how an internet search is done by a buyer/agent. If a price is just a few thousand dollars over the available comps, they won’t come up in searches and they won’t get the potential buyers attention.

Now there is no way that an over-priced property will even get shown, much less get sold!My buyer was reluctant to bid on the property which was priced $2million over the market–but he went ahead and told me to put in his bid. I got was a small drop in price—this was last year. The property is still there, still over-priced! Deal is Done

PROPERLY PRICING A PROPERTY IS CRUCIAL TO GETTING IT SOLD!! This is no secret–This is no time to “test” the market, since almost everyone who is  buying now is looking for a good price and in most cases that is the only way deals are getting done!