Realty As Is » Tax Credit

How to avoid the Tax Credit selling Train Wreck in Salt Lake

Tom Winand — Sat, 20 Feb 2010 18:28:03 +0000

From now until the end of April in Salt Lake County, there will be more offers written on homes for sale then there will be in all of 2010. Good news for home seller Right? We’ll maybe if you keep your guard up. I have to say the 2010 Home Bing Tax Credit expiring at the end of April will cause a real train wreck of buyer putting in multiple offers on lots of peppery and not really having intentions or means to buy them all. I talked to one buyer that has 6 offers in on short sales and said they would take the first one. I would bet there will be a lot of buyer doing the same with short sales and also having a non-short sale in the mix. I would bet the contract would go something like this closing on or before June 25 2010. I would bet the loan denial date would be like June 20 so they can back out of the transaction If they get a short sale a great deal and the poor home sell missing selling their home and because they Tax credit won’t be extended this time for a couple of months they will probably sell for a lot less money. The government is pulling out of subsidizing the home buying industry. They are raising the Treasury Bill rate and they will probably end the home buying tax credit. The reality is the real estate market in the country will come to a screeching halt in Aug and Sep so then they will act in November to the crisis. The government will get all in arm’s Barany Frank will get up and tall like he a concerned government superhero that know everything and it will be big news and big grandstanding and a new Tax credit form Nov 2010 to April 2011 will come out pretty much the same as today’s is it will have first time home buyers credit of $8,000 and 2^nd home buyers credit of $6,500 it they have owned for 5 years.

Back to my point how do you as a home owner not miss the best selling time with a bogus offer? We’ll you take a little piece of the short sale addendum allowing the property to stay on the market active because the offer is not binding. You can have multiple offers to buy the seller can accept all in order. The seller accepts an offer in first position and gives them a first offer the right to match the offer. Match what you say Price and ability to close. So there is no binding contract until the buyer shows the ability to close. Make the primary offers earnest money (at least 1% of sales price) non-refundable unless the inspection finds an undisclosed pertinent and substantial fact that affects the value of the home such that it will deter future home buyers, that he seller is unwilling to correct. So not the first offer ready to close force the primary offer to step up and match it or lose their earnest money if they back out. You may want to do 2% that how strongly I believe seller will be take advantage of in this crazy buyer purring in multiple offers. Some buyers will not disclose they have a home to sell. All listing agent should put a Q & A addendum do you own another home. Will you have to sell or rent the home to qualify? Then get a Pre Qualification letter stating the lender knows of this and they buyer qualifies without selling the home.

If you’re an agent or sell take this to heart it will be happening making offer on multiple property. It’s probably unethical if you don’t disclose it to the seller but agent think they can just put in contingency that will allow the buyer to back out. Like financing oh they can’t buy 2 home so they don’t qualify. Right we need to hold this kind of activity accountable but how?

Are 45% of Utah Home Owners are upside down in there home?

Tom Winand — Fri, 27 Nov 2009 23:28:40 +0000

Below are headlines from articles in National Association of Realtor news letter of the week

# 1 Headline Existing-Home Sales Record Big Gains

# 2 Headline One-Fourth of Borrowers Are Underwater

# 3 Headline Indicators Suggest More Housing Weakness

What is the news trying to say? Are thing getting better worse what is up with the media. We’ll yes they are woes and yes some may be better. The question isn’t what happening it’s why is it happening. Tax credit expiring cause people to runs out and get a home under contract. They probably rushed to put a home under contract before the credit expires and settled in some cases.It then got extended for a few months and I predict a lot of contract will be withdrawn. I can see it in the activity since the announcement on my short sales. No one saw it before because you couldn’t get a short sale closed before tax credit expired but now lots of showings. What does it men with the other ominous headlines of upside homeowners and more housing weakness recoded foreclosures. Well we having had the market reach equilibrium between the need for housing at a specific payment and the ability to qualify. SO we don’t have the home prices equal to what people will pay on a monthly payment equaling what home cost or better can be sold for. What next more lost home to foreclosure and more banks looking lots more money. That what has to happen. In Utah a $400,000 home has to get down to a $280,000 home. Sure it use to be a $600,000 home in 2006. That has no bearing on it. It’s simple supply and demand Economics 101. What do you do depending on what side buying or selling you make a plan that is best for you and you call me and execute it. That’s the best I can do with out writing 10,000 words on both. I writ at 30 words a minute but I speak at upwards of 100 with gusts in the 130′s LOL.

My educated guess in ut is were in the AZ range of 45% upside down home owners. My guess for AZ is it’s really more like 70% because of the real drop of home value there.

Daily Real Estate News | November 24, 2009

One-Fourth of Borrowers Are Underwater
More than 23 percent of people with mortgages owe more on their properties than they are worth, according to a report released Tuesday by research firm First American CoreLogic.

Another 2.3 million homeowners are within 5 percent of being underwater, bringing the total of those who are upside down or close to it to about 28 percent.

About 5.3 million U.S. households have mortgages that are at least 20 percent higher than their home’s value, the First American report says. Borrowers owing more than 120 percent of their home’s value are the most likely to default, First American calculates.

The majority of underwater mortgages are in the following states:

Nevada: 65 percent of home owners are underwater
Arizona: 48 percent
Florida: 45 percent
Michigan: 37 percent
California: 35 percent

The report also notes that most U.S. homeowners have home equity, and nearly 24 million owner-occupied homes don’t have any mortgage at all, according to the U.S. Census Bureau.

Source: The Wall Street Journal, Ruth Simon and James R. Hagerty (11/24/2009)

What the heck is going on with buying a short sale in salt Lake?

Tom Winand — Thu, 24 Sep 2009 18:16:05 +0000

I was looking at this post on Trulia.com a question about short sale buying and I couldn’t help buy write this post.

How to buy a short sale.?

What are the steps to take in buying a short sale, from start to finish. How long does the process take? And can the $8000 tax credit be used? The home is located in Plainfield NJ. Thank You.

It was bothered by the agents standard answers of 3 to 6 months to get bank approval and not looking at why a buyer is asking this question in the first place. They are frustrated and want to buy a property at a good price don’t bon truest the listing in there local area because we as MLS and agents have allow a mockery to be made of the MLS. My to the question is.

I have read the answers and know short sale very well form both the seller and the buyer perspectives. Short sales are a big problem in the real estate market right now frustrating buyers and buyer’s agents. Unfortunately some agents are using this problem of selling excess inventory to take advantage of the banks, and steel the properties for investors. With the intention to resell the property simultaneous to the public looking for a retail buyer and make big profits off home owner in or facing foreclosure. This is causing the home buying public to not trust realtors that they can find them the good deals out there. So the public is going to the listing agents to make offer on short sales and they find out after signing an exclusive buyers agreement, that the property had an investor offer or was under contract with another offer and there offer was one on many back up offers. So what’s going on? I see 3 big problems with short sale listing:

Agent’s use them as an advertising source to get buyer interested in a home that is listed way under value. To get buyers to call them and sign an exclusive buyers agency agreement locking them into buying for 6 months. I bet this is even the case in the few states that don’t allow Limited Agency. They probably circumvent that by using a team and Referral Agreement between agents. While this is going on the agent has an investor off in to the bank and is gather these names to buy the home form the investor either as simultaneous close or in 90 days as allowed by FHA.
The investor simultaneous flip. Agent gets an investor to make a very low offer and they work with the bank to get this accepted or countered at their banks drop dead point. Then while they are doing this the agent keep the property active on the MLS liking for buyers willing to pay close to retail price so they can make $20,000 or more on the simultaneous close. Usually the investor is the negotiator so they have no real interest that a short sale gets approved its how much money they need to make. Unfortunately this causes some home to be sold at foreclosure sale. The worst is asking the seller to Quitclaim the property to then buyer and stall the bank for 90 days so the new buyer can simultaneous close with a FHA buyer because FHA requires 90 days of ownership. I wish the banks would get smart and ask for a current title search for the title company with chain of ownership like lenders require. That would stop this fraudulent and dangerous practice the bank would say no sale and turn it over to the federal task force investigation this. Oh yea if your doing this it’s real and I have talked to them and advised them on investor groups doing the quitclaim scam. Any agent that would even consider having his client give his property ownership to some investor need to be expelled from the National Association of Realtor and sued for breach of contract.
Some agent’s don’t know what they are doing on a short sale and should not be attempting it. Like the FHA and VA rules and the HUD form you have to fill out to get a short sale approved prior to listing it. They have specific rules forms and % of net to the bank that you must be within. If you don’t know that please don’t list short sales.

So what can you do as a buyer or buyer’s agent? First off make reasonable offers. Do the work on want a good retail price for a home is. The bank would give the property away. In most cases it 86 to 88% of the current retail price net after closing cost, yep based on the dredged banks BPO(Broker Price Opinion. What do you do with the listing agent you ask if an offer is accepted and presented to the bank? If no make an offer that clearly states when accepted your offer will be exclusively worked on with the bank until the bank reject your offer. If they don’t feel your offer is high enough for that, then have a first right of refusal if any other offers come in you have 48 hours to make your offer match their more desirable criteria or back out of first position. Also have a time line for presentation to the bank 72 business hours after acceptance of the owner.

If there is an offer find out if there are back up offer or if you can be the primary back up offer with the same binding contract if now walk away. Now please as a buyer make a reasonable offer base on the sold comparables. With your agents determine the reasonable retail value of the property per above guidelines. Now if prices are dropping 5% a month ok offer 5% less than last month’s sales. Use your agent and do the home work and the bank will accept your offer. If you offer 50% the bank will put it in a stack of file that won’t be worked on.

It makes me nuts to see agents accepting offer after offer on a property. Buyers have rights! You as an agent need to advise your seller on accepting a good offer on the property based on it selling criteria. Agent and seller have to assume the responsibility to accept good offer and maybe then banks would be able to complete them on 20 to 30 days. I want to see the term low ball offer to get the ball rolling taken out of our language as Realtors. Lets replace it with we have an offer or we do not have and offer the owner accepted or we have an offer with a price contingency? Let’s make the buyers feel valued again.

Embarrassment to the State The New Utah Home Run Grant!

Tom Winand — Sun, 06 Sep 2009 22:51:35 +0000

How about a real alternative Realty As Is Grand Slam Grant!

Utah Legislature has used the last 1/3 of the Utah People TARP funds, allocated to the state of Utah, for New Construction Home Buyers Grant. I guess they had to give the development companies more assistant to sell their overpriced, new construction home!!!! There are a lot of programs that really would have benefited home buyer a lot more if the legislator really wanted to stimulate the real estate recovery in Utah. Like why doesn’t Utah have a, loan of the first time home buyers tax credit, so they can use it for their down payment? HUD has approved this and Utah housing, the administrator of the Home Run Grant, is really the only entity in Utah that could do it and their answer to me when I ask them why it wasn’t being provided as a program? Was they didn’t have any Money to do these loans! So why didn’t the legislator allocate the fund for this up front loan of the $8,000 first time home buyers Tax credit I don’t know? Were creating our own Home Buying Program the Realty As Is Grand Slam Rebate 1/2 of Our the Buyers Agent Commission. An Home Any Price Any Use Just buy with us. Short Sales Bank Owned Tax Credit Utah Housing Loans we Just want you to get a home and a real incentive!!!

The reason why many home buyers don’t buy now FHA requires a 3.5% down payment from their own fund or a gift form a blood relative. HUD did away with 100% purchase gifting down payment plans and raised the down payment requirement form 3 to 3.5% in the last tax credit for first time home buyer legislation. Sure Utah Housing has a 106 % program but the rate is 1% higher on the 97% first mortgage and 2% on the 6% 2^nd mortgage above the going FHA Rate. People what to buy a home with no money down and have a 5% 30 year rate that is it. Is that right or wrong I don’t know but it is real and that is what we’re about on this blog, Reality! We had the opportunity to do that and use that money from the Tarp to fund a real first time home buyers program and we didn’t. So instead what we have done is give the home builder more incentive to build home that we don’t need. We’ll I don’t get! We have thousands of short sale on the MLS in Salt Lake County and only a few hundred existing new construction homes that are complete and ready for home owners to buy. People are trying to sell their home and avoid foreclosure and the public wants to buy these homes and no help from Utah! I see this is a way to line home builder pockets so they can sell there over priced inventory and we pay for it, it’s a real sucker punch to the Utah people. I’m not even sure how well this will go over. Why buy a new home $15,000 to $50,000 overpriced to get a $4,000 Grant. I’m sure Miss Utah and the home builders will be advertising the Heck out of it.

We’ll I have a grant for you home buyers!

I will give you a free grant of ½ of my buyers commission so on a $250,000 shot sale that is $3,750 free money and you can buy a existing home or a new construction no income limit, investment or primary residence. How is that for a grant? I’m calling it the Grand Slam Home Run Grant!

Listing details of the home Lets look at how it works compared to the home Run. You can buy a listing like my short sale in West Jordan. You could offer $275,000 with seller paying $8,000 in closing costs and you would get a rebate of $4,200 on my Grand Slam Home Run program. If your would rather than buy the same home in the same development from Ivory who built this one for $350,000 and get a $4,000 Home Run grant rather then get my Grand Slam grant form me you can! Here is what you would get each way.

Grand Slam Rebate

Get a FHA 5% fixed 30 year going rate and have all your closing costs paid and help out a short seller.
You get the home for $275,000 not $350,000 so you have $75,000 less in loan @ 5% your saving is $402 a month or $4,831 a year in payment!
You’ll have equity in your home from the start as opposed to being upside down.
You home payment will be P % I $1,476 as opposed to $1,878 Wow.
You get a cash rebate of $4,200 after closing. Spends it on whatever you want, probably the back yard on this home!

Who is Eligible for the RealtyAsIs.com Grand Slam Grant!!!

Every one that buys from me as their realtor.

Home Run

You get a home buying grant of $4,000.
You get to be the first to live in your home.
You may get to pick the carper and paint form a few choices the builder gives you.
You get to say you built the home?
You P& I payment is $1,878you have to pay your own closing cost or add them on top and use your grant.

It you really want to see the details on the Utah Home Run Grant hear your go.

The Home Run Grant FAQ Home Run Program PDF Link

Eligible Listed Property Link

Who is eligible to receive a $4,000 Home Run 2 Grant?

Home buyers (any person taking title) must meet the following income restrictions:
- Single person, maximum income, $75,000
  Married couple, maximum income, $150,000
- If more than one unmarried person is taking title to the Eligible Home, each such single person is subject to the $75,000 income limit.
- Income calculations will be determined by the Adjusted Gross Income as verified by the Approved Lender using the 2008 IRS Federal Income Tax transcript obtained directly from IRS or from an authorized third-party vendor.
- Home buyers must occupy the purchased home as a primary, permanent residence.
If home buyers need a mortgage loan to purchase the home, the loan must be a fixed interest rate, amortizing mortgage loan with a term of 30 years or less.
The Home Run 2 Grant Program is effective only for home purchases closed after a Home Run 2 Grant Commitment has been issued for that specific transaction. The grant funds may not be issued for homes purchased prior to obtaining the Home Run 2 Grant Commitment and may not be used by Home buyers who received the $6,000 grant under the previous Home Run Grant Program.

First time Home Buyers $8000 Tax Credit, it’s time to jump in the game

Tom Winand — Sat, 08 Aug 2009 00:31:45 +0000

It you’re a first time home buyer and your waiting to get a good deal save money or just haven’t had time to get in the home buying game, I have news. The First Time Home Buyers $8000 free, Tax credit expires November 30 2009. With the new disclosure laws it will take 45 days to close a loan. So if you don’t have a property, not a short sale under contract by October 15^th you’ll be in big trouble! If you want to get the best deal a short sale you should have a few under contract now. Don’t’ wait until the last minute. You see this is a people phenomenon. We put off things and rush at the end. We’ll if it goes the way I foresee all the lower priced homes will have a feeding frenzy in September, lender will get back up. Short sale will get backed up and won’t get completed by the deadline. It will be like the days after Thanksgiving accept for home. Let’s avoid the big lines and get you shopping now. We’ll show you how to get and additional $4,500 on a $300,000 home!

Who is a first time home buyer? People that haven’t owned a home in the last 3 years. Married couples I’m sorry if you spouse has owned one but you have not you don’t qualify. Even if you got divorced and gave the spouse the home if your name was on a home as an owner you don’t qualify. If you co-signed for a home you’re on as an owner and you don’t qualify. If you don’t have the income and you need a non-occupying co-borrower that’s Ok you do qualify for the credit because the credit can be split or moved around to any qualifying buyer of a home. You can have a Mom, Dad or Grandparent co-sign on a FHA loan and as long as your not married to them it all good. You don’t even have to have a job to qualify for an FHA loan as long as your co-borrower is well qualified.

Can my down payment come for the Tax credit? No in Utah we don’t have a program to loan you the tax credit so you can use it for your down payment. You can borrow form a 401 K or get a gift form a blood relative and use the Tax credit to pay back the person. No gifts can be required to be paid back but nothing says you can pay them back. So how do you buy a home with no money down; we’ll if you qualify you can do a Utah Housing Loan. How do you qualify you don’t make more than the limit. Salt Lake is $64,000 family income up to 2 people in the family. Sure the rate is 5.7% but that’s not too bad.

How do you get the tax credit? We’ll you fine an amended tax return and have it in a few of weeks. Actually I have seen on line from 4 to 16 weeks. I don’t know way some take so long. It might ne shorter now that was for May and June of 2009.

So let’s get you out and shopping for a new home this month. For the month of august I will give you ½ of my commission back as a rebate if allowed by your lender

How do you get more of a Tax Credit we’ll we at Spotted Home have put our own stimulus Package together to give you a Rebate. We’ll give you 1/2 of our commission or on a 3% buyer agent commission you get 1.5% of the sales price as a gift. We won’t even make you qualify as a first time home buyer. So buy a $200,000 home with the 3% Buyer Agent Commission and you get $3,000 as a thank you. State administrative code 6.2.12 allows me to give you a gift for buying with me. As long as your lender says it is ok. The minimum commission the company can earn is 1.5% of the sale price so if the commission is 2.0% you would receive 1% of our commission as a gift. Wow now that a stimulus package.

6.2.12. Gifts and Inducements. A gift given by a principal broker to a buyer or seller, lessor or lessee, in a real estate transaction as an inducement to use the services of a real estate brokerage, or in appreciation for having used the services of a brokerage, is permissible and is not an illegal sharing of commission. If an inducement is to be offered to a buyer or seller, lessor or lessee, who will not be obligated to pay a real estate commission in a transaction, the principal broker must notify the party who will pay the commission that the inducement will be offered. This rule does not authorize a principal broker to give any type of inducement that would violate the underwriting guidelines that apply to the loan for which a borrower has applied.

First time home buyer don’t wait until the last month get out while the shopping is good and you may be able to get a short sale if you have a great agent like me.

More info on the First time home buyer Tax credit of 2009