Palm Beach Gardens Short Sale Help

by Rodney Forbes on August 25, 2009

Are you underwater on your mortgage?

Are you underwater on your mortgage?

Do you owe more on your home than it’s worth?

Did you buy when the market was going up or at it’s peak?

Has your mortgage adjusted to a level where you can’t afford it?

Are you facing a hardship such as loss of job, death in the family or divorce?

Has your request for loan modification been turned down by your bank?

If you’ve answered YES! to any of these questions a short sale may be the best option for you. A short sale is when you sell your home for less than what is owed and the bank agrees to make up the difference.

There are many misconceptions about short sales and how they affect you. Our site and video series on short sale helps to set the record straight.

WithNameCover1 copyRodney Forbes, author and real estate broker for Forbes Realty of South Florida, has written a book titled “Should I Short Sale My Home?” and you can order a FREE copy by clicking here. Rodney works in the Palm Beach County Florida area including Palm Beach Gardens, Jupiter, West Palm Beach and is a Certified Short Sale Specialist.

If you have any questions concerning your particular situation please call 561-337-4810 for a FREE and confidential interview. You can also email Rodney@ForbesRealtynline.com

If you feel a short sale may be an option for you please call Rodney at Forbes Realty of South Florida. 561-337-4810. Rodney is a Certified Short Sale Specialist. or visit http://SouthFloridaRealEstateReport.com and leave your contact information for a free confidential consultation

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In Palm Beach County Florida short sales now make up about 30-40% of pending sales. Although we hear of people having to do home short sales every day, not too many people know the potential tax consequences of the process. The tax relief available for short sales can be equally confusing.

The important thing to get from this article is to make sure to use a knowledgeable short sale specialist for a realtor and have a good tax attorney for advice.

It’s not so unusual these days to have mortgage debt that exceeds the current value of your principal residence. If you hang on to the property long enough, you have a reasonably good chance of riding out the storm with little or no harm done. On the other hand, if you have to sell now, you face what’s called a “short sale” — which means selling for a net sales price (after subtracting commissions and other closing costs) that’s less than the outstanding mortgage debt.

What are the tax consequences of a short sale? The easiest way to explain it is with some examples.

Tax gain on a short sale. Say you paid $200,000 years ago for a principal residence that you could now sell for a net sales price of $300,000. Unfortunately, you also have $350,000 of first and second mortgages against the property because you took out a big home-equity loan a couple of years ago at the top of the market when the home was worth $500,000.

Believe it or not, you’ll have a $100,000 gain for tax purposes if you sell. Why? Because the net sales price exceeds the tax basis of the home: $300,000 sales price minus $200,000 basis equals a $100,000 gain. (Your tax basis equals what you paid for the property plus the cost of any improvements made over the years, minus any past depreciation writeoffs if you rented the property out or used part of it for deductible business purposes.)

While it doesn’t seem fair that you could have a $100,000 tax gain from a sale that leaves you $50,000 in the red with your mortgage lenders, that’s the way the law works. Mortgage debts don’t enter into the gain-on-sale calculation.

Now for the good news: You’ll probably be able to exclude the $100,000 gain for federal income-tax purposes, thanks to the federal home-sale-gain exclusion break. If so, you won’t have to report the $100,000 gain on your Form 1040. You may or may not qualify for the same favorable treatment on your state income-tax return.

Tax loss on short sale. Of course, you can also have a short sale where the net sales price is less than your tax basis in the property.

Say you paid $415,000 for a principal residence that you could now sell for a net sales price of $300,000. You also have $350,000 of first and second mortgages against the property. For tax purposes, you’ll have a $115,000 loss if you sell because the sales price is lower than your tax basis in the home: $300,000 sales price minus $415,000 basis equals a $115,000 loss.

Will the IRS let you claim a writeoff for that loss? Nope. You can only claim a federal income tax loss on investment or business property. A loss on a personal residence is considered a nondeductible personal expense. Most states follow the same principle.

Excess debt. In both the preceding examples, the mortgage debt exceeded the net sales price by $50,000. If the lender won’t let you off the hook for any of that excess, you’ll have to figure out a way to pay it, and you won’t get any tax break for doing so.

If you’re more fortunate, the lender will forgive some or all of the excess $50,000. To the extent debt is forgiven, you have so-called debt-discharge income, or DDI. The general rule is that DDI is taxable income. For the year that DDI occurs, the lender should report the amount to you (and to the IRS) on Form 1099-C. Happily enough, there are some taxpayer-friendly exceptions to the general rule that DDI is taxable. Here they are:

Up to $2 million of DDI from mortgage debt that was originally taken out to acquire, build or improve the borrower’s principal residence is tax-free (you must reduce the basis of the residence by the tax-free amount). This super-favorable rule is not available for DDI from debt that was not used to acquire, build or improve the principal residence, such as DDI from a home-equity loan used for other purposes.

If the borrower is in bankruptcy proceedings when the DDI occurs, the DDI is tax-free.

If the borrower is insolvent (that is, has debts in excess of assets), the DDI is tax-free as long as the borrower is still insolvent after the DDI occurs. If the DDI causes the borrower to become solvent, part of the DDI will be taxable (to the extent it causes solvency). The rest will be tax-free.

To the extent DDI consists of unpaid mortgage interest that was added to the loan principal and then forgiven, the forgiven interest that could have been deducted (had it been paid) is tax-free.

If the DDI is from seller-financed mortgage debt owed to the previous owner of the property, it’s tax-free. However, the basis of the property must be reduced by the tax-free DDI amount.

The important thing to understand is that a real-estate short sale can potentially result in a taxable gain and/or taxable DDI. Thankfully, you can probably exclude the gain from taxation under the federal home-sale-gain exclusion deal, and you might be able to exclude some or all of the DDI, too, under the favorable exceptions explained above.

Source: Wall Street Journal

 

 

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. Call directly at 561-337-4810.

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc.

A short sale of your home is something no one wants to think about, especially not knowing what happens when you sell for less than you owe. This article is hopeful news for many Palm Beach County homeowners in this situation. For a free consultation about your particular situation please call Rodney at Forbes Realty of South Florida 561-3370-4810 or visit http://SouthFloridaRealEstateReport.com and leave your contact information.

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Jun

30

1st-time-buyer-2As home prices remain at bargain levels, and interest rates continue to stay at historic lows, many people are asking for details on the First Time Home Buyer Tax Credit. Who qualifies, when and how do I get the money, are there restrictions?

The following article gives some answers to basic questions as well as the most important answer for most, the expiration date.

According to Keystone Custom Homes, first-time buyers need to be aware that the tax credit is only available now until Dec. 1, 2009 on a closed home purchase. There are other aspects of the tax credit that are important to first-time home buyers, including:

– The tax credit is not a deduction. “It’s much better than that,” says Wisdom. With a deduction, you can only write off the deduction against your total income. So if you make $60,000, you can only reduce your total income by the amount of the deduction, which really isn’t that much savings. For instance, if you have an $8,000 deduction and earn $60,000, you still have pay taxes on $52,000. That’s not much of a savings. But the $8,000 First-Time home buyer tax credit is dollar for dollar. “So you actually reduce your tax payment by the amount of the credit. For instance, if next year, you go to file your taxes and learn that you owe nothing to the IRS, you will receive a check back for $8,000!” says Wisdom.

– First-time home buyers can receive a short-term loan to use the tax credit toward a down payment. In late May 2009, the Federal Housing Administration announced that it will allow eligible first-time home buyers to apply the $8,000 first-time home buyer tax credit to a down payment on a home. This can be done through no-interest loans now available through FHA-approved lenders in the Commonwealth. The loans must be paid back using the tax credit, which is applied to a home buyer’s 2009 tax return. First time home buyers can learn more about this opportunity by talking to their FHA-approved lender or mortgage broker.

For Florida, governor Charlie Crist approved the program as of July 1st. The details of who will administer the program are not clear. The program may be run by the Florida SHIP program.

– The first-time home buyer tax credit is available even if you make good money. The tax credit is available to single first-time home buyers who make less than $75,000 a year or couples who make less than $150,000 a year. “That income covers a lot of Americans,” says Wisdom. “And it’s also based on adjusted gross income. So if you make more than those limits, but deductions reduce your income to those limits, you still might be eligible for the tax credit or a good portion of it.”

– There are ways to receive your tax credit now without applying for a loan. First-time home buyers in essence can gain the benefit of the up to $8,000 tax credit this year by reducing their income withholdings to the amount of the credit. This will allow you to see more cash in your take home pay. And that’s money can then be used toward a down payment or for moving and other costs related to owning a brand new home.

If you have recently closed on a home and plan to use the tax credit, you can also file an amended return for your 2008 taxes and get the tax credit now. Discuss this with your accountant or CPA.

“Obviously, a first-time home buyer should check with their accountant before making any assumptions,” says Wisdom. “But right now, we are seeing record traffic at many of our 24 communities, and much of their interest is due to exceptionally low prices coupled with the Federal Tax credit. Add that to the fact that interest rates, while beginning to rise, are still at near-historic lows, and the combination of these factors makes it the best time in generations to buy a first home.”

Source: Market Watch

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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Comments

3 Comments so far

  1.    real estate web 2.0. on July 9, 2009 1:21 pm Edit This

    There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a “short sale.”

  2.    real estate web 2.0. on July 9, 2009 1:27 pm Edit This

    I just did a short sale on an investment property of mine. I worked with a company that specializes in short sales http://www.HousingAssist.com. They got the process completed for me in under 90 days. I’ve also heard many horror stories so I am very happy it went smoothly.

  3.    foreclosure marketing on July 9, 2009 1:28 pm Edit This

    When the value of a home drops by 20%, it’s tempting to let it go into foreclosure, or work out a short-sale agreement with the bank. But giving up a current home in the hopes of paying less on a future home may cost even more money – or put your finances in a riskier situation.

Palm Beach County home buyers be aware. If you are considering a short sale or foreclosure purchase to take advantage of bargain basement prices, it usually takes longer to close these tranactions, so don’t wait until the last minute to act. Many homes for sale in Jupiter, West Palm Beach and Palm Beach Gardens are having multiple offers submitted.
For more information call Rodney at Forbes Realty of South Florida, 561-337-4810, or go to http://SouthFloridaRealEstateReport.com and leave your contact information.

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You Need to Hear This! : Palm Beach Gardens Short Sales

by Rodney Forbes on August 25, 2009

May

30

If you are a homeowner in distress you need to read this. Short sales are a viable method for getting out from underneath a home mortgage that is driving you into either foreclosure, bankruptcy, or both.

What’s most important in this situation is that you find a Realtor who has specialized training and experience in the field. You don’t want to risk the  future of your home and credit to a novice short sale agent.

Some of the questions you should ask are:

  1. How long have you been working with short sales?
  2. Have you worked on both sides of the sale (buyer’s agent and listing agent)?
  3. Have you rceived any specialized training?
  4. How many of your short sale listings actually close?
  5. Do you handle the bank negotiations personally or have a specialist who is the bank contact?
  6. Have you done BPO’s (Broker Price Opinions)? These reports help banks determine value when short selling a property
  7. What is your online prescence for marketing properties?

Probably the most important thing is whether you feel comfortable withthe agent. Many people feel obligated to the first Realtor who they meet with. Remember, you’re interviewing in the beginning. You need to use the agent you feel will get the job done.

I hope this helps guide you through what is a difficult and trying time. Make sure you have someone who empathizes with your situation and doesn’t treat you as just another listing.

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc.

 

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Comments

More than ever people considering a short sale need an experienced Realtor to assist in the sale. With short sales consisting of around 30% of the homes on the market, you MUST have the best working for you.

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Aug

25

$8000 Tax Credit

$8000 Tax Credit

Many of my buyer clients in the PalmBeach Gardens and West Palm Beach areas have been asking about the possibility of an extension on the successful $8000 First Time Home Buyer Tax Credit into next year. With the time frame for getting a home under contract to qualify for the program getting short many homes in the Palm Beach County area are actually having multiple offers presented.

Although I’m advising people to take advantage of the tax credit now because of affordable home prices and low interest rates, my guess is that the tax credit will be extended, maybe even increased, next year. There are still a large supply of short sale and foreclosure homes on the market.

The following is an excerpt from a Wall Street Journal article.

Not only are some legislators (and real-estate industry lobbyists) already pushing hard for an extension of the tax credit, which will expire Nov. 30, but they’re also arguing that it should be increased, to $15,000, and expanded to all buyers, and not just those who are first-timers. The current $8,000 tax credit emerged in the stimulus legislation that Congress passed in February, replacing an existing $7,500 credit that had to be repaid over 15 years.

“Congress is not going to endanger the fragile beginnings of a housing recovery by letting the credit lapse,” said Howard Glaser, a mortgage-industry consultant in Washington, in this story on July’s strong home sales figures in Saturday’s WSJ. The story noted that Senate Majority Leader Harry Reid, who faces a tough election fight next year in Nevada, a state hard-hit by the housing bust, favors extending the credit.

But columnist Kenneth Harney notes in his latest column that Congress faces a number of high-profile issues (health-care, anyone?) that face Congress upon legislators’ return, and those priority issues could get in the way. “On top of that, a tax credit extension would cost billions in lost revenue — a big negative when the federal budget deficit is in record red-ink territory,” he writes.

Meanwhile, there’s an argument to be made that the housing market is now much closer to a bottom than it was in early 2009 or mid 2008, when the previous tax credits were implemented.  The idea behind those credits, in part, was that they would help give buyers some insurance against future price declines. With housing markets nearing some type of stabilization (at least those for first timers), does that rationale still hold? Many first-time buyer markets are now seeing bidding wars and low prices that could be enough to spur demand without any stimulus.

Courtesy: Nick Timiraos of The Wall Street Journal.

With experts predicting an increase in interest rates later this year and housing demand growing due to the factors above it may be the perfect time to buy a home and take advantage of the tax credit at the same time.

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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Comments

I’m betting on an extension of this tax credit as a further incentive for Palm Beach County home buyers to take advantage of short sale and foreclosure opportunities.

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Rodney Forbes, Realtor and broker for Forbes Realty of South Florida, begins a video series on the myths and facts about real estate short sales. Rodney works in the Palm Beach Gardens area of south Florida and his company’s focus is helping homeowners in distress. For questions regarding your particular situation please call 561-283-6497 or email Rodney@ForbesRealtyOnline.com. For news and information about Palm Beach County real estate visit http://SouthFloridaRealEstateReport.com

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This video may make you laugh and cry at the same time as it spoofs the intelligence of the government officials overseeing the economy and real estate market.

For more information on short sale in the Palm Beach Gardens Florida area, please contact Rodney Forbes at 561-337-4810 or email Rodney@ForbesRealtyOnline.com

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Palm Beach Gardens Realtor Rodney Forbes

Palm Beach Gardens Realtor Rodney Forbes

Palm Beach Gardens Realtor Rodney Forbes was featured in a national real estate teleconference focused on technology, blogging and social media. Rodney is broker for Forbes Realty of South Florida, located in West Palm Beach. Real estate professionals seem to be the last to adopt new technologies, especially when internet sites like Facebook and Twitter are seen as sites for bored teenagers.

Cutting edge real estate agents are understanding the power of social media sites for networking. For real estate professionals, most considered their web prescence to be a website with IDX access for visitors. Few, if any, actually get business from their sites, many costing thousands of dollars to set up and maintain.

“Web 2.0″, as the new internet wave is referred to, focuses on interactive media such as blogs, video and networking sites such as Twitter. Old, static websites are being replaced by free, or mostly free, blog sites and networking platforms. Agents who want to stay ahead of the curve are using Youtube, Twitter, Facebook, LinkedIn and many other “2.0″ technologies.

Click here to listen to a replayof the FREE 90 minute call from Harris Real Estate University. Harris is the largest online realtor coaching program in the country.

If you have any questions regarding the information in this teleconference, call Rodney directly at 561-283-6497 or email Rodney@ForbesRealtyOnline.com

Rodney created his real estate blog using the information in this call. Click here to check it out.

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Short Sale Myths and Facts…Part 3

by Rodney Forbes on August 15, 2009

shortThe topic of short sales and foreclosures seem to dominate the headlines everywhere. There has been a lot written about short sales and whether you should or shouldn’t short sale your home if you’re in this situation. This has led to many misconceptions about short selling your home.

This series is about the myths regarding short sales. Caveat: The rules regarding short sales are different for every lender and are changing all the time as the market changes. ALWAYS consult a real estate attorney and a CPA regarding the particulars of short selling.

Short Sale Myth #3:

Banks don’t accept short sales.

Even in today’s real estate market there is a widely held belief that banks won’t even accept a short sale. Maybe two years ago when the default rate was much lower banks would deny they accepted short sales if you had called with a hardship.

Today every bank and mortgage company I know of does short sales. It’s just a sign of the times. In Palm Beach County about 30% of all real estate listings are short sales. It may take awhile to get them approved but banks would rather do a short sale than to take a property back under foreclosure.

The most important thing to remember when contemplating whether a short sale is right for you is to get good advice from a real estate attorney and CPA.

If you are considering a short sale make sure you also consult with a licensed Realtor(r) who specializes in short sales. In the Palm Beach County area, especially in Palm Beach Gardens, West Palm Beach and Jupiter, Forbes Realty of South Florida is focused on short sales and helping homeowners through the process.

Rodney Forbes, broker for Forbes Realty, has also co-authored the book “Should I Short Sale My Home?”. Click her for your FREE copy.

Watch for the next article in the Short Sale Myths series. Or, just subscribe to the blog and they will be sent automatically.

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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Call me directly for a FREE consultation on your particular situation.
Rodney Forbes 561-283-6497

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chains

The topic of short sales and foreclosures seem to dominate the headlines everywhere. There has been a lot written about short sales and whether you should or shouldn’t short sale your home if you’re in this situation. This has led to many misconceptions about short selling your home.

This series is about the myths regarding short sales. Caveat: The rules regarding short sales are different for every lender and are changing all the time as the market changes. ALWAYS consult a real estate attorney and a CPA regarding the particulars of short selling.

Short Sale Myth #2:

Short sales are impossible and never get approved.

Fact:

Because of the current real estate market, short sales will be around for a long time. The fact that they may take longer to complete than a traditional sale doesn’t mean they’re impossible.

The most important thing to remember when you’re involved in a short sale transaction, as a buyer or a seller, is to make sure yu’re dealing with realtors who are experienced in short sale transactions. Having an experienced team to walk you through the process is essential.

As far as numbers go, for those who think that short sales are impossible and never close, in Palm Beach County, 656 short sale transactions have closed in the last 90 days!

If you are considering a short sale make sure you also consult with a licensed Realtor(r) who specializes in short sales. In the Palm Beach County area, especially in Palm Beach Gardens, West Palm Beach and Jupiter, Forbes Realty of South Florida is focused on short sales and helping homeowners through the process.

Rodney Forbes, broker for Forbes Realty, has also co-authored the book “Should I Short Sale My Home?”. Click her for your FREE copy.

Watch for the next article in the Short Sale Myths series. Or, just subscribe to the blog and they will be sent automatically.

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

 

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Forbes Realtyof South Florida specializes in assisting homeowners in short sale situations. Call 561-337-4810 and we can provide a free consultation to see if a short sale is right for you.

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