Archive for the 'Real Estate News' Category
Wahoo We Are Somebody
May 31st, 2009 Categories: Real Estate News
Real Estate Agents Win IRS Battle Over Status
Rental income is called passive income for tax purposes, there is nothing passive about collecting rent. It also has to do with passive losses. The passive loss guidelines that were put into place were because at one time it became more profitable for some groups to buy property just for the losses. That caused weird things to the supply and demand. Back during the last banking debacle ( you thought this was the first time) we had lot of unoccupied commercial properties because their value was a tax loss. Well we all know what happens when construction stops. So the IRS came up with the passive loss rule, that said if real estate was not your primary income or a certain amount of hours per year were in the real estate business, then the losses had to spread out.
Well the IRS has been challenging real estate agents status as “Real Estate Professionals” stating that only a real estate broker could claim that. The IRS’s position was that an agent was an idependent contractor of the broker and therefore not active. Which is hog wash if that is there primary business. Well it has been established in court that a real estate agent can claim themself as a “Real Estate Professional” in the eyes of the IRS.
| Discussion: 2 Comments »
Salt Lake Home Buyers CANNOT Use the $8,000 For A Down Payment
May 30th, 2009 Categories: Real Estate News
Salt Lake Home Buyers CANNOT Use the $8,000 For A Down Payment
She loves me, she loves me not, she loves me, she loves me not. That seems to be the ride we have been on since HUD Secretary Shaun Donovan announced on May 12th 2009 that FHA is going to permit lenders to allow homeowners to use the $8,000 tax credit as a down payment.
Well it seems that the Salt Lake 1st Time Home Buyers can get a bridge loan and use the $8,000 Tax Credit for almost everything BUT the down payment.
Kinda, the money can be applied to a down payment as long as it is in addition to the 3.5% minimum down payment required for an FHA Loan. So you can use for closing cost, buying down your interest rate, but you are still going to have to come up with 3.5%.
| Discussion: 1 Comment »
$8,000 Tax Credit For Downpayment Update
May 24th, 2009 Categories: Real Estate News
The Ups and Downs of the $8,000 Tax Credit For Down Payment
There is a lot of rumbling going on about being able to borrow the $8,000 tax credit for a down payment. Some say it is going away, that is NOT TRUE according to a spokesperson from the U.S. Department of Housing and Urban Development or HUD. It is a logistical issue, it has to go through state agencies, then these state agencies will loan the money and then collect it.
Well as you can imagine these same state agencies have lots of questions. Here’s a good question. What are the rules? Seems fair enough to me. One of the biggest problems I see is how is it determined that a person is actually getting an $8,000 credit? If someone has a $10,000 tax liability then they would only have a $2,000 liability afterwards.
Then how do you collect it? Does the IRS send the credit to the agency?
I think they better hurry, because to get the credit you have to buy a home by December 1st, 2009. Hmmm, I smell an extension don’t you but I wouldn’t bet on it.
| Discussion: No Comments »
Realtor, Agent, Broker, Sales Executive what’s the difference
May 24th, 2009 Categories: Real Estate News
Realtor, Agent, Broker, Sales Executive what’s the difference?
For those of us inside the industry we don’t realize how confusing and misunderstood it is. What are all those titles?
First let’s break it down into two categories. One is about a license and the other is an association. Each state has its own set of rules and guidelines, they pretty much mirror each other, differences are usually local issues that are being dealt with. Here is a link to Utah’s Administrative Rules for Real Estate which comes under the department of Commerce. It is not very exciting reading by any means.
In Utah there are two basic licenses, Real Estate Broker and Real Estate Agent. Brokers are broken into two categories Principal Broker or an Associate Broker. An associate broker is someone that has a broker’s license but is not the principal. All real estate companies MUST have a principal broker. All active real estate licensees are either a principal broker or they are licensed under a principal broker. A company can have all brokers but only one is the principal and then the rest would be associates.
Then there is Realtor. Not all real estate agents and brokers are Realtors. A Realtor is someone that is a member of the National Association of REALTORS or as it is called in the industry the NAR. The NAR is a trade association and not a licensing agency. The NAR has a set of rules that its members agree. Locally NAR members are also members of the Utah Association of Realtors and their local board, I am a member of the Salt Lake Board of Realtors.
So then what the heck is a Real Estate Sales Executive or a Real Estate Sales Professional? Those are just fancy names for a real estate agent. There is the notion that being sales person is not a good thing or just a real estate agent is not very sexy or something, and people try to disguise that. I say hogwash, being a sales person is like any other profession, there are great, mediocre, lousy and downright not nice. It just seems that the only ones that ever get any press are the latter. A professional is a professional no matter what the profession whether you are a Doctor, Painter, Lawyer, Plumber, Accountant, Electrician or Real Estate Agent.
What about all those letters? GRI, CRS, ABR, CCIM, CIPS, CPM, SRES…?
That is a seperate topic I could spend time on but I won’t.
| Discussion: No Comments »
Salt Lake Home Buyers TO Get Zero Down Loans
May 13th, 2009 Categories: Buying, Real Estate News
On Tuesday May 12th HUD Secretary Shaun Donovan announced that FHA is going to permit lenders to allow homeowners to use the $8,000 tax credit as a down payment.
Donovan’s remarks came in an address to several thousand Realtors® gathered this morning at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtors® Midyear Legislative Meetings & Trade Expo.
The way it will work is the 1st time home buyer will be able to borrow from the lender the $8,000 in the form of a bridge loan. Bridge loans usually have a little higher interest rate. But if you amend your tax return and get your money quickly it shouldn’t be that big of a deal.
The terms and guidelines have not been laid out yet, I recommend you fill out the amendment and apply for the loan now, so that when it hits you’re out of the gate first. This will put pressure on prices of entry level homes that seem to already be in a short supply in Salt Lake Housing Market. See article on market conditions in Salt Lake.
To get started call me now while rates are low. This is going to cause a surge of 1st time buyers entering the market and a rush of loan applications will cause a bump in rates and a slowdown of underwriting.
Call me Today at 801-694-4762 or email me at Rob@Aubrey.net
| Discussion: 1 Comment »
What Makes A Buyer’s Market or a Seller’s Market
May 10th, 2009 Categories: Real Estate News
What Makes A Buyer’s Market or a Seller’s Market?
A buyers market is when there is more than 7 months supply of homes in a given market, a seller’s is when there is less than 6 months supply of homes in a given market and 6 months supply is called a neutral market.
So how do you determine how many months supply of homes on the market?
Also what is a market?
A market is any given set of parameters. Area, Price Range…
So once you pick an area, a price rang…
Then you determine the # Active Listings
Then add the Sale Pending and the Sold listings for the last 60 days
Divide that number by 3, then divide the active listings by it.
So let’s go through a run.
I will do a report on Salt Lake County, Single Family Homes.
Using a price range from 0-$250,000
We have
2,740 Active Listings
848 Listings that have a sale pending
702 listings sold in the last 60 days
We add the 848 (pending) and 702 (sold 60 days back) and get 1,550.
We divide the 1,550 by 3 = 516.67
Then we divide 2,740 (active listings) by 516.67 = 5.30 Months Supply of homes.
Based on that we have a slight seller’s market. Not to be confused with the run away seller’s market of ‘04-07. What it means that these seller’s are not taken a beating and giving away the farm to sell.
Because the 100% loan has all but gone away buyers have to come up with at least a 3.5% down payment and are asking the seller to pay the buyer’s closing cost. So sellers are getting about 97-98% of the value.
The $250,000-350,000 range is a neutral market with a 6.53 Month supply of homes
Active 1,485
Pending 358
Sold (60 days back) 324
The $350,000 and above market is definitely a buyer’s market with 10.56 months supply of homes
Active 1,978
Pending 293
Sold (60 days back) 269
Now bear in mind these are for Salt Lake County as a whole. You can break it even further and get different results.
Some cities or zip codes in $250-350,000 price range may very well be a buyer’s market and not a neutral market.
| Discussion: 3 Comments »
Utah Division of Real Estate Update
May 3rd, 2009 Categories: Real Estate News
Utah Division Of Real Estate Update
New things happened during the Utah legislative session this year and it affects our real estate industry.
Utah’s Governor Jon M. Huntsman Jr. signed bills that change our education requirements. First, our continuing education will change to eighteen (18) hours, currently it is 12 hours with 6 hours being core. Second, pre-licensing hours will increase to a minimum of one hundred and twenty (120) hours, currently it is 90 hours. The dates for when the changes will go into affect have not yet been announced. The Salt Lake Board will announce this information as soon as it is released. I was told by a reliable source any license that expires this year will fall under the current guidelines.
We still are the only profession that breeds part timers. As long as real estate has a fairly easy entry we will have a lot of part timers. So where do you draw the line between easy and keeping everything professional. IMNSHO I think we should raise the membership fee to $5,000 that will get rid of the not so serious ones and then you will see professionalism. Because there will a lot less part timers it will become a very respectable profession.
Third, Utah has finally dropped out of the top ten for loan fraud. Since Utah was number one in loan fraud for a very long time, this is quite the accomplishment. To be # 1 in loan fraud at our size is scary, we are a small market compared to other places like New York, Los Angeles, San Francisco, Dallas, Houston, Philadelphia, Seattle, Denver, Miami, and Atlanta the list goes on. The division strives to increase the professional level of our real estate agents as well as the industry. I agree the division has done some things to circumvent the fraud, but I really believe it has more to do with the banks tightening up their stuff than anything else.
Information gathered from the Salt Lake Board of Realtors weekly newsletter with my views and opinions thrown in.
| Discussion: No Comments »
The New Utah Short Sale Addendum
April 26th, 2009 Categories: Real Estate News
The New Utah Short Sale Addendum
First let’s get something clear, Shot Sale has nothing to do with time.
The Utah Association of Realtors has created the “New Short Sale Addendum” I think it is a little clearer and pretty much mirrors the practices of experienced short sale agents.
It makes it clear that the contract is specifically contingent on the approval of a third party and that the terms may be modified but that the buyer and the seller are not bound to any modification unless they both agree in writing.
It allows the seller to accept an offer and submit it to the bank while taking back up offers without submitting the back up(s) to the bank. There had been debate over whether we had an obligation the banks to submit the back up(s). The argument is we do not represent the bank(s) in the transaction. They are a lien holder and are treated just like any lien holder. The contract(s) are between the buyer and seller with the lien holder as a contingency.
It also has the ability for a buyer to walk anytime prior to the written approval of the third party by providing a written notice and the earnest money is returned to them without further authorization form the seller.
It also allows the earnest money to not be due till the third party has accepted. Along with the due diligence deadlines being blank days after third party approval also.
I also placed a copy of the document for you to look at on the right hand (blue) side bar under, you guessed it Forms.
The New Utah Short Sale Addendum
| Discussion: 9 Comments »
Wrong Utah REPC Was Used OUCH
April 23rd, 2009 Categories: Real Estate News
The Utah Court of Appeals overturned a case where the wrong Utah REPC Real Estate Purchase Contract was used.
Here it goes.
A man name Flores enters into a lease option to buy a condo from a man named Earnshaw. Flores paid $10,000 for the option to purchase a yet to be built condo $144,950.
They used a REPC that was for property with existing improvements. Then later Earnshaw said they made a mistake and the price should be $184,950. Earnshaw then told Flores that he would give him a $5,000 discount and only charge him $179,950 minus the $10,000. Flores said no way.
So Flores takes Earnshaw to court for specific performance and wins.
Earnshaw takes it to the court of appeals arguing that the contract states.
1.1 Included Items. Unless excluded herein, this sale includes the following items if presently owned and attached to the Property: plumbing, heating, air conditioning fixtures and equipment; ceiling fans; water heater; built-in appliances; light fixtures and bulbs; bathroom fixtures; curtains, draperies and rods; window and door screens; storm
doors and windows; window blinds; awnings; installed television antenna; satellite dishes and system; permanently affixed carpets; automatic garage door opener and accompanying transmitter(s); fencing; and trees and shrubs.
When the contract was executed none of the above items were there and Earnshaw says because of 1.1 he was only responsible to give Flores a shell and the Court of Appeals sided with Earnshaw. He won on a technicality; it doesn’t say if there were any real estate agents involved.
I think if there were no real estate agents involved I might have to side with Flores, a professional developer vs is consumer.
I hope there were so that Flores can sue them for the damages.
| Discussion: 5 Comments »
This Month In Real Estate March 2009
March 14th, 2009 Categories: Real Estate News
| Discussion: No Comments »
Copyright © 2007 3 Pounds of Real Estate Agent Login Design by Real Estate Tomato Powered by Tomato Blogs