Monday, February 11, 2008

Short Sale & Foreclosure Helpful Tips

Homeownership isn’t always a happily ever after story. There are times when owners can no longer meet their mortgage obligations. In this case, there are several options.

One is foreclosure. In this scenario, buyers have a grace period where they can stay in the home and try to make good on their outstanding debts. Eventually, if they are unable to reverse their current course, the bank or lender will evict the owner, reclaim the home and place it on the market for sale.

A second, lesser-known option is called a short sale. Here the lender agrees to take a loss on the home in exchange for recouping most of what is owed to them. In other words, if you owe $90,000 on your mortgage, your bank may agree to take $80,000 and consider the debt paid. The benefit for the lender is that the case is expedited and closed without the added expense of a foreclosure proceeding. Of course the seller would not see any profit from the sale.
If you find yourself in such a position, research the short sale option further. Start by using online resources to learn about the agreement. If you think it is feasible for you, consult with your lender and a real estate attorney who is familiar with this arrangement

When you closed on your home, you surely did not envision yourself in this situation. Unforeseen circumstances, such as a job loss, can put you in a position you never imagined. It is imperative that you look at all options, including bankruptcy, foreclosure and the short sale before you select the one that will work best for you.

Mortgage Forgiveness Dept Relife Act of 2007

On Thursday December 20th President Bush signed into law a bill passed by Congress HR:3648. This bill is also know as the Mortgage Forgiveness Debt Relief Act of 2007. The bill can be a huge help for people considering a "Short Sale" in that unpaid mortgage debt is not considered taxable income. eg: Your home has a current market value of $350,000 and your mortgage balance is $400,000 under the old law if the bank forgave the difference on a the sale you would have to declare the $50,000 as a taxable income. The new law eliminates this "Phantom Tax". Refer to HR3648 for all the details.

Saturday, February 2, 2008

They Buy to Own

Mark Schreier
Licensed Sales Person
Century 21 Prevete Real Estate

A desire to own a home of their own and to establish a household are the reasons homeowners most often cite for purchasing a home, according to a recent consumer survey.

Thirty-three percent of all buyers, and a whopping 70 percent of first-time buyers, express these as prime motivators in their quest for a home purchase, according to the National Association of Realtors® 2007 Profile of Home Buyers and Sellers.

A wish for a larger home, a job-related move, a change in family situation, a desire for a home in a better area and an interest in being closer to jobs, relatives, school or transit are also high on the list of reasons for purchasing a home.

Interestingly enough, taking advantage of perfect market conditions was not mentioned – not this year, not last year – not in NAR’s 26-year history of surveying buyers and sellers.

“The bottom line is that housing is a good long-term investment with both financial and non-financial rewards. While the financial gains have been significant for most owners, it’s the social and personal benefits that really influence consumers to buy a home,” explained Joseph Mottola, President Long Island Board of Realtors.
“Most people buy homes to become homeowners, to live in those homes, and to be part of the communities in which those homes are located. People don’t just buy a house or a condo – they buy a home,” he said.

Reasons for a home purchase vary quite substantially among different age groups. Three-quarters of home buyers between ages 18 and 24 report purchasing a home because they want to own a home of their own or establish a household. In fact, for all buyers 64 or younger, this is the most frequently cited primary reason for purchasing a home.

Home buyers 65 years and older reported that their primary reason for purchasing a home was to downsize to a smaller home (19 percent), retire (18 percent) or to be closer to family, friends, and relatives (18 percent).

Mottola noted that for the most part speculators have left the housing market, leaving serious buyers with a wide variety of inventory to choose from.

Because market conditions vary by location and because there are many factors to consider in finding the right home and the right financing, it’s important for consumers to work with a real estate professional as they consider one of the most significant transactions of a lifetime, he added.

“By the end of 2007, one of every 16 Americans will have purchased a home,” Mottola said. “Those who hang on to their home for five to 10 years can expect a healthy return on their investment in addition to the priceless benefits of living in a home of their own,” he added].

NAR’s 2007 Profile of Home Buyers and Sellers is available for sale at