Seller Info

Here's a collection of articles I've written to help you as you consider your options. Selling what may be the largest asset you ever own is not a responsibility I take lightly. Look through my blogsite at your leisure.

When you're ready to contact me, just drop me an email or call me. I'm here to help.

Listed below, in chronological order, is an offering of articles I've written that pertain directly to sellers.

Housing Stimulus Bill Summary

July 31st, 2008 Categories: For Buyers, For Sellers, Real Estate Chatter

I’m going to catch some slack from my blogging colleagues on this one.  That’s because I’m reprinting an article in it’s entirety.  What a faux pas!  But for time’s sake, I opted for that this time.  This issue is too important and I don’t have the time for a full-fledged analysis of it but still want to make my readers aware of what’s going on.  I do hope to blog soon about the fact that this bill ELIMINATES in it’s entirety down payment assistance programs and I don’t agree with the change.  But for now, without further ado, I present you the National Association of REALTORS®’ take on the Housing Stimulus bill:

Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill (as of 7/30/08)

H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions: 

• GSE Reform - including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• FHA Reform - including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).

• FHA foreclosure rescue - development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.

• Seller-funded downpayment assistance programs - codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.

• VA loan limits - temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

• Risk-based pricing - puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.

• GSE Stabilization - includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

• Mortgage Revenue Bond Authority - authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.

• National Affordable Housing Trust Fund - Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.

• CDBG Funding - Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

• LIHTC - Modernizes the Low Income Housing Tax Credit program to make it more efficient.

• Loan Originator Requirements - Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

• 
  For more information, visit http://www.realtor.org/governmentaffairs.National Association of REALTORS®

Spoken by Maggie Dokic | Discussion: 3 Comments »

Miami Short Sale Tax Implications

June 25th, 2008 Categories: For Sellers, Real Estate Chatter, Short Sales

Several of my clients have been sellers of distressed Miami homes. Homes where the owners were no longer able to keep up with the mortgage payments. In some cases, short sales were good options. In others, a short sale was not the solution and the owner allowed the properties to be foreclosed on.

Why would someone who is facing a foreclosure in Miami not want to get out of it if possible? The simple answer is tax implications. Allow me to explain. If you own a property that is facing foreclosure and you work out a short sale agreement with the lender, that lender is going to give you a form 1099 for the amount that was short to pay the loan off completely.

For instance, let’s say the loan on the house is $250,000 and in today’s declining housing market you can only get the home sold for $175,000. After you factor in closing fees, let’s say the bank only nets a total of $155,000. Well, the bank has then forgiven you a total of $95,000 ($250,000 mortgage balance less $155,000 netted from short sale of house). The bank will then issue you a form 1099 at the end of the year in the amount of $95,000, which means you have to report that as income when you file your income tax returns.

The problem is a lot of people facing foreclosures may seek help from professionals who don’t have a lot of experience in doing them and may not even know that the homeowner will be hit with a 1099. They’re not hiding information, they just don’t know any better. But ignorance is not bliss in this case. An unsuspecting homeowner isn’t likely to have the funds to pay the taxes due on this forgiven mortgage amount. I’m no tax accountant, but on my scenario above, I would guess that taxes could be due in the neighborhood of $15,000 - $20,000.

Well, here’s the good news. For some anyway. If you lived in the home (in other words, it was not an investment property), you may be able to get tax relief from the IRS when faced with a 1099 on a forgiven mortgage debt. Certain criteria must be met, but the relief is there. It’s part of the Mortgage Forgiveness Debt Relief Act of 2007, which was enacted December 20, 2007. This Act was put in place to help people facing mortgage problems in their primary residences. Again, this is not for investment properties. Visit the IRS page to get more details about it.

I did have a client who had 6 investment properties and he did not do short sales because he did not want to get left at the end of the year with taxes to pay on the amounts forgiven. In his case, he opted for the foreclosures. Not a great option but he was grateful to me for explaining the 1099 thing. No one had told him that he would have to pay taxes on that amount. He thought he could just short sell them and be free of the whole mess. When I explained that it didn’t work like that he was dismayed that his options weren’t better, but he was grateful to me because he was now able to make an informed decision. Super REALTOR® to the rescue! Just kidding =) But I do take my work seriously and find extreme satisfaction in being able to help people with my experience.

If you’re facing a foreclosure contact a knowledgeable professional to discuss your options. That may include a REALTOR®, accountant, tax attorney or combination. You do have options. Find out what they are!

Spoken by Maggie Dokic | Discussion: 3 Comments »

Florida Property Tax Reform - Vote NO To Amendment One

January 18th, 2008 Categories: Community News, Coral Gables, Cutler Bay, Florida City, For Sellers, Homestead, Kendall, Palmetto Bay, Pinecrest, Southwest Dade, The Redland

I have been meaning to write a post regarding Amendment One and the confusion that is attached to the Florida property tax reform issues. This is not that post. This is a reprint of an email reply I sent to a friend and colleague when she asked for my support of Amendment One. I figured I had already written it and included so many great links, why not copy it and post it here? I am still planning the post but this issue is too important to wait a couple more days until I have the time. Here’s the email reply to my friend as to why I will vote NO to Amendment One on January 29th:

I am voting NO on this. There is much confusion on what this amendment represents and this is not our only chance for tax reform this year. This is direct from the Sun-Sentinel property tax blog (link below) : if it does not pass, other options are already in the works.

The Florida Taxation and Budget Reform Commission is currently meeting to decide whether it wants to put any amendments on the November 2008 general election ballot.

One proposal being considered by the commission would eliminate most school property taxes (which comprise about 40 percent of the average property tax bill) and replace the lost revenue by expanding the state sales tax to services and goods that are now exempt, such as accounting and legal services.

There is also a citizen petition drive led by Cut Property Taxes Now, Inc., which is collecting voter signatures to get an amendment on the November 2008 ballot that would cap property taxes at 1.35 percent of value.

Lastly, the Legislature convenes on Tuesday, March 4, in its regular 60-day session. At that time, lawmakers could consider putting another amendment on the November ballot.

As for local government overspending, the Legislature last summer met in special session to pass legislation mandating that most cities and counties roll back their spending between 3 percent and 9 percent. Those reductions should have been reflected on the property tax bill you received last fall unless local government officials voted to override the mandate.

—Linda Kleindienst, Tallahassee Bureau Chief

Now this is me again =)

If amendment 1 passes it would likely represent an average of $240/yr savings on our taxes. In the last 6 years taxes have pretty much tripled (ie $1900 is now $5700) and all they can come up with is a $240 cut?

I would suggest the following links for anyone who wants to learn more about whats going on:

http://fairpropertytaxforall.org/ I am signing this petition. It has NOTHNG to do with Amendment 1.

http://www.floridataxwatch.org/news/propertytax.php (according to Tax Watch, the amendment amounts to a tax cut, not true tax reform, which is sorely needed) IF YOU READ NO OTHER LINK, PLEASE READ THIS ONE.

http://www.floridataxwatch.org/resources/pdf/01152008nrFloridaTaxWatchReportAmendment1PropertyTaxes.pdf A special report from Florida Tax Watch. According to their thorough analysis œAmendment 1 on property taxes is likely to do more harm than good. Read it and find out why.

http://weblogs.sun-sentinel.com/news/custom/propertytax/blog/ ask questions, get answers

http://www2.tbo.com/content/2008/jan/14/na-if-voters-kill-tax-amendment-true-reform-will-b/?news-opinion-editorials -very eye opening as to why we should vote NO.

http://www.votesmartflorida.org/mx/hm.asp?id=home Free, Non-Partisan source for constitutional amendment information

Ill get off my soapbox now.

This is a really important issue to every one of us and it actually hurts to think that I belong to 3 4 associations that are supporting this amendment which can hurt us in the long run.

VOTE NO ON 1/29!!!

Disclaimer - I am posting this as the opinion of Maggie Dokic, not of EWM Realtors. EWM Realtors has not expressed endorsement of my opinion. Just clearing that up for anyone who may be reading. =)

Spoken by | Discussion: No Comments »

Chasing Down The Market Never Works

January 17th, 2008 Categories: For Sellers, Priced To Sell

OK. You want to sell your Miami home. You want to get the most money for it. You have some flexibility with your time and don’t mind waiting a few months for the right buyer to come along. As a matter of fact, you’re convinced that’s all it will take. Time.

Time can be your worst enemy when selling a house.

You call a real estate agent. She tells you your home is worth about $310,000 but you really, really want to get more money so you insist on listing it for $335,000. After all, your home is in impeccable condition and who wouldn’t see that? Nothing needs to be done to your house. Anyone buying it can just move in and start enjoying the gorgeous pool area.

The real estate agent does not think it is a good idea to list the home at $25,000 above what she thinks it’s worth. She knows that the most interest on a new listing is generated when it shows up on the MLS for the first time. The first 30 days are crucial. But you somehow manage to convince her to “just give it a try.” You really do believe your home is worth $335,000. Well, at the very least, you know you want to sell it for that much.

The home gets listed on the MLS at $335,000. It is now the most expensive house listed in your neighborhood. Similar homes are listed at $305,000. Similar homes without a pool are listed at $295,000. Yours is listed at the highest price and you’re proud of it.

Two days later a real estate agent with a buyer calls your REALTOR® and schedules a showing. That same day they tour the home. They agree with you on the condition of the house. It’s impeccable.

That evening an offer gets faxed over to your agent.

She calls to tell you they placed an offer of $305,000 and want to close in 30 days. The agent tells you this is a fabulous offer.

You’re insulted.

You’re so insulted you don’t even want to counter-offer. You forget that your agent told you she thought the house was worth $310,000. You’re convinced it’s worth more. You just need to wait a bit for the right buyer to come along. It’s only been on the market for 2 days, after all. Let’s wait and see who else is out there looking at homes.

During the next 30 days, the home gets shown 6 more times. No one else makes an offer on it. Another month passes and it gets shown 3 more times. Another offer comes in at $280,000. Well! That is not exactly what you had been waiting for so you ask the agent to tell them, thanks but no thanks.

But now you’re wondering if maybe your agent was right about the $335,000 being too high. Begrudgingly you agree to drop the price. Where do you drop it to? $320,000. Still higher than the amount the agent had said it was worth and guess what? Two months have passed since that value was calculated and home prices have dropped. So now your home is worth about $305,000. Not only was your reduction not great enough, the drop in home values is making it harder to close the gap between what your home is worth and what it is listed at.

This method of dropping your listing price is called chasing the market. You are chasing it, but you are never going to catch it. You will always be above what the home is worth and you will be wasting valuable time as you wait for the right buyer to show up.

The scenario in this article is not fictitious. It really happened. In the course of a year, this home seller dropped the price bit by bit until it finally reached $300,000. But in that same year, the values of homes had dropped as well and the home was now worth $290,000. This home seller commented on more than one occassion to the real estate agent that she wished she had listened. She wished she had accepted the first offer. Mind you, the real estate agent was confident that the first offer could have been brought up to $310,000 with a counter offer.

The home is now rented to a tenant as the sellers had been under contract for a new home elsewhere and could not afford two mortgages. While this isn’t what the sellers wanted in the beginning, it is a solution to their problem. But now they’ve added the responsibility of long-distance property management to their repertoire.

Don’t chase the market. It’s faster than you are.

Find a competent real estate professional and listen to what they have to tell you. Sit down. Crunch your numbers. Think it through. Mull it over and then price your home where it should be or don’t put it up for sale at all if you don’t really have to.

 

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Short Sales In Miami Dade

January 13th, 2008 Categories: For Buyers, For Sellers, Short Sales

It occurred to me that 80% of the home buyers I am working with in Miami are looking specifically at short sales yet I do not have any short sale articles posted on my blog. Hmmm! It’s really because I am busy working the short sales and have not had time to write about them.

I promise to return and dedicate more blog space to short sales but at the very least I’d like to explain what a short sale is.

So… what exactly is a short sale? Very simply put, it’s when a property is being sold for less than the amount owed to the bank(s) on it.

The short sale process is more involved than the traditional home buying process. There are things to look out for whether you are the seller or the buyer in a short sale.

If you need more information on short sales before I have the opportunity to write more posts, feel free to contact me.

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Unsuccessful Real Estate Auction - Part II

November 27th, 2007 Categories: For Sellers, Real Estate Chatter, Redland Real Estate

I wrote about an unsuccessful real estate auction in the Redland about two weeks ago. I commented that the fact that it was not an absolute auction was the primary reason for it’s being a flop.

Last week I had the opportunity to attend another auction in the Redland. This one was different in that it was an absolute auction. When the public thinks ‘auction’ they think whatever’s being sold will be sold to the highest bidder. I, personally, think it’s a gimmick to give them anything but. But that is just my opinion. When an auction is not absolute, I think it’s just a ploy to spark more interest in the property and hopefully get it sold. There’s nothing wrong with the marketing premise, in itself. I still have issues with calling it an auction. Maybe we just need to educate the public that an auction isn’t always what they think it is.

Last week I attended the absolute auction hoping to see some action and see a property get sold to the highest bidder. The property is a larger-than-most, but older and well-kept home in the Redland area. It’s right smack in the middle of the Redland and sits on 2.5 acres of tropical paradise, well manicured yet plenty of flora. Adjacent to the property is a natural hammocks, designated as such. Beneficial to the property is that most of it has a property tax benefit because of the hammocks and the property pays about a third of what a similar property without the tax benefit would pay. With the issue of property taxes being so high in Florida, this by itself is a huge benefit to the property.

On top of the tax benefits, an acre of land in the Redland sells for about $180,000, although many would like to have you thinking it’s a lot more than that. Right now, that’s about the going price (albeit not the asking price). And even though on a single property lot an additional acre isn’t technically worth the same as the 1st acre (simply because you can only build one home on it, whether it’s one acre or five) let’s give it the benefit of the doubt and do what the county property appraiser does and calculate each square foot as being worth the same. That means the land on this parcel is worth $450,000 by my calculations.

The auction was to open at $489,000. And it was going to sell to the highest bidder. Period. Seeing how the land alone was worth just $39,000 less I figured it would be like getting the structure almost free if you could buy it at the opening bid. By the way, the county property appraiser has the structure valued at $213,000, so it’s not as if there wasn’t a lot of wiggle room there.

The winning bidder would be responsible for a 10% buyer’s premium so if he won the bid at $500,000, he’d have to pay $550,000. No matter, this home was priced right, so a good deal could still be had.

Upon arriving at the property I recognized a couple from the last auction. I guess I wasn’t the only curious one. I struck up a conversation with them as we waited for the proceedings to begin. Twenty minutes after the bidding was supposed to begin we realized they weren’t going to have an auction. Of the several parties that were there (perhaps 4) none of us were registered to bid. I was dumbstruck by this fact.

Here was a prime property in the Redland available for sale at way less than market price and no one was bidding.

Is the market in South Florida that bad? Or had the auction not been advertised fully? My opinion tells me it’s the former. I had personally found the auction online but because I specifically looked for auctions. I wasn’t searching as a home buyer. The couple I met said they had seen it advertised in the local papers. So it had been advertised. Exactly how much, I wasn’t sure.

That day I went home shaking my head and thinking that the local real estate market may be in for a really looooooong adjustment. Hmmmmmm………

Unsuccessful Auction Part I

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Going, Going, Still Here! (or A Not-So-Successful Auction)

November 13th, 2007 Categories: For Sellers, Real Estate Chatter, Redland Real Estate

Are you trying to sell your Redland home in this market? Have you looked for alternative methods of selling your home? Have you looked at real estate auctions?

Real estate auctions can be very successful. And they can be total flops too. Yesterday I attended the latter at a gorgeous home in the Redland.

The home had been appraised at $900,000 back in June. My trained eye tells me the market value is more like $750K today. Was it an inflated appraisal back in June? Maybe just a little. No matter. The appraisal wasn’t an issue. The bids were.

I had seen the signs proclaiming this coming auction a few weeks back. I had read the small print. I knew what was going to happen because of it. Here’s the small print in a nut shell:

• -Bidders had to register and provide a $1,000 check at registration (no problem. If you didn’t win the bidding, you would get it back)
• -Winning bid had to add 7% as a Buyer’s Premium and that would be the sales price. So if the winning bid is $100K the sales price would be $107K (OK, this sounds good for the seller, but only good for the buyer if he gets the home at an appropriate price. Bidder, set your limit and stick with it)
• -House is sold As-is (no problem here either, you still have an inspection period and can back out if severe problems arise)
• -Seller to provide clear title at closing (good, because anything but is unacceptable)
• -Closing to take place with pre-chosen closing agent (this can be OK, but ordinarily the buyer chooses the closing company as the buyer is paying the title insurance. I’d need to ask more questions about this before I give the go ahead on this.)
• -and the one that I knew would result in a flop of an auction: Seller can accept, reject or counter-offer the winning bid. ah hah!

That last one is the reason the auction failed to reach it’s mark. There were approximately 25 people in attendance. From their nametags, I would guess that 10 of them were from the listing agent’s office. Perhaps another 10 were observers such as myself. The owners of the home were apparently there. They provided some info to the auctioneer and I took them to be the owners anyway. There were 4 registered bidders but only 3 did any bidding.

The low # of bidders was not the reason for this auction turning out the way it did. It was the last item on the list. Why is that last item the one that can make or break an auction? Because it told everyone who may have had an interest in bidding that it was not an absolute auction.

An absolute auction means that the winning bidder wins. Period. His bid does not have to be approved by the seller. The seller has agreed beforehand that he will accept whatever the highest bid is.

Can this be risky to the seller? You bet your sweet potatoes it can! But can it result in a heck of a lot of excited bidders at an auction? Bet those same sweet potatoes on it. Heck yeah.

Anyone who knows that a desirable home can be had for any amount less than the market value is going to try to be there and win the bidding. And once bidding starts, chances are he will get caught up in the furor and the bidding will start going the way a seller wants…up..up..and up!

That’s not what happened yesterday in the Redland. It took the auctioneer about 6 minutes to start the bidding at $150,000 and take it to $350,000. At $350K it stalled. He had a very hard time getting anyone to offer more than that. After some cajoling and dropping down from $400K, $375K to $360K he was able to solicit a bid at $360K. After a little more effort he was able to get it to $365K. But the buck stopped there. Not one of the 3 bidders was willing to bid more than that for this $900,000 home (that I think is worth $750,000).

Will the winning bid be accepted by the seller? My expert opinion is…heck no! Was it a total waste of time? No. I got an article out of it.

Unsuccessful Auction Part II

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