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: 4 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 »

Home Buyer Activity Increases in Miami

March 7th, 2008 Categories: Coral Gables, Cutler Bay, For Sellers, Kendall, Market Trends, Palmetto Bay, Pinecrest

I have to apologize to my 7 (he he) loyal readers for not writing in ten days. This blog truly is kept up by me and not a ghost writer. Yes, believe it or not there are real estate bloggers out there who aren’t really writing their own stuff. Gasp!

Anyway, I am not here to trash those agents who would go against the nature of blogging and hire their writing out. Nor am I here to claim that blog purists insist “you’re not a blogger unless you’re doing your own blogging.” Whatever.

I’m simply stating that I have been busy. Super busy. Wait-it’s-3-o’clock-and-I-haven’t-yet-had-lunch-busy. And I imagine that if I had been interviewed by Canal 51 Telemundo (they asked) for their piece on foreclosures, I would be even busier. (Being busier is not always my goal btw).

The simple truth of the matter is that there has been an increase of buyer activity in Miami-Dade county since the first of the year. I noticed it. My colleagues noticed it. No, wait. “Noticed it,” would be an understatement. We noticed it then reveled in it. That rare commodity known as a buyer was making it’s reappearance. Hip,hip and hooray.

Why has there been a resurgence of home buyers in the last two months? I can’t attribute it strictly to the amendment 1 voting. That took place at the end of January and we noticed the shift at the beginning. Were home buyers starting to gain confidence knowing that the vote was coming up and things might start picking up afterwards? Perhaps.

I do think the buyers that are out there right now are fully aware that this is a great time to be buying a home in Miami. Home prices will not continue on a downward spiral forever. At some point the market will shift and the trend will be an upwards one. Listen to me please, by the time this happens, it will be too late to have gotten the lowest price. By the time one realizes, “oh, we’ve hit the bottom,” it will be because we’re on the rebound again and prices have started to climb back up. In real estate, as in the stock market, you can analyze all you want, but the truth remains that the only way to tell the very peak of a market or the absolute lowest point is in hindsight.

The fact remains that this is still Miami. And contrary to many’s beliefs, there are those who love living here (hand up - me, me!). Miami will continue to draw people here with it’s vibrant joie de vivre, cultural events, melting pot diversity, ever-increasing high quality restaurants, and let’s face it, the jewel in Miami’s crown, the weather, which makes for a different way of life. I was raised in New York City. Not a winter passes for me in Miami when I don’t think about my NYC peeps who are bundling up to go to work and I’m in a T-shirt. I don’t think I am the odd one out when I say I relish the knowledge that I’m not wearing a parka in the middle of January.

So those of you who’ve been sitting on that fence for a while…it’s still a great time to jump off and see what your dream home is selling for now. You might be pleasantly surprised.

Spoken by Chris Hotz | Discussion: No 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

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.

 

Spoken by | Discussion: No Comments »

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