Welcome to the Real Estate Team of Dumb and Dumber- "Where Real Estate is a No-Brainer."
The National Association of REALTORS® conducted a survey of the current legal environment faced by real estate professionals. The 2009 results are in and it's not pretty. Are Realtors® really as ingorant as the results and responses indicate?
NAR undertakes this comprehensive research project, or "Scan," every two years. It analyzes current legal liability issues and identifies emerging legal and risk issues. The Scan is based on surveys of key people in the real-estate industry, as well as data obtained from case law and statutory research.
Breach of Fiduciary duty is one of the top issues identified in the survey responses, both by state real-estate commissions and the Key Contacts within the real- estate industry. More than 50% of the survey respondents indicated that Breach of Fiduciary Duty was the basis for a significant number of current disputes, and more than 61% ranked the issue among their top three current issues. The issue will probably continue to be significant: 57% of the respondents believe that it will increase in importance over the next two years, and it is the top-ranked potential future issue, with more than 72% of the respondents ranking it among their top three issues. Not surprisingly, two-thirds of the respondents believe there is a significant need for training on this issue.
Respondents frequently cited licensees' lack of understanding of what it means to be a fiduciary.
"As much as this topic is presented to agents, I am amazed at the lack of understanding of the responsibility they have to their clients."
"Most agents don't understand how easily and innocently [a breach of fiduciary duty] can occur."
"Many agents do not understand what these duties are and consequences of breaching them."
"Agents do not understand fiduciary duties and need a commission."
"Too many agents still do not understand what their duty is, or, they put their commission first."
The survey collected 50 items involving breach of fiduciary duty and found that 51% of the cases the licensee was found liable.
Example of cases: • Schlimmer The plaintiffs claimed that the broker did not tell them the seller had sued the builder twice over construction defects. The home had leaks in the roof and windows, along with wood rot. The seller settled for $500,000, and that amount was credited against a jury verdict against the broker for $980,000. Ultimately, a judgment of $652,000 was entered against the broker.
• Carmody The seller was acting as her own agent, using her employer as the broker. The shower leaked inside the walls of the bathroom, and the buyers claimed that repairing the leak was a condition of the sale. They claimed that the seller did not repair the leak, and the buyers discovered mold in the walls. The jury returned a verdict of $347,351, consisting of $97,351 in compensation to the buyers, $200,000 in punitive damages against the broker, and $50,000 in punitive damages against the seller.
Are fiduciary responsibilities really not understood by agents?
With the increase in lawsuits in regards to disclosing property conditions, many agents are given the advice to give the "I don't know" response when asked about property conditions. In other words, play dumb. Agents are also being advised to avoid property repair issues by passing the buck to a 3rd party inspection and not answer any questions concerning the house's condition.
As a professional salesperson selling HOUSES, and with nearly 75% of the houses having repair issues and known defects, how much do you disclose given what you know about the product YOU are selling? What should you be expected to know... and of that information you do know, how much do you disclose? So, the question still remains, "What are the fiduciary responsibilities of an agent?"
On November 6, 2009, President Obama signed a bill to extend the tax credit for first-time homebuyers (FTHBs) through June 30, 2010. The bill also opens up opportunities for others who are not buying a home for the first time.
TAX CREDIT OVERVIEW
Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000
Single taxpayers and married couples filing a joint return may qualify for the full taxcredit amount.
Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.
What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.
What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased.
Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible
Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.
What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.
What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual's primary residence.
How Much are First-Time Homebuyers (FTHB) Eligible to Receive?
An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.
Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.
This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.
As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.
How Much are Current Home Owners Eligible to Receive?
The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.
Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?
No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.
Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?
Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.
According to the IRS, factors that would demonstrate the ownership of the property would include:
1. Right of possession, 2. Right to obtain legal title upon full payment of the purchase price, 3. Right to construct improvements, 4. Obligation to pay property taxes, 5. Risk of loss, 6. Responsibility to insure the property, and 7. Duty to maintain the property.
Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer's situation, a credit would not be due:
They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from "step-relatives.")
They do not use the home as your principal residence.
They sell their home before the end of the year.
They are a nonresident alien.
They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.
Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?
Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.
If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.
Many people continue to be upside down in their house here in Phoenix, Arizona and across America. It seems that banks are still foreclosing on homes. When will the madness end? Yes, we do short sales here in Phoenix, Arizona. Plus, we receive many phone calls regarding short sales. One must be proactive and have a system to open and close short sales. You do not want a new person negotiating a short sale transaction because it may not close. Now, there are times when the expert cannot close them just because the banks says no.
One of the first questions from the sellers are "Should I pay my mortgage this month or not? It is like they want me to give them confirmation or permission to stop payments. I inform them that I cannot tell them to stop their payments. That is totally up to them. However, I explain the options in front of them. Please click on the following blog to read of the 4 Options Sellers Have Today.
It seems many more people have stopped making their monthly mortgage payments due to job loss, upside down in their house and just no hope for the future. People continue to walk away from their house. The number one problem here in Phoenix, Arizona is abandoned homes. People continue to strip vacant homes and sell the items on Craisglist and other avenues.
Simple question "SHOULD I PAY MY MORTGAGE THIS MONTH?
Feel free to listen to my Radio Show to learn more about the phoenix real estate market, new trends, and the latest opportunities. The Real Estate and Beyond Radio Show Airs every Saturday from Noon-2:00pm on Conservative Newstalk KKNT 960am in Phoenix, Arizona. You can listent to past shows, or stream on-line.
Obama has officially signed the bill that extends the first time homebuyer tax credit of up to $8,000 through June 2010 as long as the homebuyer executes a contract by April 30, 2010. This new legislation expands the tax credit program to include an up to $6,500 tax credit for existing homeowners who buy another home as long as they have lived in their current residence 5 years or more.
The bill caps the eligibility for the credit to homes costing less than $800,000 and raises the current income limit from $75,000 per year for a single person or $150,000 per year for a couple filing jointly to $125,000/single and $225,000/jointly.
For all future homebuyers that have been waiting for this, visit www.bwhometeam.com for all your homebuying needs!
I am sorry to bring this to your attention but if we can get the REO assett managers to turn off there CHEECH AND CHONG RERUNS for awhile, we might get more reposessions , bank owned , foreclosed ,and walkaway homes sold.HOW ,do you ask ?, for example here in phoenix, arizona i got another bank owned REO from an assett mananger this week and low and behold , same nonsense . They asked to list it for only $57,500 on a nice 3bed 2 bath ,with a pool repo home . SO let the bidding begin and really screw with all the good realtors with normal clients who need a affordable home.To START WITH I WILL GET MAYBE 20- 30 offers and have all 20 -30 realtors asking the same questions , where are we in price , are we highest , did they accept my low ball bottom feeder bid, whats your highest and best offer so far ?,so we, reo listing real estate agents are bombarded with calls daily , when all the assett managers need to do is list it a a fair market value , eliminating the bidding frenzy. Have you submitted a bid on behalf of your client , only to be held captive by another realtor who will not dilvudge where your bid is at, or they have not selected a bid yet , timewise it can take you 2-3 weeks to find out your $65,000 bid was trumped by a highest and best offer of say $85,000 a fair market value . SO FOR YOU AGENTS WORKING BOTH BUYERS AND SELLERS IN THE REO arena , good luck on a back to normal transaction. Phoenix, scottsdale , glendale , and mesa arizona are all going thru the bong from hell syndrome
Buying a home is about to get cheaper for a whole new crop of homebuyers - $6,500 cheaper.
First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House is scheduled to vote on the bill Thursday.
Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers - or anyone who hasn't owned a home in the last three years - would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.
"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.
The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.
"We are still in a world of economic hurt, and Congress must continue to act boldly and creatively," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "With the right mix of tax breaks and investments we will get through this recession and get folks working again."
The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.
Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate by a 98-0 vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.
"For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home," Bond said. "And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place."
The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.
Before you start house hunting, you need to determine how much house you can afford, which will entail getting either prequalified or preapproved for a home loan. A real estate agent can help you find a mortgage broker to begin the process. While getting preapproved is a more in-depth process, a preapproval letter lets both real estate agents and sellers know that you're a serious shopper who means business.
What do I do to get prequalified? A prequalification can be done online or over the phone and does not require your submitting financial documents. You will be asked to provide basic information about your finances - for instance, your household income versus your debt load. With this information, the lender will estimate what your maximum loan amount could be if you were to apply.
What about getting preapproved? A preapproval is more involved and a real estate agent can help you prepare your documentation. The lender will perform an extensive review of your finances, requiring pay stubs, tax records, credit accounts, bank statements and more. This figure will not only be a more reliable estimate of what you can afford, but your preapproval also indicates that a lender is willing to do business with you, pending the purchase price, market appraisal and the underwriting process.
What should I ask when shopping for a lender? Your real estate agent should have a mortgage broker they are willing to put you in contact with - this lender will be someone they have done business with in the past, and feel comfortable recommending. However, if you decide to do a little comparison shopping and look for a lender on your own, here are a few important questions to ask.
1.) What loan programs do you offer and which one do you think is best for me? 2.)How long will the loan approval process take? 3.) What line items of the loan agreement - if any - are negotiable? 4.) What is your policy for locking in interest rates, and will you honor a lower rate if it declines during the lock-in period? 5.)Are there fees for prepaying on my loan?
I found an interesting article published with RISMEDIA, September 19, 2009—Christine Van Tuyl and Margaret La Grange, an award-winning mother-daughter team with Prudential California Realty in Coronado, have compiled their latest list, the “Top Twelve Tips for Buying an Investment Property.”
“Real estate investors aren’t necessarily all-cash buyers with millions in the bank,” said Van Tuyl, Prudential agent. “Normal folks with $50,000 to put down can make solid investments and get positive cash flow.”
Are you ready to buy an investment property? Click on the picture for some things to consider.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
AND THINK ABOUT YOUR OPTIONS! 
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