This has always been a topic of concern and conversation, since our homes are usually our single biggest investment. During this time of declining real estate values and economic uncertainty, home values have taken on a critical nature. Although, no two homes are exactly alike, real estate agents and appraisers look at neighboring similar home sales and trends. They then compare them to your home; plus or minus upgrades, improvements, etc. You know the drill. So - what's going on in your neighborhood? I can send you a report that tells you exactly what you want to know. Drop me an e-mail to: ksakkis@gmail.com
Tell me your address, the estimated value of your home and whether you would like your neighborhood activity report to come weekly, twice a month or monthly. I look forward to hearing from you and helping you stay informed.
Thursday, September 10, 2009
Friday, September 4, 2009
Divorce & Real Estate - Never Pretty
I have been in the middle of some sticky divorce situations over the years, but this story tops all. It was sent to me by a fellow Realtor:
> > She spent the first day packing her belongings into boxes, crates and suitcases. > > On the second day, she had the movers come and collect her things.> > > > On the third day, she sat down for the last time at their beautiful dining room > > table by candle-light, put on some soft background music, and feasted on a > > pound of shrimp, a jar of caviar, and a bottle of spring-water.> > > > When she had finished, she went into each and every room and deposited a few > > half-eaten shrimp shells dipped in caviar into the hollow of the curtain rods. > > > > She then cleaned up the kitchen and left. When the husband returned with his > > new girlfriend, all was bliss for the first few days. > > > > Then slowly, the house began to smell.> > > > They tried everything; cleaning, mopping and airing the place out.> > > > Vents were checked for dead rodents and carpets were steam cleaned.> > > > Air fresheners were hung everywhere.. Exterminators were brought in to set off > > gas canisters, during which they had to move out for a few days and in the end > > they even paid to replace the expensive wool carpeting. Nothing worked!!! > > > > People stopped coming over to visit. Repairmen refused to work in the house. > > The maid quit. > > > > Finally, they could not take the stench any longer and decided to move.> > > > A month later, even though they had cut their price in half, they could not > > find a buyer for their stinky house .> > > > Word got out and eventually even the local Realtors refused to return their > > calls.> > > > Finally, they had to borrow a huge sum of money from the bank to purchase > > a new place.> > > > The ex-wife called the man and asked how things were going. > > > > He told her the saga of the rotting house. She listened politely and said that she > > missed her old home terribly and would be willing to reduce her divorce > > settlement in exchange for getting the house back.> > > > Knowing his ex-wife had no idea how bad the smell was, he agreed on a price that> > was about 1/10th of what the house had been worth, but only if she were to sign> > the papers that very day.> > > > She agreed and within the hour his lawyers delivered the paperwork.> > > > A week later the man and his girlfriend stood smiling as they watched the moving > > company pack everything to take to their new home........... > > > And to spite the ex-wife, they even took the curtain rods!!!!!!> > > I LOVE A HAPPY ENDING, DON'T YOU?
> > She spent the first day packing her belongings into boxes, crates and suitcases. > > On the second day, she had the movers come and collect her things.> > > > On the third day, she sat down for the last time at their beautiful dining room > > table by candle-light, put on some soft background music, and feasted on a > > pound of shrimp, a jar of caviar, and a bottle of spring-water.> > > > When she had finished, she went into each and every room and deposited a few > > half-eaten shrimp shells dipped in caviar into the hollow of the curtain rods. > > > > She then cleaned up the kitchen and left. When the husband returned with his > > new girlfriend, all was bliss for the first few days. > > > > Then slowly, the house began to smell.> > > > They tried everything; cleaning, mopping and airing the place out.> > > > Vents were checked for dead rodents and carpets were steam cleaned.> > > > Air fresheners were hung everywhere.. Exterminators were brought in to set off > > gas canisters, during which they had to move out for a few days and in the end > > they even paid to replace the expensive wool carpeting. Nothing worked!!! > > > > People stopped coming over to visit. Repairmen refused to work in the house. > > The maid quit. > > > > Finally, they could not take the stench any longer and decided to move.> > > > A month later, even though they had cut their price in half, they could not > > find a buyer for their stinky house .> > > > Word got out and eventually even the local Realtors refused to return their > > calls.> > > > Finally, they had to borrow a huge sum of money from the bank to purchase > > a new place.> > > > The ex-wife called the man and asked how things were going. > > > > He told her the saga of the rotting house. She listened politely and said that she > > missed her old home terribly and would be willing to reduce her divorce > > settlement in exchange for getting the house back.> > > > Knowing his ex-wife had no idea how bad the smell was, he agreed on a price that> > was about 1/10th of what the house had been worth, but only if she were to sign> > the papers that very day.> > > > She agreed and within the hour his lawyers delivered the paperwork.> > > > A week later the man and his girlfriend stood smiling as they watched the moving > > company pack everything to take to their new home........... > > > And to spite the ex-wife, they even took the curtain rods!!!!!!> > > I LOVE A HAPPY ENDING, DON'T YOU?
Tuesday, September 1, 2009
More from the Congressional Budget Office
Just so you know, aside from removing or lowering the mortgage interest deduction; here are a few more suggestions from the CBO:
1. Get rid of all write offs for local taxes, including property taxes.
2. A 15% cap on the total of your itemized deductions - remember that includes charitable contributions, medical expenses and casualty losses.
3. Revert to the capital gains rules prior to 1987. Instead of taxing long term capital gains at 15% as the current code does now - it would revert to paying taxes on 55% of the gain at the individual person's rate.
All of this will cost the individual more out of pocket for expenses, less charitable contributions, more government expense to cover programs previously funded privately, more distress in the real estate markets, less incentive to buy homes, less vested interest in your neighborhoods and communities and of course.... more taxes.
1. Get rid of all write offs for local taxes, including property taxes.
2. A 15% cap on the total of your itemized deductions - remember that includes charitable contributions, medical expenses and casualty losses.
3. Revert to the capital gains rules prior to 1987. Instead of taxing long term capital gains at 15% as the current code does now - it would revert to paying taxes on 55% of the gain at the individual person's rate.
All of this will cost the individual more out of pocket for expenses, less charitable contributions, more government expense to cover programs previously funded privately, more distress in the real estate markets, less incentive to buy homes, less vested interest in your neighborhoods and communities and of course.... more taxes.
No More Mortgage Interest Deductions!
Here we go again. Every so often this subject rears it's ugly head in Washington and then whoever brings it up, committee, Congress, President, etc., gets a resounding beating in the press and it goes away. Not so much this time. With the exploding deficit and trillions on loan and trillions more needed for health care and economic stimulus, Congress is pressed to raise revenues. I think we heard something during the election about no increased taxes on the middle class and poor.....but then nothing was ever mentioned about taking our deductions away; which is a backwards way of raising our taxes. Very clever! Anyway, the Congressional Budget Office, in August, delivered its latest revenue raising options to the House and Senate. Because there are only so many ways to raise money (taxes), this old option has come up again. Currently you can deduct mortgage interest up to 1 mill. Thankfully the existing IRS code already penalized the rich so we do not have to run through that drill again. This clever group wants to reduce the limit to $500,000. Wait a minute - isn't that home level part of the middle class that was guaranteed no tax hikes? Fully expecting trouble on the horizon the CBO has a second option. Replace current mortgage interest deductions with a flat 15% tax credit for everybody with mortgage amounts below the limits in the first option. This way your deduction would not be tied to your income, just your mortgage; except for those pesky rich people with over 1 mill dollar mortgages - they still would get nothing. Who would benefit? Government of course, with an estimated $13 billion in revenue and of course the poor who do not itemize. I wonder if they remembered that a tax credit means the government gives money back to people and I wonder if they deducted this amount from the $13 billion - gotta wonder after being off 2 trillion on the last official government estimate - remember? Let's non Ivy league educated, non PHD economists, guess what this will do to the already distressed housing market.
Finally - Recent Home Buyers in Luck!
We all know someone, friend, neighbor, relative, that bought in the height of the market. Sometimes it was us! These poor souls are watching as their homes devalue in line with the market adjustment; sometimes as much as 50%. Long time homeowners nod and sigh as they try to empathize with the plight of their friends and loved ones. Oddly enough, tax time has become the great equalizer. Those who bought late in the game, who's homes have devalued are experiencing the benefits of a reduced assessment and reduced taxes. Those who stayed put and look advantage of the Save Our Homes 3% cap have increased taxes. Why? The SOH initiative allows for the 3% increase regardless of market value. Now the new homeowners can sigh and nod as they listen to their friends and families tales of woe. But really... how much can you complain or expect sympathy when in most cases the grandfathered in SOH folks have been paying artificially low taxes for years and even with the current increase are in most cases, still valued below the market - even in this market. How does this compare with the loss of up to 50% of value?
Thursday, August 13, 2009
Foreclosure Fallout Continues
Between 2006 - 2008 statewide foreclosures rose an average of 400%, representing 623,570 properties. Through May 09, another 175,612 properties have entered the pipeline. Florida's coastal communities were hit the hardest, the aftermath of the most speculation and investors. The Herald Tribune shows a map of Florida and the percentage increases in foreclosures during this time period. http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20090813/GRAPHICS02/908079918/2107/BUSINESS&template=graphics
Port Charlotte, Fort Myers and Cape Coral had the largest increase in filings, up 788% while Tampa increased 356%. It is well known that speculators were the first phase of defaults. The problem has spread due to the recession and impact of unemployment. The next phase is just beginning. These are homeowners who are discouraged who either bought at the peak or bought at a good time and borrowed against their homes, and thus are upside down. These owners are increasingly expected to walk. What does this mean to the overall real estate market? Remember - these homes that are foreclosed on eventually make back to the market for sale at very reduced prices. They become the comps for other sales and hence lead to the devaluation of homes and neighborhoods. We have to rid ourselves of this inventory before the market can turn around.
Port Charlotte, Fort Myers and Cape Coral had the largest increase in filings, up 788% while Tampa increased 356%. It is well known that speculators were the first phase of defaults. The problem has spread due to the recession and impact of unemployment. The next phase is just beginning. These are homeowners who are discouraged who either bought at the peak or bought at a good time and borrowed against their homes, and thus are upside down. These owners are increasingly expected to walk. What does this mean to the overall real estate market? Remember - these homes that are foreclosed on eventually make back to the market for sale at very reduced prices. They become the comps for other sales and hence lead to the devaluation of homes and neighborhoods. We have to rid ourselves of this inventory before the market can turn around.
Monday, August 10, 2009
Operation Freedom Wedding Dress
Got a great request via e-mail today. Women are being asked to donate their wedding dresses to military brides-to-be that are active in service. These dresses will go to women in the Military that can't afford to purchase one of their own. This is a great gift for the women who give so much for us. If you are interested in helping contact Kelly @ 468-6396.
Friday, August 7, 2009
Home Valuation Code of Conduct
What's that? Just another bungled government attempt at oversight and management. Inflated appraisals have been sighted as one of the many consequences of the real estate boom years. Loan were made based on appraisal values that were in many cases inflated through the influence of the lenders. Instead of investigation and punishing those involved, the government has sought through the micro management of Freddie Mac and Fannie Mae to provide a "fair" playing field and oversight. The outcome has been the HVCC - Home Valuation Code of Conduct.
Effective May 1, 2009 Freddie Mac and Fannie Mae will not purchase loans unless in compliance with HVCC . This applies to all newly originated, single family home loans.
THE CODE SPECIFICALLY PROHIBITS LENDERS FROM ACCEPTING APPRAISAL REPORTS COMPLETED BY AN APPRAISER SELECTED, RETAINED OR COMPENSATED IN AMY MANNER BY MORTGAGE BROKERS AND REAL ESTATE AGENTS.
Purpose:
To prevent fraud in mortgage transactions
Remove pressure on appraisers from interested parties
Remove favoritism that could lead to high appraisal
Keep mortgages in line with value
Unintended consequences:
Since lenders can no longer speak directly to appraisers they must use Appraisal Management Companies (AMC's); these are pools of unknown appraisers (qualifications and experience unknown as well).
The AMC's take a cut of the appraisal fee, therefore the appraiser makes less, which is turn has turned many good appraisers away from the business and in many cases lessened the value and quality of the work.
The appraisers may be and often are "out of the area" geographically and not expert in the areas they are appraising; making a true judgement of value difficult.
The appraisal takes longer, as often there is a learning curve for the area involved and the inability to hurry things along due to lack of direct communication.
Who is suffering? THE BUYER AND SELLER
The loan process takes longer and is more costly for both parties.
An unprecedented number of appraisals are coming in below value, costing the buyer or seller or both more money to close or causing the transaction not to close at all. The appraiser are often appraising very conservatively - to be on the "safe" side.
THE ANSWER?
If the concept is to make sure the appraiser does not automatically appraise the property to meet the contract value, why not solve the whole thing by not giving the appraiser a copy of the contract. If we want him or her to give us an honest "opinion" of value, just give them the address of the property and wait for an HONEST answer. Too simple? What do you think?
Effective May 1, 2009 Freddie Mac and Fannie Mae will not purchase loans unless in compliance with HVCC . This applies to all newly originated, single family home loans.
THE CODE SPECIFICALLY PROHIBITS LENDERS FROM ACCEPTING APPRAISAL REPORTS COMPLETED BY AN APPRAISER SELECTED, RETAINED OR COMPENSATED IN AMY MANNER BY MORTGAGE BROKERS AND REAL ESTATE AGENTS.
Purpose:
To prevent fraud in mortgage transactions
Remove pressure on appraisers from interested parties
Remove favoritism that could lead to high appraisal
Keep mortgages in line with value
Unintended consequences:
Since lenders can no longer speak directly to appraisers they must use Appraisal Management Companies (AMC's); these are pools of unknown appraisers (qualifications and experience unknown as well).
The AMC's take a cut of the appraisal fee, therefore the appraiser makes less, which is turn has turned many good appraisers away from the business and in many cases lessened the value and quality of the work.
The appraisers may be and often are "out of the area" geographically and not expert in the areas they are appraising; making a true judgement of value difficult.
The appraisal takes longer, as often there is a learning curve for the area involved and the inability to hurry things along due to lack of direct communication.
Who is suffering? THE BUYER AND SELLER
The loan process takes longer and is more costly for both parties.
An unprecedented number of appraisals are coming in below value, costing the buyer or seller or both more money to close or causing the transaction not to close at all. The appraiser are often appraising very conservatively - to be on the "safe" side.
THE ANSWER?
If the concept is to make sure the appraiser does not automatically appraise the property to meet the contract value, why not solve the whole thing by not giving the appraiser a copy of the contract. If we want him or her to give us an honest "opinion" of value, just give them the address of the property and wait for an HONEST answer. Too simple? What do you think?
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