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Give Down Payment Help With No Tax Strings Attached

February 21st, 2012 by jeffreyspoelstra

Are you a parent considering gifting money to a child to help him/her purchase a home? The rules for using down payment gifts differ depending on which lender you use and whether your loan is guaranteed by Fannie Mae, Freddie Mac, or FHA. Here is a very, very brief and non-comprehensive summary.

If you’re the one making the down payment gift, you won’t have to pay federal income tax, nor will the recipient, as long as you give $13,000 or less in 2011 or 2012. You can give up to $13,000 per person without tax implication to any number of people in one year.

In addition, you and your spouse can each give separate gifts to your child. The IRS calls this gift splitting. For instance, if you’re planning to give to your two children, you and your spouse can each give each child up to $13,000 for a total of $52,000 ($13,000 x 4).

If you want to give more, you still may not owe taxes, but you have to inform the IRS of your gift using Form 709. Check with your tax adviser to see if the amount above $13,000 counts against a lifetime exclusion that we all get to use to pass along assets via gifts and estates.

You can’t deduct the value of gifts you make (other than gifts that are deductible charitable contributions) or any federal gift resulting from making those gifts.

I give this information to you to stimulate your need to find out more if you are going to be making a gift to a child. Get more information for yourself from IRS Publication 950. Consult your tax advisor, financial advisor and/or accountant for specific guidance in your situation.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

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No REO Wave in 2012?

February 20th, 2012 by jeffreyspoelstra

In January, foreclosure starts in California rose 15.5 percent and foreclosure sales increased 14.6 percent. Despite what appears to be significant percentage increases in foreclosure starts in California, Nevada and Washington, these increases barely offset the declines seen over the holidays. Compared with January one year ago, foreclosure starts are significantly lower.

“January’s numbers should put to rest any notion that we will see a wave of foreclosures in 2012, at least in the western states that we cover,” according to Sean O’Toole, founder and CEO of ForeclosureRadar. “Foreclosure starts remain near record low levels, significantly lower than a year ago, when many banks still had self-imposed moratoriums in place due to the robo-signing scandal. Add to that a foreclosure timeframe of more than 8 months, and there is little chance of a wave this year even if all the banks started the foreclosure process en masse tomorrow.”

This is good news if you are a homeowner with a distressed mortgage. You may, yet, have time to work things out with your lender. If you are a home buyer expecting a flood of bank-owned homes to shore up a market with too few homes to buy, you may want to re-think your strategy.

Click here to read the report.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

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Consumers Expect Home Prices and Rents to Rise in 2012

February 16th, 2012 by jeffreyspoelstra

Fannie Mae’s latest National Housing Survey shows that the majority of Americans continue to expect no change in mortgage rates over the next 12 months. Their expectations for home prices have improved for the fourth month in a row, with respondents expecting prices to go up by 1 percent, on average, during the year.

Of the consumers surveyed, 44 percent expect their personal financial situation to improve, up from 40 percent a month ago, and 30 percent of Americans believe the economy is on the right track, up from 22 percent last month and up for the third straight month since November 2011.

Specifically:

  • Twenty-eight percent of respondents expect home prices to increase over the next 12 months (up 2 percentage points since last month), while 16 percent say they expect home prices to decline (down 2 percentage points since last month). Fifty-one percent say prices will stay the same.
  • Only 8 percent of Americans say that mortgage rates will go down in the next 12 months, down 2 percentage points from December.
  • The percentage of respondents who say it is a good time to buy stayed at 71 percent in January, while the percentage who say it is a good time to sell dropped by 1 percentage point to 10 percent.
  • On average, respondents expect home rental prices to increase by 3.2 percent over the next 12 months, down from 3.5 percent in December.

Click here for more information about the survey.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

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Investors: Prequalify Now for Bulk Purchasing Bank-owned Properties

February 13th, 2012 by jeffreyspoelstra

The Federal Housing Finance Agency (FHFA) recently announced the first step of a Real-Estate Owned (REO) Initiative targeted at the hardest-hit metropolitan areas. Investors interested in participating may “pre-qualify” to establish eligibility to bid on transactions in the initial pilot phase as well as subsequent phases.

The REO Initiative will allow qualified investors to purchase pools of foreclosed properties with the requirement to rent the purchased properties for a specified number of years. This rental period could provide relief for local housing markets that continue to be depressed by the volume of foreclosed properties, and provide additional rental options to certain markets. Prequalification ensures investors will have the financial capacity and operational expertise to manage properties in a way that is conducive to the stabilization of communities hard hit by the housing
downturn.

During the pilot phase, Fannie Mae will offer for sale pools of various types of assets including rental properties, vacant properties and non-performing loans with a focus on the hardest-hit areas..

There is some opposition to the program being implemented in California as the housing market here is unique. California has an extremely low REO inventory where REO sales are getting top dollar in multiple offer situations.  On average, REOs are sold are sold in less than 60 days.  Bulk sales in California not only could have a negative impact on home prices, but could also push down home
values for existing homeowners in those communities.

Click here to read the FHFA announcement.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

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The Impact of Walking Away

February 9th, 2012 by jeffreyspoelstra

“Would you rather be $200,000 underwater, or would you rather have seven
years of damage to your credit report? It depends whether you’re finally at the
point where enough is enough.”

That is a quote from Gerri Detweiler, director of consumer education for
Credit.com, from a recent Reuters article on the personal and financial impact of a “strategic default.” A strategic default occurs when a homeowner walks away from an underwater mortgage even though financially capable of making the monthly
payments.

Engaging in a strategic default isn’t a decision to be taken lightly. If everyone did it, the housing market — and the banks — would be a non-functional and chaos would be the order of the day.

The article points to many financial experts are urging homeowners to consider their mortgage options as a “business” decision and suggest doing an emotion-less cost-benefit analysis only to determine what to do. Counter to that, the article points out other considerations that naturally play into such a decision.

Moral Quandary: People naturally feel embarrassed about breaking a contract and not paying their bills.

Impact on Credit Score: FICO estimates that someone with a 680 score would see that number drop 85-100 points after a strategic default; someone starting at 780 could lose 140-160 points.

The following are some suggestions to keep in mind:

1. Look to it as a last resort, not a first option. Exhaust all possible means to gracefully change or exit the loan, such as refinancing, a loan modification or a short sale.

2. Location, location, location. Know the foreclosure laws in your state, especially regarding what you could be liable for in the end. Can a lender come after you for any part of your loan balance after the foreclosure?

3. Know the tax implications. Forgiven debt is considered taxable by the IRS unless you qualify for an exemption under the Mortgage Forgiveness Debt Relief
Act; which, if not extended, expires at the end of 2012.

4. Talk to a professional. A bankruptcy or real-estate attorney can help you
through a very tricky process.

Click here to read the complete Reuters article.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

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The Way to a Buyer’s Checkbook is Through the Kitchen

February 8th, 2012 by jeffreyspoelstra

What is the most used, most seen – by family and by friends and visitors – most showpiece room of most any home? It’s the lowly kitchen. Kitchens are where we spend much of our time, a large portion of which is spent with family and friends. Kitchens are a key element to entertaining and often are a focal piece of modern home floor plans.

It shouldn’t be a surprise, then, that kitchens sell a house. What buyer would buy a home without seeing the kitchen? A beautiful, up-to-date kitchen is a selling point and could be the tipping point between a buyer making an offer or not. An outdated, ugly kitchen will send a potential buyer looking elsewhere or off to Home Depot to price a replacement project.

In the most recent Remodeling magazine annual Cost vs Value report for 2011 on the potential payback for the most common home remodeling projects, a kitchen remodel tops the list as having the highest return on investment when a home is sold.

RealtyTimes recently published an article with good advice for home sellers considering a kitchen remodel. Of key importance is to not over do it. Look at the competing home sales and plan a remodel project that won’t price the home out of the market for its neighborhood.

If you’re going to do one major thing to improve a home before selling it (outside of painting), look to the kitchen.

Click here to read the complete article.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

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It’s a sign of the times!

February 6th, 2012 by jeffreyspoelstra

Most of us grew up thinking that if we planned well and played by the rules, we’d never have to stand by as our financial lives unraveled.

But upheaval on Wall Street, unacceptable rates of unemployment and plummeting real estate values have taken their toll. Since 2007, 7.9 million homeowners have lost their homes to foreclosure. Current estimates are that one in four homeowners owes more on their mortgages than they could get from the sale of their home. Millions more homes will be lost to foreclosure before this real estate crisis runs its course.

The sad fact is that foreclosure is not an isolated event. For months leading up to the loss of a home, financially strapped homeowners live under a cloud of uncertainty. And then for many years afterwards, the blow to credit gets in the way of buying another home or buying anything on credit. Foreclosure even complicate employment prospects.

The impact of foreclosure is huge and the sad fact is that it’s often avoidable.

As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially strapped homeowners with options to foreclosure, ensure that they steer clear of scams, and help navigate them through the solution that best meets their needs.

Among the most important facts to keep in mind: the sooner help is sought, the better the options.

These are tough times, but more help is available than ever before. If you or someone you care about is ready to navigate away from the dark cloud of an unmanageable mortgage and realize that hope and blue skies are within reach, contact me today and let’s get started.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

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Don’t Abandon Ship Just Because It’s Underwater

February 2nd, 2012 by jeffreyspoelstra

Sailors on a submarine don’t scramble to abandon ship just because it sinks underwater. It was made to be underwater and the sailors are comfortable living on-board.

The same can be true for a home with an underwater mortgage. Most people think that it is immediately necessary to “abandon ship” and try to get away from the home and the mortgage. That my not be necessary. There are other factor to be considered besides performance of the property as a financial asset.

Your own personal values and personal prioritiesare also factors to be considered. Is owning your home important to you? Are the tax benefits of homeownership a key element of your financial picture? Are you comfortable living in the home? Do you like the neighborhood/location?

Having an underwater mortgage does not demand that you move if there are other overriding factors.

Click here for further discussion.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

Disclaimer: The above information is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. It is not intended to be construed as financial, legal or tax advice. California DRE license #01470808.

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Breathing Room From Fannie Mae and Freddie Mac For Unemployed Borrowers

January 30th, 2012 by jeffreyspoelstra

Fannie Mae and Freddie Mac recently extended their foreclosure forbearance programs to give short-term aid to unemployed homeowners, but housing counselors warn that these borrowers will need to look at longer-term solutions.

In a forbearance program, a lender agrees not to foreclose on a property and gives the borrower several months’ grace from or reduction in monthly mortgage payments. The new temporary mortgage payment is often set to 31 percent of the household income; in some cases lenders agree to accept no payments.

The programs work best for temporary setbacks, like job loss, health problems, or natural disasters. Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring approval by both Fannie Mae and the lender.

There are drawbacks to the forbearances though. The most-significant drawback is a larger total debt from the smaller payments. The unpaid balance continues to increase during this time. ANd, even with the program in place, the lender could still report a mortgage as delinquent, which could adversely affect the borrower’s credit score.

Because some agreements add onerous term and conditions, homeowners should also consult with a housing counselor certified by the Dept. of Housing and Urban Development.

Click here for more information.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

Disclaimer: The above information is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. It is not intended to be construed as financial, legal or tax advice. California DRE license #01470808.

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2011 Month-by-Month Sales Stats For Santa Clara County (By Area)

January 26th, 2012 by jeffreyspoelstra

I’ve charted the average sales price, median sales price and sales volume on a month-by-month basis – by area – for homes sold in Santa Clara County in 2011. Click the chart image or the link below to see all 18 charts.

Overall, home prices were nearly flat year-to-year across the county, but you will quickly notice from the charts that not all areas performed equally. Some areas (e.g., Almaden Valley) experienced an up-and-down see-saw of prices over the year. Other areas, such as the city of Santa Clara, saw relatively stable prices with very little month-to-month variation.

What we are seeing is the results of an uncertain market. Sellers are not motivated to sell. First-time buyers at the low-end price range are fighting with each other and with investors to purchase homes. Buyers in the middle-range and above are hungry to buy, but want to be sure that they aren’t buying into a declining value property. And, the fact that sellers aren’t selling makes it hard to find properties at all.

Expectations are that 2012 will likely be a better recovery year for the real estate market. Click here to read a recent Mercury News article. One thing is sure, another year like 2011 will get us nowhere in the overall recovery of the U.S. economy.

Click here for a larger version of the chart.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

Disclaimer: The above information is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. It is not intended to be construed as financial, legal or tax advice. California DRE license #01470808.

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Jeff Spoelstra (DRE #01470808)
Better Homes and Gardens Real Estate
5985 Almaden Expressway, San Jose, CA 95120
408-256-4330
408-997-9999