The Problem With Real Estate For TV.
I happened to be watching HGTV last weekend, as I often do. And, also as I often do, found myself shouting out loud at the TV. Why? Well, because I just couldn’t stand how the particular show I was watching was portraying the whole house buying process.
Then, coincidentally, as I was reading through news headlines and various online articles this morning, I stumbled upon this MSN posting* — “What’s wrong with ‘House Hunters’ “. And, as much as I love watching the show and trying to pick out the “winning” property, MSN is totally right. Don’t believe everything you see on TV because, well, it’s TV.
The premise for the show I was watching last weekend was that a couple of first time home buyers had found a home that they just had to buy and because this particular home was listed FSBO (for sale by owner), the seller of the home had requested no Real Estate Brokers were to be involved in the sale. This couple had to decide if they wanted to proceed in making an offer on this home without using their Broker. Jump to the scene of them sitting in front of their laptop researching “how to buy a home without a realtor” and “how to fill out a real estate contract” online.
Don’t get me wrong; I am not bashing their decision to NOT use a Realtor. (I am also not bashing the seller’s decision to not work with a Realtor either.) But what I AM bashing is the show’s inaccuracies. That and the sad lack of education and guidance/representation this particular couple had throughout their home buying process.
We come to find out that the FSBO property didn’t work out (after the seller rejected this couple’s offer for being too low), so the couple moves on to another home for sale, which happens to be new construction. Since “everything’s been going ok so far” (a direct quote) without using a Realtor, this couple decides that they must have this home and they want to put in an offer. Did I mention that they are not using a Realtor?
>> Except that they are. They asked the Listing Agent to write up the offer and handle the negotiation with the builder. So basically, this Agent is “double ending” the deal — translation, representing the seller AND the buyer.
After a lengthy negotiation process (about 2 minutes of the show, but likely a tad longer in real life) in which the buyers asked for a hefty upgrades package as well as closing costs, the seller sends a counter offer in which he’ll include the upgrades and the closing costs in the deal, but the property’s purchase price needs to be bumped up by $10k. “That’s great!” the buyers exclaim! “The builder is paying for everything we’ve asked for!“
>> Except that he’s not. The property’s purchase price has been bumped up which means that the BUYERS are paying for it by financing a larger loan amount.
At the end of the day, both the buyers and the seller (and the Real Estate Broker) all seemed happy enough and skipped off into the sunset. Not really, but you get the idea.
What I think is important to mention is that whatever you decide, Real Estate Br
oker or not, home buying (or selling, for that matter) is not as easy as it appears on TV. In real life — though sometimes it IS as easy as TV makes it appear – home buyers face counter offers galore, rejections, bad inspections, properties not appraising, financing falling through, and more.
So enjoy your TV entertainment for what it is — entertainment not real life.
*Read the full MSN article here.
Oregon — Among The Best States For Jobs And Business!
According to the folks at Forbes, Oregon comes in at #10 on the list of The Best States For Jobs and #9 on the list of The Best States For Business!
The specifics:
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**Read the full article and see the full list of states here. |
While we obviously have a bit of an uphill climb to get on the path to recovery as a state, it’s still encouraging to hear some positive press about Oregon, don’t you think?
10 Common Errors Home Owners Make When Filing Taxes
Tax season is here! In the HouseLogic article below, 10 common errors that home owners tend to make when filing taxes are outlined and discussed. Read on so you can avoid these common mistakes when filing yours!
Source: HouseLogic.com
“10 Common Errors Home Owners Make When Filing Taxes” By: G. M. Filisko
Published: January 05, 2012
Don’t rouse the IRS or pay more taxes than necessary — know the score on each home tax deduction and credit.As you calculate your tax returns, consider each home tax deduction and credit you are – and are not – entitled to. Running afoul of any of these 10 home-related tax mistakes – which tax pros say are especially common – can cost you money or draw the IRS to your doorstep.
- Sin #1: Deducting the wrong year for property taxes:
You take a tax deduction for property taxes in the year you (or the holder of your escrow account) actually paid them. Some taxing authorities work a year behind – that is, you’re not billed for 2011 property taxes until 2012. But that’s irrelevant to the feds.Enter on your federal forms whatever amount you actually paid in 2011, no matter what the date is on your tax bill. Dave Hampton, CPA, tax manager at the Cincinnati accounting firm of Burke & Schindler, has seen home owners confuse payments for different years and claim the incorrect amount. - Sin #2: Confusing escrow amount for actual taxes paid:
If your lender escrows funds to pay your property taxes, don’t just deduct the amount escrowed, says Bob Meighan, CPA and vice president at TurboTax in San Diego. The regular amount you pay into your escrow account each month to cover property taxes is probably a little more or a little less than your property tax bill. Your lender will adjust the amount every year or so to realign the two.For example, your tax bill might be $1,200, but your lender may have collected $1,100 or $1,300 in escrow over the year. Deduct only $1,200. Your lender will send you an official statement listing the actual taxes paid. Use that. Don’t just add up 12 months of escrow property tax payments. - Sin #3: Deducting points paid to refinance:
Deduct points you paid your lender to secure your mortgage in full for the year you bought your home. However, when you refinance, says Meighan, you must deduct points over the life of your new loan. If you paid $2,000 in points to refinance into a 15-year mortgage, your tax deduction is $133 per year. - Sin #4: Failing to deduct private mortgage insurance:
Lenders require home buyers with a down payment of less than 20% to purchase private mortgage insurance (PMI). Avoid the common mistake of forgetting to deduct your PMI payments. However, note the deduction begins to phase out once your adjusted gross income reaches $100,000 and disappears entirely when your AGI surpasses $109,000. Also, unless Congress acts to extend the PMI deduction again, 2011 is the last tax year for which you can take this deduction. - Sin #5: Misjudging the home office tax deduction:
This deduction may not be as good as it seems. It’s complicated, often doesn’t amount to much of a deduction, has to be recaptured if you turn a profit when you sell your home, and can pique the IRS’s interest in your return. Hampton’s advice: Claim it only if it’s worth those drawbacks. If so, here’s what to know about what you can write off. - Sin #6: Missing the first-time home buyer tax credit:
While the original home buyer tax credit deadline passed in April 2010 (and isn’t available in 2012), military families and some government workers on assignment outside the U.S. were given an extension until April 30, 2011, to get a home under contract and take advantage of up to $8,000 in tax credits for first-time buyers and $6,500 in credits for repeat buyers.
It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010. - Sin #7: Failing to track home-related expenses:
If the IRS comes a-knockin’, don’t be scrambling to compile your records. Many people forget to track home office and home maintenance and repair expenses, says Meighan. File away documents as you go. For example, save each manufacturer’s certification statement for energy tax credits, insurance company statements for PMI, and lender or government statements to confirm property taxes paid. - Sin #8: Forgetting to keep track of capital gains:
If you sold your main home last year, don’t forget to pay capital gains taxes on any profit. However, you can exclude $250,000 (or $500,000 if you’re a married couple) of any profits from taxes. So if you bought a home for $100,000 and sold it for $400,000, your capital gains are $300,000. If you’re single, you owe taxes on $50,000 of gains. However, there are minimum time limits for holding property to take advantage of the exclusions, and other details. Consult IRS Publication 523. - Sin #9: Filing incorrectly for energy tax credits:
If you made any eligible improvement, fill out Form 5695. Part I, which covers the 30%/$1,500 credit for such items as insulation and windows, is fairly straightforward. But Part II, which covers the 30%/no-limit items such as geothermal heat pumps, can be incredibly complex and involves crosschecking with half a dozen other IRS forms. Read the instructions carefully. - Sin #10: Claiming too much for the mortgage interest tax deduction:
You can deduct mortgage interestonly up to $1 million of mortgage debt, says Meighan. If you have $1.2 million in mortgage debt, for example, deduct only the mortgage interest attributable to the first $1 million. - This article provides general information about tax laws and consequences, but shouldn’t be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.
- This article may be read in full on HouseLogic.com here.
Move To Portland, Oregon — Everyone Is “lovely”!
According to the folks across The Pond, Portland Oregon is among the five best places to live in the world! In a recent article* in the British newspaper, The Guardian, Portland has been “the capital of liberal, hipster USA for decades.”
What makes Portland such a great place to live?
According to the article, there are a number of reasons, among them the fact that “cyclists are loved, not loathed”, “Portland has the highest number of microbreweries in the world’, and it’s “the most bike- and foot-friendly city in the country, packed with proper cycle routes.”
But perhaps the best quote from the article as to why Portland rocks? “Everyone is lovely.”
*Read the full article here.
And, whether you agree or disagree about how “lovely” everyone is, you can’t deny that there are some “lovely” real estate deals in town with currently over 160 properties for sale under 100k!
Search all Portland Metro area homes for sale here.
Oregonians Beware: Fee-Based Foreclosure Review Scam
We’ve talked before about different scams that are out there targeted toward struggling homeowners, and now there’s a new one to be aware of.
In a recent article*, The Oregonian’s Elliot Njus discusses this new “fee-based foreclosure review scam”:
“Homeowners in foreclosure between Jan. 1, 2009, and Dec. 31, 2010, can request an independent review if their loan service participates in a program ordered by federal regulators. Homeowners who are eligible should received a letter last year with details, and some homeowners may be entitled to compensation.
But there’s no cost associated with a review under the government program.”
Njus outlines how these scammers work:
“The suspect offers may guarantee compensation, a loan modification or halt legal proceedings. They may also ask for personal information — contact information, social security numbers, banking information or credit card numbers — in an email.”
*Read the full article on Oregonlive.com here.
Remember, never ever ever pay an upfront fee or give your personal details to anyone without first confirming they’re legitimate! Do not let your financial situation cloud your judgement; if it sounds too good to be true, it probably is.
If you have questions, or would like more information about independent foreclosure reviews, contact the Federal Reserve board at 888-952-9105 or go to independentforeclosurereview.com.
Take Action Against Online Censorship.
Many websites are blacked out today to protest proposed U.S. legislation that threatens internet freedom: the Stop Internet Piracy Act (SOPA) and the Protect IP Act (PIPA). From personal blogs to giants like WordPress and Wikipedia, sites all over the web — including the Fred Real Estate Group blog — are asking you to help stop this dangerous legislation from being passed.
Please watch this video to learn how this legislation will affect internet freedom, then scroll down to take action.
Publishing freedom is a right we must protect.
Please join us in taking a stand against this censorship and take a few minutes to head over to americancensorship.org to take action. It only takes a few moments of your time to be an agent of change!
Real Estate Brokers In Portland, Bend, and Eugene: Fred Real Estate Group Is HIRING!
AT FRED REAL ESTATE GROUP, WE BELIEVE IN OUR BROKERS AND ARE COMMITTED TO THEIR SUCCESS.
Are you a licensed real estate broker in Bend, Portland, or Eugene? Are you sick of paying through the nose for desk fees? Do you want to make more money? If so, we really should chat…
We are building a company where brokers believe in a strong work / life balance, want to be part of a fun and “drama free” company, and want to make substantially more money.
Fred Real Estate Group believes in providing their brokers: unbelievable commission splits with no junk fees, full flexibility in running their business, and offering unparalleled tools to succeed.
If you are ready for a change and want to be part of a company that thinks “outside the box” and is focused on their broker’s success, then please contact Fred for a confidential chat.
For more information, check out our local Careers pages: Portland, Bend, Eugene
40 Year Low For Home Affordability!
As home prices continue to fall, “…homes are more affordable than they have been since 1971.” This quote from the recently released December edition of the Obama Administration’s Housing Scorecard (a comprehensive report on the nation’s housing market), from the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury.
So, this is good news, right? Well, yes and no. The housing market may have made some slight improvements over the past year, but it’s still very fragile and there’s still an uphill climb.
While housing may be more affordable, lending standards are more rigid meaning fewer consumers qualify for mortgages based upon credit ‘blemishes’, etc. (See our full blog post here regarding overcoming credit blemishes.)
But, on a positive note, there’s reason to believe that the housing market is indeed picking up and 2012 is a good time to buy if you have the credit needed, or the cash.
“The substantial gain in the number of improving housing markets in January shows that more consumers are looking favorably at a home purchase in light of today’s historically low interest rates and attractive prices,” said Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. The average rate of a 30-year-fixed mortgage dropped to match the lowest on record last week, with Freddie Mac putting the number at 3.91 percent. (Source: AOL Real Estate, “Improving Housing Markets Nearly Double, New Data Says”)
AOL also reports*: “Despite the positive signs, the foreclosure crisis could continue to be a “lingering problem in 2012, NAHB senior economist Robert Denk told AOL Real Estate.
“Things are not great, but they are coming down,” he said. “There’s no imminent threat that things are going to get worse on that front.”
*Read the full AOL Real Estate article here.
Fred’s Houses Of The Week: HOT Homes For First Time Homebuyers!
TWO FANTASTIC REMODELS IN SE PORTLAND!
The scoop: These two homes are sure to go fast! If you’re in the market for a home that’s been beautifully remodeled throughout, these two properties both offer TONS of upgrades and features, including: new kitchens, new flooring, new paint, new bathroom fixtures, and so much more.
Check out the links and photos below for more info:
10105 SE Pardee St, Portland, OR 97266
CLICK HERE FOR FULL PROPERTY DETAILS!
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6325 SE 86TH Ave, Portland, OR 97266
CLICK HERE FOR FULL PROPERTY DETAILS!
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Your Current Credit Score And Its Impact On Getting A Future Mortgage
Let’s face it, if you’ve got perfect credit, you’re in the minority these days. The sad reality is that most people have some kind of credit “blemish” to overcome — bankruptcy, foreclosure, short sale, late payments, to name a few. In fact, “50 million people have lost significant credit-score points during the past several years.” (Source: “As consumer credit scores plunged in 2008-2009, lenders raised their standards“, The Washington Post)
So, just how do these “blemishes” impact your credit score, and more importantly, what can you do to clean up and rebuild your credit moving forward, especially if you’re in the market for a future mortgage?
In a recent article* in The Washington Post, they address this very topic. The article states:
“In research conducted last year, FICO estimated that a homeowner with a 720 score who falls 30 days behind on mortgage payments can take as much as 30 months to recover the 70 to 90 points he would lose because of the late payment. And this assumes the owner gets current on all debts, keeps balances relatively low on credit cards and generally becomes a model user of credit. For homeowners with scores in the 780 range to start, the same 30-day delinquency — with a loss of 90 to 110 points — can take 36 months to cure fully.”
To even consider applying for a future mortgage, you’ll need to go into rebuilding mode. But first, know where you stand! Before you can “fix” anything, you need to know exactly what your credit looks like by checking your credit report.
Tips for improving your credit:**
- Pay your bills on time. Delinquent payments and collections can have a major negative impact on a credit score.
- Avoid overextending yourself and keep balances low on credit cards and other “revolving credit.” High outstanding debt can affect a credit score.
- Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix. It probably won’t improve your credit score.
- Pay off outstanding debt rather than moving it around. Also, don’t close unused cards as a short-term strategy to improve your credit score. Owing the same amount but having fewer open accounts may lower your credit score.
How Long Does It Take To Rebuild Your Credit?**
The length of time to rebuild your credit history after a negative change depends on the reasons behind the change. Most negative changes in credit scores are due to the addition of a negative element to your credit report, such as a delinquency or collection account. These new elements will continue to affect your credit scores until they reach a certain age.
- Delinquencies remain on your credit report for seven years.
- Most public record items remain on your credit report for seven years, although some bankruptcies may remain for 10 years and unpaid tax liens remain for 15 years.
- Inquiries remain on your report for two years.
**Source: Experian.com
When you’re ready to purchase a home again, there are more “immediate” loan options available to keep in mind, such as FHA:
“Though the average FICO scores of its customers have never been higher, FHA still accepts scores in the upper 500s and is more open than other financing sources to hearing about “extenuating circumstances” — unexpected job loss, medical problems, divorce and other issues — that caused your credit score to plunge in the first place.”
*Read the full article in The Washington Post here.
