Riding the Roller Coaster of Real Estate

In this business, no two days are the same. In fact, no two anythings are the same. I might have two BUYERS looking to purchase a home in the same town in the same price range with the same type of financing. However, their specific needs and motivations will be different as will their tastes, negotiation styles, and comfort levels with how to interact with SELLERS.  Of course, I might also have Sellers who have different views of how to interact with Buyers. The ups and downs of the market are full of unexpected twists and turns.

Recently, I have been working with one family that has been working to rebuild their credit after a fairly typical situation in the last five years. They had to SHORT SALE a home after a job change. So what are the  Steps to Home Buying Readiness for this family? First, I introduced them to an amazing Mortgage Development Officer who was able to assess their current credit rating. Next, she set them up on a specific savings plan to rebuild their credit  and create a savings account for a down payment.  After they paid down their debt, built up a savings account, and increased their credit score, we began looking for homes in their price range and in their desired neighborhoods.

One thing was clear, some homes had listing details that didn't exactly match the homes... such as one listed as having a legal accessory apartment which the town tax card had identified as an in-home office, or the one with 4 bedrooms, in which one was a small room in the basement with no windows. Some were listed as being in move-in condition and they were... if you looked past the sagging wall-paper and peeling paint. But ultimately, we found a home in their price range, in good condition, and available. Offer successfully negotiated, we're moving through the home inspection process and looking forward to closing. Keep your fingers crossed for us, folks.

It's a wild roller-coaster, this career I have in Real Estate, and I love it. Do you love your career, too?

Gosh, folks, it's been a while since I have written... But here's a little story about how sometimes things in Real Estate just don't work the way we all want them to.

Some time ago, I had some friends talk to me about listing their home. It was in mostly very good condition, but needed a few small repairs and some updates. Eager to impress them and to impress my office manager with my efficiency, I ran a market analysis, talked with them about doing the improvements and the pricing, and then put the house on the market while the work was still being done... This was one of those moments in which my own enthusiasm got the better of me and of more rational thinking. I can already hear all of you collectively groaning as you point out that it is far better to put a completed product on the market than one in development (unless it is brand new construction, but that is a totally different story).

So, what happened? Well, first the work took weeks longer than anticipated, so the house wasn't ready to show for the first few weeks it was listed. Then the market changed with the sale of a  few short sales and foreclosures in the neighborhood that brought the overall sales for the area down quite a bit. Next a slew of brand new construction properties came on the market with an extremely low base price. Throughout each of these changes, we were chasing the market instead of leading it or even driving it. Still I quelled any misgivings I had because I didn't want to hurt my friends' feelings. (I can hear you all smacking the sides of your heads here and wondering what I was thinking... clearly telling the most accurate information was truly the best thing I could have done).

Ultimately, all of the home improvement projects got completed (and look fabulous!), and the sellers really liked the updates. But we did not field an offer (despite many "interested" buyers). So we have pulled the house off the market for now. We will put it back on at some point, but this time, I will make sure we are fully ready for market and not in a half-way place when we start.

Sometimes we win, sometimes we don't, but this time really made me look at my practices and spend some time reflecting on how I conduct myself and my business and on the importance of staying true to my core value of telling people what they need to hear, not just what they want to hear. It is not a mis-step I will make again.



On a much brighter note, the buyers I have taken out shopping recently have all found homes on either the first or second day looking, put in offers, and been accepted. They are thrilled with their new homes and with the next stage in their lives.


Happy December everyone, and in case I don't get back here before, Here's to a Happy, Healthy, and Prosperous 2013!

Do you wish you could refinance, but you are underwater? Help is available!

HARP
    HARP 2.0

Home Affordable Refinance Program 2.0 is intended to help homeowner's who are current on their mortgage payments and qualify under the income and credit guidelines, but are considered "underwater" because the value of their home may have declined significantly and are unable to refinance due to loan program restrictions. This program is not intended to help homeowners who cannot afford their current home.

These homeowners bought their homes several years ago borrowing at an interest rate in the 6% range, put 20% down and now want to refinance at the current rates of 4% or below. Unfortunately, they are not able to do so because the values in their neighborhood declined to the extent that their equity is gone and despite the large down payment, their loan is over 100% to value.

What prevented the success of the original HARP program?
1    Under the original program, the homeowner could not refinance their loan if they owed more than 125% of what their homes were worth
1    Second mortgage lenders were reluctant to agree to resubordinate behind a new mortgage
1    Private mortgage insurers were reluctant to transfer the insurance policy to the new mortgage
1    Fannie Mae/Freddie Mac added price adjustments that eroded the benefits of refinancing
1    Lenders still had a high liability on the higher LTV's

HARP 2.0 actually encourages homeowners to go into a shorter term loan such as a 15 or 20 year vs. the traditional 30 year, which helps them build their equity faster and pay off the loan faster. This minimizes the reluctance of the subordination of the second mortgage lenders and that of the private mortgage insurers. The Fannie Mae/Freddie Mac price adjustments are eliminated; the lenders are no longer liable for following the rules of the program as designed and the LTV cap of 125% is no longer applicable.

Who is eligible?
1    The mortgage must have been sold to FannieMae/Freddie Mac before June 1, 2009
1    They must be current on the mortgage and have no late payments in the last 6 months. A late payment is defined as one that’s more than 30 days overdue
1    Must not have had more than one late payment in the past 12 months
1    This must be the 1st refinance through the HARP program

This program is a WIN for thousands of underwater homeowners who now have the opportunity to lower their monthly mortgage payments.


For more information about programs, current interest rates, and how to attract more qualified buyers or sell more homes, call your Sovereign Mortgage Development Officer, Tiffany Liebsch at 603-502-1080.

Is There a 3.8% House Seller Tax in the Health Care Bill?

This article answers many questions about the tax implications of selling your home... The answers may not be what you expect.
Is There a 3.8% House Seller Tax in the Health Care Bill?

Is There a 3.8% House Seller Tax in the Health Care Bill?

by The KCM Crew on July 17, 2012 · 0 comments

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The political rhetoric surrounding the presidential election has renewed the debate about the Administration’s Health Care Bill. We are again getting many questions about a possible 3.8% tax on home sales that some claim is in the bill. To answer these questions, we have decided to re-run a blog we posted earlier this year. – The KCM Crew

We have received many questions about a possible 3.8% tax which will be put on home sales beginning in 2013. We want to do our best to clarify this situation for everyone. We are not accountants and give you this information just as a simple answer to the misconception. Understand that, when it comes to IRS regulations, you should check with your accountant for the most accurate and up-to-date information.

A little history on the confusion

Fact Check.org explains it this way:

The truth is that only a tiny percentage of home sellers will pay the tax. First of all, only those with incomes over $200,000 a year ($250,000 for married couples filing jointly) will be subject to it. And even for those who have such high incomes, the tax still won’t apply to the first $250,000 on profits from the sale of a personal residence — or to the first $500,000 in the case of a married couple selling their home.

We can understand how this misconception got started. The law itself is couched in highly technical language that only a qualified tax expert can fully grasp. (This provision begins on page 33 of the reconciliation bill that was passed and signed into law.) And it does say the tax falls on “net gain … attributable to the disposition of property.” That would include the sale of a home. But the bill also says the tax falls only on that portion of any gain that is “taken into account in computing taxable income” under the existing tax code. And the fact is, the first $250,000 in profit on the sale of a primary residence (or $500,000 in the case of a married couple) is excluded from taxable income already. (That exclusion doesn’t apply to vacation homes or rental properties.)

The Joint Committee on Taxation, the group of nonpartisan tax experts that Congress relies on to analyze tax proposals, underscores this in a footnote on page 135 of its report on the bill. The note states: “Gross income does not include … excluded gain from the sale of a principal residence.”

And just to be sure, we checked with William Ahern, director of policy and communications for the nonprofit, pro-business Tax Foundation. “Some home sales would see a tax increase under this bill,” Ahern told us, “but it would have to be a second home or a principal residence generating [a gain of] more than $250,000 ($500,000 for a couple).”

Simple Explanation:

The following simple explanation comes from midiShaw:

The tax will affect those sellers of real property who will be otherwise taxed on capital gains under current tax laws. Under current laws, if you sell your primary residence and meet the ‘time ‘ criteria, you are exempt up to $250,000 or $500,000 (filing individually or jointly). Any amount realized OVER that amount is taxable under current tax schedules based on income. As such, this new tax will apparently be added to the current capital gains tax burden IF your income is over $200,000/$250,000 (filing individually or jointly). For those selling second homes and investment properties, the tax, once again, will be applied to the amount of gain realized.

Detailed Explanation:

The following also comes from midiShaw in a comment to the above answer.

Beginning in 2013, the national health care reform legislation that became law in March, 2010, imposes a new 3.8 percent tax on certain investment income. The new tax will apply to single filers with incomes over $200,000 and married taxpayers with incomes over $250,000. Under the law, the investment tax provisions in Chapter 2A of the Internal Revenue Code are placed under the heading “Unearned Income Medicare Contribution.” In general, this new Medicare tax will apply to investment income that is subject to income tax, which includes capital gains. Pursuant to IRC Section 1402 (C)(1)(A)(iii), the investment income to which this new tax applies includes “net gain” (to the extent taken into account in computing taxable income) attributed to the disposition of property that qualifies as a capital asset under Section 1221 (capital gains), as well as gains on other property that are considered part of ordinary income.

We offer this just as an explanation. Remember, when it comes to IRS regulations, you should check with your accountant for the most accurate and up-to-date information. 

Finding a Short Sale Expert

I hold SFR certification. Read below to see why it is important and what you need to know about Short Sales training.

Finding a Short Sale Expert:

This week, we have spoken about the importance of using an agent trained in the short sale process when selling or buying a home as a short sale. Today, we want to address how to identify those agents who are truly qualified. There are many local instructors who have done excellent work in this field. We appreciate their dedication and commitment. However, there are three designations recognized on a national basis. Here they are:

Certified Distress Property Expert (CDPE)

One of the first designations available in the field, CDPE has reached the milestone of 40,000 real estate professionals trained in foreclosure avoidance tools and strategies through the Certified Distressed Property Expert (CDPE) Designation course. CDPE is the fastest-growing independent designation in real estate industry history.

The CDPE designation is administered by the Charfen Institute which educates and trains real estate professionals and small business owners to find opportunities in chaos – either by providing solutions to the foreclosure crisis or empowering entrepreneurs with strategies to embrace their companies’ full potential.

The growth of the CDPE designation has been assisted by the support of top brokerages, including RE/MAX, LLC, Keller Williams Realty Inc, and Century 21 Real Estate LLC, as well as industry icons such as Chairman and Co-Founder of RE/MAX Dave Liniger, RealtyTrac, Realogy, Fannie Mae and Founder of Buffini & Company, Brian Buffini.

Short Sale and Foreclosure Resource Certification (SFR)

This is the designation offered by the National Association of Realtors (NAR). The SFR Certification is NAR’s short sale training program developed and continuously updated by industry leaders. The training covers both the seller and buyer side of the short sale transaction. Designed to prepare the agents for the short sale process from the first meeting with the seller through the marketing, contract writing and submission of the short sale package it has prepared over 50,000 REALTORS® across the country to successfully navigate the distressed property waters.

Short Sale Certified (SSC)

A newer entry into the field, the Short Sale Certified designation (SSC) focuses on local laws and trends in the agent’s footprint. The course was developed by Brandon Brittingham, a top producing agent who has personally completed several hundred short sales, and Gee Dunsten, a former national CRS president who has instructed and written short sale courses all over the country and is considered an industry expert.

SSC has just announced an alliance with the Leading Real Estate Companies of the World to offer short sale training to the 100,000+ agents in the network. This will include live training as well as distance learning.

Major Price Reduction

PLUS A Newly Updated Kitchen

46 FRANCE ROAD, Barrington
5 Gorgeous Bedrooms, and 2 Beautiful Acres: Now Just $275,000
MLS: 4131246

	$15,000 Price Improvement! Freshly Painted, and Brand New Granite Kitchen Counters! Act Fast, because this seller is also offering $3000 towards closing for a fully executed contract prior to April 20! Come take a look at this gorgeous post & beam Gambrel. First floor master, plus 4 more bedrooms upstairs with huge closets and bright windows gives this home the flexibility you need. Freshly Updated kitchen, spacious living room, den, & dining room offer many spaces for you to enjoy with friends or family. Get ready for summer out on your deck, plan a bar-b-que, hook up your hot tub, and enjoy! Nearly two level acres, with much of it fenced makes the yard the perfect place to relax. Newer appliances, updated electric panels and insulation, and a fabulous wood stove mean you have nothing left to do but move in! Easy commuting to Concord, Manchester, Portsmouth, and close to Mendham's Pond recreation area. Schedule your appointment today. Welcome to your fabulous country home!
			Loren Selig Coldwell Banker RB/Portsmouth 25 Maplewood Avenue Portsmouth, NH 03801	Loren.Selig@nemoves.com Off. Ph# : (603) 334-1900 Agt. Ph# : (603) 334-1815 Cell Ph# : (603) 953-3641 Fax Ph# : (603) 431-2140

Subject to errors, omissions, prior sale, change or withdrawal without notice.

What a Long Road it has Been

Quite a while ago, I began working with a young couple who wanted to buy their first home. They initially contacted me about one property which did not qualify for financing. In other words, that property could only be sold to a cash buyer.

My clients were certainly not in a position to become cash buyers. I did refer them to a couple of mortgage specialists  so that they could get pre-approved for a mortgage and know exactly how much they could afford. Once they had that information, we sat down to discuss their must haves in a home, in other words,  how many bedrooms, bathrooms, etc. they needed.  We identified the locations they were most interested in, and then began the search.

Early on, we saw a great Fannie Mae owned condominium. They loved it. I sent an email to the listing agent indicating that we were preparing an offer, and then submitted the offer. We received no reply at all. A few days later I discovered that the property was scheduled for absolute auction. Disappointed, my clients and I moved on. We looked at many, many houses, many of which were nothing like their listing details. Most frustrating for all of us was that prior to each showing, I sent the listing agents emails asking if the properties were eligible for the specific types of financing for which my clients qualified. In almost every case, I received a reply of yes from the other agents. We would view the properties,  research the comparables, and begin to prepare an offer only to then be told by the listing agent that they were very sorry, but the property did not qualify for any financing and required a CASH BUYER. One in particular, the agent acknowledged that his sellers had told him if he did not have any showings in that time period, they were withdrawing their home from the market, so he neglected to mention to me that the property's well was only 10 feet from their septic system. Blech!

It was very frustrating, but my clients hung in there through the process. In the middle of it, our buyer's agency contract expired, I switched real estate agencies, and we had to begin all of the paperwork again. I fully expected my buyers to choose to work with someone else. "No way!" they said, "We like working with you!" So we re-signed all of the relevant contracts and began again. We found another property they liked, contacted the list agent to prepare a contract, were told that there had been no other activity on the property. Just after we submitted the initial Purchase and Sales Contract to the list agent, she emailed to tell me that the property now had multiple offers. How in a matter of hours it switched from no activity to multiple offers is a bit amazing to me, but I suppose it happens. Unfortunately for my buyers, one of the other offers was a straight cash deal, so their offer was declined.

Out we went a few days later to view some other homes. One had just come on the market that morning, an REO, or Bank Owned property (actually owned by the VA). They loved it, and though it was at the top of their price range, we put together another offer. The listing agent kept getting confused about who owned the property and what the offer requirements were. Ultimately, their offer was countered with a higher price than the property had been listed for. My buyers began to think that they were never going to be able to buy a home.

The same day that we received word their offer would not go through, we discovered that the very first condominium they had been interested in was back on the market! Without going to see it again, they decided to write up an offer on it. I contacted the agent. She told me we were in another multiple offer situation and that their offer needed to be their highest and best. We submitted it with a copy of the information about the first offer they had submitted on the property nearly 6 months before. Two days later, I received a wonderful phone call: OFFER ACCEPTED.

The home inspection went well. Their mortgage broker has been working with the lending company and the title company, and we are rapidly moving towards closing.

It's been a long road, but when I get to hand them the keys and tell them they are now homeowners, it will all be worth it.


If you know of anyone who would be interested in buying, selling, or investing in real estate, please let me know. I would be delighted to show them exactly what I can offer to them.

Changing Agencies

For those of you who have been following my little blog, first of all, THANK YOU!, second of all, you may have noticed a small change in my bio. Two weeks ago I made a move from Keller Williams Coastal Realty (KWCR), where I got a wonderful start in the business to Coldwell Banker Residential Brokerage (CBRB) in Portsmouth, New Hampshire.

I have been asked by many people why I made the change, and whether I was unsatisfied with KWCR. In truth, I really wasn't. The leadership at KWCR and the education coordinator Shannon Aldrich provided great opportunities to learn and grow my business. But my daddy always told me that sometimes in life you've got to make a move just because you know you do, and that was the case for this transition.

Physically speaking, I have moved a mile down the road. Coldwell Banker's office is right in downtown Portsmouth, walking distance to almost everything. Professionally, I have moved into a smaller office with a more personalized view of the business. Mary Williams, the head of this office, welcomed me with open arms (literally!) after trying to recruit me for two years. Within days, I was provided with everything I need to make the transition smoothly. Here at CBRB, I am able to enjoy the benefits of individualized coaching, online marketing support, access to the most current market data (which is literally updated every few minutes), and much more.

The things that will change will be my email, my brokerage, and my webpage (please be patient with www.SellWithSelig.com as it goes through the transition process, too).

The things that will never change include the personalized care I give to each client, my dedication to growing my knowledge and acting with integrity, my desire to educate clients about the process of buying, selling, or investing in real estate, and my commitment to finding the very best service providers to use for referrals.

Please let me know what types of blog posts you hope to see in the future. I am looking forward to this next chapter in my career and hope to be a resource for you as you change any chapter in your own life.

INTEREST RATES ARE AMAZINGLY LOW!!!

Have you seen the most recent MORTGAGE RATES? 

 

At these rates, you should definitely investigate buying a home, investing in a secondary property, or becoming a landlord.  

In fact, if you are currently renting and don't think you can afford to buy a home, you should seriously consider buying a duplex or another multi-family property. You could own your own space and rent the remainder for MORE than your MORTGAGE PAYMENTS! Imagine being PAID to LIVE IN YOUR OWN HOME! Better yet, money spent on improving the property counts against any income you may make! 

Here is a look at some of today's rates:

 

30 Year Fixed Rate: 

Interest Rate
4.375

Points
0.125

APR
4.468 

 

5/1 ARM

Interest Rate
2.875

Points
0

APR
3.065

This rate may increase after consummation.

 

 

 

Jumbo 30 Year Fixed Interest Rate
5.000

Points 0.125

APR

5.049

Now that you are ready to learn more about New Hampshire homes, click here.

When is the Right Time to Prepare my House FOR SALE?

One question I have been asked recently is When is the right time to prepare my house For Sale?

The answer to this question is similar to the answer to "When is the right time to save money?" Begin as soon as possible.

What I mean by this is you should always have a sense of how much your home is worth, not just the appraised value determined by a  certified appraiser and used by your lender to determine what percent of your home you own versus owe; nor just the assessed value determined by your local tax authority (usually your town) to determine your home's tax rate; but also the Comparative Market Value,determined by a Real Estate Professional who compares the features of your home with those of similar houses that have sold recently (usually within the last 6 months) and prepares a Comparative Market Analysis or CMA for you.

To get a CMA, Contact your favorite Real Estate Agent and ask him or her to help you determine the price you should be able to get if you were to list your house today. Then take a look at your house and ask your self the following questions:
* What is the general condition of your home?
* What major repairs do you anticipate within the next few years? Are you on year 18 of a 20 year roof? Is your siding in good condition? Are there major cracks in your foundation?
* Does your Kitchen have matching appliances that are in reasonably good condition? Are your counter tops and cabinets in good shape? How do your bathrooms look? What repairs might they need?
* How is your curb appeal and what is your yard like? Would it benefit from some minor landscaping changes such as some established flower beds or some mature trees? Do you have trees scraping your house that really should be cut back or removed?

By determining which of these features are in great condition, good condition, and poor condition, you can set a priority list of items to work on over however much time you plan to live in your home, whether it is another twenty years or twenty months. This will also allow you to budget your time and funds appropriately for your lifestyle.

If you live in New Hampshire, click here to begin the process of getting a Market Analysis of your home.

How do I Know if I am Ready to Buy My First Place?

Recently someone asked me how she would know if she was ready to Buy her First Home, and what Steps to Buying a Home she should take. Here is what I suggested:


First and foremost, it is important to know your numbers. What I mean by this is that you should know how much money you have in savings and other equity, how much debt you have (credit card bills, student loans, car loan, etc), and what type of support you may have from other people to help you buy a home (a gift from your grandparents, an interest-free loan from your aunt, etc).

Second, it is important to have a great REALTOR®, one who can help you identify the most important aspects of your home, narrow down the search to relevant properties, assist you in tracking a particular real estate market, and coach you through the process.

Third, your REALTOR® should help you connect with a LOCAL MORTGAGE LENDER, such as Tiffany Leibsch of Sovereign Bank  or a LOCAL MORTGAGE BROKER such as  David Duplesis of Equity America  who can help you sort through all of your financial information and come up with a savings plan or identify a mortgage program such USDA, FHA, VA, or Conventional Loan that you already qualify for.

Why a Local Lender? Your REALTOR® and your lender need to work hand in hand through the process. With on-line lenders or lenders who may be across the country, they often do not know local real estate  laws, tax rules, and contract terms.This lack of information can lead to major headaches later on in the process. Additionally, the better the relationship between your REALTOR® and your Lender, the smoother the process will go.

Click here for more information about New Hampshire Real Estate and feel free to sign up for regular email updates about properties you might be interested in.

coincidences

I think it is amazing how you can put a thought out into the universe and then something related to it just happens. I was thinking about my desire to work with some new clients, and said so to one of my colleagues. Shortly thereafter, I received an email from a friend asking me if I could show her a particular house as soon as possible. Amazing! :-)

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