South Florida Real Estate Blog

It is bad out there. We know it, you know it, EVERYONE knows it. Sometimes it is important to remember: “Clouds may come, but clouds must go, and they all have a silver lining. For behind each cloud you know, the sun, or the moon, is shining.” 

We wanted to share a silver lining we have found amidst all the turmoil. This silver lining is called Ameridream.  Just like its name implies, Ameridream offers hope to both buyers and sellers in this challengingreal estate market. Ameridream is a private national charity that has helped over 255,000 families during the 10 years it has existed.  This program enables buyers purchasing any type of primary residence to receive a gift up to 10% of the home purchase price.  The only qualifiers are:

1) Buyer needs to choose a loan type that will allow a gift (VA/FHA) maximum financed amount of $423,700

2) No taxpayer or government money can be used

This unique program also helps sellers be proactive about selling their home. By obtaining Ameridream authorization, they open up their listing to no money down financing. In a buyer’s market, it is nice to be able to position your listing above others and make clear it crystal clear about your motivation.

So you see, there is hope out there. Whether you are a buyer who is tired of renting or a seller who is tired of just sitting around twiddling your thumbs, opportunities abound! 

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We have exciting news to share that we know many people have been waiting for….

H.R. 3648, the Mortgage Forgiveness Debt Relieft Act of 2007, was signed into law earlier today by President Bush.  This is terrific news for anyone facing a “short sale” on their primary residence. We have read the bill in its entirety and have cross-referenced it with the IRS Tax Codes. Here is our understanding of how it will work in plain English:

The Mortgage Forgiveness Debt Relief Act removes the potential tax liability on the phantom income associated with a “short sale.”  There are, of course, limits and restrictions.  For example, the maximum amount of “forgiven debt” is $2,000,000 for a married couple filing jointly and $1,000,000 for a single person.  Because the bill only applies to a “principal residence,” investment properties and second homes are not eligible.  Wondering what they deem a principal residence? We were too.  They refer to section 121 of the IRS code which breaks it down quite simply to whether or not you have lived in the home you own for any two of the past five years.  If you have, then it is a principal residence.

The Mortgage Forgiveness Debt Relieft Act beomces effictive immediately.  Thankfully, it is retroactive and will encompass any short sales of primary residences since January 1, 2007.  If you went through a short sale situation after January 1, 2007 which involved your primary residence, you will not be liable for taxes on the amount of the forgiven debt as long as it is less than $2 million dollars.

Here is the Mortgage Forgiveness Debt Relief Act of 2007 in its entirety.

We also recommend the following links for more information:

http://www.opencongress.org/bill/110-h3648/show

http://www.whitehouse.gov/news/releases/2007/12/20071220-6.html

We have helped many of our clients and friends out of a negative mortgage situation and have sucessfully negotiated the “short sale” of their mortgages.  Please contact us for more information about your personal situation.  Perhaps our insight can help you avoid unnecessary turmoil and heartache.

Call Natascha or Chris Tello @ (954)237-0600.

Check out what is happening in the mortgage market here and here.  Also, did you see that the new ballot language for the new Florida property tax amendment is available?

Unfortunately, we have been receiving more and more calls lately from homeowners telling us that they can no longer afford the mortgage payment on their home or on their investment property and are now being forced to sell.  Sadly, they come to find out that the amount of money they owe is greater than the current fair market value.  Thankfully, we may be able to help via the negotiation of a short sale with their lender.

Although a short sale is definitely a paper intensive program, it is NOT an impossible one.  You may be thinking to yourself, what exactly IS a short sale?  A short sale arises when a financially insolvent homeowner faces possible foreclosure and sells his/her home for less than the value of the loan owed on it.  The lender accepts the sale as payment in full on the loan to avoid the often costly foreclosure process.

A short sale is a win-win scenario for both the homeowner and the lender because despite their persistence, banks are not in the business of foreclosing and owning real estate.  If the lender takes a home back via foreclosure and does not sell it at auction, the property becomes an REO.  This is a big money loser for the lender as there are several carrying costs involved including but not limited to legal fees, eviction costs, taxes, insurance, HOA fees and the actual closing costs when they have obtained a buyer.

For a seller, a short sale will be much less damaging to their credit (a potential 50 point drop vs. a 200+ drop.)  They will also avoid a deficiency judgement.

What makes a seller a candidate for short sale? 1) The homeowner must be able to demonstrate hardship and be financially insolvent. 2) The property in question must have a market value below what is owed on the current loan.

Because the short sale process can be long and complicated, it often helps to have an experienced real estate professional by your side pointing out possible pitfalls and opportunities. Feel free to email shortsale@telloteam.com for a confidential response to any questions or concerns you have about the short sale process. 

As far as buyers are concerned, short sales and pre-foreclosures can offer great opportunities for value. We currently have two homes available in Western Miramar that are selling for much less than the most recent comparable sales:

Four Bedrooms - Two 1/2 Bathrooms - 2446 sq. ft - $350,000!

Six Bedrooms - Three Bathrooms - 4406 sq ft - $569,000!

Click on any one of the pictures for more information about each property or give us a call at (954)237-0600.

Welcome to Natascha Tello’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Southwest Broward and beyond.