Palm Harbor Realtors on Upcoming Mortgage Industry Changes

As Palm Harbor Realtors we’ve been studying up on the Financial Reform Act that became law last month.   Government regulators will be interpreting the law and creating rules for years to come, so it’s too early to tell how many of the facets of this sweeping legislation will affect you the homeowner. 

In July, RISMedia reported that CMPS Institute (a leader in the mortgage industry) had this to say:  “The main takeaway for homeowners and buyers is that mortgage rates are currently very low, and lending guidelines are not as bad as they could be once the new law goes into effect.  This means that if you can qualify for a mortgage now, you should do so, and not gamble your homeownership goals on the future impact of the new law”.  

They cited that it’s going to get harder to qualify for a mortgage even if you’ve got a great credit score, plenty of equity in your home (should you have one already), and have plenty of cash.  And they certainly aren’t alone with their prediction that we’ll all be  seeing higher mortgage rates because the law requires lenders to keep a 5% stake in many of the mortgages they originate.  This means  more risk for the lenders and higher rates for you and me.  Plus, the uncertainty of Fannie Mae and Freeddie Mac (now largely government enterprises who back most of the US mortgages today) could add fuel to that fire.

As we see it, it’s not so much a matter of if they are right, it’s a matter of when we’ll all begin to feel the pinch more than we already are.  

Harumph …. sometimes we just don’t want to hear anymore!

With its location in the southeastern part of the United States, Florida is known for its tropical weather, sandy beaches, tourist and culture hub. With so many incredible and diverse features, what potential home buyer would not take the opportunity to call this state their home?

The journey to purchasing a home is an enjoyable time in one’s life. But it is one that will bring many additional responsibilities. Having the assistance of a reliable and experienced Tampa/Sun Coast Florida real estate agent can make all of the difference during this process.

Asbestos

Many older homes built prior to 1980 may still harvest obsolete and corrosive building materials which can create health concerns. Living in the 21st century, there is a renewed importance towards environmental sustainability, green construction and lowering your carbon footprint. Many realtors have understood this important aspect of our lives and can greatly assist clients in achieving a green home.

Asbestos is the name given for a group of fibrous minerals that were mined for their qualities as fire resistant, insulation and high durability. Often appearing in roof shingles, popcorn ceilings, piping and insulation, asbestos became one of the most popular building applications of the 20th century.

Healthy Tips

If you locate any suspected asbestos in the home, most experts suggest leaving it un-disturbed until a home inspector can examine your property, take evaluations and determine the safest course of action. Sometimes the best action is no action at all. Disturbing asbestos in good condition may cause its fibers to be released into the air.

Exposure to damaged airborne asbestos fibers can lead to the development of a severe lung ailment known as malignant mesothelioma. Due to the fact many mesothelioma symptoms are similar to less serious ailments, Diagnosis of mesothelioma is one of the more difficult tasks physicians encounter.

Removal of asbestos in public facilities, workplaces and homes should be performed by licensed abatement contractors as long as the National Emissions Standards for Hazardous Air Pollutants (NESHAP) are not violated. They must wear protective equipment such as masks and gloves to avoid any exposure. The materials should be removed in as large pieces as possible and places in disposable bags.

Green Alternatives Healthier and Efficient

Implementing Eco-friendly methods of building can have positive environmental, health and economic benefits. These include: Conservation of natural resources, enhance air quality, protect Eco systems, energy sustainability, increase property value, improve quality of life, improvement of pulmonary and cardiac health, Reduction of waste.

If asbestos is removed, green forms of insulation should be used as replacements. These include the use implementation of recycled building materials such as lcynene foam, cotton fiber and cellulose. These alternatives not only allow for a healthy and safe home, but can bring down annual energy costs.

For example, the use of cotton fiber foam has demonstrated to reduce energy costs by 25 % per year. As education and technology of green sustainable practices increase, the numbers will continue to rise.

We recently reviewed the benefits to buying a Pinellas home now.  Pinellas real estate over the long term has always historically appreciated, n0t to mention there are many tax saving and intangible emotional benefits to home ownership.   And whoa …..  interest rates are ridiculously low.  If you’re a first time homebuyer looking for an FHA loan, you’ve got critical timing issues to consider that can affect your wallet.

Now is the time to be investing in Pinellas real estate, because by time the bottom has been officially announced in the St. Pete Times, it will be staring at us in the rear view mirror.

Am I Eligible?

• The $7,500 tax credit is for first-time home buyers only for any home in the U.S.  If I haven’t owned a home in the past 3 years, I qualify!
• I must be a U.S. Citizen and file my taxes.

Will the Palm Harbor Home I’d Like to Buy Qualify?

• Any Tampa Bay home qualifies as long as it’s my principle residence.

Do I Earn to Much Money to Qualify?

• Dunedin home buyers filing as single or head-of-household can claim the full $7,500 if  my adjusted gross income (AGI) is less than $75,000.
• Married couples filing jointly can double that to $150,000.
• Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial credit.
• Married couples filing jointly who earn between $150,000 and $170,000 are eligible to receive a partial credit.
• If my AGI is greater than the limits above, I am out of luck.

When Must I Buy My Palm Harbor Home?

• I need to have closed on the purchase of my home on or after April 9, 2008 and before July 1, 2009. 

Will the IRS Write Me a Check for $7,500?

• If I pay less than $7,500 in taxes for the year, then they IRS will cut me a check for the difference.  For example, if I owe $5,000 in taxes, I will pay nothing to the IRS and they will cut me a check for $2,500.  Or, if I am due to receive a $1,000 refund, my refund will grow from $1,000 to $8,500.  SWEET!  (We’ll ALL be paying for it in other ways but let’s not digress!)
• If I purchased my home in 2008, the credit must be claimed with my 2008 tax return.  If I plan to buy my Palm Harbor home in 2009, then I have the option of filing it either with my 2008 or my 2009 tax return.

The Catch …. Payback Provisions

• The tax credit is an interest-free loan that must be repaid over 15 years.
• The minimum repayment amount must be 15 equal annual installments.  For example, if the credit amount is $7,500, then I must repay a $500 each year for 15 years. 
• If I didn’t take advantage of the tax credit and borrowed that same $7,500 from my mortgage lender at 6% for 15 years, I would pay $11,392.96 of interest in addition to repaying the $7,500 principle!
• I must begin repaying the credit two tax years after claiming the credit. 

What Happens When I Sell My Palm Harbor Home?

• When I sell my home for a profit, then I must repay the remaining credit during the tax year I sell my home.  The amount of of my repayment depends upon the amount of profit from the home sale:
  • If the profit on the sale is more than the remaining credit, then I must repay the entire remaining credit. 
  • If the profit on the sale is less than the remaining credit, then I must repay an amount equal to the profit on the home sale.  The remaining credit payback will be forgiven.
• If I sell the home but did not make any profit on the home sale, then the remaining credit payback will be forgiven.   

Oh, The Silly Disclaimer

As always, please don’t construe this article as legal, accounting or tax advice.  Always contact a tax accountant for advice specific to your situation.  That being said, we think you’ll be hard-pressed to find a professional that says this isn’t a fantastic opportunity for free money! 

How Do I Get Started?

It’s easy.  Give us a call at (727)366-0324 or contact us here to start your Tampa Bay home search today.  Of course, you can also search the MLS like a Realtor!

It’s called Listingbook.  You’ll see new listings as they hit the market, price changes, contracts that go pending, how many days a home has been on the market and so on, just like we do.  You get to drive the bus and customize your searches any way you like, and as often as you like.

We’ve been offering Listingbook for a while now, but we heard it can offer a lot more, not just for those of you wanting to purchase a Clearwater Beach condo, but for our Crystal Beach FLhome sellers, too.  So, yesterday, we jumped at the chance to attended a free advanced training session presented by Tara Jacobsen of Marketing Artfully and sponsored by Joyce Smith of Somers Titleand Ingegrity First Funding Group in Dunedin.  Tara blew our hair off.  We’re going to be working hard in the next few weeks to bring you all of the bells and whistles we learned about to help make you the most informed Pinellas home buyers and sellers out there!    

Sign up and tell us what you think.  Surfs up!  (yes, that’s Matt being an off-duty Realtor and our son catching a few waves at Lido Key in Sarasota).

Q:  I’m thinking about putting an offer your listing in Baywood Shores MLS 7346686.  I see that it’s a bank preapproved short sale at $283k (subject to 3rd party lender approval). My question is, how much leeway do you think there is on making a lower offer?

Also, I know that sometimes banks can take several months to accept/deny an offer.  Is it because they are waiting to see if they can get a better offer? If so, is there a way to write into a contract that if they receive a better offer during this “waiting period” that we may consider renegotiating ours at a higher bid?

A:  Hi Tina – Please give us a call and we’ll fill you in completely on the particulars of where we are with both lenders, other offers, suggested offer amounts, etc.

We are Pinellas short short sale experts and would be happy to fully familiarize you with how short sales work. Generally speaking, the banks are taking so long because they are so overwhelmed with case files that they can’t keep up with the workload.  Pinellas short sales are unusual in that the homeowner doesn’t have a vested interest in the amount the home sells for (they just want to know that they are out from under the house payments), so it’s just the lender(s) we are negotiating with. The bright side of this is that the banks aren’t emotionally tied to the outcome as is the case with your typical home sale, and things are handled very matter-of-factly.

All agents handle short sales differently. With the homeowners approval, we present all reasonable offers in the order received (but the seller has the ultimate say so as to which offers to accept, deny or negotiate before we submit to the lender), because we believe it’s only fair to treat buyers with the respect they deserve. So, if offer #1 and the bank don’t come to terms, then offer #2 steps in, and then they have the opportunity to negotiate the price, and so on.

Note that most short sales are not handled this way!  Many agents submit multiple offers to the banks (I’ve seen more than a dozen on a single property), and then it can turn out to an all-out bidding war with no assurances for the would-be buyers.  This is a subject for another post…..

With a Tampa Bay short sale, we have 3 vested parties to satisfy.  We, of course, want our buyers to get the best deal possible.  Our homeowners want relief.  The lender wants to avoid the cost of foreclosing and to net the maximum amount possible.  

Short sales are a WIN-WIN-WIN!