Kerstin G. Brooks, Broker

Struggling to make your mortgage payments?

The Obama Administration’s Making Home Affordable Program includes opportunities to modify or refinance your mortgage to make your monthly payments more affordable.

If you are struggling to make your mortgage payments you should watch this video:

http://www.youtube.com/makinghomeaffordable#p/u/1/wieAk15SE3c

After watching the video, contact your lender to see if a mortgage refinance or modification is right for you and will allow you to adjust your payments in a way that make them more manageable and allow you to keep your home and avoid foreclosure.

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc
http://www.propertyinseattle.com
206.276.5827

Federal Homebuyer Tax Credit effective through April 30, 2010

The Federal Homebuyer Tax Credit is effective now through April 30, 2010. Eligible buyers must have signed a purchase contract by April 30, 2010, and close the transaction on or before June 30, 2010. Restrictions apply.
Please consult your tax advisor for full details about this tax credit.

Amount of Tax Credit: First-time home buyers may qualify for up to $8000 (10% of the purchase price, up to a maximum of $8000). Repeat/move-up buyers qualify for up to $6500.

Eligibility: Qualifying first-time buyers must not have owned a principal residence during the three-year period prior to the purchase. Qualifying repeat buyers must have used the home sold or being sold as their primary residence consecutively for 5 of the previous 8 years.

Income Limits: $125,000 for single tax payers; $225,000 for joint taxpayers.

For a great visual summary, please view the following pdf file:
Federal Homebuyer Tax Credit Education Guide

Keep in mind that this is just a brief overview of the Federal Homebuyer Tax Credit.

For more detailed information about the federal home buyer tax credit program, contact the Brooks & Heinze Real Estate Team in Seattle.

Kerstin G. Brooks
Brooks & Heinze Team
Phone: 206.276.5827
Email: info@propertyinseattle.com
http://www.propertyinseattle.com

Under water? Can’t afford your mortgage payments anymore? Short Sale as Foreclosure Avoidance Tool best for some Homeowners

According to yesterday’s issue of the Puget Sound Business Journal, about 16 percent of all residential properties with mortgages were in negative equity at the end of the year in Washington State.

Negative equity means the homeowner owes more on the home than the home is worth. This can occur because of a decline in real estate value and/or an increase in mortgage debt.

In Washington state, there were 3,288 foreclosure filings in November of 2009, with one in every 835 housing units receiving a foreclosure notice — a 15 percent increase from November 2008.

Today, the Seattle PI reported more bad news about the Labor Market. According to the PI, it was the second straight week that claims rose unexpectedly. High unemployment remains one of the biggest obstacles to a sustained economic recovery.

In short, the economy is still shaky and more and more homeowners are struggling to make their mortgage payments and feel stuck because they know they cannot sell their home at a price that will cover their mortgage. Depressed, scared and uninformed about their options, many wait until the bank forecloses and evicts them from their home.

For some homeowners, a short sale may be the option they are looking for. A real estate agent may be able to sell their home in a short sale which means the bank allows them to sell their home at market value and forgives some of their mortgage debt to make the sale possible.

Each situation is different and there are no guarantees. If anyone says they can guarantee a successful short sale or charges you upfront, nonrefundable fees to negotiate a short sale for you — run!

Generally, a short sale is better for a homeowner than a foreclosure. The ramifications of a short sale on your credit history are much less severe than with a foreclosure. If you are looking to apply for an apartment and you have a foreclosure and bank eviction on your history, you may have a hard time finding a rental. Bad credit will also affect your insurance rates, employment opportunities, etc.

Your eligibility for a new home loan will be affected more gravely with a foreclosure on your record. Underwriting and qualifying guidelines for mortgages change all the time but with a short sale on your record you may qualify for a new loan in a couple of years, whereas a foreclosure may keep you from buying a new home for 6-7+ years.

If you are in the Greater Seattle Area and want to talk to an agent about selling your home as a Short Sale, please contact the Brooks & Heinze Team for a free, no-obligation consultation.

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
Ph: 206.276.5827
Email: info@propertyinseattle.com

Houses for Pennies on the Dollar? Really?

Many buyers have heard that Seattle real estate is more affordable than ever. Yes, prices have dropped quite substantially but when I hear people saying or I read articles about “Houses for Pennies on the Dollar” I get a little perturbed.

We have had a few people contact us with unrealistic expectations about what they can buy. We have had buyers asking us to find them large, updated homes with water views in nice neighborhoods like Greenlake, Richmond Beach, Queen Anne, etc. under $200,000. You’d be hard pressed to find a tiny tear down for that price in these neighborhoods.

Don’t get me wrong, there are bargains to be had but one must be realistic. Foreclosures and Short Sales can be a good value but they often require work and patience.

Buyers want to look at bank foreclosures, but they don’t want to do any work if it needs repair. They expect all homes should sell at the bank foreclosure prices regardless of whether they need work or not.

The homes that need a lot of work are the ones that sell for bargain prices. So, if you want a steal be prepared to have to do some work.

Many buyers feel the foreclosures set the prices in the neighborhood even though they may be missing a bathroom, have a structural issue and need tens of thousands of dollars in updates. Buyers are quite often dissatisfied with the condition of the distressed properties, but they don’t want to look at a regular home that is all fixed up because it is not a perceived bargain (when they can be).

You could take two similar homes next door to each other, one being a foreclosure and needing $35,000 in repairs and another being a normal sale and in excellent condition. The bank foreclosure might be priced $35,000 below the normal home, but when the buyer sees it they’re turned off. But then they’re also turned off by the price of the normal home because they feel it should be priced the same as the foreclosure fixer.

In short, there are bargains but be realistic. Either buy an updated home in good condition and get a fair price or get a fabulous bargain for a home that needs a lot of help and needs to be nursed back to health. Buying at a 20-30% discount compared to just a few years ago is a great deal and realistic. Homes for pennies to the dollar? Not in Seattle.

There are some great loan programs available for buying distressed and foreclosed homes that need repairs, such as the 203k FHA rehab loans & conventional construction loans.

For more information on these loan programs contact Michele Catoire at the Legacy Group in Bellevue, WA by email at michelec@legacyg.com or by phone at (425) 818-5885.

Michele Catoire

Happy bargain hunting!

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
Cell: 206.276.5827
Email: info@propertyinseattle.com

www.propertyinseattle.com

My house was sold at a short sale – do I owe taxes for the forgiven debt?

Homeowners who sold their house in a short sale are often cautioned by their lender, escrow officer, real estate agent or other professionals involved in the sale that they may owe taxes on the forgiven debt.

Usually, a homeowner who resided in the home (as their primary residence) sold at a short sale will not have to pay taxes on the forgiven debt thanks to Obama’s “Mortgage Forgiveness Debt Relief Act and Debt Cancellation”

Following is a reprint from the IRS website regarding this issue:

IR-2008-17, Feb. 12, 2008

WASHINGTON — Homeowners whose mortgage debt was partly or entirely forgiven during 2007 may be able to claim special tax relief by filling out newly-revised Form 982 and attaching it to their 2007 federal income tax return, according to the Internal Revenue Service.

Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec. 20, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was $2 million or less. The limit is $1 million for a married person filing a separate return. Details are on Form 982 and its instructions, available now on this Web site.

“The new law contains important provisions for struggling homeowners,” said Acting IRS Commissioner Linda Stiff. “We urge people with mortgage problems to take full advantage of the valuable tax relief available.”

The late-December enactment means that reporting procedures for this law change were not incorporated into tax-preparation software or IRS forms. For that reason, people using tax software should check with their provider for updates that include the revised Form 982. Similarly, the IRS is now updating its systems and expects to begin accepting electronically-filed returns that include Form 982 by March 3. The paper Form 982 is now being accepted, but the IRS reminds affected taxpayers to consider filing electronically, which greatly reduces errors and speeds refunds.

The new law applies to debt forgiven in 2007, 2008 or 2009. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. In most cases, eligible homeowners only need to fill out a few lines on Form 982 (specifically, lines 1e, 2 and 10b).
The debt must have been used to buy, build or substantially improve the taxpayer’s principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.
Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of tax relief, based on insolvency, for example, may be available. See Form 982 for details.

Borrowers whose debt is reduced or eliminated receive a year-end statement (Form 1099-C) from their lender. For debt cancelled in 2007, the lender was required to provide this form to the borrower by Jan. 31, 2008. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.

The IRS urges borrowers to check the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. Borrowers should pay particular attention to the amount of debt forgiven (Box 2) and the value listed for their home ( Box 7).

Note: Legislation enacted in October 2008 extended this relief through 2012. Thus this relief now applies to debt forgiven in calendar years 2007 through 2012.

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
www.propertyinseattle.com
206.276.5827

If you are looking for a CPA in Seattle, please contact Eric Kauppila, CPA, MS Tax at Greenwood, Ohlund & Co., LLP at 206.782.1767.

Green Remodel Transitioning to Green

Posted using ShareThis

Thinking about a green remodel?

Listen to Jacqueline Powers of Powers Design Company and the author of a workbook for home remodeling called “Transitioning to Green”.

Click on the link to listen: http://recyclewithkbk.podbean.com/2010/02/08/green-remodel-transitioning-to-green/

Also, Jacqueline Powers will be a presenter at a Green Remodel / Green Purchase Workshop together with Kerstin Brooks. The workshop will be held March 6, 2010 from 10:30am to 11:30am at 9709 3rd Ave NE #450, Seattle, WA 98115. Space limited, please RSVP to Kerstin at kerstinbrooks@earthlink.net or 206.276.5827.

Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.
Ph: 206.276.5827
Web: http://www.propertyinseattle.com/

Tax Time – A joyful time for homeowners

It is tax time. Yes, I know most people dread this time but for home owners this can be a joyful time. There are some really nice deductions and credits homeowners can take advantage of. Have fun with your 2009 tax filing and save some dough!

– tax credit for first time home buyers
– tax credits for move up home buyers
– property tax deduction
– mortgage interest deduction
– energy and home improvement credit
– moving deduction
– mortgage point deduction

Tax credit for First Time Home Buyers & Move Up Buyers
Most first time home buyers qualify for this tax credit of up to 10% of the purchase price (up to $8000) on their primary residence (restrictions apply) if they purchased a home in 2009.
Qualified buyers of a second home, who owned and occupied a primary residence for five consecutive years may take advantage o f a tax credit of up to $6500 (or up to 10% of the purchase price). Restrictions apply.

Property Tax Deduction
You may be able to take advantage of qualifying property taxes. You used to have to itemize your taxes in order to receive this benefit. Under the new rule, homeowners who do not itemize can boost their standard-deduction amount by up to $500/$1000 (single/married) for property taxes paid during 2009. Include a Schedule L with your 2009 tax return. Consult with a CPA or other tax preparer.

Mortgage Interest Deduction
Mortgage interest deduction on your home is one of the best ways to trim your tax bill as a home owner. You can only take the mortgage interest rate deduction if you are using Schedule A to itemize your deductions. Consult with your tax professional.

Energy and Home Improvement Credit
You may be able to take advantage of a credit up to $1500 for qualifying energy-efficiency improvements to your existing home, such as insulation, energy efficient windows, energy efficient heating, etc. Ask your tax professional about specific requirements and qualifying factors for this credit.

Moving Deductions
If you were one of the unfortunate people in 2009 who lost their job and had to move to take advantage of a new job, moving expenses may be deductible if you had to move more than 50 miles. Consult with your tax professional about which expenses may be deducted.

Mortgage Point Deduction, Refinance Points
When you buy a home, you get to deduct (all at once) the points you paid to get your mortgage. Many people refinanced in 2009 to reduce their monthly payments and take advantage of lower rates. If you refinanced in 2009 and paid for points you can deduct the points of the life of the loan. It probably won’t add up to much but every penny counts these days. Consult with your tax professional.

The information provided in this blog is for informational purposes only and is not to be construed as tax advise. We are real estate agents and cannot give you tax advice. Please contact your accountant or CPA about how you may be able to benefit from these credits and deductions. If you are looking for a CPA in Seattle, please contact Eric Kauppila, CPA, MS Tax at Greenwood, Ohlund & Co., LLP at 206.782.1767.

Kerstin G. Brooks

Brooks & Heinze Team

Skyline Properties, Inc.

206.276.5827

www.propertyinseattle.com

Smart Homebuyers are focusing on taking advantage of favorable rates along with the Tax Credit

Smart home buyers are focusing on taking advantage of the present, very favorable rate situation along with the still available tax credit.

Rates are likely to go up:

Please note that the main reason interest rates are so low is because the government is buying mortgage backed securities, or you may have heard the term “toxic assets”, which are basically sub-prime loans or loans that required no proof of income, allowed low credit scores and were generally 0% down.

After you get a loan through your bank or mortgage broker, the loans are sold to Fannie Mae and Freddie Mac and then those 2 entities package them up to sell them to investors. After the sub-prime meltdown no investors wanted them and so to keep Freddie Mac and Fannie Mae afloat, we, as taxpayers, bought them for essentially the “list price” even though they were not worth anything.

Even now, because interest rates are so low, private investors are not interested in mortgage backed securities (even though most of the loans now have a stringent qualification process) and so we, as taxpayers, are still buying them (and probably over-paying the banks).

In December (on the 24th, while most of the country was spending time at home with their family for the holidays) the Treasury announced there was to be no limit on what the government spent to bail out Freddie Mac and Fannie Mae. The prior limit was 400 Billion. This is a good article to explain what that means (besides we are all getting ripped off and our children, children’s children and so on will suffer). http://www.huffingtonpost.com/dean-baker/fannie-mae-and-freddie-ma_b_405117.html .

So, when the government decides to start stepping out of the big business welfare role, interest rates will go up and I presume that will happen in 2010 sometime. So, what happens when interest rates increase? Buyer’s qualify for less money and it impacts the housing market because buyers can afford less.

Tax Credit for First-time Buyers and Move-up Buyers scheduled to expire April 30, 2010.

In order to qualify for the credit, all home purchase contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

More about these tax credits can be learned in one of our prior posts from November 8, 2009 entitled “First Time Homebuyer Tax Credit Extended” and “A New Tax Credit for Certain Existing Home Owners”.

A great way to learn more about the above topics or decide if becoming a homeowner is right for you, please contact us or attend one of our home buyer workshops:

UPCOMING HOME BUYER WORKSHOPS

Date:	Thursday, January 28, 2010
Time:	6:30pm – 7:30pm
Location:	Northgate (Seattle) – 9709 3rd Ave NE #450, Seattle, WA 98115

Topics covered:
Loan Application Process, First-time Homebuyer Tax Credit, Market Conditions, Own vs. Rent Illustration, Home Buying Process, For Sale by Owner (FSBO), bank-owned, short-sale properties, Q & A. RSVP to Kerstin at 206.276.5827 or info@propertyinseattle.com

Krisanne Heinze & Kerstin G. Brooks

Brooks & Heinze Team

Kerstin Brooks – Seattle – Real Estate Sales – Biznik

Kerstin Brooks – Seattle – Real Estate Sales – Biznik

First Time Homebuyer Workshop

Topics covered:

Loan Application Process
First-time Homebuyer Tax Credit
Market Conditions
Own vs. Rent Illustration
Home Buying Process
For Sale by Owner (FSBO), bank-owned, short-sale properties.
Q & A

Presenters:

Micah Cade of Choice Home Finance
Broker #510-MB-29714
Phone: 253.732.1432
Email: micah@choicehomefin.com

Kerstin G. Brooks (Brooks & Heinze Team)
Skyline Properties, Inc.
Phone: 206.276.5827
Email: info@propertyinseattle.com
Web: www.propertyinseattle.com

RSVP to 206.276.5827 or info@propertyinseattle.com

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