Kathy Peacock-Morgan

What are your thoughts? Fox and Friends this morning quoted Robert Shemin, one of America's top real estate educators as having stated "Sometimes it is best to just walk away from your mortgage." Just turn your keys over... He is not the first that I have heard recommend this course of action. But he is the most responsible so far that I have heard...

He states that one of the biggest obstacles to just walking away is our sense of responsibility. We have psychological and ethical values that make it hard for us to walk away from a mortgage that we agreed to pay. This makes sense because the majority of folks out there are not irresponsible human beings. But not being able to pay their mortgage has caused many unlimited stress. And sometimes, to be able to start over, you might have to consider "just walking away."

However, I was very glad to also hear that Mr. Shemin also recommended that you don't just disappear in the middle of the night. There are options out there. You need to contact your mortgage company and try to work out a loan modification or short sale. To do the short sale, contact your local Realtor as many of us our now qualified and educated to do short sales. We can help! Other options include Foreclosure or Bankruptcy. Just remember, if you do decide to "just walk away", make sure that you get it in WRITING that they will not come after you for the balance.

Good Morning America...Top 5 Tips to Get Your Home Sold by Gary Keller

1. Don't try to make money...Price it below competition.

2. Don't be lazy...Avoid Clutter including refrigerator magnets.

3. Photos can be priceless...Showcase spring/summer home photos.

4. Don't be cheap...New is better than old and remember to promptly fix any known problems.

5. Be there...Make yourself available for questions. *Please note: Buyers will not look close at your

home if Sellers present home during the showing.

It was also noted on Good Morning American that winter is a good time to sell as there are far fewer

homes on the market during the winter as opposed to the summer.

Buying a home has always been an expensive decision. Unfortunately, during the economic times that we are currently experiencing, these costs have made purchasing a home extremely difficult. With this in mind, the United States Government has offered home buyers a tax credit incentive to buy a home. Qualified "First-Time Home Buyers" can receive a credit up to $8,000 and qualified "Repeat Buyers" can obtain a credit up to $6,500 provided that the home is purchased or under contract prior to April 30, 2010. Plus, if you are under a written binding contract by April 30, 2010, you will still be able to claim the credit providing you close no later than June 30, 2010!

The first Myth that needs to be addressed is what a "Fist-Time Home Buyer" actually is... Many believe (and rightly so) that a first-time home buyer would mean that a purchaser can not have owned a home before! Not so! For the purposes of the Tax Credit, the government has been very generous is defining a "First-Time Home Buyer" as a buyer who has not owned a principal residence for the three (3) year period prior to the new purchase. One other minor requirement would be that they have never used the DC First-Time Home Buyer Credit. They will not allow double dipping!

Then there is the "Repeat Buyers" which makes one think that anyone who has ever owned a home can qualify for the Tax Credit. Not so! The definition for "Repeat Buyers requires that the home owner must have lived in their primary residence for five (5) of the last eight (8) years in order to qualify for the credit.

As is the case with most tax credits, this credit will directly reduce your tax liability. At the time you file your taxes, you will be able to subtract the amount of the credit from your tax liability. This will either increase your refund amount or reduce the amount that you owe. The amount of the credit is equal to 10% of the purchase price with a cap of $8,000 for the "First-Time Home Buyer" and $6,500 for "Repeat Buyers". To receive the full credit for single individuals, their adjusted gross income has to be less than $125,000. For married filing jointing, the adjusted gross income should be less than $225,000. And the home must be your Primary Residence. This can include single-family detached homes, condos, or town homes.

The credit is not available for purchases between relatives or by non-resident aliens. And it needs to be stated that if you sell your home within 3 years of purchase, the entire tax credit will need to be paid back to the government. Since we expected to return to the "normal" annual appreciation, it is recommended that you hold onto the home for a minimum of three years.

Finally, you need to be prepared.... The government is now requiring proof of purchase at the time you claim the credit. Don't let this scare you as it will be easy to provide the proof. All you need to do is attach a copy of your SIGNED HUD (a/k/a Closing Cost statement) that you will receive at the closing table to your Tax Return along with the required tax forms.

As of May 29, 2009, the Department of Housing and Urban Development announced guidelines for FHA lenders allowing them to make the credit available at closing for closing costs and down payments in excess of the 3.5% normally required for an FHA loan. However, in order to take advantage of this option, the lender must be able to participate in the program.

As you can see, if you are even considering purchasing or selling a home...now is the time! Time is of the essence as this credit will expire soon... For more information, please log onto the IRS website at www.irs.gov/newsroom/article/0,,id=187935,00.html.

It used to be that when dealing with VA loans, the loan killer was a low value. Now value is not as much a problem as property condition. There are no problems with my buyers as they have excellent credit and job history. However, the house they wish to purchase is in need of many cosmetic repairs and they have a limited amount of funds without their current home selling first. At only $100,000, this is not a bad deal. Per the appraiser, the house now meets the VA minimum standards in it's FAIR condition (this after some minor repairs). But no mortgage company will give them a VA loan without it being in AVERAGE condition. It needs to be noted that FAIR vs AVERAGE is basically an opinion and it changes depending on the neighborhood. This house would not be considered AVERAGE in a more prestigious neighborhood but it is AVERAGE for it's neighborhood. Common sense would dictate that if there is a MINIMUM Standard for a VA Appraisal that it should somehow also meet the MINIMUM Standards for a VA Loan. But as we all know, common sense does not always rule.