We certainly have had an abundantly active hurricane season in 2008. As we say goodbye to Hurricane Gustav, everyone, including Florida State Emergency Services, legislators, and home insurers, have a wary eye on Hurricane Hanna, Hurricane Ike, and the newest-Hurricane Josephine.
In fact, we have experienced 10 names storms this hurricane season, which is typically the average or an entire hurricane season span, says meterology professor Hugh Willoughby of Florida International University.
When the threat of tropical systems exist, home insurers will typically devise a "geographical box", or an area that is suspended from insurance policy underwriting. For home sellers and buyers, this could alter plans for property closing. If you have a closing scheduled this hurricane season, be sure to check with your home insurance carrier to see if you are affected.
Advance planning can give you peace of mind...and save alot of frustration!
Brian C. Russell
"Uncompromising Excellence in Service"
Keller Williams South Tampa
(813) 875-3700 ext 288
If you had the unlimited resources to purchase the home of your dreams, fill it with the finest home furnishings money can buy, and display your most cherished family heirlooms and memories, you wouldn't dream of chancing fate, and leaving your belongings uninsured against damage, crime, or inclimate weather...would you?
If you are most people, the logical answer is, "Of course not!"
Even if you choose to lease, the way your protect yourself should be not different. Did you know that renters have excellent and affordable access to renter's insurance policies that cover the majority of the situations?
If you are most people, the most likely answer is "No!"
Insurance companies, large and small, offer renter's insurance policies that, in many instances, can be purchased for a few hundred dollars per year. In case you thought you misread, I will re-iterate...per year! Most policies cover up to $30,000 in loss, and many of them even cover theft/damage to items in your vehicle.
Often, renters opt not to carry additional coverage because they do not see the benefit of paying the nominal fee. But, most renters would agree that, if they wrote on paper a personal inventory of their belongings, it would be quickly evident the value of personal items and furnishings can very quickly add up!
For more information on coverage and policies, contact your insurance representative, or feel free to visit me at Www.TampaHomeWiz.com. It is a great resource for real estate information, and if you can't find the answer to your questions, I am always available for contact!
Brian C. Russell
"Uncompromising Excellence in Service"
Keller Williams South Tampa
(813) 875-3700 ext 288
By now, most homeowners have, at least, heard the term "short sale". For those that may not be familiar, a short sale is an alternative, for sellers who qualify, in lieu of foreclosure on their home if the amount owed on the mortgage exceeds the value of the home. If their lender approves the short sale, in essence, the seller walks away from their home for the amount negotiated for the purchase, and the lender foregives any remaining balance.
clShort sales are a new trend in the real estate market and, understandably, it has taken industry professionals from agents, title/closing agents, and lenders quite some time to establish a system and clear confusion on how the process is supposed to operate. The same is true of state governments, who have taken an adjustment period of trial and error as well to acclimate to the process.
Late last year, the president signed the Mortgage Debt Relief Act. Before this legislation, taxes were required to be paid on the foregiven amount of the mortgage. After the legislation was passed, homeowners are only expected to pay taxes on the amount up to the purchase price of the home. That is, of course, unless the home is not the primary residence of the homeowner as is the case with most investors. The concept behind the legislation is to offer no incentive to homeowners who absorbed multiple property investments in the real estate craze of a few years ago, and are now in dire financial circumstances in the current real estate climate.
For homeowners who are facing short sales, and are residing in the struggling property as the primary residence, will not be affected by this new legislation and will remain responsible only for taxes on the mortgage up to the purchase price amount.
However, investors will be responsible for income taxes based on the full satisfaction amount of the mortgage. For example, if the mortgage amount owed on the property is $250,000, but the property is sold through an approved short sale for $200,000, the government will consider the difference of $50,000 income. The investor-owner will be taxed accordingly on this income.
The trickle down effect does not end with the income consideration. The Florida Department of Revenue has also determined that the amount of debt foregiveness in a short sale will also determine how the documentary stamps on the deed will be computed. This tax determination is best explained in an example provided by Amy Gregory, Office Manager, or Hillsborough Title of Brandon. Consider this example:
Imagine, a hypothetical owner who has a first mortgage with an outstanding total amount due
(principal, interest, default interest, late fees, attorney fees, etc.) of $250,000, and a second
mortgage with an outstanding total indebtedness of $50,000 (again, including all amounts then
due under the 2nd mortgage)
And the two lenders agree to a short sale price of $220,000, which will be applied
Purchase Price $220,000
Expenses, realtor, title, etc. $10,000
Release to Second Mortgage 1,000
Balance to First Mortgage $209,000
Doc stamps will be due on:
Purchase Price $220,000
Forgiveness of Debt on 1st Mortgage - $41,000
Forgiveness of Debt on 2nd Mortgage - $49,000
Taxable Consideration $310,000
Doc Stamps due on deed at 70 cents per $100 - Totaling $ 2,170
An additional cash payment to the second mortgage, an unsecured note given for part of the
debt or continued liability of the borrower for the balance of the notes, reduce the amount of
forgiveness of debt income dollar for dollar. Meaning in this example if the 2nd Mortgage holder
requires the buyer to pay back the rest of the amount due on the mortgage by way of a Unsecured
Note, that amount of $49,000 would not be included in the calculation of the doc stamps.
The best advice, for homeowners facing this situation, is to consult a qualified tax advisor or appropriate attorney. If I may, personally, be of assistance to help homeowners facing this situation find the best answers, please do not hesitate to contact me at Www.TampaHomeWiz.com.
Brian Russell
"Uncompromising Excellence in Real Estate Service"
Keller Williams South Tampa
(813) 875-3700 ext 288
If Hurricane Fay, or any tropical system for that matter, has created havoc, frustration, and damage to your property, please use the following links to make searching for helpful information easier.
The Florida Office of Insurance Regulation has a website with a database of all insurers at http://www.floir.com/companysearch.
Citizens Property Insurance Corporation has their own dedicated website at https://www.citizensfla.com. Furthermore, if you need to place a claim with Citizens Insurance, you should call (866) 411-2742.
Both website links can be easily located by visiting my website at Www.TampaHomeWiz.com, and clicking on the tab for Hurricane Relief.
I hope all readers stay safe, and stay prepared for hurricane season!
Brian C. Russell
"Uncompromising Excellence in Service"
Keller Williams South Tampa
(813) 875-3700 ext 288
I am sure, by now, everyone has heard that we are living in a "buyer's market". With a record number of homes for sale across the country, and in Tampa Bay, how can the home buyer miss? You think to yourself, "If I can't do easy, quick business with one seller for the absolute best price, I can just move right on to the next deal, right?"
Well, quite possibly, but not necessarily. Aside from pursuing the purchase of your home without the advice and guidance of a knowledgeable real estate professional, there are five major mistakes that home buyers consistently make.
Featured on AOL.com Money & Finance, in conjunction with SmartMoney.com, here is a list of the most common.
#1 Waiting to Sell Your Current Home
The worst possible scenario any home buyer can face is the prospect of bridging two mortgages after they purchase a new home, and while waiting for their current home to sell. With an uncertainty of the time frame, or value a home buyer can likely recoop from the sale of their existing home, it can be tough to accurately target exactly how much you will be comfortable in affording in your new home.
To minimize financial risk, and a lot of anxiety, it is a good idea to follow a few simple techniques to minimize the impact of the sale of your existing home, and ease your transition into your new home. Be sure to contact me at Www.TampaHomeWiz.com for more tips and guidelines.
#2 Ignoring Your Credit Score
The only surprises a home buyer appreciates when purchasing a new home are the savings they will enjoy! Don't let your credit score offer you unpleasant surprises that may not be so enjoyable. Be sure to know your credit report, and order a personal copy to review for accuracy.
Your loan approval will be based on your individual credit, and depending on your credit score, may or may not qualify you for the most competitive rates that are offered. Furthermore, once you have found your new home, and are seeking loan commitment, do not make any major purchases that could affect your credit ranking!
#3 Skip the Pre-Approval Process
Again, this partly falls under the same advice of "never allow any unexpected surprises". The last thing a buyer wants to do is start their home search, only to discover their montlhy payment will be uncomfortable, they utimately cannot qualify for the home they really want, or they can't lock in the best rates to make their home purchase a sound decision. And on the topic of interest rate locks, without the pre-approval, the interest rate you see advertised today, may not be the interest rates that are available to you when you find the home you are planning to purchase.
Start early, lock in, and have piece of mind in your loan process!
#4 Not Budging on Your Budget
Every home buyer needs to find a home in a price range they can afford. And, in a buyer's market, there are certainly plenty to choose from. Having said that, once you have found the home you really want, and are negotiating the price, don't allow your inflexibility to prevent you from having what you really want.
A good rule of thumb, when figuring your monthly payments, is a "rule of nines". For every $1,000.00 you are mortgaging, your monthly payment will increase by approximately $9.00. With a reasonable amount of flexibility on your behalf, and the price of a dinner out, you can be moving into the house of your dreams!
#5 Signing a Contract with Contingencies
Contingencies, when they work to the buyer's protection, are great negotiating tools in a purchase offer/contract. Contingencies, placed on the seller's ability to sell the home and move out in order to complete the transaction, can turn into a home buying nightmare.
In addition to undefined timelines for completion of the closing, and undetermined moving dates, you may also find yourself, as the homebuyer, outside the "rate lock" period for that great interest rate you negotiated with your lender, and could be purchasing the property for significantly more money in the end.
Purchasing a home should be a positive experience, with no hidden surprises, or the stress and anxiety that comes with those surprises. I work with home buyers everyday to find the perfect home, at the best possible price, and with the fewest hassles!
I look forward to speaking with you!
Brian Russell
"Uncompromising Excellence in Service"
Keller Williams South Tampa
(813) 875-3700 ext 288
Tampa Bay Real Estate Professional with Uncompromising Service in Real Estate that Cannot be Paralleled!
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