Tere Rice

Well do ya? Let me ask you this, if you have to go to court would you show up without representation? Probably not! For today's market the buying and selling of Short Sales and Bank Owned Properties (REO) requires a knowledgeable BUYERS AGENT!! For those who want to save money, the old way of thinking that if you go direct to the selling agent you will be able to negotiate a lower price by cutting out the other agent, is not true and is a BIG MI$TAKE in today's market. You have simply put more $$$ in the selling/listing agents pocket. Chances are the selling agent has many REO's, from this Bank or Asset Manager and is solely working for the BANK and NOT YOU!

The documents you will be required to sign are drawn up by a team of legal eagle's. And they are written to protect the Bank from future lawsuits, NOT YOU THE BUYER!!! For example: Property Sold "AS IS" and "WHERE IS". The question to you the BUYER is what does that mean? The listing or selling agent will not help you define this term, they represent the Bank!!! The counter offers from the Bank will contain the following disclosures;

Buyer agrees to accept the property in its “as is” condition, and agrees to sign the attached "AS IS"
Addendum "A" which by this reference shall become a part hereof. Seller will not be obligated to provide,
pay for or perform any repairs (including those that may be required in order to turn on utilities), inspections,
reports, certifications or treatments whatsoever, including termite treatments and well and septic repair,
unless stated otherwise in this counter proposal.
Specialized
Seller will not pay any buyer closing costs, including, but not limited to, appraisal, FHA/VA nonallowables,
points, or home warranty, nor will Seller pay for or provide a survey for buyer unless stated otherwise in this
counter proposal.

Oh yes, there is also a disclaimer BUYER must sign which states "This is a Legal Instrument. If you do not understand the terms contained herein, you should contact your Attorney or Tax Adviser before signing." This is great advise. Buying Bank Owned REO's or Short Sales are a slippery Slope. We all suffer "Buyer's Remorse" coulda, shoulda, woulda, because hind sight is 20/20! Do not put yourself in this situation. A knowledgeable Buyer's Agent will protect your rights and will help you to decide when you do need Legal Advice. A BUYER'S Agent will know how to write your offer to protect you, and get the most for your money$.

So for your protection work with a REALTOR* who specializes in being a "BUYER'S AGENT".

This is my response to a buyer that would like to offer $400,00 on a $650,000 REO (bank owned)

Just a heads up. The bank will not counter offer. It is Bank Owned, and you are coming in $250,000 (@$400,000) under list price, if you can offer $450,000, it is more attractive to the bank. Are you going for a conventional loan? Jumbo is over $417,000 financed. 80% loan with 20% down 30 year? Less than 20% down you will need MI (mortgage insurance) about $150.00 a month. Rates are low right now 4 1/2% fixed 1-2 point buy down.

The offer will also need "Proof Of Funds" a current account statement with the funds in the name of the person making the offer. And Ernest Money Deposit 1% minimum. As you probably already know the turn key upgraded homes with bigger lots are high in demand, whether Bank Owned or Short Sales there are multiple offers, highest and best is the winning bid. The average price for first time buyers is between $250-350,000. With the bank accepting more short sales there will soon be less Bank Owns.

We are seeing the RE market bottom out and prices are starting to level off here in Riverside County. Currently most homes are at the 2001 and 2002 prices or 50% less than the peak years "04-"07. Good deals are out there but the turn key homes you will need to offer on average $5,000-8,000 higher then list price to win it. Otherwise you will be caught in the "No Home Zone Blues" and making offer after offer and not getting the home you want because of a few thousand dollars. I know what they are preaching in the media but I can tell you first hand what is happening here today in this RE market.

Was $1,000,000 in 2004 now only $475,000

After a few too many REDFIN "says" I decided I had better educate myself on this ominious know all Real Estate enity! So I punch it in the old PC and start reading. MMMM wow so first thing I get a feeling that is this is another "you don't need a Realtor, and you definately don't have to pay a commission when buying!" Same echoes of the FSBO website, save money do it yourself.Redfin like Realtor.com has access to the local MLS, buy like most that have access, the information is spoty and NOT accurate! I know I looked up few of my listings past and present and found the last sale amount was not there? And the worst offense was when a bank puts a property through the TD sale the minimum bid the bank would accept was listed as the last sale date! It is not the last sale price and no you should not offer less when it is now listed at a third more and it comps out to this price, in fact it is under priced and there is going to be a bidding war, because of the location and the fact it is clean and needs minimum repairs!

So now I am understanding why I look like a liar to my clients. And I can back up my information with MLS print outs and county records. But they argue that's where REDFIN gets their information. Maybe it is but whoever is transferring the data is leaving some of it out, like the important part. My favorite is when I tell my clients a property is sold after looking it up on the MLS or currently in escrow and they say but it is still listed available on REDFIN!

With this information the buyers have all they need to make a educated offer! Right? Wrong! So who will they believe? Me with the comparable area sales prices or REDFIN? They read it on REDFIN so it must be true. Everyone likes to save money, me included. So here is the kicker for REDFIN, they offer there own agents to help take you around and show you homes and they will write your offer, but the best is REDFIN will give you "half" of their (agents) commission back (Not true). What this really comes down to, they sign up agents who kick back REDFIN a 30% referral fee. But the math just didn't add up. Buyer gets half of the 30% referral fee and guess who gets the other half? Are they really helping the buyer? Or are they helping themselves?

Short Sales with Countrywide. Most important is PATIENCE!!! I sent in a signed offer Sept. 8, 2008. By November I had been assigned a "Negotiator". It took almost three weeks before he actually contacted me. Our contact was both e-mail and by phone mostly I left messages and very rarely were they returned. Mind you I called in three times a week for a or sent an e-mail. By the 20th I had a conversing relationship. What he told me was submit a HUD1 with Buyer and Seller signatures (this I did probably 20 times before it closed) first take off the recording fee, express mail fee, no buyer closing costs, $500.00 for termite and repairs.

What I had learned from the Prelim Title report was my seller had two liens on the property from a business loan and a lease gone bad. Both were put on by attorneys so I contacted the Lawyers and negotiated an amount to be paid at close of escrow out of my commission. Next the property taxes had not been paid for almost two years. Countrywide did paid those up to date. We still battered over the selling price, mind you the market was dropping daily. The BPO was done in August. An appraisal was ordered more price negotiation and agreed. Then it went thru the FRAUD Dept. that took another three weeks. Then it was reassigned, to the FINAL NEGOTIATOR, I had a name but had to wait till they contacted me. She would onl;y deal on the phone and fax no e-mail!! It was December 10, 2008. The price was still not to her liking, buyer held tight. The only thing we could do was have an other appraisal the first one was three weeks earlier. I insisted it be with a LOCAL appraiser!! With in a week the appraiser came out, I was still hoping for a 2008 closing, ha ha!!

The Holidays took care any hopes of that. By January 7 the appraisal was in and the price was OK. The second had an agreed upon price and was very accommodating (Select Portfolio). Countrywide wanted it in writing that the second was on board with another HUD1 and gave written approval first!! When I had that Countrywide gave written approval for a 30 day closing, with no mention of paying the second? Then two more personal unsecured county tax liens showed up, they are not negotiable, and to boot the city had written up notice of violations because the yard was over grown, the buyer agreed to clean it up on their dime. This was beginning to look like the SHORT SALE FROM HELL! I put my flame suit on and put out the fires as fast as I could!! Finally the first agreed to pay the second!! After submitting the 18th HUD1 I get another written approval three days before closing that says termite is approved for $1000!!? Ok then can I submit a higher amount the termite ended up being $1200. After submitting another HUD1 CW agrees. Then before it can fund and record I have to send another final closing HUD1 for approval. Thankfully she approves it and we can close. That's my story and I'm sticking to it!! Whoosh!! For anyone that thinks being a Realtor* is easy money, think again!!

Fix Housing First Homebuyer Tax Credit Act (Introduced in Senate)

S 253 IS

111th CONGRESS 1st Session

S. 253

To amend the Internal Revenue Code of 1986 to expand the application of the homebuyer credit, and for other purposes.

IN THE SENATE OF THE UNITED STATES

January 15, 2009

Mr. ISAKSON (for himself, Mr. CHAMBLISS, and Mr. CORKER) introduced the following bill; which was read twice and referred to the Committee on Finance

---

A BILL

To amend the Internal Revenue Code of 1986 to expand the application of the homebuyer credit, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Fix Housing First Homebuyer Tax Credit Act'.

SEC. 2. EXPANSION AND MODIFICATION OF HOMEBUYER CREDIT.

(a) Elimination of First-Time Homebuyer Requirement-

• (1) IN GENERAL- Subsection (a) of section 36 of the Internal Revenue Code of 1986, as added by section 3011 of the Housing and Economic Recovery Act of 2008, is amended by striking `who is a first-time homebuyer of a principal residence' and inserting `who purchases a principal residence'.

• (2) CONFORMING AMENDMENTS-

• • (A) Subsection (c) of section 36 of such Code is amended by striking paragraph (1) and by redesignating paragraphs (2), (3), (4), and (5) as paragraphs (1), (2), (3), and (4), respectively.

• • (B) Section 36 of such Code is amended by striking `first-time homebuyer credit' in the heading and inserting `home purchase credit'.

• • (C) The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 36 and inserting the following new item:

• `Sec. 36. Home purchase credit.'.

• • (D) Subparagraph (W) of section 26(b)(2) of such Code is amended by striking `homebuyer credit' and inserting `home purchase credit'.

(b) Elimination of Recapture Except for Homes Sold Within 3 Years- Subsection (f) of section 36 of the Internal Revenue Code of 1986, as so added, is amended to read as follows:

`(f) Recapture of Credit in the Case of Certain Dispositions-

• `(1) IN GENERAL- In the event that a taxpayer--

• • `(A) disposes of the principal residence with respect to which a credit was allowed under subsection (a), or

• • `(B) fails to occupy such residence as the taxpayer's principal residence,

• at any time within 36 months after the date on which the taxpayer purchased such residence, then the tax imposed by this chapter for the taxable year during which such disposition occurred or in which the taxpayer failed to occupy the residence as a principal residence shall be increased by the amount of such credit.

• `(2) EXCEPTIONS-

• • `(A) DEATH OF TAXPAYER- Paragraph (1) shall not apply to any taxable year ending after the date of the taxpayer's death.

• • `(B) INVOLUNTARY CONVERSION- Paragraph (1) shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of section 1033(a)) if the taxpayer acquires a new principal residence within the 2-year period beginning on the date of the disposition or cessation referred to in such paragraph. Paragraph (1) shall apply to such new principal residence during the remainder of the 36-month period described in such paragraph as if such new principal residence were the converted residence.

• • `(C) TRANSFERS BETWEEN SPOUSES OR INCIDENT TO DIVORCE- In the case of a transfer of a residence to which section 1041(a) applies--

• • • `(i) paragraph (1) shall not apply to such transfer, and

• • • `(ii) in the case of taxable years ending after such transfer, paragraph (1) shall apply to the transferee in the same manner as if such transferee were the transferor (and shall not apply to the transferor).

• • `(D) RELOCATION OF MEMBERS OF THE ARMED FORCES- Paragraph (1) shall not apply in the case of a member of the Armed Forces of the United States on active duty who moves pursuant to a military order and incident to a permanent change of station.

• `(3) JOINT RETURNS- In the case of a credit allowed under subsection (a) with respect to a joint return, half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection.

• `(4) RETURN REQUIREMENT- If the tax imposed by this chapter for the taxable year is increased under this subsection, the taxpayer shall, notwithstanding section 6012, be required to file a return with respect to the taxes imposed under this subtitle.'.

(c) Expansion of Application Period- Subsection (h) of section 36 of the Internal Revenue Code of 1986, as so added, is amended by striking `July 1, 2009' and inserting `December 31, 2009'.

(d) Election To Treat Purchase in Prior Year- Subsection (g) of section 36 of the Internal Revenue Code of 1986, as so added, is amended by striking `July 1, 2009' and inserting `December 31, 2009'.

(e) Modification of Credit Amount-

• (1) IN GENERAL- Subparagraph (A) of section 36(b)(1) of the Internal Revenue Code of 1986, as so added, is amended by striking `$7,500' and inserting `the amount that is 3.5 percent of the dollar amount limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), including any increase in the limitation for an area determined to be a high-cost area under such section, with respect to the purchase of the qualified principal residence'.

• (2) CONFORMING AMENDMENTS- Paragraph (1) of section 36(b) of such Code is amended--

• • (A) by striking `$3,750' in subparagraph (B) and inserting `1.75 percent',

• • (B) by striking `$7,500' in subparagraph (B) and inserting `3.5 percent', and

• • (C) by striking `$7,500' in subparagraph (C) and inserting `the amount described in subparagraph (A)'.

(f) Modification of Income Limitation- Subclause (II) of section 36(b)(2)(i) of the Internal Revenue Code of 1986, as so added, is amended by striking `$75,000 ($150,000 in the case of a joint return)' and inserting `$125,000 ($250,000 in the case of a joint return)'.

(g) Availability of Credit for Transfer- Section 36 of the Internal Revenue Code of 1986, as so added, is amended by redesignating subsections (g) and (h), as amended by this section, as subsections (h) and (i), respectively, and by inserting after subsection (f) the following new subsection:

`(g) Transfer of Credit-

• `(1) IN GENERAL- A taxpayer may transfer all or a portion of the credit allowable under subsection (a) to 1 or more persons as payment of any liability of the taxpayer arising out of--

• • `(A) the downpayment of any portion of the purchase price of the principal residence,

• • `(B) mortgage, flood, and hazard insurance premiums in connection with the purchase and paid at or before closing,

• • `(C) interest on any debt incurred to purchase the residence,

• • `(D) State and local real property taxes paid in connection with the purchase, and

• • `(E) funding fees paid to the Department of Veterans Affairs in connection with the purchase.

• `(2) CREDIT TRANSFER MECHANISM-

• • `(A) IN GENERAL- Not less than 60 days after the date of the enactment of this subsection, the Secretary shall establish and implement a credit transfer mechanism for purposes of paragraph (1). Such mechanism shall require the Secretary to--

• • • `(i) certify that the taxpayer is eligible to receive the credit provided by this section with respect to the purchase of a principal residence and that the transferee is eligible to receive the credit transfer,

• • • `(ii) certify the credit transfer amount which will be paid to the transferee, and

• • • `(iii) require any transferee that directly receives the credit transfer amount from the Secretary to notify the taxpayer within 14 days of the receipt of such amount.

• • Any check, certificate, or voucher issued by the Secretary pursuant to this paragraph shall include the taxpayer identification number of the taxpayer and the address of the principal residence being purchased. For purposes of determining the credit transfer amount under clause (ii), the Secretary may estimate the taxpayer's modified adjusted gross income for the taxable year (as described in subsection (b)(2)) based on the taxpayer's modified adjusted gross income (as so described) for the preceding taxable year.

• • `(B) TIMELY RECEIPT- The Secretary shall issue the credit transfer amount not less than 30 days after the date of the receipt of an application for a credit transfer.

• `(3) PAYMENT OF INTEREST-

• • `(A) IN GENERAL- Notwithstanding any other provision of this title, the Secretary shall pay interest on any amount which is not paid to a person during the 30-day period described in paragraph (2)(B).

• • `(B) AMOUNT OF INTEREST- Interest under subparagraph (A) shall be allowed and paid--

• • • `(i) from the day after the 30-day period described in paragraph (2)(B) to the date payment is made, and

• • • `(ii) at the overpayment rate established under section 6621.

• • `(C) EXCEPTION- This paragraph shall not apply to failures to make payments as a result of any natural disaster or other circumstance beyond the control of the Secretary.

• `(4) RECAPTURE OF TRANSFER AMOUNT- If the credit transfer amount paid to the transferee exceeds the amount of the credit allowable under subsection (a) to the taxpayer, the taxpayer's tax imposed by this chapter for the taxable year shall be increased by the amount of such excess.

• `(5) EFFECT ON LEGAL RIGHTS AND OBLIGATIONS- Nothing in this subsection shall be construed to--

• • `(A) require a lender to complete a loan transaction before the credit transfer amount has been transferred to the lender, or

• • `(B) prevent a lender from altering the terms of a loan (including the rate, points, fees, and other costs) due to changes in market conditions or other factors during the period of time between the application by the taxpayer for a credit transfer and the receipt by the lender of the credit transfer amount.'.

(h) Allowance of Credit for Residences Financed by Proceeds From State or Local Bonds- Subsection (d) of section 36 of the Internal Revenue Code of 1986, as so added, is amended by striking paragraph (2) and redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively.

(i) Effective Date- The amendments made by this section shall apply to residences purchased on or after December 31, 2008, in taxable years ending on or after such date.