Thursday, March 10, 2011

Thinking of Buying a SHORT SALE Property?

Are you a Buyer in California who is excited to see some really low prices in the current housing market, but not sure what to expect if you put an offer on a home that needs to have the offer price "accepted" by the bank, or banks, who hold the loan(s), because the offer is less than what the owner owes the bank(s)?  

The process of a homeowner selling their home at a price less than what they owe is termed a SHORT SALE.  And there are many problems that both Buyers and REALTORS(R) are facing when placing an offer on such a home.  Some of the problems are listed below:
LOS ANGELES (March 8) – Fewer than three of five short sales close in California, illustrating the complexity and difficulty of navigating lenders’ and servicers’ short sale procedures, according to a Short Sale Lender Satisfaction Survey conducted by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).  The survey gauges REALTORS®’ experience in working with short sale transactions – transactions in which the lender or lenders agree to accept less than the mortgage amount owed by the current homeowner.
 

... Of the REALTORS® surveyed, 94 percent participated in a short sale transaction during 2010, demonstrating the surplus of short sale listings in today’s real estate environment. 

The most frequent problems REALTORS® cited in working with lenders and servicers during the short sale process include unresponsiveness, onerous procedures, and long processing delays. 

Nearly three-fourths (70 percent) of REALTORS® said that closing their most recent short sale transaction with a lender or servicer was “difficult” or “extremely difficult,” while only 10 percent said it was “easy” or “extremely easy.” 

“The lack of standardization, long approval process, and lack of lender approvals are hampering what should be a 45-day short sale process,” said Peerce.  “Instead we’re hearing the typical response time for lenders is at least 60 days, and in many instances, their response time exceeds 6 months.” 

More than half (63 percent) of REALTORS® said that lenders took more than 60 days to return a written response of the approval or disapproval of the short sale agreement submitted.  Only 4 percent said they received a written response in less than 14 days.  

Additionally, 44 percent of REALTORS® said that lenders took more than five business days to return any form of communication to REALTORS®.  Only 14 percent said lenders responded “within one business day.” 

“The survey results show that the short sale system is clearly flawed and must be standardized and streamlined to reduce the inventory of foreclosures,” said Peerce.  “Increasing the number of successful short sale transactions is one important way we can help California families avoid foreclosure and move our economy closer to recovery,” she added.

Further illustrating faulty communication problems, 64 percent of REALTORS® were “not satisfied” or “not at all satisfied” with the timeliness of lenders’ response to their inquiries, while only 22 percent said they were “satisfied” or “extremely satisfied.” 

Moreover, nearly three-fourths (74 percent) of REALTORS® were “not satisfied” or “not at all satisfied” with the amount of time it took to hear whether a transaction was approved or disapproved, while 16 percent said they were “satisfied” or “extremely satisfied.” 


In overall satisfaction with the lender they worked with, 67 percent of REALTORS® were “not satisfied” or “not at all satisfied,” while 19 percent were “satisfied” or “extremely satisfied.” 

C.A.R.’s Short Sale Lender Satisfaction Survey was conducted during the last two weeks of December 2010 to gauge REALTORS®’ experience in working with lenders or servicers of short sales, bank-owned properties (REOs), and foreclosures.  The survey was delivered to 20,000 REALTORS®, with 2,150 responding to the survey. 

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.  
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Looking to purchase or sell a property in the Santa Clarita Valley?  Call me for an interview at:
LeeAnn Bell, 661-309-2364
REALTOR(R)
DRE License #01260650

Wednesday, March 9, 2011

How long should you keep real estate tax files for the IRS?

I received a question from a client asking how long he should keep his file after the sale of his property, for IRS purposes.  Below is my response:

Hi Gary:

In response to your question regarding how long you should keep your tax records for the sale of the Eagle Rock home, I'm posting below some information from the IRS website (found HERE).

How Long To Keep Records


You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Generally, this means you must keep records that support items shown on your return until the period of limitations for that return runs out.

The period of limitations is the period of time in which you can amend your return to claim a credit or refund or the IRS can assess additional tax. Table 3 contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period beginning after the return was filed. Returns filed before the due date are treated as being filed on the due date.


Table 3. Period of Limitations



IF you...THEN the
period is...
1Owe additional tax and
(2), (3), and (4) do not
apply to you
3 years
2Do not report income that
you should and it is more
than 25% of the gross
income shown on your
return
6 years
3File a fraudulent returnNo limit
4Do not file a returnNo limit
5File a claim for credit or
refund after you filed
your return
The later of 3 years or 2 years after tax was paid.
6File a claim for a loss from
worthless securities
7 years


Property. Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. You must keep these records to figure your basis for computing gain or loss when you sell or otherwise dispose of the property. Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up. You must keep the records on the old property, as well as the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition.

Keeping records for nontax purposes. When your records are no longer needed for tax purposes, do not discard them until you check to see if they should be kept longer for other purposes. Your insurance company or creditors may require you to keep certain records longer than the IRS does.

How To Get Tax Help

You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.
Contacting your Taxpayer Advocate. The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Here are seven things every taxpayer should know about TAS:

  • TAS is your voice at the IRS.
  • Our service is free, confidential, and tailored to meet your needs.
  • You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should.
  • TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. This includes businesses as well as individuals.
  • TAS employees know the IRS and how to navigate it. We will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved.
  • TAS has at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. You can call your local advocate, whose number is in your phone book, in Pub. 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www.irs.gov/advocate. You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.

You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www.taxtoolkit.irs.gov.

I would think you are safe in letting your records go now, considering the length of time that has past since that home sold, however to be confident I would suggest asking your Tax Account.

Good to hear from you,
LeeAnn
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If you have any Real Estate questions, please feel free to email or phone me for a answer.  If I can't answer your question myself, I will put you in contact with the appropriate professional who can.

And for all of your Real Estate needs in the city of Santa Clarita feel free to contact me:
LeeAnn Bell,  REALTOR(R) ... 
661-309-2364 or LeeAnnRealtor@yahoo.com

DRE License# 01260650

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