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HAPPY FRIDAY!
How is the market in Central Florida? Here are some numbers for you to think about...

From May 28th, 2009-Present, there were nearly 30,000 homes sold in Central Florida . This number includes sales in Seminole, Orange , Osceola and Polk counties for single family homes under $500,000. 43% of the sales were bank-owned properties and 20% short sales.

Currently, we have 15,000 homes listed for sale in Central Florida. 42% of the active listings are bank owned and 30% are short sales. Of the 10,000 properties currently pending (under contract) 60% are short sale properties and 20% are bank-owned.

Short sales tend to stay pending for a while due to the length of time required to obtain third party approvals.

For more specific numbers or information, please contact the Reaves Team Orlando and will be happy to drill down these numbers.

The numbers are originated from Multiple Listing Service (MLS) for Central Florida.

WHAT IS A SHORT SALE?

A Short Sale occurs when lenders agree to allow a homeowner to sell their home for less than the home owner owes on their home loan. This kind of a sale has to be approved by the lender any time the sale of a home will not be able to pay off the associated home loan from the sale. Someone has to take a loss, and it is usually the bank; in the form of the approved short sale. It is one of the options a borrower may have to avoid foreclosure of their home.

The seller is still the owner of the property in question; however, in order to transfer title to potential purchaser, the lender must release the lien on its collateral to the loan given to the borrower, which is the house.
Not all lenders will accept short sales or discounted payoffs, especially if they believe they will get more money from foreclosing and selling the home themselves.
Not all sellers or all properties qualify for short sales.

Why A Short Sale:

For Buyers:
Prices might be lower than with a bank owned property becuase the competition on short sale homes is less than with a bank owned;
While the home may need some deferred maintenance issues resolved, the repair issues in an occupied home many times are less severe as the repair issues with a bank owned home;
Seller will provide seller’s disclosures outlining the history of the home;
The buyer will be able to take possession of the home on the same date that they close;
The closing will be handled by a title company and the buyer will be able to get marketable title instead of insurable title.

Do Short sales work?
Yes, they do work but you must work with an agent that understands the intricacies of short sales transactions. There are many things that need to be taken into consideration when assessing if you as a buyer want to put an offer on a short sale home. For instance, your agent must find out how many lien holders there are, who the lien holders are, are there any offers in the works, is the property going to go be taken off of the market while the bank decides if the sellers accepts the offer? Etc.

For Sellers:
Short sales appear on your credit report as "pre-foreclosure in redemption", not as "debt discharged due to foreclosure"
A short sale can help homeowners avoided further collection activity or a foreclosure action;
Sellers can help maintain property values by ensuring that the listing agents are doing their homework with the listing price;
Sellers that remain in their home help decrease vacant homes in the neighborhood which attracts vandalism and subsequently decline in values;
There is a new law that comes into effect April 4th, 2010; where seller might qualify for 1500.00 relocation fees under the HAFA PROGRAM.

On the sale side, a good listing agent will list the property at a reasonable price; otherwise, the bank that has a lien against the property will not approve the sale price in the short sale. The property must be heavily marketed and once an offer is received the listing agent must submit a “short sale package” to the lien holder as soon as possible. This package is quite extensive, but is necessary if the lender is going to agree to take a substantial loss on a short sale. Sellers must consult with a CPA for possible tax ramifications.

President Obama Signs Into Law New Tax Credit for Current Home Owners and Extension of New Home Buyer Tax Credit

President Obama just signed a bill TODAY to extend the tax credit for first-time homebuyers (FTHBs) through June 30, 2010 and includes a new tax credit for people who already own a home. Following is an overview of the law. If you or anyone you know has questions, please have them contact me.

TAX CREDIT OVERVIEW

Who Gets What?
First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?
In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?
The amount of income someone can earn and qualify for the full amount of the credit has been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap and up to $145,000 can receive a partial credit. Single filers who earn $145,000 and above are ineligible Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap and up to $245,000 can receive a partial credit. Joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?
Qualifying buyers may purchase a property with a maximum sale price of $800,000.

What is a Tax Credit?
A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

Who is Eligible fort FTHB Tax Credit?
Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

Are There Other Restrictions to Taking the FTHB Credit?
Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

• They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
• They do not use the home as a principal residence.
• They sell their home before the end of the year.
• They are a nonresident alien.
• They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
• Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
• They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.

If a Parent (Who Will Not Live In The Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?
Yes, provided that the child meets the other requirements for the tax credit.

Above Information obtained from The Mortgage Market Guide.

CREDITO PARA PRIMER COMPRADOR DE CASA

No hay muchas personas que saben o entiende que el congreso enacto un credito para el primer comprador the vivienda...

Este credito es para primeros compradores de casa o personas que no han tenido una casa en los tres ultimos anos;
Este credito no deber ser repagado a el govierno;
El credito es el 10% de la compra de la casa sin exceder $8000;
Este credito is para las casas compradas de Enero 1st a Diciembre 31st 2009;

Para oir mas en espanol, visite la link the IRS Credito para el primer comprador the vivienda