Price Is The Determining Factor In The Sale Of A West LA Home

Price Is The Determining Factor In The Sale Of A West LA Home

Pricing A Home To Sell

Fairy tales and overly-optimistic assurance will Not sell your house, but EFFORT will.

A sign in your yard will Not sell your house, Proper Counseling will.

If you are placing your house on the market, be certain it is ON THE MARKET.

If you want your house “listed for sale”, over price it.

If you want it SOLD, PRICE IT RIGHT!


1. Seller and Realtors are not appraisers – Buyers are…

…and they make their evaluation by comparing your property with others which offer similar features and are in similar condition to yours. Condition and Price are the most important criteria


2. The Buyer does not yet have an emotional attachment to your home.

Sellers speak of value, amount invested and what they “can afford to take”. Buyers consider only price, condition, and other competitive properties.


3. Your house will sell because it is priced competitively in today’s market.

Not because it is yours.


4. Over-pricing causes your home to get stale on the market.

Buyers and other Realtors begin to wonder what is wrong with it. Why hasn’t it sold?


5. Be sure you have accurate information about recent sales in your neighborhood.

Don’t let pricing rumors influence your decision to price your home realistically in today’s market.


6. Any house unsold after 90 days on the market was most likely overpriced…

…for it’s condition in today’s market. The present market might be weak or strong, but the present market is the ONLY one that affects properties for sale today.


7. The agent who suggests the highest price for your home may not be the most qualified to sell it.

Select your sales agent for their professionalism, track record and the rapport established between you.


FHA Will Increase Cost For Home Buyers

Based on a new article published by Lorraine Woellert, as of April 1st, the Federal Housing Administration (FHA) will increase up-front-premiums. If you have FHA clients on the fence, now is the time to buy before the cost of their loan goes up!

They’re talking about increasing the up front mortgage insurance premium from 1% to 1.750% of the loan amount on top of the increase for the monthly PMI from 1.15% for loans up to $625,499 to 1.25% and for loans above $625,500 from 1.15% to 1.5%. Buying before the changes are implemented can save your clients a lot of money! Also have your FHA clients re-qualified if they wait to buy based on the increased fees which will offset their debt to income ratios slightly.

For Example:


Current FHA Loan:

$500,000 – Purchase Price
$482,500 – Base FHA Loan Amount (96.5% LTV)
$487,325 – Total FHA Loan Amount w/ UFMIP financed


30 Year Fixed FHA

$2,257 Principal and Interest Payment
$467 PMI


Future FHA Loan:

$500,000 – Purchase Price
$482,500 – Base FHA Loan Amount (96.5% LTV)
$490,435 – Total FHA Loan Amount w/ UFMIP financed


30 Year Fixed FHA

$2,271 Principal and Interest Payment
$511 PMI

This is more dramatic above $625,500, now is a great time to take advantage of the lower premiums. The changes may be in place sooner then we know.

If you should have any questions please contact Gary Limjap at 310.586.0339.

Original article:

FHA Will increase Cost of Up-Front Premiums
By Lorraine Woellert – Feb 27, 2012

Income Tax after A Short Sale in Santa Monica or Brentwood

After a short sale, there is still one more type of paperwork that the seller has to accomplish and it pertains to income tax after a short sale. Ordinarily, a debt that has been forgiven is still treated as taxable income. However, because of the Mortgage Forgiveness Debt Relief Act of 2007, homeowners may qualify to exclude the forgiven debt from the net taxable income but what is considered as a forgiven debt and what makes a homeowner qualified for debt relief? It is important for a homeowner who just went through a short sale to fully understand the provisions under Mortgage Forgiveness Debt Relief Act of 2007 since not all types of debt forgiven can be excluded from the net taxable income. By doing so, a homeowner can avoid paying for unnecessary taxes or being penalized for excluding a taxable income. Here are the common questions that relate to income tax after a short sale.


What is forgiven debt?

A forgiven debt is an amount you owe your lender but have been waived usually as a result of a request backed by a very valid reason. In the case of a short sale, a forgiven debt is the difference between the selling price and the mortgage which the lender or bank has waived because of your valid hardship situation.


What is exclusion of forgiven debt or income?

Ordinarily, debt that has been waived by a lender is considered taxable since it constitutes as an income. If however, a forgiven debt like a waved debt in short sale qualifies for debt relief under the Mortgage Forgiveness Debt Relief Act of 2007, it is ‘excluded’ or not reported on the list of income when filing for the annual income tax after a short sale.


Does the Mortgage Forgiveness Debt Relief Act of 2007 cover all types of forgiven debt?

Not all types of forgiven debt relating to a mortgage qualify for debt relief and not all of the amount of the forgiven debt can be excluded as well. Under the act, only debt used to ‘acquire, construct and improve the principal residence’. The debt is properly termed as qualified principal residence indebtness. This also includes debts used to refinance debt used for the said purposes but should be secured by the principal/primary residence of the homeowner. A homeowner can exclude forgiven debt up to $ 2 million.


Does the Mortgage Forgiveness Debt Relief Act of 2007 cover rental homes?

The act covers for principal homes only; thus, forgiven debt relating to a short sale of rental or vacation homes do not qualify for exclusion. As a homeowner may live in different homes throughout the year, only the home where he or she spends time most is considered a principal home. In preparing income tax after a short sale, the homeowner must submit proof that the said property was his/her principal residence. The principal residence must also be occupied by the homeowner until the short sale was completed. So if a homeowner had moved out of the home when a foreclosure was seen to happen. But then before the foreclosure was enforced he managed to get approved for a short sale, the forgiven debt would not qualify as an exclusion from income tax after a short sale.


How do homeowners know the exact amount of forgiven debt?

The amount of the forgiven debt will come from the lender or bank and will be written on a Form 1099-C Cancellation of Debt. This form includes the creditor’s name and identification number, debtor’s name, amount of debt cancelled interest if included in the debt cancelled; fair market value of said property, and the date the debt was cancelled. If a homeowner does not receive the form by February 2, it should be followed up with the lender in order to appropriately file exclusion from income tax after a short sale. Homeowners should also verify the amount on the form and if any discrepancy is seen, he or she should contact the lender. The amount of short sale deficiency should be at least $600 or more; otherwise, it does not qualify as indebtedness income.


How does a homeowner report the exclusion from income?

After receiving the Form 1099-C Cancellation of Debt from the lender, the homeowner should report the same amount on Form 982-Reduction of Tax attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment). The homeowner should check the appropriate box on Part 1 –General Information where circumstances leading to the exclusion are itemized. In the case of a short sale, qualified principal residence indebtedness should be ticked. Additionally, the same amount that appears on the 1099-C Form should be reported on box 2 of Form 982.


Are there any other circumstances a homeowner can claim exclusion if the forgiven debt does not qualify under qualified principal residence indebtedness?

Under Form 982-Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), exclusion from the forgiven or cancelled debt may include those resulting from a bankruptcy, non-recourse loans, insolvency and farm debts.

Article by Mike Linkenauger