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Mirjam

Mortgage debt relief act, and beyond…

By | Making Home Affordable, Sellers, Short Sale, Sonoma County info | No Comments

You might not remember, in 2007 the Mortgage Debt Relief Act was passed, helping homeowners who sold their home for less than what they owed.

expired

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. The amount of forgiven debt in a short sale would have been subject to taxes as ordinary income, the Mortgage Debt Relief changed this. Initially it ended December 2012 but was extended for an other year till December 2013.  But what about next year? Some good news to report:

Recent announcement from C.A.R. :

C.A.R. has been working with California Sen. Barbara Boxer to protect distressed homeowners from debt relief income tax associated with a short sale in California.  As part of this effort, Sen. Boxer requested the Internal Revenue Service (IRS) to provide guidance on whether mortgage debt forgiveness in a lender-approved short sale would be taxable income under federal law, given California’s recent non-recourse laws for short sales, which were hard fought victories by C.A.R.

The IRS has clarified in a letter that California’s troubled homeowners who sell their homes in a short sale are not subject to federal income tax liability on “phantom income” they never received.  The IRS recognizes that the debt written off in a short sale does not constitute recourse debt under California law, and thus does not create so-called “cancellation of debt” income to the underwater home seller for federal income tax purposes.  This clarification rescues tens of thousands of distressed home sellers from personal liability upon expiration of the Mortgage Forgiveness Debt Relief Act of 2007 on Dec. 31, 2013.

C.A.R. is seeking a similar ruling from the California Franchise Tax Board (FTB), which has been awaiting the IRS action; C.A.R. anticipates the FTB will act promptly.  Short sales may raise other tax issues and, as always, REALTORS® should advise their clients to speak with their tax professional regarding the tax consequences of a short sale. C.A.R.’s Legal Department has prepared a Realegal to further explain the IRS’s clarification.
– end announcement
Although the state tax is not as high as federal tax, we are eagerly waiting for the response of the Franchise Tax Board.
Coming from the Netherlands where it’s normal to pay appr. 60% income tax it was a relief to find out that taxes are much lower here, yet paying taxes on mortgage debt that is forgiven is difficult since the one reason that you do a short sale is to avoid foreclosure, not a time of financial prosperity.
As mentioned many times, a short sale is a gracious alternative to foreclosure on so many levels, please consult a good realtor should you face a foreclosure or have a need to sell while still owing more than your house is worth.
Sunset Sonoma Coast
Besides this, enjoy the beauty of nature that surrounds us, take a hike and let the sunset take your breath away…
Mirjam
P.S. Thank you Mathew Schweifler for helping with the research for this blog posting 😉

Location: Walkability…

By | Around the house, Buyers, Sellers, Sonoma County info | No Comments

Zwolle walkFor more and more people the walkability of a neighborhood is no 1. Walking to stores, restaurants, schools and parks is on top of the list of  needs as to location . Come to think about this: this is common in small town Netherlands. When I visit my mother or my brother in Netherlands we usually walk to the store or farmers market, to the doctors office, restaurant etc. This might say more about the small towns my family live, yet this is very common in Netherlands.

De kaasboer

According to Walk score, New York is the no 1 in most walkable cities. Sonoma County in general doesn’t come out that well. AND that is where the knowledge of your local Realtor as well as your own research comes in place. We have great local neighborhoods that score high as to walk-ability. In Santa Rosa: the JC area, Proctor Terrace, Montgomery Village, West End, all score high as to proximity to stores, restaurants, shopping and schools. For Sebastopol: the whole downtown area scores high, it’s a small town anyway so that helps.  Also Petaluma: West Petaluma is very popular for that reason: walkability to the downtown area has caused a revival in some of the neighborhoods, while the historic district always has been very desirable.

Most people will have different need. Walkscore.com is a great website to help you with your research and help you find your perfect location.

Mirjam

Location: what is important for you?

By | Around the house, Buyers, Sellers, Sonoma County info | No Comments

Over the years I have come to realize that what is important for one person is not important for the other. So number one for a realtor is to find out what ‘hot buttons’ are, most buyers don’t even know that themselves. What might seem to be important might not be important at all, or might not be a good idea life style wise. That is probably where the saying in ‘Realtor land’ comes from: buyers are liars.

on 16 Acres in Franz Valley

One of my clients is looking for a quiet location… what does this mean: no street traffic in the street?  quiet as to noise? A few years ago, one of my clients moved to a location right under the flight path of airplanes into Santa Rosa airport… She loved the noise of the planes and loved seeing them. Interestingly enough this is quit often viewed as a minus, for her it was a plus. Friends of mine bought a multi million dollar home in the hills where they can see airplanes taking off.

In general most people connect rural locations with quiet as to noise etc… I have come to realize that you can find quiet locations -noise wise- in town and might have a hard time finding a quiet location noise wise ‘in the boonies’. I am always surprised how ‘noisy’ rural locations quite often are.
Zwartsluis huisMy brother lives in the Netherlands in an old town called Zwartsluis. Walking distance to shops and restaurant, that place is super quiet noise wise, except for a car through the street every once in a while during the day but at night, dead quiet.

 

BTW, there are super quiet locations closer to town. Think of West County, Piner road, Crane Canyon …and more.

Side note: this is also the case when selling a home: make sure your realtor knows why you bought the house, quite often that is what will attract that buyer that has been looking for that special home/location.

There is so much more to share, this will be number one on a series about this subject. Feel free to contact me as to what’s important to you so I can use this for upcoming postings.

Mirjam

Refinancing your home – beware of scams

By | Mortgage, Sonoma County info | No Comments

How many letters with offers to refinance your homeMailboxes did you receive in the mail last week? Was one of them from the bank your current mortgage is with? The last one seems like a good option to refinance your loan. There is the promise of an easy process and you would think there would be less paperwork involved… NOT.

Recently I am hearing more and more homeowners frustrated by their bank: the promise of less paperwork, less hassle is an empty one. You will end up working with a junior loan officer who quite frankly doesn’t have the wherewithal to help you with the process.

BETTER option: contact your favorite mortgage person, or if you don’t have one, ask your realtor. First of all, working with a lender who knows what he/she is doing is not more expensive – I have done the math- but more important, you are sure you have the best mortgage product that suits your situation. Besides this, the whole process less frustrating, as a matter of fact it will be a pleasant experience.

Locally, yours truly can highly recommend a few local lenders who are really good at what they are doing, one of them is Darren Seliga, he is a Mortgage Broker. Just give him a call and tell him I told you to do so. His phone no: 707-577-8737.

Mirjam

Multiple Offers? How to get yours accepted…

By | Buyers, Sellers | No Comments

Embracing young couple who have just bought a houseYou found that great home and of course you’re not the only one. For a while now we have more buyers than sellers in Sonoma County. This means that there are usually multiple offers on well priced properties. How do you make your offer stand out? Besides working with a reputable realtor there is more that you can do.

First of all: make sure your offer makes sense. If a home is priced at $450,000 and you are willing to pay $475,000 for it, make sure you are able to do this. Should you need a mortgage, make sure that either the property will appraise at that value (submit the offer with an overview of comparable sales) or show that you are able to come up with the difference in case the appraisal comes out at $450,000. Your lender can help you with this.

Next: Share your story. Write a nice letter about yourself, dutch-wooden-shoes.jpgyour family and why you like the house that much, if you can, add a picture. Recently one of my clients had to pick from 10 offers, one had a letter and a picture of the family in Disneyland. Since my clients love Disneyland, this picture caught their attention and when she read the letter, they wanted this family to get the house. There was a another offer that stood out money wise, that offer is now in second position in case the first family won’t be able to complete the sale. The same was the case for one of my other sales, it made the sellers feel good about the choice they had made.

I know for some of you this doesn’t make sense and it does not always work, yet it won’t hurt either.

Had to share this with you,

Mirjam