Tulsa Real Estate

FACING FORECLOSURE?

2011-10-01T13:28:00.000-07:00

If you've fallen behind on your mortgage, a counselor may be able to help. But stay clear of those who ask for fees upfront, or who guarantee they can stop a foreclosure or get your mortgage modified.

Here are some groups that can guide you.

* Hopenow.com
1-888-995-4673 toll free

* NeighborworksAmerica.org
202-220-2300

* Makinghomeaffordable.gov

- Taken from September 20ll AARP Magazine

What's a Short Sale?

2011-07-08T11:04:00.000-07:00

Making an Offer on a Short Sale? What You Need to Know

Are you looking to buy a new home? Are you thinking that now's a great time to find bargains? Before you make an offer, it pays to know a little about the seller's situation.
If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.
A short sale is different from a foreclosure, which is when the seller's lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.
You're a good candidate for a short-sale purchase if:

You're very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you're preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.
You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property—or you need to be in your new home by a certain time—a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.

If you're serious about purchasing a short-sale property, it's important for you to have expert assistance. Here are some people you want to work with:

Experienced real estate attorney. Only about two out of five short sales are approved by lenders. But a good real estate attorney who's knowledgeable about the short-sale process will increase your chances getting an approved contract. Also, if you want any provisions or very specialized language written into the purchase contract, a real estate attorney is essential throughout the negotiation.
A qualified real estate professional.* You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many buyers they've represented in a short sale and, of those, how many have successfully closed. A qualified real estate professional will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communications with the lender. (All MLSs permit, and some now require, special notations to indicate that a listing is a short sale. There also are certain phrases you can watch for, such as “lender approval required.”)
Title officer. It’s a good idea to have a title officer do an initial title search on a short-sale property to see all the liens attached to the property. If there are multiple lien holders (e.g., second or third mortgage or lines of credit, real estate tax lien, mechanic’s lien, homeowners association lien, etc.), it's much tougher to get that short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you’ve waited for months for lender approval. If you don’t know a title officer, your real estate attorney or real estate professional should be able to recommend a few.

Some of the other risks faced by buyers of short-sale properties include:

Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.
Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.
No repairs or repair credits. You will most likely be asked to take the property “as is.” Lenders are already taking a loss on the property and may not agree to requests for repair credits.

The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.
* Not all real estate practitioners are REALTORS®. A REALTOR® is a member of the NATIONAL ASSOCIATION OF REALTORS® and is bound by NAR’s strict code of ethics.

Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA.

Avoiding Foreclosure

2011-05-08T10:09:00.001-07:00

Action Line: Take steps to avoid foreclosure

By PHIL MULKINS World Action Line Editor
Published: 5/5/2011 5:08 AM
Last Modified: 5/5/2011 7:12 AM
Dear Action Line: How can we avoid foreclosure? – S.M., Tulsa
Oklahoma foreclosure: See "Avoid foreclosure: Oklahoma" on the U.S. Department of Housing and Urban Development website at tulsaworld.com/OKforeclosure It offers a guide to avoiding foreclosure as well as information on the Emergency Homeowner Loan Program, housing counseling agencies, the Veterans Affairs Regional Loan Center and various refinance options.
Foreclosure filings increased 7 percent in March, and one expert believes there are alternatives consumers can use to avoid being part of it. In March, 239,745 foreclosure filings were reported by RealtyTrac - up from 225,101 in February. Although this increase was slower than March 2010, financial expert Deborah McNaughton - author of "The Essential Credit Repair Handbook" (Career Press), tulsaworld.com/EssentialCreditRepair - said the decrease wasn't attributable to better market conditions.
"The slowdown is because there are so many foreclosures to file, it is taking lenders longer to process them," McNaughton said in a news release. "Allegations of fraud in some of these foreclosures surfaced last September, and a temporary suspension of foreclosures occurred while it was investigated." She points out alternatives.
Short sale: This is your first choice, but the downside is there are so many players in the mix. You must list the property with a real estate company, and when a buyer makes an offer, "submit a hardship letter and your financials to your original lender with the offer to purchase your property at a price lower than your balance." This takes the lender weeks or months to consider, and by this time the buyer is usually gone. If you haven't made mortgage payments, the lender might foreclose at this point. Unless you can overcome these issues, this alternative is not for you.
Short refinance: If your payments are not behind, contact a lender about eligibility for a "short refinance." A property appraisal is ordered, and when it comes in at less than the balance, the lender states how much of a loan will be made. With a commitment letter and appraisal from the lender, submit these to your original lender and seek a reduction of current balance. If a reduced payoff is accepted, ask the new lender for a new loan at the lower amount and with better terms.
Lease purchase option: Put the home or property on the market as a "lease with an option to buy." Lease purchases allow buyers to purchase property for an agreed sale price, and earnest money is applied to a down payment. As owner, you collect monthly payments and apply them to your loan. Get enough down payment money to catch up any past-due payments, and continue making mortgage payments until the sale is complete.
Rental: Renting out your house is also an option when the renter can cover your payments and you can rent another place for less money. When things get better and your finances loosen up, you can always move back into your home.
Read more from this Tulsa World article at http://www.tulsaworld.com/business/article.aspx?subjectid=15&articleid=20110505_15_E4_bDearA821951

New Roofing Law in Oklahoma

2011-05-08T10:06:00.001-07:00

Action Line: New roofing law doesn't address 'good practices'

By PHIL MULKINS World Action Line Editor
Published: 5/8/2011 2:31 AM
Last Modified: 5/8/2011 4:44 AM
Dear Action Line: Thanks for the roofing info Wednesday, as we got hailed on April 23. I also saw your column on the new "roofers registration law" but didn't save it. What does that offer when we have problems roofers won't fix? - N.P., Tulsa
ORCRA: The Oklahoma Roofing Contractors Registration Act doesn't tell roofers how to put on a good roof. Oklahoma still has no law outlining "good roofing practices" because every time the roofing industry tries to push one through, the "mom and pops" (small roofing firms) cry "burdensome regulation," and legislators back away. Read the act at tulsaworld.com/OKrooferlaw
Insurance: Construction Industries Board Administrator Nathan Powell said the act did not create a skill-enforcement "licensing" program like the one CIB administers for electricians, plumbers and mechanical contractors (air conditioning). It compels roofers to register with the board before they can do business in Oklahoma. It requires them to "show qualifications (having previously roofed) and evidence of $500,000 of liability insurance and to show proof of workers' compensation insurance coverage (or an exemption)."
Fees & fines: It also requires an annual $300 registration fee with annual registration renewal by June 30, a $100 late renewal fee on July 30 and suspension of registration Aug. 30 for failure to renew. Failure to register is a misdemeanor carrying a fine of up to $500, to be issued by the district attorney with jurisdiction over the job site. This is the boom to be lowered on the heads of unregistered, out-of-state roofers.
Complaints: Consumer complaints that may be filed with CIB can have nothing to do with roof quality but only with the following acts or omissions: Abandonment of a roofing contract without legal excuse after a money deposit or other consideration has been paid; diversion of funds or property entrusted to a roofing contractor; engaging in fraudulent or deceptive acts or misrepresentation of products, services or qualifications as a roofing contractor; and making false or misleading statements in an application for roofing contractor registration or renewal or in soliciting a contract for roofing services.
Complaints may also involve adjudication against contractors by a court of jurisdiction for violation of act provisions; engaging in work without registration or performing roofing services when the roofing contractor's registration is denied, suspended or revoked; engaging in roofing without proper permit as required by state or local authority; failure to comply with state or municipal tax laws; damaging or injuring persons or property while roofing under a valid registration for which the contractor's liability insurance or workers compensation coverage is inadequate; or failure to comply with a specified provision of this act.
Complaint form: Fill out and download CIB's "Roofing contractor complaint form" at tulsaworld.com/RooferComplaint and mail it to Oklahoma Construction Industries Board, 2401 NW 23rd Street STE 5, Oklahoma City, OK 73107.
Read more from this Tulsa World article at http://www.tulsaworld.com/business/article.aspx?subjectid=15&articleid=20110508_15_E2_bDearA423376

Top 20 real estate websites in February

2011-03-30T10:37:00.001-07:00

Top 20 real estate websites in February

2011-03-30T10:34:00.000-07:00

Ranch has key selling point: Steve McQueen ....Now you can buy his ranch!

2011-02-28T09:52:00.000-08:00

House Profile: Iconic star's hideaway is on the market
By Mary Umberger
Inman News™

February 28, 2011
The "King of Cool" apparently found a measure of peace in Santa Paula, Calif., where he could stash his collection of cars, planes, and motorcycles, and the locals didn't seem to think it was such a big deal that a legendary movie star was living in their midst.
Steve McQueen had largely turned away from Hollywood when he settled in the town, about 75 miles northwest of Los Angeles, in 1979. Drawn there, according to biographers, by the town's reputation as the vintage-plane capital of America, the tough-boy icon purchased a nearby 15.5-acre ranch (see slide show below) with an 1892 cottage and a 4,500-square-foot hangar that he stuffed with dirt bikes, Indian motorcycles and rare sports cars.
McQueen, who became one of the world's highest-paid actors in the 1960s, honed an image of toughness in such noted films as "Bullitt," "The Great Escape," and "The Cincinnati Kid."
But he started turning down most roles in the 1970s, focusing instead on auto and motorcycle racing and traveling the back roads of the West. He purchased two vintage Stearman biplanes and persuaded a Santa Paula local to become his flight instructor.
"He married his third wife, Barbara Minty, in the living room of the house at the ranch," said David Kean, the Los Angeles real estate agent who's currently marketing the property for sale. McQueen and the former model wed in January 1980, not long after the couple moved into the house.
McQueen's time at the ranch was to be brief. Diagnosed with mesothelioma, a cancer related to exposure to asbestos, shortly before they were married, he spent his last months there and in Mexico seeking medical treatment.
He died of complications from surgery in Ciudad Juarez, Mexico, in November 1980, at 50.
A memorial service for the actor was held at a pond on the Santa Paula property, Kean said.
"He loved to ride his dune buggy around the ranch," Kean said. "The airplane hangar on the property was full of his cars and motorcycles."
They're gone now, having been auctioned in Las Vegas in 1984. But other McQueen touches remain, Kean said.
Although a subsequent owner installed a kitchen/family room addition and planted a vineyard, "everything else is as McQueen left it," Kean said.
"He collected old pull-chain toilets from old bus stations, and had them installed in the house," Kean said. "He tried to make everything of the period that the house was built."
The property declined, turning into "kind of a mud pit" in the years after McQueen died, Kean said. The current owners bought the place about seven years ago, spruced it up, and established a now-flourishing vineyard that produces 5,000 to 7,000 bottles a year, he said.
"My idea would be to make a deal with the McQueen estate, and buy the property and work in the McQueen rights," he said. "They could produce wine and export it to Asia -- McQueen is a folk hero in Asia."
The McQueen name apparently has retained its luster: In 2007 Forbes magazine listed him as No. 10 among 13 "top-earning dead celebrities," with the licensing of his name having earned $6 million in the prior year.
The magazine said at the time that McQueen's image of hard driving and fast living, which earned him the nickname "King of Cool," had found appeal with a new generation, 40 years after the release of "Bullitt," arguably his best-known film.
Actor Ashton Kutcher and David Beckham, among others, have said they regard McQueen as a personal style icon.
Indeed, Keen said, it's been mostly Hollywood-types who have visited the Santa Paula ranch as a candidate for a second home, drawn by the McQueen connection and the isolation of the property.
"McQueen liked the town because people left him alone," and that attitude appears unchanged, Kean said. "I've had celebrities (who came to see the ranch) go into the town, have lunch, and nobody bothers them."
But no sale so far, Kean said.
Even for a Beverly Hills buyer, the $1.095 million asking price for the three-bedroom home (down from the original $1.95 million, and now listed as a short sale) gives pause.
"In this economy, even my wealthiest clients are tightening their wallets," he said. "One client said his net worth had dropped from $1 billion to $600 million and he's nervous about it. They see the loss, they don't see what they have."
Still, he said, some actors "who I think may want that McQueen image" have been interested in the place.
"They want the fantasy of the ranch, but they get overwhelmed" by the idea of maintaining its acreage and horse facilities, he said. "It's a fun fantasy, but not everyone wants the reality."

Mary Umberger is a freelance writer in Chicago.

6 big-time homebuyer turn-offs that make buyers cringe at the thought of your home

2011-02-24T12:01:00.000-08:00

Here are 6 big-time homebuyer turn-offs that make buyers cringe at the thought of your home, and action steps you can take to prevent your home from being an offender:

1. Stalker-ish sellers. I know you think you’re being helpful, walking the buyer through your home and pointing out the wagon-wheel light fixture you made with your own two hands, the custom mural of a stingray you paid top dollar to have painted across your living room wall and the way the sounds of happy schoolchildren running across the front yard of your corner lot to get to the school in the next block lifts your spirits. However, the buyers might be trying really hard to ignore, minimize or figure out how to undo the very features of your home you hold dear. They also may want or need to have personal space and conversations with their mate or their agent while they’re viewing your home - you being there, especially walking right alongside them while they’re in your home, prevents them from being comfortable about doing this, or discussing all the things they would change if the home were theirs. In my experience, the more nitpicky a buyer gets about a house and the more detailed their list of things they would change, the more serious they are about considering making an offer on this place.

What’s a Seller to do? Back off. Let your home be shown vacant, or leave the house when people come to see it. If you need to be there, at least walk outside or go sit at the coffee shop down the way while prospective buyers view your home. If the buyers have questions, their people will contact your people.

2. Shabby, dirty, crowded and/or smelly houses. You already know this one. Yet, buyers constantly marvel. The buyers who come to see your home are making the decision whether to choose your home for the biggest purchase they’ve ever made during the worst economic conditions most of them have ever experienced. Your job is to get your home noticed – favorably – above the sea of other homes on the market, many of which are priced very, very low.
What’s a Seller to do? Other than listing your home at a competitive price, the only tool within your control for differentiating your home from all the foreclosures and short sales is to show it in tip-top shape. Pre-pack your place up, getting rid of as many of your personal effects as possible. Do not show it without it being completely cleaned up: no laundry or dishes piled up, countertops freshly washed, smelly dogs (I have a couple who smell on occasion – no judgment – but don’t show your house with pet odors) or litter boxes cleaned and/or out of the house.

3. Irrational seller expectations (i.e., overpricing). Buying a house on today’s market is hard work! On top of all the research and analysis about the market and situating their own lives to be sure they’ll be able to afford the place for 5, 7, 10 years - or longer, buyers have to work overtime to separate the real estate wheat from the chaff, get educated about short sales and foreclosures and often put in many, many offers before they get even a single one accepted. The last thing they want to add to their task lists is trying to argue a seller out of unreasonable expectations or pricing. And, in fact, there are so many other homes on the market, buyers don’t have to do this. When they see a home whose seller is clearly clueless about their home’s value and has priced it sky-high, most often they won’t bother even looking at it. If they love it, they’ll wait for it to sit on the market for awhile, hoping the market will “educate you” into desperation, priming the pump for a later, lowball offer.

What’s a Seller to do? Get real. Get out there and look at the other properties that are for sale in your area and price range. Get multiple agents’ take on what your home should be listed at, and don’t take it personally if their recommendation is low. If your home has much less curb appeal or space or is much less upgraded than the house across the way, don’t list it at the same price and expect it to sell. If you owe more than your home is realistically worth, you may need to reexamine whether you really want or need to sell, or consider a short sale, if you simply have to sell. Don’t be tempted into testing your market with an obviously too-high price, unless you’re prepared to have your home lag on the market and get lowball offers.

4. Feeling misled. Here’s the deal. You will never trick someone into buying your home. If the listing pics are photo-edited within an inch of their lives, or your home is described as an “approved” short sale when, in fact, the bank approved another offer, now withdrawn, but will require a new offer to go through any sort of approval process (even a truncated one), buyers will learn this information at some point. If your neighborhood is described as funky and vibrant, as code for the fact that your house is under the train tracks and you live in between a wrecking yard and a biker bar, prospects will figure this out. If the detailed information about your home, neighborhood or even transactional position (e.g., short sale status, seller financing, etc.) is misrepresented, the sheer misrepresentation will turn otherwise interested buyers off. If you authorize your agent to “verbally approve” the buyer’s offer, don’t go back the next day demanding an extra $5,000. In cases where the buyer feels misled, whether or not that was your intention, running through the buyer’s mind is this question: If they can’t trust you to be honest about this, how can they trust you to be honest about everything else?
What’s a Seller to do? Buyers rely on sellers to be upfront and honest – so be both. If your home has features or aspects that are often perceived negatively, your home’s listing probably shouldn’t lead with them (like the ad I recently saw with the intro line: “this place is a mess!”), but neither should you go out of your way to slant or skew or spin the facts which will be obvious to anyone who visits your home. Make sure you know what the listing of your home reads like, before it’s published to the web, and that a prospective buyer will not feel misled by it.

5. New, ugly home improvements. Many a buyer has walked into a house that has clearly been remodeled and upgraded in anticipation of the sale, only to have their heart sink with the further realization that the brand-spanking-new kitchen features a countertop made, not of Carerra marble, but brand-new, pink tiles with a kitty cat in the middle of each one (I saw this once, people – no joke). Or the pristine, just-installed floors feature carpet in a creamy shade of blue – the buyer’s least favorite color. New home improvements that run totally counter to a buyer’s aesthetics are a big turn-off, because in today’s era of Conspicuous Frugality, buyers just can’t cotton to ripping out expensive, brand new, perfectly functioning things just on the basis of style – especially since they’ll feel like they paid for these things in the price of the home.
What’s a Seller to do? Check in with a local broker or agent before you make a big investment in a pre-sale remodel. They can give you a reality check about the likely return on your investment, and help you prioritize about which projects to do (or not). Instead of spending $40,000 on a new, less-than-attractive kitchen, they might encourage you to update appliances, have the cabinets painted and spend a few grand on your curb appeal. Many times, they will also help you do the work of selecting neutral finishes that will work for the largest possible range of buyer tastes.
6. CRAZY listing photos (or no photos at all). We’ve seen listing photos that have dumpsters parked in front of the house, piles of laundry all over the “hardwood” floors touted in the listing description, and once, even the family dog doing his or her business in the lovely green front yard. Listing pictures that have put your home in anything but its best, accurate light are a very quick way to ensure that you turn off a huge number of buyers from even coming to see your house! The only bigger buyer turn-off than these bizarre listing pics are listings that have no photos at all; most buyers on today’s market see a listing with no pictures and click right on past it, without giving the place a second glance.
What’s a Seller to do? Check your home’s listing and make sure that the pics represent your home well.

PMI Tax Deductibility Extended Through 2011

2011-02-18T14:44:00.000-08:00

There's great news for homeowners! Congress recently extended legislation making private mortgage insurance(PMI) premiums tax deductible through 2011!

So why is this significant? PMI can help people buy a home sooner, by enabling them to put less than 20% of the purchase price down when buying a home. This increase in purchasing power can sometimes be the difference between affording the home of your dreams...or not.

What's more, this deduction is not just for first-time home buyers, so it can be used by current homeowners looking to upgrade to a new home. However, it does only apply to "qualified" residences, which typically include a primary residence and a vacation home, but not an investment property.

It's important to note the PMI is only tax deductible for homeowners with adjusted gross incomes of less than $110,000. Borrowers with adjusted gross incomes up to $100,000 may be able to deduct 100% of their 2011 premiums. Deductions are phased out in 10% increments for borrowers with adjusted gross incomes between $100,000 and $109,000.

As with any deduction, be sure to consult your tax advisor if you have any questions.

And if there's anything at all I can do to help you with obtaining your mortgage or pre-approval, please let me know. I'm always happy to do whatever I can to make sure you are able to buy the home you want!

Randy Johnson
Coldwell Banker Select
(918) 633-2437
http://www.74063.com/
randyjohnson@tulsarealtors

Rent vs Buy - Tax Issues

2011-02-04T12:09:00.000-08:00

The tax benefits of homeownership

Real Estate Tax Talk
By Stephen Fishman
Inman News™
February 04, 2011
Q: How can real estate agents be a resource for buyers on tax issues, such as the tax benefits of buying vs. renting?
A: Unless a real estate broker or agent is a bona fide tax professional -- for example, has an MBA or other specialized training in taxation -- he or she should not give clients detailed tax advice. As a real estate professional, you are licensed to help your clients buy real estate -- not serve as their professional tax adviser.
If you give tax advice and it turns out to be wrong, it could cost the client a bundle of money, and leave you with a lawsuit for malpractice.
If a client does ask you for tax advice, and you give it, a good practice is to have the client sign a statement providing that he or she has not relied on your advice and that the transaction is contingent on the approval of the client's tax or legal counsel.
That said, the tax benefits of real estate ownership are something every buyer should understand. You need to understand them as well.
When it comes to the tax benefits of renting vs. buying, the benefits of buying are many, while there are few or no tax benefits for renting. This simple fact can help get renters motivated to take the plunge into homeownership.
The tax benefits of buying a home include:
Home mortgage interest deduction: The interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home is deductible as an itemized deduction. In the early years of a home loan most of the payments consist of interest, so this deduction is particularly substantial during the first years of homeownership.
Depending on the state a buyer lives in and his or her tax bracket, this deduction can reduce the cost of borrowing by one-third or more.
Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest as an itemized deduction. The money can be used for any purpose, such as paying off high-interest credit card debt. In contract, the interest on credit card debt is not deductible.
Property tax deduction: Homeowners also get to deduct from their federal income taxes the state and local property taxes they pay on their home. This is another itemized deduction that renters don't get.
Deductible homebuying expenses: Various closing costs ordinarily involved in a home purchase are also deductible as itemized deductions, including loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.
$250,000/$500,000 home-sale exclusion: Perhaps the greatest tax benefit of owning a home comes when a person sells it at a profit. Homeowners who lived in their home for two of the prior five years prior to its sale need pay no income tax on a substantial amount of their profit -- $250,000 for single homeowners and $500,000 for married homeowners who file jointly. This exclusion can be used once every 24 months.
14 days of free rental income: Another little known tax benefit of owning a home is that the owner can rent it out for up to 14 days during the year and pay no tax at all on the rental income. In contrast, a renter who sublets his or her rental must pay income tax on all the rental income he or she earns.
Tax benefits of renting:
The only tax benefit that a renter can qualify for by virtue of being a renter is the home office deduction. This is a business deduction available to renters who own a business and have a home office they use regularly and exclusively for business purposes.
Some employees can qualify for this deduction as well. The deduction is limited to the amount of profit earned from the business each year. If a renter pays a lot of rent, this deduction can be substantial. Homeowners who are in business and have a home office can also qualify for the deduction.
Of course, the value of the tax benefits of buying a home depends on the state the buyer lives in and his or her tax bracket. Buyers who live in high tax states like New York or California get the most benefit.
This is why the blanket statement "it's always better to buy than rent" is not always true. It all depends on the buyer's individual circumstances.
You should encourage prospective buyers to run the numbers. There are some excellent websites you can refer clients to that have online calculators they can use to compare the costs of renting vs. buying a home.
A good rent vs. buy tool can be found on the Smart Money Magazine website: http://www.smartmoney.com/personal-finance/real-estate/to-rent-or-to-buy-9687/.
Freddie Mac also has a good online calculator: http://www.freddiemac.com/corporate/buyown/english/calcs_tools/.
Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.

Fed on real estate loans

2011-02-03T10:30:00.000-08:00

Fed punts on real estate loan disclosures

Consumer protection bureau tasked to devise single, standardized form
By Inman News
Inman News™
February 02, 2011
Editor's note: This story has been updated to include comments from mortgage industry groups.
The Federal Reserve is backing down from a slew of proposed changes to mortgage loan disclosures, saying authority in that arena will soon be transferred to the new Consumer Financial Protection Bureau.
The Fed's proposed changes to mortgage loan disclosures were over a year in the making, prompted by criticism that homebuyers often didn't understand the true cost and terms of mortgages taken out during the boom.
The situation was complicated by the fact that borrowers get two sets of federal mortgage disclosures: one addressing Truth in Lending Act (TILA) requirements, and the other satisfying requirements of the Real Estate Settlement Procedures Act, or RESPA.
The Federal Reserve has had rulemaking authority for TILA loan disclosures under Regulation Z, while the Department of Housing and Urban Development (HUD) oversees RESPA disclosures.
Lenders, the real estate industry, and consumer groups have complained that having two sets of mortgage loan disclosures is confusing.
In an attempt to address that problem, the Dodd-Frank Wall Street Reform and Consumer Protection Act transfers oversight of both TILA and RESPA to the Consumer Financial Protection Bureau in July.
The bill mandates that the CFPB issue a proposal for a single federal mortgage disclosure form that satisfies both TILA and RESPA requirements within 18 months of assuming oversight responsibility.
By the time Dodd-Frank was passed, HUD had rolled out new RESPA loan disclosure forms in the face of industry opposition, but the Fed was still in the process of overhauling TILA disclosures.
A combined TILA-RESPA disclosure rule "could well be proposed by the (bureau) before any new disclosure requirements issued by the Board could be fully implemented," the Fed said in announcing that it will not finalize three rulemaking proceedings it's initiated since August 2009.
Although there are specific provisions of the Fed's proposals that would not be affected by the bureau's development of joint TILA-RESPA disclosures, adopting them "in a piecemeal fashion would be of limited benefit, and the issuance of multiple rules with different implementation periods would create compliance difficulties," the Fed said in an announcement.
In announcing plans to update TILA loan disclosures in the summer of 2009, Fed Chairman Ben Bernanke said the one-page TILA disclosure currently in use "is not adequate to convey the features and risks of today's complex products."
The Fed promised improved disclosures would:

Capture most fees and settlement costs paid by consumers in the disclosed annual percentage rate.
Require lenders to show how the consumer's APR compares to the average rate offered to borrowers with excellent credit.
Require lenders to provide final TILA disclosures at least three business days before loan closing.
Require lenders to show consumers how much their monthly payments might increase for adjustable-rate mortgage (ARM) loans.

Another issue the Fed was attempting to tackle was the use of "yield spread premiums" -- rebates paid by lenders when mortgage brokers place borrowers in loans with higher interest rates than they might otherwise have qualified for.
Critics said the rebates were often pocketed by mortgage brokers without a borrower's knowledge, creating a financial incentive for loan originators to place borrowers in more costly loans.
The Fed proposed a ban on yield-spread premiums that was to take effect April 1 -- a move adamantly opposed by the National Association of Mortgage Brokers.
NAMB director and government affairs chairman Mike Anderson said the group supported the Fed's move.
"This (loan disclosures) needs to be put under CFPB, along with loan officer compensation," Anderson said. "The Fed shouldn't be doing all this -- put it under one roof and do it right the first time."
The Mortgage Bankers Association also welcomed the Fed's move, saying a series of "unnecessarily duplicative rulemakings would have increased confusion, regulatory burden and costs to the very consumers these rules should protect."
Anderson, the president of Metairie, La.-based Essential Mortgage Co., said mortgage brokers had difficulty obtaining guidance from the Fed on exactly how the new rules for loan officer compensation would work. Although the Fed updated its guidance on the topic on Jan. 26, Anderson called the update a "cut and paste job" that left many questions unresolved.
The Small Business Administration's Office of Advocacy agreed, writing the Fed Tuesday to express concerns that its guidance may not meet the requirements of the Small Business Regulatory Enforcement Fairness Act.
The SBA's Office of Advocacy said mortgage brokers had complained that the guidance "answers almost none of the questions that the industry has about the rule and view it as simply a summary of a complex issue and not guidance on how to comply with the requirements of the rule."
The Fed, SBA's Office of Advocacy said, has a legal obligation "to provide the industry with a description of the actions needed to comply with Regulation Z in a manner specific enough that will enable a small entity to know if it has met the requirements of the rule."
HUD, for its part, has maintained that yield-spread premiums can benefit borrowers who would otherwise have trouble paying their closing costs, as long as the rebates are not pocketed by mortgage brokers.
Instead of banning yield-spread premiums, the standardized loan disclosure forms HUD began requiring lenders to use last year require that the rebates be credited against a borrower's closing costs.
Inman News columnist Jack Guttentag has characterized the dual-disclosure system as "a disgrace" because critical information is often buried or absent.
But Guttentag -- also known as "The Mortgage Professor" -- has also questioned whether the solution put forward in Dodd-Frank will solve the problem.
Dodd-Frank appears to have more mandated disclosures than TILA, some of which are "nonsensical and will prejudice the ability of (the CFPB) to do its job," Guttentag wrote in a column on the topic.

Real Estate Sales Rebound in 2011!

2011-02-02T10:39:00.000-08:00

Real estate sales rebound in 2011, prices nearly flat

NAR forecast anticipates quicker recovery for new homes
By Inman News
Inman News™
January 27, 2011
In its latest real estate and economic forecast, the National Association of REALTORS® anticipates that sales of existing homes, after falling 4.8 percent in 2010, will rise 7.9 percent this year, to 5.3 million, and another 4.5 percent in 2012, to 5.53 million.
The median price of existing homes, meanwhile, rose 0.3 percent in 2010 after a 12.9 percent drop in 2009, and is expected to rise 0.5 percent this year, to $173,800, and another 2.4 percent in 2012, to $177,900.
Sales of new single-family homes are expected to rebound faster, rising 17.7 percent this year, to 374,000 sales, after a 15.5 percent drop in 2010, and then rising 51.1 percent in 2012, to 565,000 sales. In an earlier forecast, released last month, NAR anticipated that sales of new single-family homes would climb 20.8 percent in 2011 and 30.9 percent in 2012.
The new-home median price rose 2.2 percent in 2010 and is expected to climb 1.8 percent this year, to $224,700, and 1.9 percent in 2012, to $229,000.
NAR expects that 30-year-fixed mortgage rates will average 5.1 percent this year, up from 4.7 percent in 2010, and rise to 5.9 percent in 2012.
The group also forecasts the U.S. unemployment rate to fall from 9.7 percent in 2010 to 9.4 percent this year and 8.7 percent in 2012, while U.S. real gross domestic product is expected to dip from 2.8 percent in 2010 to 2.6 percent this year, rising to 3.2 percent in 2012.
Also today, NAR reported a 2 percent month-to-month rise in December for its index tracking pending sales of existing homes, though the index was down -4.2 percent compared to December 2009.
The Pending Home Sales Index tracks homes for which a sales contract has been signed but the transaction has not yet closed. Typically, a sale is finalized within one to two months of signing, so the index is considered a leading indicator.
Regionally, the index fell 10.7 percent in the West, 5.3 percent in the Northeast and 5.1 percent in the Midwest while rising 1.7 percent in the South in December 2010 compared to December 2009.
And the index dropped 13.2 percent in the West while rising 11.5 percent in the South, 8 percent in the Midwest, and 1.8 percent in the Northeast from November 2010 to December 2010, NAR reported.
Lawrence Yun, NAR's chief economist, said in a statement, "Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions. Mortgage rates should rise only modestly in the months ahead, so we'll continue to see a favorable environment for buyers with good credit."
NAR reported last week that the sales rate for existing homes rose about 12.3 percent from November 2010 to December 2010, but fell 2.9 percent compared to December 2009. The median price of existing homes dropped about 1 percent year-over-year in December, to $168,800.
Sales of new single-family homes were up an estimated 17.5 percent from November 2010 to December 2010 and fell about 7.6 percent year-over-year in December, the U.S. Census Bureau and Housing and Urban Development Department reported Wednesday. The median price rose about 8.5 percent year-over-year in December, to $241,500.
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Buy Tulsa Now!

2011-01-20T12:50:00.000-08:00

Go to http://www.buytulsa.info/ for some great info!
Randy Johnson
Coldwell Banker Select
(918) 633-2437
http://www.area918homesales.com/

10 Hidden costs of owning AND renting a home - By Tara-Nicholle Nelson | Broker in San Francisco, CA

2011-01-20T11:52:00.000-08:00

Everyone thinks that the costs of renting are limited to, well, rent! On the other hand, there is a laundry list of expenses we all know go along with owning a home.

But many people aren't aware of the hidden, surprising costs associated with both owning AND renting a home, and it's what you don't know that has the potential to derail your rent vs. buy decision-making, so here are the Top 5 Hidden Costs of both renting and owning your home:

Top 5 Hidden Costs of Owning

1.    Special assessments. HOA dues to maintain the complex come as no surprise to condo owners, but hefty special assessments to make unexpected (and unbudgeted) repairs to the roof, windows, boiler or even foundation often catch unit owners unawares. Even if your home doesn’t belong to an HOA, don’t be surprised to see special assessments tacked on top of your property tax bill, covering public services including things like street lighting, tree trimming, pest control, libraries, and even schools.

2.    Utilities and services you didn’t need while renting. Many renters have never had to pay for things like gas, garbage, water and pest services, and they've also looked to their Electric, gas, garbage, alarm, water, pest, home warranty – which mitigates larger surprise costs of unexpected major repairs, gutter cleaning/maintenance, snow removal/winterizing, etc)

3.    Private mortgage insurance. Today’s savvy homebuyers are well aware that they’ll have to pony up for private mortgage insurance, or PMI, if they’re putting less than 20 percent down on their mortgage. But the cost of PMI has spiked over the last year, and the amount definitely catches buyers off guard.

4.    Penalties and fines. HOA rule violations, like parking in the wrong spot, installing hardwood floors in an upstairs unit, or painting your home a forbidden hue can result in surprising fines, on top of the costs of remediating the issue. Even single-family homeowners can get ticketed and/or fined by their city or town for violations like having overgrown weeds or other building code violations – especially those which create fire and safety hazards.

5.    Items you didn't need while renting, but you do as a homeowner. This varies based on your climate and the type of home you own, as well as on the services you outsource, but can include landscaping equipment (e.g., lawn mower, snow/leaf blowers), washer/dryer, fridge, window treatments, and light fixtures.

Top 5 Hidden Costs of Renting

1.       Opportunity Costs. When you rent, you lose out on the chance of equity – which can mean an increase in your home’s value but, even in a down market, can also mean the chance of ever owning the place you live free and clear.

2.       Income taxes. If you earn above a certain level of income, the income taxes you’re paying as a renter will be substantially higher than they would be if you owned a home and could deduct your property taxes and mortgage interest.

3.      Storage. Many a renter simply has too many personal belongings to stuff into their small apartment, so it’s not uncommon for tenants to also pay for a storage space, without calculating that expense into their “housing” budget.

4.      Costs of improving the property. Long-term renters may paint, replace the flooring, and do other improvements to make the place livable. But since it’s not technically “their” home, when they do move out, all the cash they invested is lost. In fact, some landlords may require them the pay or forfeit deposit money to bring the place back to its original, neutral décor.

5.    Lost deposits. Anyone who has rented more than a couple of apartments is well aware of the chances of losing some or all of your security or peet deposits, no matter how well you care for your home.

Call me, Randy Johnson, if your are buying or selling in the greater Tulsa, OK area. If you are moving out of the area call me and I will refer you to a Realtor in the city you are going to move to.

Randy Johnson
Coldwell Banker Select
(918)633-2437
http://www.74063.com/

Tulsa ranked No. 5 on list of best places to live

2011-01-18T14:16:00.000-08:00

Mortgage rates low, time is right for first-time home buyers

by: PHIL MULKINS World Staff Writer
Wednesday, January 05, 2011
1/5/2011 4:44:22 AM

Although mortgage rates have been ticking higher from historic lows in November, 30-year, fixed-rate home loans generally remain below 5 percent. This means now is still the time to get into that first house, but buyers need all their ducks in a row before venturing out onto that big pond, says the website MonitorBankRates.com.

Credit score: It was easy to get into a home before the housing crash, but now it's a different reality on mortgage credit requirements. One of the old rules still applies: The higher the credit score, the lower a buyer's down payment and monthly payments will be. FICO scores below 680 mean would-be buyers must either pay sizable fees or a higher down payment to be able to qualify.

Although there are many qualified borrowers in the 580 range, today's market is looking for 640 to 660 minimum. Scores of 700 to 720 will get good deals, and 750 and above will garner the best rates of the market. Buyers can improve their chances by pulling their credit reports - see tulsaworld.com/ACR - to ensure they're not being penalized for old, paid or settled debts. They should stop applying for new credit one year before applying.

How much house: Look for a home that's financially comfortable. Determine how much home you can afford with BankRate.com's mortgage calculator - see tulsaworld.com/BANKmortgagecalculator - by typing in wages, debts, down payment, loan term (years), interest rate, insurance (cost per year), real estate taxes, car payment, credit cards monthly payment, etc.

FHA financing: About 20 percent of buyers will get FHA-insured loans, and for FHA approval home buyers' house payments can't exceed 31 percent of their monthly incomes.

FHA will let buyers go higher in some cases, but for conventional loans the safe formula is home expenses cannot exceed 28 percent of gross monthly income.

Improve chances: Shoppers should try on these financial obligations before signing mortgage papers by calculating prices for homes in their price ranges along with increased expenses (ad valorem taxes, insurance and utilities). They bank the difference between this cost and what they're paying now. This builds a nice nest egg and shows them what living without "the difference" will be like.

Mortgage preapproval: Before real home shopping begins, buyers should get financing in place through the "preapproval process." This is much more extensive than it was just a few years ago. Documentation of income and assets is essential to approval. Buyers should get financing in place before even walking into the first house.

Buy a house you like: When buying today for the family that will live in the house many years, pick a home that will make them happy for at least the next decade. Gone are the days of house hopping through quick sales and "house flipping." Depending on the down payment amount and the cost of selling and relocating, short-term ownership is an expensive proposition. Love the house you'd like to buy.

Call me........Randy Johnson - Coldwell Banker Select (918)633-2437 http://www.area918homesales.com/

Hire a Realtor that cares!

2011-01-18T13:47:00.000-08:00

Whether you are thinking about selling your first home or your tenth, a trained real estate professional can help you earn more money in less time on the sale.I work hard to understand the unique selling points of your home and neighborhood.

Looking for a new home can be an exciting and challenging experience. Having a real estate professional that takes the time to understand your unique needs and lifestyle is important.Randy Johnson

http://www.area918homesales.com/

I work hard to not only find the perfect home for you, but also to handle every last detail of the purchase process, from negotiating the contract to the closing table.

TAX FILING DATES TO CHANGE: from www.irs.gov

2011-01-13T12:36:00.000-08:00

Following recent tax law changes, the Internal Revenue Service announced the upcoming tax season will start on time for most people, but taxpayers affected by three recently reinstated deductions need to wait until mid- to late February to file their individual tax returns. In addition, taxpayers who itemize deductions on Form 1040 Schedule A will need to wait until mid- to late February to file as well.

The start of the 2011 filing season will begin in January for the majority of taxpayers. However, changes in the law mean that the IRS will need to reprogram its processing systems. Check out WHO MUST WAIT TO FILE

DEADLINE EXTENDED Taxpayers will have until Monday, April 18 to file their 2010 tax returns and pay any tax due because Emancipation Day, a holiday observed in the District of Columbia, falls this year on Friday, April 15. By law, District of Columbia holidays impact tax deadlines in the same way that federal holidays do; therefore, all taxpayers will have three extra days to file this year.

If You Pay For Tax Preparation, Make Sure They Are Certified

Federal guidelines require preparers to pass competency tests, undergo continuing education and register with the government. The requirements do not affect certified public accountants, lawyers and other enrolled professionals who are in good standing with regulatory agencies. About 75% of taxpayers use a professional or some sort of online software.

MAKING WORK PAY CREDIT

A simple way to save on your taxes, is to file a Schedule M form, which takes advantage of the Making Work Pay tax credit. (IRS INFO HERE)

The credit knocks off $800 earned income for joint filers with modified adjusted gross income (MAGI) between $12,903 and $150,000 and $400 for single filers with MAGI between $6,451 and $75,000.

The amount is reduced for couples with MAGI totaling $150,000 to $190,000 and others with MAGI of $75,000 to $95,000.

Morgage Rates Expected to Rise in 2011

2011-01-13T08:32:00.000-08:00

The Mortgage Bankers Association (MBA) anticipates that rates will rise slightly in 2011, hovering around 5 percent and increasing to about 6 percent in 2012. Holden Lewis of Bankrate wrote this past fall that economists had predicted a rise in mortgage rates by the third quarter of 2010. At the end of 2010, mortgage rates began to climb out of the 4 percent range and slightly above 5 percent. While any increase in mortgage rates is unwelcome to homeowners who want to refinance or to buyers, a 5 percent mortgage rate is still historically in the low range of interest rates.

If you have any questions dealing with real estate in the greater Tulsa area, please call or email me. My info is on my Web site at http://www.74063.com/

Randy Johnson
Coldwell Banker Select

Why Wait To Buy?

2011-01-11T12:54:00.000-08:00

Hi, my name is Randy Johnson and I am a Realtor that buys and sells homes in the greater Tulsa, OK area. Please call or email me if I can be of service to you.

Now is a great time to buy that home you have been waiting for! The interest rate is lower than it has been since the 1960's and there are many homes on the market to choose from! Now is the time to make that move!

Visit me at SellingSandSprings.com for more info!