Archive for the ‘investment’ Category
Wayback Wednesday… Recovery?
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Recovery… In it or do we need to go to it? That was my question two years ago this week… and it is STILL a valid question. And two years ago, I don’t think there were many people (including me) that were expecting the housing slump to last this long.
But here we are, not knowing if a bottom to the market has been established or if there is more blood that needs to run in the streets.
At least now, more of us in the real estate community have figured out that stimulus and incentives aren’t the answer… JOBS are the answer. There are too many potential buyers out there that are worried about the security of their jobs. Demand can’t rise until buyers don’t feel threatened.
And that means that the Supply side of Supply/Demand will be out of whack… even thought the supplies have be mostly dropping for well over a year (compared to the previous year). And even though supply has been coming down, there have been reports of a wave of foreclosures just out of sight over the horizon (those reports have been with us for well over a year, too).
On the flip side, there are some pretty good deals. Mortgage rates are ROCKING… I heard a report today that rates hadn’t been this low in 60 years. If you ARE in a position to buy, it might be the best time in a generation. If not, I understand…
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- Wayback Wednesday… Don’t be Dumb Like a Bank (lanebailey.com)
- Wayback Wednesday… Add on or Get out? (lanebailey.com)
View CommentsFlashback Friday… Are You Ready to Rumble?
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Competition. If you are a seller in this market… and for the last several years… you have been in competition. If you weren’t… your competitors were, and you can’t win the race if you weren’t running.
If you are a buyer in this market, you have still been in competition. Same story as above. And while there is a LOT of inventory (less than the last couple of years, but still a lot), the deals aren’t on every corner. You have to grab them when they pop up…
The bottom line is that opportunities are out there for both buyers and sellers, but they aren’t so plentiful as to be squandered.
I wrote a post last year about this very thing… Drop in and take a look.
View CommentsWayback Wednesday… Don’t be Dumb Like a Bank
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A couple of years ago I wrote a post about a particular property. It was a foreclosure, and the bank acted stupidly. And I’m not saying that lightly. Had they accepted my client’s offer, they would have sold the property a year earlier and for $40k more than they eventually got.
Now I see a lot of people making the same mistake from the other side of the fence…
I see buyers trying to deliver one last beating to the bank… often during the inspection phase… and losing a great deal over things that are trivial. I understand it. That doesn’t make it any better…
I had one client that was angry that the bank accepted his offer. He thought they would counter. I had warned him that they might accept of reject, but not counter. Some of the banks have a number. If you offer $1 over the number, they accept. If you offer $1 below, they reject. During the inspection period, this client made a LOT of demands. The bank rejected. No counter… no discussion.
Don’t make the same mistake the banks were making.
View CommentsFlashback Friday… Get Out of Your Mortgage for FREE?
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Don’t expect it to actually happen… I wrote about this phenomena a year ago, and there are still lots of practitioners claiming it can be done. They all say that they have done it, but I have been able to find no verified cases where the mortgage was set aside by one of these operations… Delayed, perhaps… but not set aside.
The bottom line is that it could happen… could. BUT, it is WAY more likely that you will spend thousands of dollars on legal fees, and be strung along for months and months… or even years, and then end up in worse straights than when you started.
The line sounds great, and to a non-legally trained mind like mine, it seems logical. But, my industry friends tell me that it just isn’t realistic in the real world.
View CommentsThere IS a New Real Estate Transfer Tax in the ObamaCare Law
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One of the forums in which I participate has had stories on both sides of this issue for a couple of months… with the more conservative members saying that there is a 3.8% sales tax on the sale of homes, and those that are more supportive of the President and his policies saying that there isn’t.
Neither side was real specific about their information source… talk radio for some, blogs for others… nobody seemed to be going to the source… the 20,000+ page law signed by the President. In all fairness, there is a LOT of room in 20,000 pages to hide a lot of little Easter Eggs like this. And being fair to the other side, if there isn’t a tax, the bill isn’t going to say “there is not a tax” anywhere…
I have an answer…
There is indeed a tax on the sale of real estate. It doesn’t apply to many people, but it WILL apply to some people that have profit from the sale of their homes. Starting in 2013, those with incomes over $200,000 will have to pay a 3.8% tax on profit from the sale of their primary residence or investment properties. The exact amount will be based on a formula that includes the profit from the property and the income above $200,000. The tax is not an income tax, but rather it is a “payroll tax”… officially it is a Medicare Tax.
It does not just apply to real estate, but also applies to investment income and dividends.
The bottom line is that both groups are right… and both are wrong.
But…
It will drive another nail into the luxury real estate market. It has been in the doldrums for a while. Adding new taxes will not get it going again. And if you are thinking that this only affects ‘the wealthy’, think again. Those homes are not built by ‘the wealthy’. Those homes are not renovated by ‘the wealthy’. Those consumers are more likely to hire contractors to do improvements. And they are more likely to update more often… They are a driver in the housing sector. This added tax is NOT putting gas in the tank…
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