Buyers need your help to close on short sales, REOs

Realtor Notebook

BY TERESA BOARDMAN, THURSDAY, AUGUST 2, 2012.

Inman News®

Red tape image via Shutterstock.

There might be more information than ever before available to consumers on the Internet, but it won't replace real estate agents anytime soon.
More has been added to our role. Sometimes it feels like we are becoming a source for free labor for banks and government agencies who will not allow buyers or sellers to represent themselves. Sometimes, they make information about special programs available only to real estate agents.
Between Neighborhood Stabilization Program homes, traditional foreclosures and Fannie Mae foreclosures called "HomePath" homes, the homebuying process has changed. When a government agency is the seller, they sometimes use a committee to determine if the buyer is qualified to buy the home.  There are processes and there is paperwork, and sometimes representing one buyer or short-sale seller can feel like a full-time job.
The paperwork can be complicated and the instructions are not always clear. There are agents who are avoiding showing certain homes to their buyers because they don't understand the programs and can't handle the paperwork.

Responses to economic peril not grounded in reality

Commentary: Central banks can't make debt disappear

BY LOU BARNES, FRIDAY, AUGUST 3, 2012.

Inman News®

Flying saucers image via Shutterstock.

This bizarre time resembles a sci-fi epic involving three alternate universes -- one real and two political -- at each change of scene each universe moving more distant from the others.

Reality first. Today's reported 163,000-job net gain in July has surprised markets expecting more bad news, and thus triggered a short-covering rally in stocks and a dumping of safety-bought bonds, with market moves magnified by thin attendance during vacation season.

The job gain was half-again the forecast, but other aspects of the report were as weak as prior months: more part-time workers unable to find full-time jobs, and fewer people in the workforce able to find any work at all.

The Institute For Supply Management reports for July were on the cusp of weakness, manufacturing shrinking slightly at 49.8, the service sector at 52.6 a hair better than hoped. June personal income grew 0.5 percent, spending not at all. June factory orders were expected to rise and instead fell 0.5 percent; excluding a nice month for aircraft, orders tanked 1.8 percent.

10 expenses you can deduct when renting out a room

Real Estate Tax Talk

BY STEPHEN FISHMAN, FRIDAY, AUGUST 3, 2012.

Inman News®

Tax forms image via Shutterstock.

Lots of people are trying to earn a few extra bucks by renting out a room in their home. This can not only be a good source of income, but result in tax deductions.

If you rent out a room in your home, the tax rules apply to you in the same way as they do for landlords who rent out entire properties. This means you get to deduct the expenses arising from your rental activity.

There is one big difference, however: You must divide certain expenses between the part of the property you rent out and the part you live in, just as though you actually had two separate pieces of property.

You can fully deduct (or, where applicable, depreciate) any expenses just for the room you rent; for example, repairing a window in the room, installing carpet or drapes, painting the room, or providing your tenant with furniture (such as a bed).

MLS granted injunction against NeighborCity.com

Insurer denies duty to pay for portal's defense against copyright lawsuits

BY ANDREA V. BRAMBILA, FRIDAY, AUGUST 31, 2012.

Inman News®

Gavel image via Shutterstock.

Five months after filing suitagainst the operator of NeighborCity.com, mid-Atlantic multiple listing service Metropolitan Regional Information Systems, Inc. (MRIS) has been granted a preliminary injunction prohibiting NeighborCity from using copyrighted content from the MRIS database without authorization.

In a complaint filed March 28, MRIS alleged NeighborCity's owner and operator, American Home Realty Network Inc., reproduced, displayed and distributed copyrighted listing content, including photographs, without the MLSs' authorization and violated copyright laws through "the creation of unauthorized derivative works incorporating the MRIS database."

St. Paul, Minn.-based Regional Multiple Listing Service of Minnesota Inc. (NorthstarMLS) filed a similar suit against AHRN on April 18. NorthstarMLS has also filed for a preliminary injunction against the company, but the court has yet to render a decision.

The lawsuits were filed not long after San Francisco-based American Home Realty Network, which is licensed as a brokerage in California, updated profile pages for 850,000 agents on NeighborCity.com that feature agent scores and performance metrics based on their transaction history.

The preliminary injunction in the MRIS case, filed Aug. 27, denied NeighborCity's motion to dismiss the MRIS case and enjoined the company "from unauthorized copying, reproduction, public display, or public distribution of copyrighted content from the MRIS database, and from preparing derivative works based upon the copyrighted content from the MRIS database."

Bernanke defends easing but holds off for now

Commentary: Central banks must be as active as neccessary without risking inflation

BY LOU BARNES, FRIDAY, AUGUST 31, 2012.

Inman News®

Iceberg image via Shutterstock.

At the end of each August, the world's central bankers gather in Jackson Hole, Wyo. Sit around the ol' campfire singin' sad songs, goin' fishin' in pin-striped suits, and tellin' tales about the big trout that got away. This year, most of 'em.

Despite the risk of feeding conspiracy theorists, it's good to know that these people talk with each other constantly. The People's Bank of China comes to Jackson Hole. Money is money everywhere, the problems different but the same, and today are tightly linked. Mangled policy in Europe creates risk in China, and makes it all the more difficult for China to adjust its own severe imbalances.

One central banker is missing: in the midst of widespread expectation of bond purchases by the European Central Bank, its chairman, Mario Draghi, cancelled his scheduled Jackson Hole speech. One thing is certain: if you're afraid to leave town, you don’t have a deal.

Tax clock is ticking for underwater homeowners

Real estate tax talk

BY STEPHEN FISHMAN, FRIDAY, AUGUST 31, 2012.

Inman News®

Elated man image via Shutterstock.

Ordinarily, if all or part of a home loan is forgiven by the lender, either in a short sale or foreclosure, the amount forgiven is taxable income. Thus, for example, a homeowner who had $100,000 in mortgage debt forgiven through a short sale would have to pay income tax on the $100,000.

However, Congress adopted the Mortgage Debt Relief Act of 2007 to save millions of underwater homeowners from this tax disaster. Under the Act, homeowners can exclude from their taxable income up to $2 million of debt forgiven on their principal residence during 2007 through 2012. The Act applies to debt reduced through mortgage restructuring, as well as forgiven in connection with a foreclosure.

But the Mortgage Debt Relief Act expires on January 1, 2013. Any mortgage debt forgiven after that date will be fully taxable, unless the Act is extended. To avoid this deadline, a home must not only be sold before the deadline, but the lender must formally forgive the loan in a letter issued before January 1, 2013.

Will the Mortgage Debt Relief Act be extended past 2012? No one knows. In its 2013 budget, the Obama Administration asked that the Act be extended for two years. Several bills have been pending in Congress to extend it as well, but so far nothing has happened. No one has any idea what Congress will do, and it likely won't act until after the election on November 8, if then. It may depend on who wins the election.

Homeowners who want to take advantage of the Mortgage Debt Relief Act must sell their homes before the end of the year. It may already be too late for most homeowners, since short sales often take many months to complete. But some homeowners may be able to complete a short sale before the deadline if they act now -- it all depends on the property and lenders involved. There will likely be a deluge of sellers trying to meet the end of year deadline.

Realtors seek details of 'secretive' REO bulk sales

Fannie, Freddie regulator says it will release 'pertinent information' when deals close

BY ANDREA V. BRAMBILA, THURSDAY, AUGUST 30, 2012.

Inman News®

Spotlight image via Shutterstock.

California Realtors say Fannie Mae and Freddie Mac's federal regulator is moving forward with bulk sales of real estate owned (REO) homes in "a highly secretive manner," without giving full consideration to the objections of California lawmakers or the program's potential negative economic impact on housing markets and cost to taxpayers.
The Federal Housing Finance Agency is implementing an "ill-conceived" plan while "refusing to disclose any details, such as property locations, final property count, sales price, or names of winning bidders," said LeFrancis Arnold, president of the California Association of Realtors, in a statement
FHFA, the federal regulator that oversees Fannie Mae and Freddie Mac, announced last year that was considering bulk sales of properties to investors, with the goal of converting REO properties into rentals.
After collecting feedback and under pressure from lawmakers to move forward with the program, FHFA in February announced the launch of a pilot initiativetargeting bulk REO sales in metropolitan areas "hardest-hit" by the foreclosure crisis, including Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of Florida.

Agents: Just say no to overpriced listings

Sellers often have unrealistic expectations about value of upgrades

BY BERNICE ROSS, THURSDAY, AUGUST 30, 2012.

Inman News®

House of dollars image via Shutterstock.

Overpriced listings have always been the bane of the real estate business. Given the tough lending environment, there is no longer any wiggle room when it comes to pricing. If your sellers aren't willing to be realistic, even if they do get into contract, there's a high probability they will never close.

It used to be that placing a property under contract was the toughest part of the transaction. Tight credit and major changes in the appraisal process have made it exceedingly difficult for agents to close transactions. In fact, when it comes to the appraisal process, many agents are finding themselves in an entirely new world.

For example, in the past, if a property had high-quality upgrades such as granite countertops, custom wood cabinets, hardwood or marble floors, appraisers would normally upgrade the value of the property. Today, that is almost never the case.

Why is nobody making my dream real estate app?

Realtor Notebook

BY TERESA BOARDMAN, THURSDAY, AUGUST 30, 2012.

Inman News®

Dreaming image via Shutterstock.

I was recently asked by a company that builds iPad apps what kind of app I would like to see.

I did not hesitate to suggest an app that I could use to write real estate contracts. No one but agents who use iPads in the field fully understands what I am looking for, and I don't think the app is being built.

Pen and paper are easier than some of the clunky apps and mobile sites I have used to fill out forms and make offers, and that is just wrong. Some of them can reduce an agent to tears when they crash and the offer vanishes.

I want a single, easy to use app that works on my iPad where I can load or access the entire library of real estate forms, add forms of my own, and write offers for my clients, have them signed on the screen or electronically and manage them from cradle to grave and access them from any device.