Has the Real Estate Market Hit Its Sweet Spot???

My husband John is a high-school baseball coach and former pro-baseballer. Of course, to me, everything is about real estate, so lately I’ve been mixing the two subjects in my brain – baseball and real estate – pretty frequently. So when the California Association of Realtors reported that statewide, prices dropped 3 percent but the number of sales rose 15 percent in April 2008 (when compared to March), the first thought that came to mind was – the market might have just hit its sweet spot.

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Taking the Tax Sting out of Short Sales for Upside Down Owners: Mortgage Debt Forgiveness Tax Act

It’s a common conundrum these days: homeowners faced with increasing mortgage payments need to sell their homes fast, but home values have decreased and they can’t sell their homes for as much as they owe on them!

 

There is a transaction that resolves this issue called a short sale, in which you actually sell your Taxhome for less than you owe on it, and your lender agrees to forgive the difference.  Until very recently, if you did a short sale, your lender would send you a 1099 form at the end of the year, and the IRS would actually charge you income tax on the difference between what you sold your home for and what you owed on it.  [Talk about kicking someone while they’re down, right?  Can’t make your payment, selling your home at a loss, and now you get a tax bill, too?]

 

Many sellers simply said no, and chose foreclosure over selling the place and getting a big tax bill for the forgiven debt.

 

In December, the federal goverment passed this new law – it’s a mouthful – the Mortgage Debt Forgiveness Relief Act of 2007 – it basically says:

  • if you have to sell your home in a short sale, and 
  • you do so in 2007, 2008 or 2009,
  • the IRS will not charge you with income tax on the mortgage debt that your lender forgives. 

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Book Review: Real You, Incorporated: 8 Essentials for Women Entrepreneurs

Real you inc picA good friend of mine, Kaira Rouda, just released her new book, and it is awesome. Kaira is the Co-owner and Vice-President of the fourth largest independent real estate brokerage in America – Real Living - and also holds the fabulous distinction of having written the foreword to my book, The Savvy Woman’s Homebuying Handbook.Kaira pic

Real You, Incorporated is in some ways a love note to women entrepreneurs, in other ways a very practical-yet-inspirational manual to support biz mavens in their efforts to develop a personal brand out of their authentic personal selves.

In Kaira’s words, the top 5 things you’ll take away from Real You, Incorporated are as follows:

  1. One Real You chart that will help you define your unique passions, brand, and positioning in the marketplace.
  2. Eight real facts — broken into chapters — to help you build a brand that’s all your own.
  3. Sixteen inspirational stories from women who have built their own real brands. (Tara’s Note: And yes, Virginia, yours truly is one of those women!)
  4. Twenty-four practical action steps to help you get you started.
  5. Countless lessons from Kaira’s personal experiences as a marketing executive, writer, and entrepreneur.

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Real Estate B.S. Alert: Don’t Hire a Consultant - Reduce Your Own Property Taxes in 30 Minutes

BSAlert page1Don’t you just love public records? I’m all for transparency in government, but if you own a home, you (like me) probably receive a million pieces of mail “tailored” to your supposed wants and needs based on the data about your home and your mortgage that are on file with your County’s Recorder’s office.

I was horrified when I opened one such piece of mail this week. It was an “offer” for assistance in getting my property taxes reduced from a real estate broker purporting to “specialize in reducing people’s property taxes.”  He wrote on:

My research shows that because you bought your property at the height of the market, there is a very good chance that you are overpaying the property taxes on the property at ____________________ (my address.)

I am one of the most experienced and successful agents in the state at reducing property taxes. . ..

Please understand that I would not spend the money to send this letter unless I was reasonably sure I could save you money on your property taxes.

I’m reasonably sure he could, too. The thing is, though, ANYONE can do this – on their own – for FREE! 

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Now THAT’s What I Call a Foreclosure Auction! Neverland To Go On the Block for 50% off!

Okay. So, last year, on the Bravo! series Million Dollar Listing, you might have seen SoCal megabrokers helicoptering potential buyers all over Michael Jackson’s abandoned adult playground, Neverland Valley Ranch, trying to sell it for around $50 million.

Though many developers were interested – I mean, the estate is over 2,900 acres of prime, Santa Ynez property (Oprah & Ellen have lived in the ‘hood) – nary a deal was cut.  By contrast, the average residential lot is around 1/10th of 1 acre – you could fit 29,000 houses on the Neverland property, and each one would still have a medium-sized front and backyard of its own!

Well, I guess times are tough for everyone. Yesterday, a foreclosure auction was scheduled for March 19th – if M.J. hasn’t paid the $24 mill. or so he owes on the place, it’ll go on the auction block.

Neverland

Any lessons here for the real-world property owner?  Yep – avoid overimprovement and overpersonalization.  Neverland is a very valuable parcel, but it would cost the next buyer tens or hundreds of millions of dollars to dismantle the amusement park/zoo/private railroad and convert it into something usable to, uh, regular people. So the interested buyers didn’t want to pay a jillion dollars for the place and have to still demo and redevelop it. 

My guess is that you don’t have a ferris wheel at your place, but remember when you convert your garage into a sauna that most folks would actually prefer the garage, so you might want to convert it back before you try to sell the place.   

 

Is there “Schmuck Insurance” on Run’s House? Russell Simmons’ Investing Term You Should Know

 Run's HouseDuring my JetBlue flight to NYC last month, to attend the Inman Connect NYC 2008 real estate & technology conference, I watched a couple of episodes of Run’s House.  If you haven’t seen it, it’s an MTV reality show that chronicles the daily lives of Rev. Joseph Simmons, a.k.a. “Run” from the rap group Run DMC.  Rev. Run is the youngest brother of hip hop and business mogul Russell Simmons.

In one episode, Russell extends to Rev. Run the opportunity to invest a couple million dollars in a hip hop Web 2.0 venture, GlobalGrind.com.  Run balks at the amount, and also at the fact that the web space is completely outside of his comfort zone.  Despite Russell’s extensive market research into the opportunity and track record of startup success, Run remains undecided about the opportunity until his wife and youngest son check the site out and encourage him to get in. 

Before Rev. Run agrees to invest, Russell reminds Rev. that Russell set aside a number of shares for his family and friends as “schmuck insurance.”  Huh?  Russell then defines schmuck insurance as shares of an investment you offer to those close to you, so that when you make a fortune on it, they won’t be left standing there with nothing - “like a schmuck.”

Anyone out there offering schmuck insurance to their friends and fam who are trying to ”wait for the bottom” of this real estate cycle?  

How to Unload Your House - Fast!

My hero(ine) Barbara Corcoran was on the Today Show yesterday, sounding off about mistakes sellers make. She also gave some tips for how sellers can get their homes off the market immediately.

Barbara Corcoran

I have my own take on this issue, too. Selling a home is not rocket science. In my opinion, there are only three elements involved in getting your home to sell, no matter how long it has been on the market, and no matter how slow the market is in your neck of the woods:

  • Pricing,
  • Condition, and
  • Marketing.

And the greatest of these is pricing.

If your home is not selling, you must tweak one or more of these three elements. Here are my tips - and some of Barbara Corcoran’s - on getting your house to finally sell:

Pricing

Lower the price. Period. And not a whole bunch of little, inconsequential price reductions. Look at the sales price (not the list price) of comparable properties that have recently sold in your neighborhood, and price yours below them. You can’t really underprice a home - the lower the price, the more it looks like a bargain. The more it looks like a bargain, the more people will come see it. The more showings, the more likely you are to get a qualified buyer. Read more »

Hiatus - OVER