asginvestments.com

NEW YORK (CNNMoney.com) — Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks, when the government starts handing out cash to encourage lenders to close these deals.

“Banks have ramped up short sale approvals,” said Duane Legate of House Buyer Network, which connects short sellers with buyers. “They’re hiring a lot of the people who once worked in the mortgage-lending industry and moved them over to short sales.”

These transactions, where lenders allow homeowners to sell their houses for less than they owe, accounted for 17% of all residential real estate sales in February, up from nearly 13% in November, according to a monthly real estate market survey by Campbell/Inside Mortgage Finance.

And Bank of America (BAC, Fortune 500), the country’s largest mortgage servicer, has more than doubled the number of short sales it processed in recent months.

Elizabeth Weintraub, a Sacramento, Calif.-area real estate agent who handles many short sales, was amazed at how quickly a recent deal went through. “Bank of America approved it in 24 days,” she said. “That flipped me out.”

This is a huge change from even just six months ago when the short-sale market was stalled and most people would describe the process has real estate hell. Because lenders stand to lose so much on these transactions, they have been reluctant to make short sales happen, often waiting months before getting back to potential buyers.

Beware: You lost your house but still have to pay

“In the past, many short sales would never come to fruition and the ones that did averaged over half a year to complete,” said Chris Saitta, CEO of Equator, which produces short sale software.

“Things would just fall into a black hole and not come out again,” added Weintraub.

And even when banks did agree to the sale, the process could be further complicated if the original owner had a second mortgage.

In most cases, the first lender is repaid in full before any money flows to a second-lein holder. And because most distressed borrowers are severely underwater, there’s usually nothing left to send on. As a result, second-lein holders are left holding the bag and have been killing many deals.

But that has been changing. For one thing, banks realize that they make out far better financially with a short sale than a foreclosure. “The lenders lose 50% on a foreclosure and only 30% on a short sale,” said Glenn Kelman, founder of the real estate Web site Redfin. “And short sales offer a way to get distressed properties off their books quickly.”

And on April 5, lenders and mortgage investors will have even more incentives to offer troubled borrowers short sales instead of foreclosing.

Under the new Home Affordable Foreclosure Alternatives program, borrowers will earn a $3,000 “relocation incentive” and servicers will get $1,500 for handling a short sale.

The investors who actually own the mortgage notes will get $2,000 in exchange for sharing proceeds of the short sales with any second-lien holders. And, finally, those second lien holders will receive up to $6,000 for releasing their claims.

Lenders participating in the program must also determine the market values of properties early on and inform the owners of just what price they’re willing to accept. Then, if owners come back to the lenders with bonafide offers, they have to be accepted within 10 days.

Equator’s Saiita anticipates a short sale explosion in response to the new program. “The challenge will be handling all the volume,” he said.

The company has already tweaked its software, which 58 servicers use, to handle the new HAFA rules. And that should help reduce the time it takes to execute a sale, which currently averages 88 days.

The boom in short sales may accelerate the end to the foreclosure crisis by cleaning out the overhang of borrowers in distress and replacing them with more stable homeowners.

Plus, these sales are better for distressed borrowers because their credit scores suffer less. Going through a foreclosure can knock 200 points off a FICO score, twice as much as the penalty for a short sale

Because of the nature of real estate the trends that exist within it move and change much slower than other markets. Real estate trends tend to get moving in one direction for long periods of time until they reach a “Bubble” (as it’s commonly being called right now). When this inflection point is reached the balance of power changes, the other side of the table begins to realize that they are now the ones holding the cards and setting the rules. There usually are some big problems for the participants involved when these changes begin to take place, that problem… They usually don’t realize the changes are occurring. For instance in a seller’s market it usually takes a homeowner a year or two to realize and accept that the buyer is actually back in control now and that they must adapt their expectations and price to the buyers.

2006 was the height of the last seller’s bubble, where sellers were holding all the chips. The agent’s job was simple and there was no need for a marketing strategy other than list it on the MLS. Pricing the house for the realtor was really simple; look at the recent comparables and price their listing about 5% to 10% higher than the last one that sold. Then they sat back as bidding wars started and many offers came in above the already inflated asking price.  The belief was that prices were going to continue to go up and no matter what price a buyer purchased the house at it would be worth more very shortly afterwards. The laws of supply and demand are no exception here and since houses were in huge demand with little supply prices continued to increase.

This frenzy continued its course and buyers bought, and as they did the pool of qualified buyers shrank. Home prices remained inflated and a surplus of homes began to enter the market. Top this off with a shrinking pool of qualified buyers and soon sellers are forced to bring prices down. They must adjust realizing that those who could buy have already done so and there are fewer buyers on the market.

What we are currently in is without a doubt a buyer’s market; sellers are now competing with one another to get the attention of any buyer who is looking to buy a home. This causes home prices to drop, closing cost to be paid in full by seller; we have even seen cases where sellers agree to pay two months mortgage payments to us in order to off load the property. This is the time when many part-time real estate agents drop out the game, and those with experience are challenged with having sellers accept the reality that they are not going to get top dollar for their home right now.  Failure for a realtor to correctly educate their seller simply ends up wasting both parties time.

Sellers must realize in a buyer’s market getting top dollar for their property is highly unlikely, regardless of what comparable sales come in at, a buyer simply does not have to pay top dollar in this market. Even harder to accept for some sellers is if their home has some negatives such as repairs, outdated rooms, lack of curb appeal, etc they can expect offers 15% or more lower than recent comps. If a seller is stubborn in their way they will be stuck with the property, simply put there is no amount of marketing that is going to convince a buyer to overpay in a buyer’s market.

P.S. If you are a seller who really wants to sell your house don’t hesitate to call us today 1-888-210-6134.

P.S.S You can email us for more information at info@asginvestments.com

P.S.S: Buyers if you are ready to take advantage of the 2008 Housing Tax Credit and receive your $8,000.00 you need to call us today! @ 1-888-210-6134 or sign up here to get the free special report http://www.asginvestments.com/buyer-welcome.htm

We are very glad to hear from so many who found yesterdays part 1 very informative. Today in part two we break down the exact meaning to each qualification along with answering some of the most common questions that have been asked. We are sure you will find todays information extremely useful to you.

Part 2…

We have had tons of people emailing us asking if this tax bill is just a renewal of the one enacted by Congress in July 2008 and the answer is a BIG “NO”. There are a few key differences between the two and probably the most important one to you is that this new tax credit does not have to be repaid. The previous one (which is still available to those who may not qualify for this specific one) basically was an interest free loan that you had to pay back. This new credit is truly that… a credit, however the home being purchased must be the principal residence for the taxpayer for a minimum of three years or you will be faced with a recapture of the credited amount, and like all rules there are some exceptions that will apply to that.

Here’s some additional good news; participating in the tax credit is really easy and simple. All you have to do is claim your tax credit on your federal income tax returns for 2009. More specifically home buyers will complete IRS form 5405 to determine their tax credit amounts, and then claim this amount on Line 69 of their 1040 returns, that’s it nothing else to do not even a pre-approval or screening all you have to do is make sure you fit the guidelines that have been laid out under the tax credit (hopefully this is being accomplished with the reading of this article).

Looking back through the thousands of emails we received that prompted us to write this article there were two other very common questions being asked and they were, what types of homes will qualify for the tax credit and what does it mean when they say the tax credit is refundable? The first question has a simple answer and that is ANY home qualifies from a single-family, to an attached home i.e. townhomes and condo’s, new construction (regardless if by a builder or if you hire your own contractors to build a home), manufactured homes (mobile homes) heck they have even included houseboats. As long as it’s your principal residence it qualifies. Principal residence is determined identically to how you may qualify for the $250,000 / $500,000 capital gain tax exclusion.

Something else we wanted to make clear here before we move on; if you decided to have your home built by contractors yourself you still qualify as long as your first occupy the residence on or after January 1, 2009 and before December 1, 2009.

So what about the refund and what does that mean?  This simply means that the tax credit can be claimed even if the home buyer has little or no federal income tax liabilities to offset. In other words if there are not enough debts to cancel out the tax credit a surplus from the tax credit may remain, in that case the federal government would then send the home buyer a check for any remaining portion. So for example if a qualified individual expected a tax liability of $6,000 and had tax withholdings of $4,000 then without the tax credit the individual would owe the IRS $2,000 on tax day (April 15^th). However if the individual taxes advantage of this tax credit and is qualified for the full $8,000 then on April 15^th they would be receiving a check for $6,000 ($8,000 tax credit - $2,000 tax liability).

For those individuals who purchase their home under the mortgage revenue bond (MBR) program you can combine the two together this is another notable change from the July 2008 tax credit where you could not combine it with your MBR.  As some of you may know there is also a nice home tax credit for first time homebuyers in the District of Columbia but unfortunately you can only claim one.

Tax credit versus tax deduction, are these two the same? The answer is NO. A Tax credit is a dollar for dollar reduction in what you will owe on your taxes. That means if you owed the IRS $8,000 on tax day and qualified for the housing tax credit you would owe the federal government nothing. A tax deduction is subtracted from the amount of income that you are taxed. So in our previous example let’s assume are individual is in the 15% tax bracket and received the $8,000 tax deduction the individuals liability would be reduced by $1,200 ($8,000 x 15%) so your tax liability would be lowered to $6,800 ($8,000 liability - $1,200 deduction). As you can see there is a significant difference between the two, and I am willing to bet a million dollars on which one you would prefer to have; kudos to this administration for really taking the route of tax credit and bringing greater value to the home buyer.

Another interesting note of this tax credit is that home buyers do not have to wait until they file their 2009 tax returns to access this credit. As long as you qualify you are permitted to reduce your income tax withholdings. By doing this by the amount of the credit you will receive will enable you to accumulate cash by raising his/her take home pay. In turn you can take this money and apply it to your down payment. To do this you would need to adjust your W-4 through your employer. Be warned that if you do reduce your withholdings and do not qualify for the tax credit you would then be liable for repayment and possibly interest charges and penalties.

There are some additional rule changes that were made with the economic stimulus that you may be able to take advantage of like the tax-exempt bonds. There are a few states whose housing agencies are introducing programs that will provide short term credit acceleration loans that may be used to fund a down payment.  Check with your state housing agency to determine the availability of such programs. Too our knowledge Maryland has not finalized any such program as of yet, but we have seen a lot about Missouri currently implementing this program.

With regards,

Antoine and Shonda Grier
ASG Investments, LLC

1-888-210-6134
Info@asginvestments.com

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a primary residence on or after January 1, 2009 and before December 1, 2009. Unlike the first tax credit enacted in 2008, the new credit does not have to be repaid. One thing is for sure, the enhanced tax credit is providing an excellent opportunity for new home buyers. It’s no secret that we are in a struggling economy and the government has been taking steps to try and revive it, especially the housing market which many say is the heart of the problems. 

The American Recovery and Reinvestment Act of 2009 (The official name of the tax credit) has a few key components that home buyers should be aware of.  Most importantly … it’s for first time home buyers and the credit does not have to be paid back. The credit is equal to 10% of the homes purchase price or a maximum of $8,000.00, and is available for any home bought on or after January 1, 2009 and before December 1, 2009.  Single taxpayers with an annual income up to $75,000 and married couples with an income up to $150,000.00 can receive the tax break.

So with all this talk about first time home buyers lets be sure that you understand exactly what the government defines as a first time home buyer. The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the past three-year period prior to the new home purchase. In addition for married couples, the law looks at both parties individually but it affects the couple as one. In other words, if you have not owned a property  in the past three years but your spouse has owned a principal residence, neither you or your spouse qualify for the tax credit.

However, the tax credit can work for unmarried joint purchases where one party can allocate the credit amount to any buyer who qualifies as a first time buyer. So a parent may jointly purchase a home with a son or daughter allowing the child to get the tax credit. In addition, ownership of vacation or rental properties that are not used as primary residence do still qualify as first time home buyers for the tax credit.

Now let’s take a closer look at the income limits and what all the small legal print exactly means.  It’s funny as I sit here and type this, a phrase that a good friend says popped into my head.  He would always say “Check the fine print, because what the good Lord giveth the fine print take away”.  Now what the income limits state specifically is that the tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) more than $75,000 for single buyers and $150,000 for married couples who file joint tax returns. If an individual makes greater than $95,000 or a couple makes greater than $170,000.00 then the tax credit is reduced to zero.  For individuals and couples who’s MAGI falls in between these ranges the tax credit is reduced proportionally.

Okay so I can just feel a few of your sitting there reading that last part and scratching your heads thinking  ”I thought you were going to explain this for us in easy terms”.  We are so — let’s first define exactly what this MAGI means. The IRS defines MAGI as the Modified Adjusted Gross Income.  To find yours you must first determine your “adjusted gross income” or “above-the-line deductions”, keep in mind this number is before itemized deductions from Schedule A or personal exemptions are subtracted. Simply put on your 1040 and 1040A tax forms your AGI.  It appears as the last number on page 1 and the first number on page 2. If you use the 1040-EZ, then your AGI shows up on line 4.  It is important to understand that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

Remember that was to discover your AGI, we still need to get to the MAGI and in order to do that we need to add to the AGI any foreign income, foreign-housing deductions, student-loan deductions, IRA-contributions deductions and deductions for higher-education cost as well. Once you have done that the number that is sitting in front of you is your current MAGI. To reiterate if your MAGI is over the limits either individually ($75,000) or jointly ($150,000) you still possibly can get partial credit of less than $8,000.

If you are like me you might work best with examples so let’s do one for both individuals and couples. Assume a single home buyer has a MAGI of $80,000, that buyer exceeds the single limit of $75,000 by $15,000. We take the $15,000 (amount over the limit) and divide it by $20,000 you get a 0.75 yield. Subtract that 0.75 from 1.0 and the result is .25, we then multiply $8,000 by the .25 and we discover that the homebuyer can still receive a tax credit of $2,000.

The same holds true for a married couple, for our example let’s say jointly they make $160,000 and the maximum amount is again $150,000 which means they are $10,000 over the limit. We take the $10,000 and divide it by $20,000 and we get a 0.5 yield. Subtract that 0.5 yield from 1.0 and we are left with 0.5. Then to determine their tax credit we take $8,000 and divide it by 0.5 to discover they still qualify for a $4,000 tax credit.

Another nice plus is that the law allows you to elect (choose) a qualified home purchase in 2009 as if the purchase occurred on December 31, 2008. I know, what does this mean for you? Well what it means is that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed. (Tax filling for 2008 returns instead of for your 2009 returns) This is a nice benefit to you the buyer because you know your 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.

Taxpayers buying a home who do wish to claim it on their 2008 returns, but have already submitted them to take advantage of the $7,500 tax credit but qualify for this tax credit can file an amendment to your 2008 tax returns (form 1040x) and then use the new tax credit that you will not have to repay.

Please remember ASG Investments is not a tax authority, and what we have just provided are examples of how the tax credits might be applied in different circumstances, you should always consult your tax advisor for information related specifically to you. Sorry folks, I had to get that disclaimer out of the way.

Stay Tuned for Part 2 coming 03/05/09.  Please feel free to contact us with any questions that you may have.

By: Antoine and Shonda Grier
ASG Investments, LLC
1-888-210-6134
Info@asginvestments.com

Remember That Image is a Fundamental Key to Your Successful

Within the first three seconds of a new encounter, you are being evaluated … even if it is just a glance.  In this short period of time, the other person forms an instant opinion about you based on your appearance, your body language, your demeanor, your mannerisms, and how you are dressed.  People appraise your visual and behavioral appearance from head to toe. Within those three seconds, you make an indelible impression. You may intrigue some and disenchant others.

But once the first impression is made, it is virtually irreversible. When you meet someone face-to-face, 93% of how you are judged is based on non-verbal data - your appearance and your body language. Only 7% is influenced by the words that you speak. Whoever said that you can’t judge a book by its cover failed to note that people do!   When your initial encounter is over the phone, 70% of how you are perceived is based on your tone of voice and 30% on your words. Clearly, it’s not what you say - it’s the way that you say it.

I’ve found that there is no sweeter sound than that of your own name. I make it a point to use my client’s name during our conversation within the first twelve words and the first few seconds.  By doing so, I’m sending a message that I value that person, and I’m focused on him/her. Nothing gets people’s attention as effectively as calling them by their name. 

With every new encounter, you are evaluated and yet another person’s impression of you is formed. These first impressions can be nearly impossible to reverse or undo, making those first encounters extremely important, for they set the tone for the all the relationships that follow.  So, whether they are in your career or social life, it’s important to know how to create a good first impression.

I believe the process works like this:

·         If you appear to be of comparable on a business or social level, you are considered suitable for further interaction.

·         If you appear to be of higher business or social status, you are admired and cultivated as a valuable contact.

·         If you appear to be of lower business or social standing, you are tolerated but kept at arm’s length.

When you make the best possible first impression, you have your audience in the palm of your hand. When you make a poor first impression, you lose your audience’s attention, no matter how hard you scramble to recover it.

Anyone can learn to make a positive and lasting first impression.  Doing so requires you to be able to modify any situation to suit the outcome to become a winner. It also, requires you to assess and identify your personality, physical appearance, lifestyle and goals. Those who do will have the advantage.

In my business environment, I plan every move with potential clients. I arrange the appointments, I prepare for the meetings, I rehearse for the presentations, but in spite of my best efforts, potential clients pop up in the most unexpected places and at the most bizarre times. For that reason alone, I leave nothing to chance.  Every time I walk out of my office, I’m ready to make a powerful first impression.  Are you?

To Your Success,

Shonda Grier