FHA 203(k) Loans Offer Way to Finance Repairs for Foreclosures

FHA’s 203K  loan program is designed to finance the purchase and renovation a home, all in one loan.

Purchasing foreclosures also means discounts, but with the markdown is the price of repairs. According to RealtyTrac, foreclosures or REOs sold at an average discount of 27 percent compared to non-distressed properties in the first quarter of 2012. Through an FHA203(k) loan, potential buyers who want to purchase a discounted foreclosure but don’t have cash for the repairs may find a way to receive financing.

According to HUD, the 203(k) program is the department’s main program for rehabilitating and repairing single family properties, and it’s viewed as an important tool to revitalize neighborhoods.

In order to be eligible, the property must be purchased as a primary residence or it can be for a HUD approved nonprofit. Also, the property must be a one-to four-family residence that has been completed for at least one year.

The maximum amount that can be taken out for the property is based on the value or the purchase price of the property before rehabilitation (whichever is less), plus the estimated cost of rehabilitation or 110 percent of the property after improvements, according to HUD.

A down payment is required, and the minimal amount for a down payment is 3.5 percent of the accepted bid price plus the cost of financing repairs.

“FHA 203k approvals take more time, but are no more difficult than any other mortgage type,” said Green. “Borrowers should expect to provide the documentation required, and should respond to loan officer requests in a timely manner.”

Is a 203K Loan Right for You?

  1. Buy a “Fixer-upper” or REO property needing renovation
  2. Get funds to both purchase and upgrade your dream home
  3. Refinance and renovate your existing home

Advantages of 203K

  • Loan amount based on the home value including renovations
  • Only one loan needed to both purchase and improve
  • Refinance and rehab your own home
  • Can be used to buy property otherwise not eligible for financing

Who Qualifies?

  • A minimum down payment of 3.5%
  • A credit score of 640 or higher
  • You currently have no other FHA loans
  • You DO NOT have to be a
    first-time buyer

Bargain home prices still available

Bargain Home prices will not get much cheaper than they are right now. Several housing experts are predicting that 2012 will be the last chance to cash in on the best deals of the weak housing market. Homes have never been more affordable…. but it won’t stay this way for much longer.

Home prices are down 34% since 2006 and mortgage rates are at historic lows. The mortgage rate reached a record low today.

Housing markets are beginning to stabilize, and in some cities, such as Phoenix we see the turnaround beginning as the once bargain home prices are starting to rise. Phoenix recorded an 8.4% jump in during the three months ended April 30, compared with the three months ended January 31, according to Clear Capital.

Some key indicators:

  • Foreclosures are diminishing
  • Demand for home is picking up
  • Mortgage rates remain low

Foreclosure inventory is shrinking

The percentage of mortgage loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.” That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.

Before things slow down, however, buyers should prepare for a temporary spike in the number of foreclosures as banks start expediting the processing of their shadow inventory.  That backlog should move more quickly now.

Investors have been key in the clearing out the foreclosure inventory in Phoenix, and many are still out there snapping up foreclosures and turning them into rental properties.

Home buying is now much cheaper than renting.

The demand for rentals escalated when hundreds of thousands of homeowners lost their homes and needed to find rentals for their families. This demand has caused the rental rates to rise over the last couple of years.

Mortgage Rates are at record lows.

Mortgage rates have been at or near historic lows for much of the past six months. The average interest rate for a 30-year, fixed-rate mortgage has not topped 4.5% since July 2011 and this week, it hit 3.84%, a new low. But rates aren’t expected to remain at these record-low levels much longer. This may be the last chance you have to get a 3.8% mortgage.

The Mortgage Bankers Association is forecasting that the 30-year fixed will hit 4.5% by the end of the year.

As housing markets stabilize and bargain home prices start to evaporate and jobs continue to grow, home buyers will be even more confident about buying….homes have never been more affordable and may never be this affordable again.

Bank of America Short Sale

BofA Plans to Speed Up Short-Sales Process

Bank of America wants to speed up the process of selling thousands of distressed homes by implementing changes to its short-sale procedures that will shorten decision times on short sale offers to 20 days, down from 45 days or longer.

Beginning Saturday, April 14 Bank of America will be ready to approve short sales in 20 days.

The move could spare delinquent homeowners from months of limbo while the bank considers offers from buyers. No longer will the buyer have to wait up to 6 months for the Bank to approve the deal.

The new task flow in Bank of America’s short-sale management platform, Equator, will enable short-sale specialists to conduct tasks like document collection, valuations and underwriting simultaneously.
Bank of America has been working with Equator, a real estate software company, to develop a program that allows short-sale negotiators to approve the process faster.

When the changes to Equator take effect Saturday, five documents will be required to process short-sales initiated with an offer:

• A purchase contract including buyer’s acknowledgment and disclosure.
• HUD-1.
• IRS Form 4506-T.
• Bank of America short-sale addendum.
• Bank of America third-party authorization form.

Offer documents and supporting documents for all short-sales submitted with an offer must be uploaded before Friday, April 13, or files may be declined.

Major lenders are looking to save millions on court costs, lawyer fees and property taxes by avoiding foreclosure. Short-Sales also speed the process of getting bad loans off bank books and gets the properties back on the market faster.

To further sweeten the deals, many lenders are waiving the deficiency on the mortgages, which would allow homeowners to sell the house for less than they owe without having to make up the difference to the bank.


Speak to a Short-Sale Expert Today: (480) 421-8116

Foreign Investors Snapping up Bargain Priced Arizona Homes

A growing number of cash-rich foreign investors are seizing the opportunity to snap up U.S. homes at bargain prices.

Not all U.S. markets are universally appealing to out-of-country investors.  International homebuying activity is largely concentrated in a few areas of the country. Using public record data compiled by San Diego-based real estate data analysis firm DataQuick, Inman News has identified the 10 most popular areas in the U.S. for foreign homebuyers.

The majority of the markets, if not all, are recognizable as tourist destinations. Six of the 10 areas are in Florida; three are in the West (Arizona, Hawaii and Nevada); and one is in the Northeast (New York). No Midwest markets made the list.

The 10 markets, ranked by highest share of foreign buyers, according to public records data, are:

  1. Lakeland-Winter Haven, Fla.
  2. Cape Coral-Fort Myers, Fla.
  3. Orlando-Kissimmee-Sanford, Fla.
  4. North Point-Bradenton-Sarasota, Fla.
  5. Miami-Fort Lauderdale-Pompano Beach, Fla.
  6. Phoenix-Mesa-Glendale, Ariz.
  7. New York County, N.Y. (Manhattan)
  8. Honolulu, Hawaii.
  9. Tampa-St. Petersburg-Clearwater, Fla.
  10. Las Vegas-Paradise, Nev.

Foreign buyers account for a small but growing segment of overall U.S. sales. Sales of U.S. existing homes totaled $1.07 trillion in the 12 months through March 2011, according to the National Association of Realtors’ 2011 Profile of International Homebuying Activity.

Demand for U.S. real estate from abroad has inspired some real estate companies,  global franchisor Re/Max, to launch international versions of their real estate search sites.

Four states accounted for 58 percent of international sales in the year through March 2011, according to NAR: Florida (31 percent), California (12 percent), Texas (9 percent), and Arizona (6 percent). Other states corresponding to the markets on this list made up smaller shares of overall international sales: 3 percent in New York and 2 percent each in Hawaii and Nevada.

Only 37 percent of respondents to NAR’s national survey said their international clients intended to use their purchase as a primary residence. Of the remainder, 28 percent planned to use it as a vacation home for family and friends, 16 percent as a residential rental property for investment, and 13 percent for both vacation use and rental income.

iStock Housing Market Chart

Surprising Early Rebound for Phoenix Housing

As home prices continue to drop in most cities, and the  real-estate rebound here in Phoenix holds lessons for the rest of the country.

This sprawling desert metropolis was one of the hardest hit housing markets during the bust.Phoenix home pricesdeclined 55% from 2006 through the end of 2011, and Arizona’s foreclosure rate jumped to No. 3 in the nation in 2009. Hundreds of thousands of homeowners are underwater, meaning they owe more than their homes are worth.

Now real-estate economists across the country are studying an early but surprisingly broad Phoenix turnaround. The sharp drop in home prices has brought new buyers into the market. Unlike other markets where housing recoveries have been snuffed out by big overhangs of homes for sale and foreclosed properties, inventories are lean here.

“Phoenix has hit a bottom,” says Thomas Lawler, an independent housing economist who was one of the first to warn six years ago that prices in overbuilt metros were poised to fall.

The nation’s hard-hit housing markets face a tough act: engineering a housing recovery without traditional trade-up buyers, many of whom are either unwilling or unable to sell because of huge price declines.

Phoenix has found a viable formula. Low prices are igniting demand from first-time buyers and investors who are converting the homes to rentals. The local economy is on the upswing with several big employers like Inc. and Intel Corp. hiring again, which is further increasing demand for housing. And the region is benefiting from a surge of buyers from Canada who are using their favorable exchange rate to scoop up bargains in the desert.

Local mom-and-pop investors are also playing key roles in soaking up supply. “I’m running my Realtor ragged looking at properties,” said Robert Gerundo, who last month stood inside a two-bedroom condominium, scribbling his signature on an offer to buy the unit for $50,200, slightly above the listing price set by the bank, which recently foreclosed on the unit.

From Bloomberg News.

Mike Jones flips real-estate signs for a Realtor, David Rod, as they are printed. Investors are buying many Phoenix properties and renting them out.

Mr. Gerundo has bought 13 properties in Phoenix in the past two years and rents them out for as little as $950 a month. The 49-year-old, who drives around in a Jaguar with a Rutgers sticker on it, says he is making so much money as a landlord that he quit his job last year in New Jersey as a banker.

Nationally, housing demand still remains weak and bank-owned sales are expected to rise this year, putting more pressure on prices. Many economists say they expect home prices nationally could fall by another 3% or so this year before hitting a bottom next year. Most expect that prices will rise little for several years.

U.S. home prices fell another 2% in the fourth quarter on a seasonally adjusted basis, according to the Standard & Poor’s/Case-Shiller index tracking 20 cities. But prices rose by 2% in Phoenix, the biggest increase of any metro area in the country. Over the past year, prices in Phoenix are down by 1.2%, the smallest drop since its prices started falling in 2006.

Other markets are showing signs of life, too, as the spring buying season gets under way. Recent job gains for Detroit’s auto sector have helped rev up sales in recent months. Home prices in Washington, D.C., have fared better than in much of the country thanks to better employment prospects from government-related hiring.

Big price drops, like those in Phoenix, are another key. In Detroit, prices are down by 46% over the past six years and have fallen to levels last seen in 1994. Sales have picked up in Miami, where prices are down by 51% over the past five years.

But low prices alone haven’t been enough to so stabilize other epicenters of the housing bust where job growth still lags. In Las Vegas, where prices have tumbled 62% since 2006, including 8.9% over the past year, the local economy is heavily dependent on tourism and gambling, both industries that haven’t recovered. “A lot of markets in the country have hit a bottom, but I just don’t see them coming back the way Phoenix has,” says John Burns, a homebuilding consultant in Irvine, Calif.

The improving housing market in Phoenix isn’t much comfort to anybody who bought a home there a few years ago. More than 52% of mortgage borrowers owe more than their homes are worth, according to CoreLogic, a real-estate data company. And not everyone in Phoenix is convinced that the improvements will last, especially if the economy falters or oil prices soar.
Source: Wall Street Journal/Business

Wells Fargo Providing Help to Phoenix Homebuyers

Wells Fargo is making an $8 million investment this year to cover down payment assistant grants and homebuyer support programs.

Phoenix is the third market to obtain assistance from the NeighborhoodLift program.

Pulling enough money together for a down payment is often a sticking point for aspiring home buyers.

Help may be at hand
For a limited time, if eligible, you can receive up to $15,000 for down payment assistance for the purchase of a primary,
owner-occupied residence in the city of Phoenix. This program is fully forgivable after you live in the home for five years.

Who can qualify?
The program is available if you are approved for home financing and your household income is equal to or less
than 120% of the area median income. Whether this is your first home or you are ready to buy again, there are a
number of homebuyer education requirements that must be completed prior to the home purchase.

Homebuyers must meet all program requirements to be eligible for the down payment assistance and its ongoing benefits.

Program Description

• Up to $15,000 for down payment assistance for the purchase of a primary, owner-occupied residence in the city of Atlanta.
• Program is administered through NeighborWorks America and its affiliates.

Program Repayment Requirements

0% interest rate. Program is forgivable 20% each year for five years.
• The prorated balance due is repayable if the property is sold, refinanced, foreclosured, not owner-occupied as the primary residence or transfers title within the first 5 years.
• The only exception is the refinance of the first mortgage to a lower interest rate. No cash out is allowed

Borrower Eligibility

Household income cannot exceed 120% of Area Median Income (AMI) adjusted for family size.
• Not required to be a first-time homebuyer.
• Current Homeownership: If you currently own a home, it must be sold prior to closing. The current home cannot be rented/leased.

Property Eligibility
• Single Family Detached, 2-4 units, Condos, and PUDs.
• No Manufactured Housing.
• Property must be owner-occupied primary residence.
• Property must be in an area as defined in the city of Phoenix.

First mortgage requirements
To receive the down payment assistance, you must be approved for a first mortgage loan.

The NeighborhoodLIFT event is coming to Phoenix

• The program offers Phoenix homebuyers the opportunity to attend a March 23-24 event at the Phoenix Convention Center where they can apply for Wells Fargo funded down payment assistance grants and homebuyer support programs totaling $8 million.

• At the event, Neighborhood housing services of Phoenix will process applications for down payment assistance grants of up to $15,0001 per homebuyer in the city of Phoenix through the Wells Fargo Foundation.


Phoenix-area Homebuyers Squeezed out by Investors

by Catherine Reagor – Mar. 10, 2012
Arizona Republic /

Many potential homebuyers who sat on the sidelines watching metro Phoenix’s house prices fall during the past five years are back in the market, ready to take out a mortgage and move in.

But many are finding they cannot buy.

Armed with a preapproved mortgage and even enough cash for a hefty down payment, they bid on foreclosed homes and houses up for short sale — but are outbid by investors buying houses for cash on the spot.

Traditional homebuyers, who typically make an offer contingent on other steps such as an appraisal and securing the loan, find they can’t compete with someone who is willing to pay up front the entire asking price or more.

Tight supply makes the competition even stiffer.

Home resales, averaging 7,500 a month, are at their highest level since the peak of 2005-06. But the number of homes for sale is at the lowest level in more than a decade. There currently are about 23,000 homes for sale in metro Phoenix, one-third of the area’s housing inventory in 2009.

With demand for houses high and supply so low, many are drawing multiple bids. That is not to say the bidding wars are driving up prices in the overall housing market nearly as much as they did in boom times. Median resale prices remain near the bottom of the lows to which they fell after the housing crash and wave of foreclosures that began in 2007.

But those low resale values have kept many traditional sellers out of the market, too, experts say. Many homeowners don’t have enough equity to sell, or just don’t see enough profit to make selling and moving worth it.

The result is that much of today’s bidding is on foreclosure homes or short sales, where banks approve a sale for less than the current borrower owes.

And in these cut-rate homes, cash is king.

Foreclosures have declined in recent months, as banks increasingly approve short sales to help residents avoid foreclosure. The drop in foreclosure inventory is working to push up home prices a little each month.

Most metro Phoenix homes for sale are still considered great deals. Market watchers agree that long-term investors paying cash will lead to fewer empty homes and a better market overall.

But for the housing market to truly recover, they say, it must see a return of the regular participants: homeowners confident enough to put their houses on the market, and perhaps more importantly, regular buyers with mortgages and jobs who can afford to buy homes of their own.

“Phoenix’s housing market is in a state of fast changes,” said Mike Orr, real-estate analyst for Arizona State University’s W.P. Carey School of Business. “Prices are ticking up, and buyers are getting more and more frustrated they can’t find
homes,” said Orr, who also publishes daily real-estate analysis called the Cromford Report.

Traditional buyers Nakisha and Lenny Williams heard about the great deals for Phoenix foreclosure and
short-sale homes more than a year ago. The couple began searching online. The low prices for homes built just a few years ago helped them decide it was time for a move. The young couple quit their jobs, sold their Chicago-area home for a modest profit and relocated to Phoenix, where they found new jobs fairly quickly and rented an apartment while they shopped for a home. But the Williamses have been outbid on at least five homes so far and have been waiting for more than a month to hear back on their latest bid on a Litchfield Park house.

Nakisha Williams works for a water company. Though Lenny Williams recently lost his construction job, the couple have been saving for a down payment and are preapproved for a mortgage they can afford, if their offer of $120,000 for the home is approved.

“It’s crazy for buyers now,” said the couple’s real-estate agent, Yvette McDonald of Monopoly Realty. “The Williamses are still looking for other homes while they wait to hear back from the lender on the Litchfield Park home, but we can’t find anything that is still available by the time we make an offer.” She has several other potential buyers in the same position, making multiple offers that aren’t accepted or are topped by other bidders, especially investors.

Investors Andy Rysdam has $10,000 for a down payment and is pre-approved for a mortgage to buy a home for as much as $175,000. Recently, his real-estate agent found a potential house listed late in the afternoon. They went to see it first thing the next morning, and already there were seven other offers on it. “It’s the investors getting the best homes. They have cash,” said Rysdam, who is renting and not giving up on buying a home despite already being beaten out by investors several times.

Cash buyers, who are typically investors looking to resell the properties or use them as rentals, account for nearly 60 percent of all Phoenix-area homebuyers now, according to data compiled by, an online foreclosure-auction service. “We are seeing multiple offers on any decent home,” said Rysdam’s agent, Brett Barry of Phoenix’s HomeSmart. “These are different than the bidding wars from the boom, but buyers are getting more and more aggressive as the inventory of homes for sale continues to shrink.”

Scottsdale real-estate agent Diane Watson is working with a Canadian investor who wants to spend $10 million on metro Phoenix homes that can be turned into rentals. Wealthy investors can make more money buying foreclosure or short-sale homes in growing areas like Phoenix and renting them for seven to 10 years until prices rebound than they can on most other investments now. Watson can’t find enough homes for her Canadian investor and is considering approaching homeowners underwater on their mortgages and late on their payments to sell through a short sale even before their lender suggests it.

“I am about to go door to door,” she said. “People don’t realize they have the short-sale option because the deals have been so hard to do in the past, but not now.”

Laura Gonzales thought she had found the home of her dreams in Phoenix. The elementary-school teacher has been renting a house in north Phoenix’s Desert Ridge area since she moved from California in 2007. As foreclosures have climbed in her neighborhood and home prices have fallen, she has slowly saved for a down payment. In January, she found “the perfect home” listed for short sale just a block from where she’s renting. The house was bigger, and her monthly mortgage payment would be less than her rent.

She made an offer the day it was listed for sale. But already a dozen other offers had been made. She upped her offer by $10,000, but at least two investors upped their offer by twice as much. The home ended up selling for almost $200,000 — more than $50,000 over the asking price.

“It was heartbreaking,” Gonzales said. “And last month, the same thing happened to me on a house I didn’t want nearly as much, but I felt like I had to keep bidding because the homes I like are going so fast in this area.” Diane Brennan of Scottsdale’s Keller Williams Integrity First Realty said the housing market is crazy now. “It’s nearly impossible to buy a home in the $100,000 range,” she said. “I’ve got tons of buyers and no properties to sell them. One home in south Scottsdale got 43 offers.”

A rush to avoid higher prices Metro Phoenix’s median existing-home price has been steadily ticking up since last
August when it fell to a 12-year low of $113,000. In February, the median price for the region was up to almost $123,000, according to a monthly analysis from AZBidder. All types of homebuyers see metro Phoenix’s prices finally rising and want to close a deal before they go higher.

Some first-time buyers with Federal Housing Administration financing have a bit of an advantage now, said real-estate agent Barry. Those buyers are required to put down only 3.5 percent, so they can often keep bidding with investors, knowing that if they win and the appraisal doesn’t come in that high, the lender will have to lower the price to meet the housing agency’s requirements.

Banks might boost supply of homes

Banks still hold many of the homes they took back through foreclosure in recent years; the rush to buy could push them to put more on the market. “If lenders are holding back on foreclosures and waiting for a sign the homes will sell, well, the time is now,” said Jim Sexton of Phoenix’s Realty ONE Group. “Real-estate agents and buyers are all frustrated. The demand for homes is real.”

Lenders did slightly increase the number of new notices of foreclosure they sent last month, which could mean more short sales or foreclosures for buyers to choose from in the next few months.

Housing analysts say the current buying frenzy may run its course in six months and not create a lasting recovery. Experts say the region’s housing market won’t really recover until regular homeowners, who can afford their mortgages, feel like they can sell and make a decent profit — not the profit of 2006, but enough to pay off their mortgage and net a slight profit if they bought before 2000.

Regular buyers, who have to put down 10 to 20 percent for a mortgage, might have to wait for those regular sellers to put their homes on the market, creating enough supply to ease the bidding frenzy. When demand is strong enough that multiple bids are made on houses owned by homeowners, not lenders, that will be a strong sign of a return to a
normal market.

“Once sellers begin to realize the market is recovering, and they can actually make some money on their home, then the market will truly start to stabilize,” said ASU housing analyst Orr.


Arizona Foreclosure Filings Dropping, Inventory Shrinking

A total of 8,749 Arizona properties had a foreclosure filing in January, down 44 percent from January 2011.

According to RealtyTrac, a “foreclosure filing” is any one of the following foreclosure-related events:

  • A default notice on a home
  • A scheduled auction for a home
  • A bank repossession of a home.

In looking at the January 2012 national figures:

  • Default Notices were down 22% from January 2011
  • Scheduled Auctions were down 19% from January 2011
  • Bank Repossessions were down 15% from January 2011

On a monthly basis, however, the numbers weren’t so promising.

Default notices and scheduled auctions were mostly unchanged, but bank repossessions rose 8 percent. The rise in bank repossessions is likely because 2010’s robo-signing controversy has been rectified at the state and lender level.

This trend toward more bank-owned homes is expected to continue through 2012.

As in most months, January’s foreclosure activity was geographically concentrated. Nevada led the nation in Foreclosures Per Capita, followed closely by California.  Arizona came in third with one foreclosure filing in every 325 housing units.

The difference in foreclosure frequency:

  • Top 13 Foreclosure States: 1 foreclosure per 435 households, on average
  • Bottom 37 Foreclosure States: 1 foreclosure per 5,101 households, on average

North Dakota had January’s lowest foreclosure rate nationwide. Just 1 in 63,500 homes was in some form of foreclosure in North Dakota last month.

As a first-time home buyer or Investor, foreclosed homes can be enticing.  However, just because a foreclosed home can be bought for a “steal”, that doesn’t mean it’s worth buying. The process of buying a foreclosed homes is different from the process of buying a non-foreclosed home.

The contract-and-negotiation process may be different with a foreclosed property, and foreclosed homes are often sold “as-is”. This means the home you buy at auction could be run-down and defective to the point where it’s uninhabitable.

If you plan to buy a foreclosed home, therefore, have a real estate professional on your side. The internet can teach you much about how the Arizona housing market works, but when it comes to writing contracts, you’ll want an experienced agent on your side.

The cost of a new home may never be as low as it is today.

Housing Starts are rising and Homebuilder’s confidence is rising as foot traffic increases through their model homes and sales offices.  What this translates into is expect new home prices to rise.

A “housing start” is a new home on which construction has started.

Here in metro Phoenix we are starting to feel the beginnings of the housing turnaround and that is evident by the number of housing starts.

According to the Census Bureau, on a seasonally-adjusted, annualized basis, January’s Single-Family Housing Starts crossed the half-million unit marker for the second straight month.

The housing market has carried forward its year-end momentum.

This hasn’t happened in close to 2 years and is the latest in a series of strong data that suggests the beleaguered housing market has turned a corner — both nationally and locally in Arizona.

Although single-family starts slipped 1 percent from December; January’s annualized 508,000 figure represents a 16% spike from January 2011 and is the second-highest reading since April 2010 — the last month of 2010’s federal home buyer tax credit program.

The strength of January’s Housing Starts data surprised Wall Street analysts and is responsible for an unexpected mortgage rate spike last week.

We should have seen this coming…..

Earlier in the week, the National Association of Homebuilders announced that Homebuilder confidence has climbed to its highest point since 2007 amid builder reports of rising sales volume and the most foot traffic from buyers in more than 4 years.

In addition, builders expect to sell more homes in 2012 than in 2011.

Homebuilders are Building and the Buyers are Buying.

Meanwhile, as another sign of housing market strength, the Census Bureau reports that, in January, Building Permits moved to a multi-year high as well. Permits issued for single-family homes in January rose 1 percent from December, a statistic that suggests housing will continue its run through the spring season, at least.

86 percent of homes break ground within one month of permit issuance.

It’s a good time to be a home buyer. Mortgage rates and home prices are low. Housing market momentum, however, is building. Now is the time to take the leap off the fence if you have been sitting there for awhile assessing about whether to buy a home in Arizona.

There may never be a better time….


Will You Be Impacted By The New 3.8% Tax When Selling Your Home?

A guest column written by Paul Guppy of the Washington Policy Center regarding the impact of the health care bill hit the Internet recently and became viral.  In the column Paul claimed that a 3.8 percent tax on all home sales was a part of the recently passed legislation.

This news has caused a great deal of confusion about the new 3.8% Medicare tax that goes into affect on January 1st, 2013.

This is inaccurate and needs to be corrected.

The truth about the bill is that if you sell your home for a profit above the capital gains threshold of $250,000 per individual or $500,000 per couple then you would be required to pay the additional 3.8 percent tax on any gain realized over this threshold.

Most people who sell their homes will not be impacted by these new regulations. This is not a new tax on every seller, and that correction needs to be made. This tax is aimed at so-called “high earners” – if you do not fall into that category you will not pay any extra taxes upon the sale of your home.

Some Snippets from the Report

Beginning January 1, 2013, a new 3.8 percent tax on some investment income will take effect. Since this new tax will affect some real estate transactions, it is important to clearly understand the tax and how it could impact you.

Understand that this tax WILL NOT be imposed on all real estate transactions, a common misconception. Rather, when the legislation becomes effective in 2013, it may impose a 3.8% tax on some (but not all) income from interest, dividends, rents (less expenses) and capital gains (less capital losses). The tax will fall only on individuals with an adjusted gross income (AGI) above $200,000 and couples filing a joint return with more than $250,000 AGI.

The New 3.8% Tax Rate

Applies to:

  • Individuals with adjusted gross income (AGI) above $200,000
  • Couples filing a joint return with more than $250,000 AGI

Types of Income: Interest, dividends, rents (less expenses), capital gains
(less capital losses)

Formula: The new tax applies to the LESSER of

  • Investment income amount
  • Excess of AGI over the $200,000 or $250,000 amount

Click here for specific scenarios:

Click here for the full Report published by The National Association of Realtors.

Be sure to check with your Tax Advisor for clarification.


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