Tax Breaks for Short Sale Sellers Expire December 31, 2012

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One of the most unfortunate outcomes of the housing market crash was plummeting housing values followed by a series of events leading to a weak economy that further negatively impacted the real estate market. Those people hardest hit as a result have been mortgage holders of homes that are no longer worth at least as much as what is owed on them.

As time continued on and homeowners continued to struggle with keeping up on their mortgages, we started to see loan modifications and other drastic measures taken by banks and property owners to deal with these struggles.

Short sales became a household name as the benefits became more apparent; the government issued a tax break for those people suffering a tax loss as a result of forgiven debt. When a home that is worth less than what is owed on it and a bank agrees to accept the lesser amount, the difference is considered taxable income. Regardless of present day large-scale struggles suffered by countless Americans, they would have to pay income tax on the forgiven debt.

In 2007, however, the Mortgage Forgiveness Debt Relief Act addressed this concern by allowing cancelled or forgiven debt resulting from the sale of a primary residence to be exempt from taxation. The Act, however, is set to expire at the end of this year.

What does this mean for people considering selling their home as a short sale? It means that now is the time to start your short sale if you have been considering one. Because after December 31, 2012 any short sales that close will incur a good amount of income taxes on the forgiven debt. And that amount can add up quickly.

Now, even though short sales have come a long way and some are taking as little as 30 days to process, most of them are still processing for 45, 60, 90 days or even longer. If you are not sure whether there is enough time left to initiate a short sale, contact us today and we will review all the circumstances of your home and financial situation with you. There is still time to put in an application for a short sale but the end of the year is fast approaching.

July 2012 Market Update – Harford and Baltimore Counties

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Do you know how to detect a strong and solid real estate market? Look no further than our own back yard. In fact, aside from the slow but steady status of home prices and values, things are overall improving in our marketplace. And the good news is that it is a market that works in favor of buyers, sellers and investors alike.

Increase in the Number of Sales Transactions

Across the board we have experienced an increase in transactions, making it a very ideal time for sellers to list their homes. With fewer homes on the market and buyers beginning to pick up the pace in case the market does rebound sooner than later, the result is a higher probability of success for homeowners choosing to sell.

Fewer Homes on the Market
We are currently reporting about 20% fewer available homes on the market particularly good quality homes in desirable locations that are in great condition. Buyers realize the opportunity at hand and as they see inventory continue to dwindle they are actively seeking out good homes on our MLS. Another positive outcome of the lower inventory is an improved Days On Market average. While the entire year’s average DOM is about 125, the figures from the last 30 days are showing an average DOM of about 90 days.

Multiple Offers and Higher List to Sale Ratios

Homeowners that have chosen to list their homes are enjoying a higher list to sale ratio with most receiving multiple offers on their properties. This makes it the perfect time to be either a buyer or seller – because as a seller you know you have some leverage in negotiation and buyers can still walk away with a great deal. List to sale ratios are anywhere from 91 to 95% and in some cases we are even seeing 100%.

Continued Low Interest Rates

The great deals continue for buyers and investors with interest rates hovering at their record setting historic lows, making the market a phenomenal environment to be a first time buyer, move up homeowner or investor. Recently there have been mortgages offered and accepted at 3.25% for a 30-year fixed rate FHA loan.
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If you are considering buying, now is a great time! With interest rates as low as they are – you will be getting the deal of a lifetime! Combine that with the low prices and relative ease with which you can go through a mortgage process compared to just a couple years ago, it could not be a better time to buy.

Conversely, sellers are also seeing some great results. Though some properties are more in demand than others, with the drop in inventory chances are you will generate a lot of interest and receive some good offers on your home.

To make our process even more efficient, we have developed a new program where we match buyers with properties before they even go on the market. Whether you are a buyer, seller or investor – we encourage you to contact us so we can match your needs with your goals and together achieve success! We look forward to hearing from you.

The Lee Tessier Team Receives National Attention as Real Estate Expert Advisors Aired on NBC, ABC, CBS and FOX

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On a recent television show “New Masters of Real Estate”, we were fortunate enough to have been showcased as an expert in the industry by the National Association of Expert Advisors. During that interview I was asked to share some key points as to what makes a strong real estate professional stand out from the rest. We thought this would be valuable information for our clients (both existing and future clients) so here is a recap of what was discussed on the show.

Gaining Strength In Numbers

One of our biggest assets is the ability to serve our clients with a uniquely specialized team that is dedicated to serving specific service areas. When we get an incoming inquiry, the first thing we do is to gain as much information as possible to learn the areas within which the client requires assistance. Like the triage in a hospital, our designated team member then directs the client to the appropriate person on our team.

Getting the Word Out

The single biggest mistake that many agents commit is not properly marketing their clients’ properties. We realize that marketing is the key component to getting a home sold so we place a heavy emphasis on that aspect of the business. In fact, we spend thousands of dollars each month on marketing alone – more than what many agents make in any given year.

Most agents do what I call the “three P’s”; they PUT a sign in the yard, PLACE the home on MLS and then PRAY the home sells. Not only do we spend plenty of time preparing the home before even listing it on the market, we also work to reach our extensive buyer database to match the right buyer with the home. Additionally we actively market the property by placing it on multiple websites. Rather than straight photographs we hire professionals, both photographers and videographers, to take High Definition images of the home.

Putting Our Expertise to Good Use

There are basically two categories in terms of real estate agents. There are either those 10% that do 90% of the work or the other way around. At the present time, in Baltimore and Harford Counties approximately 40-50% of homes are not selling. In an ongoing month, 10% are selling. Would you rather be in the group that is seeing success or have your home sit around for months on end?  Our team ensures that positive result and we do it through years of experience and expertise. In fact, we recently took two homes that were on the market in excess of 200 days and we sold them within 17 and 21 days respectively.

Another aspect of our specialized attention to our clients’ needs is that we don’t just perform market comparisons to help determine your selling price – we go out there and get to know the neighborhood thoroughly. We know and understand market conditions and act upon them. When a house down the street doesn’t sell, we set out to find out why – whether it is due to bad presentation, lackluster marketing or the wrong negotiation techniques. We put an emphasis on making sure the home we have listed on that same street doesn’t exhibit the same gaps as the unsuccessful homes in the neighborhood.
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Our team has grown sizably over the recent past and this year we are forecasting double the number of buyers and sellers serviced by our company. The video New Masters of Real Estate as seen on CBS, NBC, FOX and ABC is just another example of how dedicated we are as a team and how we are regarded as experts in our field. I invite you to visit us and give us the opportunity to serve you! Call us today at 410.638.9555 or 410.803.0900 or email lee@leetessier.com.

8 Secrets to Getting Your Offer Accepted by Sellers in a Multiple Offer Situation

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With our shifting real estate market comes new (and in many cases) welcome problems to have to deal with. Take the relatively new occurrence of multiple offer situations in our area lately. After months (and years) of a buyer-controlled market, we are finally seeing fewer homes available and more buyers interested in the choice properties that are out there.

So what do you do if you are a buyer faced with multiple offer competition?  You BEAT that competition!  Here are eight ways to get around those other offers, make yours stand out and GET the home of your dreams!

Avoid a Bidding War in the First Place

One of the easiest ways to avoid a bidding war is to act fast on your interest in a home. If you see it, like it and want it – make an offer on it!  There is no reason to delay things because eventually you will have a chance to look back on the purchase while it is under contract and iron out any details. But if you don’t want other buyers fighting for the same house, beat them to it.

Keep The Emotions Out of It

Some overzealous buyers that don’t have their offers accepted lash out and retaliate against the sellers. Expressing anger and disappointment through a letter or via their agent is not a smart way to handle the situation. Often the first offer on a home is not even realized, where the seller revisits other bids received, going to their next choice. If you handle rejection gracefully, maybe with a thank you letter expressing regret but that you’re interested in the home should they change their mind, you may walk away with your dream home after all.

Bring Some Personality to Your Offer

While some agents prefer to make offers on behalf of their clients in writing and other impersonal ways, the best way to do it is by bringing an element of personality into your offer. Write a handwritten letter expressing what you love about the house and that you’ll take care of it just like they have for so many years (if applicable). This will show your sincerity in wanting the house and it will also stick in their minds when they go back to review all offers received on the property.

Choose a Communicative Agent

As mentioned in the previous point, some agents choose lackluster means of communication. When hiring your agent, be sure to select someone that is warm but also on the ball and quick.
Accessibility is key for the buyers’ agent as much as it is for the sellers’. If the seller is to gauge the level of your enthusiasm then they must be getting those signals from your agent.

Know Your Numbers

Sometimes the final sales price doesn’t matter. There will be an appraisal before the home is financed, which is the value that you will end up paying on the home. Knowing in advance gives you a head start over other buyers since you will be armed with knowledge ahead of time and can anticipate a reasonable offer accordingly. You should be aware of price per square foot as well as other comparable sales in the area. Keep in mind, there may not even be a need for a bidding war because the price might be capped by the appraisal anyway.

Don’t Stray From the Straight and Narrow

Offers that are simple, cleanly written and to the point are the ones sellers respond to the most. Especially in a multi-offer situation, sellers do not want to have to rifle through endless pages of contingencies, conditions, minor detail mongering and other unnecessary things. The easier you make it for the seller, the better your chance to get the home of your dreams. Remember that at the end of the day you can go back and identify any specific wants you may have but just wait until you have an accepted offer.

Choose Your Priorities Carefully

A common request these days is for FHA buyers to request assistance from the seller with closing costs. If you are a buyer that is faced with a multi-offer situation and you have the choice to not ask for closing costs – you may just be able to win your bid after all. Most sellers today are selling their homes after 10, 20 years and they have no idea of the recent trend of closing cost sharing. To avoid this and the potential of losing your bid on the home overall, don’t ask the seller – make alternate arrangements for closing costs. Borrow from someone. Accept a gift from a family member. Tap into your savings.

Do Better Than the Rest

An excellent tool used by buyers in these situations is to offer more than everyone else. Everyone wants more money and in today’s market sellers are already getting less than what they had expected to get. If you have found the home of your dreams pay extra money to make sure your offer is the one that is accepted and it will offset any costs you may have needed to put into a less-than-perfect property otherwise.
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Remember, this is a time when more buyers are vying for fewer available homes. So nothing is foolproof and there is always the potential of not winning your bid. The best defense you can have against that happening is to be prepared in advance. Get ready to be disappointed. If the home you are looking at is perfect, chances are there are others looking at it with the same eyes too. Aside from putting into our secrets into play, the best thing you can do is to stay realistic. When the right house comes along – things will fall into place. Good luck!

5 Reasons Homes Don't Sell

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Who does not want to get top dollar for their home?  The truth is that with the countless homes that have been on the market during the past several months – in many areas, just getting an offer is great news.  But regardless of your location, it is important to avoid making mistakes that could cost you the sale of your home.  Here are five things that sellers do wrong (and what you can do right) that end up in an unsold house.

Pricing

You want as much money as you can but that ends up backfiring when homeowners overprice.  The priceshould be set at middle or low end of the range for your home to be able to sell.  It’s important to review area comparable sales to gauge what other homes in the same neighborhood have recently sold for.  Overpricing helps other homes in the neighborhood sell and it also slows down your offers.

Staging and Photographs

Staging has become more popular – arranging furniture and removing personal items from the house.  It allows buyers to look at the home with a blank slate and be able to envision their own lifestyle in the home. Another benefit of this is that the home’s features will be in plain view for buyers rather than being buried beneath mountains of the seller’s stuff.  High quality photographs are another part of effectively selling a home.  Almost all buyers begin their property search on the Internet and photos are pivotal to the process. 

Access to Property

Restricted access to the property will hinder successful sales because buyers will not be able to get in and see the home on their own schedule.  If you have a busy schedule that may seem difficult to work around, meet and discuss alternatives with your Realtor such as installing a lock box on the front door or setting up specific blocks of time each week that allow for some level of predictability without sacrificing accessibility to your home.

Attendance of Seller at Showing

One of the cardinal rules of real estate transactions during showings is that the seller must not be present while the buyer is reviewing the property.  If you happen to be present when a buyer shows up, leave quickly and do not interact with the buyer or their agent.  If that is not possible for some reason, make yourself as scarce as possible by either going to an area of the home that they have already looked at or go outside for a little while. 

Rejecting First Offer

The first offer you get on your property is usually the best offer you will get on your property.  It is important to look at that first offer as your best one and keep in mind that the longer the home remains on the market, the lower the offers are going to get.  Offers come in between 15 to 20 percent lower than the asking price but the home usually sells within about 5 to 10 percent of the asking price.

If you would like us to review your home and provide suggestions on how you can improve your chances for a successful sale, contact us today!