San Diego Short Sale and Foreclosed Homes

 
 
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I received a phone call today from a couple who are interested in moving up in my area. They have outgrown their existing home and want to take that next step into a larger home in a more exclusive neighborhood. After chatting with the wife for a few minutes about exactly what they are looking for in a new home, I asked her "How were you referred to me?". I don't have any homes listed in the subdivision she is most interested in, so I was curious what led her to me. Her response was a blogger's dream.

"I searched the Internet for homes in the area and it led me right to you."

YES!!! We talked for a few more minutes and I got all of the information that I need to start working with her to find her next home. Since she already sees me as the neighborhood expert (would Google lie?) we will be looking at homes next week.

THAT is the power of blogging locally...very locally. Naturally, she had me interested in how I ranked for other areas. I googled each of the different neighborhoods that I have spotlighted in the past few months and I am on page 1 for almost every one of them. With each new neighborhood post, more people are finding their way to my blog and my stat counter tells me that they are searching for individual subdivision or neighborhood names. My keyword analysis is saying consumers want information about hyper-localareas, not just general market reports.

Of course, I had to take this small success and pay it forward. If you haven't taken the time to post about specific communities in your area, here are some suggestions for what you may want to include:

Pictures. I always visit the subdivision and take photos of the entrance. You want your reader to know that you have actually been to the area, not that you are just spewing facts any other agent can give them. Buyers love to get a feel for an area without ever leaving the comfort of their PC. How about creating a Real Estate Show to go with that neighborhood information?


Community Information. Planned communities or HOAs often have websites that can provide a wealth of information about the events that happen year round. Does the neighborhood participate in Night Out Against Crime? Do they have a Christmas decoration contest? Garden of the Month? These little tidbits are the things that will make the consumer know that YOU know the area. If there is no community website, take note of the closest schools, parks, playgrounds, libraries...all of the things that many people want near them when choosing a new home.

Transportation Information. It's not an issue here in New Orleans, but in other parts of the country, easyaccess to mass transportation is a huge asset to a community. Information about public transportation, the nearest bus or train station or even just a blurb about the distance from the neighborhood to downtown lets them know that you are the expert.


Current listings. I provide an overview of homes for sale without getting into specific properties. How many are for sale? What price ranges? What is the average number of bedrooms and bathrooms? What is the average square footage?

Recent Sales. Providing recent sales information is a breeze! I usually throw in some absorption information as well. If a subdivision is doing particularly well in sales, point it out, create some urgency and get those buyers off of the fence!


Since I started creating my Neighborhood of the Week posts, I have been so much better informed about the trends in my area. We all get those questions from friends and people that we meet. When they find out you are in real estate, everyone questions how the market is in their neighborhood. 

Once you've taken the time to do a little weekly research, you'll be answering those questions with confidence and building your reputation as their very own neighborhood expert!
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Starting January 1, 2011, the Real Estate Transfer Disclosure Statement (TDS) will be amended to streamline the disclosure of home safety devices.  First, the TDS will include a new disclosure of whether the seller has a carbon monoxide detector.  This disclosure addresses a new law requiring California homeowners to install or plug in a carbon monoxide device in an existing single-family residence by July 1, 2011 (next year), and other existing dwelling units by January 1, 2013.  The new TDS will specifically state that installation of a carbon monoxide detector, among other appliances and devices, is not a precondition of sale or transfer of the dwelling.

Second, the TDS will be amended to incorporate a seller's certification that, by close of escrow, the seller will be in compliance with existing requirements for smoke detector and water heater bracing.  Effective January 1, 2011, the new TDS will eliminate the need for a separate standard form Water Heater and Smoke Detector Statement of Compliance (C.A.R. Form WHSD) for applicable transactions.

The new requirement to install or plug in a carbon monoxide detector will apply to dwelling units with a fossil fuel burning heater or appliance, fireplace, or attached garage.  "Fossil fuel" means fuel gases, wood, oil, coal, kerosene, or other petroleum or hydrocarbon products that emit carbon monoxide as a combustion byproduct.  Special rules apply to residential landlords.

C.A.R. will update our standard form TDS in the November 2010 forms release to reflect these changes, and provide members with more information about this law as the effective date draws nearer.  The full text of this law, Senate Bill 183 (Lowenthal), is available atwww.leginfo.ca.gov.


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RISMEDIA, May 11, 2010—Although this year's cohort of college graduates is facing one of the toughest job markets in decades, they actually have an advantage over other job seekers, according to Andy Chan, vice president of career development at Wake Forest University. They are among the age group most likely to be hired and also will be acquiring valuable job hunting skills that will serve them well in the future.

"If I could be anyone in this job market who is unemployed, who would I want to be? A new college graduate," Chan says. "Organizations are very interested in hiring young people because they have a lot of energy and are willing to do whatever it takes to get the job done."

New college graduates also have an advantage because they don't have the financial obligations of older workers with families and can be very open-minded regarding their choice of job since they are at the start of their careers, Chan said.

"The National Bureau of Labor Statistics predicts that the average worker will hold 10 to 14 different jobs by the time they are 38," Chan said. "Although some of those might be within the same organization, students really need to learn to be resilient in today's job market.

"I find that the years when the market is down can offer some advantages because students have to work to find jobs and later in their lives they're not as anxious about finding work because they have had the experience of looking for a job," he said. "Those who had it too easy with two or three job offers right out of college are often in shock and totally unprepared if they later find themselves unemployed."

Chan warns, however, that job hunting is not for the fainthearted. It could take dozens of interviews and several months to land the right job. He also says new graduates have a better chance of success if they can avoid the five most common job hunting mistakes of college seniors:

1. Overusing the Internet -- "Students in this digital age think if they apply to enough jobs online then someone will eventually want to hire them. But it's actually quite difficult to obtain a job on the Internet due to the high volume of resumes submitted. The number one method to obtain a job is by networking."

2. Being Too Choosy -- "Many students get so focused on a specific job or organization that they don't realize there are other roles and other types of organizations that might be really good opportunities for them too."

3. Giving Up Too Early -- "Some students think that given the poor job market, it's not worth the time to search for a job. But many companies are now recruiting students this spring and through the summer. Our biggest problem is getting students to pay attention and apply for these jobs."

4. Mis-using the Grad School Option -- "For some people, grad school is a great option, but if you're just doing it as a back up because you can't find a job, it's a very expensive back up. Grad school does not necessarily increase your job prospects -- and the pressure can be even greater if you took on loans or don't like your area of study and the types of opportunities it provides."

5. Not using the college's career office -- "Students don't realize that their career office can help them identify networking contacts, learn important job search skills, and significantly improve their resume and cover letter. It's amazing how out of every 10 resumes, only one or two are very good, but 8 out of 10 are terrible."
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RISMEDIA, May 11, 2010--Incorporating video into the process of marketing homes is crucial for real estate agents in today’s fast-paced, technology-driven world. As prospective buyers continue the trend of turning to the Internet to view potential properties, virtual tours give individuals the opportunity to view homes on their own time, from the comfort of their own home. Rob Jenson, Founder/CEO of The Jenson Group of RE/MAX Central in Las Vegas, Nevada, discusses how real estate agents can take advantage of the virtual tour phenomenon and reach out to prospective buyers around the world. 

As people continue to juggle the demands of longer work days as well as family life, their free time is now more valuable than ever. “While anyone can go online and look at still photos of a home, home tour videos offer the prospective buyer a two-and-a-half minute tour of the property,” says Jenson. “Virtual tours take the home search process one step further as they enable prospective buyers to tour the home without actually visiting the property,” he adds. Virtual tours are a perfect marketing tool as they provide a feel for the layout of a home as well as showing the property from different angles, giving the viewer a complete picture of the property and its surroundings. 

“In addition to providing prospective home buyers with a more in-depth tour of the home, video tours are a time saver for both buyers and sellers,” says Jenson. Giving prospective buyers the opportunity to tour properties on the Internet has helped streamline the home showing process as agents can now focus on buyers who are truly interested in the properties they are listing. “Prospective buyers can search for properties in specific communities as well as different price ranges and be prepared with questions and concerns before they even meet with their agent,” adds Jenson. This ensures that Realtors are spending their time with prospective buyers who are more likely to see the process through to the end. 
“The Internet has changed the way prospective buyers view homes in addition to the way in which agents have to market homes in order for them to become widely available,” says Jenson. 

Video gives the opportunity to show off a home’s distinct features—focusing on more than just the structure of the home. “Video allows you to take advantage of different aspects of a home such as landscaping features that make the home stand out, in addition to motion such as wind or lights flickering—giving a real life quality to the home.

“As the Internet continues to dominate the real estate scene, real estate professionals need to take advantage of the technology that is available to market homes in the best way possible,” concludes Jenson. Virtual tours give agents the ability to stand out amongst their competitors and they will continue to dominate the landscape as they provide a 24/7 open house and take prospective viewers deeper than still photos. 
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RISMEDIA, May 11, 2010--The need for differentiation is always a hot topic. What makes someone remember you? What makes someone choose you? Here are 5 ways to brand your business online. Using these tips may just help your brand stick.

1. Protect Your Name. As an entrepreneur, your name is vital to your brand & the identity of your business. Be sure to secure a domain name in your name. For example, www.myname with .com, .net and/or .biz. It's usually a good idea to register multiple domains in case someone types the wrong extension, that way you can be found. Network Solutions and GoDaddy are two choices to register a domain name.

2. Create a Founder Profile Page. Brand yourself on your Web site. Create a profile about you to build trust with potential clients. Make it easy for visitors to find info about you. Clients and prospects want to know who you are in terms of industry, experience and personality. Personalize your Web site and share info to build a relationship with visitors to your site. 

3. Prepare for the Future. Millions of people use mobile devices to connect to their business, when they are out of the office. Make sure your Web site is accessible to these devices and will load quickly and easily. Even if your site is not yet formatted for .mobi, get the name. By registering a domain with a .mobi extension you secure the name for your company.

4. Protect Yourself from Spam. Search bots troll the Web looking for email addresses. This can lead to spam emails to your inbox. Protect your business email box. Use email addresses on your Web site like: contactus@domainname.com, media@mybusiness.com or moreinfo@mybusiness.com. 

5. Considering joining LinkedIn or ZoomInfo. These popular, social networking sites give you a free way to post a biographical profile. Be aware: everything you post is public information. You give up some privacy when you post info. The sites can provide connections between people with similar interests. The sites add to search engine results for your name & your company name. 
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Short Sales 101 05/14/2010
 
RISMEDIA, May 11, 2010--As distressed properties continue to dominate the real estate landscape, real estate agents across the country are continuing to adapt their services to better help the millions of homeowners who are facing foreclosure and other serious trouble. Here, Rosemary West, The Rosemary West Team, RE/MAX Realty in Joliet, Illinois, discusses the short sale process and how agents can make it work. 

In the simplest terms, short sales are a last hope for people looking to avoid foreclosure. The market that we are experiencing today is full of homeowners who are truly hurting and they don’t know where to start or who to turn to. Short sales, although not an ordinary transaction, are a good alternative for sellers who are either in a foreclosure already, or are headed toward one. It is crucial that real estate professionals take the time to understand that these are real families on the verge of losing their home.
 
The biggest advantage to offering a short sale is that it helps the distressed homeowner avoid a foreclosure, which is crucial since foreclosures are one credit item that are almost impossible to repair. Foreclosures stay on your history forever and affect your credit score as well as your present employment and the hiring process for a new job. 

Many people think short sales can be used as an alternative for homeowners who find themselves in trouble with their mortgage payments, but they are only an option for sellers who are either in a foreclosure already, or are headed toward one. It is important to understand the difference between dissatisfied homeowners- those who are simply upside down with their mortgage and are facing hardships- and homeowners who are in trouble. 

Before dedicating their time to help sellers through the short sale process, agents need to make sure the seller is 100% committed to the time frame of the process as well as being willing to work with them through the process. 

A seller’s assessment sheet is an important tool to help save time and effort in pursuing a short sale. The assessment sheet is based on four criteria and each is graded on a 1-10 scale, with one being the lowest and 10 being the highest. 

1. Expectation- The client has to have real expectations of the market and what is possible- both within value and market time. 

2. Motivation- What is the client’s motivation to get out of the situation? If they aren’t motivated, they may become disinterested in the sale, and that will be a waste of the agent’s time, money and marketing. 

3. Cooperation- Will the client work with you through the short sale process? Will they keep the property neat and accessible to show and be available when you need them? 

4. Communication- The client has to be willing to communicate with their agent openly, honestly and on a regular basis. If the client isn’t being upfront, that is a huge warning sign. 
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RISMEDIA, May 11, 2010--"Technology is a crucial component toward any real estate agent’s success, especially in today’s market,” says Carlina Boji, broker/owner, RE/MAX Classic in Farmington Hills, Michigan. As technology continues to dominate the real estate landscape, it is maintaining its position as the pathway to an agent’s sphere of influence as well as prospective buyers and sellers as the industry is no longer dealing with a local client. “While an increasing number of agents are experiencing working with clients who are spread across the world, it is important to stay on top of the technology trends as they are the quickest and easiest way to reach out to clients,” adds Boji. 

As new technologies continue to change the way in which agents communicate with their clients, it is important that agents take the time to understand these new technologies in order to successfully communicate with their clients. “The technology that is available to our consumers today has dramatically changed the way in which our customers prefer to be communicated with,” says Boji. “Email communication has taken over that of direct mail and the Internet has become the new go-to place when prospective buyers are seeking homes. With the changing technology landscape, agents have to be willing to change along with it in order to connect with customers through the means in which they wish to be contacted.” 

Since technology is continually changing the way in which agents interact with their customers, keeping up with the latest technology trends—whether that be social networking or texting, only serves as a greater benefit. “With all of the technology that is available to agents today, having devices such as a Blackberry is a great tool to help keep up with your customers in a timely manner. In addition, being knowledgeable about your own personal website as well as your company’s is important in providing your customers with the information they are seeking.”

Technology allows agents to remain consistent with their marketing materials as well. “Any correspondence that you send to your clients should contain your contact information as well as your Web address and how to find you on the social networking sites you belong to.” All of your technology must be consistent so that your message is clear and deliverable. Having the technology in your office is the first step to creating a consistent message that can be delivered in a timely manner. “In order to keep consistency across the board, you have to make sure all of your technology is turned on and you know how to use it so that at the end of the day, it benefits you and your company.” 
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During this time period of depreciating land values and renewed emphasis upon environmental restoration and water resource protection, many agricultural landowners are considering the use of conservation easements as a means to realize value from properties that have natural resources deemed worthy of protection, while still maintaining productivity of the land for agricultural and recreational activities.  One of the more widely used easement programs is the Wetland Reserve Program (“WRP”) administered by the Natural Resources Conservation Service (“NRCS”).  Where appropriate, in order to defer the recognition of any gain or loss upon the sale of a conservation easement, landowners often utilize Section 1031 of the Internal Revenue Code of 1986 (the “Code”) to effectuate a like-kind exchange.  However, there was a time during 2009 when the USDA modified its contract to purchase WRP easements to prevent the contract from being assigned to a third party, thus creating an insurmountable limitation on the ability to utilize the deferred like-kind exchange mechanism found under Code § 1031(a)(3).  This article analyzes the planning opportunities of utilizing WRP easements and reinvesting the proceeds therefrom under Code § 1031 and the steps that were taken over the past year to rectify the restrictions imposed by the USDA upon its contracting process to allow sellers of WRP easements to once again utilize the deferred exchange planning opportunities.

What is a WRP Easement?

The Wetlands Reserve Program was first authorized by Congress in 1990 as part of the Food Security Act (Farm Bill) of 1985, and has been reauthorized in every subsequent Farm Bill.  The program came as a response to the recognition of both the importance of functioning wetlands and an acknowledgement of the loss of a large portion of the natural wetlands in this country.  In fact, some states have lost as much as 90 percent of their wetlands from the 1780’s to the 1980’s.1  WRP is administered by the NRCS, whose stated goal for the program is “to restore wetland functions and values to natural conditions to the extent practicable, while maximizing wildlife habitat values.

As of 2008, slightly over 2 million acres were enrolled in the WRP.  The 2008 Farm Bill increased the cap on enrollment in the program to 3,041,200 acres; an increase of over 750,000 acres.  The program is limited to private and Tribal lands, and offers three enrollment options: Restoration Cost-Share Agreements, 30-year easements and permanent easements. 

On land enrolled in the permanent or 30-year WRP options, the NRCS attempts full hydrologic restoration of the property, then shifts management responsibility for the restored wetland to the private landowner, with assistance from the NRCS.  Landowners participating in the easement programs continue to have exclusive control over access to their property, retain recreational use of the land, and may lease or engage in other activities on the property not inconsistent with the purpose of the WRP easement.  The government does not purchase a fee simple interest, taking over ownership and responsibility for the land, but instead removes certain rights from the land, for fair value, and cooperates with the landowner to maintain the restored system.  To qualify for the WRPprogram, the landowner must have owned the property for at least seven (7) years and meet certain income from farming requirements.

Our experience has been that a WRP easement is a valuable tool for family-owned agricultural operations to realize value from wetlands, maintain ownership and control of the lands, while simultaneously restoring important natural functions of the land.  In short, the property owner benefits, and so do the natural systems and society as a whole.

Taxation of a WRP Easement

The sale of a WRP easement is no different from the sale of any other type of conservation easement.  The threshold tax issue is to determine if the property rights sold are significant enough to treat the transaction as a sale of all of the taxpayer’s rights in the real property.  If not, then the transaction is treated as a return of the taxpayer’s capital.  If so, then the transaction is treated as the sale of an interest in real property.  See Rev. Rul. 59-121, 1959-1 C.B. 212. 

Generally, a taxpayer must recognize gain or loss upon a sale or exchange of property, as set forth in Code § 1001(c).  However, Code § 1031 provides an exception from the general rule requiring the current recognition of gain or loss realized upon the sale or exchange of property.  Under Code § 1031(a), no gain or loss is recognized when property held for productive use in a trade or business or for investment is exchanged solely for property of a like-kind that can be held either for productive use in a trade or business or for investment.  Like other “non-taxable exchange provisions,” Code § 1031 provides an exception only from current recognition of the gain realized.  The realized gain is deferred until the “replacement property” received in the exchange is disposed of in a subsequent taxable transaction.

For long-time agricultural landowners, a Code § 1031 exchange is commonly used for the sale of land which may have nominal or de minimis tax basis.  Some have a per-acre basis of less than $100.00 in land having a current fair market value of 30 to 100 times that amount.  Thus, the potential exists for a significant tax liability for those participating in the WRP program.

In 1991, in an effort to provide clear rules for typical deferred exchange transactions, the Treasury Department issued Regulations which provide four “safe harbors” which, if followed, and all other requirements of Section 1031 are met, allow the transaction to qualify as a tax-deferred exchange under Code § 1031.  Although it is still possible to accomplish a qualifying exchange outside of the safe harbors, the 1991 Regulations are so user friendly that virtually all exchanges that have taken place after the Regulations were issued have been structured to conform to one or more of the safe harbors.

Three of the safe harbors include restrictions on the taxpayer’s receipt of exchange funds, requiring sales proceeds to be held in an escrow or trust account, and usually by a “qualified intermediary.” See Treas. Reg. § 1.1031(k)-1(g).  A “qualified intermediary” is an entity or a person who enters into an agreement with the taxpayer to acquire the taxpayer’s relinquished property, transfers it to the buyer, receives and retains possession of the sales proceeds, acquires the replacement property and transfers it to the taxpayer.  Treas. Reg. §1.1031(k)-1(g)(4)(i).  The most common method of transferring the properties sold and purchased is through an Assignment Agreement, assigning the qualified intermediary into the contract, coupled with an instruction that the relinquished property be deeded directly from the taxpayer to the buyer and the replacement property be deeded directly from the seller to the taxpayer.  

Recent Developments

Despite the relative ease of implementing a deferred exchange, the NRCS created a significant problem for taxpayers selling WRP easements.  The NRCS adopted a new WRP easement contract effective in the Fall of 2009.  The new contract used by the NRCS to acquire such an easement expressly prohibited the seller from assigning its rights under the contract, with no exceptions for assignments to qualified intermediaries.  Therefore, except in the situation of the now rare simultaneous exchange, all new sellers would be forced to pay tax on the transaction since Code § 1031 deferred exchange would not be available.

The NRCS recently agreed in one transaction to revise the WRP contract for new sales and amend existing WRP contracts in a manner that allows taxpayers to utilize Code § 1031 for deferred exchanges in relation to the sale of the WRP easement.

Conclusion

The WRP easement program continues to yield excellent results for the public and the environment, and the tax planning opportunities afforded landowners for a deferred exchange appear to remain intact.  Similar to the WRP easement program, the sale of a conservation easement may also be structured to qualify for the benefits of Code § 1031.

 

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