TheBlogDog.net: December 2009

Home Inspectors Are Just Placebos - Do they really find anything?

This is a great post about home inspections and an incorrect point of view from a townhome purchaser.  Some people might be of the adage that a home inspector 'never finds anything wrong' with a property.  Well, I can state for a fact that that is definitely not true!! 

A good home inspector can make and does make a prospective buyer more comfortable and more knowledgeable about the mechanics of his new purchase.  A home inspection gives the new buyer and the new home 'time to get to know each other'.  At no other time has the buyer (and family, friends, relatives, grandmas) stayed in the home for that amount of time viewing every nook and cranny!

I highly recommend a home inspection with every purchase without exception.  If you are concerned over an aspect of your home purchase, unlike this buyer, hire your own advocate.  Hire someone that can give you their unbiased perspective on the roof or whatever issue concerns you!  It's great for your piece of mind to spend the money and it will give you additional knowledge about your homes construction or mechanicals. 

Another point not mentioned - maybe there was nothing bad about the house to report!  Yes, it's happened and it's not that uncommon!  Not every house is a mechanical misfit!  Many sellers maintain their home well, others not so well.  Should the inspector make something up for you? 

Enjoy this perspective from home inspector Jay Markanich.

Via Jay Markanich (Jay Markanich Real Estate Inspections, LLC):

It was a phone call from a concerned, potential, client.  He is building a new townhouse.  A friend told him to hire a roofer to make sure that rubber was put between his roof and the houses next to his.

Yes, that puzzled me too.

I told him that step flashing and some form of counter flashing, even if it was vinyl siding, is an appropriate transition between roof and sides.  And that I had never heard of using rubber.  But, "I can check that flashing for you.  You really don't need a roofer.  In fact, a roofer is going to charge you almost as much as I will for a complete home inspection."  Asking my price, he confirmed that.

He set up an inspection.  "But, I might be calling you back because I want to check one more thing."

He called back.  "I'm no longer going to need your services."  

"Well, you're the boss," I said, "but why not?"

"Because I am told you home inspectors are just placebos."

Suppressing a laugh, honestly, I needed to pursue this one!  "Sir, this is the first time I have heard that one!  Please, explain!"

"Well, you almost never find anything.  And when you do, the builder won't fix it anyway because they build everything to code and won't change that."

I am REALLY amused at this point and wouldn't want to do his inspection anyway, but this was too good.  Now I am laughing.  "Who in the world told you that?!"

"THE SALES LADY IN THE BUILDER'S OFFICE."

That's right!  The sales lady.  The sales lady!!  Miss Information herself!!  (Read that misinformation...)

"Sir, I am going to bet you did not have a pre-drywall inspection, am I right?"

"I didn't need one.  The builder gave me a walk through."

During the conversation I found out what he did for a living.  This is a very intelligent person.  But, CLEARLY,  not at all smart in this regard!  Here is someone who CLEARLY doesn't know what he doesn't know.  He is listening to a friend who CLEARLY doesn't know what he doesn't know.  He is listening to his builder who CLEARLY doesn't want him to know what he doesn't know. 

AND I AM A "PLACEBO..."  How do you spell Aaaaaarggghhh?  Is that close enough?  I could say more, but I will leave this as polite as I can.

 

My recommendation:  Don't call a placebo.  Call a home inspector.  Call an objective, independent home inspector.  Call one with experience.  Call one who stays current with annual continuing education (I usually do 35-40 hours annually).  And call one who wants you to know what you don't know.

For sure you won't be calling one of these pills to the left.

Oh, and don't take your advice from friends or "the builder!!!"  Because you never know.

 

bartlett IL homes,the blog dog,lyn sims,

Bartlett IL Homes,the blog dog,lyn sims,  Bartlett IL Homes Bartlett IL homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims,  Bartlett IL real estate,the blog dog,lyn sims,    
Lyn Sims and The Blog Dog © 2007 - 2012

Bartlett IL homes,the blog dog,lyn sims,     Bartlett IL homes,the blog dog,lyn sims,  

6 commentsLyn Sims and the Blog Dog© • December 22 2009 12:10PM

Short Sale Sellers - What the banks don't want you to know

Short Sale Sellers beware of what the banks are telling you! I recently had a prominent short sale,mortgage forgiveness debt relief act,bank with a 'stage coach' in the logo (got it now?) tell one of my sellers - no, I'll take that back - try and scare the hell out of my seller that she would have to pay taxes on the additional income from her pending short sale.  Frozen in fear, she did nothing until I found this law recently enacted for just these situations.

Are the banks trying to scare you?  You bet they are!  Are they telling you about financial decisions that are beneficial to you?  I doubt it!   The purpose of this post is so that you can go into a short sale situation with your eyes wide open and know what the outcome will be for your credit and your tax situation.

Is Cancellation of Debt on a Short Sale always taxable?   The good news is NO.  

Here's why - it's called the Mortgage Forgiveness & Debt Relief Act  enacted on 12/20/2007.  Why haven't we known about this?  I've just heard of it and I'm thrilled for some of my seller clients that are currently selling or thinking of selling on a short sale.  As if their situations weren't bad enough, the short sale differences we were told by the lenders would be a tax liability.  Now I find out that in most instances that is not the case!

The most common situations when cancellation of debt income is not taxable involve:

  • Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
  • Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
  • Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
  • Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
  • Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.

So ..... Short sale sellers take the full loan balance and subtract the sales price.  This is a positive number and is treated as 'ordinary income'.

Here are the conditions and requirements that the seller not be taxed on this income for federal income tax purposes (note, not necessarily state taxes) if the following conditions are met:

  • You lived in the home - primary/principal residence
  • The loan was used to buy, construct or improve that home referenced in #1
  • The income not taxed is capped at $1 million for a married person filing separate and $2 million otherwise
  • The short sale has to take place after Jan 1, 2007 and before January 1, 2013 (any guess as to how long the government thought this might be an issue?)


Questions I've snatched for further clarification:  If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?

Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or cancelled is $600 or more, the lender must generally issue Form 1099-C, Cancellation of Debt, showing the amount of debt cancelled. However, you may be able to exclude part or all of this income if the debt was qualified principal residence indebtedness, you were insolvent immediately before the discharge, or if the debt was canceled in a title 11 bankruptcy case.  An exclusion is also available for the cancellation of certain nonbusiness debts of a qualified individual as a result of a disaster in a Midwestern disaster area.  See IRS Form 982 for details.


More frequently asked questions here.
Publication 4681
Release IR-2008-17




Note and Disclaimer:  This is a very complex situation and should be verified by your accountant or the IRS.  I am in no way giving tax advice only passing along information that I have been made aware of recently.  I am in no way an attorney or tax advisor so please verify all these statements in their entirety.  It seems in California, this income is still taxable so please verify with your state of residence.



Resources:  IRS, Dr. Danielle Babb, Landlord Protection Agency

 

bartlett IL homes,the blog dog,lyn sims,

Bartlett IL Homes,the blog dog,lyn sims,  Bartlett IL Homes Bartlett IL homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims,  Bartlett IL real estate,the blog dog,lyn sims,    
Lyn Sims and The Blog Dog © 2007 - 2012

Bartlett IL homes,the blog dog,lyn sims,     Bartlett IL homes,the blog dog,lyn sims,  

1 commentLyn Sims and the Blog Dog© • December 20 2009 12:30PM

Hanover Highlands - 4BR 2.5BA $244,900 - HANOVER PARK ILLINOIS

Lyn Sims | RE/MAX Suburban | 847-230-7324
7944 SHERWOOD CIRCLE N, Hanover Park, IL
VAULTED GREATROOM ADDITION ~ 2.5 BATHS ~ 2 MASTER BR'S
4BR/2.5BA Single Family House
offered at $244,900
Year Built 1968
Sq Footage 1,705
Bedrooms 4
Bathrooms 2 full, 1 partial
Floors 2
Parking 1 Car garage
Lot Size 8,056 sqft
HOA/Maint $0 per month

DESCRIPTION

4BR's 2.5 BA's ~ This house rivals largest in area! Greatroom addition w/fireplace, remodeled kitchen with all appls, neutral carpeting & decorating thruout, Zoned heating & AC, 6 panel doors, 2 Master BR's, Possible In-Law Suite. Schaumburg Schools & low Cook County Taxes!

see additional photos below
PROPERTY FEATURES

- Central A/C - Central heat - Fireplace
- Walk-in closet - Family room - Living room
- Dining room - Dishwasher - Refrigerator
- Stove/Oven - Microwave - Attic
- Washer - Dryer - Yard

COMMUNITY FEATURES

- Garage parking - Storage space(s)


OTHER SPECIAL FEATURES

- Cement Crawl for Storage - Pull down attic Storage
- Double Drive accomodates 4 cars easily
- Newer siding, roof, fascia, gutters, garage door
- Paver brick patio & fenced yard
- Large UTLRM - Mud Room with outside entrance
- Neutral carpeting, ceramic tile thruout - no work to do!
- 1.5 Blocks to Grade School ~ Distr 54 Schaumburg Schools
- 2 FIREPLACES
- 2 MASTER BR's - You pick one

ADDITIONAL PHOTOS


Open Greatroom

Remodeled Kitchen

Master BR has walk-in

Master has dual closets

Livingroom

Hall Bath
Contact info:
Lyn Sims
RE/MAX Suburban
847-230-7324
For sale by agent/broker

powered by postlets Equal Opportunity Housing
Posted: Dec 3, 2009, 10:20am PST

 

bartlett IL homes,the blog dog,lyn sims,

Bartlett IL Homes,the blog dog,lyn sims,  Bartlett IL Homes Bartlett IL homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims, Bartlett IL Homes,the blog dog,lyn sims,  Bartlett IL real estate,the blog dog,lyn sims,    
Lyn Sims and The Blog Dog © 2007 - 2012

Bartlett IL homes,the blog dog,lyn sims,     Bartlett IL homes,the blog dog,lyn sims,  

0 commentsLyn Sims and the Blog Dog© • December 03 2009 01:32PM