Real Estate Information Archive

Second Homes Treated Differently

While a principal residence and a second home have some similar benefits, they have some major differences. A principal residence is the primary home where you live and a second home is used for personal enjoyment while limiting possible rental activity to a maximum of 14 days per year.

The Mortgage Interest Deduction allows a taxpayer to deduct the qualified interest and property taxes on a principal residence and a second home. The interest is limited to a maximum of $1,000,000 combined acquisition debt and a combined $100,000 home equity debt for both the first and second homes.

The gain on a principal residence has a significant exclusion for taxpayers meeting the requirements. The gains on second homes must be recognized when sold. Even if you sell a smaller second home and invest all of the proceeds into a larger second home, you'll need to pay tax on the gain.

Tax-deferred exchanges are not allowed for properties having personal use including second homes.

If the home is owned for more than 12 months, the gain is taxed at the long-term capital gains rate. If the home is owned for less than 12 months, the gain is taxed as ordinary income which would be a considerably higher rate.

The article is intended for informational purposes. Advice from a tax professional for your specific situation should be obtained prior to making a decision that can have tax implications.

The following information was taken from the Northern Kentucky Multiple Listing Service (MLS) on August 9, 2011.  It reflects the residential properties in the MLS.  This includes residential homes, condominiums and town-homes.  All information is as of January 1, 2011.

Approximately the average number of homes sold per month so far in 2011 has been 348.  This makes an 11.16 month supply of residential property in Northern Kentucky.

Out of those 3882 active listings, there are 190 active foreclosed properties for sale that are foreclosures.  That is 5% of our residential inventory in the MLS.  Year to date, 587 foreclosed properties have sold.  That's approximatly 24% of our sales since January 1, 2011.  This is about the same number as its been for the last two years.  Recieve your list of NKY Bank Owned Homes and foreclosed properties for sale in Northern Kentucky today. 

Inside the Northern Kentucky MLS there are 423 "NEW" homes for sale (New homes by builders).  259 "NEW" construction homes have sold since January 1, 2011.

Feel free to sign up to receive listings in the Northern Kentucky MLS delivered right to your inbox.  You can also sign up to receive Bank Owned Homes or a get a free market analysis of your home. 

"Like" us on Facebook for more reports like this as well as community information and exciting property listings.

The following information was brought to you by Mike Parker of HUFF Realty "Northern Kentucky's Real Estate Expert."  Contact him today today for all of your real estate needs.

This was originally posted by Ralph Roberts but we thought it was such great information, we just had to share it. 

If you or someone you know is currently facing foreclosure, you have options, including:

1.    You are not alone. Foreclosure knows no geographic, racial, ethnic, or socio-economic boundaries. We have seen real estate agents, attorneys, and others face foreclosure. Michael Jackson recently filed for bankruptcy. Foreclosure is much more prevalent than you think.

2.    Most people facing foreclosure have at least a dozen options. (Many people falsely believe that they have only two options – pay up or move out.) You can reinstate the loan, refinance (consolidate debt), list the home for sale with an agent, sell to an investor (if you have insufficient time to list the property), offer a deed in lieu of foreclosure, declare bankruptcy, negotiate forbearance or a mortgage modification, to name several of the most common options.

3.    Banks and other lending institutions do not want to foreclose. They make more money if you can make your payments. When they foreclose, they not only lose your monthly payments, but they also have the expense of foreclosing, rehabbing the home, and then selling it. In today’s market, there’s a good chance they’ll have to sell the home at a loss. This is all good news for you – it means the bank is highly motivated to make a deal with you.

4.    Given the current mortgage crisis and resulting foreclosure epidemic, the federal government, your state government, and consumer protection advocacy groups have put more pressure on mortgage lenders and provided them with additional resources to help homeowners in distress. In a way, people facing foreclosure now may be in a much better position to avoid it than they would have been, say five years ago.

5.    If you own the home with your spouse or life partner, tell them immediately. Far too many people try to keep their partner in the dark. Eventually, the person will find out. It’s always better if they find out from you earlier rather than from someone else when they have little or no time to do anything about it. Couples that work as a team almost always see much better results.

6.    Call your lender – the sooner, the better. As soon as you stop making payments, the foreclosure clock starts ticking. The earlier you know your options, the more time you have to pursue those options.

An Advertorial Presented by Frost Brown Todd LLC

Written by: Kyle R Grubbs

I'm interested in purchasing a parcel of Real Estate, but the property owner just filed for bankruptcy?  Can I still purchase the property?  Is there anything special I need to do?

Yes and Yes.  The Bankruptcy Code permits a debtor-in-possession to sell its real estate and other assets based on its reasonable business judgment.  As with other purchases of real estate, as a potential purchaser, you should conduct standard due diligence including title, survey, environmental, zoning, and building inspections prior to purchasing the property.  In fact, since there will be virtually no representations or warranties made by the seller, the purchaser's due diligence is even more important in the bankruptcy context.  In addition, because the property owner is in bankruptcy, additional precautions are warranted.

First, the sale of the real estate must be authorized by the bankruptcy court if the sale of the real estate is outside of the debtor's ordinary course of business.  In almost all cases, sales of real state will be outside of a debtor's ordinary course of business.  To ensure the debtor obtains prompt bankruptcy court approval of the sale, the purchase contract should require the debtor to immediately file a motion seeking the bankruptcy court's approval of the sale.

Second, the sale of the real estate should be free and clear of any interest or lien of the debtor's creditors.  Because the seller of the real estate is in bankruptcy, the property is likely encumbered by mortgages, mechanic's liens, judgment liens, and other encumbrances.  Unlike a typical real estate transaction, liens and other monetary encumbrances are not necessarily paid at closing.  To ensure your purchase is free from the claims of the debtor's creditors, the order authorizing the sale of real estate should provide, among other things, that the (a) sale is free and clear of all liens, claims, encumbrances, and interests and that any liens will attach to the sale proceeds only; (b) purchaser is a "good faith purchaser" under the Bankruptcy Code so that the validity of the sale is not affected by an appeal of the sale order; and (c) ten-day stay set forth in the Bankruptcy Code is waived and the sale order is effective immediately to avoid any post-closing challenges to the sale.  You should work closely with your title company to ensure that the sale order is sufficient in all respects for the title company to issue you a clean title policy at closing.

The folllowing article was written by a real estate agent named Doug Quance and we thought it was worth reading!!!

This following "top ten" list from a local "for sale by owner" website landed in my feed reader this morning. I would provide a link - but it’s not my intention to draw further attention to this particular site.  To each "point" that the author makes, I will provide a "counter-point" for your consideration.

1. You Can “Sell” Your Home Better Than Anyone Else: You know your home best and what is special about the area, as well as other details about the property. A well maintained, fairly priced home virtually sells itself.

You might know all the particulars about your home and area - but you may not know what NOT to say. You could be held legally liable for what you say to buyers!

While a well-maintained, fairly priced home virtually sells itself - you need to make sure your home can be found by the most buyers… and the most important place to get the widest possible audience is the Multiple Listing Service.

2. More Money in your pocket: Calculate 6% or 7% of what you think your property is worth, then ask yourself: is it worth paying this much to have someone else show my property? Chances are the answer is NO.

If Realtors did nothing but add 6-7% to the cost of selling a property while bringing no value to the transaction - there wouldn’t be very many Realtors.. and justifiably so.

In addition to the many services that Realtors bring to the table - they also deliver worldwide marketing exposure which results in the best prices for sellers.

3. You’re in control: You can advertise where and how you want to, schedule showings when it’s convenient, talk directly with prospective buyers, and even take your house off the market when you choose. Remember, listing a home usually requires a minimum of 6 months with a Realtor.

Realtors know where to advertise your property - and if you are serious about selling, you need to allow showings when it is convenient for the buyer… not you.

The reason why most competent Realtors require a six month listing has to do with the current real estate market absorption rate -  because we don’t want to give it away for free.

4. Less Hassle and Frustration: When selling by owner, you don’t have to leave the house because an agent wants to show it, or clean every morning “just in case”. You know exactly when people are coming and can prepare accordingly. When a buyer makes an offer, there is not all the frustrating back and forth phone tag between agents.

In a buyer’s market - like the one we’re in - a seller should be delighted to leave so an agent can show their home. Buyers are not easy to come by, and you only get one chance to make that first impression - so if you’re serious about selling, get that house in ship-shape and smile when an agent wants to show it.

5. Less Uncertainty:  Because you meet the prospective buyers, you have a much better idea how interested people are, what they like about the home, how serious they are about buying and what their time frame and situation is. The direct feedback is easier to live with than wondering how things are going, or worse why no one has made an offer yet.

You don’t get less uncertainty simply because you are dealing directly with the buyers! Do you think that a seasoned Realtor doesn’t know how to interpret a Buyer’s signals and ask the proper questions to determine how motivated the buyers are? Do you really believe the buyers are going to tell you why they don’t like your home - directly to your face?

6. You Can Sell Faster: If you list your home with a real estate agent, everyone knows you’ll probably inflate the asking price to cover the commission fee amount. Three to six months down the road you’ll come to the painful realization that no one is going to buy it at that price, and you will end up reducing your price ( or accepting an offer) equal to the original amount you would have asked if selling by owner. Do it right the first time, and avoid taking the loss. Pass the savings along to yourself and the buyer and sell your home quicker.

If you believe that you can inflate your asking price to cover the brokerage fee - you are mistaken. You would be equally mistaken if you believe you can inflate your asking price because you have kids in college or because you need a big down payment for your next home.

The reason why the vast majority of "for sale by owners" end up listing with a Realtor is because selling your own home is not easy… and most FSBO’s are a failure at doing it, themselves.

7. Show Only To Interested Buyers: You can be sure that buyers are truly interested in your property when they visit because they have personally made the effort to be there. They haven’t been dragged there by an agent using your property for comparison purposes only.

Spoken like someone who knows nothing about showing property. Agents will show your property in the interest of helping you sell it. But if they find that your home is overpriced, then yes - it will help sell another property. It’s called comparison shopping. Every educated consumer does it.

8. You have greater access to out–of-area buyers: Our internet site allows buyers anywhere in the world, easy access to your ad and phone number. Currently it is estimated that 1.3 Billion people have internet access.

My neighbor’s daughter has a MySpace page that anyone in the world can access… but few people can find it. If you want worldwide reach, a Realtor will have your listing on Realtor.com - as well as hundreds of other websites that pull their listings from the listing services.

9. It’s Easy: If you can sell your own car, you can sell your own home…it’s that simple. Once our marketing efforts locate a buyer—lenders, lawyers and title companies take over. Use our marketing resources as your best advertising resource.

Sorry - it’s not that simple. And if you believe that once a buyer is found, then the lenders; lawyers; and title companies will take over - you are sadly mistaken. Don’t get me wrong… I am not saying that you can’t sell your own home - many people do each year. If you decide to take this route, be sure you get educated in the process of selling your home. Just because someone says it’s easy - doesn’t make it so.

10. What is your alternative?  Listing with an agent? The “gravy train” days for agents asking 6% for listings should be dead. Understand that 9.5 out of every 10 listing agents don’t sell their own listings. So why would you even think about listing for a 6% commission. No Listing Commissions-EVER!

The reason why the so-called "gravy train" days of asking 6% aren’t over is because they never were "gravy train" days! Successfully listing and selling a property - especially in a buyer’s market - is not an easy affair.

And the reason why most agents don’t sell their own listings is the same reason why you should list with an agent. Agents are able to attract other agents who are assisting their buyer-clients in their quest for a new home - and this is done through the cooperation of the listing services.

Also, keep in mind that without an experienced agent to help guide you through the transaction - all sorts of bad things could happen. Sometimes, it’s just better to let the professionals handle your affairs!

This article was written by Sam Miller, Agent in Mt. Vernon, OH and one of Mike's friends.....try this out...it is WAY COOL!!!!!

Have you ever needed a quick phone number and didn't want to take the time to boot up your computer and search Google and you wanted to avoid the high charge for directory assistance or 411 connect?   Have you ever wanted the phone numbers for the local movie theatres or pizza places near you and you don't have anything to write the numbers down on?  There is a quick and easy way to get the information you want within 60 seconds and most of you can get the information quick and cheap with your cell phone and your text message feature. 

Send a text message to this number:  466453 (I know this is a partial number but trust me it will work).  Now type in what you are searching for and for your example use the following as a test:  Plumber 43050 (of you can type in Plumber XXXX (enter your zip code where my x's are)  Now simply press send and sit tight and within 60 seconds you will get a text message with the information.  This works for client names, addresses and phone numbers and it works for just about anything you are searching.  If you want another good test why not search your name or your spouses name and your zip code?  If you have a spare moment send a text to 466453 and enter Realtor, Florence, Kentucky 41042 and see what comes up.

There are so many potential uses for this service and once you play with it a bit you will quickly see the many possibilities.  Your family will love it, your past clients will love it, your team will love it, I have a feeling that pretty much anyone with a cell phone will find a use for it at some point.  The key to remember is that if you do not have a text messaging account you will get charged a non contract text message rate.  For those of us with text messages contracts and especially those of us who have unlimited text messaging this is a feature that we will be using on a very regular basis.  Google has done it again and the speed of this service is amazing

February’s Existing Home Sales Best In Two Years

This article was written by Denny Grimes, a friend of Mike's who is a real estate agent in Fort Myers, FL.   Denny Grimes is a real estate broker with Denny Grimes & Company

Robust sales leave market in dangerous territory

I have good news and bad news. Which do you want first? Let’s start with the good news.

Last month, over 900 existing homes went under contract, thus making February the best sales month in Lee County since March of 2006. In fact, February’s pending sales were up more than 60 percent from the same month in ’07.

We are on a 60-day winning streak. The first two months of ’08 show that single-family home sales are 36 percent ahead of ’07, and condominium sales are up 16 percent for the same time frame. Notice, I am talking about “pending” sales, which are contracts written and accepted, but not yet closed. Even though there will be sales that fail to close, we will still post a significant sales increase. So, for those that thought our market was flat-lining, put the body bag away, because it appears it has a pulse.

Before you roll the market out of ICU, let me give you the bad news. The bad news is that many people will misinterpret, dismiss or ignore this positive news. 

Sellers and agents may misinterpret this surge in sales and believe it signals the return of the glory days. If they do, they will react in a way that would be contrary to further recovery. This is my biggest fear.

Skeptics and nay-sayers may dismiss this information and file it in the folder titled “Propaganda to Trick Fence-sitting Buyers.” Many will even wonder how this tidbit of positive news made it past the good news censors, who seem to be working at every media outlet.

The die-hard wait-for-the-bottom buyers will chalk up this two-month trend as a seasonal blip. They believe sales will tank about the time the last snowbird’s taillights cross Lee County’s northern border.

The continuation of the market’s recovery beyond the winter season is directly related to the correct interpretation of this long-awaited surge in sales. Does it mean the market is fully recovered or that the market has bottomed? No. Does it mean that prices have stabilized? No. Does it mean agents can finally eat something other than peanut butter? That depends, do you like Spam?

The surge in sales was not caused by an influx of European or Canadian buyers. It wasn’t caused by sunburned snowbirds from Sheboygan, Baby Boomers or ball players looking for a spring training home. In fact, buyers did not cause it at all.  

Sales are picking up because sellers are getting closer to where the buyers are. After 30 months behind the wheel, sellers are finally driving their prices into the outskirts of buyer’s territory. This is dangerous territory for our market because some sellers will be tempted to slow down, stop or put the car in reverse and drive their prices back up, thinking that the buyers will follow them. All of these reactions will stall our recovery, and heaven knows we don’t need any stalling going on.

Our market began its recovery 2.5 years ago, when prices started falling back toward real values. It’s been a long journey, but we are finally beginning to see evidence that we are getting closer to our destination. We are now faced with the most important and difficult question since the recovery started, and that is “Will we have the fortitude to finish the trip?” We must press on to the final destination, the tipping point, which is the epicenter of the buyer’s territory.

Would you like to see our market fully recovered and prices stabilized? That will not happen until prices in each sub-market reach the point that makes that market tip back toward equilibrium.

So, it really isn’t a question if prices reach the tipping point, it’s a questions of when. For some market segments, like developer homes that can be bought below replacement cost, that’s just around the corner. Other markets should start counting cows or Burma-Shave signs, because there’s still a lot of road ahead.

Regardless, every market segment must meet buyers where they are. Therefore, the more downward pressure sellers keep on the gas pedal and prices, the sooner their journey will be over. Sorry, there aren’t any shortcuts.

Sellers, I know you are tired of driving, but don’t slow down now. There’s a lot of open road ahead because the traffic jam is behind you in seller’s territory. Over 900 sellers entered buyer’s territory last month and picked up a buyer. If you keep pressing forward, you will begin to see buyers thumbing for a ride. When that happens, stop and give them one.

Keep the Faith

  With the Rates just dropping, NOW is a GREAT time to buy a home!!!  One of our friends, Sam Miller, up in Ohio, posted this YouTube video and it explains why...  Check it out!!!

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This blog was posted by some friends of ours, The Jones Team, realtors out of Tennessee....we thought we had to share because it is so good!!! 

In a suprise move, the Federal Reserve announced this morning that it has cut the Federal Funds Rate three-quarters of a point, moving the key rate from 4.25 to 3.75 percent.

While it was no suprise that the Fed would slash rates, the shocker is that the US central bank would not only make the move before its scheduled meeting next week, but also implement the biggest federal funds rate cut on record going back to 1990.

In addition to dropping the funds rate, which governs overnight lending between banks, the Fed also slashed the discount rate it charges on direct loans to banks by three-quarters of a point to 4 percent.  Many economists believe rates could be cut again at the Federal Reserve’s scheduled meeting on January 29-30.

Check out the full story here.

Submitted by Jill Kuchle:

I am an avid TODAY show viewer and on the show today was real estate expert Barbara Corcoran.  She gave some great tips for those of you who are trying to get your home to sell.  Here are 8 of her Tips on Getting your Home to Sell.  Click on  http://www.msnbc.msn.com/id/21134540/vp/20741973#20741973  to watch her interview with Ann Curry - it is very informative as well!!!!

1. Make the right first impression
Buyers decide in the first eight seconds whether or not they want to buy your home.

2. Let the sun shine in!
After location, light is the second most quoted reason why a buyer chooses the house.

• Clean all the windows.
• Replace drapery with sheer curtains or white shades.
• Replace lamp shades with sheer white shades.
• Replace light bulbs with higher wattage.
• Trim back shrubs that block window light.
• Paint the inside walls white.
• Put white slipcovers on all dark furniture.
• Put up lights in each corner of the major rooms.

3. Remove clutter
People can’t visualize themselves living there when they can’t see past your clutter.

• Store half your “stuff,” including knick-knacks and furniture.
• Remove personal objects like family photos and children’s artwork.
• Remove all objects from closet floors.
• Put half your clothes into storage.
• Make your linen closet meticulous; people judge hidden wiring and plumbing by how neat your linen closet is.
• Hide all electric cords and wiring.
• Eliminate unhealthy plants.
• Put fresh sheets on beds with four extra pillows.

4. Send kitty to Grandma’s House
People buy with their eyes and their noses.

• Remove kitty litter, dog beds and other smelly pet items.
• Warm a few drops of vanilla inside the oven door.
• Smoke outside; remove ashtrays.
• Open all windows an hour before the buyer arrives.
• Keep the trash can clean.

5. Freshen the kitchen
The kitchen is everyone’s favorite room in the house.

• Clear all countertops.
• Replace cracked, scratched or broken appliances.
• Re-grout the tile.
• Wax the floors.
• Update kitchen knobs.
• Paint or replace cabinet fronts.
• Put in a window; it can increase the value of your home by 10 percent.

6. Clean the bathroom
No one wants to move into your bathroom.

• Scrub the walls and floors.
• Clear off all shelves and put away personal items.
• Re-grout tiles and replace caulking.
• Hang a new shower curtain.
• Buy fresh hand towels and rug.
• Replace old soap.

7. Add color
Touches of yellow and other warm colors say ‘welcome home.’

• Buy new throw pillows for the sofa and bed.
• Add a fresh ficus tree.
• Define areas with colorful rugs.

8. Don't empty out the house
An empty house makes the seller look desperate. Buyers generally don't pay full price for an empty house. In addition empty rooms look smaller.

• Rent or borrow furniture if you need to in order to make the home look lived in and give the buyer a sense of space.