Tree Hugger's Ultimate Hero

SAVE THE TREES!*

This is a blog about real estate in Coral Gables/Coconut Grove and North Carolina and there are, obviously, other issues of concern to real estate other than bricks and mortar; for example: TREES. What would our homes and neighborhoods be like without beautiful, sheltering trees? As we all know, there are many places in the world where rampant, government sponsored deforestation has erased vast areas of ancient forests. In our neighborhoods the loss of the trees would mainly affect us aesthetically whereas in parts of Africa, Asia and South America the loss of forests wipes out the entire interdependent eco-system that humans, animals and plants need to survive. As a person who worships trees as other people worship some big, invisible guy in the sky I would like to share with you the inspiring story of one woman's mission to save trees.

The power of one woman to vastly improve the lives of millions of suffering people against all odds is proven by the story of Wangari Maathai, the founder of The Green Belt Movement in Kenya, Africa who, with one simple idea; that women should plant trees, was able to overcome years brutal government opposition including death threats and bloody beatings and go on to see her simple idea become a highly successful, international movement and for which she was awarded the Nobel Peace Prize in 2004. Why would the Kenyan government want to kill one woman who simply wanted to teach other woman how to plant trees? If you don't already know Wangari's story you should take the time to learn it...it will inspire the tree-hugger in you or just the human being in you!
http://greenbeltmovement.org/blog/index.php

* Very sadly Wangari Maathai died last year, a great loss for all who love trees and those who defend them from predation.

The Ongoing Problem of SQUARE FOOTAGE

I have been trying for over 10 years now to get the local Real Estate Board here in Miami-Dade County to require our Multiple Listing Service (MLS) to have a uniform source for the square footage figures quoted online for listings. To date, they have not done this. So, beware, the square footage shown on realtor's listings may or may not be accurate. Here is a copy of my latest letter to our local real estate board which defines the problem and how it adversely affects the public.



February 3, 2009

Dear MLS Board of Directors,

I am hoping you can help me solve the long-standing problem of deceptive square footage quotes on our MLS system and, if not, perhaps you can direct me to someone who can.

Today is the 10 year anniversary of my quest to have our MLS require all MLS users to use one, authenticated source for the square footage quoted on listings published on MLS yet today, as per usual, a random sampling of several listings on MLS still shows that square footage of listings on MLS can be just about anything the listing agent decides to put in there. This has been the case for many years now and really needs to be corrected. Obviously, without one, agreed upon standard for the source, accuracy and authenticity of square footage figures on MLS our Real Estate Boards continue to fail, with impunity, in their legal duty to protect the public from dishonest real estate practices and I am still requesting that something be done about it soon. Too many realtors are getting away with "puffing up" their square footage on their listings on MLS which throws off all the computations we make on our CMAs and is a huge disservice to the honest realtors who refuse to puff their square footage and whose listings are then rejected by the buyers in favor of the ones with the faked, bigger square footage.

Right now MLS square footage for properties shown in the computer field marked LA: which stands for SqFt Liv Area and from which all our CMA's draw their SQ. FT. data, is auto populated from a feed from the Miami Dade County Tax Assessor but can be manually altered using many possible other sources such as; other public records data bases, an architect's rendering, an appraisal, a builder's spec sheet, a survey, an owner's opinion or a realtor's imagination. There is also no requirement for MLS users to identify the source from which the square footage comes when it has been changed from the auto-populated figure. Some realtors identify the source of the altered square footage in the comments section and some don't. Some diligently upload the document as an attachment on MLS (ideal!). Some realtors identify the source of the altered data but do not have a copy of the document from which they are quoting available to others who wish to check it. And since all of the above sources of square footage figures use completely different methodologies of calculating square footage using MLS square footage figures for "comps" is totally useless and all CMA estimates of value, routinely disseminated to the public upon request, are bogus. All of this is totally unacceptable, unprofessional, completely misleading and easily correctable.

Since the number one thing people want to know, prior to making an offer on a property, is what they are paying on a cost per square foot basis and how that compares to other recent sales, on a cost per square foot basis, realtors have a legal duty to make a reasonable effort to have a competent system in place to facilitate client requests for "comps". When the public asks members of the realtor community for "comps" the realtors have a duty to at least attempt to provide accurate data. While realtors cannot be expected to guarantee the accuracy of all square footage data they acquire from the public records they should not be allowed to knowingly disseminate data to the public which will be relied upon by the public to make important financial decisions that the realtors know may be flawed because there are no standards in place to insure its accuracy. This an open invitation for a class action lawsuit from members of the public who relied upon realtor CMAs to their detriment.

Another problem is that Realtors who choose to overstate the square footage of their listings in the MLS gain an unfair advantage over the honest realtor who declines to engage in such deception. Sellers who hire honest realtors may lose money as their listings do not compare as well to the listings of dishonest realtors who make their listings seem like better deals on a cost per square foot basis by inflating the square footage figures.

Charlette Seidel, manager of Coldwell Banker's Coral Gables office at 1501 Sunset, and I have offered solutions to this problem for the last 10 years, over and over again yet our real estate boards have never acted to fix this problem. Coldwell Banker has a policy that requires a listing agent to have, on hand, proof of square footage claims if they deviate from the public records figures. But we have no control over all the other non-Coldwell Banker realtors who input listings on MLS and whose often flawed data we must rely upon for CMAs which the public demands.

We have suggested, over and over again, that MLS go back to their previous system of blocking any changes on the one computer field that shows adjusted sq. footage which is drawn from the Miami-Dade Public Records and which is used in our CMAs to produce "comps". Obviously, this is not a perfect solution as the public records can be wrong but if the listing agent has an authenticated document that can be posted as an attachment on MLS which authoritatively shows different square footage, calculated using Public Records methodology, then that document can be referred to in the comments section. But, adhering to a strict policy of requiring the square footage quotes in MLS to all come from exactly the same authoritative source is an absolute statistics 101 must. Allowing realtors to post an attachment on MLS claiming different square footage allows for gross errors in the public records. Owners can also lobby the public records to correct their square footage figures. This way realtors and the public will be able to compare apples to apples when they use MLS data to compare properties and not be deceived by the occasional dishonest watermelon thrown in there.

Please let me know how we can go about correcting this problem. I realize that you are not a working realtor out in the field dealing with these issues on a day to day basis and so may not really have insight into how adversely this affects our business and I would be glad to sit down with you and show you specific examples of these problems and explain more fully how and why this really is such a serious and time consuming problem for all us realtors working out here in the trenches.

The market is so difficult right now and with the public really soured on real estate in general we really need to try everything we can to restore the public's confidence in the real estate industry. Having no standards whatsoever that MLS users must adhere to for the square footage we quote on our listings to the public is just absurd and I feel like an idiot having to admit that to my clients. Correcting this problem would go a long way toward trying to build up confidence again in our industry. After 10 years of asking for this to get fixed I don't hold out much hope but, hope springs eternal, right?

Thanks, Laura Mullaney

Real Estate Tax Tips

Selling a Principal Residence Formerly Used for Investment Purposes?Amendment to IRC §121 May Reduce the $250,000/$500,000 Exclusion

Internal Revenue Code (“IRC”) §121 allows taxpayers selling a principal residence to exclude $250,000 of gain from taxation (or, $500,000 for married taxpayers, filing jointly) as long as they have lived in the residence for 2 out of the preceding 5 years.
Alternatively, for taxpayers selling investment/rental property, while they may not exclude gain from taxation, they can nonetheless defer payment of taxes by completing their disposition as an exchange under IRC §1031.
While the rules for excluding gain from taxation or deferring payment of taxation may seem fairly straightforward under the above code sections, they become more complicated if the property was used as both a principal residence and for investment/rental purposes.
Fortunately, in February of 2005, the IRS issued Revenue Procedure 2005-14 clarifying that taxpayers are entitled to take advantage of both the §121 capital gains exclusion and the §1031 capital gains deferral. However, Rev. Proc. 2005-14 only addresses situations wherein the property being sold is investment property formerly used as a principal residence; it does not address how to apply §121 to situations when the property being sold is a principal residence formerly used for investment purposes.
Now, pursuant to the Housing Assistance Tax Act of 2008, taxpayers selling a principal residence formerly used for investment purposes, have specific guidance on the application of §121. Specifically, IRC §121 has been amended, effective January 1, 2009. Again, the amendment only affects taxpayers who are selling a principal residence (“qualified use”), which they formerly used for investment (“non-qualified use”). The central point of the §121 amendment is that these taxpayers are not entitled to the full §121 exclusion because the prior investment use is considered “non-qualified” use and any gain allocated to the period of non-qualified use may not be excluded under §121.
How to determine the amount of gain that is not eligible for exclusionThe period of non-qualified use (period not used as a principal residence) must be divided by the total years of ownership to determine the amount of the gain that is not eligible for exclusion under §121.
Any period of non-qualified use before January 1, 2009 should not be included in the calculation. And, depreciation should also be excluded from the calculation and is simply taxed at the applicable recapture rate.
Summary of the rules under §121 amendment
Sale of residence that was formerly investment property – the taxpayer is entitled to only a prorated portion of the $250,000/$500,000 exclusion.
Non-qualified use prior to January 1, 2009 is disregarded, except for purposes of meeting the 5 year rule under HR 4520, if applicable1
Gain resulting from depreciation is taxed and is disregarded for purposes of determining the prorated amount of the exclusion
The application of the amendment is illustrated by the following examples:
Example 1: Taxpayer acquires an investment property, rents it for 3 years and then occupies it for 5 years as his principal residence (no use prior to 2009) before selling it and realizing $350,000 of gain of which $40,000 is from depreciation deductions.
$40,000 of gain is depreciation and is excluded from the calculation. The remaining $310,000 is subject to the prorata calculation as follows:
3 (years of non-qualified use) =
3 (37.5%) x $310,000=$116,250
8 (years total ownership)
8
Thus $116,250 is not eligible for exclusion and is taxed at the applicable capital gains rate. $40,000 of gain is from depreciation and is taxed at the applicable recapture rate. The remaining gain of $193,750 may be excluded from taxation under §121.
Example 2: Taxpayer acquires an investment property in 2007, rents it until 2010, and then occupies it for three years as his principal residence before selling it in 2013, realizing $400,000 of gain. The two years prior to January 1, 2009 are disregarded (but included for determining the five year period).
1 year non-qualified use (disregard 2007, 2008) =
1 (16.66%) x $400,000=$66,640
6 years of total ownership
6
Thus, $66,640 is not eligible for exclusion and is taxed at the applicable capital gains rate. $250,000 of the remaining gain may be excluded under §121, with the balance of the gain, $83,360 taxed at the applicable capital gains rate. In sum, $250,000 is not taxed and $150,000 is taxed.
Taxpayers selling a principal residence after January 1, 2009, which was formerly used as an investment/rental property should consult with their tax or legal advisors regarding the application of the amendment to §121 to their particular situation.
1
If property was originally acquired as part of a 1031 exchange, H.R. 4520 mandates that the property must be owned by the taxpayer for at least 5 years in order to get the §121 exclusion (note: this is in addition to having lived in the property for 2 of the preceding 5 years.)

SOURCE: From a Newsletter from Old Republic Exchange Company, Charlotte, North Carolina 28202

Updated INFO on FIRST-TIME Homebuyer Credit

2008 Housing Stimulus Legislation
First Time Home Buyer Tax Credit Fact Sheet

Who is Eligible

1. The $7,500 tax credit is available for first time home buyers only.
2. The law defines a first time home buyer as a buyer who has not owned a home during the past three years.
3. All US citizens who file taxes are eligible to participate in the program.

Types of Homes that Qualify for the Tax Credit

1. All homes, whether single family, town homes or condominiums will qualify.
2. However, there are several conditions:
a. The home must be used as a principal residence, and
b. The buyer has not owned a home in the prior three years.
3. The Tax Credit includes newly constructed home.

Income Limits

1. Home buyers who file as single or head of household taxpayers can claim the full $7,500 credit if their adjusted gross income (AGI) is less that $75,000 annually.
2. For married couples filing a joint return, the income limit doubles to $150,000 annually.
3. Single or head of household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first time home buyer tax credit.
4. Married couples filing jointly who earn between $150,000 and $170,000 annually are eligible to receive a partial first time home buyer tax credit.
5. The credit is not available for single taxpayers whose AGI is greater that $95,000 and Married couples filing jointly with an AGI that exceeds $170,000 annually.

Effective Dates for the Tax Credit

1. First time home buyers would receive a $7,500 tax credit for the purchase of any home on or after April 9, 2008 and before July 1, 2009.
2. To qualify, you must actually close on the sale of the home during this period.

Tax Credit is Refundable

1. A refundable credit means that if you pay less than $7,500 in federal income tax, then the government will write you a check for the difference.
a. For example, if you owe $5,000 in federal income tax, you would pay nothing to the IRS and the will send you the difference of $2,500.
b. If you are due to receive a $1,000 tax refund then your refund will total $8,500. ($1,000 plus the $7,500 tax credit)
2. If you purchased the home in 2008, the tax credit is taken on your 2008 tax return. If you buy in 2009, you have the option of taking the credit on your 2008 or 2009 tax return.

Payback Provisions

1. The tax credit is an interest free loan that must be repaid over 15 years.
2. The minimum repayment amount must be 15 equal annual installments. For example, if the credit amount is $7,500, then the home buyer must repay a minimum of $500 each year for 15 years.
3. A home buyer must begin repaying the credit two tax years after claiming the credit. For example, if the credit is claimed on the 2008 tax return, repayment of $500 (or less, if the credit amount is less than $7,500) per year begins with the 2010 return.
4. If the home owner sells the home for a profit and there is a remaining credit, then the home owner is required to repay the remaining credit during the tax year of the home sale. The amount of the repayment will depend upon the amount of profit from the home sale:
a. If the profit on the sale is more than the remaining credit, then the home owner must repay the entire remaining credit.
b. If the profit on the sale is less than the remaining credit, then the home owner must repay an amount equal to the profit on the home sale. The remaining credit payback will be forgiven.
5. If the home owner sells the home but did not make any profit on the home sale, then the remaining credit payback would be forgiven.

Further information regarding the tax credit may be found at

www.federalhousingtaxcredit.com or www.irs.gov

This information is provided for general awareness only, and is not intended for the purpose of providing legal, accounting, tax advice or consulting of any kind. Please consult with your tax professional for complete details.

Capital Gains on the sale of your home

Many people are familiar with IRS rules concerning capital gains on real estate but if not here is a brief refresher:

When you sell your primary residence, you are not taxed on any profits if;

• You have have actually lived in the home for two out of the last five years.


• Your gain on the sale does not exceed $250,000 as a single taxpayer or $500,000 as a married couple filing jointly.

Gains above these limits are taxed at the current rate of 15% for higher income tax payers and 5% for lower income tax payers.
In 2008 the rate will continue for higher income taxpayers; while the 5% lower income rate will drop to 0% for the 2008 tax year only. Then on January 1, 2009, the long term capital gains tax will once again be 15% and 5% through 2010.
Homeowners can use this tax free provision every two years. As set forth in the American Job Creation Act of 2004, properties converted from a 1031 exchange property into a primary residence must be held and used as a primary residence for at least five years to qualify for the tax exemption.

To determine what, if any "gain" you have you need to consult a tax specialist or go to the IRS website for publications on the subject.

First Time Homebuyer Tax Credits

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009.

Basic features:

photo is of 3521 Crystal View Court, Coconut Grove...$645,000.

• The tax credit is available for first-time home buyers only.


• The maximum credit amount is $7,500.


• The credit is available for homes purchased on or after April 9, 2008 and beforeJuly 1, 2009.


• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

FAQ's

1.Who is eligible to claim the $7,500 tax credit?First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.



2. What is the definition of a first-time home buyer?The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.



3. What types of homes will qualify for the tax credit?Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.



4. Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009.In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.



5. What is "modified adjusted gross income"?Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.



6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.



7. Can you give me an example of how the partial tax credit is determined?Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625. Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.



8. Does the credit amount differ based on tax filing status?No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.



9. Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit?In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.



10. I heard that the tax credit is refundable. What does that mean?The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).



11. What is the difference between a tax credit and a tax deduction?A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.



12. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?No. The tax credit cannot be combined with the MRB home buyer program.



13. I live in the District of Columbia. Can I claim both the DC first-time home buyer credit and this new credit?No. You can claim only one.



14. I am not a U.S. citizen. Can I claim the tax credit?Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.



15. Does the credit have to be paid back to the government? If so, what are the payback provisions?Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.



16. Why must the money be repaid?Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.



17. Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit?Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.



18. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.



19. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount. 's





SOURCE OF DATE = COLDWELL BANKER MORTGAGE COMPANY

Expert Advice to Sellers & Realtors From A Top Dog Realtor

William Meyersohn is my rival in the real estate business but he is of the friendly variety and the absolute, consummate professional in our industry and a legendary "Top Producer" having handled some of the priciest real estate in our area. So when he was invited to conduct a real estate seminar by one of our realtor organizations recently realtors from far and wide lined up like adoring lemmings in droves to hear him speak. I was not able to attend having overbooked myself with something or other but my office manager went and brought back some of his words of wisdom which I will share with you:

Advice to sellers and to realtors in this present "Buyer's Market";

To realtors - don't take overpriced listings. You are wasting your time. Some brokers have done damage to our profession by doing this. They went into the business when it was easy and should not be in the business today. Now they are panicking and taking overpriced listings.

To sellers - Stage your property. The property MUST BE PERFECT to sell. Get the property in shape. If you know about a problem fix it. Spend money on paint and new carpet. Eventually the buyer's inspectors will find any of these problems that are not fixed and their estimates to fix the problems are usually inflated (to protect themselves). It is best to fix the known problems prior to listing.

To sellers and realtors: Pricing is more difficult now as appraisals are an issue. Be proactive with appraisers and provide good comps.

To realtors - if your seller tells you he "doesn't have to sell" remind him that the buyer "doesn't have to buy".

To realtors and sellers - price conservatively at the beginning instead of doing a long series of reductions later. You will be ahead of the game in a depreciating market and price accordingly on the LOW end of similar properties.

To realtors and buyers - many people out looking at real estate right now are just not buyers. They are only lookers because they cannot sell their house or condo to enable them to become a buyer.

To realtors and sellers - homes are sold by referral not by ads or open houses.

To realtors - when the property is shown, make certain that the sellers AND their pets are not there.

To sellers - when you ask the question; "should I sell now" the answer is "yes, because the devil you know is better than the devil you don't know. " I know today's market but I do not know tomorrow's market. There is no crystal ball.

To realtors - don't encourage your seller to pay a bonus...its a bad message to a buyer.

How to Calcualte Your "Portability" Tax Savings

Now that the tax savings initiative has been passed by Florida voters all homeowner who have been "trapped" in their homes because they would have to give up their lower real estate taxes and pay double, triple or quadruple their old tax bill for any new home they bought can now calculate what, if anything, they may save under the new tax provisions. True to form for politicians, the new provisions were made so complex that an IRS bureaucrat would totally adore them but, for some very strange reason, http://www.miamidade.gov/ actually has a "portability S.O.H. tax savings" calculator on its website that does the math for you. Just go to http://www.miamidade.gov/ and go to PROPERTY SEARCH then search for your home address and when your information comes up you will see an option in the menu to the left that says: PORTABILITY S.O.H. CALCULATOR click on that and follow the instructions.

Will "Portability" help Miami real estate?

Tough times for tax savings
From the Miami Herald, December 8, 2007, Page 1 B.
State economists slashed up to $3.2 billion in estimated savings from the property-tax plan's portability proposal because Florida's housing market is `crashing.'
Posted on Sat, Dec. 08, 2007

BY MARC CAPUTO
TALLAHASSEE -- The value of Gov. Charlie Crist's property tax-cut plan is dropping like a rock.
It no longer would cut $12.4 billion in taxes statewide over five years.
It'd be more like $9.2 billion -- and perhaps even less, state economists said Friday.
The worsening economy, they said, is dragging down property values statewide and indicates homeowners won't take much advantage of the proposal's centerpiece: ''portability'' to transfer tax exemptions to a new primary residence.
''Florida, pretty much statewide, is into a housing crash right now,'' said chief state economist Amy Baker, quoting Moody's Investor Service, which said this week that the worst-hit states in terms of risky home loans are Florida and California.
Even Crist's economist, Christian Weiss, noted the tough times and wondered if the new downgraded numbers are ``too optimistic.''
The economists' language conflicts with that of Crist, who has repeatedly said he's optimistic about Florida's financial health. Earlier this year, the governor pledged to make property taxes ''drop like a rock'' and said this property-tax plan in particular would ``fire up Florida's economic engine.''
Florida voters will decide on the proposed constitutional amendment on Jan. 29.
The devaluation of the plan comes just a day after Crist attended a New York fundraiser hosted by Donald Trump -- who is also a Palm Beach County resident -- for a campaign to persuade voters to approve the proposed constitutional amendment.
Whether the lower bottom line helps or hurts the plan's chances at the polls is unclear. On one hand, compared to other proposals, it cuts so little money out of local government and schools that there won't be much organized opposition.
But the low number could threaten backers of alternate tax-cut plans proposed for future ballots. Many fear that if this tax cut passes, it will blunt the public's appetite for bigger cuts or reforming Florida's tax code.
House Speaker Marco Rubio, a West Miami Republican who trashed the property-tax proposal when it passed the Legislature in October, said he voted for it anyway because ''it does so little. Why not?'' He is backing other measures, among them one being debated by the state Taxation and Budget Reform Commission for the November ballot and another to limit government taxation that could be voted on in future years.
Another number also spells trouble for any plan on Election Day: 60 percent. That's the threshold by which any proposed constitutional amendment must be approved by voters.
TOUGH TO ESTIMATE
The new dollar figure for the property-tax plan is hardly set in stone. It's an estimate -- and a tough-to-determine one at that.
The economists largely left intact the projected numbers for the value of cutting taxes on some business equipment -- $1 billion -- and boosting homestead exemptions by about $15,000 -- a cost of $4.6 billion over five years.
But Baker, the state economist, wondered if the credit crunch and tough times would make more people either lose their homes or leave Florida, reducing the money statewide that the homestead-exemption increase would save.
The effect of two major parts of the plan are far harder to predict:
• A 10 percent limit on annual tax assessments increases for commercial and second-home properties. Revenue estimators struggled with determining how much non-homesteaded properties would increase in value and therefore how many of them would save money if their tax-assessments are capped.
The economists didn't officially agree on the bottom-line savings of this portion of the plan but guess it will likely be $931 million, down from about $1.2 billion due to falling property values. But that is good tax-cut news for businesses because falling property values will likely mean lower taxes.
• Portability. Figuring how much this saves requires predicting how many people would move from one house to another, how much in tax-exemption savings they could carry, and how much the new home would be valued at.
With most sales flat or falling and the availability of cash tightening, the number of people who could sell their homes for a good price and afford to buy a new one is far smaller than it was last year.
HOW IT WORKS
The portability plan allows homeowners to transfer a maximum of $500,000 in tax exemptions to another primary residence, depending on the values of the old home and the new one.
The proposal centers on the long-standing Save Our Homes tax cap that limits assessed value increases on homesteads to three percent annually. Over time, the difference between the market value and assessed value of a home increases, creating what's known as the ''differential,'' which is the amount of money a homesteader could transfer.
Statewide, the value of existing properties is expected to decline about 3 percent in 2008. With the decrease in value, the estimated worth of the differential exemption will decrease also -- from $425 million statewide in 2007 to a low of $334 million in 2008, before the value is expected to start ticking back up.
Also estimated to fall: the percentage of homeowners switching to new homes -- from 7.25 percent in 2007 to 4.12 percent in 2008 and then to a low of 0.6 percent in 2009.
Those two sets of numbers suggest that portability, if approved by voters, won't spark the real estate market much. The economists from the House, Senate, Department of Revenue and Governor's Office agreed that portability would save taxpayers about $2.67 billion statewide over five years -- not $5.62 billion.
The Senate's chief economist, Alan Johansen, acknowledged the difficulty of predicting the numbers, calling it ``augury based on reading high-tech information and not chicken entrails.''

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