Real Estate Blog

• Fifty-one percent of respondents identify the U.S. as providing the best opportunity for capital appreciation;
• This compares to 37 percent in 2008, 26 percent in 2007, and 23 percent in 2006;
• The last time respondents’ perceptions for U.S. real estate were this strong was in 2003, when the percentage once again reached 51 percent;
• The U.K. emerges as the second-best country for capital appreciation, receiving 30 percent of respondents’ votes;
• In third place, China receives 10 percent of respondents’ votes.

• Two thirds of respondents plan to increase their investment in the U.S. in 2010 compared to 2009;
• Investors say they plan to increase U.S. allocations above 2009 levels by 62 percent for equity and 83 percent for debt; at least half the survey respondents report a stronger appetite for both debt and equity investments in the U.S. than in other countries;
• Plan for global equity investment in 2010 exceed plans for 2009 by 46 percent; 2010 plans for global debt are 20 percent lower than planned for 2009;
• By the middle of the fourth quarter of 2009, foreign investors placed only 62 percent of planned debt allocations and 43 percent of planned equity allocations globally; in the U.S. they placed only 35 percent of planned debt allocations and 23 percent of planned equity allocations;
• As a portion of global real estate, U.S. 2010 allocations for debt represent 80 percent of the global pool; allocations for equity represent 49 percent.

• In the June 2009 mid-year survey, half the respondents said they expected recovery by or before the second quarter of 2010;
• In the 2010 annual survey, half the respondents say they expect the recovery by or before the fourth quarter of 2010. But, optimism about the state of the U.S. real estate market remains strong:
• Thirty-three percent of survey respondents say they are more optimistic about the U.S. real estate market than they were in June 2009;
• Sixty-three percent say their perspective has not changed;
• Six percent say they are more pessimistic.

Modified loans on home can hurt your credit score but is better than the alternatives of a short sale and much better than a foreclosure.

The last thing many troubled homeowners want to hear is that they could be denied a car loan after they get a chance to modify their home loan.

But credit scores can get dinged after a home loan modification, making it more costly or tougher to get a loan or credit card.

Hundreds of thousands of homeowners find themselves in a financial squeeze, thanks to the recession and the meltdown in the housing market. Lenders have offered trial loan modifications to more than 700,000 eligible borrowers. As of late November, about 31,000 trial loans have been made permanent, which requires at least three on-time payments under the trial program and proof of income.

What these troubled homeowners don’t realize is that these attempts to avoid foreclosure may result in their credit scores taking a hit.

A potentially damaged credit score is one of those hidden costs of home loan modification – and it varies significantly depending on your lender, as well as when you received your loan modification, your credit history and how your loan was altered.

“They need to tell people up front that this could happen,” said James Sperr, 46, of Belleville, Mich.

Sperr and his wife, Carol, received a trial modification through Bank of America that cut their house payment, including taxes and insurance, to $957 a month from $1,140 a month.

But it came with a hit to the credit score.

“Our credit rating has gone from the 800s to 750,” Carol Sperr said.

“It’s punitive to a consumer who is already scared, frustrated, mad,” said John Ulzheimer, president of consumer education for Credit.com.

The Sperrs said they had never been late or missed a mortgage payment, but their bank had reported them as being behind on payments.

Their credit score took a hit, falling from the 800s to 750.

“They tell us that once the paperwork ‘catches up’ and the new loan is finalized, they will correct the credit reporting agencies,” Carol Sperr said.

No one saw this coming.

“I didn’t find out about our credit until they did a check on this van we bought,” James Sperr said.

He said his wife was able to provide more documentation that their mortgage was in compliance so they did not have to pay a higher rate or get shut out of a loan.

Others aren’t so lucky.

Loan modifications remain a good thing, but they often come with that consequence.

Homeowners who face hardships but cannot traditionally refinance their mortgages can try to get a loan modification. A modification temporarily reduces the monthly payment, which can be helpful if someone’s dealing with a pay cut. Typically, the principal amount owed on the loan is not reduced or changed and the amount of debt owed is not forgiven.

The federal government has programs, and banks and credit unions have proprietary programs as well.

Yet many homeowners feel blindsided when they discover that their credit score has dropped by 50 to 100 points or even more after they entered a trial modification.

“What’s the point of the additional credit damage? What have they just accomplished by doing that to the borrower?” asked John Ulzheimer, president of consumer education for Credit.com.

Good question.

In the first few months after receiving a trial modification, Ulzheimer said, it is possible that the initial payments would show up as a “partial payment plan” on a credit report, which turns into a negative hit to a credit score. This can be a problem even for homeowners who never have missed a mortgage payment.

“It really depends on how the mortgage company decides to report this to a credit agency,” said Julie Bos, group manager and certified credit counselor for GreenPath Inc. in Grand Rapids, Mich.

A homeowner who is behind on payments will see credit score damage, and that won’t change from a modification.

“If you’re already delinquent, your credit is already impacted,” said John Snyder, manager of foreclosure programs for NeighborWorks America.

But consumers who are making their mortgage payments are getting modifications, too, perhaps because wages were cut or jobs were lost. They may be struggling to stay current, but their credit may not be bad when they start a modification.

At Bank of America, consumers who are current on mortgage payments could show up as being delinquent in the bank’s system after a trial modification period begins because they’re paying less than the actual mortgage payment during that trial period.

At the end of the trial period, the bank said it brings its system up to date when the loan is converted to a permanent modification.

Some might argue that it’s not a wise move to take on more debt, such as a car loan, if a person saw a cut in pay and needed a home loan modification. But many consumers often cannot control when their car breaks down.

On top of that, lenders benefit from home loan modifications because potential foreclosures can be avoided.

Unknowingly though, many consumers discover themselves boxed in later when they try to get approved for credit.

“They’re concerned about the damage to their credit. They’re not happy about it,” said Bos.

“If you go out and try to purchase a car in two months, you could be denied,” she said.

Or you might have to get a co-signer or put down a bigger downpayment or accept a higher interest rate to get a loan.

What’s stranger is that not all home loan modifications will hit consumers in the same way on their credit reports.

Consumers who modify their mortgages under federal programs, such as the Making Home Affordable and the Home Affordable Modification Program, now can do so without hurting their credit scores since those modifications are listed as a “loan modified under a federal plan” as of Nov. 1.

Here’s the sticking point: If you are able to modify your loan through an individual bank or credit union’s program and not a government plan, it’s likely your credit score will be hurt.

To complicate matters further, eventually a “loan modified under a federal plan” on your credit report could hurt your score, too.

Ulzheimer noted that the only reason the new reporting guidelines do not damage your credit scores is because FICO, the company that created the FICO credit score, hasn’t had a chance to study the long-term predictive value of loan modifications to credit risk.

Still, homeowners who are in trouble must realize that a foreclosure or a short sale would be listed as a charge-off or settlement on a credit report and last seven years, Ulzheimer said, while a modification would typically last a few years.

If you do receive a loan modification, ask questions and be more careful about how you handle your credit elsewhere to try to combat any potential damage.

Before making any moves, talk to a nonprofit housing counselor. See www.findaforeclosurecounselor.org.

How to keep up your credit score

These days, a good score is around 720 points or higher. Here are some tips to help you maintain or improve your credit score:

• Do not apply for several credit cards. Applying for a store credit card could cut 10 points off the credit score of some consumers with good credit.

• Pay all bills on time – utilities, mortgage, credit cards, etc. Lenders customarily don’t report you as late to the credit bureaus until you have missed the original due date by at least 30 days. Being a month late with all payments, for example, might lower a credit score by from 60 to 110 points.

• Missing a payment on one account that wasn’t already late could slice 40 to 75 points from some credit scores.

• Keep your credit card balances low on all cards, much lower than half of the available limit on your credit cards. Maxing out can cut credit scores by 45 to 100 points.

• Negotiating a debt settlement with creditors can lower some credit scores by 45 to 125 points. A short sale on a home would be reported as a debt settlement.

• A loan modification to get a lower mortgage payment and stay in your home could impact your credit score. In some cases, consumers could see credit scores drop by 100 to 150 points.

• Having your home foreclosed on could knock 45 to 100 points off your credit score, depending on where your score started.

• Filing for bankruptcy will hurt some credit scores by 195 to 255 points.

© 2010 Detroit Free Press, Susan Tompor. Distributed by McClatchy-Tribune News Service.

The foreign buyers have returned in a big way and the buying momentum looks like it will continue to increase expedientially.

Wong, president of Optimus U.S. Real Estate Fund, has bought 60 condos at heavy discounts from developers in financial trouble. Wong paid about $62,500 each for 18 Las Vegas condos that once were priced at about $250,000 apiece.

“This could be a once-in-a-generation opportunity for real estate investment,” said Wong, whose Calgary, Alberta-based fund has already invested $5 million cash and will spend millions more in the U.S. Southwest over the next several months.

While foreign real estate investment in the first six months of 2009 was lower than last year’s level, real estate agents from New York to Las Vegas say purchases have increased rapidly in recent months.

Foreign investors have long been attracted to U.S. residential real estate, drawn by the market’s stability compared with other countries. But the dollar’s descent in the past six months has made makes homes even cheaper for foreigners, and prices are showing signs of stability.

International investors bought 154,000 homes and condos in the 12-month period ending in May, down nearly 10 percent from 170,000 for the same period a year earlier, the National Association of Realtors reports.

But since June, the dollar has tumbled by 9 to 11 percent against currencies like the Japanese yen, the European euro and the Canadian dollar. The Brazilian real has gained 17 percent against the dollar in the past six months.

Buyers from Brazil, Canada, France and the Netherlands, for example, have paid mostly cash for second homes ranging from $6 million to $15.5 million in condo buildings like 40 East 66th Street, a stone’s throw from Central Park and steps from shopping, restaurants and nightlife.

“(Foreign investors) love to have everything available to them once they walk out their front door,” said Barbara Russo, an agent with The Corcoran Group Real Estate in Manhattan.

Manhattan real estate agent Cynthia Crowley recently spoke with three different Israeli investors who have complained about rising real estate prices at home.

“They want to buy,” said Crowley, an agent with Olshan Realty in New York. “This is not tire kicking.”

Foreign investors love floor-level prices and the limp dollar but also are confident in a long-term recovery of the U.S. economy and the housing market’s resurgence. Some want vacation homes, while others are looking for rental income.

Buyers from Canada, India, the Middle East, Mexico, and Venezuela like Houston’s neighborhoods and its economy, which benefits from strong oil and health care industries.

“They also like to gravitate to where they have friends or family,” said Bill Gottfried, managing director of Gottfried International Estates.

Foreign investors often pay cash, or offer downpayments of 40 percent or more, because financing is difficult to get. Nearly half paid cash in the 12-month period ending in May, the Realtors group reports.

Florida leads the country in the amount of international buyers, accounting for nearly a quarter of foreign purchases. The Sunshine State was followed by three gateway states with warm climates - California, Texas, and Arizona.

Miami home prices are down by half from the peak period of late 2006 due to foreclosure sales and a glut of unsold units. With the dollar hitting a 15-month low this week against the euro, the bargains are enticing. Investors are buying single-family homes or condos for two-thirds the cost three years ago.

Peter Zalewski, a Miami-based real estate agent, said at least seven bulk deals involving foreign condo buyers have taken place in downtown Miami alone, with investors coming from Argentina, Canada, Colombia, Italy, Norway, and Venezuela. Similar deals also have taken place in heavily-populated Broward County and ritzy Palm Beach County.

Claudia Bacelar, an Esslinger Wooten Maxwell real estate agent, has seen more South Florida inquiries from Brazilian, Canadian and British buyers of second homes, many of whom gravitate to condos with great views in the $800,000 range. And they pay cash.

Argentina native Marco Bordoni bought a $860,000 house on a deepwater canal in the Golden Isles neighborhood last month. An importer-exporter of perfumes, he plans to spend half his time in South Florida on business.

Bordoni is spending $450,000 to remodel the house, which was valued at $1.2 million four years ago, said his agent, Scott Patterson.

“Prices fell enough that I could buy a property I would not be able to buy two years ago,” said Bordoni, 30.

Content from real estate blog with cedit giving to Adrian Sainz, real estate writer

ORLANDO, Fla. – Nov. 23, 2009 – Florida’s existing home sales rose in October, marking 14 months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®. October’s statewide sales also increased over sales activity in September in both the existing home and existing condominium markets.

Existing home sales rose 45 percent last month with a total of 15,160 homes sold statewide compared to 10,444 homes sold in October 2008, according to Florida Realtors. Statewide existing home sales last month increased 5.1 percent over statewide sales activity in September.

Florida Realtors also reported an 82 percent increase in statewide sales of existing condos in October compared to the previous year’s sales figure; statewide existing condo sales last month rose 6.1 percent over the total units sold in September.

All of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales and higher condo sales in October. A majority of the state’s MSAs have reported increased sales for 16 consecutive months.

Florida’s median sales price for existing homes last month was $140,300; a year ago, it was $169,700 for a 17 percent decrease. Housing industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in September 2009 was $174,900, down 8.1 percent from a year earlier, according to NAR. In California, the statewide median resales price was $296,090 in September; in Massachusetts, it was $290,000; in Maryland, it was $261,718; and in New York, it was $213,900.

According to NAR’s latest industry outlook, the housing market is continuing its positive momentum. “We’re getting early indications of price stabilization, but we need a steady supply of qualified buyers to meaningfully bring inventories down and return us to a period of normal, steady price growth,” said NAR Chief Economist Lawrence Yun. “That, in turn, would help fully remove consumer fears, which would then revive the broader economy.”

In Florida’s year-to-year comparison for condos, 5,398 units sold statewide last month compared to 2,958 units in October 2008 for an 82 percent increase. The statewide existing condo median sales price last month was $105,200; in October 2008 it was $147,900 for a 29 percent decrease. The national median existing condo price was $175,100 in September 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 4.95 percent last month, a significant drop from the average rate of 6.20 percent in October 2008, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s smaller markets, the Gainesville MSA reported a total of 172 homes sold in October compared to 130 homes a year earlier for a 32 percent increase. The market’s existing home median sales price last month was $156,700; a year ago it was $173,300 for a 10 percent decrease. A total of 22 condos sold in the MSA in October, up 22 percent over the 18 units sold in October 2008. The existing condo median price last month was $116,700; a year earlier, it was $133,300 for a 12 percent decrease.

Home inventories are also way down across the board.

WASHINGTON – Nov. 6, 2009 – President Obama signed H.R. 3548 this morning, enacting into law an extension, and adjustment, of the $8,000 tax credit for first-time buyers. Among other things, the extension adds money for certain move-up buyers; creates one deadline for signing a contract and a later deadline for closing; changes income requirements; and limits a purchased home’s cost to $800,000.

“Extending the homebuyer tax credit and expanding it to reach more homebuyers is the right thing to do,” says 2009 Florida Realtors® President Cynthia Shelton. “It is critical to maintaining the positive momentum we’ve been experiencing in the housing market and in the overall economy. Florida Realtors applaud congressional leaders for taking action to extend the homebuyer tax credit into 2010, which will help Florida families realize their dream of homeownership, improve our communities and strengthen our economy.”

Adds John Sebree, Florida Realtors vice president of public policy, “Florida residents enjoy two additional advantages. The Florida Homebuyer Opportunity Program (FHOP), created by the Florida Legislature earlier this year, still has approximately $28 million that first-time homebuyers can access and use toward their downpayment. And move-up buyers now have the ability to ‘port’ their current property tax savings to a new home.”

First-time homebuyers

Most details for first-time homebuyers mirror the rules currently in existence. The maximum tax credit remains $8,000 ($4,000 for married individuals filing separately), and anyone who has not owned a home within three years is considered a “first-time buyer.”

• A purchase must be under contract by April 30, 2010.

• A purchase under contract by April 30 must close no later than June 30, 2010.

• After Dec. 1, 2009, income limits rise to $125,000 for singles and $225,000 for married couples; up from limits effective through Nov. 30 of $75,000 for singles and $150,000 for married couples. The tax credit phases out incrementally at each $20,000 increase in income.

• Effective immediately: The maximum home value purchased cannot exceed $800,000. Prior to the law being signed, first-time homebuyers had no limitation on a home’s cost.

Current homeowner tax credit

An existing homeowner who purchases a home may now claim a tax credit of up to $6,500. To qualify, that owner must have owned and used the same residence as a principal residence for any consecutive five-year period in the previous eight years.

• This new tax credit is effective immediately. Eligible homebuyers do not have to wait until Dec. 1 to close in order to qualify.

• Personal income limits, maximum home value, and contract/closing deadlines are the same as those for first-time homebuyers.

Long-time Florida homeowners who enjoy discounted property taxes resulting from the state’s Save Our Homes amendment qualify for property tax portability, notes Sebree. For more information or to calculate how much tax savings can be transferred to a new home, visit floridarealtors.org at: http://www.floridarealtors.org/LegislativeCenter/TopInitiatives/index.cfm

Florida Homebuyer Opportunity Program

Under FHOP, first-time Florida homebuyers can obtain interest-free bridge loans to access their federal tax credit before they complete a home purchase, enabling them to use that money upfront for downpayment and closing costs. Once buyers submit their returns to the IRS and receive their tax credit money, they repay their loans to the state.

The Florida Realtors-backed program came out of the 2009 session of the Florida Legislature. However, as part of the 2009-2010 budget year, did not become effective immediately. They tax credit extension will allow many first-time buyers to tap into the approximately $28 million in the program's remaining funds.

While funded by the state, the money is distributed through the city and county housing offices that operate the State Housing Initiatives Partnership (SHIP) program. There is no standardized program, and each local agency may operate under different rules for distribution. For more information, buyers should contact their local SHIP office.

To find a local SHIP office, go to: http://apps.floridahousing.org/StandAlone/FHFC_ECM/AppPage_SHIPLGContacts.aspx.

Additional changes

The tax credit extension includes other new rules, such as:

• The new law also impacts dependent purchases of homes, which weren’t addressed under the old rules.

• The new law requires a buyer to attach documentation about the home purchase to his or her income tax return. An audit found that some buyers are claiming the tax credit when they don’t deserve it, and investigators continue to seek out fraud. To minimize tax abuse going forward, buyers won’t receive the credit without submitting proof to the Internal Revenue Service (IRS).

The homebuyer tax credit is collected as part of the normal income tax process. As a credit, it’s calculated separately from an individual’s income tax, and paid regardless of taxes owed or withheld from income. As always, however, only a tax planner can render specific advice to anyone seeking the credit. For more information on the credit, contact a tax planner or visit the IRS website at: http://www.irs.gov.

Florida Realtors will update tax credit information and clarify details when available on the Homebuyer Center, part of floridarealtors.org at: http://www.floridarealtors.org/AboutFar/homebuyercenter/index.cfm.

Cynthia Shelton, 2009 Florida Realtors® president, shares the great news about the newly extended and expanded homebuyers tax-credit program.

• Watch the video now
  
  © 2009 Florida Realtors®

Florida’s existing home, condo sales up in September 2009

ORLANDO, Fla. – Oct. 23, 2009 – Florida’s existing home sales rose in September, which marks more than a year (13 months) that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®. September’s statewide sales also increased over sales activity in August in both the existing home and existing condominium markets.

Existing home sales rose 34 percent last month with a total of 14,419 homes sold statewide compared to 10,778 homes sold in September 2008, according to Florida Realtors. Statewide existing home sales last month increased 4.1 percent over statewide sales activity in August.

Florida Realtors also reported a 77 percent increase in statewide sales of existing condos in September compared to the previous year’s sales figure; statewide existing condo sales last month rose 8.9 percent over the total units sold in August.

All of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales in September; all but one MSA also showed a gain in condo sales. A majority of the state’s MSAs have reported increased sales for 15 consecutive months.

Florida’s median sales price for existing homes last month was $142,000; a year ago, it was $174,900 for a 19 percent decrease. Housing industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in August 2009 was $177,500, down 12.1 percent from a year earlier, according to NAR. In Massachusetts, the statewide median resales price was $315,000 in August; in California, it was $292,960; in Maryland, it was $265,862; and in New York, it was $205,000.

NAR’s latest industry outlook notes positive signs in the housing sector, but adds that extension of the federal first-time homebuyer tax credit would help sustain a fragile recovery. “Now that the market is showing some momentum, we have an opportunity to achieve a more rapid and broader stabilization in home prices,” said NAR Chief Economist Lawrence Yun. The outlook for home sales and prices depends on whether the tax credit is extended, he said, describing it as “the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit.”

In Florida’s year-to-year comparison for condos, 5,088 units sold statewide last month compared to 2,870 units in September 2008 for a 77 percent increase. The statewide existing condo median sales price last month was $102,500; in September 2008 it was $153,500 for a 33 percent decrease. The national median existing condo price was $179,300 in August 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 5.06 percent last month, a significant drop from the average rate of 6.04 percent in September 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s smaller markets, the Pensacola MSA reported a total of 275 homes sold in September compared to 267 homes a year earlier for a 3 percent increase. The market’s existing home median sales price last month was $135,000; a year ago it was $146,900 for an 8 percent decrease. A total of 48 condos sold in the MSA in September, up 41 percent over the 34 units sold in September 2008. The existing condo median price last month was $190,000; a year earlier, it was $180,000 for a 6 percent gain.

Big rebound in existing-home sales shows first-time buyer momentum. Read more.

© 2009 Florida Realtors®

Attention Homeowners: Property tax appeal fee could triple!

TALLAHASSEE, Fla. – Oct. 22, 2009 – Fighting property taxes would cost more under a push to more than triple filing fees imposed on taxpayers appealing their tax bills.

Property owners statewide can now pay $15 to appeal their tax assessments. Palm Beach County officials are calling for the Legislature to increase that statewide fee to $50.

This comes as more South Florida property owners are filing appeals to try to reduce what they owe in property taxes amid an economic recession.

The $15 fee isn’t enough to cover processing costs to consider appeals, according to Palm Beach County’s Value Adjustment Board.

Palm Beach County contends it costs about $43 per application to cover appeal costs that include holding a hearing with an independent magistrate who serves as a mediator.

Linda Phillips, supervisor of the Broward County Value Adjustment Board, said that her agency hasn’t calculated actual cost of processing tax appeals, but she knows it’s more than $15.

With the number of appeals increasing, the Legislature should boost the fee to $50, said Palm Beach County Commissioner Karen Marcus, who heads the county’s value adjustment aboard.

“People should be willing to pay what it costs to process,” Marcus said. “The rest of the taxpayers are going to have to subsidize them.”

The fee has been around for at least 20 years, Phillips said.

“We found a 1989 resolution that it was $15,” Phillips said. “It’s been $15 for a long time. It has not gone up.”

Meanwhile appeals have steadily increased over the last 15 years or so.

Appeals of property values used for tax assessments are increasing as more people grow frustrated that their property tax payments are staying the same or rising, even though their property values are dropping.

South Florida county property appraisers say their estimated property values are going down, but that property tax bills may remain the same or go up because of rising tax rates set by local governments as well as the differing effects of the state’s homestead exemption.

Appeals hit record numbers this year in Palm Beach County, which saw a 40 percent increase with 18,325 taxpayers filing to challenge their 2009 assessments.

In Broward County, the appeals increased 9 percent, to 32,411.

Miami-Dade County has yet to finish counting the appeals filed as of the September deadline. As of last week, about 69,000 petitions have been entered into Miami-Dade’s appeals system and the total is projected to far exceed the 70,000 filed last year.

Before raising the cost to file appeals, state legislators and local officials should look for ways to cut costs, said Robert Weissert, spokesman for Florida Tax Watch – a nonpartisan Tallahassee-based research group.

Too many times, state and local governments increase fees to help cover other expenses, Weissert said.

“We are seeing these fees raised more than necessary,” Weissert said. “It is absolutely vital that the citizens have an opportunity to challenge their property taxes.”

State legislators last spring resisted calls to boost property tax appeal filing fees, even as they changed state law to make the appeals process more taxpayer friendly.

In the past, county property appraisers benefited from a “presumption of correctness” that put the burden on taxpayers to prove that an assessment was wrong. Now county property appraisers have to go further to defend how they arrived at their numbers.

Changes to state law also now allow more leeway for property owners to file appeals late, if they can prove that an extraordinary circumstance, such as illness, delayed their application.

Copyright © 2009 Sun Sentinel, Fort Lauderdale, Fla., Andy Reid. Distributed by McClatchy-Tribune Information Services. Staff Writer Brian Haas contributed to this report.

A. The 2008 $7,500, repayable credit increased to $8,000 and the repayment feature was eliminated for 2009

A. Only first-time homebuyers are eligible – those who have not had any ownership interest in a home in the

A. Every dollar of a tax credit reduces income taxes by a dollar. Credits are claimed on an individual’s income

A. If the total tax liability before calculating the credit was $6,000, the IRS would send the purchaser a check

A. Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income

A. Not always. The credit phases out between $75,000 - $95,000 for singles and $150,000 - $170,000 for

A. A principal residence is where an individual spends most of his/her time (generally defined as more than

50%). Also defined as “owner-occupied” housing, it includes single-family detached housing, condos or coops,

A. There is no repayment.

Q. How do I apply for the credit?

A. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected

A. No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but

A. The credit is available for purchases before Dec. 1, 2009. A home is considered as “purchased” when all

A. Eligible homebuyers who make their purchase between Jan. 1, 2009 and Dec. 1, 2009 can treat the purchase

A. If you claim the credit but then sell the property within three years of the date of purchase, you are required

A few years ago, few people in the housing market had ever heard of a short sale.

Mention the term today and people, whether they are homeowners or real estate agents, just roll their eyes.

The Tampabay Business Journal statistics show that less than 10% of short sales even make it to the closing table in the Tampabay area.

The practice, which involves selling a property for less than the amount owed on the mortgage, has grown in popularity as an exit strategy for financially strapped homeowners because it doesn’t ding a credit report as deeply as a foreclosure. But because the transactions have to be approved by first and second lien holders, they are languishing. Some real estate agents try to steer clear of them entirely and even specify in their listings that a property is not a short sale.

The Obama administration is aware of the frustrations. In mid-May, Treasury Secretary Tim Geithner announced plans to streamline the process by offering financial incentives to mortgage servicers and investors that accept short sales, much in the same way that they are rewarded for refinancing or modifying troubled mortgages.

Four months later, homeowners, real estate agents and lenders are still waiting for specific details of how the plan would work. A Treasury Department spokeswoman said an update on the program is expected in a few weeks.

Meanwhile, homeowners like Dallas O’Day are in limbo.

O’Day, a Chicago attorney, and his family relocated from California in June 2004 and bought a Mediterranean-style home in Chicago’s Beverly neighborhood for $395,000. They rewired the house, stripped and refinished the wood floors and the woodwork and did other work to restore its charm.

Last year, personal circumstances prompted them to list the home for sale just as the housing industry’s meltdown was picking up steam. With no takers and no longer even expecting to break even on his investment, O’Day relisted the 2,700-square-foot home in January as a short sale.

Four months and three price reductions brought the house down to $384,900, at which point a potential buyer made an offer in late May. O’Day accepted it and submitted the paperwork to the lenders holding first and second mortgages on the home.

He has yet to receive a response. Meanwhile, the family has moved into a North Side apartment, the refrigerator has broken in the home and there’s evidence of mold in the basement.

“The only thing we keep hearing is they keep wanting current payroll stubs, bank statements and taxes,” said O’Day’s real estate agent, Pam Decker at Prudential Biros Real Estate in Evergreen Park.

“What has astonished me is that in the presence of one of the softest housing markets I can remember, we’re hitting up on four months and they’ve just had a person assigned to look at it, that they would move at such a glacial pace,” O’Day said. “My expectation is I’ll be renting until whatever blemish is gone. I’ve just accepted the fact that at some point it’ll be foreclosed upon because I just don’t think the banks will pull it together. I feel like I’ve done everything I can do.”

During the second quarter, 14 percent of all home sales were short sales and they were made primarily to first-time buyers who may have more flexibility to deal with the long wait times, according to a survey by Campbell Communications. The sales volume could be much greater. Two out of three short sales never close.

“In general, you have to have three offers for every completed short sale,” said survey designer Thomas Popik. “The first offer, the buyer walks before they get a yes or no. On the second offer they walk a good part of the time. The third offer is the charm because it’s been in process long enough at the lender that [the lender] knows they want to do this.

“Home buyers are now putting in half a dozen verbal offers, hoping that on one of them the lender will say yes. What this is doing is bogging down the approval [process] at the mortgage servicers. It’s just gotten to the point that everyone has started engaging in unproductive behavior. It’s a vicious cycle.”

The process of getting a short sale approved involves a packet of documents that includes bank statements, tax returns, letters explaining any other sources of income and a hardship letter explaining why a short sale is being sought.

After the packet is submitted to a mortgage servicer, it has to be entered into the system, a person has to be assigned to it, and an appraisal has to be ordered for the property. On average, it took loan servicers 9 1/2 weeks to respond to a short sale offer, Campbell’s survey found.

“You’ve got to stay on top of these banks,” said James Orrico, a real estate agent at Professional Residential Brokerage LLC in Oak Brook. “I call on my files every day. If you don’t stay on top of them, you’ll lose it.”

But not every real estate agent is willing to deal with the process. Online realty company Redfin doesn’t show or write offers on short sale properties “because of the slim chance that you’ll get the home,” according to its Web site.

A number of factors are contributing to the delay. Lenders say their top priority is keeping people in their homes, and their own and the government’s loan modification programs are taking the bulk of their resources.

“The modification [program] was just like an atom bomb that dropped on [servicers],” said Matt McCabe of National Short Sale Center, a company that acts as a negotiator between borrowers and mortgage lenders. “They had a really hard time reacting to that increased demand.”

Wells Fargo Home Mortgage, which services more than 8 million mortgages, said it has cut the average 60-day response time on short sale offers to 30 to 45 days.

“We’re not satisfied with that number,” said Tamara Swain, senior vice president of real estate owned and short sales at the lender. “The current goal is 15 to 20 days. This has been a big learning process of a function that wasn’t very prominent a couple years ago.”

Also delaying the process is that if a home can’t be saved, servicers are keen on trying to recover as much as possible for what could be multiple investors and that requires a fair amount of due diligence.

“The challenge is buyers always want to pay as little as possible and sellers want to receive as much as possible,” said Tom Kelly, a spokesman for JPMorgan Chase, which services 10.3 million mortgages. “The bank is the server in the middle.”

From a prospective buyer’s standpoint, purchasing a short sale property can be preferable to a foreclosure because if the borrower stills owns the home, he or she is likely to take better care of it.

However, with so many distressed properties for sale, and other homes selling conventionally at drastically reduced prices, there’s a wealth of inventory available allowing buyers to get a quick yea or nay to their offer. Some buyers make offers on multiple short sales or write the offers so they can walk away if a lender doesn’t respond within a certain time frame.

Xia Zhao and her family thought they’d found their next home when they walked into a Jefferson Park townhouse that was listed as a short sale. It was large and near her son’s school. However, they walked away from the offer after a month because they still hadn’t received a response and were worried they wouldn’t be moved in by the time school started.

Instead the family bought a new town home with a price that was cut by the developer in the city’s Old Irving neighborhood.

“I guess we’re not people with extreme patience,” Zhao said. “What if you wait for a couple months and this goes away? You have to start all over again.”

“Most people really aren’t in a situation where they can deal with the uncertainty,” said Zhao’s real estate agent, Eric Rojas at Prudential Rubloff. “Even when you explain that it’s not accepted until the bank accepts it and you build these safeguards into the contract, people are dropping out, left and right. These sales would get done, but people just can’t wait.”

Chicagoan Marie Cabrera, a real estate agent at Baird & Warner, is hoping she has found a purchaser with some patience.

After being unable to sell her own condo in the luxury Palmolive Building, Cabrera decided she didn’t want to simply wait for her lender to foreclosure on it. Earlier this month she listed it as a short sale, priced at $1.15 million. Within a week, she had a cash offer of $1 million that she sent to her lender.

“I have no idea whether the bank will take it,” Cabrera said. “I have an offer that’s solid and they’re willing to wait.”

Copyright © 2009 Chicago Tribune, Mary Ellen Podmolik. Distributed by McClatchy-Tribune Information Services.

Foreclosures and other financially distressed sellers accounted for about 30 percent of the market. Sales of homes under $100,000 were up 150 percent from a year ago. Sales of homes priced at over $250,000 were down nationally, with the biggest drop of nearly 40 percent coming among homes priced over $2 million.

Existing-home sales dipped unexpectedly last month after a four-month streak of gains, providing evidence that the housing market recovery remains fragile.

The National Association of Realtors said Thursday that sales dropped 2.7 percent to a seasonally adjusted annual rate of 5.1 million in August, from a pace of 5.24 million in July.

Sales, which were still up 3.4 percent from a year earlier, had been expected to rise to an annual pace of 5.35 million, according to economists surveyed by Thomson Reuters.

"We suspect it is just a temporary blip in the improving trend rather than a sign of renewed weakness," wrote Paul Dales, U.S. economist at Capital Economics.

First-time buyers purchased almost one in three homes last month. New homeowners will get an $8,000 tax credit if they complete the transaction by Nov. 30, which the credit expires.

"There is strength in the market and we will see stronger sales through November," said Patrick Newport, an economist at IHS Global Insight.

Lawrence Yun, the Realtor's chief economist, said the drop may reflect delays in completing sales due to tough lending standards and new rules for appraisals.

Nationwide sales are up nearly 14 percent from their bottom in January, but are still down nearly 30 percent from their peak nearly four years ago. For the housing market to stabilize, Yun said, sales would need to rise to a pace of around 5.5 million to 6 million per year.

If buyers see clear evidence of stable prices, the housing market recovery can be self-sustaining, Yun said, adding, "We are not there yet."

The median sales price was $177,700, down 12.5 percent from $203,200 in the same month last year.

With unemployment and foreclosures rising in the upper end of the housing market, "there will be plenty of more pain for higher-priced properties," wrote Joshua Shapiro, chief U.S. economist with MFR Inc.

In one positive sign, the inventory of unsold homes on the market fell to 3.6 million, from 4 million in July. That's an 8.5 month supply at the current sales pace, and the lowest level in more than two years.

2009 The Associated Press / CNBC.com

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1. Know what you can afford.

Review your monthly spending plan to estimate what you can afford to pay for a home, including the mortgage, property taxes, insurance, and monthly maintenance and utilities. Make sure you save for emergencies. Plan ahead to be sure you will be able to afford your monthly payments for several years. Check your credit report to make sure that the information in it is accurate. A higher credit score may help you get a lower interest rate on your mortgage.

2. Shop around--compare loans from lenders and brokers.

Shopping takes time and energy, but not shopping around can cost you thousands of dollars. You can get a mortgage loan from mortgage lenders or mortgage brokers. Brokers arrange mortgage loans with a lender rather than lend money directly; in other words, brokers sell you a loan from a lender. Neither lenders nor brokers have to find the best loan for you--to find the best loan, you have to do the shopping. For more information on mortgage shopping, see Looking for the Best Mortgage--Shop, Compare, Negotiate.

3. Understand loan prices and fees.

Many consumers accept the first loan offered and don't realize that they may be able to get a better loan. On any given day, lenders and brokers may offer different interest rates and fees to different consumers for the same loan, even when those consumers have the same loan qualifications. Keep in mind that lenders and brokers also consider the profit they receive if you agree to the terms of a loan with higher fees, higher points, or a higher interest rate. Shopping around is your best way to avoid more expensive loans.

4. Know the risks and benefits of loan options.

Mortgages have many features--some have fixed interest rates and some have adjustable rates; some have payment adjustments; on some you pay only the interest on the loan for a while and then you pay down the principal (the loan amount); some charge you a penalty for paying the loan off early; and some have a large payment due at the end of the loan (a balloon payment). Consider all mortgage features, the APR (annual percentage rate), and the settlement costs. Ask your lender to calculate how much your monthly payments could be a year from now, and 5 or 10 years from now. A mortgage shopping worksheet (33 KB PDF) can help you identify the features of different loans. Mortgage calculators can help you compare payments and the equity you could build with different mortgage loans.

5. Get advice from trusted sources.

A mortgage loan is one of the most complex, most expensive financial commitments you will ever assume--it’s okay to ask for help. Talk with a trusted housing counselor or a real estate attorney that you hire to review your documents before you sign them. You can find a list of counseling resources at NeighborWorks and on the U.S. Department of Housing and Urban Development's (HUD) website or by calling (800) 569-4287.