For those of you that bought a new home in 2007--in the state of Florida, March 1, 2008 is the deadline for filing for your homestead exemption. You will need to go to the property appraisers office to do this. March 1 is this Saturday, so you have until close of business on Friday to file.

The same deadline also applies for the portability of the homestead exemption if you acquired a new homestead and sold or moved from the previous homestead.

Previously the homestead exemption allowed you to get $25,000 off the assessed value of your home, lowering your tax bill. This year that has increased to $50,000 on homes worth at least $75,000, so taking a few moments to file this paperwork can save you a considerable amount of money.

Remember, also, if you are a disabled veteran, you also get an additional $5,000 added to your exemption. Benefits also apply if you are widowed as well.

There is also a 10% cap on non-homesteaded properties, however, it does not apply in 2008.

For Okaloosa County, Florida, the link for more information is:

http://www.okaloosapa.com/index-exempt.html

To find property appraisers in other counties in Florida, follow this link:

http://dor.myflorida.com/dor/property/appraisers.html

A relatively new term coming to light in real estate is called Short Sale. I'm asked what is a short sale and how does it work.

A short sale is when a home is sold for more than is owed on it. It's an alternative, or rather, a step prior to going through foreclosure. Chances are that if the house is selling for less than what is owed on it, the current market value won't support the current loan amount. The seller will need to work with their lender, and find out what needs to be done to accomplish a short sale. When a realtor is involved, the seller can sign paperwork allowing the realtor to discuss negoations directly with the lender and their loss mitigation department.

In buying a short sale house, not only does the seller have to approve the offer, but so does the bank/lender that is holding the loan. Because of this, buying a short sale house may take longer than the average (approximately 30 days) to 60-90 days--sometimes longer--depending on the lender. Some of these homes can turn out to be very good deals, but as with the purchase of any house, it is best to do your due diligence--get an inspection, check things that are pertinent to you as a buyer, find out what your taxes and insurance will be and work closely with your own lender and Realtor.

So how does a short sale affect the seller? In the past, if a seller sold their home for $50,000 less than what was owed, the bank/lender would send the seller a 1099 at the end of the year identifying this $50,000 as income you received and then you would owe taxes on that $50,000. Due to the recent upswing of foreclosures and shortsales, though, this has recently changed, and banks are supposed to be forgiving these amounts. It's best to check with your tax professional first to find out what your specific circumstances are--everybody's tax situation is different. Information can also be found at www.irs.gov and searching on "short sale."

If you have further questions, feel free to email me or give me a call!

I've been getting a lot of questions lately about how does a person know if it is better for them to buy or rent. There are times when it is much better to rent for a while--usually if you expect to be in a place temporarily it's better to rent. If you plan to stay in one place 4-5 years, or more, financially you are better off buying a house.

Many people assume they don't qualify for buying a house, but they haven't talked to a banker or mortgage broker to find out what their status is. There are as many variables in a person's finances as there are people, so there is no cookie cutter answer, which is why it is best to talk to a banker or mortgage broker--maybe even more than one--I've worked with people that have been told previously they don't qualify to buy a home, yet, within a month of being told this, and a different lender, they were approved and moved into their new home.

Buying a house is the first step many people take towards long-term wealth management. Think of it this way, if you rent for 30 years, all the while your rent is going up, maybe not very much, but it seems every time you get a payraise, it goes straight for the increased rent. With a fixed rate mortgage, the money you put to the mortgage each month pays down the equity in your home. After 30 years, you own this property and have more options than you would had you rented all that time. I have a friend who's husband passed away after 40+ years of marriage. They lived in the same house for 28 years--renting. On her social security, she could no longer afford the low rent (the landlord rarely raised the rent as they were such good tenants!), so out the door she had to go...with very few options. She's angry because had they bought that same house 28 years earlier, she would have had so many options--even to rent out the other rooms in her house to pay off the last 2 years of her mortgage...and then have a place to stay rent-free the rest of her life...

The following is taken from the Florida Association of Realtor's website, and the full article link is below;

For someone who plans to stay put more than two or three years, home ownership usually makes more sense financially. The key benefits include annual tax benefits, "forced savings" from paying down the mortgage and potential appreciation in value. "Owning a home is one of the best builders of wealth," says Todd Nordstrom, a sales associate with Esslinger Wooten Maxwell, Miami Beach. "There is a huge difference in net worth between renters and owners." In fact, the most recent Federal Reserve Survey of Consumer Finances shows the median net wealth of a homeowner household is $171,700 compared with just $4,800 for a renter household.

http://www.realtor.org/PublicAffairsWeb.nsf/Pages/TPHousingasanInvestment

Enjoy!

Many people ask me if this is a good time to be buying or selling real estate. Some people try to "play the market" like buying stocks and bonds. One thing to remember when buying real estate is to figure out what your goal is first. Then you have to keep in mind that buying a home for any reason is a long-term investment.

If your real estate purchase is to be your primary residence, it is more than a financial investment, it is emotional, and it's practical, and it's where you are going to be spending the majority of your time when you are not at work. For those of you fortunate enough to work from home, that's a LOT of time. You'll be building memories for you and your family--whether your family consists of humans or animals--or both!

As a buyer, consider this, you have to live somewhere, so if you're paying a mortgage, why not it be yours? If you're paying rent, you're paying someone else's mortgage. You do have more responsibilities as a homeowner than a renter does, however, you don't have to get permission to paint, or make changes to your house. You get to live by your own rules, and not your landlords rules.

When you own a home, you have the advantages of writing off the interest you pay on your mortgage on your tax return. In the first few years, this is a considerable amount. You can also write off the property taxes you pay. This amounts to most of what your monthly payments are. You can't write off rent. At least not in the State of Florida.

As for selling property in the current market, some are concerned that "this isn't the time to sell," and "we haven't seen the bottom yet," or "it's going to take a long time to recover." We all need to keep in mind, though, that anyone you talk to or listen to, or the articles you read, including mine, are just opinions. Not one of us has a crystal ball that can tell you for sure what will happen next week, month or year with any definitive guarantee. The two things that sell a property are marketing and price. The realtor you choose has control over their marketing efforts and how they get exposure out there for selling your home. You, as the seller, have the control over changing the price of your home if you are not satisfied with the showing activity.

Whether you are a buyer or seller, you, like everyone else, want to get the best deal they possibly can. For some buyers that might be the features in the home, others it may be the price of the home, many times it's the payment and terms of the payments, and for everyone it is varying combinations of these things. For those same homes, and the sellers, it may not only be the price, but other unique circumstances, like needing to wait 60-90+ days to close, or closing as quickly as possible.

To be honest, the best time to buy or sell real estate is "yesterday." As long as you don't treat buying and selling real estate like stocks and bonds to be bought and sold quickly and on a whim, you'll be fine. Make sure you do your homework on what the current local market conditions are when you are ready to buy or sell, and don't be afraid to ask a lot of questions!