If you owe a debt to someone and they cancel or forgive that debt, the canceled amount may be taxable. Same goes for mortgage debts. Hence, the creation in 2007 of the Mortgage Debt Forgiveness Relief Act. The IRS explains the concept surprisingly well. This act expires in 96 days, the end of this year, after the holidays; much sooner than you realize.

People have been opining this whole year about the possible extension of the $1 billion mortgage debt forgiveness relief provision at the end of the year. I’ve been hearing the following:

“Should I short sell before the end of the year?”

“Can I count on the hopeful January 1 extension?”

“The $1 billion mortgage debt relief provision allows me to avoid paying taxes on mortgage debt forgiven by my lender, but it expires at the end of the year! My chance to short sell and still seek tax relief is disappearing quickly!”

“But I hear these holiday months aren’t as slow as one might think. Oh, no! I’m almost out of time to avoid the tax repercussions of selling my home short!”

Let’s be clear on what the act does.

The 2007 Mortgage Debt Relief Act allows taxpayers to exclude up to $2 million of forgiven debt on their principal residence in calendar years 2007 through 2012. With one caveat: The discharge of debt must be directly related to the decline in the residence’s value or in the financial condition of the taxpayer.

The Mortgage Forgiveness Debt Relief Act was originally going to expire at the end of 2010, but lawmakers decided to extend it until the end of 2012. If it does expire, anyone who receives mortgage forgiveness on day one of 2013, or after that, will have to face paying income tax on a forgiven debt.

Isn’t it in the President’s budget?
Didn’t it pass the committee level in the Senate?

Yes/But… We don’t know the outcome of the election in November and nothing is moving in Congress for the next 6 weeks. This time bomb very likely won’t be voted on before the end of the year, what with their attention consumed with the nation’s budget crisis.

Furthermore, given that it takes 3 to 6 months to close on a short sale…Are you really willing to take the risk that the act will be extended?

What’s the bottom line?

List now and be more certain that you will avoid that tax liability. I strongly advise you consult with a tax attorney!

[referee photo: compujeremy] [house photo: surprise truck]

This is part two of my little analysis of what you might want to consider when deciding between a house and a condo. So, let’s get right in to it.

1.      Gated security may be just what you’re looking for right now.

Perhaps you are living alone. Perhaps you like to know that there are people right next door. These are all legitimate concerns that condominiums (at least the good ones) seek to address.

Some questions to consider regarding security at condos:

• How careful is the management company with the common area keys or codes?
• Is the common are well-lit?
• Is the HOA paying for any live security? If so, how much does that impact the monthly assessments?
• When you look at the condo, does it look like the other condo dwellers take security seriously?

2.      Condos are often close to public transportation (the car-free life!)

One of the best things about urban dwelling is that you can leave that car in the garage, or just go without it completely.

Some things to consider when you’re looking for a condo:

• Some condos used to be apartment buildings and the parking may not always protect your car from the sun and weather while you are taking the light rail to work every day.
• The closer your condominium is to public transportation, the more likely that your condo will eventually sell for more.
• If you are thinking of the car-free lifestyle, also consider whether amenities such as groceries, the dry cleaners, and coffee shops are near-by.

3.      Condos maintain all the goodies: pools, landscaping, general maintenance.

 Especially on those hot summer days, it’s a great relief not to have to maintain your own landscaping, or pay somebody else to do it. This is especially helpful if the condo has a pool. Maintaining a pool at a detached residence house can cost thousands every year, and you may not even use it 10% of the time!

Some things to ask yourself before you buy a condominium**:

• Is the current HOA solvent? Do they have enough to properly maintain all of the features they promise when you buy?
• Who manages the property? Many HOA’s pay a management company to take care of details such as landscaping contracts and maintenance.
• How long has that company been working? How many properties do they maintain? What do the current residents think of their work?

** You can have a chance to ask these questions during the inspection period.

 4.      What is an assessment and what is expected of you in an HOA?

An assessment is a monthly fee on every unit in condo that goes in to a pot to pay to keep the place up. If you don’t pay your assessments, the HOA can record a lien against your property. If you have a lien against your property, you can’t finalize the sale of your condo to another person without paying off that lien.

The more units vacant in a condominium, the harder it is for the HOA to pay the bills.

Also, if there are outstanding big projects or maintenance issues on the condominium, or if the HOA board is not wise with its money (your money!), your assessment might go up every month.

Learn what you can about the HOA board, before you purchase a condominium.

5.      What is a CC&R?

CC&R means “Covenants, Conditions, and Restrictions”. It means, basically, that all of the people in a Home Owner’s Association agree that their property came with (and will go with, in the future) certain conditions and restrictions.

In other words, condo owners can’t just do anything they want with their condo.

CC&R’s outline everything from how often the board meets, to what is considered common property.

When you buy a condominium, inspecting the CC&R before your purchase is just as important as inspecting the condo’s wiring!

If you are part of an HOA, read what is expected of you in the CC&R’s. The best way to protect your investment is to stay involved in the HOA.

For those looking to relieve some pressure from the uncertainty of when to swing their buy-it-now bat and make contact with the house-ball, the number of listings  are creeping up again, wouldn’t you know it. (See the brown line in the “Monthly Average Sales Price” chart below).

Why is that, you ask?

Houses are being scooped up really quickly right now.  This is no exaggeration: good homes are selling within 24-48 hours now. I’ve seen how frustrating it’s been for some of my clients when they don’t get the properties they offered on.

So… Here are five things that I am asking my clients to do to increase there chances of getting the property that they want. (There are other things, but I can’t give away all my trade secrets!)

1.  Check MLS in the evening, rather than the morning.

Most agents don’t get up early and post new listings. They do it at night. I try to check for new listings in the evening for this reason. If you see something you like, shoot your Realtor an email.

2.   Look closely at the neighborhood on the Internet before visiting the property.

If you are looking at one property in a neighborhood you don’t like, you might miss another property that you do like. So, let’s use the Internet to our advantage. Type the address of the property in to Google Street View and have a look around. We agents already have an opinion of the neighborhoods that we know. But we can’t always predict what you like.

3.  View the property within hours of identifying it, not days.

My “Get Your PHX Team” is adapting to the market conditions. When a property comes on that one of my clients wants to see, the member of our team who is available immediately will try to get them in to see the property, quickly.

4. Have your prequalifcation letter or proof of funds ready.

Realtors cannot show properties unless the buyer has all their financing sorted out. In this market, we need to make decisions in hours. Further, sellers want to verify the buyer’s purchase method. So, everything has to be ready to go.

5. Print/Scan/Fax

These days, we are allowed to sign contracts, then scan or fax them. For this reason, I have my team carry blank contracts to a property in case a buyer wants to make the offer immediately. However, if we don’t write a contract on the spot, we may need the buyer to print/sign/return documents quickly. If a buyer doesn’t have this capability at their office or home, it’s important for them to let us know before we view properties.

The rush that we Realtors feel in this market is frustrating. We understand that nobody likes to feel pressured. Yet, we want the buyer to get what they need and we sincerely appreciate their patience and accommodations. By doing these five things, we are more competitive in getting buyers the property they want.

[image: woodleywonderworks]

Many of you know the role that monOrchid played in the establishment of First Fridays over 13 years ago, back when people still hosted raves and Clinton was still President.

You could not do First Friday without stopping first at monOrchid.

The recession slowed business for a while, but owner Wayne Rainey powered through with a rag tag fleet of artists, architects, designers and the like. Now he is announcing new additions and new incentives to his “creative  co-lab.”

First, for the uninitiated, a creative co-lab is a space where you can have office space at a great price and access to other folks in your industry. While you don’t necessarily need to be an award winning photographer, for instance (I’m not and I’m in here!), being here gives you access to folks with whom you can collaborate, market and create new ideas.

You also have free access to the conference room, wireless and a kitchen. Soon to come is a media room where you can print, cut, copy and touch-up. You can also have access to the industry standard cyclorama and event space.

The folks over at Co-Hoots have proven recently that there is a huge market demand for this and we all share the same vision for a creative hub in downtown.

So, what is new? First, the Songbird Coffee and Teahouse plans to open by July 9th, which will greatly increase foot traffic and give you the much-needed caffeine to get through your busy day.

Second, a bunch of us are moving in to help make this dream a reality: Get Your PHX, Stacey Champion and Cesar Chaves Design are the most recent.

Third, the massive loft spaces, which can be broken up in to affordable creative stalls, are available with a new price structure.

Finally, if you sign a contract between now and August 30th, you will get 25% off event space and studio rental for a year.

This is your chance to get inexpensive bricks and mortar in a reinvigorated downtown establishment.

See this link for floor plans, availability and prices.

Please call me at 602-456-9388 or ken@getyourphx.com for more information.

According to our friend Jeannie Bolger, Sr. Loan Officer for Nova Home Loans:

Back in April the Federal Housing Administration announced they were going to change the requirements for all FHA buyers with $1000 or more in collections–anyone with unsettled, unpaid, or unresolved disputes–must be paid in full.  The requirement was scheduled to start this Sunday, July 1st. But as of HUD’s June 15 Mortgagee Letter, they have rescinded the requirement.

What was the new July 1 requirement going to mean to home buyers who plan to use low-down-payment FHA financing, other than making it more difficult for everyone to get FHA loans? For one, it was going to complicate the process of qualifying for an FHA loan. (As if borrowers did already have enough problems with approval delays!). It would have likely reduced the qualifying amounts.

Unfortunately, many lenders wrongly pre-approve borrowers because the loan officer wasn’t paying close enough attention to things like these new, often overlooked collections requirements. This leads to borrowers getting denied on purchasing a home while they are still in escrow. Which means their earnest money is in danger of being lost.

All because of something most people are unaware  of that’s tucked away in their national credit bureau files: Medical bills, old student loans, retail purchases, any debts reported as unpaid. It wouldn’t have mattered if these debts were incorrectly reported to collection agencies, or if the borrower had currently high credit scores and income.

“Fortunately, these new collections requirements have been rescinded. The current guidelines are as follows”,  said Jennie Bolger.

Collections:

Manually Underwritten Loans

Collections indicate a borrower’s regard for credit obligations, and must be considered in the creditworthiness analysis. The lender must document reasons for approving a mortgage when the borrower has collection accounts. The borrower must explain, in writing, all collections. FHA does not require that collection accounts be paid off as a condition of mortgage approval.

TOTAL Scorecard Accept/Approve Recommendation

Collection accounts trigger neither an explanation requirement nor a hypothetical monthly payment to be used in qualifying borrowers. The presence of collection accounts in the borrower’s credit history already result in lowering the credit bureau scores used in TOTAL and, thus, no further information need be provided by the borrower.

Disputed Accounts:

TOTAL Scorecard Accept/Approve Recommendation

If the credit report reveals that the borrower is disputing any credit accounts or public records, the loan must be downgraded to a manual underwriting review by a DE underwriter–

–unless any of the following circumstances apply to the disputed account:

o It has a zero balance

o It’s marked as “paid in full” or “resolved”

o It’s less than $500 and more than 24-months old

Nova Home Loans has a Credit Services Department that can—for free–assist you with any Collection, Charge-off, Disputed Account and Judgment questions; and help you get your FHA/HUD loan approved.

Please call Jeannie Bolger, Sr. Loan Officer for assistance. 

Jeannie Bolger, Sr. Loan Officer

Licensed Mortgage Consultant #194387
Nova Home Loans
2850 E. Camelback Road, #270
Phoenix, AZ 85016
602-550-8674  Mobile
602-385-4812  Office
602-464-7322  Direct Fax
jeannie.bolger@novahomeloans.com

I was recently introduced to the 2012 Centennial Edition of the Bicycle Map and Phoenix Historic Neighborhoods  (PDF).

It was created under the guidance of Joseph Perez, the city of Phoenix Traffic Safety & Bicycle Coordinator (May 31, 2012 video), so I had high hopes for what Joe might bring to the mix.

I’m hoping people using the map will see the close proximity of the historic districts, bike trails, canal paths, and light rail stops, and think, ‘I should move here. It’s so close to everything,’  Perez told me when I asked him about it.

As it turns out, I live in the Campus Vista historic district and own a bike, so I felt endowed with certain unalienable rights to… put this map to the test.  Campus Vista is one of the 35 historic districts profiled, colored, numbered for easy recognition in this unique little fold up map. My neighborhood (light blue, #4):

Campus Vista. The opening of a new campus for Phoenix College in 1939, just outside city limits, created a demand for nearby housing. Bordering on the eastern and northern campus, the homes in this district represent a heterogeneous collection of mid-20th century domestic architectural styles.

Eager to start my journey, I head east on Thomas until I reached the yellow dots at 5^th ave and head south. This dedicated bike lane takes me through a dark orange neighborhood, one of my favorite places to buy and sell homes, and one of the most popular historic areas to walk, drive, or bike through: the Willo District.

Showcasing a wide variety of home styles including Tudor, Spanish Revival, Bungalow and Ranch, Willo is one of the largest historic neighborhoods, with majority of construction having taken place during the 1920’s-1930’s. Significant architectural changes in Willo can be marked  in the neighborhood starting with the earliest development near McDowell, and progressing north toward Thomas.

As I leave Willo, I cross south at McDowell and enter the Roosevelt District,

The first Phoenix neighborhood to be designated a historic district… A typical “Streetcar” neighborhood, its narrow and deep lots often showcase both California and Craftsman Bunaglow.

It’s a wonderful ride and I slow my pace even though it’s over 105 degrees out. (One has to have priorities, you know.)  A bit later, I follow the dedicated bike path over the I-10 freeway, then stop as I’m struck by the proximity of the majestic Kenilworth Public School building (and not just because I see my name is in it).

View Phoenix Historic Districts in a larger map

I’ve reached Fillmore. The map shows my path as orange dots, a “Bike Boulevard” that leads east through central Phoenix to 7^th street and the Garfield Historic District–- “modest bungalows, Period Revival homes, turn-of-the-century structures and a concentration of Pyramid cottages.”

A bike boulevard is designated visually on the road by ‘sharrows’, two white parallel arrows over a large white bicycle that make it obvious the road is to be shared with bicyclists. This summer, the Bike Boulevard (begun in a public meeting in 2010) will be completed when it reaches the Grand Canal Trail at 33^rd street, leading bicyclists from there into Tempe. (Read the full story here.)

SRP has plans to install a pedestrian bridge this year,” said Perez.  “To help connect the boulevard to the Grand Canal Path immediately east of Indian Trail but seperate because of an irrigation ditch.” [update: the bridge is now complete at Garfield & indian Trail!]

If you’re a bit skittish about sharing the road with cars, like I am, you might reconsider when you read Taz Looman’s Blooming Rock post, “Why I Converted from a Sidewalk Cyclist to a Street Cyclist”.

Well…Bike Boulevard and the land of Garfield awaits…I’m off!

You have to give it to them. Despite upcoming triple digit temperatures, the Phoenix Bike Community never stops peddling.

And why would they? All Valley Metro buses are equipped with bike racks and the city is finally expanding bike lanes to help support this very green form of travel.

And I have to say finally! I remember about 12 years ago I tried to ride my bike to work from the Willo neighborhood to downtown. I was certain every morning that I was going to die. The drivers would buzz me as if to say, “yeah, buddy, we’re gonna enforce this here no-ride zone.”

Anyway, in Celebration of the city’s growing bike scene, Twenty-five top local graphic designers will show their original bicycle-themed poster artwork for Third Friday festivities and through the month of April by appointment all leading up to Pedal Craft.

The one night event will feature lots of bikes, plenty of beer, and a bike themed poster show highlighting Phoenix bike culture. Throughout Phoenix, bicyclists, walkers, and pedicab riders will be visiting downtown Phoenix restaurants that have installed bike racks and are offering special menu discounts for PEDAL CRAFT PHX participants. Those bike racks were created in part by SideWalk Phoenix, a newly formed advocacy group for walkable, bikeable, and livable communities, will display a dozen one-of-a-kind bicycle racks designed by local artists and metal sculptors.

SideWalk Phoenix will be raising awareness and funds at Pedal Craft to create a temporary infill “pop-up” park at the quarter-acre Ro2 Lot at 1005 North Second Street. According to Pedal Craft Co-organizer, Jim McPherson,  “Fun, community-minded events like PEDAL CRAFT PHX help to raise awareness and, knock on wood, support for much needed bicycle transportation initiatives in the Valley.”

These are great community organizations and members working together for the great phoenix area. I’m inspired every time I see a new project like this come together.

THIS, my friends, is why people are flocking to Phoenix.

I am a bit intense about recycling. I pick up batteries on the ground when I see them. I drive my recycling to my friends houses because my misguided HOA board refuses to make that a priority.

Most Phoenix resident receive  a recycling bin with their house for all their recyclables. (It is a shame that the city does not recycle for condos, apartments and businesses, but that is something we need to work on.)

But what about all those items you can’t recycle in the regular blue bin?

Light bulbs, car batteries, foam packing peanuts, bubble wrap; none of these items go in the blue can. But throwing them away isn’t an option either. So what do you do? Well, there are recycling options all over the valley for items like these and you can find out where at the click of a button. Earth911 finds recycling options in your area, no matter where youare in the country.

Many of us use compact Flouresent Lightbulbs. Making this change will help to use less electricity at home and prevent greenhouse gas emissions that lead to global climate change. But what do you do when the bulb, which contains mercury, burns out? The EPA recommends that consumers take advantage of available local recycling options for compact fluorescent light bulbs. EPA is working with CFL manufacturers and major U.S. retailers to expand recycling and disposal options.

Keep Phoenix Beautiful has been in Phoenix since 1982 to promote the preservation and protection of our environment through cling initiatives and education, litter reduction, beautification, and community improvement activities. You can keep up with them for news and events about your area.

Have pride in your neighborhood! Keep it clean and safe!

Over the years, brokers have gotten a bad wrap. I work with people everyday who want to go with big banks and credit unions for their loans (because they haven’t done anything wrong in the past few years, right?).

Just recently I had a client who went with a big credit union for her loan, and 7 days before close of escrow, they decided to pull the loan because the bank had issues with the HOA. Lucky for us, Jeanie Bolger from Nova Home loans came in and saved the day. I can’t tell you the number of times this happens.

Here is what I learn and I want to share with anybody who is thinking about finding a lender:

1. Big banks are just that BIG. They’ve got lots of red tape and work to get through everyday, before they even think about giving you a loan. On the other hand, a mortgage broker is a certified professional who seeks the best mortgage terms for you by accessing a network of lenders that includes major banks, trust companies, credit unions and finance companies.
2. Big banks and credit unions tend to be more conservative on loans. So, if you have something out of the ordinary going on, like a second property, a divorce or a spouse with bad credit, stay away from the big banks, especially.
3. Underwriters work fast with Brokers. Jeannie’s brokers are in the same office, so she can work with the underwriter to make sure everything they need and you need is in place. Jeannie can physically walk down a hall and ask an underwriter a question about a loan and get an answer right away. They can’t do that in the mega bureaucracies.

I recently worked with Lonna to find a home downtown. Lonna wanted to go with a credit union because they had given her pre-approval. One week from closing escrow, the credit union pulled the loan and we once again turned to Jeannie.

Lonna loved working with her. “Jeannie answered all my questions immediately and spoke to me like she was trying to help. It feels like your being interrogated when your with a Credit Union, like you’re just a case number, but with a broker it was like they cared.” Once Jeannie took over, it only took two days from when the underwriter received the application to approval.

So, let me be clear: from the time we started to the time we close, Jeannie swooped in and got it all done within 5 days! Its gotta be a record!

So if you’re thinking of buying a home in downtown phoenix, use a broker. Heck, Call Jeannie!

Or call me for more information about the market: 602-456-9388.