Should the Mortgage Interest Deduction be eliminated?
Would you be a home owner if you could not write off the mortgage interest?
There is a lot of talk on Capitol Hill about eliminating the Mortgage Interest Deduction (MID). The federal government is facing a huge gap between the money they take in versus what they spend. I know there is a ton of waste going on in the government but that is a discussion for later. The fact is, law makers are looking to get more money from us tax payers and just about every tax deduction is on the table for elimination or overhaul. According to CNN Money, MID is costing the government $573 BILLION in tax revenue from 2009-2013. Can’t you see them rubbing their hands together, with an evil laugh and drooling when they see that number?
Looking further into what the MID includes, I think there are some things that can be done to the MID without eliminating it completely. Did you know a second home’s mortgage interest can be deducted? According to the IRS, a second home is considered a second residence and not an investment property. If you have a second home you are probably making enough money to lose that the tax deduction on the second home. Did you know that a yacht qualifies as a second home? Me neither. I get that some people choose to live on a boat and it actually sounds kind of cool. What I don’t get is that you can claim that yacht as your second residence and get a tax break on the mortgage interest. Come on now! I don’t think eliminating the yacht interest write off from the tax code is going to have much effect on the rich or super rich buying a yacht. They all still want to be on their boat feeling like Captain Jack Sparrow or screaming “I’m the king of the world” from the front of it. Well, at least that’s what I would do.
I don’t see how the elimination of the MID helps the home owners or the already fragile Real Estate market. I am sure there are other things that can be done to modify the MID in the tax code (the National Association of Realtors is 100% against changing any of it) but I think a complete elimination of the MID is a bad idea. There are many homeowners that are still making payments on homes that are worth 50% of what they owe because the tax deduction makes it worth it for them. Would you still pay on your upside down mortgage if can’t use the deduction? If you are in the market to buy your first home, would you still want to buy if there was no more MID?
How NOT to market a Short Sale
Driving around yesterday I found a home for sale near where I live in Elk Grove. It’s in a great location that’s really close to a park, school, golf course, etc. As I pulled up I could tell it was one of the biggest homes on the street, but I could barely see it. The grass, or weeds I should say, were 3-4 feet high! From the street you could see the garage and the second story but that was it.
So, being the curious Realtor I am, I went back to the office to see if if this property had any offers. According to the MLS, this property has never had any offers, it’s been on the market for almost a year and it’s the lowest price home for it’s size in the area. In the listing there was no description written by the Realtor and the pictures show the house is filled with garbage. What the?
If you are considering a Short Sale here are some things NOT to do:
1. Don’t abandon the home – If you are going to stay in the area, try to stay in the home. Buyers don’t mind to seeing a home while someone is living there, especially if it is being maintained.
2. Don’t trash the home – If you have to move make sure you take all of your belongings. Nothing make a home show worse than trash being left behind sitting in a hot, vacant house. It looks bad and probably smell bad too. Yuck!
3. Don’t treat the listing differently – When you short sale, you are not going to cash out any equity like you would have six years ago. That does not mean you shouldn’t keep it clean or you shouldn’t expect your Realtor to market the heck out of it. Make sure your Realtor has a marketing plan. A sign in the yard and a couple pictures on the MLS are not good enough. The better it shows the quicker you will be able to sell and move on to the next phase of your life.
If you have been following Real Estate news at all (it’s hard to get away from it) you know the market is mostly REO/bank owned properties or short sales. With all the bad news surrounding housing, I think homeowners have lowered their expectation on how they should sell their home or what to expect from their Realtor. In this market, the better a home shows and the better the marketing, the quicker it will sell and you can move on with your life.
First Look: Inside the $75 Billion Plan to Save Housing
A look at the number of trial loan modifications that have succeeded since the government launched its program last June, with CNBC’s Diana Olick.
Approved in 2 weeks!
Just wanted to highlight some of our success stories from 2009 – this listing was the highlight of the year! It only took us 2 weeks from the time we had an offer on the property to get the lender to approve the short sale! The sale of this property allowed the seller to get out of an over-leveraged situation so she could focus on her health and family.
Sold 5/4/2009
7507 Westover Ct.
Fair Oaks, CA 95628
Fresh Start In North Natomas
Now PENDING SALE!!!
5763 Spenlow Way, Sacramento, CA 95835
Just Sold!!!
50 Regency Park Circle #11106, Sacramento, CA 95835
Dear Neighbors:
These days good news is sometimes hard to come by. We wanted to share some fantastic news from two of our clients and your neighbors. Both sets of clients owed more on their homes than they worth and they felt stuck. After shrinking incomes and rising costs, both sets of clients needed a fresh start. We were able to guide them successfully through the sales of their homes—we even negotiated with their lenders for them to accept less than what was owed on their mortgages! Now, both clients have that fresh start they were looking for!
To celebrate, we’re offering everyone in the neighborhood a FREE November 2009 Report on Natomas Home Prices. If you’re curious about what your Natomas home may be worth, here’s an easy way to find out what homes like yours are selling for in today’s market.
Plus: Get a free report with up-to-the-minute statistics based on all the homes for sale and sold in Natomas over the last six months in all price ranges.
To get your free November 2009 report on Natomas house prices, just call 888-873-4007, ext. 12 for a 24-hour free recorded message, or go to click here: www.24hrhomeprices.com/northnatomas.
Chris & Mari Medina
Realtors, CDPEs
CA DRE Licenses: 01427762, 01817017
Re/Max Gold, 916-436-5205
www.findmysachome.com
Interactive Map – Foreclosure Rates, Unemployment Rates & Median Income
Here’s a great tool published by NPR! It’s an interactive map that tracks national August 2009 Foreclosure Rates, Unemployment Rates & Median Household Income statistics. Click here for the link.
Great News for Buyers!
Housing statistics are just out for 2nd Quarter 2009 and the verdict: while median home prices increased a slight percentage in some areas for the month of July, prices are still lower now than they were a year ago. In the Sacramento area, we saw a year over decrease of -22%. And prices have begun to stabilize in our area for the time being. For more on the article, see: http://bit.ly/WaWP5.
