DC CLOUT "DC Area Real Estate Buzz"

Understanding Capital Gains in Real Estate

When you sell a stock, you owe taxes on your gain — the difference between what you paid for the stock and what you sold it for. The same holds true when selling a home (or a second home), but there are some special considerations.

How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate, follow these steps:

1. Purchase price: _______________________

The purchase price of the home is the sale price, not the amount of money you actually contributed at closing.


2. Total adjustments: _______________________

To calculate this, add the following:

• Cost of the purchase — including transfer fees, attorney fees, and inspections, but not points you paid on your mortgage.
• Cost of sale — including inspections, attorney fees, real estate commission, and money you spent to fix up your home just prior to sale.
• Cost of improvements — including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.

3. Your home’s adjusted cost basis: _______________________

The total of your purchase price and adjustments is the adjusted cost basis of your home.

4. Your capital gain: _______________________

Subtract the adjusted cost basis from the amount your home sells for to get your capital gain.

A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:

• You have lived in the home as your principal residence for two out of the last five years.
  
• You have not sold or exchanged another home during the two years preceding the sale.
  
• You meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.
  

courtesy Al Matlock real estate agent  Washington DC and Maryland - Realtor 

DC Residents First-Time Homebuyer Seminars - New Sessions Scheduled

Today, is a great time to buy a Home in Washington DC.

Learn How to Get your $8000  Obama First Time Home Buyers Tax Credit,TODAY.

1. Prices are down…  2. Huge supply to choose from… 3. Little or No competition… 4. Rates are at historic lows… 5. Lenders have money to lend… 6. The $8,000 (free money) tax credit… 7. HPAP is back online.  *lower assistance levels.. .If you want to buy a home in the District of Columbia there is Still help available.

7pm - 8pm Tuesday, May 5, 2009

Washington DC Cleveland Park Library  2nd Flr 3310 Connecticut Ave NW Washington DC 20008 Convenient to: Cleveland Park Metro Station (map)

7pm - 8pm Wednesday, May 13, 2009 Washington DC Southwest Neighborhood Library 900 Wesley Pl SW Washington DC 20024 Convenient to: Waterfront-SEU Metro Station (map)

This is a FREE one hour seminar with unbiased information. We will discuss the whole home buying process A-Z, with advice from an experienced Realtor....   Mortgage basic: rates, points fees Fees and closing costs.. The Tax Benefits of home ownership.

Learn how you can get up to $70,000 $40.000 (click here) towards the purchase of a new home.

Learn how you can get up to $7,000 $4,000 (click here)in closing assistance.

First time buyers Federal ($7,500) NOW: $8000 of FREE Money in the President Obama's Stimulus Package.. and DC ($5,000) tax credit.

Buyer Agency and choosing a realtor.. Make that dream come true. Register Now! click here  Sponsored by DC Clout

Obama's Foreclosure Help - the Homeowner Affordability and Stability Plan

President Obama's Homeowner Affordability and Stability Plan is designed to help between 7-9 million families avoid foreclosure by restructuring or refinancing their mortgages. The links below are the best sources for info on the specifics of the plan I have found... This is great. I see the sufferinbg up close almost daily...

Questions and Answers for Borrowers   From the The White House Briefing Room Blog

The New Housing Plan

President Obama's housing plan is expected to help as many as seven million to nine million homeowners by making it easier for them to either refinance their mortgages or renegotiate payments.  continue New York Times

Three Sample Cases   from the United States Department of Treasury

Homeowner Affordability and Stability Plan: Executive Summary - from StockMarketFunding.com

Homeowner Affordability and Stability Plan  Fact Sheet   From the United Stated Department of Treasury

Obama Administration's Home Mortgage Crisis Fact Sheet     From the Washington Post

courtesy Al Matlock Washington DC and Maryland Real Estate

10 Ways to Prepare for Homeownership

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

2. Develop your home wish list. Then, prioritize the features on your list.

3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.

4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.

6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.

9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.

courtesy DC/MD Real Estate Agent Al Matlock

Resolve to Get Your Home Documents Organized

As a homeowner, you begin to accumulate all sorts of records and papers the moment you made the offer on your home. Loan documents, inspection reports, title insurance policy, home improvement receipts, appliance warranties are just a few of documents that you may at one time or another need. Would you be readily able to locate these items? Are they filed away or in different junk drawers around the house? Knowing where these items are can save you a lot of time and even money in the long run.

Consider investing in a record-keeping system. It doesn’t have to be expensive. You can purchase an accordion file and label each flap with a different category. Then use the following tips as a guide to get started.

Contracts and Legal Papers
Keep all the papers signed and/or given to you at the closing together in one place, preferably in a safe deposit box. These documents include the deed, settlement statement, appraisal, disclosures, mortgage note, inspections and any other reports, and title insurance policy.  You will need these records again if you decide to refinance or sell your home.

Insurance Policies
Keep a copy of all insurance policies relating to your property together. This may include homeowners, flood and earthquake policies. With these documents, keep a list of insurance agents or companies and copies of correspondence related to claims.

Purchase and House Data
It’s also a good idea to keep a copy of the original listing of your house, comparable market analysis, floor plans, blueprints, and historical information. If you own a newly built home, keep a list of contractors and material suppliers as well.

Property Taxes
Keep your tax bills and record of payment for as long as you own the home and possibly even longer. You may need these items if your tax returns are ever audited.

Home Maintenance and Improvements
Records in this category include receipts for repairs or replacement expenses, names of contractors, contracts, and a log of maintenance tasks.

Warranties, Manuals and Receipts
These documents provide you with a proof of purchase date and determine service and parts guaranteed. In addition, the manuals usually provide care information so you can help ensure your household appliances are being properly maintained. You should keep your warranties, manuals and receipts for these items for as long as you own the appliances.

Home Inventory
If you were ever to lose any of your possessions due to fire, burglary, or vandalism, having a home inventory can help you avoid a lot of heartache and make it easier when filing an insurance claim.

Start with a sheet a paper for each room in the house. Go around the room and list every item. Don’t forget the attic, basement or other storage places. For each item, write the original cost, purchase date, replacement cost, model number, brand name, where purchased, and a general description. You can also use a computer software system so that you have an electronic copy.

Besides a written inventory, take photos or video of each room for visual documentation. It is also a good idea to arrange valuable collections, silver, jewelry, etc. and take close up photos. 

Keep a copy in your home files and the originals in a fireproof safe or safe deposit box. Make sure you update your home inventory photos and list at least once a year.

Organizing your home files may take a considerable amount of time initially, but it will definitely be time well spent in the event you need the documents later on.

courtesy Al Matlock Washington DC Real Estate Consultant

Washington DC Condo Sales for September 2008 by price

Price Range

Units Sold

Under $100,000	1
$100,000 - $199,999	22
$200,000 - $299,999	45
$300,000 - $399,999	47
$400,000 - $499,999	33
$500,000 - $599,999	13
$600,000 - $699,999	11
$700,000 - $799,999	8
$800,000 - $899,999	4
$900,000 - $999,999	0
$1,000,000 - $2,499,999	8
$2,500,000 - $4,999,999	2
Totals	194

courtesy of the DC Condo Guy            August Sales Here

Q: How safe is the money I've deposited into my bank account?

A: If you have $100,000 or less in your name at any FDIC-insured bank or savings association, you have nothing to fear. If you have certain types of retirement accounts, such as an individual retirement account, you're eligible for even more coverage -- up to $250,000 per account owner, per insured bank. Deposits at credit unions have similar coverage through the National Credit Union Administration, an independent government agency.

Q: What if I have more than $100,000 in deposits? Is there any way to get more coverage?

Answer at washingtonpost.com

Top U.S. Real Estate Markets For Investment - Washington DC ranks Second

1. New York City

2. Washington, D.C.

You wouldn't expect the District to have performed so well if all you've read about is overbuilding of residential properties in the exurbs. But office, multi-family home and commercial spaces have proved attractive enough to foreign investors to place it second in the U.S.--and tie it with London for second worldwide. The D.C. metro area continues to see strong business and salary growth, especially in Northern Virginia.

3. Los Angeles, Calif.

4. San Francisco, Calif.

5. Seattle, Wash

6. Boston, Mass.

7. Chicago, Ill.

8. Las Vegas, Nev.

9. Phoenix, Ariz.

10. Orlando, Fla.

source forbes.com

If Everyone’s Finger-Pointing, Who’s to Blame?

Everyone wants to know who is to blame for the losses paining Wall Street and homeowners.

The answer, it seems, is someone else.

A wave of lawsuits is beginning to wash over the troubled mortgage market and the rest of the financial world. Homeowners are suing mortgage lenders. Mortgage lenders are suing Wall Street banks. Wall Street banks are suing loan specialists. And investors are suing everyone. continue reading  nytimes.com

The Word For 2007 'Subprime'

Even the American Dialect Society knows how risky home mortgages are these days.

The group of wordsmiths chose "subprime" as 2007's Word of the Year at its annual convention Friday.

"'Subprime' has been around with bankers for awhile, but now everyone is talking about 'subprime,"' said Wayne Glowka, a spokesman for the group and a dean at Reinhardt College in Waleska, Ga. "It's affecting all kinds of people in all kinds of places."   source  usatoday.com