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k. JAY HAUGEN

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This website is a resource for our clients and a good place to keep updated on the market. From time to time we post stories our clients share with us about their real estate experiences that we think would be of interest to folks buying or selling property. We also post issues regarding interesting real estate laws or trends that are brought to our attention. Bookmark this page to see what's up in Arizona real estate! A BILLION Defined (see Below)

MARKET TRENDS ........Investors Beware
The hot topic everyone is talking about in Arizona is the real estate market. Since the Arizona Regional Multiple Listing System (ARMLS) has the largest number of units posted for sale and sold it provides helpful trend statistics. 2005 was a hot sales year but 2006, 2007 and 2008 are a different story and the principles of solid market advice are needed again when selling property.

The real estate market is currently going through some interesting changes that are similar to the supply and demand issues of the late 80’s and early 90’s. During that time I developed a “6 Step Property Selling System” to improve the odds of selling for property owners. Using this system I produced an 11 year track record of selling 100%. Those calendar years that did not contain an expired listing are labeled on the report as (JAY SOLD 100%). A 100% success rate for 11 years is rare as illustrated by the percentage of homes that sold, shown below on the MARKET STATISTICS report. More information regarding this track record can be found at SELLING TIPS here on the website.

If you want to see a PDF of the market statistics click on the link below. The report shows the years 1984 through 1994 and 2001 through the end of the most current quarter. Years 1995 through 2000 were not available. It is interesting to see the changes.

Market Statistics - CLICK HERE

Arizona Regional Multiple Listing System Reports

The information below is made available as a resource for further investigation and not provided as tax advise. Consult with your tax advisor to determine the impact of the following information on your tax liability

FORECLOSURE

Did you know that if you lose your house in a foreclosure the IRS can tax you for the foregiveness of the loan. In addition to talking with your tax professional the link below will help you start your research on the IRS possition regarding foreclosures.

IRS Information about TAX DUE from a foreclosure-CLICK HERE

A BILLION Defined There is a lot of talk about the government providing Billions of dollars of support to help resolve foreclosure issues. I thought it might be helpfull for taxpayers to understand how long it may take to pay this off, so here are a few definintions of a Billion and it's distant cousin the Trillion.

Billion =
A 1 followed by 9 zeros. 1,000,000,000
One thousand piles of a million things.
2.74 million years.
A billion seconds is 31 years.
A billion minutes ago was just after the time of Christ.
A billion hours ago man had not yet walked on earth.
A billion dollars ago was late yesterday afternoon at the U.S. Treasury

Trillion =
A 1 followed by 12 zeros. 1,000,000,000,000
One thousand piles of a billion things.
2,740 million years.
A trillion seconds is 31,688 years.
The country has not existed for a trillion seconds.
Western civilization has not been around a trillion seconds.

Forgiven mortgage debt tax relief. Addressing the subprime lending crisis, a late 2007 law changes provides tax relief for homeowners whose mortgage debt is forgiven. Prior to the enactment of this law, a homeowner could be taxed on the amount of forgiven mortgage debt. For example, before this law, an individual with a $200,000 mortgage whose lender foreclosed on the home and sold it for $180,000 would have had to report $20,000 of income from the forgiven debt. The result would have been the same if the lender restructured the loan and reduced the principal amount to $180,000. Under the new law, a taxpayer does not have to pay federal income tax on up to $2 million of debt forgiven for a qualifying loan secured by a qualified principal residence (e.g., one to buy or renovate a residence). (Code Sec. 108(a)(1)(E), Code Sec. 108(h)(2)) The change applies to debts discharged from Jan. 1, 2007 to Dec. 31, 2009.
You will have to fill out and attach IRS Form 982 to your return to get this new tax break, which is subject to some limitations on loan size and income.

Mortgage insurance deduction extended. Mortgage insurance premiums will continue to be deductible after 2007, thanks to another relief provision for homeowners. Originally, this deduction was available only for 2007. It now applies through 2010. (Code Sec. 163(h)(3)(E)(iv)) Basically, it allows taxpayers to treat amounts paid during the year for qualified mortgage insurance as home mortgage interest-and thus deductible in most instances. The special rule for home mortgage interest is phased out at higher levels of adjusted gross income (AGI). The insurance must be in connection with home acquisition debt, the insurance contract must have been issued after 2006, and the taxpayer must pay the premiums for coverage in effect during the year. [See Federal Taxes Weekly Alert 12/20/2007 for further discussion of this provision.]
If you itemize your deductions and pay for mortgage insurance, for the first time you will be allowed to deduct your premiums on your 2007 return in addition to any mortgage interest you pay. The one catch: your mortgage insurance policy must have gone into effect after Dec. 31, 2006. The deduction is also subject to income limitations.The premiums, plus the interest you pay on your mortgage, is entered on line 13 of Schedule A.

ATTENTION NEW HOME BUYER
Did you know your homebuilders warranty against construction defects is longer than the 1 to 2 years? This implied warranty protection is also extended to subsequent buyers of the home. In addition to any express warranties by the homebuilder, a homebuilder impliedly warrants the home against construction defects for a minimum of six years. A.R.S. 12-548 and 12-552.

NEWSLETTERS
February 2009


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