Did You Get Your 1099 On Your Short?

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2011

If you’re one of the unfortunate people who had to sell their home on short sale in 2010 because you owed more than what your house was worth, check your mailbox and see if the previous lender(s) have sent you a 1099 form to file with your tax return next month.  That form is evidence that your lender(s) forgave your debt when you sold the property. If you didn’t get the letter, you may be chewing your nails for years to come.

            Let’s say you sold your home last year for $200,000 but you owed $250,000. The Realtor who helped you sell the property worked with you and the bank to negotiate the mortgage down to a level where the home could be sold and not go to foreclosure.  It worked! You walked out of the closing without any money, but you also got out of $50,000 of debit. Um, maybe not.  Revisit your documents from the closing and the short sale negotiations with the lender.  But, IF the lender forgave the deficiency (of the $50,000 example), you will have a 1099 form that counts the $50,000 towards your ordinary income in the year of your short sale.  Not to panic because a law passed in 2007 allows the owners of primary residences to not pay taxes on that deficiency. Don’t quote me on tax matters though-talk to the IRS or your CPA.

            Here’s the nail biter: IF you didn’t get a 1099 a lender may be coming after you for that $50,000 in years to come.  Most people who are upside down on their home often have a first mortgage and a second mortgage. Lenders can file against you for the deficiency amount for up to six years after you sell your home. Lenders can file within three months to claim that deficient amount after a sale  if they have a first mortgage against you. If they don’t file, they lose the right to file. The second mortgage can take up to six years to file against you if they weren’t the one who initiated the foreclosure proceedings.

            If you think you may be haunted by a lender coming after you once your property was sold, talk to a legal professional. There are plenty of legitimate non-profits out there to help you get the facts.  You may have to consider filing bankruptcy to get rid of that debt. Whatever you do, don’t sit on your laurels and think just because you sold a home on short sale that you may be free of the mortgage debt. There are companies popping up all over the country going out to lenders and saying, “Hey, we’ll go after those former home owners for you!”.  And we all know there’s nothing worse than a debt collector calling you night and day, right?

We’ve Gone GREENER!

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2011

I’m calling out all the other real estate companies in the state to make a concerted effort to GET GREENER. My firm is now the first real estate brokerage in the state to banish ‘fact sheets’ attached to real estate signs in order to achieve a more greener business practice. Fact sheets or info sheets on listing signs take up an enormous amount of paper as well as staff time to keep them full. Phasing out and fully replacing these boxes with a more permanent option only makes sense to be greener.

In our recent practices a ‘yard arm’ with a brokerage ‘for sale’ sign would go up on a home for sale. Attached to the sign would be a plastic box or tube for 8.5 X 11” flyers about the property. I figure we used 5000 reams of paper on fact sheets for our for sale signs just last year. That’s 300 trees we killed.

Now all our flyers are all being replaced with a ‘semi-permanent’ sign attached to the ‘for sale’ sign. This has the basic information found on any flyer PLUS a QR code.  QR codes are scrambled bar codes that can be read by any smart phone bar code (free) reader.  This way a buyer can walk up to the sign, read the flyer and then download the QR code on the bottom of the sign. Their smart phone will download ALL the photos of the property. The fact sheet itself will (on the sign and in the download) provide contact information, massive photos, pricing, interior and exterior information. This can then be saved in the phone or emailed immediately to anyone.  The new fact sheet sign can then be re-cycled with a new flyer for another listing when the home is sold.

I’ve owned my own brokerage for 10 years now and in that time period I figure over 3000 trees were killed to produce the paper used for real estate flyers just by my firm. That floored me. I went on the web and found in Built Green and Sustainable Living that to built a 2000 sq. foot all-wood home, the construction would required the killing of 100 trees. We don’t build many all-wood homes here in Utah, but we definitely put up wooden frames to support the stucco. If I estimate that framing a home would take say 30 trees, then I could have helped build over 100 homes over those 10 years. I’ve been in business almost 30 years and I’m betting in addition to that 100 home projection I personally contributed to 10 times the loss of trees coming down in order to provide information on houses to get them sold.

I can only imagine how many trees have been killed by the big corporate real estate brokerages in the state in addition to the ones I’ve helped cut. I’m just a single number among the thousands of licensed agents in the state of Utah. I hope other real estate brokerages and agents in the state wide follow my lead and commit to eliminating the practice of paper-eating, environment-killing outside fact sheets on all for ‘sale signs’.” QR codes can be generated for free on any product, property or company from any of a hundred websites and apps. The cost then is zero to generate the code, and the semi-permanent sign can be recycled from house to house with a new flyer/sticker going over the old one.

Is This A Safe Neighborhood?

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2011

“Is this a safe neighborhood?” asks my buyer as we look at homes. I really can’t answer that question, but I can send my buyer to a myriad of websites to find out the answer. I might think it’s a safe hood, but I’m not a statistician. Thanks to technology you can find out where all the ‘Chester the Molesters’ live in your potential zip code and check police statistics for type of crimes (robberies, rapes, murders, etc.) in the area.

Recently I was showing homes to a mom and dad with three kids. They had grown out of their home in Rose Park and wanted more space. We hovered around two different neighborhoods and found two homes they liked that were about the same price. After our outing, the mom went home to her computer and went to the State website for sex offenders in Utah and discovered that by one of the homes there were 300 sex offenders, and only 12 offenders registered near the other one. She called me immediately and said ‘we want the home where only 12 creeps live nearby’. After some negotiations, they bought the house.

Apart from the obvious checks of public statistics and data about a neighborhood, there are other simple things both home owners and renters can do to make their property more secure. Remember the story on how Brian David Mitchell broke into the Smart house to abduct Elizabeth Smart? He supposedly cut through a screen in front of an open window. Crime happens in all neighborhoods, and many crimes happen just because people make it easy for criminals to harm them or steal their property. For crime statistics in Utah, go to: https://bci.utah.gov/utah-crime-statistics/ .

Here are some good tips to be safer:

  1. Lock your damned house and your damned car. Police friends tell me the number one crime in Salt Lake City is ‘car prowls’-where cars are broken into (locked and unlocked) because people left stuff in them that was visible to the criminal;
  2. If you rent or buy, have your locks re-tumbled. You don’t have to go to the expense of buying all new locks when you take occupancy. Just have a lock smith re-tumble the guts of the locks and make a new key. If you’re a renter, do this with your landlord’s permission of course. You never know who’s had keys to your property before you got there, right?
  3. Consider installing an alarm system. There are several local companies that will come wire your house and put in simple to elaborate alarm systems. I had a home once where the front door lock didn’t always catch. For $30 a month I had an alarm system, and when the door blew open they would call me and tell me ‘your front door is open again’.
  4. When you have the lock smith or alarm company come over, have them take a look at your window locks as well. If you’re in an older home, there are often small basement windows which you might not think of as a potential entry for criminals-because the windows are just too small. That’s foolish because criminals break those windows out, have little kids crawl inside them once they are busted out to go open up doors.
  5. Meet your damned neighbors! I just listed a home where the owners had lived in the home 30 years and they had only met two neighbors during their entire occupancy. You let neighbors know your name, your contact information and watch your property when you aren’t home with a promise to do the same for them. Better yet, get your neighborhood involved in the local neighborhood mobile watch program.