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  • psst … I’m a Realtor! Thanks for stopping by my website. I would love to help you find your dream home and community in the Hampton Roads or Williamsburg area or to sell your existing home. This website is authored by local resident and REALTOR, John Womeldorf. John is known around town as Mr. Williamsburg, for both his extensive knowledge of Hampton Roads and the historic triangle, and his expertise in the local real estate market. His websites, WilliamsburgsRealEstate.com and Mr Williamsburg.com were created as a resource for folks who are exploring a move to Williamsburg, VA , Hampton Roads VA and the surrounding areas of the Virginia Peninsula. On his website you can search homes for sale , foreclosures, 55+ active adult communities, condos and town homes , land and commercial property for sale in Williamsburg, Yorktown, New Kent, Poquoson, and Gloucester, VA as well as surrounding markets of Carrolton, Chesapeake,Gloucester, Hampton, Isle of Wight, Portsmouth Mathews, Newport News Norfolk, Poquoson, Smithfield, , Suffolk, Surry, Va Beach, Yorktown and York County Virginia You can reach John by email John@MrWilliamsburg.com or phone @ 757-254-813
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Top Ten Things You Need to Know About the 3.8% Tax

imageIn case you’ve heard rumors or received worrisome emails about any of this, here’s a quick primer. Yes, there is a new 3.8 percent surtax that takes effect Jan. 1 on certain investment income of upper income individuals — including some of their real estate transactions. But it’s not a transfer tax and not likely to affect the vast majority of homeowners who sell their primary residences next year. In fact, unless you have an adjusted gross income of more than $200,000 as a single-filing taxpayer, or $250,000 for couples filing jointly ($125,000 if you’re married filing singly), you probably won’t be touched by the surtax at all.

The 3.8% tax will NEVER be collected as a transfer tax on real estate of any type, so you’ll NEVER pay this tax at the time that you purchase a home or other investment

You’ll NEVER pay this tax at settlement when you sell your home or investment property.  Any capital gain you realize at settlement is just one component of that year’s gross income.

Top Ten Things You Need to Know About the 3.8% Tax

  1. When you add up all of your income from every possible source, and that total is less than $200,000 ($250,000 on a joint tax return), you will not be subject to this tax.
  2. The 3.8% tax will never be collected as a transfer tax on real estate of any type, so you’ll never pay this tax at the time that you purchase a home or other investment property.
  3. You’ll never pay this tax at settlement when you sell your home or investment property. Any capital gain you realize at settlement is just one component of that year’s gross income.
  4. If you sell your principal residence, you will still receive the full benefit of the $250,000 (single tax return)/$500,000 (married filing joint tax return) exclusion on the sale of that home. If your capital gain is greater than these amounts, then you will include any gain above these amounts as income on your Form 1040 tax return. Even then, if your total income (including this taxable portion of gain on your residence) is less than the $200,000/$250,000 amounts, you will not pay this tax. If your total income is more than these amounts, a formula will protect some portion of your investment.
  5. The tax applies to other types of investment income, not just real estate. If your income is more than the $200,000/$250,000 amount, then the tax formula will be applied to capital gains, interest income, dividend income and net rents (i.e., rents after expenses).
  6. The tax goes into effect in 2013. If you have investment income in 2013, you won’t pay the 3.8% tax until you file your 2013 Form 1040 tax return in 2014. The 3.8% tax for any later year will be paid in the following calendar year when the tax returns are filed.
  7. In any particular year, if you have no income from capital gains, rents, interest or dividends, you’ll never pay this tax, even if you have millions of dollars of other types of income.
  8. The formula that determines the amount of 3.8% tax due will always protect $200,000 ($250,000 on a joint return) of your income from any burden of the 3.8% tax. For example, if you are single and have a total of $201,000 income, the 3.8% tax would never be imposed on more than $1,000.
  9. It’s true that investment income from rents on an investment property could be subject to the 3.8% tax. But: The only rental income that would be included in your gross income and therefore possibly subject to the tax is net rental income: gross rents minus expenses like depreciation, interest, property tax, maintenance and utilities.
  10. The tax was enacted along with the health care legislation in 2010. It was added to the package just hours before the final vote and without review. NAR strongly opposed the tax at the time, and remains hopeful that it will not go into effect. The tax will no doubt be debated during the upcoming tax reform debates in 2013.
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Did your VA real estate agent ask you to sign something before you looked at a home ?

On July 1, 2012 Virginia’s real estate agency law changes — this is the law that governs how Realtors® and their clients do business together.

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The most significant change is fairly simple and straightforward:

 Brokerage agreements must now be in writing. Further, they must be signed as soon as an agent meets and engages in any kind of “licensed activity”

i.e. If you want to see a home that’s for sale you will have to sign a brokerage agreement or a non client agreement. If you refuse to sign an agreement or a non-client representation agreement, and an agent shows you a house, that agent would be in violation of Virginia State law!

Basically what this means is either you are or are not being represented by an agent who is showing you a home. If you are being represented, then the agent works for YOU! The agent can recommend price, negotiate on your behalf, they look out for your best interest. Whatever you tell them stays private. If you do not sign a buyer broker agreement, then the agent showing you the homes works for the seller , they can not recommend anything but full price, they can disclose anything you say  to the sellers.

Why the change?

  1. Inform the consumer: The law is to make sure consumers are fully informed about the real estate services they’ll receive and the nature of the relationship with the licensee.
  2. Mitigate REALTOR® liability: The law is designed to protect licensees by making sure full disclosure is provided and the nature of brokerage relationship is reduced to writing. It’s to eliminate much of the consumer confusion that can come back and bite the licensee.
  3. Discourage opportunistic dual agency: The law is intended to make sure that licensees who practice dual agency are fully informing consumers about the risky nature of that relationship.

Other important points

• Duration. A signed agreement doesn’t have to be a long-term contract — it can be for a month, a week, a day, or even to show a single property.

  • Exclusivity. Brokerage agreements do not have to be exclusive. The following must be included in a brokerage agreement

• A schedule of services you will provide. (Your brokerage may already have standard language for this section.)

• A list of fees, if any — and how and when they will be paid.

• The duration of the agreement; if this is omitted, the law assumes it’s for 90 days. Traditionally, some agents have waited until later in the client relationship to ask for a signed agreement, even to the point of including it with documents at closing. But best practices have always suggested you provide this sooner and in writing. And as of July 1, the law requires it as well

Read more about a Realtors duties here

 

bannerpsst … I’m a Realtor! Thanks for stopping by my website. I  would love to help you find your dream home and community in the Hampton Roads or Williamsburg areas of Virginia or to sell your existing home.

This post was authored by local resident and REALTOR, John Womeldorf. John is known around town as Mr. Williamsburg, for both his extensive knowledge of the Williamsburg/ Hampton Roads area and  and his expertise in the local real estate market.

His websites, WilliamsburgsRealEstate.com and Mr Williamsburg.com were created as a resource for folks who are exploring a move to Williamsburg, VA , Hampton Roads VA and the  surrounding areas of the Virginia Peninsula.

Here you can search homes for sale , active adult communities, 55+ communities, condos and townhomes , foreclosures/ REOland, building lots, commercial property  in Williamsburg , Yorktown, New Kent, Gloucester, Poquoson as well as the surrounding areas of Hampton Roads, Virginia
You can reach John by phone at 757-254-8136 or email him atJohn@MrWilliamsburg.com

I look forward to serving your real estate needs!

Best,

John

US Foreclosures down 15% from 2011 in April

There were 66,000 completed foreclosures in the U.S. in April 2012 compared to 78,000 in April 2011. Almost 50% of these were in five states.

Highlights as of April 2012:

  • The five states with the highest number of completed foreclosures for the 12 months ending in April 2012 were: California (142,000), Florida (92,000), Michigan (60,000), Texas (58,000) and Georgia (57,000). These five states account for 48.8 percent of all completed foreclosures nationally.
  • The five states with the lowest number of completed foreclosures for the 12 months ending in April 2012 were: South Dakota (62), District of Columbia (162), North Dakota (541), West Virginia (598) and Hawaii (601).
  • The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were: Florida (12.0 percent), New Jersey (6.7 percent), Illinois (5.3 percent), Nevada (5.0 percent) and New York (5.0 percent).
  • The five states with the lowest foreclosure inventory were: Wyoming (0.7 percent), Alaska (0.8 percent), North Dakota (0.9 percent), Nebraska (1.0 percent) and South Dakota (1.4 percent).

image"Nationally the inventory of homes in foreclosure decreased 0.1 percent from what it was a year ago at this time, and has leveled off over the first four months of 2012."

ForeclosureClick here to download the full April 2012 Foreclosure Report. from Corelogic

From the chart below you can see that Virginia ranks in the lowest percentages of foreclosure rates in the US,

You can search foreclosed , bank-owned homes/ REO in all of Hampton Roads VA here. No registration required.  FREE

The worst is over for the U.S. housing market

imageThe worst is over for the U.S. housing market. After six years of declining sales and falling prices that wiped $7 trillion from the value of housing assets, a turning point has been reached.

The housing recovery will come in two phases. First, home prices will rise by just under 1 percent in the second half of 2012. In 2013, prices will rise by 1.5 percent, then go up another 2.5 percent in 2014. For the second phase, home prices will increase 3 to 3.5 percent between 2015 and 2017. These are the predictions from a report released by the Demand Institute, which is jointly operated by The Conference Board and Nielsen. The Demand Institute sees average prices rising by up to 1 percent in the second half of 2012 (in seasonally adjusted terms), marking the start of a housing recovery.

Currently, 11 percent of homeowners say they would like to sell their home but their home is not on the market. The commonest reason cited, by half of these homeowners, is that they would not be able to get the price they want.12 We predict that once price growth has risen to the 3 percent forecast for 2015, these homeowners will start to return to the market and the volume of sales of existing homes will increase. Given that homeowners are voluntarily holding back today, they will re-enter the market cautiously and in an orderly fashion, and the potential likelihood of a flood of inventory that could reverse price increases will be avoided.

The recovery will be led by demand from buyers for rental properties, rather than, as in previous cycles, demand from buyers acquiring properties for themselves. More than 50 percent of those planning to move in the next two years say they intend to rent.

  • Rental demand will help to clear the huge oversupply of existing homes for sale. In 2011, some 14 percent of all housing units were vacant, while almost 13 percent of mortgages were in foreclosure or delinquent—increases of 12 and 129 percent respectively over 2005 levels. It will take two to three years for this oversupply to be cleared, and at that point home ownership rates will rise and return to historical levels. More than 70 percent of those planning to move three to five years from now say they intend to purchase their home.
  • The housing market recovery will not be uniform across the country. Some states will see annual price gains of 5 percent or more. Others will not recover for many years. The deciding factors will include the level of foreclosed inventory and rates of unemployment.
  • Despite the number of Americans who have been hurt financially by the housing crash, the desire to own a home remains strong. We do not expect to see a long-term drop in ownership rates. Indeed, one survey has revealed that more than 80 percent of Americans recently thought buying a home remained the best long-term investment they could make.

Read the entire report here

Mortgage rates hit record lows again

The 30-year fixed rate average dropped to an all-time low for the second consecutive week, falling ever so slightly from 3.84 percent last week to 3.83 percent, according to the latest data released Thursday by Freddie Mac. The average stood at 4.63 percent this time last year.

The 15-year average followed suit, dipping to 3.05 percent after setting a new record last week at 3.07 percent. One year ago, the 15-year averaged 3.82 percent.

Frank Nothaft, Freddie Mac’s vice president and chief economist, largely pegged the drop in rates this week to a dip in bond yields.

“Following April’s weaker than expected employment report, and the French and Greek election results raising concerns over the stability of the Euro currency zone, long-term Treasury bond yields declined allowing fixed mortgage rates to ease to new all-time record lows this week,” he said in a statement.

On Wednesday, new data showed that the number of U.S. homeowners behind on their mortgage payments has also dropped to the lowest level since 2009, with only 5.78 percent of mortgage holders falling behind during the first three months of the year. That’s down from a 6.19 percent delinquency rate during the same period last year and 6.01 percent during the last quarter of 2011, according to the report published by TransUnion.

10 Best Places to Buy Foreclosures in 2012

ForeclosureIn Williamsburg, James City County we are blessed with a low percentage of bank owned foreclosures on the market. In the past 12 months they accounted for only 9.3% of sales.

Other areas have been hit much harder. As a point of comparison  in the rest of Hampton Roads, 25% of sales in March of 2012 were distressed sales ( REO, Foreclosures, Short sales).  On average they were selling for a 41% discount from non distressed properties.

Prices for residential real estate, which plunged more than 50 percent in some markets after the housing bubble burst, appear to be stabilizing. Some real estate markets are better than others. But where are the best opportunities to buy discounted foreclosures? Which metropolitan areas offer homebuyers and investors the biggest discounts and the highest potential return on investment (ROI)?

RealtyTrac has selected the 10 best places in America to buy a foreclosure in 2012. 

To compile their Top 10 list, they started with the nation’s 100 largest metropolitan statistical areas based on population. From there, the list was narrowed  further by selecting market with at least 200 sales transactions in January 2012. The list was then pared down by selecting metros where the average foreclosure sales price was at least 30 percent below the average price of a non-foreclosure home.

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You can search foreclosed , bank-owned homes/ REO in all of Hampton Roads VA with the links below. No registration required.  FREE

Search Chesapeake VA Foreclosures

Search Hampton , Newport News Foreclosures

Search Isle of Wight Foreclosures

Search Norfolk Foreclosures

Search Poquoson Foreclosures

Search Portsmouth Foreclosures

Search Smithfield Foreclosures

Search Suffolk Foreclosures

Search VA Beach Foreclosures

Search Williamsburg Foreclosures

Search Yorktown Foreclosures

 

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bannerpsst … I’m a Realtor! Thanks for stopping by my website. I  would love to help you find your dream home and community in the Hampton Roads or Williamsburg areas of Virginia or to sell your existing home.

This post was authored by local resident and REALTOR, John Womeldorf. John is known around town as Mr. Williamsburg, for both his extensive knowledge of the Williamsburg/ Hampton Roads area and  and his expertise in the local real estate market.

His websites, WilliamsburgsRealEstate.com and Mr Williamsburg.com were created as a resource for folks who are exploring a move to Williamsburg, VA , Hampton Roads VA and the  surrounding areas of the Virginia Peninsula.

Here you can search homes for sale , active adult communities, 55+ communities, condos and townhomes , foreclosures/ REOland, building lots, commercial property  in Williamsburg , Yorktown, New Kent, Gloucester, Poquoson as well as the surrounding areas of Hampton Roads, Virginia
You can reach John by phone at 757-254-8136 or email him atJohn@MrWilliamsburg.com

I look forward to serving your real estate needs!

Best,

John

Positive Outlook for US Real Estate Market

The report this week  from Wells Fargo Securities’ Economic Group indicates many positive signs for the real estate market in the U,S

Wells Fargo has upgraded its outlook on the housing market in its April forecast, thanks to modest upswings in consumer confidence and home prices nationwide. The forecast, released jointly with NAHB, projects continued recovery through the rest of 2012. They do caution, however, that a full recovery could still be years away.

The increase in consumer confidence, says the report, largely stems from rising employment nationwide; this in turn leads to greater consumer spending, which drives confidence even higher.

  • New home sales are expected to increase 12 percent in 2012 and rise nearly twice as fast in 2013. With inventories of new homes at all-time lows, those gains should produce sizeable gains in single-family starts.
  • Single-family permits have risen in each of the past five months and are up 23.6 percent on a year-ago basis. Builder remains at its highest level since June 2007.
  • Home prices are expected  to definitively bottom by the middle of 2012, as the backlog of foreclosures finally begins clear. For properties not in foreclosure, prices have probably already bottomed, but should remain relatively low nonetheless given the competition and perceived competition from foreclosures.

Some of the greatest improvement in recent months has come in markets where overbuilding and speculation were the greatest, most notably Florida, Arizona and, to a lesser extent, Nevada. Prices have fallen so sharply in Florida, Arizona and Nevada that many traditional retiree buyers do not have to wait until they can sell their home in the Northeast or the Midwest before purchasing a home in the sunshine. Many of these buyers tend to transition to these states anyway, spending more time there until they eventually relocate permanently This has led to prices rising again, spurring the housing markets in those areas.

Prices have fallen so far in many markets that affordability is at a record high. One market where this trend is particularly true is Florida.  Prices have likely overshot in many Florida markets, including Miami, Daytona and Naples, which has been driving sales as investors search for undervalued properties. While this trend has not necessarily been true for the nation as a whole, it has also been evident in other boom-and-bust states, such as Nevada, Arizona and California.

Housing in the Sun Belt has also seen a modest turnaround, largely driven by economic policy, particularly the Home Affordable Refinance Plan (HARP). With the ability to refinance their mortgages at today’s lower interest rates, many homeowners are working their way toward a better overall financial situation.

Real home prices continue to fall and are now back down to 1999 levels. Price-to-rent ratios are also back down to 1999 levels. We are getting close to finding a bottom in national home prices.

All of these positive signs are especially significant on the heels of a cool winter selling season. As noted in the report, new- and existing-home sales both fell in February from January, dropping 1.6 and 0.9 percent, respectively; pending home sales also declined 0.5 percent.

To read the rest of the forecast, click here