If you qualify for a Senior Exemption on your real estate taxes, you might also qualify for a senior freeze. A senior freeze is a great way to keep your taxes down, because it will essentially freeze the assessed value of your property to whatever the assessed value is the year you qualified. You won’t be subject to annual increases in the assessed valuation of the property, as long as you continue to qualify. To qualify for the 2013 senior freeze: 1) You must be born in 1948 or earlier. 2) You must own the property you are applying for, and it must be your principal place of residence. If you do not own it, but you have a lease that states that you are responsible for the payment of real estate taxes, that is sufficient. But you must have owned the property or had a leasehold interest… read more →
If you are a senior and you own a home in Illinois, you could qualify for a senior exemption on last year’s real estate taxes. While the first installment of 2013 taxes has already been paid, the second installment won’t be due for month, and you can still get the benefit of the senior exemption if you qualify. To get a senior exemption for 2013: 1) You must have been at least 65 years old during 2013.2) You must own your residence. If you do not own, you may still qualify for the senior exemption if your lease states that you are responsible for real estate taxes.3) If you moved during the tax year, you can apply for and receive a prorated senior exemption. Make sure you submit your HUD or settlement statement, proof of age, proof of residency, and a copy of a recent real estate tax bill. Contact… read more →
Are things really getting better? RealtyTrac recently released it’s Foreclosure Market Report for January of 2014. Unfortunately, foreclosure filings increased 8 percent since December 2013 nationwide. Perhaps the large increase is just because less foreclosures might have been filed over the holidays? Who knows. What we do know is that according to RealtyTrac, there were nearly 125,000 new foreclosure filings nationwide in January. What’s more, Illinois had one of the highest rates of foreclosure filings in January. Only Florida, Nevada and Maryland has more. The top five were rounded out by New Jersey. On the bright side, to the extent you’re looking for a home, there might be some more inventory out there in the near future as a result of all of these foreclosures.
The Senate Finance Committee recently proposed some startling tax reform changes directly affecting real estate and real estate transactions nationwide. If their proposal is enacted, here are some of the changes investment properties would face:1) Section 1031, which allows deferral of taxes owed on like-kind exchanges, would be repealed. For general information on what a 1031 Exchange is, click here.2) The tax incentives for energy-efficient improvements to large apartment buildings will be repealed.3) All real property would be depreciated over 43 years on a straight-line basis. The current depreciation periods (39 years for commercial non-residential property, 27.5 years for residential property, and 15 years for leasehold improvements) would no longer exist.4) Recaptured depreciation would be taxed as ordinary income, instead of at 25% as it is currently taxed.All of this would make real estate investments more expensive for the owner. Let’s see what happens. . .
The Illinois Department of Financial and Professional Regulation (IDFPR) has amended the licensing requirements for real estate appraisers. The following changes went into effect on December 31, 2013: If you are an associate or trainee appraiser, you must: 1) Give the name and address of your supervising appraiser to the IDFPR; and2) Keep a log for each supervising appraiser you work with, detailing the type of property, the type of work you performed, and other details. If you are a supervising appraiser, you must: 1) Directly supervise associate or trainee appraisers for their first 500 hours of experience;2) Have a valid license as either a certified general real estate appraiser or a certified residential real estate appraiser; 3) Give the IDFPR the name of each new associate or trainee appraiser within 10 days after you hire them; 4) Give the IDFPR the name of each associate or trainee appraiser immediately after they leave your employ.
In the mid-2000s, flipping homes was common. Buyer A would buy a home from Seller, and shortly thereafter sell it to Buyer B, making a tidy profit . But when the economy crashed and lenders tightened up their guidelines, flipping became increasingly rare. But in the last year, as the price of real estate has risen, flipping is slowly making a comeback. According to RealtyTrac, nearly 5% of single-family homes sold nationwide last year were flipped within 6 months. In fact, the number of homes flipped in 2013 increased over 15% from 2012, and nearly 115% from 2011. The average gross profit on such flips in 2013 was over $60,000 per sale. While flipping may be slowly increasing nationwide, according to RealtyTrac the Chicago area has not seen a big increase in flipping. The greatest flipping increases have been out east, in Virginia Beach, VA, Jacksonville, FL, and Baltimore, MD.
Last month, the Department of Housing and Urban Development (HUD) issued new guidelines for lender notice to homeowners who are delinquent in the payment of their FHA loans. If you are delinquent, here’s what you can expect within sixty days after you are delinquent: 1) In the second month of your delinquency, you should receive a letter from your lender including specific information about your past due payments, the lender’s contact information (including a toll free number for their loss mitigation department), a toll-free number you can call to get information on housing counseling agencies approved by HUD, and a request for your current financial information. 2) In the second month of your delinquency, you will also receive a brochure, sent to you by your lender but prepared by HUD. The brochure is called: Save Your Home: Tips to Avoid Foreclosure. These requirements kick in on February 10, 2014, and… read more →
According to CoreLogic, a data and analytical firm, the shadow inventory in today’s market is at its lowest level in five and a half years. There are only 1.7 million homes in the shadow inventory nationwide, a drop of nearly 25% from this time last year. Unfortunately, this is still a lot more homes than what CoreLogic says is a “healthy” shadow inventory — only about 650,000 homes. CoreLogic states that shadow inventory was decreasing at the rate of 46,000 homes per month last year. While that’s good news for a depressed economy, the foreclosure rate is still high. At the end of 2013, there were about 810,000 homes in foreclosure. That’s 400,000 fewer homes in foreclosure than at the end of 2012, but it’s still a lot of foreclosure.
The appellate court recently came down hard on a buyer who reneged on his purchase contract. In 1472 Milwaukee, Ltd. v. Feinerman, 2013 IL App (1st) 121191, the court affirmed the trial court’s judgment that the buyer should be responsible for losses the seller incurred when the buyer defaulted on his contract to purchase real estate. Back in 2006, the defendant contracted to purchase a commercial building located on Milwaukee Avenue in Chicago from plaintiff for $1.2 million. However, defendant never showed up for closing in mid-November as scheduled. The closing was rescheduled, and again, the defendant was a no-show. The plaintiff re-listed the property, and eventually sold it for $911,500 in July of 2007. Subsequently, plaintiff filed suit for the difference between the original and eventual purchase price, as well as plaintiff’s carrying costs for the eight months in the interim between when the property was supposed to close,… read more →
If you read my blog, you may already know that alternative energy tax credits are available through 2016. However, here’s what you may not know: If you are selling, or will be selling, the excess electricity generated through your new solar equipment back to the utility company, you won’t qualify for the whole tax credit. To refresh your memory, you can claim a tax credit of up to 30% of the cost of certain alternative-energy improvements, so long as those improvements are completed prior to the end of 2016. But, if you are making more energy than you need to power your own home and selling it back to the utility company (called “net metering”), then you can only claim a tax credit of up to 30% of the cost of the equipment actually used to power your OWN home. So if you spend $15,000 on solar panels, technically you should… read more →