Guiding Your Clients Through Short Sales & Foreclosures

Now that the Mortgage Debt Forgiveness Relief Act has ended, here’s what you as an attorney need to know to guide your clients through a foreclosure or a short sale.

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One of the most common questions I’ve been asked in recent weeks is, “What do we do now that the Mortgage Debt Forgiveness Relief Act has ended?” This act was designed for homeowners who went through a short sale or foreclosure to avoid paying taxes on the forgiven debt.

If you’re an attorney and you have one or multiple clients who are asking themselves the same thing and looking to you for guidance, there are a couple things you need to understand.

Whether you do a short sale or a foreclosure, the canceled debt portion is considered potential income to the sellers. In a foreclosure, a short sale, and a deed-in-lieu of foreclosure, your clients will receive a 1099 form for the forgiven balance. Does that make it a taxable event, though? During the height of the market crash, the Mortgage Debt Forgiveness Relief Act decided that it wasn’t.

Now that that act has ended, the question becomes whether to do a short sale or a foreclosure and what happens to the forgiven debt.

To figure this out, use publication 4681 of the IRS Circular, which is titled “Canceled Debts, Foreclosures, Repossessions, and Abandonments.” It explains how the IRS looks at the taxation on the forgiven debt.

The good news is that if the short sale occurs on the primary residence, chances are the primary residence is an exclusion to the canceled debt and will not be a taxable event. Additionally, even if they don’t qualify under that, they may qualify under insolvency. The publication has a chart that you can use where you add up all of your client’s assets and liabilities, and if they have negative equity across their entire income and they’re insolvent at the time of the short sale, then the canceled debt is a non-taxable event.

The 4681 will be your guide for your clients.

This publication will be your guide for your clients. Keep in mind that the biggest benefit between foreclosures and short sales is that when you do a short sale for one of your clients, the bank is accepting the payoff as payment in full and they give up their right to pursue the deficient balance. That is not true for foreclosures, though. The bank has the right to collect the debt on a foreclosure.

You won’t see this right away, but banks are now selling that forgiven debt off to debt collectors who—now that the economy has improved—are going after the folks for their deficient balance. The nice thing about the short sale is there is finality in it. For foreclosure, there’s a pretty big window to pursue that deficient balance.

If you’re contemplating how to advise your client on a short sale, a foreclosure, or a deed-in-lieu, or you need help interpreting the 4681 publication, give me a call so we can talk. I’m also conducting a continuing education class for the family law section next month where you can get your continuing education credits, so if you’d like more information about that, I’d be happy to provide it to you.

If you have any other questions, don’t hesitate to reach out to me. I’m here to help.

Thank You For Contributing to Our Success

Thank you for contributing to our success!

Buying a Kennett Square, PA home? Get a full home search
 Selling your Kennett Square, PA home? Get a free Home Price Evaluation

I wanted to take a moment to say thank you. Over the last several years, the Matt Fetick Team has been recognized as a leading real estate team in the region.

On average, we sell a home every 48 hours and in today’s market, it’s almost every 24 hours. With that in mind, we wanted to say thanks! Thank you so much for working with us and contributing to our success.

Our market is in a frenzy right now, so whether you’re buying or selling a home, you’re going to need our advice. We don’t want you to overpay as a buyer or get stuck with bad offers as a seller.

We don’t want you to overpay as a buyer or get stuck with bad offers as a seller.

I’m sure you’ve got questions about the market, so please feel free to give me a call or shoot me an email. If you send me a question I can answer in a video, I’ll send you a $25 Starbucks gift card so you can have some coffee on me.

Thank you so much again! We look forward to hearing from you.

How to Know if Your Buyer’s Agent Is Right for You

If you’re buying a home, you should interview one or multiple agents and ask them different qualifying questions to get a sense of their capabilities and how well they match with you.

Buying a Kennett Square, PA home? Get a full home search
 Selling your Kennett Square, PA home? Get a free Home Price Evaluation

If you’re a homebuyer, how can you know if a particular agent is the right fit to help you buy a home?

Our lead buyer specialist David Williams knows all about this topic. David has been part of our team for eight years, and he’s helped more than 249 people purchase a home. He’s exclusively a buyer’s agent, which is a little different than most agent’s you’ll meet.

He’s still amazed by buyers who go to open houses or stop at a new construction site and end up hiring the first agent they come across. That’s all well and good if that agent can represent them well, but if you’re considering buying a home, it’s important that you interview one or multiple agents the same way a person would if they were listing a house instead of buying one.  

Your house is your biggest financial asset, so the agent you hire should know how to represent you, how to work the market you’re currently in, and know what’s important to you for the long term. We’ve even created a list of about a dozen questions a buyer should ask an agent before working with them. Some of these questions include:

• Why did you get into real estate?
• What are some things that can happen during the transaction that can cause problems?
• How long have you worked in the area?
• How many homes have you sold?

There are many different qualifying questions you can ask an agent to find out what their experience is, how actively they can solve problems that come up, and how well they can represent you in the process.

The agent you hire should know how to represent you.

Our team loves your questions so if you have one, feel free to email us any time of the day. If we choose your question as the subject of one of our videos, we’ll send you a Starbucks gift card. We look forward to hearing from you.

We’re the Key to a Successful Sale

Getting an offer on your home is easy in this market. What’s not easy is making it all the way to the closing table without a Realtor’s assistance.

Right now, it’s a feeding frenzy in the real estate market. We are seeing near-2007 levels of sales prices and pace. You might think selling today would be easy. You’d be partly right. It is easy to get an offer, but it’s much harder to get to the closing date with the offer still intact. I want to share a few important thoughts with you today about how you can make it through your transaction with a little helping hand.

When a buyer makes an offer on your home, there are generally 10 to 20 different people involved in the transaction. You might have a few different buyers, with each of them having a loan officer, an underwriter, an appraiser, a home inspector, and more. There are a lot of expectations to manage and being able to negotiate all the way through to closing is the hard part of the transaction.

Our job is to give you the best advice possible.

Our job as Realtors is to give you the best advice possible. When we review offers with you, we will find out about the buyer’s credit, income, and probability of securing their loan on closing day. We also want to make sure you are protected throughout the inspection process by recommending which repairs to make and referring you to someone who can help you out for a fair price.

If you market your home right, stage it, and price it correctly, you’ll get an offer. However, it will be hard for you to get to the closing table without the help of an experienced professional. If you’re thinking about selling your home, give us a call and we’ll pair you up with a team member who is an expert in your area. We cover Chester County, Delaware County, Montgomery County, parts of Philadelphia County, and the entire state of Delaware. We’re ready to help you today.

If you have any other questions, we’re always here to answer them. Just give us a call or send us an email. We can’t wait to hear from you.

Our Team’s Success Is Because of You

Today we want to say thanks. Thanks to all of our friends, families, and clients who have been supportive of our team over the years.

I just wanted to take a moment to say thank you. Over the last few years, The Matt Fetick Team has been recognized as a leading real estate team in the region.This wouldn’t be possible without the support of our friends, family, and clients who have entrusted us with the purchase or sale of their home.

On average, we sell a home every 48 hours. In today’s hot market, we’re selling one almost every 24 hours. We’re almost back to 2007 pre-recession levels. We don’t want you to overpay for a home or accept a bad offer, however. Both are still possible in this market. Our team is positioned to help keep your best interests in mind whether you’re buying or selling.

If we answer your question in the next video, we’ll send you a Starbucks gift card.

I’m sure you have a lot of questions if you’re thinking about buying or selling. Give me a call or send me an email to let me know what those questions are. If I answer them in my next video, I’ll send you a Starbucks gift card.

If you have any other questions, give us a call or send us an email. We look forward to hearing from you.

3 Tips to Sell Your House This Year

If you want to sell your house this year, follow these three tips.

Selling a house isn't easy, but if you plan on selling yours in 2017, we can help you make the most of your time on the market. There are three things you can do to make sure you sell your home fast for the most money possible this year:

1. Find the right agent: Not all agents are the same. Sure, we all pass the same tests, but you want to hire an agent with the expertise and knowledge to help you get the most for your home. You want a consultant to help you understand what the market is saying so you get the best advice and marketing. 


Your first showing actually happens online.


2. Hire a professional photographer: Marketing counts, and your first showing actually happens online. Your presence online is of the utmost importance. 
3. Price your home right: You want to pick the price that will cause your home to sell. Price can be up to 80% of your marketing. If the price doesn't seem right, buyers won't make offers—it's that simple. Some people choose to price high from the start to see what they can get, but this can be a risky move that results in your house spending more time on the market and ultimately netting you a lower price. The longer your house is on the market, the more your price will go down. We're in a seller's market, and the only homes not selling here are ones that aren't priced correctly.

We want to help people realize their home selling goals this year and help make it as stress-free as possible. If you have any questions for us or you're ready to get your house on the market, give us a call or send us an email. We look forward to helping you!

Why Now Is the Best Time to Sell

If you’re thinking about selling your home, don’t wait until spring. Today I’ll go over a few benefits of beating spring sellers to the market. 

Should you wait until spring to sell your home? In my opinion, no. 

Real estate is a supply and demand business, which means the more homes that are on the market, the less money you will get out of your home sale. 

When buyers have more options, they have more negotiating power.

It’s true we see more homes sold in April, May, June, and July. However, because there are so many more homes on the market, buyers have more options. When buyers have more options, they have more negotiating power. 

If you go on the market in the winter months, you’ll have less competition and you’ll have a much better chance at getting top dollar for your home. 

If you’d like an up-to-date home value or if you’d like some advice on how to add value to your home, feel free to give us a call or send us an email. We look forward to hearing from you! 

How Does Our Market Currently Look?

We’ve been getting asked about the market a lot lately. We’ve got some advice to share with you today whether you are thinking of buying or selling.

I often get asked about the current status of the market, so I wanted to dive deeper into that topic today. As you know, 2016 ended with a bang. Nearly every community in our region posted a higher sales volume and higher average price in 2016 than they did in 2015. The question is, “Where are they headed now?”

Keep in mind that when talking about real estate, we are always in a cycle. In 2008, we saw prices bottom out. Since then, they’ve been going up. They are still going up now, but how do we know when we’ve reached the peak? The truth is that we don’t know and we won’t know until prices start coming down. On the other hand, we don't know we’ve bottomed out until prices start going up.

We won’t know we’ve peaked until we start declining.

As you can see, it’s nearly impossible to time the market. If you’re thinking about selling your home and wondering if you should wait longer, you should know that. Even those of us that study it for a living can’t time it. The best thing you can do is find the middle ground where the market is either slightly going up or slightly going down. Those small, fractional changes won’t affect your bottom line significantly.

The question for sellers is if we can get the best price for your home. The question for buyers is if you can make sure you don’t overpay at the peak of the market. To answer these questions, you need one of our team members to sit down with you and talk about the specifics regarding your sale or purchase.

We need to look at all the things important to you, including interest rates, the condition of your home, and more so that we can determine whether now is a great time for you to buy or sell.

We are never here to push you towards buying or selling. Our goal is to give our consultation services to you and help you make the right decision. We want you to be a client for life and we don’t want you to miss any great opportunities.

If you have any questions for us or if you’re thinking about buying or selling, we would love to hear from you. Just give us a call or send us an email.

How Did Our Market Fare in 2016?

Now that the new year is underway, I wanted to give you a look at the fantastic numbers our real estate market ended with in 2016. 

I’ve got some great news! Last year was fantastic for our real estate market and I’ll give you the full 2016 recap today. 

In the Philadelphia suburbs, we saw these statistics related to home sales for the following counties:

Chester County is up 14% in home sales year after year, which means we sold 14% more homes in 2016 than in 2015. The average sales price also increased by 3%. 

Delaware County has similar numbers as it saw a 13% increase in home sales from 5,255 homes sold in 2015 to 5,800 in 2016, and the average sales price increased by 2.5%. 

Montgomery County’s numbers are up with a 12.5% increase in home sales and a 5% increase in average sales price. 

Finally, New Castle County boasted the most significant home sales increase with almost 16% more homes sold in 2016 than 2015 and an increase in average sales price of just over 1.5%.

The real estate market has proven to have hit its stride in its recovery. Home prices are almost back to where they were in 2007, so if you’re thinking about selling or you need an updated market value for your home, please keep in mind that all real estate is local. The up-to-date information on your home will be based on the specific area you live in. 

The real estate market has proven to hit its stride in its recovery.

If you would like to get the up-to-date value of your home, or if you have any other questions, don’t hesitate to give me call or send me an email. I would be happy to help you! 

We Are Excited for 2017 and You Should Be Too

We look forward to many things in 2017. One of them is the launch of our new client appreciation program.

As we begin 2017 and say so long to the previous year, we want to thank you for your support in 2016. Last year, we helped nearly 300 families buy and sell real estate. We are proud of that accomplishment, but we are even more proud of the relationships we have built. 

With that in mind, we look forward to rolling out our new client appreciation program this year. We want our clients, friends, families, and raving fans to know they’re appreciated for their business and their referrals. Keep an eye out in your inbox for some cool events that are coming up. 

We are rolling out our client appreciation program this year.

You’ll also be able to see some of our charitable giving. When our company is successful, we reinvest in the community. We’ll keep you updated with our efforts there as well. We hope that 2016 was good to you and your family, and we look forward to an even better 2017 for everyone. 

If you have any questions or any real estate needs at all, give us a call or send us an email. We look forward to hearing from you.