Real Estate Information Archive


Displaying blog entries 1-3 of 3

The Facts on The Real Estate Sales Tax

by Samia S. Morgan

Politics are everywhere it seems as the November mid-term elections are coming closer. You may have heard rumors about a possible 3.8% sales tax on real estate sales and have wondered what the facts really are. If you are like most homeowners and potential home buyers you are in shock and may be confused about this potential tax and want to know the real deal.

Here are the facts:

1. Starting in 2013, not only will you pay the closing costs and real estate fee when you sell your house but you may be required to pay a 3.8% Sales Tax

2. You are only subject to the tax if you make over $200K a year, $250K married filing jointly.The Internal Revenue Service says that to qualify for the $250,000/$500,000 exclusion, a seller must have owned the home and lived there as the seller’s "main home" for at least two years out of the five years prior to the sale.

3. If you are fortunate enough to bring in $200K, the tax still does NOT apply to the first $250,000 on profits ($500,000 if married)

4. This new tax was implemented under the new health care bill that was signed earlier this year

5. On the bright side, in today’s economy and with home values falling, you most likely will have no tax burden if you sell your home. A typical home sale would not incur any tax. In March, for example, half of all existing homes sold for $170,700 or less, according to the National Association of Realtors.

If you’re still concerned about this possible tax, it is a good idea to check with your accountant if you are planning and selling your home and you think you will have a large profit.



California Senate Bill 931 Bans Deficiency Judgments on First Liens

by Samia S. Morgan

Short sales (when the sale amount is less than the balance owed on the property’s loan) have become a popular option to avoid foreclosure proceedings, especially for home sellers in California. While it was thought to have a better credit outcome for the borrower, short sales in California have NOT been protected from lenders pursuing the original borrowers for the remaining loan balance – until now.

The California Senate has passed Senate Bill 931, without opposition. SB 931 prevents banks from pursuing sellers on ALL first mortgages, including short sale sellers. The bill protects sellers on all first liens, even if the seller has refinanced the loan or taken cash out. This basically nullifies California’s “recourse loan” statutes on short sales.

SB 931 has been passed to Governor Arnold Schwarzenegger’s desk for signature. It prohibits deficiency judgments on properties of 1 to 4 dwelling units, non owner or owner occupied. While some sellers have been able to get lender settlements without recourse, this bill eliminates the need to engage costly attorneys or mediators to make those negotiations.

SB 931 was sponsored by Denise Ducheny, a San Diego Democrat. The implications are huge – many sellers have been reluctant to go through with short sales, which are also time-consuming and complex, because they fear the recourse. With recourse out of the picture, both Realtors who specialize in short sales and their clients have reason to celebrate.

Since the bill went through unopposed, there is no reason to believe that the Governor will not sign 931.  Will other states follow?



Homeowners And The Mortgage Crisis

by Samia S. Morgan

New headlines on the mortgage crisis appear daily with the same troubling news. Lenders are in trouble, home values are falling, homeowners are struggling and foreclosures are at an all time high. Recently, the lowest interest rates in history are getting attention and that is leaving many asking the question, is now the time to buy?

It could be if you have stellar credit, steady income and don’t mind playing by ever changing rules. One of the biggest impacts that the mortgage meltdown has had on home buyers is that underwriting standards are tighter than ever before, leaving many people out of luck when trying to get approved for a home loan. Here are today’s top challenges for home buyers:


  1. Credit Score – Defaults and foreclosures have caused lenders to raise the bar on acceptable credit scores. Want those ultra low interest rates? You have to have nearly perfect credit to qualify. In fact, just get approved for a home loan, you’ll need a score well above 600, and if you want to avoid higher rates and your score should be above 700.
  2. Income Requirements – The rules of engagement for income and proof of income has changed a lot. Your mortgage application will be checked and verified multiple times. Previous “liar loans” or no documentation loans are now illegal, which hurts the self employed. You may be turned down for any number of things that look strange or can’t be verified on your application, even if you are purchasing with a good bit of cash.
  3. Changing Guidelines  - OK – you have credit scores above 700, debt to income below 36% and at least 20% down. You have been employed by the telephone company for 10 years. You’re set, right? Not so fast. Both far reaching regulations and nervous individual lenders keep changing the rules for qualifiers. You may have to jump through many hopes to get your loan approved, even if you look great on paper.
  4. Low Appraisals - Short sales and foreclosures may put some bargains on the market, but they also impact the value of other homes in the neighborhood or community. Houses are not appraising for the contract price, slowing or stopping the application process. Inexperienced appraisers also hurt the appraisal process.
  5. Condo Approvals – Finally, the condo and townhome market has been hurt by increased regulations, with lenders taking not only the individual buyer into consideration but also the status of the condo building ownership - documenting cash reserves, occupancy and delinquency rates of other occupants. 

It may be tougher than ever to get a home loan, and only time and some success stories will relax the current standards. Hopefully, the strict guidelines will help the overall market long term by slowing foreclosures and delinquent loans.


Displaying blog entries 1-3 of 3




Contact Information

Photo of Samia S. Morgan, Inc. Real Estate
Samia S. Morgan, Inc.
dba Samia Realty Group
BRE# 00967165
San Mateo CA 94403