Dear Friends,

Seattle Real Estate Associates is very pleased to invite you to join us for the West Seattle Art Walk on Thursday, April 14th between 6 and 9pm. At this time, we will be hosting the incredible exhibit of Igor Kashinskiy.

Artist Statement:

The canvas is my writing paper and I am exploring unique ways to write my story. I seek to be true to my inner feelings. My inner world has changed since I begin to meditate more then half a year ago. My conciousness moved to a new level of understanding of who we are, what is this physical reality we live in and I expressed these ideas on canvas.

Everything in the physical universe is energy which vibrates at different frequencies. We humans are a part of this Universal energy. Every human Being is unique and can be translated into energyform on different levels.

My art that is now flowing out of me is translating my ideas about this new reality that opened for me. We exist on so many dimensions beyond the normal and accepted idea that we have only five senses of the three dimensional world that we can rely on. Thus, truereality is expressed in such a way as to show much more than what people see with their eyes. My paintings have their beginnings in the physical realm, but since my inner spiritual Being cannot be limited, my thoughts leap out on canvas in an unbounded freedom. I am a beginner in this knowledge so, I am discovering new ways every day of how to express it by releasing my inner understanding into the visible world of ours.

ART WALK MISSION
The mission of the Art Walk is to acquaint the audience with Igor’s latest art as well as introduce our business to West Seattle community. The exhibit will take place at our new office located on 4535 44th Avenue SW, Seattle, WA 98116. Be ready for food, beverages, art and of course a lot of fun! We look forward to seeing you soon!

Is now the time to buy a house? This is probably one of the most asked questions concerning the current housing market. With spring in the air and summer on the horizon, many people are considering whether now is the right time for them to purchase a home. After the collapse of the housing market, home ownership, for many, may seem too risky. Despite this, one cannot dispute that there are great opportunity in a down market. Before you make a decision on whether to keep renting or start your home search, there are a few questions you need to ask yourself.

1.) Why do you want to buy? Buying a house is an enormous investment so why do you think you want to? Are you looking to buy a house because a friend told you it would be a great investment? Or have you found a home that you want to start a family in? If you’re looking to buy a home with the sole purpose to resell it five years later for a profit, you may find yourself dissatisfied with the result. The market will take time to recover. At this point, it would be more ideal to find a home you truly love. You’ll never regret your purchase, even if the market takes another dip.

2.) What is your financial situation? It is difficult to purchase a home without a sizable down payment in the current market. By dropping a 20% down payment into a house, many people can find themselves “house poor” if they didn’t take an honest look at their finances before meeting with the bank. The other thing to consider is that with 20% down, you avoid paying PMI. The larger the down payment, the smaller your monthly payment and the more equity you start with in your home. While it may be tempting to purchase a home when interest rates are at a historic low, it’s only a good idea if you can truly afford to do so. Be honest with yourself and take into account your bank balance before you start looking at open houses.

3.) Where will you be five years down the road? One factor that many people disregard when purchasing a home is how it will affect them in the long term. It may seem to make sense now, with prices and interest rates being so low, but if you’re a student or your work occasionally relocates you, does that house become an asset or a liability? Similarly, if you’re a new couple starting out, how much house will you need? You may fall in love with a small two bedroom one bath home. But in the long term is your plan to have a family and children? Always keep in mind what direction you’re heading and it will help you decide if a house will make sense for you.

Buying a home should be a personal decision, not a market decision. Obviously the market will have an influence and either help or hinder the process. However, in the end, buying a house is an emotional and personal decision that will require time and investment. Only you can determine if now is the right time for you to buy a house.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reducing through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

What is Cancellation of Debt?

If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the canceled amount in income for tax purposes, depending on the circumstances. When the borrowed money you were not required to include the loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a form 1099-C, Cancellation of Debt.

Is Cancellation of Debt income always taxable?

Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:

• Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
• Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
• Insolvency: If you are insolvent when the debt is canceled, some or all of the canceled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
• Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your canceled debt is generally not considered taxable income.
• Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.

What is the Mortgage Forgiveness Debt Relief Act of 2007?

The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.

What does exclusion of income mean?

Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?

No. The Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as qualified principal residence indebtedness. The maximum amount you can treat as qualified principal residence indebtedness is $2 million or $1 million if married filing separately.

Does the Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home?

Debt used to refinance your home qualifies for this exclusion, but only to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified. For more information, including an example, see Publication 4681.

How long is this special relief in effect?

It applies to qualified principal residence indebtedness forgiven in calendar years 2007 through 2012.

Is there a limit on the amount of forgiven qualified principal residence indebtedness that can be excluded from income?

The maximum amount you can treat as qualified principal residence indebtedness is $2 million ($1 million if married filing separately for the tax year), at the time the loan was forgiven. If the balance was greater, see the instructions to Form 982 and the detailed example in Publication 4681.

If the forgiven debt is excluded from income, do I have to report it on my tax return?

Yes. The amount of debt forgiven must be reported on Form 982 and this form must be attached to your tax return.

Do I have to complete the entire Form 982?

No. Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), is used for other purposes in addition to reporting the exclusion of forgiveness of qualified principal residence indebtedness.

If part of the forgiven debt doesn’t qualify for exclusion from income under this provision, is it possible that it may qualify for exclusion under a different provision?

Yes. The forgiven debt may qualify under the insolvency exclusion. Normally, you are not required to include forgiven debts in income to the extent that you are insolvent. You are insolvent when your total liabilities exceed your total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is qualified farm indebtedness or qualified real property business indebtedness. If you believe you qualify for any of these exceptions, see the instructions for Form 982. Publication 4681 discusses each of these exceptions and includes examples.

I lost money on the foreclosure of my home. Can I claim a loss on my tax return?

No. Losses from the sale or foreclosure of personal property are not deductible.

If the remaining balance owed on my mortgage loan that I was personally liable for was canceled after my foreclosure, may I still exclude the canceled debt from income under the qualified principal residence exclusion, even though I no longer own my residence?

Yes, as long as the canceled debt was qualified principal residence indebtedness. See Example 2 on page 13 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments.

Will I receive notification of cancellation of debt from my lender?

Yes. Lenders are required to send Form 1099-C, Cancellation of Debt, when they cancel any debt of $600 or more. The amount cancelled will be in box 2 of the form.

How do I report the forgiveness of debt that is excluded from gross income?

Check the appropriate box under line 1 on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to indicate the type of discharge of indebtedness and enter the amount of the discharged debt excluded from gross income on line 2. Any remaining canceled debt must be included as income on your tax return.

How do I know if I was insolvent?

You are insolvent when your total debts exceed the total fair market value of all of your assets. Assets include everything you own, e.g., your car, house, condominium, furniture, life insurance policies, stocks, other investments, or your pension and other retirement accounts.

How should I report the information and items needed to prove insolvency?

Use Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to exclude canceled debt from income to the extent you were insolvent immediately before the cancellation. You were insolvent to the extent that your liabilities exceeded the fair market value of your assets immediately before the cancellation.

For more information and full documentation please see the The Mortgage Forgiveness Debt Relief Act and Debt Cancellation IRS web page. For questions pertaining to your personal situation please see your tax accountant or real estate attorney.

Dear Friends,

Seattle Real Estate Associates is very pleased to invite you to join us for the West Seattle Art Walk on Thursday, March 10th between 6 and 9pm. At this time, we will be hosting the exhibit of two incredible photographers, Rosanne Olson and David A. Barnes.

ROSANNE OLSON
With a lifetime of experience in many worlds, I know how to show the truth about people and the human condition. As a photographer I have worked with some of the best design firms and advertising agencies in the Northwest and around the country. As a photojournalist and writer, I honed my skills to bring the heart of my subjects to light. The same intense passion to understand informs my photographs of individuals and families. As an award-winning photographer, teacher and lecturer for over 30 years, I also authored This is Who I Am, a collection of images and essays on women, body image and compassion which has been noted for its insight and power to inspire. I collaborate with my fellow humans to tell the truth, beautifully, of families, women and business professionals, in my Knowing Portraits practice.

DAVID A. BARNES
Over the course of a forty year career David Barnes has traveled the world and produced a wide array of photographic images, bringing his subjects to life with a style and composition that is uniquely his own, and which has won him recognition through prestigious awards and highly sought after photographic assignments.

With the coming of age of stock photography, David began to move in a new direction.
It gave him the artistic freedom to pursue his interest in history and the cultures of different peoples through his photographs. In 1983 he went to Europe on a bicycle carrying a camera, accompanied by a friend who planned to stay for one month, and no obligations. The friend went home after the month, and David stayed on to study French and resumed the love affair he had started with Europe and France many years before as a college student. For the next 20 years David spent increasingly more of his time in Europe, till finally he moved to live in Paris.

ART WALK MISSION
The mission of the Art Walk is to acquaint the audience with Rosanne & David’s latest photographs as well as introduce our business to West Seattle community. The exhibit will take place at our new office located on 4535 44th Avenue SW, Seattle, WA 98116. Be ready for food, beverages, art and of course a lot of fun! We look forward to seeing you soon!

Many people have been asking questions regarding how to handle the situation when they believe that loan servicers are not following the guidelines of the Obama Administration’s Making Home Affordable Program. The Making Home Affordable Program is a program for modifying eligible mortgages and refinancing Fannie Mae and Freddie Mac mortgages.

Below are the recommended steps to take if you believe your servicer is not complying with the program.

1.) Go to www.makinghomeaffordable.gov, the official Treasury website for the Making Home Affordable Program. Once at the site, determine whether the loan is owned or guaranteed by Fannie Mae or Freddie Mac by clicking on the “Loan Look Up” ribbon on the top of the home page. This must be initiated by the holder of the loan.

If the loan is a Fannie Mae, call (1) 1-800-7Fannie or for a Freddie Mac loan (1) 1-800-Freddie. Do this whether the issue relates to the refinancing or the loan modification program.

2.) If the loan is not owned or guaranteed by Fannie Mae or Freddie Mac you can determine if the servicer is participating in the Home Affordable Modification Program (HAMP) by going to the website and clicking “Contact Your Mortgage Servicer” on the top ribbon of the page. As of now, there are 16 servicers that participate which covers more than 80% of all mortgages.

If the servicer is participating, the next step is to contact the servicer using the phone number or email address listed on the site so you can appeal the issue to a supervisor. Be sure to identify the specific provision of the guidance that you believe is not being followed. If the supervisor cannot or will not correct the problem, call 1-800-7Fannie to report the disagreement. Fannie is administering the Treasury Department and will work to resolve the issue.

Request a Home Affordable Modification

Making Home Affordable Program Website

www.MakingHomeAffordable.gov

According to the news article by the Seattle Times, houses with mortgages in the Seattle metro area now owe more than their homes are worth, from an estimate by Zillow.com.

At the end of 2010, over 34 percent of all single-family homeowners in King, Snohomish, and Pierce counties were underwater on their homes. This is higher than the national figure of 27 percent.

Also shocking is that the region’s rate of increase over the past year is greater than the national increase. Part of the reason this is happening is because homes in the Seattle metro areas were still increasing while homes in other parts of the country were falling. The Pacific Northwest was about a year late in terms of the housing bubble. So what we’re seeing now is homes in the area at levels that Los Angeles was at a year ago.

Negative equity can have a large impact on the housing market, and also the rest of the economy. This is especially poignant where the gap between the home’s value and loan balance is large. There’s a likelihood that owners will default – even if they can still manage the payments.

This is referred to as a “strategic default” where a owner chooses to default on a mortgage. One of the negative effects of strategic defaulting are that it also damages the owners’ ability to obtain credit for other purchases, further reducing economic activity. This also means that they probably wouldn’t be able to buy another house anytime soon which also hinders a housing market recovery.

Using public records, Zillow estimated that over 28 percent of all houses and condos sold in the Seattle metropolitan area in December sold for a loss. That’s up from 20 percent in December of 2009. Snohomish County was hit the hardest where sellers of almost 42 percent of homes in that county in December received less than what they had paid.

The number of sales at a loss will continue to increase as home prices continue to drop. By Zillow’s calculation, homes in King, Snohomish, and Pierce counties are now worth what they were in 2004.

For the original article, please see the Seattle Times website.

During the winter, your home may have been closed up to stay warm. Over those winter months, with the windows and doors shut, your home may want to breathe in the cool outside air. Lack of air circulation may have left your home stuffy and may have trapped common allergens that normally get circulated out of the home. Below are some tips for opening up your home and preparing it for spring.

Open windows and doors. This lets in the fresh spring air and sunshine. By opening the doors and windows, stale air and stuffiness will be reduced and will give your home new life.

Clean window screens and windows. Over winter, dust and other particulates can collect on the windows and screens, reducing visibility and light that enter the house. Cleaning the windows and screens will give you a more open and airy feel to it.

Vacuum and clean your upholstery, furniture, and draperies. Dust that hadn’t had a chance to escape will collect on surfaces that don’t get cleaned as often as others. Furniture and draperies are a prime place for dust and allergens to collect. Vacuuming and cleaning them will help to remove latent and hidden dust.

Thoroughly clean your ceiling fans, floor vents, and ceiling vents. If your home has a ceiling fans, or other vents, that is a prime area for dust to collect. It can then circulate through the room when you turn them on.

Clean your carpeting with an organic rug cleaner. Cleaning your carpets thoroughly will help to remove any pet odors that may be there as well as dust mites that can cause allergic reactions and leave lingering stale air.

Dust thoroughly. Dusting will further reduce airborne allergens that may have accumulated over the winter.

So you’re trying to sell your home in the current market. In most situations, one foreclosed home in the neighborhood shouldn’t affect your home price. However, in neighborhoods or areas where bank owned or short sales are more prevalent, it can more difficult as you’ll have to compete with those distressed properties. Your home’s market value is related to distressed sales if those short sales and foreclosures dominate the neighborhood.

Prior to the real estate bubble of the mid 2000′s realtors would often ignore the distressed sales surrounding a home when appraising the home. Since then, appraisers are paying closer attention to distressed sales that have closed and distressed properties that are for sale. How can a regular seller with equity compete?

Pricing a Home With Equity Against Foreclosures and Short Sales

Pricing a home can be difficult at time because it requires you and your agent to look objectively at your home in comparison to those around it. It’s a combination of wearing a seller’s hat and stepping into the buyer’s shoes. It does not matter how much you think your home is worth if all of the potential buyers disagree.

When pricing your home, you and your agent need to try to answer these three questions:

• What would make a buyer buy your home over a foreclosure or a short sale?
• Why would a buyer’s lender appraise your home for more than a foreclosure or short sale?
• How much more is your home worth than a distressed sale?

The answers to these questions may surprise you. The truth is that your home will not be worth a whole lot more than a foreclosure or short sale, even if you put in upgrades.

Buyers want a good deal. They might buy a home that needs carpeting, for example if adding the cost of the new carpeting still makes that bank-owned home’s price attractive. On the other hand, if your home is in tip top shape, clean, move in ready, as well as priced competitively with foreclosures and short sales in the area, your home’s price then becomes more attractive.

Examine the Foreclosed and Short Sale Comparable Sales

• Look at similar homes in the area to determine comparable sales. The list should contain homes within a ¼ mile to ½ mile.
• Pay attention to neighborhood dividing lines such as major streets, train tracks and freeways. Do not compare homes from “the other side of the tracks.” Perceptions and desirability have value.
• Compare homes with similar square footage if possible.
• Compare homes that are similar ages. One neighborhood may consist of homes built in the 1960′s, which co-mingle with homes built in the 1980′s. The values between the two will differ. Compare apples to apples.

In the current economy, we constantly come across more information and news regarding the volatile housing industry. According to Amy Bohutinsky, VP of Marketing and Communications for Zillow.com, it could take some time for Puget Sound to recover.

Bohutinsky says that as far as the recovery goes, the Northwest is about a year behind the rest of the nation. According to Bohutinsky, home prices in the Northwest peaked in the middle of 2007, in California, home prices peaked in 2005, and across the country in 2006. What this means is that since we were late to reach our peak, we’ll be late to stabilize as well.

Despite sales being up, home values are still dropping. The problem is the excess inventory of homes.

As more foreclosures hit the market more houses will be added to the housing inventory. Until the months of housing inventory starts to deplete, home prices will continue to decrease.

One thing to keep in mind is that certain areas or counties are hit harder than others. For example, year-over-year declines show Seattle down 11.5 percent, King County down 9.6 percent, Pierce County down 7.9 percent, and Snohomish County down 13.3 percent.

In this market, there are a few simple things to keep in mind.

If you’re a homeowner, it only matters to you if you’re going to move right now or you want to refinance.

If you’re a buyer, it means that homes are more affordable than they’ve been in many years, coupled with historically low mortgage rates, it can be a great time to buy.

If you’re trying to sell your home, be realistic about pricing. An overpriced home will sit on the market indefinitely unless the price is comparable to others homes on the market.

To see the full article and interview with Amy Bohutinsky, please see the King 5 website.

There’s a good reason about 80 percent of homes are sold with the help of a Real Estate Agent. Below are some of the ways that Real Estate Agents help the buying or selling of a home be a straightforward and manageable process.

Setting the right price. One of the very first things a Real Estate Agent presents to a home seller is a Comparative Market Analysis or CMA. The CMA is a report that analyzes the current market trends and recent sales prices within a given area. This report is an important tool that helps the agent determine a fair and reasonable price. Setting the right price is absolutely crucial in home sales, especially in this market. Sellers who utilize a Real Estate Agent, on average, receive 20 percent more for homes compared to those who sell on their own.

Neighborhood knowledge. A Realtor has a better understanding of what buyers can get for their money in the neighborhood they want to buy in. The agent will have information available about the neighborhood and be able to offer guidance and advice to their clients. Agents have information about the neighborhood including noise levels, schools, shopping, property taxes, local amenities, and demographics. For sellers, these details are equally important as they affect the value and marketability of the home.

Marketing expertise. Along with the CMA, a Real Estate Agent will typically present sellers with a marketing plan that details what they will do to sell the home. This may include open houses, internet exposure via large home search sites, fliers, brochures, placing ads in various media including social media, and showing your house to potential buyers. Agents also have access to two extraordinary resources that are critical to selling a home: other agents, and the Multiple Listing Service (MLS).

The MLS and the other agents. The multiple listing service (MLS), is a database of all the homes for sale by Real Estate Agents in a particular region. Once a home is listed, information about it can be accessed by those Real Estate Agents and matched to buyers. You are engaging the efforts of not just one person, but hundreds to sell your home. According to the National Association of Realtors, 82 percent of homes are sold through an agent’s contacts.

Objectivity. When selling, a Real Estate Agent can provide an unemotional analysis of the home and what needs to be enhanced to make it more appealing to buyers. Buyers who choose to utilize a Real Estate Agent will benefit from the agent’s objectivity. Real Estate Agents can provide an unemotional analysis of a home. They will determine any enhancements, modifications or remedies that might be needed to efficiently buy or sell a home.

Efficiency. With the expertise of Real Estate Agents a transaction will be more efficient. Buyers will be shown homes in relation to their needs and qualified loan amounts. Sellers will be best served by Agents objectivity in preparing their home for the market.

Contracts. Realtors can complete the purchase and sale agreement and are knowledgeable about the correct forms needed to accommodate the transaction.

Negotiation and closing assistance. A Real Estate Agent can provide advice for both buyers and sellers about whether to accept an offer, or counter-offer. Real Estate Agents know what a home is worth and what a fair price to offer or to accept is.