Archive for January, 2011

VAR’s Jay DeBoer on why the re-fi tax should be eliminated

VAR’s Jay DeBoer, Vice President of Law and Policy, tells Virginia Realtors® and homeowners why the recordation tax on re-fis should be eliminated:

First, it has become extraordinarily difficult to determine who actually owns your mortgage. The days are mostly gone of the friendly neighborhood bank making a loan and holding the note for 30 years. Lending institutions sell notes freely, transferring them electronically and sometimes the original lender continues to collect the payments as a “servicer.” When the homeowner is asked whether he is “refinancing with the same lender,” the honest answer is usually “I don’t know.”

Second, mortgage interest rates are extremely low right now, and those who have older loans with higher interest rates would generally save money by refinancing. But lenders have become far more restrictive in approving loans. Having an extra $700 to $1,000 on hand, saved from not having to pay recordation taxes a second time, might mean the difference between a loan refinance approval for a homeowner who is struggling, and a rejection.

Read the full piece at the Richmond Times Dispatch. Members should be familiar with this issue and urge their clients to respond to any calls to action from the Virginia Homeowners Alliance.

Google to drop real estate listings

February 10 will be the last day Google offers real estate listings on its site.

Per the 800-lb gorilla itself:

At Google one of our key philosophies is to take risks and to experiment. To that end, in July 2009 we announced the ability to find property for sale or rent directly on Google Maps. This is one of the “search options” next to the search box on Google Maps, and is currently available in the US, Australia, New Zealand, the UK and Japan.

The search giant (I think we’re required by law to refer to Google as “the search giant”) cited low usage and “the proliferation of excellent property-search tools on real estate websites” as major reasons for the decision.

Click here to read all about it.

Snakes. Why did it have to be snakes?

I don’t know what Idaho law says about disclosure, but I suspect "infested with garter snakes" is probably not on the list.

"Huh?" I hear you say. You need to read the story of the "Snake House."

After some time, the Sessions [family] began to see more snakes. Amber Sessions saw eight snakes within a couple of days and decided to research the house a little more.

"I went online to find out what was going on. I typed in ‘Idaho snake house,’ and there was a Channel 6 news report of the previous people that lived there, the Ards, and it was our house," said Amber Sessions.

Now, are you ready for the "Eeeeew" moment?

[Realtor Todd] Davis understands the snakes to be under the foundation of the house and Ben Sessions says he believes the snakes to be by the well because the water at the house tasted the same as the snakes smelled.

Garter snakes "secrete a foul-smelling fluid from anal glands when alarmed."

The good news is that Davis, the new Realtor working to sell the house, says he’s being sure to tell any interested buyer about the snake problem. "I guess I need a snake lover," he said. "Or someone with multiple mongooses."

Not an RPAC fan? Cool. Read this:

REALTORS® know what it’s like trying to urge a reluctant client to make a real estate decision that’s clearly in that client’s best interest. They’re often not persuaded by the well-reasoned counsel of their REALTOR® adviser – maybe because they perceive that you have skin in the game. Who knows? Often, though, all it takes someone else – a third party they trust: parent, friend, partner – pointing out the merits of what you’ve been saying all along, and suddenly the fog clears, bells ring, birds sing, and your client does the right thing.

Ironically, an awful lot of REALTORS seem to be that way themselves when it comes to RPAC, conjuring up all manner of reasons – from the sad state of the economy to the distastefulness of politics in general to philosophical differences about the candidates RPAC supports – for not making a measly $20 Fair Share annual investment.

So here, for that crowd, is a third-party perspective on RPAC’s effectiveness – its very real impact on your business.  I’m hoping it pushes a few of you over the edge. (I mean that in the best way.)

It’s a January 21 article from Politico, the online publication about politics for political types.

We link to the full piece below, but the gist is that REALTORS®’ political efforts nationwide in last November’s Congressional elections were not only effective in electing pro-real estate candidates; those efforts are also a harbinger of what post-partisan politics will look like in coming elections: campaign support driven not by party affiliation, but by how well a candidate represents the interests of a particular profession – REALTORS and property owners, say.

Here are some salient excerpts:

A year ago this week, the Supreme Court freed corporate America to fully engage in campaigns, prompting dire predictions that Big Oil, Wal-Mart or even foreign firms would suddenly flood the political marketplace.

That didn’t happen. But at least one industry sector quietly and without controversy became a major player in the 2010 midterms – in a way that some campaign-finance experts believe could be the wave of the future for 2012 and beyond.

The model: the “Realtors’ Party,” the moniker the National Association of Realtors gave to its $6.5 million election effort, which backed a bipartisan slate of 103 pro-Realtor candidates and saw election of 66 of them.


Much of what the Realtors did in 2010 could have been done before the landmark Citizens United ruling – pooling contributions from individual Realtors and targeting pro-Realtor politicians for assistance.

But by 2012, some experts envision a day when industry groups will not only hit up their individual members, but their corporate accounts for campaign cash as well – and then target their spending in ways that have less to do with Democrat or Republican, and more to do with who is pro or con on their big issues.

And this one:

In a post-election boast on its website, the association said: “Because of these ongoing efforts, the next Congress will contain many old friends and new friends who understand real estate issues.”

Those aren’t just feel good messages. The real estate industry had real stakes in the election. It is still in a precarious recovery and will be looking to Washington for continued help with foreclosures, lending and other issues. Most of the candidates it supported sit on the House Financial Services Committee, which oversees the housing industry.

The Realtors’ campaign differed from that of such large trade and business groups as the U.S. Chamber of Commerce in that it was built around one industry and targeted at a subset of candidates with clear records of advocating on housing issues while serving in Congress, a state legislature or on the job.

Now, as an insider, I find those compelling reasons to see RPAC in a new light. It’s sort of what we’ve been saying all along: We’re not about party affiliation we’re not about social issues, we’re about real estate and property ownership, and – at least as last November’s elections go – the proof of our effectiveness in protecting those interests – protecting YOU and your business – is in Politico…er, the pudding.

Maybe you don’t hear bells (or birds), but do the right thing anyway. Invest your fair share. It really does matter.

Here’s link to full story in Politico:

State could ban lawn fertilizer with phosphorus

The General Assembly is expected to consider a bill that would ban fertilizer containing phosphorous from being used on most lawns, golf courses, parks, and cemeteries in Virginia.

Phosphorus runoff from lawns is a major cause of a “dead zone” in the Chesapeake Bay, where it acts as a nutrient for algae that can overwhelm plants and some marine animals.

The bill, introduced last year and postponed till this session, would not apply to smaller areas — gardens, trees, shrubs, or indoor plants. But huge tracts of land would have to be fed using a phosphorous-free fertilizer. Stores would be required to have the phosphorus-free products on shelves, but could sell products containing the mineral upon request.

How common is phosphorous in plant food? Well, you know those three numbers you often see — e.g., 5-10-5? The middle number is the amount of phosphorous.

So instead of this:


You would need to use this:


Arlington already bans lawn fertilizer with phosphorus, and many states and localities limit or ban the use of laundry or dish detergents that contain it.

A tax deduction you probably don’t want to miss

In case you’re one of those people who likes to save money on your taxes, there’s a deduction lurking in your 2010 paperwork that Realtors and other independent contractors ought to know about.

If you pay for health insurance, you (should) already know that you can deduct the cost of your premiums from your income tax — that’s on line 29 of the 1040.  But it can also be deducted from the net income you report for Social Security and Medicare self-employment tax.

The place to take this deduction is on line 3 of Schedule SE (self-employment). Here are the IRS’s instructions (sorry I couldn’t give the plain text):


(Click here to view the full PDF; this section is on page 3.)

Call for Action: Stop re-taxing homeowners!

A piece of legislation is being considered that you should be aware of, as a Realtor® and as an advocate for Virginia property owners.

It’s a bill that would eliminate the recordation tax from property refinances, thereby allowing Virginia property owners to refinance at a lower cost, saving them in these hard economic times hundreds of dontretaxmuch-needed dollars.

But in Virginia property owners may also have to pay a recordation tax on that refinance.

Under current Virginia law, refinancing a property loan can cost property owners hundreds, even thousands of dollars in recordation taxes.  And with so many property owners in danger of losing their properties or going ‘upside down’ on their mortgages, it’s unfair that they are taxed again when they’re trying to refinance to keep their properties or reduce their costs.

These days, refinancing a mortgage is a great way to take advantage of rock-bottom interest rates and save property owners on monthly payments. If Virginia property owners are facing foreclosure, refinancing their

Continue reading Call for Action: Stop re-taxing homeowners!

Convincing clients they (may) qualify

It certainly makes sense to educate potential first-time home buyers about the buying process, but that requires actually having buyers. In a piece for the National Association of Mortgage Underwriters, Gail Foster (a Realtor and licensed mortgage officer in Maryland) argues that educating people about the mortgage process is more important.

The problem is a loan officer can only reach someone who walks through the door, picks up the phone or clicks a link on the internet to inquire about financing. We need to go out and find, lure, and encourage people who may be thinking about home ownership to make the leap and see if they qualify.

Quick, interesting reading — see the whole piece at NAMU’s site.

NAR’s Jerry Giovaniello to speak at Get Active conference

Gerard “Jerry” Giovaniello, NAR’s chief lobbyist and senior vice president of government affairs, is slated to speak to Virginia Realtors® at the 2011 Get Active conference in Richmond, VA, on February 11. Mr. Giovaniello will focus on national legislative issues, including the proposed changes to the mortgage interest deduction (MID).

Mr. Giovaniello serves as NAR’s lobbyist for members of Congress from California, Washington, Nevada, Hawaii and Oregon. After winning an extension of the homebuyer tax credit in 2009, NAR focused much of its efforts in 2010 on the problems homebuyers face in obtaining mortgages. To further its members’ interests, NAR played an active role in the 2010 elections, racking up more than $6 million in independent expenditures on behalf of incumbents who have supported the group’s causes in the past. Giovaniello has firsthand knowledge of how things work on Capitol Hill, having served as chief of staff for two California Congressman from 1972-81. He was also recently named one of Inman News’ 100 Most Influential Real Estate Leaders in 2010.

Learn more about the Get Active conference and register to attend at

Taxes down, reporting up for rental owners

If you’re a small-business owner, there’s a lot to like in the Small Business Lending Funds Act that passed last year: Eight separate tax cuts totaling about $12 billion for one thing, plus $30 billion being made available for small banks to lend to small businesses.

The law is "revenue-neutral," meaning that whatever the law costs is made up for by the savings or income it creates.

In the case of the Small Business Lending Funds Act, one way the government is offsetting the cost is by making sure that contractors — plumbers, landscapers, accountants, etc. — don’t hide income. Caesar wants what’s coming to him, in other words.

Yeah, it's more paperwork. And one way the IRS is doing that is by requiring just about anyone who makes money by renting property to document (via the good ol’ 1099-MISC form) when they pay $600 or more to a contractor during a year. Starting now.

Someone who owns dozens of properties with dozens of contractors doing hundreds of jobs over the year — well, he’s going to have a bit more paperwork than the landlord who owns one or two rentals. (Of course, the landlord with lots of property probably has accounting software that can handle the reporting without batting a virtual eyelash.)

There are some exceptions to the requirements, but check with the IRS if you think any apply to you. (In other words, don’t get your tax advice from a blog.)

Individuals renting their principal residences — think active members of the military and intelligence community — are exempt. So, too, are individuals who can show that the extra paperwork will be a hardship. (How you can do that isn’t clear yet.) And ditto for anyone who receives a "minimal amount" of rental income — e.g., charging that 24-year-old slacker son of yours rent.

Is it a big deal? Not really — at least, assuming you (Mr. Landlord) keep accurate records. There are some mighty hefty fines if you don’t report your payments.

Still, the money raised (expected to be about $2.5 billion over 10 years) will help offset the cost of helping small businesses, many of which can use all the help they can get.

Want more?

Accounting Today has a detailed write-up about what the bill does, and NAR has a two-page PDF explaining its position.