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Dating Our Money

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About Us

Dating and money are not typically two topics that come together in the same sentence. Yet, for "suddenly single" women out there, the reality is that these two world will collide before we are often ready. Join me here as we explore these topics together and get ready for the release of my new book, "Dating Our Money." Welcome!

Short Sales

Currently, I am trying to buy a short sale home.  People are constantly asking what that means. Tonight I will explain and tell you how it relates to every one of us.

The news is constantly reporting on houses being foreclosed or short sales. What is a short sale? A short sale is when a piece of real estate is bought for a price that falls “short” of what the balance is on the loan.  Here is an example. Let’s say you still owe $250,000 on a loan for your house. You can’t make the payments anymore and the house is about to go into foreclosure. You find a buyer who will buy the house for $150,000. The bank agrees to the sale because they want to avoid  foreclosure and the heavy fees associated with it. Until January 1, 2013, the difference of $100,000 is waved by the bank and the IRS won’t even charge you a tax for the difference. There are so many houses  in the short sale and foreclosure process for SO many reasons but one of them is the belief you should sell your short sale property NOW versus later because in 2013 you will have a large tax associated with the $100,000 difference.

How does this affect you if you are not selling your house? Unfortunately, in almost every neighbo rhood in America you can find a short sale property that is being sold and lowering your real estate values. Now you are probably paying real estate taxes that are substantially higher than the true value of properties in the neighborhood. You may want to try to fight your current tax value by giving the value of recent home sales in your neighborhood. It is sobering.

If you are a first time home buyer, there are so many reasons why this could be a great time to jump in to home ownership. You can definitely find very good values out there! The main issue is qualifying for a loan. Your credit score is essential! Without a good credit score, your interest rate will skyrocket. Make sure before you buy a house, you have investigated the full cost including taxes, maintence like lawn service, insurance and utilities. Don’t get into a large home that you can not afford if you lose your job or get disabled. Suze Orman’s rule is a 20% down payment and an eight month emergency fund must be in place before you buy a house.

More and more people are deciding to rent versus the headache of homeownership. There is no right or wrong answer. Each person’s needs are unique and require their own specific approach. Feel free to visit a CPA or Financial planner because home ownership is probably the largest asset people will own. Make sure to choose it wisely. Let your home be a place of peace and happiness not a place of fear and unrest due to poor financial choices.

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