My Contact Information

You can reach me at any of the following:

Cell Phone: 240-483-7556
Office: 301-384-8700

Wednesday, September 5, 2012

I'm Buying a NEW HOUSE, do I still need an inspection?

I am often asked when I help buyers buy a New Home "Do I need a Home Inspection"? and I always say the same thing! "YES"

The builder representative is going to tell you that they are going to have the home inspected after the house is completed, which they should, but think about it, the person doing the inspection works for the builder.     You are spending $$$$$ Big Bucks to have the house of your dreams built and "no one is perfect" so I would absolutely have a home inspection. Without a question get it done.

Nothing against builders but with the economy right now, they may have a tendency to cut some corners at your expense. If corners are cut they can be very costly if you don't have a home inspection.

A good home inspection only costs around $350-$450 depending on the square feet and what you would like to have done and it is so worth it.  So having a home inspection is a small price to pay for peace of mind.

Another reason to have a home inspection is so you can use the report as a final punch list for the builder to make any final repairs.

Whether you are purchasing a "New Home" or a home that is 90 years old you need a home inspection, I recommend Tory, from Property Preservation Specialists. He usually brings 2 other inspectors with him who goes over the whole entire house with you and provides you the following:

We create easy to understand reports with color photos and an easy to read summary.
We deliver the report over the Internet to anywhere in the world within 24 hours.
We use Home Gauge inspection software to generate a professional report with a password protected link for viewing.

To contact Tory at Property Preservation Specialists, just call 202-271-3626 or visit their website at

You can Reach Coni Otto
Cell Phone: 240-483-7556 Office: 301-384-8700

Tuesday, September 4, 2012

Tax Clock is ticking for Underwater Homeowners!

Tax clock is ticking for underwater homeowners

Real estate tax talk
By Stephen Fishman
Inman News®
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Ordinarily, if all or part of a home loan is forgiven by the lender, either in a short sale or foreclosure, the amount forgiven is taxable income. Thus, for example, a homeowner who had $100,000 in mortgage debt forgiven through a short sale would have to pay income tax on the $100,000.

However, Congress adopted the Mortgage Debt Relief Act of 2007 to save millions of underwater homeowners from this tax disaster. Under the Act, homeowners can exclude from their taxable income up to $2 million of debt forgiven on their principal residence during 2007 through 2012. The Act applies to debt reduced through mortgage restructuring, as well as forgiven in connection with a foreclosure.

But the Mortgage Debt Relief Act expires on January 1, 2013. Any mortgage debt forgiven after that date will be fully taxable, unless the Act is extended. To avoid this deadline, a home must not only be sold before the deadline, but the lender must formally forgive the loan in a letter issued before January 1, 2013.

Will the Mortgage Debt Relief Act be extended past 2012? No one knows. In its 2013 budget, the Obama Administration asked that the Act be extended for two years. Several bills have been pending in Congress to extend it as well, but so far nothing has happened. No one has any idea what Congress will do, and it likely won't act until after the election on November 8, if then. It may depend on who wins the election.

Homeowners who want to take advantage of the Mortgage Debt Relief Act must sell their homes before the end of the year. It may already be too late for most homeowners, since short sales often take many months to complete. But some homeowners may be able to complete a short sale before the deadline if they act now -- it all depends on the property and lenders involved. There will likely be a deluge of sellers trying to meet the end of year deadline.

Keep in mind, however, that even if the Mortgage Debt Relief Act is allowed to expire, many homeowners will still be able to avoid paying income tax on their forgiven mortgage debt.

One way to do this is for the home to file for bankruptcy and have the debt discharged by the bankruptcy court. Debts discharged through bankruptcy are not considered taxable income.

Alternatively, if the homeowner is insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable. You are insolvent when your total debts are more than the fair market value of your total assets. For these purposes your assets the value of everything you own. This includes things like your interest in a pension plan and the value of your retirement account.

For details, see IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments.
Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.

Copyright 2012 Inman News