May 2009 Newsletter
Table of Contents
- Three Ways to Split the House
- REDS Content Marketing Program: New Benefit for
Members
- Another New Tax Law
- An Incredible Interview with Gibran Nicholas, CEO
of CMPS
- Thought for the Day
Three Ways to Split the House in Divorce
By Carol Ann Wilson, CFP, CFDP
1. Sell the house and divide the profits that remain after sales
costs and the mortgage is paid off. It is important to consider
the basis in the house and possible capital gains. Also, if your
client wants to buy another home, determine if he/she will be able
to qualify for a new loan
2. One spouse buys out the other spouse's interest in the house.
This can be done by trading another asset for the interest in the
house.
The first step is to determine the value of the home. An appraisal
should be done. The fair market value of the house minus the mortgage
will show the equity in the house.
What if the wife decides to keep the house and she finds within
a short time that she cannot afford to keep it and she puts it up
for sale? Should you consider subtracting selling costs and capital
gains taxes from the value in the beginning? These are issues that
definitely should be considered.
What if the wife wants to keep the house and there is not another
asset to offset the value? She could refinance the house to withdraw
enough cash to pay off her ex-husband. But that means she now has
a higher mortgage payment. Can she afford a higher payment?
Instead of refinancing the house, she could owe a sum to her ex-husband,
which is paid off over time (a property settlement note). A note
should include reasonable interest, and it should be collateralized
with a deed of trust on the property. A problem with this arrangement
is that it keeps the ex-spouses in an uncomfortable debtor-creditor
relationship.
Another problem with buying out the other spouse's interest is
that the non-owner spouse's name stays on the mortgage. Even though
the husband may quit-claim the deed to the wife, his name remains
on the mortgage. If she decides to stop making the payments, he
is still liable. This may impact his credit.
3. One spouse keeps the house for a certain time period, say until
the children are out of school, and then the house is to be sold
and the proceeds divided. This creates a tie between the ex-spouses
that they may not want. But is does allow for the "out-spouse"
to be able to also take a $250,000 exclusion from capital gain.
REDS Content Marketing Program
The new REDS Content Marketing Program is another benefit to all
current members of the Real Estate Divorce Specialist Association.
You've probably heard about Content Marketing. It is proven marketing
strategy based on the idea that if you consistently provide your
potential clients with valuable information (content), they will
ultimately reward you with their business and referrals.
The REDS Content Marketing Program provides you with a new piece
of written content every month that you can use in your blog, newsletter,
website or other marketing. The marketing content is powerful, and
you will have the 100% right to reproduce it anywhere. The REDS
Content Marketing Program is an easy way to help you attract and
keep clients.
Another New Tax Law
This comes from the AARP Bulletin. In December 2007, the Mortgage
Forgiveness Debt Relief Act was signed into law that changes the
length of time widowed homeowners have to sell their house. Previous
to passage of this law, a home had to be sold the same year as a
spouse's death to qualify for the $500,000 exclusion. Now, widowed
homeowners have up to two years following a spouse's death
to sell their jointly owned home and be able to exclude $500,000
from taxable gain. This change should allow recently widowed homeowners
more time to grieve and better plan their future, instead of rushing
a home sale to avoid paying more taxes.
Interview: Motivating Buyers in the Age of Excess
Housing Inventory
With so many foreclosed properties, short sales, and other types
of distressed property, it is becoming increasingly difficult to
compete. Gibran Nicholas, CEO of the Certified Mortgage Planning
Specialist Institute, provides some proven ways to make your property
more attractive to buyers. Gibran shows several ways to use financing
incentives to add value to the house, clears up the confusion surrounding
the first time home-buyer's credit, and shows how important reverse
mortgages can be for senior citizens.
This interview is incredible, and I know that these ideas will
bring you at least one extra sale this year. This interview is part
of our Gold Inner Circle program for REDS graduates, but this information
is so important that we are offering it to everyone.
Click here for more information and to purchase the interview:
http://www.realestatedivorcespecialist.com/shop/audio/tc85e.html
Thought for the Day
"Don't put off till tomorrow what you can do today, because
if you do it today and you like it, then you can do it again tomorrow!"
- Lazarus Long, a character in Robert A. Heinlein's books
Click here to read our previous
newsletters
|
