Montague, Miller and Company Blog

Today’s KCM Blog reported that the Mortgage Forgiveness Debt Relief Act may be extended for several years. This would be a great help to those involved with foreclosures and short sales, but anything can happen in this economic climate. Read the KCM Blog inserted below to find out more:

Many of our readers have asked whether or not we believe the Mortgage Forgiveness Debt Relief Act of 2007 will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

The reason this act is important in today’s housing market is that, without the act, debt reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. If the legislation is not extended, then it would require homeowners to complete a short sale or modification prior to year’s end in order to avoid a tax consequence.

Last week, DSNews reported:

“Obama’s FY2013 budget proposal includes an extension of the Mortgage Forgiveness Debt Relief Act of 2007…

In the Treasury’s Green Book, its summary explanation of the administration’s budget proposal, it calls for an extension of the tax break due to “the continued importance of facilitating home mortgage modifications.”

The administration is proposing an extension that would apply to any amounts forgiven before January 1, 2015.”

In today’s political environment, the passage of any budget proposal could be considered doubtful. However, both parties seem to be in agreement that this provision should be extended. We can only hope that it doesn’t fall victim to an election year.

Disclaimer: As with all tax issues, we strongly suggest you consult with your accountant to find out how this may impact you and your family.

Amherst Milling Co, photo by Steve Spring

Several weeks ago in this blog I wrote about Going LOCAL.  That will be a theme throughout this year as I discover local treasures, experiences and opportunities to share.

Just this past week, I was in the Montague, Miller office in Amherst and while there visited Amherst Milling Co. This frame building will take you  back at least 100 years! There must have been 20 different brands and kinds of feed on the front porch, the chickens were roaming around and the selection of goods on the inside would tempt any serious farmer or even a suburban “want-a-be”.
I had sampled the wares of Amherst Milling at the annual North Garden Apple Harvest Festival in November, which is a wonderful community event sponsored by the North Garden Ruritans.  The stone ground grits are some of the best in Virginia and you can take your pick…either white or yellow grits!! Being a good Southern girl, I appreciate good grits, and I have learned from my daughter, Ashley Clarke Brooks, a local chef, that the stone ground variety have the best taste and texture. But, what I really want to extol is that the dozen eggs I purchased were amazing. We enjoyed eggs in many different ways this past weeks because of the extraordinary taste and brightness of those eggs.
Don’t miss an opportunity to explore the varied towns and villages in Central Virginia. . Amherst is less than 45 minutes south of Charlottesville, and  has the feel of an old Virginia town, with cute shops, antique stores, a great little cafe on the corner, and of course…Amherst Milling. Don’t forget to buy the fresh eggs!!
Remember Local is Best!
Carol Clarke
President, Montague, Miller and Co. Realtors

photo courtesty of Steve Spring

There should be a disclaimer, I suppose, about my Fitness musings.  I am not a physiology of exercise PHd-just someone who has been involved with exercise for a long time-longer than I have been a REALTOR.  Here are some ideas:

When you travel (we are going to VAR Legislative conference tomorrow) take some sneakers and shorts for working out.  The hotels all have fitness areas.

Park far away from your intended target and WALK.

Try interval training.  It is repeating a series of slow and fast movements.  For example: Walk 100 yards And run 100 yds.

Make sure to STRETCH before and after working out.  It is just as important as the cardio session or the wt. training session.  We all lose flexibility as we get older.

Work on balance and core strength.  There are a number of ways to do this in the gym. Ask someone to help!

Make a commitment to an exercise program and stay with.  You will notice a change!

Barbara

This Thursday is the date over 200 women and men will be attending the Chamber of Commerce Women’s Conference, Quadruplicity 2012. Celebrating its 5th year, this event is a unique opportunity to network with community, civic, and business owners in the Charlottesville area.

The line up of speakers for 8 breakout sessions on life, career, health, and finance, is impressive this year, and the keynote speaker is Slate magazine Senior Editor, Dahlia Lithwick, who will be speaking on “What We Can Learn from the Women of the Supreme Court”.

The International Athena Award will be presented as well as the Charlottesville 4 Under 40 award, earned by a young professional under the age of 40 who has made a positive impact on the local community. Montague Miller & Co is proud to have Sasha Farmer as one of the first award winners in 2011.

This year’s event at the Omni in Downtown Charlottesville is sure to bring a great number of professionals to connect for a day of education, growth, awards, and leadership development. I encourage you to attend!

Carol Clarke, President

Just today, at our company business meeting, we had a very good discussion about whether as agents we should include short-sales and foreclosures in our market analyses. This article on the KCM Blog was very timely.

Many of our readers ask us if appraisers use distressed properties (short sales and foreclosures) as comparables when doing an appraisal on non-distressed properties. We have posted on this issue on several occasions

Last month, the Appraisal Institute issued a paper on the subject. In the paper, the Institute explained that:

“Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

On whether an appraiser should use distressed properties as comparables, the Institute was very direct:

“An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”

And they explained the possible differences between short sales and foreclosures:

“A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

Bottom Line
Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be.

Those of us in the real estate business are known  to be wonderful caregivers.  We are helpful to our clients in every way. What  we are not good at is taking care of ourselves.  For the last year I have been thinking about how are REALTOR® members could work a little fitness into their daily routines.  Here goes:

• Join a gym.  If that seems like too big of a commitment, have your Dr. write a “rehabilitation” prescription.  Most gyms have short term-“try us out” plans.  It is always a good idea to see your Dr. before beginning a new exercise program.
• Keep your gym bag in the car.  If a client cancels an appointment or if your schedule changes, hop over for an extra work out.
• Just walk.  If all else fails, take a walk every day.
• Do something different.  Go to a class at the gym, walk a different  route.
• Train for a specific event.  Are you up for a ½ marathon? How about a 5K?
• Find a group of people who work out.
• Try some of the exercise CD’s or game console activities.
• Like to dance?  Try ZUMBA.
• Take up a “lifetime sport”.  If you can’t play softball anymore or soccer or basketball-take up golf.  Try tennis- If you can’t play single-try doubles.
• Ride a bike.  Go to a Second Hand sports equipment store to buy a bike and see if you like it.
• Just get going.  It really is fun and you will feel better.

Barbara G. McMurry was a Phys. Ed. Teacher before going into Real Estate.

At this mornings Charlottesville Area Association of Realtors General Membership meeting, Montague, Miller & Co.’s Brad Conner was installed as the 2012 President of the Board of Directors.  He succeeds Montague, Miller’s Barbara McMurry, who was 2011 President.  Joining Brad and Barbara on the BOD was Anita Dunbar. 

At the same meeting, Sasha Farmer was recognized as CAAR Salesperson of the Year, which is one of two highest awards given to a member of the Association. 

Big congratulations to Brad, Barbara, Anita, and Sasha!

According to my basic research, which is flawed from the start, given lack of assignment from foreclosed individual owner to lender in the Albemarle courthouse, there are 14 bank owned properties and 25 Fannie or Freddie (GSE = Government Sponsored Entities) owned properties.  (One on-line tool indicated 41 total active foreclosures in Albemarle County, though the author can not validate that number.) The sample included fourteen major and mid-sized mortgage lenders.  HUD owned homes appear to be still listed in the previous homeowner’s name, as do many of the bank or GSE-owned homes, so understanding how large the population base is very hard to determine. 

We can extrapolate to some degree but without any statistical accuracy from Fannie & Freddie’s on-line listings:  Fannie publishes properties available through HomePath.com, which offers incentive loan programs.  Currently, there are nine listings appearing in Albemarle County, but only six of those are shown on the property records as Fannie Mae.  Freddie also publishes their properties on HomeSteps.com and of the four listed, one was not shown on the records as Freddie owned.  So, is it 25%-33% of the market more than on the rolls?  Who knows.  Further, since we know there are an additional 16 properties not listed on MLS, HomePath or HomeSteps, we know that this is “shadow inventory,” that is a REO that hasn’t make it back onto the MLS. 

Surely, the MLS would help.  No, a quick check that a Realtor provided for me listed one Active listing for “Fannie” and none for “Federal”.  In fact, the vast majority of the REOs in Albemarle County do not show up on the public side of the MLS as active listings.  This could mean they are under contract, but most likely it means they are shadow inventory.  Add in the individuals already foreclosed upon, but assignments have not occurred in the tax records and that number jumps. 

What’s the takeaway?  We don’t have a good handle on REOs, but it would appear from anecdotal evidence that home sellers – both distressed and not – are pricing properly, perhaps with a view to the shadow inventory that lurks and the Spring market is starting earlier than usual.

This past Tuesday marked the culmination of a six year planning process as representatives from the City of Charlottesville, Albemarle County, and the Rivanna Water and Sewer Authority met to approve the new Community Water Supply Plan.   The plan is intended to provide for the Charlottesville area’s water supply needs for the next 50 years.  The first order of business is the construction of a new earthen dam at the Ragged Mountain Reservoir, which is supposed to begin this spring.

The process of arriving at this agreement between the 3 entities has not been without its challenges and bumps in the road.  Congratulations to Montague, Miller’s own Mike Gaffney who, as chair of the RWSA Board, has played an integral role in shepherding this plan to completion.