Real Estate News

Latest Realty News from NAR

Yes, Interest on Home Equity Loans is Still Deductible

There’s been confusion since the big tax law was enacted over the deductibility of interest on home equity loans. NAR has been saying that the interest is still deductible for the part of the loan that’s used for home repairs, renovations, and additions. And that’s the correct interpretation, according to the IRS. The agency confirmed that in a memo about a week and a half ago.

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The part of the loan that’s used on the house to fix something or improve it remains deductible under the new tax law. Loan proceeds that are used for personal living expenses or anything not related to improving the home are not deductible.

The clarification is looked at in the latest Voice for Real Estate news video from NAR.

The video also looks at an important vote in the House on so-called drive-by lawsuits. These are lawsuits filed by people who are using accessibility requirements under the Americans with Disabilities Act to extract fees from small property owners. People are sending letters to property owners alleging they have an ADA violation and threatening a lawsuit unless the owner reaches a settlement with them. The person sending the letter typically doesn’t even say what the alleged violation is. The only way the owner can find out is by going to court. Most owners end up settling as the cheaper alternative and if there was ever any violation the owner never finds out what it is.

The House passed a bill requiring people who send these letters to identify what the alleged violation is and to give owners a chance to correct the problem before taking them to court. It’s a solution that addresses a clear abuse of an important law and NAR supported its passage. The bill still has to be taken up in the Senate.

Other topics in the video include NAR’s Commitment to Excellence initiative, which will roll out later this year, to give NAR members a chance to voluntarily assess how well they perform on key aspects of their business, including technology, the Code of Ethics, and the forms and contracts they use.

The video also gives an update on home sales—they’re off to a slow start this year, mainly because of inventory shortages in many markets, especially among lower-cost starter homes—and what’s happening in commercial real estate. Briefly, transaction volume on small cap properties is doing okay but volume on large cap properties is slowing down.

Watch and share video.

What’s the Right Way to Structure a Marketing Service Agreement?

Real estate practitioners entering into marketing service agreements with lenders, title companies, and other settlement service providers is a well-established practice, but a recent court decision shows why you have to structure these agreements the right way.

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An appellate court just ruled that it’s okay for a mortgage lender to refer business to mortgage insurers who are buying reinsurance from an affiliate of the lender, because the reinsurance is a bona fide service and the insurers are paying fair market rates for it. In other words, the arrangement doesn’t amount to a kickback.

Although the case involves a lender, insurance companies, and a reinsurer, the structure of the agreement is something that applies to the kind of marketing service agreements you might be involved in as an agent or broker. Any agreement you enter into with a lender or title company must be for actual services rendered and priced at fair market rates and not simply an arrangement for referrals.

How do you ensure a marketing agreement is appropriate under federal anti-kickback rules? The most important thing is to have it looked at by an attorney who’s familiar with the Real Estate Settlement Procedures Act, or RESPA. For a general idea, though, there are two tests you can apply:

1.Is the marketing fee you receive based on the number of referrals you make to the company, whether it’s a title company, a lender, or another service provider? If the fee corresponds to the number of referrals, you could be inviting a close look by the Consumer Financial Protection Bureau (CFPB), which is the federal agency that enforces RESPA.

2. If you have an arrangement to split costs on a joint project, like a newspaper ad, is the split reflective of what each of you get in return? For example, if you and the title company are splitting the cost of the ad down the middle, then half the ad should go to the title company and half should go to you. If the title company is covering 75 percent of the cost of the ad but only taking up 25 percent of the space, that split makes it look like the company is subsidizing 50 percent of the ad cost. Again, you could be inviting a close look by the CFPB.

Learn more about the recent court decision in the latest Voice for Real Estate news video from NAR. The video also looks at what was in the budget agreement enacted into law about two weeks ago. Among other things, the new law extends the tax deduction for mortgage insurance premiums and retains the prohibition on taxing forgiven mortgage debt as income. It also looks at why a recent Supreme Court decision on the regulation of bodies of water is important to your inbdustry.

Watch video now.

Robots are Starting to Do Showings

vre 80 stillA company called Zenplace in San Francisco is using robots to help its agents conduct showings. When people arrive at the unit, they’re greeted by what amounts to an iPad on a mobile stand that leads them around, but it’s personalized; it’s the agent’s image and voice that people see and hear. Other companies are coming out with their own versions of this.

It’s a good question whether this type of automation will take off. As people get used to buying goods at automated stores in which everything is done with your phone or credit card and no employees are around, it’s feasible mobile iPads will do the trick at showings.


Screen grab from Zenplace video

Whether you like the idea or not, it’s a trend that’s poised to hit your industry. There are other tech trends you’ll be faced with whether you like them or not. One is a kind of virtual tour that’s more immersive than what you get by just wearing goggles. You get an additional tactile component, because you’re wearing gloves with sensors. Now you feel the door handle when you open the refrigerator as well as see it in multiple dimensions.

Will this be the norm six years from now? Who knows, but now that the genie’s out of the bottle, it’s not likely to get put back in.

REALTOR® Magazine spent a few days at CES in Las Vegas two weeks ago and brought back coverage of all types of tech innovations coming to real estate. CES stands for Consumer Electronics Show and it’s the big showcase each year at which companies try to wow people with what the’re cooking up for us.

You can learn more about CES and also about real estate robots in the latest Voice for Real Estate video. The video also looks at something the U.S. Department of Labor did a few weeks ago that could eventually be important to you because it promises to get the real estate industry one step closer to setting up association health plans (AHPs) for independent contractors.

The agency proposed adding “working owner” to the definition of employer for purposes of setting up AHPs, which would enable sole proprietors and small business owners to ban together for insurance under the large group market, which could make coverage available more cheaply than under the small group market. There remain a lot of hurdles, but this was a crucial step in the right direction.

The video also looks at the three-day federal government shutdown and what could happen to your pipeline of homes sales if there’s another one in a few weeks, which could happen since the short-term budget law expires in early February. If your buyers are applying for FHA-backed financing, they would probably be okay, although processing might take a bit longer. But if they[re buying a new house in a flood area, they might not be able to get flood insurance, and that would mean a delay in  closing.

Watch the video now.

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Henry Sudol
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Real Estate Broker

Phone/text: 845-800-7856  

2274 Route 300,
P O Box 839
Wallkill, NY 12589


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"My house would still be on the market had it not been for Hank. Hank found me when my listing agreement expired. His plans to sell my house were professional, thorough,and appropriate for the changing market. His dedication, understanding ,people skills, photos and on line presentation were critical to attracting buyers" M. Arlotta
"Choosing Hank was our best selling decision. Our agreement had expired after six months of no offers and limited interest. We interviewed 4 agents. Listed with Hank we were under agreement in three weeks choosing 1 of 3 offers." J. Thompson
Dear Hank… It's a pleasure to write this letter to thank you for all your hard work in selling our house. Thank you, in your case, certainly is not enough! We hope this letter explains our belief that you are an exemplary Realtor. In May we found ourselves trying to sell a one hundred year old house that was in need of many repairs in a challenging selling market. From the time of our first meeting, you were honest and direct. You explained to us how the process would unfold so we wouldn't be surprised, and you recommended things that we could do to help with the sale. When it came to setting an asking price and later when we wanted to adjust and lower the price, you always listened to our thoughts and recommended we keep the asking price, be patient and wait for the right buyer. In those discussions it quickly became obvious that you knew your market and the players in local real estate. Unlike many of your contemporaries you communicated frequently and effectively with us. To your credit we were never blindsided or in the dark at any time. You were proactive and kept us looking ahead of the present. Your advertisement and numerous tours of our house were comprehensive and beneficial in making a difficult sale happen. No one knew how much real estate values were going to fall but they certainly did. During these challenging real estate market other agents would focus more on quick easy sales but you did not. It was during these difficult times when we needed your best, and that was what we got. By this time we had grown accustomed to your great work ethic, your flexibility, creativity, and persistence in making the sale. It is no exaggeration that closing and selling a house is a stressful endeavor both emotionally and fiscally. You provided that support and confidence we needed to know things would work out. Through it all you were a Realtor who was clearly a partner and a friend. For all of these reasons this is why we can unconditionally recommend you to our friends and acquaintances. It is without hesitation we would seek you out with any future real estate needs. Sincerely, Ed and Nereida Castillo Ed and Nereida Castillo
"We had an accepted offer for our asking price in under a week. We don't believe this would have happened without your advice and suggestions on ways to ready the house for the market... you priced and marketed our house perfectly." Matt and Sarah Messing
"We sold in 8 days. Hank listened to our needs and wants. I would definitely recommend Hank" B. Redder
"We thought we might never sell our 1870's home. We had been listed with another agent for a year with minimal results. In contrast, Hank posted great photos, marketing the house effectively on the web creating an amazing amount of activity and appointments." [7 offers] K. Hernandez
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Rita Levine Real EstateRita Levine Real Estate
New York State Licensed Real Estate Broker
2274 Route 300 P.O. Box 839, Wallkill, New York 12589