Monday, February 7, 2011
Thursday, February 3, 2011
Glen Eagle Golf and Country Club
Naples Florida Golfing Community Condo with Golf Membership
Click on the link above....this is UNDER $200k and furnished!!!!
Click on the link above....this is UNDER $200k and furnished!!!!
TIB Bank Rates for today.
Rates today….
Saleable loans
30 YR Fixed 4.875% apr 4.976%
15 YR Fixed 4.25% apr 4.342%
JUMBO 30 YR Fixed 5.75% apr 5.880%
JUMBO 15 YR Fixed 4.875% apr 5.102%
Portfolio
5/1 base rate 3.625%
LTVs for Portfolio loans
80% LTV Primary or Second home up to an loan amount of $1,600,000.00
75% LTV up to $2,500,000.00
70% LTV up to $3,500,000.0
65% LTV up to $5,000,000.00
We underwrite our own loans, conforming jumbo and portfolio and can close fast~!
Conforming, Jumbo, FHA, Foreign National loans, Portfolio loans (good loans that just don’t fit into conventional financing)
Kindness is the greatest wisdom. ~Author Unknown
Have a great day~! : ) Lynn
Lynn Rainey
Senior Residential Loan Consultant
TIB Bank est. 1974
599 Tamiami Trail N. Suite #201
Naples, FL 34102
(239) 659-5840 office
x60840
(239) 825-7142 cell
(239) 659-3060 fax
L12.tibmortgageinflorida.com (web application)
Wednesday, February 2, 2011
Sunday, January 30, 2011
Thursday, January 27, 2011
Woman lives in home 25 years without making mortgage payments...
http://realestate.msn.com/article.aspx?cp-documentid=27145486&refId=LIKE
Unbelievable. Comic irony at its best!
Unbelievable. Comic irony at its best!
More than 30,000 homeowners permanently lowered their mortgage payments last month as participation in the government’s anti-foreclosure program accelerated, the U.S. Treasury Department reported.
Borrowers aided by the Home Affordable Modification Program grew to 579,650 in December, 5.5 percent more than a month earlier. Participation had grown 4.5 percent in November. Troubled borrowers continue to fail out of the program at a faster rate than they join. A total of 58,020 loan modifications have been canceled, a nearly 30 percent increase from the 44,972 reported in November, the Treasury report said.
Treasury released a partial scorecard on HAMP in advance of a scheduled Feb. 1 report as criticism of the effort mounts. Representative Jim Jordan, an Ohio Republican, said today that he and Representative Patrick McHenry, a North Carolina Republican, have introduced a bill to end the program. “At some point we’ve gotta say enough is enough, we’ve gotta end this program,” Jordan said. He made his comments during a House Oversight and Government Reform Committee hearing about the $700 billion Troubled Asset Relief Program, or TARP, which funds the mortgage modification effort.
Short of Goal:
HAMP has failed to reach President Barack Obama’s goal of helping 3 million to 4 million homeowners avoid foreclosure. It has been criticized by housing advocates, lawmakers and watchdog groups, including Neil Barofsky, special inspector general for TARP. In a report yesterday, Barofsky called the program “anemic” and “remarkably discouraging” as permanent loan modifications “pale in comparison” to foreclosure filings, which reached 2.9 million in 2010, according to RealtyTrac Inc., an Irvine, California data company. “HAMP appears to be under siege, with a chorus of criticisms from all points on the ideological spectrum growing more insistent and calls for termination or dramatic restructuring gaining traction,” Barofsky said in the report. “I share your frustration,” he said during today’s hearing in response to comments by Jordan. “I just hope Treasury can hear what you’re saying,” he said, “and be honest about where this program is going if it’s going anywhere.”
Administration officials have said the foreclosure efforts are turning a corner after changes in paperwork requirements and expanded participation by lenders. Acting Assistant Treasury Secretary Timothy Massad also testified at the oversight hearing today.
Borrowers aided by the Home Affordable Modification Program grew to 579,650 in December, 5.5 percent more than a month earlier. Participation had grown 4.5 percent in November. Troubled borrowers continue to fail out of the program at a faster rate than they join. A total of 58,020 loan modifications have been canceled, a nearly 30 percent increase from the 44,972 reported in November, the Treasury report said.
Treasury released a partial scorecard on HAMP in advance of a scheduled Feb. 1 report as criticism of the effort mounts. Representative Jim Jordan, an Ohio Republican, said today that he and Representative Patrick McHenry, a North Carolina Republican, have introduced a bill to end the program. “At some point we’ve gotta say enough is enough, we’ve gotta end this program,” Jordan said. He made his comments during a House Oversight and Government Reform Committee hearing about the $700 billion Troubled Asset Relief Program, or TARP, which funds the mortgage modification effort.
Short of Goal:
HAMP has failed to reach President Barack Obama’s goal of helping 3 million to 4 million homeowners avoid foreclosure. It has been criticized by housing advocates, lawmakers and watchdog groups, including Neil Barofsky, special inspector general for TARP. In a report yesterday, Barofsky called the program “anemic” and “remarkably discouraging” as permanent loan modifications “pale in comparison” to foreclosure filings, which reached 2.9 million in 2010, according to RealtyTrac Inc., an Irvine, California data company. “HAMP appears to be under siege, with a chorus of criticisms from all points on the ideological spectrum growing more insistent and calls for termination or dramatic restructuring gaining traction,” Barofsky said in the report. “I share your frustration,” he said during today’s hearing in response to comments by Jordan. “I just hope Treasury can hear what you’re saying,” he said, “and be honest about where this program is going if it’s going anywhere.”
Administration officials have said the foreclosure efforts are turning a corner after changes in paperwork requirements and expanded participation by lenders. Acting Assistant Treasury Secretary Timothy Massad also testified at the oversight hearing today.
Wednesday, January 26, 2011
Blue Heron Condo in Naples, FL
Condo in Naples, needs some work, can be purchased for as little as 3% down. Give me a call 239-595-2200
I know of a Charming Third Floor (elevator in building), 2 Bedroom, 2 Bath Blue Heron Condo with Carport. Great Community, close to Shopping and Beaches! This is a Fannie Mae HomePath property, purchase this condo for as little as 3% down! This property is approved for HomePath Mortgage Financing and HomePath Renovation Financing. 15 Day First Look Period reserved for owner occupants or public entities, please visit HomePath.com for details.
I know of a Charming Third Floor (elevator in building), 2 Bedroom, 2 Bath Blue Heron Condo with Carport. Great Community, close to Shopping and Beaches! This is a Fannie Mae HomePath property, purchase this condo for as little as 3% down! This property is approved for HomePath Mortgage Financing and HomePath Renovation Financing. 15 Day First Look Period reserved for owner occupants or public entities, please visit HomePath.com for details.
Beware of Latest Scams in Real Estate
Beware of Latest Scams
Typically, the imposter communicates through email, however, many times disposable cell phones are used. Before accepting the listing from a foreign seller, consider taking the following steps:
1. Seek to contact the Seller at his last known address on the tax rolls.
2. Google the Seller in his hometown to verify a legitimate phone number.
3. Insist that the listing agreement be mailed or sent overnight to the address listed on the tax roll.
Assure the Seller you are verifying facts for their protection. By taking these simple additional steps at the time of listing a Foreign Seller’s property you are not only protecting both the buyer and the seller, but yourself as well!!
How often have you received an unsolicited email from a potential buyer from overseas that wants to submit an offer on a property sight unseen?
Numerous title companies and even worse unsuspecting attorneys have been burned by this scam. Here’s how it works:
A potential buyer who has no connection to a referral, contacts the realtor explaining they are interested in purchasing property in the community where the realtor transacts business. They would like additional contact information regarding who the realtor would recommend as a closing agent. The next step is the contract offer and deposit. Price is seldom negotiated (a big red flag should go up), however, a contingency is always written into the contract.
After the contract is accepted, deposit monies are sent (typically official bank drafts are overnighted). The closing agent deposits the funds (even the local banks are convinced the check is legitimate). The closing agent is credited funds from his or her bank. Next, an issue always arises during the contingency period. The buyer then requests his funds be wired back to him. After verifying with the local bank the funds are in the escrow account, the closing agent wires back the funds, less nominal expenses for inspections, title searches or other minor matters. Sure enough, within 24 or 48 hours of wiring the funds out, the bank discovers the provisional credit and acceptance of the deposit was based on a fraudulent bank check. The closing agent is then stuck with the debt and the realtor unnecessarily wasted time and effort and inadvertently participated in the scam.
Next time you receive an unsolicited email, ask for the buyer’s phone number and speak to the prospective buyer. Ask a number of questions. Google the individual and area code. Most scammers will not provide a land line phone number and if a number is given, it is typically from a disposable cell phone. If you have any skepticism I would encourage you to do what I do…click report spam. All of us are too busy to deal with this nonsense. As Samuel Johnson eloquently penned…truth invites examination.
In the age of the Internet, identity theft has found its way into an increasing number of real estate transactions in the State of Florida. Perhaps you are aware of these scams, however, if you are not I want to give you a quick heads up.
Who’s Your Seller?
Who’s Your Buyer?
Latest Seller Scam
There has been an alarming increase in the number of transactions involving sellers who own property in Florida, yet reside overseas. The most common occurrence involves vacant lots as keys to access are not an issue. The scam starts when forged identity documents are created and the imposter contacts an agent to list the vacant lot for sale without the actual owner’s knowledge.Typically, the imposter communicates through email, however, many times disposable cell phones are used. Before accepting the listing from a foreign seller, consider taking the following steps:
1. Seek to contact the Seller at his last known address on the tax rolls.
2. Google the Seller in his hometown to verify a legitimate phone number.
3. Insist that the listing agreement be mailed or sent overnight to the address listed on the tax roll.
4. In addition to requesting a passport, consider verifying a second form of identity such as a driver’s license.
5. Insist that the deed be executed at the U.S. Consulate in the country where the seller resides. Explain that the closing agent can no longer accept a deed acknowledged by a Notary Public or Civil Notary of that country (Often times Notary Seals can be “bogus”).
6. Recommend it is best to appear at closing and receive proceeds in person. If not practical, request bank contact information and a bank contact person to independently verify prior to any funds being wired.Assure the Seller you are verifying facts for their protection. By taking these simple additional steps at the time of listing a Foreign Seller’s property you are not only protecting both the buyer and the seller, but yourself as well!!
Latest Buyer Scam
Numerous title companies and even worse unsuspecting attorneys have been burned by this scam. Here’s how it works:
A potential buyer who has no connection to a referral, contacts the realtor explaining they are interested in purchasing property in the community where the realtor transacts business. They would like additional contact information regarding who the realtor would recommend as a closing agent. The next step is the contract offer and deposit. Price is seldom negotiated (a big red flag should go up), however, a contingency is always written into the contract.
After the contract is accepted, deposit monies are sent (typically official bank drafts are overnighted). The closing agent deposits the funds (even the local banks are convinced the check is legitimate). The closing agent is credited funds from his or her bank. Next, an issue always arises during the contingency period. The buyer then requests his funds be wired back to him. After verifying with the local bank the funds are in the escrow account, the closing agent wires back the funds, less nominal expenses for inspections, title searches or other minor matters. Sure enough, within 24 or 48 hours of wiring the funds out, the bank discovers the provisional credit and acceptance of the deposit was based on a fraudulent bank check. The closing agent is then stuck with the debt and the realtor unnecessarily wasted time and effort and inadvertently participated in the scam.
Next time you receive an unsolicited email, ask for the buyer’s phone number and speak to the prospective buyer. Ask a number of questions. Google the individual and area code. Most scammers will not provide a land line phone number and if a number is given, it is typically from a disposable cell phone. If you have any skepticism I would encourage you to do what I do…click report spam. All of us are too busy to deal with this nonsense. As Samuel Johnson eloquently penned…truth invites examination.
Law Offices of Ronald S. Webster
985 N. Collier Blvd
Marco Island, FL 34145
239-394-8999 Phone
239-394-3511 Fax
In the age of the Internet, identity theft has found its way into an increasing number of real estate transactions in the State of Florida. Perhaps you are aware of these scams, however, if you are not I want to give you a quick heads up.
Tuesday, January 25, 2011
A bit about me....
Kurt’s success in real estate is attributed to experience, professionalism, and commitment to service in an area in which he enjoys living. Helping individuals find the right property is one of his strongest values.
I have extensive knowledge of the real estate industry and our local marketplace ranging fromNaples Marco Island Bonita Springs Ft. Myers
I have extensive knowledge of the real estate industry and our local marketplace ranging from
Originally born and raised in Iowa Aquinas High School Drake University Northeast Missouri State University Truman University Walt Disney World Village Radisson Suite Beach Resort Marco Island Naples Florida Lee Counties
Kurt currently resides in Old Naples and has been a resident of Naples
Contact Kurt for all your Real Estate needs as you can see he is a caring and well qualified Agent.
Contact Kurt for all your Real Estate needs as you can see he is a caring and well qualified Agent.
Monday, January 24, 2011
Saturday, January 22, 2011
Ten Ways to Make Your House More Salable
Courtesy of Kurt Hoenig, REALTOR®
Ten Ways to Make Your House More Salable
- Get rid of clutter. Throw out or file stacks of newspapers and magazines. Pack away most of your small decorative items. Store out-of-season clothing to make closets seem roomier. Clean out the garage.
- Wash your windows and screens to let more light into the interior.
- Keep everything extra clean. Wash fingerprints from light switch plates. Mop and wax floors. Clean the stove and refrigerator. A clean house makes a better first impression and convinces buyers that the home has been well cared for.
- Get rid of smells. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Open the windows.
- Put higher wattage bulbs in light sockets to make rooms seem brighter, especially basements and other dark rooms. Replace any burnt-out bulbs.
- Make minor repairs that can create a bad impression. Small problems such as sticky doors, torn screens, cracked caulking, or a dripping faucet may seem trivial, but they’ll give buyers the impression that the house isn’t well maintained.
- Tidy your yard. Cut the grass, rake the leaves, trim the bushes, and edge the walks. Put a pot or two of bright flowers near the entryway.
- Patch holes in your driveway and reapply sealant, if applicable.
- Clean your gutters.
- Polish your front doorknob and door numbers.
To Prequalify or Not to Prequalify...
Do you prequalify the Seller and Listing Agent before you submit a Short Sale Offer?
Agents are familiar with banks requesting the purchaser of an REO property or the buyer of a short sale to furnish proof that the buyer is pre-qualified before the bank accepts the offer. However, turnaround is fair play. If you have a qualified buyer why commit them to a property for the next 60 to 180 days only to discover the short sale will most likely be rejected?
Unfortunately, many realtors take short sale listings and have no clue what they are doing. Even worse there are title companies or law offices that have little experience processing them. First before submitting an offer, ask the listing agent these questions:
1. Is this a realistic price which can be supported by recent comps? Quite frequently agents list the property well under market value or alternatively foolishly fail to negotiate a short sale contract and submit the low ball offer to the bank. Wrong approach! The number one reason most short sales are not approved is because of the price. Don’t let a listing agent lure your buyer into being married to a contract that will never be approved.
2. How many mortgages and how many liens are on the property? If you know up front there are three separate mortgages on the property you might want to think twice before submitting an offer as it may be a real challenge to get the cooperation of all three lenders. Similarly, judgment liens present additional issues.
3. Is the loan in default? Regrettably, banks are more motivated to accept a short sale to get a non-performing loan off their books. I cannot encourage sellers to stop making payments, but experience has taught me that banks are more receptive to short sales once the loan has gone into default. If the borrower is current, the bank does not have as much of an incentive to take less than the full payoff amount of the loan.
4. Is the property presently in foreclosure? If so, at what stage? More times than I would like to think, short sale contracts have been presented to our office days before a foreclosure sale. Unfortunately, this is typically a recipe for failure if previous negotiations had not already been commenced and a prior dialogue established with a negotiator who has the power to stop the sale.
5. Who will be processing the short sale for the Seller? The Realtor or the Closing Agent? What experience do they have? I have painfully represented buyers to watch their reasonable short sale offer rejected by the lender simply because the seller’s realtor and closing agent did not fully understand the process. Without representing the seller I had no authority to communicate with the lender. If there is not constant contact with the lender and if financial information is not updated every 30 days, the file will be closed.
Agents are familiar with banks requesting the purchaser of an REO property or the buyer of a short sale to furnish proof that the buyer is pre-qualified before the bank accepts the offer. However, turnaround is fair play. If you have a qualified buyer why commit them to a property for the next 60 to 180 days only to discover the short sale will most likely be rejected?
Unfortunately, many realtors take short sale listings and have no clue what they are doing. Even worse there are title companies or law offices that have little experience processing them. First before submitting an offer, ask the listing agent these questions:
1. Is this a realistic price which can be supported by recent comps? Quite frequently agents list the property well under market value or alternatively foolishly fail to negotiate a short sale contract and submit the low ball offer to the bank. Wrong approach! The number one reason most short sales are not approved is because of the price. Don’t let a listing agent lure your buyer into being married to a contract that will never be approved.
2. How many mortgages and how many liens are on the property? If you know up front there are three separate mortgages on the property you might want to think twice before submitting an offer as it may be a real challenge to get the cooperation of all three lenders. Similarly, judgment liens present additional issues.
3. Is the loan in default? Regrettably, banks are more motivated to accept a short sale to get a non-performing loan off their books. I cannot encourage sellers to stop making payments, but experience has taught me that banks are more receptive to short sales once the loan has gone into default. If the borrower is current, the bank does not have as much of an incentive to take less than the full payoff amount of the loan.
4. Is the property presently in foreclosure? If so, at what stage? More times than I would like to think, short sale contracts have been presented to our office days before a foreclosure sale. Unfortunately, this is typically a recipe for failure if previous negotiations had not already been commenced and a prior dialogue established with a negotiator who has the power to stop the sale.
5. Who will be processing the short sale for the Seller? The Realtor or the Closing Agent? What experience do they have? I have painfully represented buyers to watch their reasonable short sale offer rejected by the lender simply because the seller’s realtor and closing agent did not fully understand the process. Without representing the seller I had no authority to communicate with the lender. If there is not constant contact with the lender and if financial information is not updated every 30 days, the file will be closed.
6. Beware: There is no such thing as an approved short sale! What the banked accepted with one buyer does not mean they will accept the same deal again. Investor guidelines frequently change. Even if the price was approved, each closing has a different set of closing expenses. Commissions are constantly being altered by lenders as well as many other factors. If an agent represents the short sale has been pre-approved, force them to show you the unconditional letter of approval as a condition of submitting an offer.
At the end of the day, do yourself and your buyer a favor and use due diligence before you submit a short sale offer. Turn the beat around and be the one who determines if the seller, realtor and closing agent are worthy of your time and energy. A little investigation now can avoid a lot of frustration later and will provide you with a greater sense of whether your short sale will be approved.
Law Offices of Ronald S. Webster
239-394-8999 Phone
239-394-3511 Fax
Short Sales ala Bank of America
The same is equally true of short sales. Unfortunately, many in the banking industry make Forest Gump look incredibly insightful. I try to tell both buyers and sellers this whenever possible. Unfortunately, as I have consistently stated the general rule with short sales are there are no general rules.
I recently had two mirror image properties (side by side townhouses in the same development) go under contract. The first offer which was approved closed at $199,000.00 through Bank of America. The following week an identical offer was submitted for the identical next door property with the same lender (Bank of America). Ironically, the bank countered the second short sale at $239,000.00…Yes $40,000.00 more! The seller and the buyer were fit to be tied as well as the realtor. The deal fell apart and the file was closed. The bank gave no explanation so I started my own investigation.
Turns out, the first property was in default and the borrower on the second property was current. The bank was motivated to get the first loan off their books because it was a “non- performing loan.” For every non-performing loan a lender must set aside a certain amount of reserves. With the second borrower/seller, the bank had no motivation. In fact, they did not want the property to sell and reasoned since the seller had shown an ability to weather the storm of the past few years perhaps they will keep it current until the market turns around.
A similar but different situation occurred with another lender. In this case we had virtually identical properties. Both parties were similarly 120 days late in payments and on the verge of having foreclosure suits filed. Identical offers were brought on both properties. One offer was accepted while one was not. A further investigation revealed that while both properties were appraised by the bank at the same price one offer was approved and the other was not because Wells Fargo was dealing with two separate investors who had different guidelines for short sale approval. No one gave the parties the memo up front and it was extremely frustrating to watch one close while the other fell apart.
The reason I am sharing this with you is to help you create and manage the expectations of your buyers and sellers. The key to short sale success is two-fold. First and most importantly, price is the biggest factor. The closer you are to true market value the greater the likelihood of success. However, even if the price is right, the short sale may fail for undisclosed reasons, which leads us to the second point. It is important to create as well as manage both the seller’s as well as the buyer’s expectations when submitting short sale offers.
Be honest and upfront. Short sales are neither a science nor an art and unfortunately as much as we work them, they may not always work. What we can do is advise our clients as best as we can based on experiences that we have encountered in the past but at the end of the day… short sales are like a box of chocolates…you never know what you are going to get.
I recently had two mirror image properties (side by side townhouses in the same development) go under contract. The first offer which was approved closed at $199,000.00 through Bank of America. The following week an identical offer was submitted for the identical next door property with the same lender (Bank of America). Ironically, the bank countered the second short sale at $239,000.00…Yes $40,000.00 more! The seller and the buyer were fit to be tied as well as the realtor. The deal fell apart and the file was closed. The bank gave no explanation so I started my own investigation.
Turns out, the first property was in default and the borrower on the second property was current. The bank was motivated to get the first loan off their books because it was a “non- performing loan.” For every non-performing loan a lender must set aside a certain amount of reserves. With the second borrower/seller, the bank had no motivation. In fact, they did not want the property to sell and reasoned since the seller had shown an ability to weather the storm of the past few years perhaps they will keep it current until the market turns around.
A similar but different situation occurred with another lender. In this case we had virtually identical properties. Both parties were similarly 120 days late in payments and on the verge of having foreclosure suits filed. Identical offers were brought on both properties. One offer was accepted while one was not. A further investigation revealed that while both properties were appraised by the bank at the same price one offer was approved and the other was not because Wells Fargo was dealing with two separate investors who had different guidelines for short sale approval. No one gave the parties the memo up front and it was extremely frustrating to watch one close while the other fell apart.
The reason I am sharing this with you is to help you create and manage the expectations of your buyers and sellers. The key to short sale success is two-fold. First and most importantly, price is the biggest factor. The closer you are to true market value the greater the likelihood of success. However, even if the price is right, the short sale may fail for undisclosed reasons, which leads us to the second point. It is important to create as well as manage both the seller’s as well as the buyer’s expectations when submitting short sale offers.
Be honest and upfront. Short sales are neither a science nor an art and unfortunately as much as we work them, they may not always work. What we can do is advise our clients as best as we can based on experiences that we have encountered in the past but at the end of the day… short sales are like a box of chocolates…you never know what you are going to get.
Law Offices of Ronald S Webster
239-394-8999 - Phone
239-394-3511 - Fax
Hello out there in Cyberspace
Ok, after getting some pointers from my cousin Ken, I have taken the initiative to learn how to blog. The name itself isn't very appealing, but what the heck? Here we go.
This blog will primarily focus on SW Florida and the Real Estate Market in SW Florida.
There have been more customer complaints against Bank of America than any other Florida bank in the past three years, according to a study by Kenneth Thomas, a Miami-based banking analyst. In 2010, there were a total of 1,379 complaints filed against Florida banks, although that number was fewer than the 1,840 in 2009. Bank of America had 227 complaints against it in 227 filed to the Florida Division of Financial Institutions. Bank of America was the largest bank in the state as of June 30, according to the FDIC.
Here are mortgage rates from TIB Bank in Naples and Ms. Lynn Rainey:
TITLE CONCERNS. Transferring funds to purchase a home or condominium is a simple process for Canadian buyers, however, many foreign buyers often overlook the consequences of their purchase. The acquisition of U.S. real estate by a Canadian citizens poses significant issues including but not limited to U.S. estate tax, capital gains tax, incapacity issues, complex Florida probate rules and creditor protection issues. Proper cross-border planning for Canadian Citizens must address all of these issues. A deep analysis is required to find the best solution. There is no simple answer or one size fits all. However, as a general rule, the vast majority of concerns can best be addressed by creating and taking title in a Canadian Florida Land Trust which is considerably more advantageous then owning property in a buyer’s individual or corporate name or even a Canadian Trust.
INTRODUCING THE FLORIDA LAND TRUST. This vehicle often referred to as an “Illinois Land Trust” because of its origin is a unique legal entity. This form of ownership is unfamiliar to most U.S. Lawyers and tax advisors due to the fact that Illinois and Florida are the only states that have a specific nearly identical land trust statute. This form of ownership is so far removed from classic trust law that calling it a trust can be misleading. The land trust is very versatile and differs from conventional trusts in many ways.
A land trust is a legal arrangement whereby the trustee holds legal title to the property, yet all ownership interest in the property lies with the beneficial owners of the trust. The trustee takes action, solely upon the direction of the beneficiaries. Among countless list of benefits to holding property in a Florida Land Trust is:
In contrast, if title to real estate is placed in the buyers’ individual names there are a host of issues to be concerned with:
1. PROBATE. Although a will, valid in Canada, will be recognized in Florida, unfortunately the will is not exempt from the costly and time consuming complicated probate process to transfer title in Florida. A Canadian Florida Land Trust can be created at the time of purchase and title can be placed in the name of the trust. Should the property owner pass away, provided title has been placed in the land trust, probate and related expenses will be avoided. Even though the property owner passed away, the land trust continues and the provisions within the trust set forth the order of the contingent beneficiaries (typically the surviving spouse and then the children).
2. INCAPACITY. Another advantage of Canadian Florida Land Trust is that it not only avoids probate and seeks to marginalize estate tax but it also acts as an excellent tool in the event of incapacity. If the property owner becomes incapacitated mentally or otherwise provisions are contained within the trust to provide for successor trustee(s) thereby avoiding the timely and costly process of Florida guardianship proceedings.
3. CREDITOR PROTECTION. Unlike owning property in your individual name, the interest of the beneficiaries do not need to be made public in a Canadian Florida Land Trust. As a result, third party creditors cannot place a lien or seize the property as it remains confidential who the true owner is.
4. ESTATE TAX CONCERNS. Estate taxes are of paramount concern when Canadians own property in the U.S.
A. Unlike their U.S. counterparts, Canadians may only pass sixty thousand dollars (U.S) ($60,000.00) tax free to their spouse or beneficiaries. If title is in a couples individual name, the surviving spouse may be hit with a significant estate tax that starts at 26% and climbs all the way to 45% based on the value of the estate. If properly drafted, shares within the land trust not need to be revealed until the time of death thereby making it possible to artfully manipulate the reported interest of the deceased and hopefully avoid estate tax.
B. Another tool to avoid or minimize estate tax is to make children beneficiaries at the time of purchase thereby increasing the number of $60,000.00 exemptions by the number of individuals possessing an interest in the land trust. There is no gift tax in Canada. If the funds are gifted to the children in Canada and transferred for closing there is no taxable event. However, if the property is located in the United States, a subsequent transfer of property to children will trigger a gift tax owed to the U.S.
OWNERSHIP BY A CANADIAN CORPORATION: In years past Canadian corporations were frequently used to own U.S. property. The corporation, if properly structured, was considered to eliminate U.S. estate tax on the death of the shareholder and the shareholder benefit issues did not arise due to an administrative provision of Canada Revenue. This type of corporation was referred to as a single purpose corporation. However, Canada Revenue withdrew this policy effective January 1, 2005. As a result a taxable shareholder benefit is created if the property held by a corporation was made available for the personal use of the shareholder.
C. Yet another technique to reduce exposure to the U.S. estate tax is to split interest ownership within the Land Trust. Under such an arrangement, an individual may acquire a life interest in the land trust share and his children could acquire the remainder interest in the property. Upon the death of the individual, there would be no estate tax on the life interest, since the life interest would have no value upon death. However one caveat: Should the children die while holding a remainder interest, the estate tax would be assessed on the value of the remainder interest. As a practical matter, children can obtain term life insurance at lower costs (due to their age) to protect them from estate tax exposure.
This blog will primarily focus on SW Florida and the Real Estate Market in SW Florida.
Bank of America tops in complaints
January 18, 2011 12:30PMThere have been more customer complaints against Bank of America than any other Florida bank in the past three years, according to a study by Kenneth Thomas, a Miami-based banking analyst. In 2010, there were a total of 1,379 complaints filed against Florida banks, although that number was fewer than the 1,840 in 2009. Bank of America had 227 complaints against it in 227 filed to the Florida Division of Financial Institutions. Bank of America was the largest bank in the state as of June 30, according to the FDIC.
Here are mortgage rates from TIB Bank in Naples and Ms. Lynn Rainey:
30 YR Fixed 4.750% apr 4.856%
15 YR Fixed 4.00% apr 4.124%
5/1 ARM 3.625% apr 3.827%
JUMBO 30 YR Fixed 5.500% apr 5.650%
JUMBO 15 YR Fixed 4.875% apr 4.954%
LTVs for Portfolio loans
80% LTV Primary or Second home up to an loan amount of $1,600,000.00~!
75% LTV up to $2,500,000.00
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Sincerely, Lynn
Lynn Rainey
Senior Residential Loan Consultant
TIB Bank est. 1974
599 Tamiami Trail N. Suite #201
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(239) 659-5840 office
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Law Offices of Ronald S. Webster Presents:
The Canadian Florida Land Trust:
The Most Versatile and Beneficial way for Canadian Citizens to hold Title to Real Estate in the State of Florida
TITLE CONCERNS. Transferring funds to purchase a home or condominium is a simple process for Canadian buyers, however, many foreign buyers often overlook the consequences of their purchase. The acquisition of U.S. real estate by a Canadian citizens poses significant issues including but not limited to U.S. estate tax, capital gains tax, incapacity issues, complex Florida probate rules and creditor protection issues. Proper cross-border planning for Canadian Citizens must address all of these issues. A deep analysis is required to find the best solution. There is no simple answer or one size fits all. However, as a general rule, the vast majority of concerns can best be addressed by creating and taking title in a Canadian Florida Land Trust which is considerably more advantageous then owning property in a buyer’s individual or corporate name or even a Canadian Trust.
INTRODUCING THE FLORIDA LAND TRUST. This vehicle often referred to as an “Illinois Land Trust” because of its origin is a unique legal entity. This form of ownership is unfamiliar to most U.S. Lawyers and tax advisors due to the fact that Illinois and Florida are the only states that have a specific nearly identical land trust statute. This form of ownership is so far removed from classic trust law that calling it a trust can be misleading. The land trust is very versatile and differs from conventional trusts in many ways.
A land trust is a legal arrangement whereby the trustee holds legal title to the property, yet all ownership interest in the property lies with the beneficial owners of the trust. The trustee takes action, solely upon the direction of the beneficiaries. Among countless list of benefits to holding property in a Florida Land Trust is:
- The interest of the beneficiaries are not disclosed except upon choice, upon sale or upon order of the court.
- The beneficial interest is deemed personal property and avoids expensive and lengthy probate requirements.
- Provisions can be made in cases of disability which negate guardianship proceedings which otherwise may be required.
- It serves as a substitute for a will and provides planning providing direction for distributing the property upon death.
- It can serve as a substitute for a partnership agreement and outline the various partners rights and interest in the property.
- Transferring interest within a land trust is simple and not subject to state imposed documentary transfer tax.
- In the event of sale, provided the property has been held for one year or longer, favorable individual capital gain rates of 15% apply rather than the regular corporate rate of 34%. In Florida there is further a state income tax for corporations, but not for individuals which can push the effective combined rate to 40%.
- When creating the land trust you can determine who will serve as trustee. Typically, in a Canadian Florida Land Trust this is the owner, though it does not need to be. Trustees serve a ministerial role as the beneficiaries direct the trustee on how they wish to manage the property. Trustees are the individuals whose name is made public and is the individual who signs deeds or mortgages at the direction of the beneficial owners. Successor Trustees can be listed and set forth in the event of death or incapacity of the initial trustee.
In contrast, if title to real estate is placed in the buyers’ individual names there are a host of issues to be concerned with:
1. PROBATE. Although a will, valid in Canada, will be recognized in Florida, unfortunately the will is not exempt from the costly and time consuming complicated probate process to transfer title in Florida. A Canadian Florida Land Trust can be created at the time of purchase and title can be placed in the name of the trust. Should the property owner pass away, provided title has been placed in the land trust, probate and related expenses will be avoided. Even though the property owner passed away, the land trust continues and the provisions within the trust set forth the order of the contingent beneficiaries (typically the surviving spouse and then the children).
2. INCAPACITY. Another advantage of Canadian Florida Land Trust is that it not only avoids probate and seeks to marginalize estate tax but it also acts as an excellent tool in the event of incapacity. If the property owner becomes incapacitated mentally or otherwise provisions are contained within the trust to provide for successor trustee(s) thereby avoiding the timely and costly process of Florida guardianship proceedings.
3. CREDITOR PROTECTION. Unlike owning property in your individual name, the interest of the beneficiaries do not need to be made public in a Canadian Florida Land Trust. As a result, third party creditors cannot place a lien or seize the property as it remains confidential who the true owner is.
4. ESTATE TAX CONCERNS. Estate taxes are of paramount concern when Canadians own property in the U.S.
A. Unlike their U.S. counterparts, Canadians may only pass sixty thousand dollars (U.S) ($60,000.00) tax free to their spouse or beneficiaries. If title is in a couples individual name, the surviving spouse may be hit with a significant estate tax that starts at 26% and climbs all the way to 45% based on the value of the estate. If properly drafted, shares within the land trust not need to be revealed until the time of death thereby making it possible to artfully manipulate the reported interest of the deceased and hopefully avoid estate tax.
B. Another tool to avoid or minimize estate tax is to make children beneficiaries at the time of purchase thereby increasing the number of $60,000.00 exemptions by the number of individuals possessing an interest in the land trust. There is no gift tax in Canada. If the funds are gifted to the children in Canada and transferred for closing there is no taxable event. However, if the property is located in the United States, a subsequent transfer of property to children will trigger a gift tax owed to the U.S.
LESS FAVORABLE ALTERNATIVES
The value of the taxable benefit is determined by either, the fair market rent approach or the imputed rent approach. Under the fair market rent approach the taxable benefit will be the fair market value rent for the property less any consideration paid by the shareholder to the corporation for the use of the property. Under the imputed rent approach, the taxable benefit is calculated by the greater of the cost and the fair market value of the property X the Canada Revenue Agency’s prescribed interest rate, the operating costs related to the property paid by the corporation, less any consideration paid by the shareholders for the use of the property. As a result, it is no longer desirable to own property intended for personal use inside a Canadian corporation.
OWNERSHIP BY A CANADIAN TRUST. A Canadian trust many times referred to as a “cross Border Trust” may also be used to own a U.S. property. If properly established, the trust may avoid any exposure to U.S. estate tax. In particular, the trust must be set up before the purchase of the U.S. property and the person who provides the funds to the trust for the purchase must not be a trustee or a beneficiary of the trust. The most common structure is where one spouse creates the trust (the grantor) while the other spouse and their children are named the beneficiaries of the trust. The grantor’s spouse and their children can then use the property rent-free during their lifetimes. The property held by the trust would not be included the grantor’s estate for U.S. estate tax purposes, nor will it be included in the spouse’s estate for U.S. estate tax purposes on his or her death.
Using a Canadian trust to own U.S. property does have its disadvantages. If the grantor’s spouse predeceases the grantor, the grantor must pay fair market value rent to the trust for the property to be excluded from his or her estate for U.S. estate tax purposes.
The only potential benefit that may result in creating a “Cross Border Canadian Trust” is that special wording may be put in the trust to preserve foreign credits in Canada under the Canada/U.S. tax treaty regarding capital gains tax. If properly structured, the seller may receive credit for the 15% United States I.R.S. Capital Gains Tax upon sale which otherwise would not be possible. However, in my opinion this potential benefit is pale in comparison to the potential estate tax which could otherwise be due if the wrong spouse dies first.
TAXES UPON SALE. Whenever a foreign citizen sells his or her interest in real estate in the United States it is a requirement to comply with FIRPTA (Foreign Investment Real Property Tax Act). At the time of sale 10% of the gross sale proceeds must be held in escrow until a determination can be made if a profit were realized upon sale. All of your initial acquisition costs together with any capital improvements are totaled to create your “basis”. All expenses of sale are subtracted to determine your net proceeds. If your net proceeds are greater than your basis you will be taxed on the profit in the United States. This tax rate varies at the present rate of 15% if the property is individually held or held in a Land Trust to as high as 34% if held in the name of the corporation. In addition, there are further tax consideration upon the sale that could result in a double whammy when the profit is reported in Canada.
Other options to owning real estate individually is to take title in a Canadian corporation or to create a Canadian trust sometimes referred to as a Cross Border Trust. Below is an overview of both. The value of the taxable benefit is determined by either, the fair market rent approach or the imputed rent approach. Under the fair market rent approach the taxable benefit will be the fair market value rent for the property less any consideration paid by the shareholder to the corporation for the use of the property. Under the imputed rent approach, the taxable benefit is calculated by the greater of the cost and the fair market value of the property X the Canada Revenue Agency’s prescribed interest rate, the operating costs related to the property paid by the corporation, less any consideration paid by the shareholders for the use of the property. As a result, it is no longer desirable to own property intended for personal use inside a Canadian corporation.
OWNERSHIP BY A CANADIAN TRUST. A Canadian trust many times referred to as a “cross Border Trust” may also be used to own a U.S. property. If properly established, the trust may avoid any exposure to U.S. estate tax. In particular, the trust must be set up before the purchase of the U.S. property and the person who provides the funds to the trust for the purchase must not be a trustee or a beneficiary of the trust. The most common structure is where one spouse creates the trust (the grantor) while the other spouse and their children are named the beneficiaries of the trust. The grantor’s spouse and their children can then use the property rent-free during their lifetimes. The property held by the trust would not be included the grantor’s estate for U.S. estate tax purposes, nor will it be included in the spouse’s estate for U.S. estate tax purposes on his or her death.
Using a Canadian trust to own U.S. property does have its disadvantages. If the grantor’s spouse predeceases the grantor, the grantor must pay fair market value rent to the trust for the property to be excluded from his or her estate for U.S. estate tax purposes.
The only potential benefit that may result in creating a “Cross Border Canadian Trust” is that special wording may be put in the trust to preserve foreign credits in Canada under the Canada/U.S. tax treaty regarding capital gains tax. If properly structured, the seller may receive credit for the 15% United States I.R.S. Capital Gains Tax upon sale which otherwise would not be possible. However, in my opinion this potential benefit is pale in comparison to the potential estate tax which could otherwise be due if the wrong spouse dies first.
OTHER TAX CONSIDERATIONS TO BE AWARE OF…
RENTAL INCOME . Canadian snowbirds who rent out their Florida real estate are subject to a withholding tax of 30% of the gross amount of rental income. One way for Canadians to avoid the 30% gross withholding tax is to file a U.S. tax return and pay tax on the net rental income. The Canadian Citizen is then entitled to a refund for any taxes withheld to the extent the withholding amount exceeds to the tax which is payable.TAXES UPON SALE. Whenever a foreign citizen sells his or her interest in real estate in the United States it is a requirement to comply with FIRPTA (Foreign Investment Real Property Tax Act). At the time of sale 10% of the gross sale proceeds must be held in escrow until a determination can be made if a profit were realized upon sale. All of your initial acquisition costs together with any capital improvements are totaled to create your “basis”. All expenses of sale are subtracted to determine your net proceeds. If your net proceeds are greater than your basis you will be taxed on the profit in the United States. This tax rate varies at the present rate of 15% if the property is individually held or held in a Land Trust to as high as 34% if held in the name of the corporation. In addition, there are further tax consideration upon the sale that could result in a double whammy when the profit is reported in Canada.
GET IT RIGHT THE FIRST TIME
Interestingly, a Land Trust will allow the gifting of shares up to $13,000.00 annually so that it is possible to gift away your interest over an extended period of time utilizing a Land Trust. Otherwise, if gifted out right the gift tax of the fair market value would apply which is the same graduated rate that applies to estate tax.
This means when purchasing property you need to title it correctly from the outset. If a decision is made to transfer the real property at a later date, Revenue Canada requires the value needs to be determined at the time of transfer to see if capital gain applies. Further, when a foreign investor transfers existing U.S. real estate by gift, he or she will be subject to U.S. gift tax. Again, this is the case even where an estate and gift tax treaty applies. There is no gift tax credit available to a transferor who is neither a citizen of nor resident in the United States (other than a limited annual exclusion of $13,000.00). Interestingly, a Land Trust will allow the gifting of shares up to $13,000.00 annually so that it is possible to gift away your interest over an extended period of time utilizing a Land Trust. Otherwise, if gifted out right the gift tax of the fair market value would apply which is the same graduated rate that applies to estate tax.
At the end of the day, there may be unique facts and circumstances particular to your case that may warrant further investigation. As indicated above when it comes to proper planning there is no panacea or one size fits all, however, most common pitfalls can be avoided and countless benefits obtained by creating a Canadian Florida Land Trust at the time of purchasing property.
Law Offices of Ronald S. Webster
985 N. Collier Blvd
Marco Island, FL 34145
239-394-8999 Phone
239-394-3511 Fax
OWNERSHIP BY A CANADIAN CORPORATION: In years past Canadian corporations were frequently used to own U.S. property. The corporation, if properly structured, was considered to eliminate U.S. estate tax on the death of the shareholder and the shareholder benefit issues did not arise due to an administrative provision of Canada Revenue. This type of corporation was referred to as a single purpose corporation. However, Canada Revenue withdrew this policy effective January 1, 2005. As a result a taxable shareholder benefit is created if the property held by a corporation was made available for the personal use of the shareholder.
C. Yet another technique to reduce exposure to the U.S. estate tax is to split interest ownership within the Land Trust. Under such an arrangement, an individual may acquire a life interest in the land trust share and his children could acquire the remainder interest in the property. Upon the death of the individual, there would be no estate tax on the life interest, since the life interest would have no value upon death. However one caveat: Should the children die while holding a remainder interest, the estate tax would be assessed on the value of the remainder interest. As a practical matter, children can obtain term life insurance at lower costs (due to their age) to protect them from estate tax exposure.
AVOID COMMON PITFALLS THROUGH A FLORIDA LAND TRUST.
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