Do I Need a Living Will?

 

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Do I need a living will?  I suggest that you go ahead and get a living will. They are not very expensive.  It is also called a declaration wherein you state in writing that you do not want your life prolonged in the event that you have a terminal condition, end-state condition or permanent vegetative state and you direct and authorize life support to be discontinued.

There was a case several years ago called the Schaivo case where someone was left on life support for years and years and years. She did not have a living will, and she made an oral declaration saying that she did not want to be put on life support. The family as well as the husband spent over $1 million on attorney fees litigating the issue as to whether or not life support should be discontinued.  Eventually, life support was discontinued.

With a living will, it does not keep you off of life support in the event that 911 is called. Even if you have a living will, they will come, revive you and take you to the nearest emergency room.  If you’ve lost consciousness or whatever the situation is, they will wait to stabilize you.  Once you’re stabilized, they will evaluate you to determine whether you’re in a permanent vegetative state, whether you’ve got any other complications.  And then once they make that evaluation then they’re authorized to contact whoever the healthcare surrogate is, a person you designate in your living will, as to whether or not you’re authorized to disconnect life support.  And then that person would then authorize the discontinuance of life support pursuant to your written instructions.

Many people say, “Well, I don’t want to be put on life support.”  There is a form called a “Do not resuscitate,” which is a DNR form; however, you have to be under a doctor’s care, and it’s usually whenever you’re in hospice and posted on a colored form over your hospital bed whenever you’re in hospice or in the hospital.  And if you do have a “Do not resuscitate,” and you go into a coronary arrest or some other life-threatening situation, they will not call in 911 or administer emergency care.  So it’s my suggestion, just as a precautionary measure – no one usually wants to be sustained if you’re in a permanent vegetative state – to have a living will so your loved ones will not be burdened with that problem if you’re never going to reach consciousness again and they have to support you in an assisted living facility or in a hospital.

So I suggest you do have a living will.  If you have any questions, give me a call at 727-847-2288.

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What is a 1099-C?

 

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What is a 1099-C?  It’s an IRS form which is completed by a lender whenever they forgive debt of a borrower.  Usually, a 1099-C is issued whenever you have a short sale, meaning that you sell the property for less than the amount of money owed.  The difference, if the lender forgives it, is shown on the 1099-C, which is reported through the Internal Revenue Service as income.  And if you receive a 1099-C, you need to contact a knowledgeable certified public accountant. You will not necessarily have to pay taxes, and you will be able to subtract your basis if it’s investment property from whatever gain the lender has reported under the 1099-C.

If it has to do with your primary residence, and you get a 1099-C, you may not have to pay any tax likewise, and as an individual you can exempt up to $250,000.00 of gain as far as the sale of your home if you’ve lived in the home for two out of the past five years. Also, if it was the original mortgage and you did a short sale there’s some federal legislation that may also excuse the issuance of a 1099-C. I would also add that many times on a short sale, the lenders don’t necessarily issue 1099-Cs. So if you do get a 1099-C, I suggest that you consult with a knowledgeable certified public accountant and ask them how much you’re going to have to pay or recognize as income.

And if you have any other questions about 1099-C, give me a call at 847-2288.  Thank you.

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Should I Buy a Short Sale Home?

 

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Should you buy a house that is going to be short-sold, or a short-sale house? Well, short sale means that you are purchasing the property for less than what is owed to the lenders, whether it has a first mortgage and a second mortgage or just a first mortgage. Well, you need to do your homework whenever you’re buying a property that is in a short sale. The owner of the property is the one who enters into the contract, and then there’s an addendum that says that this contract is contingent upon the lender approving the sale.

So, it is not that you’re purchasing it from the lender; you just need to have the lender approve the sale. They usually go through the process of sending out someone to look at the property, which is called a BPO – a brokerage price opinion – to determine that the price that you’re paying is about what the property is worth, to approve the sale. This takes some time, and you have uncertainty whenever you’re dealing with short sales in that you don’t whether the lender’s going to approve it. It takes sometimes months to determine whether or not the bank will approve it; if they take other contracts. You don’t have any certainty that they’re going to approve your deal, and so you need a healthy dose of patience.

Once the bank does approve the short sale, then they want to close yesterday, or give you a very short time period. This presents a problem if you’re going to go through a bank or FHA in order to finance the home. You can start to process and get it all ready to go, but you don’t have an approved contract. So, then your appraisals and all the expense involved as far as getting financing is concerned may be outdated by the time they approve the contract. Or, if you turn around and wait until your contract is approved, they’re going to want to have the transaction closed within a 30-day period, which may present a real problem as far as getting your appraisals and everything done by your lender in time to close on the short sale agreement.

So, you have a lot of uncertainty in dealing with short sales, although you usually get a very good deal. Remember, though, that you need to do a good job researching the property because the person who’s selling the property probably does not have the money to pay you for any damages you might be incurring as a result of their failure to disclose any defects about the property. So, you should have the property thoroughly investigated as far as that’s concerned. So, if you’d like representation in conjunction with a short sale, please give me a call at (727) 847-2288. Thank you.

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Should I Buy a Foreclosure Home?

 

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Should you buy a foreclosure home? Well, homes that have been foreclosed upon are usually held by a bank. Well, you may want to buy it because the price is right; because with this real estate market, there’s a lot of bank-owned property. One of the problems with buying bank-owned property is the addendums they put on contracts. The contracts exclude the bank from any liability as far as the condition of the home, particularly if it had any particular latent or hidden defects. Of course, the big one is sinkholes.

You would need to do a very thorough job of having the property inspected to make sure it was not a prior sinkhole home. If it was, it’s almost impossible to get these engineer’s reports to determine whether or not it was repaired properly. And that will impair your ability to insure it, where if it was an unrepaired sinkhole home, you’re not going to be able to get insurance on the property, or you won’t have coverage even if you do. The insurance company may decline coverage. There’s any other number of other problems in buying these – physical problems with the property.

It would be to your benefit to hire an inspector to thoroughly inspect the property, make sure there are no sinkholes, make sure everything’s in working order –especially the roof– so you know what you’re buying and you don’t wind up buying a pig in a poke. You also need to look at the title and keep in mind that these contracts, or the addendums they put on bank-owned property, say that the bank can get out of the contract for any particular reason, and so it’s problematic. You don’t have absolute certainty, particularly if they discover that they’ve got some title problems. Well, they’ll say, “I’m sorry. I can’t close because we found that we didn’t do the foreclosure right,” or whatever, and they cancel your contract, which makes it very frustrating.

So, those are some of the pitfalls or things that you need to look out for if you’re going to buy foreclosed property, particularly from a bank, which is usually who you’re buying it from. The addendums are almost as long as the contract and they just exclude the bank from any liability as to any problems with the property, and you have no recourse. So, the advantages are that you usually get a super-good deal. The downside is, you’ve really got to do your homework and investigate the property, and also investigate the title to make sure they’re not going to back out at the last minute and that all the liens are cleared up.

Another big pitfall, particularly in this area, is unpaid utility bills. Many times, the utility company has a lien against the property, particularly in the Gulf Harbors, which was formerly Lindrick, or the Aloha district, which is now Florida Government Utility Association, and they will not give you utility service unless you pay the past-due utility bill. So, you need to look out for that. If you’re buying property in a Homeowners Association, you need to check and make sure that there are no past-due Homeowners Association dues or Condominium Association dues if you’re buying from a bank-owned or foreclosed property. If you’d like representation concerning a purchase of foreclosed property, give me a call at (727) 847-2288 and I’ll be happy to represent you. Thank you.

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When Should I Let my Home Go Into Foreclosure?

 

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When is the best time to let your house go under foreclosure? Well, that’s a very subjective question, and a lot depends upon your facts and circumstances. Many people find themselves not having the option as to whether or not to let their property go into foreclosure or not, and that if they don’t have the money to make their mortgage payments – well, it’s inevitable that it will go into foreclosure.

When is the best time to do it? You need to understand the various alternatives and the consequences of a foreclosure action; or the alternative of a short sale; or the alternative of a possible deed in lieu of a foreclosure; or even attempting to do a mortgage modification. So, the answer as to when’s the best time to let your house go into foreclosure is one that depends upon your individual circumstances. If you’re unable to make your payments because you lost your job and you’ve been unable to modify your mortgage – well, you probably want to go through a foreclosure process because of the time it takes the bank to foreclose. And you may even want to research some defenses so that you can remain in your home as long as possible.

The foreclosure process, without defense, usually runs nine months to a year. If you hire an attorney to defend you in a mortgage foreclosure, that time period can be anywhere from a year to two years, or possibly longer. Of course, there’s no guarantee, and so you should consult with an attorney whenever you’re facing a problem with your property, whether the mortgage is more than the market value and you think it’s a bad investment or whether you can’t make your payments and it looks like they’re going to be foreclosing on you. So, if you’d like to discuss the mortgage foreclosure process and your various options, give me a call at (727) 847-2288. I’ll be glad to discuss those with you. Thank you.

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