Real Estate and Property Blog

i.e. if on the purchase of $500K home the agent gets 2.5% commission (=$12.5K) and then gives $5K back to the client as a rebate, is he paying taxes on $12.5K (since that is how much he originally got) or $7.5K (the amount he actually ended up with)? If it's only $7.5K, how the rebate should be accounted for in terms of the taxes?

To keep it legal, the rebate should be paid through escrow, so therefore you will be paid by the broker. The broker will only be recieving what is left on the commission less his fee's then the rest will go to you.

So you will be taxed on only what you receive.

For example, if the fee is 6%, the agent only gets about 1.5% before taxes (after splitting the commission and giving some back to the firm, lik REMAX).

So, if he/she has an offer that is $10,000 too low for you, the agent loses only $150 (and saves a lot of time and effort) but you lose about $10,000. What incentive is this for the agent to hold out for a higher price?

Do you know any agents that are both a) good and b) negotiate a sliding fee?

I think it could go both ways, as far as developing unmotivated and motivated realtors. Flat rate gives an expectation and also give better ability to forecast, rather than wondering if the person will think it is too much. on the other hand for those who want a little more, this set rate might stiffle growth and cause disinterest. Hope this is clear.

landstonegsl@yahoo.com

General: what are some of the pros and cons about real estate, rentals in particular. And also I have heard commercial leasing/sales is the most lucrative. How are leasing commissions usually given in commercial loans, I know in residentials it’s usually a split of 1 months rent. Also what would you advise a newbie (I have had my re lisence for a year and a half but have not used it other than 1 summer very part time) looking to take a jump to self employment as steps to getting organized (health ins, taxes, learning sales and marketing techniques for my area, etc.) What 3-5 things would you recommend to a new agent that you wish someone told you.

Boston Rental agents: pros and cons to rental market in and around boston, what a typical day is like, what tips for interacting and finding landlords. Any tips on marketing the luxury buildings?
Also a general what books in real estate and sales had the best impact and information, but also kept it light enough to want to read.?

Real estate contact take time to establish. Get to know people in the business there and check it out. Don't jump cold turkey in there. Be very prepared. You sound very bright .
Good luck and God bless!

I am a new real estate agent. My only commission last year was on the purchase of my own home. The business administrator in my office told me today that a 1099-Misc was not filed on me since the commission was on the purchase of personal property. So should it be reported as taxable income?

Any info from experienced agents appreciated.

If you took the commission in cash at closing, it's reportable income for your taxes. Doesn't matter whether or not it was earned buying a property for yourself or for a client, it's still income.

Most of the information I found online related to the issue referred to the Redfin IRS ruling -
http://www.redfin.com/stingray/do/landing-page?uid=pr-irs-ruling
According to it, a 1099 should not be issued for a buyer agent commission rebate. But, I have already been
issued a 1099. Does that make the rebate taxable? If no, how do I report it on my taxes?

very tricky question.
The redfin ruling is merely a clarification, not IRS Code.
The rebate could easily be considered income, particularly if a 1099 was issued. You should request a meeting with the IRS in local area. Take the redfin ruling, and your 1099, your real estate closing papers, and discuss with them.

I own two rental properties (both are duplexes)…neither of which are providing any cash flow due to the cost of ownership, taxes, utilities, etc. I really need to sell one but with the market the way it is I feel it the hit may not be worth it. I bought the first property 8 years ago and it appreciated nicely…then I used the equity from that one to buy my current house two years ago (bad time to buy) but this property value has decreased. LIkewise, after real estate commissions, I really have no net worth…I keep beating myself about this last purchase and I am constantly stressed and worried about the situation….this investment idea I had has gone south and the situation is getting worse fast…what would you advise me to do?

If you are not dependent on the income for survival then I would suggest holding onto the properties and tighten your belt and pay to that principle - if you've got no income coming in and are heading toward foreclosure put them on the market now and move into the one that doesnt' sell.

Lots of luck and remember this too shall pass.

http://www.davidpannellhomes.com A short sales occurs when the net proceeds from a the sale of a home are not enough to cover the sellers mortgage obligations and closing cost, such as property taxes, transfer taxes, and the real estate practitioners commission. The seller is unwilling or unable to cover.

Some, although by no means all-short sellers may be in default on their mortgage loans and be headed for foreclosure. However, homeowners who bought at the top of the market or who took out large amounts of equity with refinance abd who need to sell because of divorce or job transfer may also find themselves upside down, owning more than the home is currtenly worth when closing costs are factored in..

Tip, losing your home is very emotional and you might be ed off your losing your home or in some cases don’t care..If you care, call us early…so we can help.

Your Home is where you live, not in the home your being harassed in.

Who do I talk too? Call us, the Fort Worth Home Resecue Team. David 817-797-9047 or Barbara 817-846-5093-both professionals in saving your home from foreclosure…

its a good idea to call before they seek foreclosure, so we have plenty of time to help…we need atleast 4 weeks prior to foreclosure court…

call now, not next month when you get another letter

Bankrupty will not save your home…trust me.

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Technorati Tags: Default, Foreclosure, homes, House, mortgage, sale, Short, Texas

“The most important piece of advice I’ve got to give anybody that wants to get started on the wealth-building track is this: buy your own home,” says Dr. Joseph Simini author of Financial Security in an Unstable Economy.
The problem is that many people pay a landlord who uses the money to pay loans, fix up the property, and keep it in good repair. When the loan is paid off, the building belongs to the landlord, while the tenant owns only rent receipts.
Buying your own home is the most important step in building wealth. You can get started with a small down payment. You will benefit from paying your own mortgage, instead of paying rent and making the landlord wealthy. Owning your own home leads to tax benefits that can make a huge difference in your tax return.
Property tax and mortgage interest is deductable. These can be deducted from your regular income, leading to huge savings for you. The deductions are substantially more than the standard deduction allowed by the IRS.
Find a realtor who is willing to sit down and work with you. The real estate broker wants to help you because he or she is working toward a commission. Let the realtor know you are ready to buy and how much you can afford. He or she will find you the best deal for your investment.
Buying your own home is the foundation for building financial independence. Be proactive, take some action and change your financial future.
About the Author:
Dr. Proactive, Randy Gilbert enjoys producing the “Inside Wealth Success,” hosted by Jay Aaron, who presents his insightful interview with Dr. Joseph Simini based upon the techniques from his book. You can hear the entire inspirational interview for free by going to:
http://www.insidesuccessradio.com/Guests/Joseph-Simini

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Technorati Tags: adviser, Budget, Dr, expert, Financial, Freedom, income, Independence, Inside, Joseph, money, Proactive, Simini, Success, wealth

Did you ever wonder what progress you have made towards your sales or commissions goals? How much you have sold to date? Home much you have in escrow? What your tax liability might be? ComTrack is a Real Estate commission tracking system. ComTrack allows you to track your sales, commissions (gross

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Your own capital gain is based on the amount you actually received for the sale of the property, minus the associated expenses, such as ….the agent's commission. The commission is part of the agent's income for that year, hence something that the agent will pay taxes on. Bring the Closing Statement or similar document to your tax preparer next time around and it's an easy task for them to pick out the right numbers for you.