Big Changes Are Coming to the Orange County Real Estate Market

Collin Frangie (Collin Frangie) — Mon, 23 Nov 2015 12:44:00 -0800

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The real estate market has been seeing some big changes lately. Why is this?

It's because of changes to the TILA-RESPA Integrated Disclosure (TRID), and this will affect everyone involved in real estate, from consumers to Realtors to lenders. The Consumer Financial Protection Bureau (CFPB) issued a final rule amending regulations to the Truth in Lending Act as well as the Real Estate Settlement Procedures Act.

So, what does this mean for you? The TILA-RESPA rule consolidates four disclosures for closed and credit transactions secured by real property into two different forms.

One of these forms is a loan estimate that must be delivered or placed in the mail no later than the 3rd business day after receiving the consumer's application. A closing disclosure must be provided to the consumer at least three business days prior to consummation.

These new disclosures must be provided by a creditor or mortgage banker that receives an application from a consumer for a closed-end credit transaction.

The TILA-RESPA rule includes some new restrictions on certain activity prior to consumers receiving the loan estimate. These restrictions took effect on August 1, 2015 regardless of whether an application was received on that date. These restrictions include imposing fees on a consumer before the consumer has received the loan estimate, or requiring submission of documents verifying information related to the consumer's application before providing the loan estimate.

Please don't hesitate to contact me with any questions about this issue. I understand that it may seem a little confusing or overwhelming. I would be happy to clear up any misconceptions that you may have!

How Can You Benefit from a Deferred Sales Trust?

Collin Frangie (Collin Frangie) — Mon, 2 Nov 2015 08:18:00 -0800

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Today, I am here with Richard Hershey of the Estate Panning Team to discuss the deferred sales trust, and how it can reduce the property gains tax. The deferred sales trust is a legal tax strategy that helps people facing capital gain issues in the sale of their real estate.

When selling a primary residence, you are entitled to a $250,000 exclusion from capital gains as an individual or $500,000 as a couple. In many markets, such as California, it’s not uncommon to face people that have gains in excess of that. If they have $1 million or $2 million of equity in their homes, they are exposed to capital gains taxes when they decide to sell.

The deferred sales trust is a really useful tool for real estate agents. We have worked with many agents who have been successful in bringing properties to the market that otherwise wouldn’t even have been listed. It helps you, the agent, work with someone who is otherwise reluctant to list because of the potential impact of capital gains taxes. If they can be comfortable with this, these are homes that agents can bring to market, sell, and gain commission on. Most of the agents we meet initially have not been exposed to, nor are they familiar with, the transaction. This strategy is a valuable tool to have in your arsenal when competing against other agents.

A deferred sales trust is a fantastic opportunity for those of you in investment real estate. It’s a true, tax-deferred alternative to a 1031 exchange. It allows someone who owns investment real estate to sell that real estate, keep the entire transaction tax-deferred, not require them to purchase a replacement property, a 1031 exchange, or have a 45-day waiting period for identification purposes.

We have a team of professionals who specialize in this type of transaction, and would love to offer a complimentary consultation to you or any of your prospects. If you find a client that has interest, give us a call or send us an email. We would be happy to help out!

To find out more about deferred sales trust or to contact Richard Hershey directly, click here.

The Title Group Podcast

Big Changes Are Coming to the Orange County Real Estate Market

How Can You Benefit from a Deferred Sales Trust?