Selling Poinciana One Property at a Time.: Florida Department of Revenue Sucks on Short Sales!

Florida Department of Revenue Sucks on Short Sales!

D'ooh!!!OK so the Department of Revenue in Florida has decided to charge Documentary Stamps (tax) on the amount of mortgage forgiveness related to short sales. Doc Stamps in Florida are charged at the rate of $.70 per every $100 on the Deed of every real estate transaction. 

For example: If you sell your house for $100,000 the seller pays $700 in doc stamps. 

Now what the State is saying is that if you sold that same house for $100,000 BUT it was a short sale where the Lender forgave $50,000 the tax due is now $1,050!!! 

So this brings up some interesting questions. 

  • How many out of State lenders are going to be willing to give the "forgiveness" amounts to the title company? 
  • How is this going to affect future appraisals where the appraiser relied on Doc Stamps as an indicator of sale price?
  • What about a closing where the Seller brings money to closing? Will they too have to pay Doc Stamps on their mortgage balance instead of the sales price?
  • Will the Department of Revenue ever get their head out of their ass? 

Oops!! Did I just say that? Oh well.....what say you?

Tutas Towne Realty has already successfully negotiated Short Sales with the following Lenders and Investors.

Chase Short Sale,Sun Trust Short Sale, GMAC Short Sale, Wells Fargo Short Sale,Bank of America Short Sale,USA Bank Short Sale,PNC Bank Short Sale,Citi Short Sale,HomeEq Short Sale,Fifth Third Bank Short Sale,ING Direct Short Sale,GreenTree Short Sale,Capital One Short Sale,ASC Short Sale,First Horizon Short Sale,E-Trade Short Sale,Transland Financial Short Sale,US Bank Short Sale,IBM LBPS Short Sale,
Nationstar Short Sale,BAC Florida Short Sale,Real Time Solutions Short Sale,Fannie Mae Short Sale
FHA Short Sale,Selene Finance Short Sale,DTA Solutions LLC Short sale,Flagstar Short Sale,IndyMac Short Sale

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Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Winderemere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

Comments

Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Blog Boy...

This is what I say: "It's been years upon years since The State has seen daylight" :)

We are talking about the same government body who cut the education budget then followed it up with the statement:

"Will you parents out there stop home schooling children" :)

TLW...ROAR!

Posted by "The Lovely Wife" (Broker Bryant's Wife) The One And Only TLW. (President-Tutas Towne Realty, Inc.) over 3 years ago

Good question.

Short sales are here to stay

Keep on blogging

Bill

Posted by Bill C. Merrell, Ph.D. (Merrell Institute ~ Appraisal Education Network) over 3 years ago

Bryant - From where I sit and ponder things.....the head will remain planted firmly where it currently resides.

Posted by John MacArthur Licensed Maryland/DC Realtor (ReMax Realty Centre) over 3 years ago

Oh Broker Bryant-it never ends with the short sales that is for sure and I wonder how to many properties may not close due to this.  Do people really ever get a second chance?

Posted by Midori Miller - Ormond Beach | Daytona Businesses And Area Information (Midori Miller @ Coastal Results Referral Company) over 3 years ago

Bryant good questions that need answers.  We don't have a stamp tax here in Connecticut, but we have a Conveyance Tax which is the same thing.  Here in Middletown it is 1%, and they were trying to impose a Conveyance Tax on the Buyer as well.

Posted by George Souto NMLS# 65149 FHA, CHFA, VA Mortgages Connecticut over 3 years ago

Geez!  It never ends.  Check the code and see if the code says the tax is to be charged on the transfer price or market value.  I doubt if that tax is even legal. 

Market is too subjective. 

Don't they know that real estate taxes in Florida are one of the reasons folks from up north are not buying at the rate they once were?  Even with market prices in the dumps, the taxes are a serious matter to retirees and others on fixed incomes. 

It is the lack of income tax that brings many folks to Florida.  If the real estate related taxes are going to keep going up, relocating home buyers will just not go there.

 

Posted by Lenn Harley, Real Estate Broker, Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 3 years ago

BB, Short sales...short sales....short sales...lalalala....that's all we do! Don't mind me...on so short saled out:)

Posted by Neal Bloom-Realtor ®CRS-Weston FL Real Estate (Keller Williams Properties, Weston FL) over 3 years ago

This new ruling seems pretty ridiculous.  The state is simply stretching the law in order to fill their empty coffers.  I bet if someone filed a lawsuit against the DOR that the state would lose big time.

Posted by Rob Arnold, metro Orlando full service, investor friendly & foreclosure Realtor (Sand Dollar Realty Group, Inc.) over 3 years ago

What better way to spend the federal tax refund sent out this year?

Posted by Laurie Mindnich at Options Realty over 3 years ago

I say that sucks too!  Talk about kicking someone when they are down. 

Posted by Meridian Idaho Real Estate ~ Pam Pugmire (Market Pro Real Estate) over 3 years ago

BB,

I'm in agreement with Lenn on whether or not it's the transfer amount. We pay $1.10 her per one-thousand and it's on the transfer value. We know what the loan amount has nothing to do with actual value, especially today.

Posted by Orange Co. Real Estate~Lynda Eisenmann, Broker-Owner, CRS,GRI,SRES, Brea, CA (Preferred Home Brokers) over 3 years ago

Yikes................as if it wasn't enough.

Posted by Missy Caulk-Ann Arbor-Realtor® Ann Arbor Real Estate (Keller Williams-Ann Arbor) over 3 years ago

As they say in California, SUE THEM cause I'll bet Lynn is absolutely right. Sue their ASS off cause that's where their head is at.

Broker B, I'll trade you 5 of our beaurecrats for a warm beer and 2 dead fish.

Posted by Cameron Wilson:The Short Guy Blog, Murrieta,Temecula,Menifee California (Labrum Real Estate) over 3 years ago

First time I read about this on AR, I thought this was a mistake. It is called Documentary Stamp on the Deed, so I thought the only amount they can collect is on the amount shown on the deed. Looks like evething is possible, and even illogical things are still possible.

Posted by Jon Zolsky, Daytona Beach, FL. FunCoast Realty, 386-405-4408 over 3 years ago

Another classic example of Bueracracy gone wild! Lets not take time to see what is the right thing to do for the people. Instead let's make sure we protect that revenue stream.

After all every one knows that the people who are in trouble are all Speculator's and Investor's who have gotten rich and now are calling for a bail out. Right?

MORON's !

Posted by Downtown Portland Real Estate Broker~Herb Hamilton,CDPE (RE/MAX Preferred Inc. Realtors) over 3 years ago

BB, Where were all the voters when this was passes?  I guess the state Gov't thinks it is easier to take advantage of the down and out,  just like they found it easier to blame someone else for the credit/housing crisis we are in. aj

Posted by Alan 'AJ' Nisen California Contra Costa Mortgage Officer (A Large Bank in America) over 3 years ago

I've not heard about that in our area I'll ask my title rep tomorrow.

Posted by Terry+Bonnie Westbrook Westbrook Realty Grand Rapids Forest Hills MI Real Estate (Westbrook Realty Broker-Owner) over 3 years ago

Our greedy lawmakers have not thought of that yet.  We have a conveyance tax which is very similar, without the short sale penalty.

Posted by Randy L. Prothero - Hawaii REALTOR® (808) 384-5645 (Century 21 Liberty Homes ) over 3 years ago

By the way in Dade county it's only .60 per 100 on doc stamps unless they changed it the last time we closed in Dade.

Posted by Neal Bloom-Realtor ®CRS-Weston FL Real Estate (Keller Williams Properties, Weston FL) over 3 years ago

BB- Just what we needed...another obstacle to stall the housing market.  Haven't come across this little gem yet.  Ugh..

Posted by St.Cloud Homes & Land, LLC over 3 years ago

Neal, That's strange since doc stamps are a State tax not a county tax. Maybe there's an add on or something.

Allison, I know!!! I did get approval on 2 of my short sales today so that's a good thing. Of course I'll now have to eat the additional doc stamps since there ain't no way I'm going back to the lender to approve another HUD!! 

I agree completely with you guys who are saying this is probably an illegal tax. It makes no sense at all to tax the short. I imagine the title companies will be fighting this as it creates a whole bunch of extra work for them.

All I know is it's getting harder and harder to get through this current real estate market. It's just one thing after another.

 

Posted by Bryant Tutas-Tutas Towne Realty, Inc over 3 years ago

Bryant- Our attorney just sent the issue over to us. She was talking to the DOR to make sure of the interpretation and this is correct what you are saying. I think this may be illegal too. Not only that but law suits may start to happen against short sale lenders who foreclose when they could have taken a short sale. This is just another obstacle that is so ridiculous. There will be sellers that the extra $500 to $1000 will be enough to just walk away and not complete the short sale. Our state is supposed to start helping us, not being our enemy.

Posted by Nestor & Katerina Gasset Realtors® Wellington Florida Homes For Sale (International Properties and Investments, Inc.) over 3 years ago

Hi Katerina, The other problem is with HUDs that have already been sent and approved. I had 2 approved today and I certainly won't be changing them at this time. So unless my sellers pay it I'll be eating it. I don't know how the title companies are going to get these figures from the lenders.

FYI, I got a short sale approved today with HomeEQ Servicing where the buyer is going FHA with Nehemiah and is getting a total of 9% in seller concessions!!!! Who'd of thunk it!!!

Posted by Bryant Tutas-Tutas Towne Realty, Inc over 3 years ago

Wow - I'm so glad I live in Idaho - this is ridiculous!

Posted by Christina Ethridge (The North Idaho Dream Team powered by SKE Realty Group) over 3 years ago

Bryant - I don't know the answer to any of those questions except for the last one. The question about the Department of revenue getting it's head out of it's ass? Never

And a lot of people are moving to Tennessee from Florida because the cost of living is lower here. But our government has it's head up it's ass also.

They are charging builders enormous impact fees to make up for the loss in revenue they were getting 2 years ago. What's the result, higher prices homes. The homes don't sell because they are too high, the builders quit building, the taxes stop coming, the govenment decides to raise taxers again because they don't have enough money. Are they stupid or what.

Posted by Larry Brewer (Benchmark Realty LLc) over 3 years ago

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