Klor Strong Team Blog

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TAX FREEDOM

Tax Freedom Day is a calculation that dates back to a Florida businessman in 1948 that figures out how long Americans work to pay taxes if all of their wages went to taxes first.

The states with the latest Tax Freedom Day are:

1. Connecticut, May 2
2. New Jersey, April 29
3. New York, April 24
4. Maryland, April 17
5. California, Minnesota, Washington, Wisconsin and Washington D.C. tied at April 16

Tax Foundation President Scott Hodge added, “This year, taxes amount to 28% of America’s income… that’s short of the record set in 2000 (when Tax Freedom Day was) May 1.”  Thank you Duane Gomer for the reminder!

Related articles

• ‘Tax Freedom Day’ arrives later in 2011 (thegazette.com)
• Your tax bill: 3 months of work (money.cnn.com)

My email got flooded this morning with a number of clients and associates forwarding information claiming that there is a “3.8% Real Estate Sales Tax buried in the recently passed Health Care Initiative due to take effect in 2013″. 

My first response was “WHAT???? …  A Real Estate Sales Tax as part of a Health Care Bill?”. 

My immediate  action was to try and locate the original article purporting this information.  Here’s what I found: http://www.snopes.com/politics/taxes/realestate.asp.

While relieved to find that the original message received was less than correct it really made me think of all the other dis-information that is being blasted out to the public as facts each and every day.  Home Buyers and Sellers are constantly receiving information from a myriad of sources, all with some sort of spin involved, entirely dependant upon the end goal of the person delivering these so called facts.

I spoke of cliches in my last post and there being some kernel of sound reasoning behind them, so here’s another I would venture to share with you dear reader:   “Take everything you hear or read with a ‘grain of  salt’.  While my last statement may be somewhat paraphrased,  I would also add to this;  Verify – Verify – Verify, and  oh yeah… be sure and Verify … before acting on the information!  Knowledge can definitely be empowering – but only if the knowledge is correct and accurate!

So where does one go to get the straight scoop? 

Your trusted Realtor is a excellent resource to help determine if  the information being received has any basis of truth involved.  I won’t speak for all real estate agents, licensees or those who work part-time, however, of the many professional Realtors we have the pleasure of working with, all strive to have the latest correct information available for our clients.  This information is gleaned from many hours of continuing education dealing with changes in taxes, changes in local, regional and national laws and procedural changes  that affect how property transactions are conducted.  A great number of Realtors volunteer their time and energies participating in the leadership and administration of the local Real Estate Boards as well as involvement in our local  governments.  Many of these same individuals are also involved in State, and National organizations, where the primary focus is on Real Estate and the preservation of property owners rights, through the California and National Association of Realtors.  We do this not only to better prepare ourselves, we also do this to better serve and protect our greatest asset – YOU, our clients

Remember, the only question that is silly, is the one that goes unasked.

That’s my opinion – What’s yours?

Our main issue is that there is not enough housing for the amount of buyers that want to purchase. Because Real Estate statistics are hyper local, any general statement that has as its basis a global statistic for the United States, has little to zero relevance to our Bay Area RE. In Detroit you can purchase a single family home for $59,0000. In the Bay Area, that will buy you a large, newer vehicle or old trailer- not even a financeable mobile home….

New construction in the Bay Area is not selling like hotcakes due to the difficulty of obtaining financing, not due to lack of demand. We have a MAJOR stumbling block right now in the financing process which is the new appraisal rules & regulations- the amount of war stories are mounting and unfortunately we are all getting wounded by it! These new rules have left us with very few good appraisers that are intelligent, professional & discerning and instead we have a bunch of uneducated, unmotivated, & unknowledgeable  people  that are willing to work for $125 for over 20 plus hours worth of work! These are the folks that are stopping transactions from going through. But then, we’ll talk more about that later….

As a secondary problem for new housing- which is just getting started- is the Chinese Drywall issue www.newsinferno.com/archives/5591 (just an example).

Indicators that ARE important are:

2/21/09     1,375 Properties available for sale in Santa Clara County 28.1% were in escrow

2//10     760      “          “       “   “    “    “     “    “      59.3% are in escrow

But even these stats are not totally correct due to the amount of Short Sales that are under contract/in escrow that will NEVER close escrow and will end up back on the market as Foreclosures…..