Link it up! A day late for good reason

This week wasn’t the hottest of weeks on the re.net, so until I found Lani‘s Social Media Marketing post on Agent Genius, which was an add-on to DoshDosh‘s Social Media Marketing post, I didn’t really have much I wanted to post on. Lani and DoshDosh’s posts though helped reinvigorate my Social Media senses.

Oh yeah, I also liked Jeff Corbett‘s Microblogging bit (if you couldn’t tell from my last post).

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Microblogging feels…

easier, more concise, and more easily digestable (like Twitterfollow me).

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Why farmers now MAY NOT get stuck in a ditch

Approximately .2 seconds after submitting my last post about certain agricultural lands possibly being deemed not like-kind to other real estate I got an update that, thankfully, this issue now looks to be ironed out!

With the lobbying of Dave Brown, an Iowa-based Qualified Intermediary, and Max Hansen of Montana, Senate Bill 2242 proponent Democratic Senate Finance Committee Chairman Max Baucus, also from Montana, has indicated that he now opposes the provision. So, it will likely be pulled from the final version.

What does this mean for REALTORS and Escrow companies?

As I see it, there are two ways to look at this issue, both of which benefit REALTORS, Escrow companies, and the real estate market on the whole. First, if the Farm Bill went through, then farmers wouldn’t be able to exchange out of their farms upon retirement and buy other properties. That would obviously hurt their realtor’s wallet. The second way to look at the issue is that if the Farm Bill were to go through, then this would be the first legislative step towards eliminating 1031 exchanges overall. With the fears people already have about 1031 exchanges because of the yay-hoos that skipped town with peoples’ 1031 money, passage of this bill would be tough to overcome the downward spiral of you and your clients buying and selling properties tax-deferred. From “scary stuff” last night, now we can breath a little easier.

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Why farmers may get stuck in the 1031 ditch…

Senate Bill 2242, the Heartland, Habitat, Harvest and Horti-culture Act of 2007 is threatening to restrict the ability of farmers to do 1031 exchanges out of their farms upon retirement. As the tax code now reads, an agricultural / raw piece of land can be exchanged out of into any other kind of real estate and be considered “like-kind” (see an earlier post to understand what “like-kind” means). Thus, Frank the Farmer can sell his farmland upon retirement and buy other money-producing property tax deferred.

Well, the language of section 504 of the proposed statute is as follows:

Section SEC. 504. MODIFICATION OF SECTION 1031 TREATMENT FOR CERTAIN REAL ESTATE.

 
 
 

(1) IN GENERAL – Unimproved agricultural real property and improved real property are not property of a like kind.

(2) UNIMPROVED AGRICULTURAL REAL PROPERTY – For purposes of this subsection, the term unimproved agricultural real property means real property –

(A) which is unimproved;

 
 

(B) which is used for farming purposes (within the meaning of section 2032A(e)(5)); and

(C) with respect to which a taxpayer receives, in the taxable year in which an exchange of such property is made, any agriculture program payments or Com-modity Credit Corporation loans.

(3) EXCEPTION- Paragraph (1) shall not apply with respect to any unimproved agricultural real property which, not later than the date of the exchange, is permanently retired from any program under which any payment, loan, or benefit described in paragraph (2)(C) is made.
Essentially, this seems to say any agricultural land which farmers have banked on being able to exchange out of will no longer be allowed. As such, all of your commercial farmers will be heavily taxed upon retirement. I can only imagine what far-reaching implications this will have if it goes through. Montana’s Prairie Star makes the great point that if this goes through, just how long will it take until the common rental property owner won’t be able to exchange anymore.

Scary stuff…

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Bad Boys, Bad Boys, what you gonna do…

Everyone hide! The FBI is looking for YOU! Yes you sitting behind your laptop sipping your $5 Starbucks cappuccino and muffin. SFGate reported that the FBI is out looking for the culprits of the Mortgage Meltdown we have all been living through. But, “unlike other big financial scandals such as Enron and the savings and loan crisis, the perpetrators are not a cadre of easy-to-finger folks in the executive suite. Instead, they’re everywhere in the mortgage food chain. Borrowers who lied about their income, mortgage brokers who flogged risky loans, appraisers who inflated home values, lenders that originated dicey mortgages, Wall Street firms that packaged them as securities and sold them, ratings firms that said those were safe investments – many participants in the market pushed the envelope, or, in some cases, may have committed outright fraud.

Does this description fit you?

Did you help a client “round up” their income because you knew that might have pushed them down 1/8% on their loan? Did you price that property in 2005 $10k too high just to see if someone would bite?

The Solution (is there one?) My Solution

If you think you will ever feel wrong by the transaction you are contemplating, do you think it would be better to be able to look at yourself in the mirror at the end of the day rather than have received a commission you may not have truly deserved? I say this all preachy-like and am in no way perfect, but it seems like when we ask ourselves what’s most important to us in life, our ethics and personal values will far surpass the number in our bank account we all seek after.

I guess this article got me thinking that at the end of the day, I can go forward a better person than I have been in the past if I choose to live the values I espouse.

* Sorry about the sappy-ness, but I am running under the influence of two people that I care about passing in the last week and have thought much of the man I am and want to be when that day comes. *

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Link it Up! Super Bowl Special

Super Bowl XLII Real Estate Bloggers' Picks

May I present your Super Bowl XLII predictions from the real estate blogs of the three cities most intimately involved with this Sunday’s Super Bowl between the record chasing New England Patriots and the New York Giants (Jersey A): Boston, New York City, and Phoenix (host city).

Boston

“Sir”, as Bostonians are likely to call him, doesn’t want anybody making predictions about the game so as not to jinx the team. But, man alive, I didn’t think he’d go so far as silence the real estate blogs.
So, Boston’s got nothing to show for themselves. As such, I’ll take the burden upon myself and make new England’s pick for them. Since I figure they want to finish off their stellar run in fashion so, for the first known and official Boston Real Estate Blog prediction for Super Bowl XLII, I say the Patriots win 42-17. On to the New Yorkers’ take on the game.

New York

New York bloggers have to represent better than New Englanders. Ton Coughlin could barely keep his job before this year, let alone silence the blogosphere. Here’s what we find…

  • Curbed’s got nothing.
  • Sellsius was a bust too. Joe must have been thinking about the departure of Rudy to Trulia too much to even think about Sunday’s game. (h/t to Agent Genius). BTW, Joe said he may be looking for a Rudy replacement over at Sellsius; can I get on based solely on the fact that Rudy is my favorite movie of all time?
  • Nothing from Noah at UrbanDigs also. Does Tom Coughlin really hold as much sway as Bill Belichick?
  • Brownstoner was a bust too.
  • Inman also pulled up bupkus.

I guess I’ll have to post the first official real estate blogger’s Super Bowl pick for New York too. Unless Tom Coughlin’s face has continued to worsen, I see the Giants putting up a great fight with the Patriots and winning 23-17, just like Plax called it (see above and all 2008 presidential candidates’ websites about flip-flopping).
Phoenix

So, with the picks in by everyone not from New England, New York, or Phoenix, it looks like one thing is certain ……………. everyone else in the real estate blogosphere is more into their work than into the Super Bowl (unlike me).

And with that, a great, safe, and Patriots-winning Super Bowl weekend to all!

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Why would you not…

want to live in Seattle? Thank you Ardell and Harley!

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