Reporting for Landlords Eased

Households that find renters for a second property but aren't in the business of real estate no longer have to send an IRS form 1099 to vendors if the vendors do more than $600 worth of work in a year!  That means that our Owners in Angel Fire who are not real estate agents, no longer have to worry about extra paperwork during tax time.  Owners of Vacation Rentals in Angel Fire are now exempt...again!

President Obama signed the repeal  into law in late April.  So, now the requirement applies as it always has: just to those in the business of real estate!

Owner Financing in Angel Fire

With the lending industry changes, the trend in Angel Fire, and I am sure other areas, is for owners of houses, condos, or lots to hold financing for buyers.  This generally involves a third party Escrow company who takes the payments and administers the terms of the contract.  They also hold the deed or deeds depending on the contract.

We generally see a downpayment of at least 20%.  Monthly payments are figured on a 30 year amortization at a few percentage points above the interest rate being given by banks.  Usually there is a balloon at 3-5 years, at which time the buyer pays off the loan or gets it refinanced.

In an attempt to avoid any potentially expensive foreclosure procedures, should they become necessary, many contracts call for a deed and a reverse deed.  Both would be held by the escrow company to be recorded at the conclusion of the contract.  The first deed is the deed by the owner to the buyer, upon final payment.  The reverse deed is a deed from the buyer to the seller.  In the event of a default by the buyer and termination of the contract, the reverse deed is recorded thereby avoiding expensive foreclosure proceedings.

AS WITH ANY CONTRACT, ALWAYS SEEK LEGAL COUNSEL PRIOR TO EXECUTION OF A CONTRACT.