A home is an important purchase and a home inspection is an inexpensive way of discovering the homes universal condition. Thus, to avoid a costly mistake, it is recommended to do home inspections so that you do not end up purchasing properties requiring major repairs.

A professional who is a certified home inspector conducts general inspection of the home. Generally, a good home inspector assists the buyer in exactly understanding what to acquire. A home may appear ready-to-move position, but it is an home inspector who considers the features such as plumbing, electrical wiring, insulation, roofing and structural features and unveils issues that fails to gain attention of the buyer.

A buyer must understand exactly about the home before purchasing as he is making a vast investment. Having a certified home inspector do a thorough inspection of the property is essential. Home inspection processes are done in different types before purchasing a home. Importantly, a certified home inspector inspects the exterior, structure, electrical, roof, HVAC, plumbing, insulation, interior and ventilation. As the inspection is complete, the home inspector provides a report suggesting repairs or improvements essential meeting the current standards.

Home inspections reveal problems that could be pricey.  This also may be a great tool in negotiating with the seller.  As a buyer you may negotiate the price based on the findings of the home inspector.  During inspection within the home, if flaws were found, the buyer has an opportunity to negotiate based on the repairs he has to pay or about the issues he may find problematic.

• Another very important home inspection process is the termite/wood destroying inspection. The home inspector checks for structural damage signs caused by wood boring insects. A general home inspector also performs this inspection if he is paid an additional cost.
• A radon inspection is also done importantly before buying a home as it is considered dangerous to health. Radon is a gaseous element that is a breakdown of radium and occurs in granite areas. A radon test is done using a radon kit that is hung or placed in the house for a period of two to seven days. If the test is high, alleviating radon meant seal concrete slab floors, water drainage systems and basement foundations.
• Other inspections include well water testing, septic tank testing and oil tank testing. General home inspectors are qualified to perform all the tests. It is important you check the qualifications of the home inspector and if required consider skilled professionals.

Ideal Title Agency is committed to helping realtors and homeowners to deal with all aspects of the home purchase process. We continue to offer advice and broad context for real estate agents, buyers and sellers. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle.

Here’s something most of us are coping with in the age of home isolation: how to set up our office space. Tools that boost efficiency, comfort, and pleasure make any work-from-home assignment better. Here are suggestions from Chicago designer Tom Segal of the design firm Kaufman Segal for the optimal home office setup.

• Decide how much privacy and quiet are needed and whether it’s best to have a room or if a nook would suffice. Good options are a finished basement with a window well for daylight or, for empty nesters, a grown child’s former bedroom. Even a large hallway or walk-in closet can be outfitted.
• Ensure you have strong Wi-Fi, which might mean getting a signal booster.
• Select a standard 29- to 30-inch-high desk or table large enough for a laptop or two and a spread of papers. Some prefer a standing or adjustable desk.
• Pair the desk with an ergonomic chair with adjustable arms, seat height and tilt, and lumbar support. With casters, it will move easily over wood or carpet.
• Illuminate a work area with several layers of light: an overhead fixture with a halogen bulb to reduce shadows, a task lamp so eyes don’t become strained, and a softer lamp light of incandescent or warm LED bulbs.
• Have enough electrical outlets to charge laptops and other devices.
• Don’t forget containers to organize pencils, pens, and markers.
• Try to control noise. No door? Make a sign that says, “Quiet, please.”
• For web calls, be sure you have a backdrop, such as a well-organized bookshelf, that looks professional.

Ideal Title Agency is committed to helping realtors and homeowners to deal with all aspects of the home purchase process. We continue to offer advice and broad context for real estate agents, buyers and sellers. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle .

Title and escrow fees are two key areas of a real estate transaction. When you are purchasing a home, be prepared when you come to the table with the right information on closing costs. 

Here’s what home buyers need to know about title and escrow fees:

TITLE AND ESCROW: THE BASICS

A title company handles needs surrounding title and escrow when you purchase a home. During the real estate transaction, the company will perform a title search to make sure the title to your home is “clear.” (no unpaid liens, errors in recorded documents, etc.) The title company will also provide separate title insurance policies for you and the lender. The owner policy will protect you for the entire length of time you own the home, and the lender policy protects the financial institution/mortgage company during the transaction. 

Escrow needs include the management of the funds and documents related to the home purchase. It is important to have a third party, such as a title company, to handle financial information and legal documents to ensure privacy, security, and accuracy. 

COST OF TITLE AND ESCROW FEES

Title and escrow fees are part of your closing costs. How much they are can vary by where you live, the property’s sales price, and the financial institution/mortgage company you are working with for the purchase. Typical closing costs amount to about 2% -5% of the purchase price. 

Most title companies have a formula addressing how to calculate title and escrow fees. There is a typical base rate to start with, and then a percentage rate per thousand dollars of the purchase price is added. 

With title insurance, in particular, additional variables that may affect the cost include state regulations, negotiations with the seller, negotiations within full components of the policy, and any available bundle discounts. Some states have regulations on title insurance policies, including Florida. Homebuyers work closely with the title company in deciding the parameters of the title insurance for your particular property. Around $1000 per policy is a standard average on many home sales. 

These are one-time fees that are typically submitted on the closing day.

WHO PAYS?

The buyer pays for the bulk of title and escrow fees during a real estate transaction. The seller will have to pay a certain, usually smaller percentage of the overall closing costs, but it is not uncommon for the buyer and the seller to have some negotiations regarding closing costs. 

DISTRIBUTION OF TITLE AND ESCROW FEES

When it is time for the much-anticipated closing day, an escrow officer will distribute the fees and any additional closing costs. These can include:

• Taxes and other fees to the county
• Charges to third party providers including title insurance
• Real estate commissions to the agents
• Loan fees to the financial institution
• Profits from the real estate transaction

Once the funds are distributed, and the closing is complete, the title company that handles the escrow will ensure that all the documents are correctly recorded to the county and any other appropriate local agencies. The official recording is very important because it secures the new homeowner’s legal rights to the home and property.

OTHER REAL ESTATE TRANSACTION FEES

Title and escrow fees make up the majority of fees (outside of the purchase price) when you buy a home. Depending on the property and the home buyer’s needs, other costs may be a part of a completed real estate transaction. Appraisal fees are commonly needed to evaluate the home and ensure it is worth the selling price and to determine the market value. 

Additional fees that are often included depending on where you are in the country are:

• charges for a credit report, 
• an assignment recording fee to create the official record, 
• a closing protection letter (CPL) that covers the disbursement of the funds in the purchase, and 
• flood certification

Yes, certain fees are unavoidable but know that some are negotiable. Working with a respected title company, you will receive transparency in communications throughout the real estate transaction to help you through it all. 

Ideal Title Agency is committed to working with all participants of the settlement services transaction to help ensure that information is kept as secure as possible. By knowing the threats, asking questions and practicing good security hygiene, we can work together to protect transactions.

Ideal Title Agency continues to offer advice and broad context for real estate agents, buyers and sellers. 

A record 27.0% of home searchers looked to move to another metro area in April and May 2020, a new high in the share of Redfin.com users searching for homes outside their area. It’s up from 25.2% in the second quarter of 2019 and 26.0% in the first quarter of this year.

The latest migration analysis is based on a sample of more than 1 million Redfin.com users who searched for homes across 87 metro areas in April and May, excluding searches unlikely to precede an actual relocation or home purchase. To be included in this dataset, a Redfin.com user must have viewed at least 10 homes in a particular metro area, and homes in that area must make up at least 80% of the user’s searches.

The places home searchers are looking to leave and those they’re looking to move into remain largely the same as before the pandemic took hold: Redfin.com users want to leave expensive coastal metros for affordable inland areas.

New York, San Francisco and Los Angeles had the biggest net outflow of Redfin.com users in April and May. A net outflow means more people are looking to leave than move in, while a net inflow means more people are looking to move in than leave.

San Francisco, Washington, D.C., Chicago, Seattle, Denver and Boston have all seen small (less than 2 percentage points) increases in the share of people looking to move away since last year.

Ideal Title Agency continues to offer advice and broad context for real estate agents, buyers and sellers. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle .

Source: https://www.redfin.com/blog/april-may-2020-housing-migration-report/  Redfin Blog (2020)

“While the pandemic has impacted our views on the desirability of density, it is clear that home buyers have not given up on condominiums,” CoreLogic reports.

Condos are making a strong recovery since May. “Interestingly, while condominium sales took a larger dip during the peak of shelter-in-place orders, pending contracts have healthily rebounded to the same rate of annual growth for single-family homes, with both averaging about 17% year-over-year increases in the first two weeks of July,” according to the most recent data from CoreLogic.

New inventory of condominiums outpaced single-family growth in June. Inventories are constrained for both condos and single-family homes, but active condo inventories has leveled off at about a 13% decrease year over year since May compared to about 30% decrease in the inventory of single-family homes.

“The stabilization in condominium inventory reflects an increase in newly available inventory,” CoreLogic reports. “After dipping to a 50% year-over-year fall during the height of the shutdown, we have seen a rapid growth in new inventory and recorded an 8% increase by mid-July.”

The largest increase in new inventory in June was among condos priced at 200% or more of the median price, which is up 16% compared to a year prior. Newly listed inventory of condos priced below 100% of the median price was up 5% and new inventory priced between 100% and 200% of the median price was up 2% annually in June, CoreLogic reports.

Condos may be offering buyers better deals than single-family homes. The share of condos that sold below the asking price is higher than the rate of single-family detached homes, CoreLogic reports. Nevertheless, the discount on condos is at the lowest rate it has been in at least the last 2.5 years, showing that condos remain desirable even in the pandemic, CoreLogic reports.

Ideal Title Agency continues to offer advice and broad context for real estate agents, buyers and sellers. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle .

Source: “Data Showing Mixed Views on High-Density and Condo Desirability in the Face of COVID-19,” CoreLogic Insights Blog (Sept. 2, 2020)

Identity theft, financial fraud and other cyber-crimes are on the rise in the financial services and insurance industries. Settlement services transactions have become a target for fraudsters, and these types of cyber-crimes continue to grow. To reduce the risk of cyberfraud, everyone involved in a real estate transaction needs to know the threats and be armed with knowledge to combat them.

Know the Threats

When fraudsters become interested in a transaction, they’re looking to gain unauthorized access to nonpublic personal information (NPI) or use business email compromise (BEC) to perform fraud.

NPI is personally identifiable financial information provided by a consumer to a financial institution resulting from any transaction with the consumer or any service performed for the consumer. In the hands of fraudsters, this information is valuable and can be sold or used to commit cyber-crime.

BEC is a process fraudsters use to access emails containing NPI or conduct cyber-crime. This could lead to wire transfer fraud, where a transaction participant wires funds to an unauthorized person. Organized crime groups typically follow a process such as this:

1. Identify targets within the transaction
2. Reach out to the targets with phishing emails, telephone calls and, in some cases, in-person visits to collect useful information such as transaction dates, accounts, participants, amounts, etc.
3. Exchange information with the targets and participants
4. Change wire transfer instructions to have funds sent to an account controlled by the organized crime group

Protecting the Settlement Services Transaction

Each participant in a transaction is responsible for ensuring fraudsters don’t collect data, interrupt or insert themselves into a transaction. These are some ways parties to a transaction can help prevent interference:

• Know the transaction process from start to finish
• Use a contact log created at the beginning of the transaction to reference contact information for the title agent, lender, real estate broker or agent, attorney, seller and buyer
• Keep a level head and eliminate urgency
• Ask questions if you don’t understand something or if you feel uncomfortable
• Scrutinize emails that contain or collect NPI or request that funds be transferred
• Verify the authenticity of any request to wire or send money
• Do not use phone numbers and links within the email; use the contact log set up at the beginning of the transaction
• Avoid using public wi-fi even if the wi-fi is protected by passwords
• If you can’t avoid public wi-fi, utilize a virtual private network (VPN) to encrypt data
• Keep your computers, mobile devices and applications patched and updated with the latest versions or releases to help close security vulnerabilities
• Verify fund transfers immediately

Whatever your role in the real estate settlement services transaction process, stay vigilant to help reduce the risk of cyber-crime. Use the following tips to help protect transactions:

Title Companies

• Transmit data using encryption (Web applications, databases, file transfer, email)
• Use two-factor authentication for remote access to your network resources
• Maintain a contact log for all participants (phone numbers and email addresses)
• Implement a multi-step funding process that eliminates urgency for transferring funds
• Educate all participants to understand the threats to the settlement services transaction process
• Perform a risk assessment to identify security gaps within your organization and develop a plan to close the gaps

Real Estate Brokers or REALTORS®

• Avoid using free email services to conduct business
• Use secure email whenever possible
• Use two-factor authentication for email
• Transfer files and data using encryption
• Don’t store data that’s not required by regulation or legislation
• Change passwords on a periodic basis
• Educate customers on BEC, wire transfer fraud and the settlement services process

Consumers

• Learn about the settlement services process and what you should expect
• Confirm the authenticity of all communications
• Only transfer NPI in an encrypted format (If you aren’t sure if the method is encrypted, question the requestor)
• Understand wire transfer fraud
• Scrutinize wire transfer instructions, and don’t accept changes in instructions unless you’re 100% sure of the authenticity of the change

Ideal Title Agency is committed to working with all participants of the settlement services transaction to help ensure that information is kept as secure as possible. By knowing the threats, asking questions and practicing good security hygiene, we can work together to protect transactions.

Ideal Title Agency continue to offer advice and broad context for real estate agents, buyers and sellers. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle .

It’s pretty simple; you have a better chance for reliable returns where there is – and will be – good demand for housing. And that usually requires a growing local economy.

In the time of Covid-19, in 2020 and probably 2021 as well, that simple analysis logic is upended because almost every local economy is not growing. Furthermore, many kinds of jobs will be permanently lost as a result of the Covid-19 recession, which will affect some local economies more than others. This means that investors have a more complicated task; it boils down to playing defense, to focus on local markets that are most likely to produce good returns in the future because they’re least likely to suffer long-term harm.

How do we do that? The data we usually analyze, like jobs and unemployment, can be misleading right now; some states shut down their economy, others didn’t. Recent data on home prices and rents reflect transactions that were started many months ago, before Covid-19 was even a word; they’re not much of a guide for the future.

Let’s be strategic; look at the underlying structure of local economies to see which are more fundamentally solid than others. Markets that were strong before Covid-19 should do well after Covid – with some exceptions.

We’ll start with demand for housing, measured by rising home prices the last few years. That’s a reliable measure for renters as well as homeowners. What we’re looking for is a consistent increase at a sustainable level. Ranking the 100 largest local markets, we get the Top 20 list in Table A. Phoenix might be on the high side for sustainability, but a consistent 5 to 6 percent

Next, let’s see which local economies were doing well in the years before Covid*19, measured by job growth. Again, we’re looking for consistent growth, not boom economies. Ranking our 100 markets we get the list in Table B. There’s a wider range here, from more than 3 percent to just over 1 percent annual increase shows solid demand.

Unless the pandemic continues unabated for several years and the real estate markets collapse, investing in rentals will be a good idea. There are a number of favorable local markets for investors, even during this time.

The markets listed in Tables A. and B. are all candidates; those listed in Table C. are even stronger choices; and the eight markets with low Covid-19 vulnerable jobs give you the least to worry about: Atlanta, Austin, Columbus, Fort Lauderdale, Houston, Phoenix, Richmond and San Antonio.

If you’re considering investing in real estate, when you’re ready to close on a deal, Ideal Title will be here to help. We have the professionals to assist investors with their title and escrow needs. To find out what title insurance and closing services options are available, contact Ideal Title Agency. We’re glad to help you navigate these questions. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle .

Article Source: Forbes Real Estate

https://www.forbes.com/sites/ingowinzer/2020/08/19/how-to-make-a-smart-rental-investment-during-the-covid-19-recession/#27082e861c26

So, we all wonder what the Jones are doing to make things even better next door. The answer varies by location but there’s a few clear trends.

According to Houzz, an online home design and fix up platform, outdoor spaces were a very big focus. They say that new decks or patios, pools, and fences have been a real hot spot. Which makes sense, since everyone is trying to find a safe open space in these times.

One homeowner interviewed by CNBC explained his feelings about several projects. Justin Sullivan shared some insight on his pool, home gym, and sauna projects. “When you’re not able to go out, your house is an enjoyable space where you can live bunker-style and still be active, still feel comfortable, and still enjoy,” Sullivan says. “The kids will have spaces to make sure they can work from home, and when it gets really hot in the summertime, they’ll have a place where they can cool off.”

The data from Houzz’s well-travelled web app indicates a 58% annual increase in project leads for home professionals in June of 2020. That was largely from homeowners planning to update their spaces. Top searches included – as you might have predicted – pool and spa professionals which tripled this summer compared to a year ago, according to Houzz’s data. Another standout was deck and patio professionals who saw more than double the demand over last year.

Apparently staying at home also calls for good neighbor etiquette; demand for interest in fence installation and repairs rose 166%. Good fences they say, make good neighbors.

Space has also been at a premium, so more space has been in demand during the pandemic. It would correlate with Houzz’s 52% increase in people seeking professionals to provide home extensions and additions on their current space.

It should come as no surprise that kitchen and bath remodels also have jumped 40% jump in demand in June compared to a year ago, according to Houzz. These are projects that most homeowners have on the back burner, so this was an ideal time to hunker down and get it done.

Overall, homeowners have experienced record high amounts of home equity during the pandemic. That could be a motivating factor to undertake more house fix ups. More than 15 million residential properties—or 27.5% of all mortgaged homes–were considered equity-rich in the second quarter, according to ATTOM Data Solutions.

If that seems like good news, then there’s more to come. Homeowners haven’t slowed down in fixing and improving. In a survey by Pitch.com which tracks this stuff, more than three-quarters of homeowners say they plan to tackle a new house project over the next 12 months. The results indicate that top motivators included “finally having time,” “adding value to the home,” and a desire to make their home “feel cozier.”

If the increase in asset value from your improvements has you considering the sale of your home, when you’re ready to close on a deal, Ideal Title will be here to help. We have the professionals to assist investors with their title and escrow needs. To find out what title insurance and closing services options are available, contact Ideal Title Agency. We’re glad to help you navigate these questions. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle .

The COVID-19 pandemic has left millions sheltered in place, which has subsequently wreaked havoc on the economy. Now, more than ever, investors may want to look towards more long-term investments.

Let’s revisit how the program works and the available tax benefits. After selling an appreciated asset, an investor generally has 180 days to move capital gains into a Qualified Opportunity Fund (QOF). A QOF is an investment vehicle, organized as a corporation or partnership, that holds at least 90 percent of its assets in a Qualified Opportunity Zone Property (QOZP). Generally, QOZP represents a stock or partnership interest in, or a direct investment in, Qualified Opportunity Zone Business Property (QOZBP).

There are three primary tax benefits for investing capital gains into a QOF:

1. Temporary Deferral on Initial Capital Gains Tax Payment – The capital gains tax owed on the reinvested capital gains is deferred until the QOF investment is sold or exchanged, or until December 31, 2026 (whichever comes first).
2. Partial Exclusion of Initial Capital Gains Tax Liability – If the QOF investment is held for at least five years, there is a 10 percent exclusion of the deferred capital gain.
3. Elimination of Future Capital Gains – If the QOF investment is held for at least 10 years, the investor has the potential to eliminate any tax owed on the appreciation of the QOF investment if the QOF investment is subsequently sold.

The program’s proposed regulations created several uncertainties and questions regarding the implementation of the program. After receiving feedback from the public, the U.S. Department of Treasury and Internal Revenue Service issued final regulations. The final regulations are comprehensive in nature and provide clarifications and modifications to the proposed regulations. Some of the key takeaways are as follows:

Eligible Gain

As a general rule, the program only allows deferral of capital gains that are subject to United States federal income tax. Ordinary income, such as money sitting in a savings account, does not qualify. The final regulations outline the type of gains eligible for deferral when reinvested into a QOF within a 180-day reinvestment period.  The 180-day reinvestment timeline for each type of gains is as follows: 

• Sales of business property: Gross Section 1231 gains for business or trade property held for more than one year (other than those recaptured and treated as ordinary income) can be invested in a QOF without regard to losses. The 180-day reinvestment timeframe begins on the date of the sale or exchange as opposed to the last day of the taxable year.
• Installment sales: Gains from installment sales can be reinvested beginning on either the last day of the taxable year in which the gain would ordinarily be recognized or the date each payment is received. As a result, a taxpayer who receives multiple payments throughout the year may elect to have multiple, separate 180-day reinvestment timeframes.
• Foreign investments: Non-resident aliens and foreign corporations can invest capital gains that are effectively connected to a U.S. trade or business. This includes gains on real estate assets that are taxed to non-residents and foreign corporations under the Foreign Investment in Real Property Tax Act (FIRPTA) rules.
• Pass-Through Entities: Partners in a partnership, shareholders of an S Corporation, and beneficiaries of estates and non-grantor trusts have the option to start the 180-day reinvestment timeframe on the same day as the entity’s 180-day reinvestment timeframe, the last day of the entity’s taxable year, or the due date of the entity’s tax return (without extension) for the taxable year of the gain.
• Regulated Investment Company (RIC) and Real Estate Investment Trust (REIT): The 180-day reinvestment timeframe begins at the end of the taxable year in which capital gain dividends would otherwise be recognized by the shareholder. However, the shareholder may elect to instead begin the 180-day period upon receipt of capital gains dividends from a RIC or REIT.

Inclusion Events

Any gain arising from an inclusion event (i.e., events that reduce direct equity interest in a QOF), such as the termination or change in classification of a QOF’s status or transfer by gift or divorce, is eligible for deferral into a new QOF. The inclusion event can represent all or only a portion of the initially deferred gain. The 180-day timeframe begins on the date of the inclusion event. A full list of events and additional rules can be found in the final regulations. 

“Sin Business” Narrowly Permitted

The final regulations allow a QOZB to lease up to 5 percent of its property to any of the prohibited sin businesses, which include golf courses, country clubs, massage parlors, hot tub facilities, tanning salons, racetracks, gambling facilities, and liquor stores. However, a QOZB may not engage directly in any of such sin businesses.

Original Use of Tangible Property

Original use commences when a QOF or QOZB places into service property in a QOZ for purposes of depreciation or amortization. For instance, a QOF that purchases raw land and constructs a new multi-family building can pass the original use test because there was no prior economic use for the land or materials. The final regulations include the following exceptions:

• Self-constructed: Tangible property manufactured, constructed or produced (rather than purchased) by a QOF or QOZB may qualify as QOZBP as long as construction occurred after December 31, 2017 with the intent to use it in a QOZ. Also, the materials, construction and production must all be considered zone business property.

• Vacant property: Property that has been vacant for one year may qualify as original use, but only if the property was vacant for one year prior to the designation of the QOZ and remains vacant through the date of purchase. Property that does not meet this requirement will qualify after three years. Furthermore, the final regulations define “vacant” property as “significantly unused,” or more than 80 percent of the building or land is not being used.
• Brownfield sites: The land and structures qualify as original use property as long as the QOF or QOZB invest enough to improve the safety standards for human health and the environment.
• Leased property: A lease between unrelated parties is generally presumed to be a market-rate release. State and local governments, as well as Indian tribal governments, will be exempt from market-rate requirements.

If the property is not original use and does not meet the above exceptions, it must be substantially improved in order to qualify.

Substantial Improvement Test

The final regulations modified the substantial improvement testing to mitigate the asset-by-asset approach in the proposed regulations. The following aggregation methods were added:

• Aggregation of property: QOFs and QOZBs are permitted to incorporate the cost of purchased original use assets that would otherwise qualify as QOZBP. The property must be located in the same QOZ and used in the same trade or business. It must also improve the functionality of non-original use of the property. For example, if a QOF intends to substantially improve a hotel, it may incorporate mattresses, bed frames, linens and other tangible property utilized in the hotel business.
• Aggregation of buildings: Two or more buildings within a single QOZ, or a series of abutting QOZs that are located on land described in a single deed, may be treated as single property for purposes of the substantial improvement test.

Safe Harbors

The final regulations offer additional rules and expansions of previous safe harbors:

• 50 percent gross income: A QOZB is required to derive at least 50 percent of its total gross income from the active conduct of a trade or business within the QOZ. The 50 percent active conduct requirement is quantified with the addition of three safe harbors: (1) contractor or employee hours; (2) the amount of payments for services; and (3) gross income.
• Working capital safe harbor: The proposed regulations incorporated a safe harbor permitting a QOZB that acquired, constructed or substantially improved a QOZBP to treat cash or cash equivalents (with a term of 18 months or less) as a reasonable amount of working capital for up to 31 months. The final regulations provide the property may benefit from an additional 31-month safe harbor, for a maximum of 62 months. To qualify for the 62-month safe harbor, the QOZB must receive multiple cash contributions and each contribution must be allocated in a 31-month spending plan. If government delays (i.e., approval of building permits, zoning changes, etc.) interfere with the spending plan, the time is halted until the delay is resolved. Also, a QOZB may receive an additional 24 months if it is located in a zone identified as a disaster area.
• QOF 90 percent testing: A QOF must ensure that at least 90 percent of its assets are invested in the stock or partnership interest of a QOZB or invested directly into a QOZP. A measurement of assets must be conducted semi-annually, on the last day of the first six-month period (June 30) and the last day of the taxable year of the QOF (December 31), or the QOF will incur a penalty. Prior to the final regulations, investors questioned the possibility of meeting the testing requirements, especially given shifting assets and the varied taxable years of businesses. Under the final regulations, a business only needs to be considered a QOZB at the end of its respective tax year. Even if the business fails the test, it can take advantage of a one-time 6-month cure period.

10-Year Exit

The final regulations allow investors that hold QOF investments for at least 10 years to elect to exclude all gain from the sale of QOF, QOZB interests, and, most significantly, from assets held by QOZB partnerships and S corporations with the exception of inventory sold in the ordinary course of business.

For more information about the opportunity zone program, visit the U.S. Treasury Department’s Opportunity Zone Resources web page.

Opportunity Zone Investing: Is it right for you?

Investments in the opportunity zone program isn’t just about seeking tax benefits – the guiding principle of the program is to bring much-needed investment capital to historically low-income communities and provide revitalization with a lasting impact.  If you’re looking to participate, it’s best to read the final regulations in their entirety and consult with investment and tax professionals and to consider the risks and benefits. When you’re ready to close on a deal, Ideal Title will be here to help. We have the professionals to assist investors with their title and escrow needs. To find out what title insurance and closing services options are available, contact Ideal Title Agency. We’re glad to help you navigate these questions. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle .

Veros Real Estate Solutions, an industry leader in enterprise risk management and collateral valuation services, announced that Q2 2020 VeroFORECAST^SM data indicates an average projected appreciation rate for residential real estate in the nation’s largest 100 housing markets has rebounded sharply from last quarter for an average of 3.5% through the second quarter of 2021. This forecast is in line with previous projections indicating positive average home price appreciation, despite economic uncertainty and unemployment, particularly in the leisure, hospitality and tourism industries, as a result of the global COVID-19 pandemic.

“With some exceptions, the vast majority of housing markets remain strong and resilient in contrast to the crash they fueled over a decade ago,” said Darius Bozorgi, CEO of Veros Real Estate Solutions. “This is a testament to the programs and policies implemented in the wake of the Great Recession. During this tragic pandemic, the current state of the housing market is proving to be a stalwart for the U.S. economy.”

Veros monitors home prices in relation to numerous economic factors, including employment trends. While economic indicators signal continued unemployment, the job losses are not consistent across the country, and in some areas, there has been a rebound from initial expectations. The fundamentals of the real estate market are still strong in most places.

Veros is committed to the data science of predicting home value based on rigorous analysis of the fundamentals and interrelationships of numerous economic, social and geographic variables as they pertain to home value. This data-driven approach indicates that many of the top-performing cities are now trending back towards the pre-pandemic level through the second quarter of 2021.

Helping you navigate of real estate transactions

 Would you like to understand the protections you will need in the new real estate environment? And what about the proper insurance coverage? Ideal Title Agency is glad to help you navigate these questions. We continue to offer advice and broad context for real estate agents, buyers and sellers. Contact us at info@idealtitleagency.com or check us out on Facebook: facebook.com/idealtitle .

Source: https://www.globenewswire.com/news-release/2020/07/07/2058448/0/en/Veros-Home-Prices-Remain-Resilient-Despite-the-Pandemic.html