However, if a seller is still amenable to an FHA mortgage, they should be sure to place a specific dollar cap on repairs that the FHA requirements for a seller would demand. Even a home that seems well maintained can reveal some of the following FHA defects.

Repairs That Must be Completed for FHA approval

Peeling paint in homes built before 1978 Lead Based Paint rules
Broken, damaged or unpainted gutters and downspouts
Exterior doors that do not operate properly
Exposed wiring
Major plumbing problems
Broken A/C systems
Leaky or defective roofs, roofs with a life expectancy of less than 3 years
Active and visible pest infestation
Rotting exterior wood items.
Rotting Window frames and sills
Missing appliances that are customarily included with a home
Bedrooms without minimize-sized windows or obstructions preventing egress
Foundation or structural defects
Inoperable kitchen appliances
Empty pools or those without a working pump or other defects
Torn house or lanai screens
No pressure relief valve on water heater
Damaged fencing

Repairs That are Not Necessary to Fix Before Closing

Peeling paint in homes built after 1978 (Not Lead Based Paint)
Cracked glass
Minor plumbing defects
Damaged wall coverings in homes built after 1978 (Not lead based paint)
Worn flooring
Beat-up or damaged exterior doors that operate properly
Removal of debris
Evidence of previous or inactive pest infestation
Replacement of flat roofs
Water tests

A seller of improved real estate should be aware of FHA Requirements for a Seller. If accepting a contract with an FHA contingency, a seller should be sure to limit their repair exposure. Discuss the implications with your agent.

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For more info on FHA loans visit the HUD website

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The United States Federal Tax Law requires that a foreign citizen who sells real estate owned in this country pay taxes on the profit of such sale. To insure that the tax is paid, 15% of the proceeds at closing are withheld and transferred to the United States Treasury. The 15% withholding is mandatory if the seller is a foreign person. (A foreign corporation that distributes a U.S. real property interest must withhold a tax equal to 35% of the gain it recognizes on the distribution to its shareholders.)

The following ONLY applies to homes priced under $300,000. It does not apply to land.
There is a possible waiver available if the buyer signs and states that the home will be the buyer’s primary residence for the next two years. The part everyone forgets about the waiver is, if the seller does not file a tax return and pay the capital gains on the property, the IRS will send a notice of deficiency for the 15% of sales price to the buyer. That deficiency is due in 30 days. If the new buyer can’t pay the tax due, IRS will place a lien on the property and/or sell the property to get the tax owed. This is an enormous risk for the buyer.

At the time of closing the seller must have an ITIN or an application to get one. If they do not the IRS does not have to issue any refunds at a later date.

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service. This number is used to record the sale. If a seller needs an ITIN they must complete the W7 application with a Certified Copy of their passport. Click here for the IRS page with Form W7 and instructions. One can apply on line for the ITIN (for a fee, 3rd party company): https://www.itinformw7.com/Application.html

(Certification can only be done by their passport office or a Certified Acceptance Agent) The fee for this process at the time of writing is $200 per application.

Each individual must file a tax return the following January to either claim a refund or pay the balance due. For more information reporting and paying taxes: https://www.irs.gov/individuals/international-taxpayers/reporting-and-paying-tax-on-u-s-real-property-interests

Two forms are used for reporting your sale to the United States Treasury. These are Form 8288 Form-8288 and Form 8288A Form-8288a. The title company conducting the closing should file these forms with the IRS at closing. You should be sure that the title company has your Social Security Number or ITIN to submit with these forms. If you are selling the property without a real estate broker you should check with the seller to be sure that they complete the forms necessary and send the withholding to the IRS. They should send you a copy of the Forms 8288 and 8288A so you can file your tax return for a refund.

Another form that may be relevant is Form 8821, Tax Information Authorization, which will designate the escrow company withholding the seller’s funds.

This is a helpful site with information on How to get your FIRPTA Tax Withholding back. How to get your FIRPTA Tax Withholding back

The IRS (Department of Treasury) has written a page on their website called Road Map to Regulations FIRPTA Road Map to Regulations

This page may have answers to many of your questions.

FIRPTA Process Overview

A Non Resident Alien may be entitled to a refund for taxes withheld under section IRC § 1445 by filing Form 1040NR, U.S. Nonresident Alien Income Tax Return. Click here for Form 1040NR, U.S. Nonresident Alien Income Tax Return Instructions and to download the form.

You may also hire a Certified Acceptance Agent to do all this work for you and to file the tax returns. An Acceptance Agent charges a fee to acquire an ITIN and to file a tax return. The cost of a Certified Acceptance Agent to file your tax return would usually be a minimum of $200 so unless you have a significant withholding amount, you should probably do this yourself. There is also a cost to acquire an ITIN. See the link for Form W7 above.

To find a Certified Acceptance Agent, do a web search for Certified Acceptance Agent or email Your Suncoasteam.

This article contains information for foreign buyers and sellers of Florida real estate. What are the rules and costs for a foreign or international buyers of homes or land in Florida. Is there any difference in costs to a Canadian buyer of Florida real estate, homes or condos? What does it cost for a European to buy Florida homes? What taxes does a foreign seller pay when selling Florida Real Estate? What are the fees to an investor in Florida real estate and homes for a resident of UK, England, Great Britain? Are there any hidden costs to buy or sell real estate in Florida for a non-resident foreigner?

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Some property owners have been rather cavalier in submitting their payments to Condominium Associations or Home Owners Associations. If they make the payment a few weeks, months or even years late, there was really nothing to worry about.

That is about to change. One major credit reporting agency is planning to include missed Condo or HOA payments in their credit scores. It is probable that the other major credit reporting agencies will follow suit. The credit reporting company believes that persons who make timely payments should see an improvement in their credit score. Of course those who miss payments or are habitually late will see a negative effect. The companies also believe this reporting will have a major effect on condo and home owners associations as their cash flow should improve.

Reporting of missed condo or HOA payments will be phased in with full implementation before the end of 2016. This should give property owners an opportunity to catch up on late payments.

HOA’s and condo associations have been seeking this reporting for many years. Association managers have felt that many property owners abuse the system which is costly to those who pay on time and can be a factor in driving up fees. If everyone paid on time there would be a much better cash flow and interest payments to the association bank accounts would increase. When more property owners become aware of the new reporting there should be a positive effect on these accounts.

You have the legal right to view your credit report. To be sure that your credit report is correct, agencies have the obligation to provide a report at least once a year upon your request. For more information about obtaining a copy of your credit report, see this article on the Federal Trade Commission website. Get my free credit report

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The adverse possession stature requires that a property be maintained openly and continuously for a period of at least seven years. This means cleaning it up, paying taxes and utilities and using it as one’s own.

Many owners of adjacent and nearby properties are very happy with the new tenants and feel it makes the neighborhood safer, more attractive and helps property values. Local authorities disagree and the broker is scheduled to go on trial in December (2010) in a test case of the statute. The broker faces up to 15 years in jail.

If owners and banks do not take responsibility for abandoned properties, someone must. The towns consider them a problem but are doing nothing. More people should do as this man has. Neighbors should form committees to clean up these homes and help their neighborhoods. And towns, cities, counties and states should cooperate by allowing them to do so. Once a property has been designated a nuisance, governments should protect individuals or committees which maintain these derelict properties. They should protect any investment, allowing a lien on the property for taxes and expenses.

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OK, let me get this right. The owner wants to honor his responsibility to pay his debt. He has great credit a good job and could easily get the mortgage. Times are tough and he and his wife are struggling to meet their obligations but they are stretched to the limit.

The bank owns the note and if the owners cannot pay the current mortgage, they will end up losing the home. If they could refinance, their payment would go from $1,265 to $983. A $300 / month concession that would guarantee that the bank does not have to foreclose. But the bank refused the mortgage because the home they already have on their books has fallen in value.

The owners do not even want the bank to reduce the principal, only allow them to refinance.

This is the kind of thing that will get the public outraged. They will demand new legislation that will cause the banks to force banks to modify loans. If the banks would only cooperate with owners they could avoid most of the new regulations… and there will be new regulations unless banks amend their practices.

While there is much reason for concern, there are also many opportunities for buyers. There are many foreclosures and many more private sales where sellers own the homes out right or have a small mortgage. These sellers can afford to price their properties competitively. It is always much better to buy a well priced home from an individual that a foreclosure or heaven forbid, a short sale. The properties are almost always in better shape, you can negotiate much faster and usually have a much faster response. Individuals are more receptive to negotiations and if there is a problem uncovered during inspection, more apt to repair the defect.

For more information about homes for sale in this area, please visit our website: Homes For Sale In Port Charlotte, Punta Gorda, North Port, Englewood, Rotonda FL

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