Thursday, April 20, 2017

Attorney Shannon Wynn: Make an equitable real estate offer with these five tips

Wynn at Law, LLC is honored to be part of more successful real estate offers than we can count since the 2008 recession. Every one of them had five components in common that made for 'clean' bids and negotiations without animosity.

1) Know what you're buying. This means getting your property inspected and making sure that your offer is based on what the inspector says. Making an offer with the inspections waived is a huge gamble with one of your largest investments… it can be done, but it takes a perfect storm of knowing the property extremely well, a bargain on the market as-is, and a knowledgeable attorney in your corner. A tip: Walk through the house with an inspector before your offer.

2) Know what it's worth. Real estate 'comps' show what similar homes have sold for in the area. A good agent will produce them for you. You can also sleuth for them on your own through public records. You'll know what the owner paid when. You can also find permits issued for renovations the current owner made so you'll know the work was locally inspected.

3) Know your seller. Is the bank selling the property? Or is the owner distressed? Or is the family selling on behalf of a decedent? Each selling situation has its own nuances. For example, the bank is less emotionally attached to a number than a long-time owner.

4) Know your own finances. Offer c-a-s-h. This is true whether it is your cash, or a lender's money. From the bank’s perspective in a foreclosure or distressed property, by placing a cash offer they view you as not subject to financing. Regardless of whether it's bank-owned or family-owned property, the seller's been previously dealing with offers that involve financing.

5) Know your real estate attorney. Wynn at Law LLC knows the real estate in southeast Wisconsin, most of the agents and many of the local lenders. As we mentioned in a previous article, the sooner in the home-buying process our firm is involved, the more we can assist in a smooth, legally sound transaction.

The fair comes in August

Remember our article on honesty? If you're low-balling an offer just for the sake of doing it, think twice. This tactic can burn your bridges with local realty professionals and homeowners alike. 'Fair' isn't really a real estate term. It's a subjective concept: What's fair to the seller or the buyer or the bank are not likely to be the same. Wynn at Law LLC sees the best offers as being equitable, rather than fair. From our experience, the only 'fair' upon which there is objective agreement is the one at the fairgrounds in August.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 Photo by Andy Dean, used with permission.

Thursday, April 6, 2017

Attorney Shannon Wynn: Don’t cash out your IRA to avoid bankruptcy

Bankruptcy filing – or the prospect of it – usually puts Wynn at Law LLC clients in full-out panic mode. One of the most alarming, last-ditch, hail-Mary ideas coming from this desperation is to cash out a retirement plan to avoid bankruptcy court. In some cases, people can ‘borrow’ against their company retirement plan, usually a 401(k). This is as dangerous as cashing out to cover the financial struggle.

Don’t. Touch. This. Money.

Retirement money is tax-exempt until you touch it. If you touch it too early, you’ll be subject to taxes and penalties. Here’s a primer on a few of those consequences:

·         If you put the money in after paying taxes on it – like in a Roth IRA – you’ll pay tax on the earnings and a 10 percent penalty if the IRA is less than five years old and the owner is younger than age 59 ½.

·         If you put the money in tax free – like in a regular IRA or a 401(k) – the entire distribution is subject to income tax at your current rate, plus the 10 percent IRS penalty if the owner is younger than age 59 ½.

A tax specialist or accountant will give you clearer instruction on your particular situation’s consequences. Wynn at Law LLC is concerned about those immediate consequences, and the long-term ones. It’s your retirement income you’re putting in jeopardy. You’re mortgaging your entire future! If you leverage this nest egg to avoid bankruptcy filing today, you may have just kicked the can down the road, facing potential bankruptcy in your retirement years.

In almost every case, your qualified retirement plan is EXEMPT from your bankruptcy filing anyway. You get to keep the plan, your creditors don’t. But this goes back to a message from an earlier Wynn at Law LLC article on honesty: You have to disclose that your own a retirement account. It’s still going to be your retirement nest egg, they can’t touch it, but you can’t hide it.

*The content and material in this original post is for informational purposes only and does not constitute legal advice.

 Photo by Barbara Reddoch, used with permission.