What is a Buyer's Agent?

When a buyer engages the services of a real estate buyer's agent, then the buyer becomes that agent's client. This means the agent represents the buyer. The buyer's agent owes the buyer undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. The buyer's agent must put the buyer's interest first and negotiate for the best price and terms for his/her client, the buyer. Having said all of this, in the event a non-exclusive buyer's agent transitions to Disclosed Dual Agent or Designated Agent status, I cannot believe it is possible to maintain a neutral unbiased relationship where confidential information already disclosed will be safe-guarded. This will be further explained as you read on. (Full Story here)

What is an ABR®?

ABR® is an acronym that stands for Accredited Buyer's Representative. ABR® is a designation attained through completion of an extensive classroom training program on buyer agency practices and procedures followed by a rigorous written examination. However, the designation is not rewarded until the applicant can submit evidence of practical experience as a buyer's representative --- that means transactions successfully closed representing buyers.

What is an EBA?

Any licensed real estate agent can receive the ABR® designation; however, only a licensed real estate agent who is an exclusive buyer's agent and member of the National Association of Exclusive Buyer's Agents (NAEBA) can receive the EBA designation. EBA's are required to adhere to a strict Code of Ethics EBA Code of Ethics. To find an EBA, go to www.naeba.com and the 'find an agent' section. When interviewing a buyer's agent it is important to ask two questions: 1) Do you or your firm take listings? 2) Do you practice dual agency? If the answer to these questions is 'yes', you will not be represented by an EXCLUSIVE Buyer's Agent. (More on this subject here.)

What does REALTOR® mean?

Not every real estate agent is a REALTOR®, although they may refer to themselves as realtors. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® (NAR) and subscribes to its strict Code of Ethics.

What is 'The HUD'?

The HUD-1 is the form commonly used to track all the various costs related to a property purchase and sale transaction. (Full Story here)

What is Title Insurance?

When you purchase a home on Martha's Vineyard, instead of purchasing the actual building or land, you are really purchasing the title to the property - the right to occupy and use the space. That title may be limited by rights and claims asserted by others, which may limit your use and enjoyment of the property and even bring financial loss. Title insurance protects against these types of title problems for Martha's Vineyard real estate and brings confidence and certainty to the parties at a real estate closing that the title of the subject real property is as represented and expected. The title insurer offers financial protection and will indemnify and defend against an attack on covered title hazards as insured, and will either perfect the title or pay valid claims. (Full Story here)

What is The Land Bank?

The Martha's Vineyard Land Bank is a conservation entity charged with the task of acquiring, holding and managing a diversity of important open space resources for the use and enjoyment of the general public. To accomplish this task the Martha's Vineyard Land Bank imposes a 2% real estate transfer fee which is levied against the purchase price on most real estate transfers on Martha's Vineyard Island. This is not a tax and there is no way around it. Only first time homebuyers are eligible for a nominal credit. (Full Story here)

Why have a Land Bank?

Martha's Vineyard has witnessed unprecedented change in the most recent decades. Farming declined; centuries-old pastures and fields were left to knot into vines and shrubs. The "freedom to roam" was curtailed as fences were erected across trails, beaches were gated off and hunting was restricted. Few of these problems could be solved by planning boards and conservation commissions only; the Vineyard needed a new type of land agency. (Full Story here)

What is 'Title 5'?

Title 5 of the State Environmental Code sets standard guidelines and requirements for the inspection, design, siting, construction, upgrade and expansion of on-site wastewater treatment and disposal systems in the towns of Edgartown, Oak Bluffs, Vineyard Haven, West Tisbury, Chilmark and Aquinnah. The onus usually falls upon the seller for compliance. (Full Story here)

What is the MIL rate?

A mil (tax) rate is the method used to determine the taxes that are to be paid on a property here on Martha's Vineyard. That tax rate when multiplied by your property value (assessed value determined by the tax assessor) equals your tax bill. (Full Story here)

What is a Section 1031 Tax-Deferred Exchange?

When you sell real estate you are taxed on any gain or profit realized from that sale. Gain is the difference between your Basis and the amount of money you receive when you sell a property. For example, you bought a property in Dodger’s Hole for $200,000 back in 1995 and you sold it last week for $800,000. Your Basis is $200,000, and your Gain or profit is $600,000; that amount is subject to tax. However, you did not use the property as your personal residence; the majority of the time you rented it and spent very little time there yourself. You might qualify for a Section 1031 Tax-Deferred Exchange. (Note: When selling a primary residence, exclusions are available to offset capital gains.)

Anyone who owns a second-home or plans on purchasing a second-home on Martha’s Vineyard should be knowledgeable about the Section 1031 Exchange laws. Implementing a 1031 Exchange is simple if you follow very precise rules and utilize the services of a reputable Qualified Intermediary. If you want to know more about the Section 1031 Tax-Deferred Exchange process, follow this link to download some excellent literature that will help you understand the full scope and options available to Martha's Vineyard investors.

As of March 10, 2008, there has been a new development in the law governing Section 1031 Exchanges; the recent release of Revenue Procedure 2008-16.

The Revenue Procedure 2008-16 creates a safe harbor for properties, second homes in particular, to meet the Section 1031 'Qualifying Use' requirement. Rev. Proc. 2008-16 establishes firm guidelines regarding the length of ownership, and the amounts of both rental use and permitted personal use for the property to meet the Qualifying Use Safe Harbor. These guidelines will enable many taxpayers to know with certainty that their properties qualify for a 1031 Exchange, and that this qualification will not be challenged by the IRS. Please note that failure to meet the 'Safe Harbor' guidelines will not necessarily disqualify a property from a Section 1031 Exchange.

Revenue Procedure 2008-16 will be especially helpful to owners of Vacation or Second-homes on Martha’s Vineyard, where there typically is both rental and personal use. Please follow the link to read the entire Revenue Procedure 2008-16 document provided by Beacon Exchange Company along with a complete library of other useful information.

Tax season is always a time of angst as Martha's Vineyard real estate investors are faced with countless hours managing property finances. I found a web tool that I think you should try. Simplify'em is a free property management solution. It provides automated tracking of income and expenses, and allows you to be ready for tax season in just one click. It is a great way to stay organized, and it is very easy to use. I am sure it will save you time and money. Click on Property Manager and see if it works for you.