HAPPY CHINESE NEW YEAR!
FEBRUARY 8, 2016 – YEAR OF THE MONKEY
Interested in some background on this Year of the Monkey? Go to this site, one of many that you can Google up. By the way, the Year of the Monkey is apparently NOT a good year for the Monkey.
FIRPTA CHANGES ARE GOING TO BE A DEAL KILLER:
I can’t stress the importance of the upcoming change to the Foreign Investments in Real Property Act (FIRPTA) regulations, which will be effective for real estate transactions closing nationwide on or after February 17th.
If you have something in the pipeline, or a new listing coming up, or even a Buyer that is in the market, and there is a foreigner somewhere in this mix, watch out!
I have so many foreign Chinese clients who purchase high end properties over $1 million. At that amount their withholding is going to be $150,000 (15% of gross sales price) when they go sell. They are just going to cry.
Let me know if you wish for further info which I can send you.
WHERE’S THE (Real Estate) BEEF?
Of course, the new FIRPTA regs are not the only thing that the Treasury Dept (which governs the IRS) is involved in.
Another initiative taken on by Treasury is their tracking the scent of money of high end real estate purchases made “all cash” (no new loan).
What they have in their sights are purchasers who are hiding their identities and funneling their “illicit” monies (money laundering) into U.S. real estate.
They are starting with Manhattan and Miami-Dade County (Florida) and forcing the real estate companies to disclose their customer identities.
Can Los Angeles and other parts of California be that far off?
For the actual Financial Crimes Enforcement Network (FinCEN) news release click on this link for a PDF copy.
COULD BE THE (Real Estate) BEEF is right here:
Piggybacking on the BEEF, I understand that New York City, the land of the luxurious over-the-top living, has declared that this particularly condo complex on One57 has hit the enviable mark as the most expensive with a $6,010 cost per square foot of living area.
If you read further down this Housing Wire article you will see further reporting that fits right into the Treasury initiative of full purchaser disclosure. Beware Qatari buyers; Uncle Sam wants YOU and your money.
HSBC IS GETTING OUT AND ADDING TO THE BAD NEWS MIX:
Those of us working in the areas with many affluent Chinese have known for quite some time that the government in China has been cracking down on the outflow of renminbi to the Western world, of which investments in the Southern California area is major.
We have seen a huge drop in purchase transactions in the last half year, and now, it promises to slow down even more, as the biggest bank that caters to the Asian countries – HSBC – will no longer be lending to those foreign nationals who are here temporarily and whose assets and income are still in China.
First you have the U.S. government breathing down their neck with full disclosure and new FIRPTA laws, now you have one of the world’s biggest banks succumbing to pressure from the Chinese government. Lose Lose situation.
THE RAMS ARE COMING! THE RAMS ARE COMING!
L.A. is soooo excited! We are finally getting a football team! Wow, Monday Night Football might start to really mean something here in Southern California.
I am not sure, though, that everyone is feeling the love. Imagine you are part of the Rams organization, maybe not one of the highly paid players, but staff and administrative personnel. You are moving from St. Louis, the 112th most expensive market to L.A., the 6th most expensive market, quoting this article from Housing Wire.
You would be selling your home where the median price is $160,000 approximately and trying to buy and qualify for a new home where the median price is $507,000 approximately. Renting? Just as bad. Rents could double what they are used to in St. Louis. So who wins? L.A. of course.
Why do you think we fought so hard?
Regretfully, it still will not help fill the gap left by the drying up of Chinese investment funds….
CREDIT SCORING ON MILLENNIALS :
Lest I forget to mention “Millennials” this month, let me do so right now with a link to an article regarding how these 30 – 40 year olds are spending their bucks. An “Infographic” (new word!) depiction of how their credit scores look like are making some lenders, particularly this one – Avant – to consider NOT using FICO scores to evaluate their potential Millennial borrowers.
Click to enlarge or follow this link for a look at the bigger picture. Does it look familiar? Tell me about it. I have two of them.
HELLO! CAN YOU HEAR ME?
And finally, for your enjoyment, a real estate agent’s parody video takeoff on Adele’s #1 song.
Love it! Share it!
̴ Life is 10% what happens to you and 90% how you react to it ̴
Charles R. Swindoll, Pastor