BUYER BEWARE!!!!

I took a real estate law class this morning from Tom Rice, our in house counsel at RE/MAX Advantage Plus. It seems like every time I take a new professional class, I learn something really important. It is a part of keeping up in my chosen field of work and a very important part. This morning’s big revelation is a bit complicated but very important. There is a federal law known by the acronym FIRPTA. It deals with the tax liability owed to the IRS when a nonresident of the United States sells real estate in the US. The IRS insists that 15% of the SALES PRICE of the home be held for a potential tax liability by the seller. The big news to me, was that it is the responsibility and liability of the buyer to collect that 15%. Now in a normal closing, the closer would have researched the residency status of the seller and if not a resident, would collect it. The seller even has to sign an affidavit to that effect. But if the seller lies about his status and it is not picked up somewhere else, then the LIABILITY FOR THE 15% IS ON THE BUYER. Do I hear a big WOW! This is just one of many, many complications in real estate transactions that an educated, knowledgeable agent should be watching out for both buyers and sellers. I have included a recent article on my website written by Anna Johannson of Inman News with some other warnings for consumers about real estate transactions. You can find it under the Real Estate News tab at MnhomesbyDave.com, my website. The site also has all the homes available in the 13 County Metro and local market statistics there. Thanks for reading.

David Feerhusen

David Feerhusen

Broker/Realtor, CDPE, GRI, CRB
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