For the purposes of counting assets towards certified annual income, “real estate” includes real property, land, and mobile homes. To calculate the cash value: Current market value of real estate – Cost to sell – Unpaid principal loan balance = Cash value.
Different sources may be used to obtain the current cash value of real estate:
- Third-party verification completed by the realtor handling sale of the property.
- Tax assessor’s records (may be found online).
- Sale pending documents (but not offer letters).
- Printout from an online housing/real estate database, such as Trulia or Zillow.
When the value of the real estate is determined, the following items may be deducted to reduce the cash value:
- The unpaid principal loan balance (the mortgage payoff), which may be found on the most recent mortgage statement. Note: Loan interest may not be deducted.
actual closing costs if (including settlement costs, legal fees, and broker’s
fees); if not known, by 6% of the current cash value.
- Applicable only if the property is up for sale.
- Taxes, other liens such as home equity loans or personal loans, and balances due for utilities may NOT be used to reduce the cash value of real estate.
Use the Real Estate Asset Worksheet to assist in determining the value of the asset.
If real estate is sold at a fair market value, do not include as an asset. However, proceeds from the sale must be accounted for and may be visible in savings or checking accounts. The total proceeds must be accounted for on the Disposal of Asset form.
Bonus Tip: LATE RECERTS!
Complete as many outstanding recerts as possible before the end of the year, so that they can be counted in the 2019 annual reporting.