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Saturday, October 23, 2010

DON'T FORGET ABOUT THE 203K LOANS!

Tis the time of vast foreclosure opportunities. Since most of these properties needs some fixing, don't forget about this little-known loan program for fixer-uppers.


Home buyers thinking of purchasing a distressed property in need of repair, but who are concerned that the cost of the repairs could drain their savings account may qualify for the Federal Housing Administration’s (FHA) 203(k) rehabilitation program.

KEEP THIS IN MIND

• The FHA’s 203(k) rehabilitation program provides loans for covering renovation costs as well as the purchase price of the primary residence. Investors are not eligible for this program. Additionally, similar to traditional FHA loan programs, the rehab program allows for a down payment of as little as 3.5 percent.

• A common misperception about the program is that the house needs to be unlivable. Realistically, the property just needs to be outdated, according to a lender familiar with the program. The property “just has to appraise below market value and then at market value with the repairs.”

• Improvements deemed “luxury” are ineligible; however, the program has a wide range of definitions for “repairs” and “modernization.” Covered repairs include items such as a new roof or heating system, as well as decorative changes, like replacing vinyl with ceramic tile on the kitchen floor or painting the interior.

• In addition to putting down at least 3.5 percent of the current value of the property, buyers also must use a HUD-approved lender, appraiser, and a contractor approved by the lender for the repairs. One list of approved businesses can be found at 203kcontractors.com.

• Borrowers considering the FHA rehab loan program should be aware that loan rates typically run around a percentage point higher than conventional loans, and come in 15- to 30-year terms, either fixed or adjustable. Additional paperwork for inspection, appraisal, title updating, and the like can increase closing costs by $1,000 or more higher than the average.

• For additional information about the FHA 203(k) rehabilitation program, please visit HUD 203K INFO

So if you're looking at a good buying opportunity but worried about how to find the money to fix it up, this is a great program for you.  Call me with any questions.  I have access to 203K approved contractors and lenders for this program.  It's worth your time to investigate the possibilities. 


Call Charlie, your friend in the Neighborhood with all your real estate questions.  If we don't have the answer, we'll find it for you!

Tuesday, October 5, 2010

OWE MORE ON YOUR HOME THAN IT'S WORTH? GOOD NEWS!

If you owe more on your home than it's worth, I have some good news for you! No Short Sale Deficiencies: Starting January 1, 2011, a seller's first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale. Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan. This law applies to first trust deeds secured by one-to-four residential units, but does not limit the lender from seeking damages for fraud or waste by the borrower. Senate Bill 931. Governor Schwarzenegger vetoed Senate Bill 1178, our sponsored bill, which would have extended California's anti-deficiency protection to refinance loans.


If you owe more than your home home is worth and don't know what to do, call me, I can help! You can also check out my Short Sale Website for answers to some common questions in today's market.
As we near the Holiday season for 2010, please start thinking about ways to help some of our South Bay families in need this year. Although we are blessed to have fewer foreclosures and homeless families than most areas in the county, we still have friends and neighbors in need. If you have a request for your neighbor or friend, let me know. We are starting to collect Holiday Gifts for kids and food bank supplies for families. If you can contribute, please call and I will pick up. If you or a friend or neighbor needs help please let us know. We are here to support our community in any way we can!

Monday, August 30, 2010

TIME TO CANCEL TIME MAGAZINE

I’d always considered myself a centrist/conservative. Subscribing to Time Magazine is not something a “dyed in the wool” conservative would do. I appreciate hearing all points of view. That said, the August 30th issue with the cover question “Is America Islamophobic?” really got my dander up (that’s a Midwest phrase.) I spent 9-11-01 in Hawaii with 2000 people at a seminar, a good portion from New York. My roommate lived less than 1 mile from Ground Zero. Dozens of my attendee friends lost loved ones. We were stuck on the island. No flights in or out that week. We grieved together, cursed together and learned about each other on a much deeper level than could ever have been anticipated. The Time article particularly angered me. To cover that gripe I need the space of a book, not a blog.

Now I’m reading the September 6th issue, the front cover shouting “Rethinking Homeownership.” As a Realtor and Real Estate Broker I tried to review their information with an open mind. After all, I need to know what my clients are being told. That recalls another phase “Keep your friends close and your enemies closer.” When I finished their ludicrous article I didn’t know whether to laugh or cry. Their concept conclusion - Americans should trend toward dumping their homes and consider inner city living in cities where people can walk to work. The author envisioned urban areas becoming hotbeds of rental housing. Obviously, this writer is probably not a homeowner, certainly doesn’t live in Los Angeles and most likely will never earn a living as a writer except maybe for comedy.

Since most of my clients live near the beach or on the hill (Palos Verdes Peninsula) I’m trying to imagine leaving those homes behind and moving downtown. They could rent a flat (some buildings are currently converting to lofts.) They could walk to work (assuming they can find a job downtown.) They could also take the Red line to the Blue line to the bus station to the beach …problem with dragging those surf boards though. Perhaps this author lives in New York City. If that’s the case, I pray she lives in the same neighborhood as the intended mosque. Meantime, if you would like to downsize to a rental loft in the business district, please call me! I have many people trying to buy homes in the South Bay area. Somehow we have this strange conception that God is not making anymore Beach Front property. I suppose that will hold until the next “big” one drops us into Las Vegas, but I digress.

If you are a first time buyer NOW is the time to buy not rent. Interest rates are in the 4’s for heaven’s sake. If you have a paycheck and even if you have to commute to a job in East Butt Scratch, I suggest this is your window of opportunity. And if you’re short on funds, you can start saving money right now by cancelling your Time Magazine subscription!

Sunday, August 22, 2010

Tired of the Wolves?

Every day we hear a different story....the real estate market is recovering....oops, foreclosures are up....OK, notices of default are down...Oh boy, stock market is up...Geez, Dow just crashed...It's gotten to be such a travesty that "television news" is no longer watched for information, just for entertainment.  We know a lot more about Brad and Angelina than what the new health care bill actually contains.  News in the information age has become much more confusing and self-serving than helpful.   

The information available for distressed homeowners is abundant.  If you're currently unemployed, you'll have time to wade through it.  If you aren't, the task is daunting.  I've been in the real estate business for over 30 years now and I've seen depressed market conditions before.  I don't think I've ever seen such depressed homeowners though.  After receiving so many "trouble" calls this year, I decided to create a team to help those people who are overwhelmed with "wolves at their doors" and underwhelmed with the accuracy and availability of helpful infomation.  Team South Bay Realty has had it's own TeamSouthBayShortSales website for quite a while but we needed more.  We needed more "hands on deck" and a way to get the information out to those in need but too embarassed to call for help.  We decided to partner with a national site to help our homeowners "keep the wolves from their doors" and obtain information more easily and accurately either on their own or with our help.  Thus was born our additional site:  Program 3648. Now with the expanded reach of a national information site and our "hands on" regional assistance, we can help our neighbors and friends solve problems and save their homes and sanity. 

Visit our sites and/or call or email Charlie for a personal consultation if you need one.  Invite your friends, neighbors, co-workers and relatives to do the same.  We expect the foreclosure market to get much worse between now and 2013.  We want you to know that if and when you need us, we're here for you.  We cover the South Bay for all your real estate needs including residential and income properties.

Team South Bay provides many services to our clients including our network of small business partners throughout the Southland listed in  Charlie's Business Referral Directory.  We invite you to partner with us too and let us know who you recommend for premium service.  If you'd  like to recommend someone, please call or email their information. 

Please remember, we are NEVER too busy for your referrals.  We take pride in our personal service and you can rest assured the people you send our way will be grateful for your referral.

Meantime, chin up!  There is always a light
at the end of every tunnel. 
Let's keep the lamps lit together.

Charlie :)

Saturday, July 24, 2010

SUMMERTIME DREAMS FOR LOWER POINT VICENTE, RANCHO PALOS VERDES

The local Realtor Boards were invited to a luncheon yesterday provided by the Annenberg Foundation at the new Terranea Resort in Rancho Palos Verdes.  The presentation was on their new proposed DISCOVERY PARK at Lower Point Vicente.  Discovery Park would annex the Point Vicente Interpretive Center combining with and adding a combination of exhibits and programs on topics relevant to the region and community: a Tonga village, an archaeological dig, flora and fauna, geology, weather, local pioneers including whalers and ranchers and much more.  It will be a Gift to the Community provided by the Annenberg Foundation under the leadership of Wallis Anennberg.  Ongoing operations and maintenance would be underwritten by the Foundation as well. 

The presentation was lengthy and informative.  The proposed projects and designs were awesome and beautifully articulated.  Since there is too much information for my simple blog, click on the link to learn about the Lower Point Vicente Discovery Park Project and the Annenberg foundation. 

You may already be familiar with some of their other Los Angeles programs, such as the Annenberg Space for Photography and Annenberg Community Beach House.  You can also call with questions or concerns regarding the project at 310-406-3710 or email jjaakola@annenbergfoundation.org

p.s. my dogs photos appear here because they are definitely in favor of the project.  We walk the trails all the time and know this will be a wonderful addition  (especially the Pet Adoption Suites) for the community and our families. 

p.s.s. The Lunch was FABULOUS!  I highly recommend the new Terranea Resort as well and their public access grounds are animal friendly! 

Monday, April 5, 2010

A Good Time To Buy?

A good time to buy?



Many housing economists have said that for borrowers with stable incomes, good credit history, and FICO scores of at least 620, now is an opportune time to purchase a home. Although inventory rates are below the long-run average, there still are plenty of options available for buyers of middle to high-end homes.


Consumers trying to time the market and purchase their home when prices are likely to rise again are advised to take a different approach. According to one real estate consultant, while home prices have stopped declining in most areas, and even have risen in some markets, mortgage rates may rise, offsetting any potential savings.


Early last year, the Federal Reserve began purchasing mortgage-backed securities, which helped maintain low interest rates for consumers. However, the Fed’s purchase program ended in March, and some analysts forecast interest rates to increase throughout the rest of the year. One financial publishing company predicts that rates likely will rise to 5.5 percent by mid-2010 and close the year at 5.75 percent to 6 percent. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) projects rates on 30-year fixed-rate mortgages to average 5.6 percent this year.

Closely-watched indices, including the Standard & Poor’s/Case Shiller Index, indicate that the high end of the market didn’t experience the same dramatic price appreciation as the low end. Home prices in this segment have not declined as steeply as homes in the mid- to low-end of the market. Additionally, many discretionary sellers in the high end—those who do not have to sell their homes—are opting to wait until home prices rise before listing their homes for sale.



The high end of the market also is facing challenges with buyers qualifying for financing. During the height of the market, many high-end home purchases were fueled by exotic mortgage products. Now that those mortgages are no longer readily available, many lenders are requiring borrowers to provide proof of income, such as W-2s and recent paystubs, as well as demonstrate their ability to meet the monthly mortgage obligation.

This year is still providing many windows of opportunity.  If you've been waiting to move into a larger home or waiting to downsize for retirement, this is a good time to move forward.  As the market stabilizes, interest rates will rise.   Use this time to meet your goals and make the most of the current market.  Why wait 3-5 years to achieve the same result under different circumstances. 

Call me with questions about your home value or for a list of homes to preview in your area. You know I'm never too busy to be of service in my community and never too busy for your referrals!

The home pictured above is a wonderful 3 bedroom home in the Lomita Pines area.  Check out this home's personal website:
http://www.2077guyson.com/ for all the details or call me and I'll send a copy of the listing information directly to you. 

Enjoy the beautiful Spring weather!

Friday, March 26, 2010

Governor Signs Home Tax Credit Bill!

Governor Schwarzenegger today signed AB 183 providing $200 million for home buyer tax credits. The bill allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.

 
Eligible taxpayers who close escrow on qualified principal residences between May 1, 2010 and December, 31, 2010, or who close escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit.

This credit is equal to the lesser of 5 percent of the purchase price or $10,000, taken in equal installments over three consecutive years. Under the bill, purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state). Buyers also must be at least 18 years old and be unrelated to the seller. First-time buyers are defined as those who have not owned a home in the past three years.

Governor    “I have been up and down the state pushing this important housing bill that will get people off the fence and into homes while creating jobs and stimulating our economy – and today I am proud to take action and put it into law,” said Governor Schwarzenegger. “Creating jobs is my number one priority and I am glad that I have been able to sign two job-creating bills in two days. I applaud the legislature for their great work and encourage them to keep it up and pass the remaining job-creating elements of my California Jobs Initiative.”


If you are a first time home buyer - call me!  Let's put you in escrow before all our First Time Home Buyer initiatives run out.  If you're a move-up Buyer, the clock is ticking on the $6500 federal tax credit for you this year as well. 


Wednesday, February 17, 2010

2010 FNMA LOAN LIMITS BY COUNTY IN CALIFORNIA

Wake up to some good news in 2010!  It's a piece of cake to trade up in this market.  Prices are low - interest rates are low and conforming loan limits are the highest they have ever been!  There is a great window of opportunity that is wide open right now.  Don't stay behind the curve and miss your chance to lock in a great deal on a home at historically low interest rates fixed for 30 years.  Also, don't forget the $8000 first time buyer credit and $6500 move-up tax credit for current homeowners.  They both require purchases by April 30th and closed escrows by June 30th 2010

If you're stuggling with your mortgage and want to sell your home - this is the right time to attract buyers too!  Check out the conforming loan list by county below.  Feel free to call with any questions and if you're thinking about moving out of your current area and need a great broker referral, let me know and I'll research the appropriate professional for you in your chosen city or county. 


1- Unit       2-Units        3-Units        4-Units

Los Angeles-Long Beach-Santa Ana                     
Component Counties: Los Angeles, Orange
$729,750 $934,200 $1,129,250 $1,403,400

Oxnard-Thousand Oaks-Ventura                          
Component County: Ventura
$729,750 $934,200 $1,129,250 $1,403,400

Riverside-San Bernardino-Ontario
Component Counties: Riverside, San Bernardino
$500,000 $640,100 $773,700 $961,550

San Diego-Carlsbad-San Marcos
Component County: San Diego
$697,500 $892,950 $1,079,350 $1,341,350
                  
Santa Barbara-Santa Maria-Goleta
Component County: Santa Barbara
$729,750 $934,200 $1,129,250 $1,403,400


                
I have the entire list for California by county.  If you don't see yours here, call or email and I'll send you the list for your area or any area of interest to you. 

If you think your property's market value may be below your current loan amount, call me and I can show you how to work with that issue as well.  I'm also a Certified Distressed Property Expert.   

Once we isolate the problem, we can always find a solution! 

Call Charlie @ Team South Bay Realty  310-534-3940 for all your real estate needs!

Tuesday, January 5, 2010

New $6500 Tax Credit for Repeat Home Buyers

Happy New Year!  I just posted the South Bay and Palos Verdes Peninsula sales charts for 2009 on my Facebook.  The stats are from November 2008 through November 2009 and the trends are quite obvious.  We are heading back into market momentum.  With interest rates still at an all time low and destined to begin a steep increase this year, this is really the right time for first time buyers and move-up buyers to secure a great home at a great price with long term 30 year fixed rate financing.  It just won't get any better than this!  Here are some "Good News" Facts:

Q: Who can claim the $6,500 tax credit?


Qualified move-up or repeat home buyers purchasing any kind of home intended as his/her primary residence are eligible to claim this credit. The tax credit does NOT apply to second homes, vacation homes, or investment property.

Q: What is the definition of a move-up or repeat home buyer?

The law defines a tax credit qualified move-up home buyer (long-time resident) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.

Q: When does the credit take effect, and how long will it last?

Transition buyers are eligible for all contracted purchases dated Nov. 7th, 2009 through April 30, 2010, with closing occurring on or before June 30, 2010.

Q: How is the amount of the tax credit determined?

The tax credit is equal to 10 % of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.

Q: Are there any income limits for claiming the tax credit?

Yes. The income limit for single taxpayers is $125,000; & $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts. (NOTE: I suggest you consult your CPA or accountant regarding your MAGI questions.  There are several complications that are best defined by a professional.)

Q: If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?

Possibly. It depends on your income. Partial credits of less than $6,500 are available for some taxpayers whose MAGI exceeds the phaseout limits.

Q: How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008? How is this different than the rules established in early 2009?

The previous tax credits applied only to first-time home buyers and were for different amounts of money.

Q: How do I claim the tax credit? Do I need to complete a form or application? Are there documentation requirements?

You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns.
No other applications are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and repeat home buyer tests. Note that you cannot claim the credit on IRS Form 5405 for an intended purchase for some future date; it must be a completed purchase. Home buyers must attach a copy of their HUD-1 settlement form (closing statement) to IRS Form 5405 as proof of the completed home purchase.

Q: What types of homes will qualify for the tax credit?

Any home that will be used as a principal residence will qualify for the credit, provided the home is purchased for a price less than or equal to $800,000. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences per the IRS.

It is important to note that you cannot purchase a home from — among other family members — your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members. Please consult with your tax advisor for more information. Also see IRS Form 5405.

Q: I've heard that I could be required to repay the credit if I do not occupy the new home for at least 36 months from the purchase date. Is this true?

Yes. If, within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full amount of the credit is due at that time the income tax return for the year the home ceased to be your principal residence is due. The full amount of the credit is reflected as additional tax on that year's tax return. Form 5405 and its instructions will be revised for tax year 2009 to include information about repayment of the credit.

Q: Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?

Yes. However, for the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been purchased on the date the owner first occupies the house, not when the lot was purchased or construction began on the property. In this situation, the date of first occupancy must be after November 6, 2009 and on or before April 30, 2010 (or by June 30, 2010, provided a binding sales contract was in force by April 30, 2010).

Q: I am not a U.S. citizen. Can I claim the tax credit?

Perhaps. Anyone who is not a nonresident alien (as defined by the IRS) and who has owned and resided in a principal residence in the United States for at least five consecutive years of the eight years prior to the purchase date can claim the tax credit if they meet the income limits. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. The IRS provides a definition of nonresident alien in IRS Publication 519.

Q: Is a tax credit the same as a tax deduction?

No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $6,500 in income taxes and who receives an $6,500 tax credit would owe nothing to the IRS.

Q: Is there a way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 or 2010 tax return?

Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.

Q: HUD allows monetization of the tax credit. What does that mean?

It means that (in theory) HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 or 2010 income taxes to receive a refund, provided the FHA lender offers the option of purchasing the tax credit in advance.
Q: For a home purchase in 2009 or 2010, can I choose whether to treat the purchase as occurring in the prior or present year, depending on in which year my credit amount is the largest?

Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in the present year and a larger credit would be available using the prior year MAGI amounts, then you can choose the year that yields the largest credit amount. (Again, your CPA or accountant should be consulted on this.)

Q: Where should I get the most reliable and up-to-date information from regarding the $6500 repeat home buyer credit?

From your tax advisor or the IRS directly. While the credit is specific to the purchase of qualified real property, it is still a tax issue, and not a real estate or mortgage matter. As such, it falls under the taxation and revenue codes of the IRS. Your tax professional or an advisor at the Internal Revenue Service is best equipped to provide you current information about this new credit.

Looking forward to working with you this year.  Please feel free to call with any questions.  I don't have all the answers but I generally know someone who does.  And, I am NEVER too busy for any of your referrals!