If you think you may have had your personal information stolen while a customer of CountryWide, please read the attached story. If you have questions, please call us at 925-308-7045.
http://www.latimes.com/business/la-fi-countrywide-20100824,0,5710799.story
According to early reports, the new tax credit for first time home buyers or new homes has been budgeted for $200,000. However, it is divided equally between the first time buyers and purchasers of new (never been lived in) homes.
According to the Franchise Tax Board’s website, here are the details:
These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes. Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.
These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.
The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.
We will allocate the tax credits on a first-come, first-served basis.
Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.
Taxpayers will not be eligible for either tax credit if any of the following apply:
New Home Credit: A qualified principal residence, for purposes of the New Home Credit, must:
Tax credit allocation:
First-Time Buyer Credit: A qualified principal residence, for purposes of the First-Time Buyer Credit, must:
A first-time buyer is any individual (and the individual’s spouse/RDP, if married on the date of purchase) who did not have an ownership interest in a principal residence, either in or out of California, during the preceding 3 year period ending on the date of the purchase of the qualified principal residence. If the buyer is married on the date of purchase and either the buyer or the buyer’s spouse/RDP had an ownership interest in a principal residence during the preceding 3 year period, the buyer does not qualify for the First-Time Buyer Credit even if the spouse/RDP is not going to be on title.
What this means is that there will be more than $200,000,000 available as the ‘pool’ of available dollars is reduced only by a percentage of the credit claimed. Only in government can this accounting be figured.
I highly recommend anyone who needs to know to visit this website: http://www.ftb.ca.gov/individuals/new_home_credit.shtml
If you have any questions, please contact us at 925-308-7045.
We work with a number of banks for a number of reasons; loan modifications for our clients, short sales, and REO (bank owned) properties. After 3 years of working with them, we have found one thing that is true.
The banks would prefer working with your agent or a lawyer than directly with you, on the loan modification or short sale. It is not because they do not respect you, far from it. They know that the realtor or lawyer has been through the process many times before and knows what to expect as you go through the process. Many of these banks give priority to their borrowers that employ their real estate agents or a lawyer to do the negotiations for them.
The big difference is that your real estate agent, whom you should have a close relationship with, must do this work for you without charge. A real estate agent is not allowed to charge for these types of negotiations. A lawyer, of course, does charge for these and may charge up front for services that may not come to success.
We, of course, think that your real estate agent is the best choice for assisting you in the negotiations for a loan modification or failing that, a short sale.c Short sales are for the near term, the easiest way to shed yourself of difficult financial situations if you cannot successfully negotiate a loan modification. Successful short sales are very near penalty free with regard to your credit and tax liability. Just recently, the State of California signed into law the abolishment of tax on the short sale forgiveness of debt. Along with the Federal government, there is now no tax liability for short sale for the majority of cases.
In short, id you think you may need to try for a loan modification, using your real estate agent may be the best choice. If you have any questions, please contact us at 925-308-7045. We have had success in these efforts and can help you as well.
Our real estate meltdown has been in force for 2 1/2 years now, and those who engaged in a short sale or a deed-in-lieu of foreclosure are beginning to come back into the real estate market looking for a home. The guidelines were then that the short sale or deed-in-lieu would have an impact of 2 years on their credit and that after that thety could again buy a home as the impact on their credit would disappear.
The collapse of real estate prices and the continuing search for the end of the potential millions of foreclosures have caused some backtracking by Fannie Mae (Fannie Mae, the Federal National Mortgage Association (FNMA), is a government created, privately held company that buys mortgages from institutions, thus making more capital available to the banks for more loans. The company, along with Freddie Mac(the Federal Home Loan Mortgage Corporation) currently are losing money. Together, they have lost over $380 billion; Congress has taken off the loss caps and there is no limit to how much they will lose.
Back to the point. If you know of anyone who had a short sale or a deed-in-lieu, they may have more of a problem getting the loan than they were led to believe. The current guidelines are as follows:
After overcoming the credit score limitations required (see your mortgage professional as to what your credit score must be) the qualification is as follows.
If you are putting a down payment 20% or more, the short sale or deed-in-lieu must have been 2 years ago or longer.
If you are putting 10% down to 20% down, the short sale or deed-in-lieu must have been 4 years ago or longer.
If you are trying to get an FHA (3.5% down) or VA loan (0% down), then your short sale must have been 7 years ago or more. This is the same as if you had your property foreclosed upon.
There may be programs from Fannie Mae (the HomeSteps program comes to mind, where you may be able to overcome some of these limitation; check with your lender).
If you have any questions, please contact us at 925-308-7045. These changes are happening all of the time and may change at no notice.
Interest rates are near historic lows, prices are lower now than in 1999, the Federal Government and the State Government are offering tax credits that can total up to $18,000.00………..
and no one is buying; at least not in Contra Costa County.
Why is this? There are several rationales that make an explanation, but upon close examination do not stand up to logic. Let’s look at why.
1) The economy. It is weak with no projected end to the weakness according to the Board of Economic Statistics. We have 12% unemployment in the state with projections into the future of continuing high unemployment. Even at unemployment of 12%, 88% of the people are working. There are plenty of people that want to purchase a home but feel they cannot because of factors that do not affect them. They read or hear the news, they see the number of people in foreclosure and all of the empty homes on the block and are afraid it could happen to them. Everyone has his or her own reasons, but to this point, these reasons do not apply to them.
2) ‘Timing’. As a rule people purchase things at the wrong time. Everyone is familiar with the catchphrase; ‘Buy low, sell high.’ However in our area people seem to do the opposite. Over the past 10 years peol;e have bought high and now they are selling low. Why? It has to do with the psychology of the masses. When everyone else was buying, many people were feeling forced to purchase a home as prices rose. They were afraid that they would be priced out of the market. At the top, many people were already priced out but deceptive lending practices got them into a home that a.) they really could not afford and b.) that really did not meet their needs. Timing the market is something that is done by professional investors. It does not apply to the purchase of a home or any other long term purchase.
3) Buying for the wrong reasons. During the meteoric rise in real estate prices, many peole lost their way with regard to buying a home, assisted by the lenders and the government. If you are a homebuyer, looking for your perfect home, it is not an investment. It makes no income and ,in fact, it is not calculated as part of your net worth, as in order to make profits from it, you must collect income, not just make a payment. Too many people were sucked into the belief that it was an investment as the monthly increases of prices were publicized often, making some people ‘paper millionaires’ with the current values of their homes. All of the paper profit has disappeared, as well as the homes that many people had due to the collapse of the economy.
An investment makes money; therefore investing in real estate requires that you must collect rent. If you live in your home, it is not an investmement. certainly if you live there 30 years and do not refinance the property, you will own it outright, but in order to make it an investment, you must move and become a landlord. Many people would prefer not to be a landlord, so the investment aspect of real estate disappears. If you purchase real estate on the hope that prices will rise, you are not an investor, you are a speculator.
The last time prices were at these levels, interest rates were 3 to 4 percent higher. Yet, people bought. I think the reason they bought their home was that they were not being bombarded by the constant onslaught of bad news.
My recommendation is to ignore the news and follow your needs, rather than someone else’s. We can help you as a homebuyer or as an investor; and know the difference. Give us a call at 925-308-7045.
Bank of America launched a new program to help homeowners reduce their mortgage principle. Please give us a call if you have a Bank of America Mortgage.
925-308-7045.
Another incentive toward homebuyers! California has reinstituted a tax credit for new homebuyers. $10,000 or 5% of the purchase price whichever is lower. If you have missed the Federal Tax Credit, you can benefit from this one! See the attached.
We hear all of the time, ‘Buyers go to the Internet first when begining to look for a new home’. The National Association of Realtors claims that 90% of Home Buyers go to the Internet first. That may be true, but I must ask ‘Would you buy a home over the Internet without going to it first’?
We can buy lots of things on the web, books, home goods, toys, supplies, and loads of other things. But when it comes to making one of the most important purchases of you life, would you buy it over the web or would you use an experienced representative to ensure you are getting what you want at a fair price?
I think that an overwhelming number of you would choose to get a little help. Of course, the number one response I get to this is that many people would choose to use the Listing Agent to represent them, because after all, ‘he can get us the best deal…….’ To be honest, using the listing agent may be one of the worst ideas a Homebuyer can have. Of course, we will do it if the Homebuyer insists, but we recommend against it. We do this for one very simple reason; we have a contract with the Seller and we represent him. We are bound to get him the best price and terms, not the Buyer. We cannot disclose any of his private information but must relay to the Buyer his terms.
Getting back to the topic at hand. Prior to the Internet, there were the newspapers, prior to that you had to call a Realtor first, or you could cruise neighborhoods looking for open houses to visit. It was unlikely that the home you may have entered on a cold open home visit would meet your living requirements, price and budget, or other requirements. The Agent then could set you up to find a home that met your needs.
Many peole use the Internet the same way; they cruise the real estate websites looking for available homes (hence the claim that 90% of the buyers start with the internet). There is so much information on the web that it can (and does) overwhelm the average Buyer. Additionally, often the web is not up to date. Once in a while I look at listings on the web for the express purpose to find properties that have been off market for a while. It generally takes me about 2 minutes to find many homes advertised that have been sold or taken off market over 1 year in the past.
With todays gas prices, cruising neighborhoods is not the best use of this precious resource.
Using the internet to find your new home is equally ineffective.
What is a Buyer to do?
Most real estate companies provide their agents a targeted search, often modifiable by the User. The best solution is to contact a Realtor and specify your search criteria; price, square footage, the number of beds and baths, location/neighborhood and lot size are common specifications but there are lots of others you can name. The tools then provide you an up to date list of homes available that meet the specification. After contacting your realtor, you can then get appointments to see the homes you are interested in.
The results? Lots of time and gas saved. You see homes, all of which may meet your needs. You may find that what you thought you wanted is not at all what you purchase (this happens all of the time). You are represented by someone who has your interests in mind.
All of this is the result of using the interent wisely. The web is not designed to be used like your car, idly meandering through the neighborhoods, wasting time and money. New tools means new approaches to accomplish old jobs.
After speaking with several escrow and title representatives recently and experiencing it ourselves, we have noticed new ways that some real estate agents are extracting fees from their clients.
The most popular one is the transaction coordination fee, which ranges from $200 to $450 dollars. Many agents use transaction coordinators to do the tons of paperwork required in every transaction, chase down and get return phone calls, status updates, and the like. These are all things that a competent real estate can do, but many times when they get busy and the help is beneficial to keep on top of the many transactions that successful realtors may have. These tasks are also ones that unsuccessful realtors may use in order to avoid doing the loads of work that can be overwhelming. Either of these is alright, as the paperwrok gets done, the transaction closes on time, and everyone is happy. However, the problem is when your agent charges you for the service. Most agents consider this as part of their service to you and pay for the coordination themselves. When you are charge as a Buyer or Seller, you should question that charge andwhy you should pay for it.
Other charges that have been popping up are $800 ‘escrow’ fees (escrow charges their own fees), paperwork costs, desk fees, etc.
When selecting an agent, ask them what fees they will be charging and question why. When selling your home, you will be charged the commission as that is how an agent makes their living. When purchasing, you agent normally will not charge you anything for their services.
For what its worth, we do not charge any ‘extra’ fees when working with our clients.