Real Estate and Real Life in the Wine Country

Reporting from Washington - If you’re thinking about applying for the new $6,500 home buyer federal tax credit or the extended $8,000 version, the Internal Revenue Service has just issued its first formal guidelines for you.

A great article in the Los Angeles Times: it is an easy to read outline of the new rules.

It is still a great time to buy but also a great time to sell with the tax credit for repeat home buyers. So you can sell your home and take advantage of the tax credit to buy your new home. The housing inventory in Sonoma County is so low, properties priced well sell fast and you are able to take advantage of the current market to move into your dream house.

  Mirjam

I am copying a posting from Kevin deBoer from 3 Oceans Real Estate. The link didn’t work but the info is interesting:

We are continuing to see the benefits of the current government programs to spur home sales across the country. Recent news that the $729,750 limit on conforming loans in our area has been extended into 2010, and that the government will continue to buy loans into 2010 have both contributed to increased sales and consumer confidence in our area, which means more buyers and sales. buyers+sales = Happy Realtors!

Even with those two incentives in place, there are some would-be-home-buyers that are still sitting on the fence. Here are two additional data points of interest:

Today the 10 year Treasury yield is at 3.2%. This indicator corresponds to mortgage rates – typically when it’s down, mortgage rates are down. Throughout this year rates have remained at historical lows; the average 10 Year Treasury yield for the last 12 months was 3.17%. However, the average yield over the last 10 years was 4.50%. In fact, from April 1953 to December 2008 the average annual yield for the 10 year Treasury was 6.36%. The highest rate during that 55 year period was 15.32%; the lowest rate was 2.29%. The high was attained in September of 1981. The low was achieved in April of 1954.

Translation: Evidence shows the 10 year Treasury yield and conforming mortgage rates are at historic lows; it’s unlikely they’ll continue in this range throughout 2010. How often does a 55 year interest rate low occur? About every 55 years!
According to the National Association of Realtors®, last month showed another big gain in existing-home sales, while inventories continue to decline.

Translation: the competition is getting tougher.

So, let’s see if all this “once in a lifetime” economic data, low interest rates, low prices, etc. are the bottom, or just the middle of the “double-dip recession” that the pessimists are talking about.

Mirjam

For all of us in Sonoma County the name Clem Carinalli is a familiar name. Once a name of trust and reliability, now a name connected to scandal and swindle. This morning’s Pressdemocrat has an interesting article about the shock of the investors.

Interestingly, halfway in the articles, several investors did admit that they also have themselves to blame by not doing their due diligence as to the investments they were making.

Due diligence… related to Real Estate, many times used in the CAR purchase agreement we generally use and the disclosures being given to sellers and buyers.

It used to be ‘buyers beware’ and sellers/agents were not statutary obligated to disclose anything they know about a property and affects the desirability of a property. However… always and I mean always read your disclosures, if you don’t understand what you are reading, talk to your Realtor, Mortgage broker, Home Inspector, Pest Inspector, Escrow officer etc etc. Not only do you have the right to do so, you also owe it to yourself to do so. These professionals are there to help you. Sometimes they might ‘assume’ that you understand every document you sign and read, please don’t hesitate to ask, the only ‘dumb’  question is a question not asked.

For myself, I have included a copy of the purchase agreement as wel as some general disclosure documents in a Buyers Guide I put together for my buyer clients. Quite frankly I hope they take the time to read it and mark the items they don’t understand. I love working with people who like to educate themselves as to what they are doing.

   It is a beautiful autumn day in Sonoma County, enjoy it.

Mirjam

Just wanted to share this information… great info for buyers!

Fannie Mae and Freddie Mac are offering financing incentives for buyers of foreclosed homes owned by Fannie and Freddie.  Home buyers have until Oct. 30 to apply for Freddie Mac’s SmartBuy program, which started in July, and offers up to 3.5 percent of a home’s sale price to help cover closing costs.

To qualify, the home must be a principal residence and must be selected from Freddie Mac’s HomeSteps Web site (www.homesteps.com/homeshoppers.htm) for its foreclosed properties. Loans must close by year’s end.  The HomeSteps properties also include two-year warranties on major appliances and electrical, plumbing, and air-conditioning and heating systems.

Fannie Mae’s HomePath program (www.homepath.com) is an ongoing program and offers more incentives than Freddie Mac’s.  Through participating lenders, Fannie will offer mortgages to buyers who make a down payment of 3 percent.  The buyers do not have to secure private mortgage insurance, a common practice with nearly all lenders.  Home buyers also can negotiate for Fannie Mae to offer closing-cost assistance.  Unlike Freddie Mac’s program, Fannie’s assistance level is not capped.  Under the HomePath program, the average participating homeowner has received payments equivalent to 3.75 percent of the loan’s value.

The homepath program is also a good option for investors to consider.No matter what the media tells us, today is a great time to buy property in Sonoma County!

Yesterday we received a ‘Red Alert’ email from our local MLS board about the Rental Scam on Listed properties. The PressDemocrat had an interesting article about the subject earlier this week.

There is a rental scam taking place in which listed properties are advertised on Craigslist and other online classified services for rent, when the property is not for rent at all.  The ads run for a very brief period of time.

 How can you protect your listings from being a part of the scam?
Some brokers have removed the address of their listings on the internet.  While this hides the address from the scammers, both the buying public and the seller could be disadvantaged.
Monitor classified advertising internet sites like Craigslist to watch for ads using your listing information “for rent”.
Put a “NOT FOR RENT” rider on your signs.

The FBI’s guidelines for the general public to avoid being victimized.

• Only deal with landlords or renters who are local.
• Be suspicious if you’re asked to only use a wire transfer service.
• Beware of e-mail correspondence from the “landlord” that’s written in poor or broken English.
• Research the average rental rates in that area and be suspicious if the rate is significantly lower.
• Don’t give out personal information, like social security, bank account, or credit card numbers.

Should you have your property listed, please follow the advise your Realtor gives you. He/She is made aware of the problem and knows how to handle this. So far we do not know of people being victimized in Sonoma County and right now it is a major nuisance.

Enjoy the rest of this wonderful weekend, it’s a bit breezy still sunny and warm.

  Mirjam

This program was developed to help address first-time home buyers’ concerns about potential job loss and how such a loss would impact their ability to make their mortgage payment. Through the Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for up to six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.

The first time home buyers tax credit ends in a few month, together withe the mortgage protection program this is a time to get serious about buying a home.

And the definition of a first time home buyer: someone who has not lived in his owner occupied home for 3 years. So technically, someone who owns rental property and has been renting the last 3 years is a first time home buyer.

The government pays you to buy a house, go for it!

    Mirjam

Some buyers are trying to time the bottom of the market and purchase once it appears that prices are consistently and steadily rising.  Many housing forecasters advise against this approach as buyers should not view their homes solely as investment opportunities.  Historically, the average annual rate of return on a home lived in for five years or more is nearly 12 percent, based on data C.A.R. has collected over the last 40 years.

Despite what you make think: today is a great day to buy your next home in Sonoma County.

Have a great weekend,

Mirjam

Isn’t it great, all the tools we have to totally check out a property before setting foot in it? Of course when a property is for sale there is the property website : www.3605Sumatra.com is an example, the virtual tours: here’s on of my newest versions and the Google satellite views. 

And now there is Google Street View…  And MSN has bird eye view. Here is my office, it’s on the corner… Did you get a chance to travel through your neighborhood?

The Pressdemocrat had an article about the privacy issues involved. The people who are concerned to make a point, in the meantime: it’s a great tool to ’scope out’ a property and a neighborhood before even visiting the property.

There is ofcourse lot’s more to learn about a property when you decide to sell or buy, but technology today gives a great start.

Have a great exploring day!

Mirjam

The Press Democrat had a article about the “Bittersweet windfall”: when you bought you home at the height of the market, you can ask for an adjustment for your property taxes. Your Realtor can help you with the ‘comps’ by the way, just call and ask. he/she will know what you need.

However, coming back on the article: Now is a great time to buy property, most people know that by know. However, ever thought of the fact that it’s also a great time to move up/move down? Yes you will sell your home for less than if you would have sold it in 2005 however, what you are moving into is also less and guess what the basis is for your property taxes… yep, current market value, in most cases the price you paid for the home. And for investors: quite a few properties do cash flow…

Actually my friend Raquel stated it very smart: it doesn’t matter when you buy or sell as long as you do it in the same market. It’s very difficult to time a market, investors do in some way, but so far the people that were waiting for the market to come down/go up have done nothing at all. So Raquel is right: ‘do the math’ see whether it makes sense and make your dreams come true!

And some stats to prove that sales are picking up:

Have a great weekend. Great recommendation from Pat Pisenti (best Chiropractor in town) for a small winery with great wines: Porter Creek Vineyards. I haven’t been there recently so let me know what you think.

Have a great day!

Mirjam de Rijk - email: mirjam@c21alliance.com

Pete Phillippe from Indymac Bank was so kind to send an extensive overview with updates in underwriting as of June 1, 2008 Industry wide General Loan guidelines by the Secondary market (some variance with specific Lenders).

• With Foreclosures , reestablished credit history now 3 yrs after event before a new loan given
• No 60 plus mortgage lates within the last 12 months
• Authorized users of credit trade lines will no longer be considered in credit decisions. Can’t piggyback on someone’s good history. FICO now is “not using” card holders good scores for the authorized user to improve their own scores
• On interest only loans, borrowers have to be qualified on the full principal and interest payment
• Min. credit scores 640 for 1 to 2 unit properties, 680for three to four units . . .620 if LTV less than 75% of property value
• Stated income loans max. 80% ltv for w-2 wage earners and self employed or commissioned borrowers, or combinations of salaried and commissioned. Usually 700 middle ficos required. Cash out? 75% ltv’s
• With FHA loans 580 and above FICOs still ok with alternative credit documentation and “good” credit explanations

Dont’ forget, these are general guidelines, exeptions are possible with every lender. For more info, you can also contact Pete Phillipe @ Indymac bank 707-535-1263. He will give all his client free credit reports.

More to come in the coming days.

Mirjam (mirjam@c21alliance.com)