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Sonoma County info

Firestorms in Sonoma County!

By | Natural disasters, Sonoma County info | No Comments

The night from Sunday to Monday October 9 2017 as well as the weeks immediately after that won’t easily be forgotten. When I was living in the Netherlands, flooding was something a large part of the country had to deal with. After a major flooding in 1953, new laws came into place to protect the country. Living in California, the main natural disaster we anticipated was an earth quake. That was a scary Having to evacuate within 10 minutes because of imminent danger due to a firestorm most likely cause by a combination of faulty PG&E lines and a storm, was not something we ever imagined would happen.
IMG_0868and memorable night. Our neighborhood was
blocked of by the national guard for more than a week, it was not safe to go back.

The local newspaper has a section dedicated to this disaster. An other great article can be found here. Very soon after the disaster the city of Santa Rosa and the county of IMG_0777Sonoma came up with this website:  sonomacountyrecovers.org

The fires destroyed at least 5500 structures and  caused a major shift in our local Real Estate market. Our local markets sales and inventory dropped while prices rose by double-digit percentage points.

Lots are being clearedFor many of us this was a rude awakening as to insurance coverage. Many learned that depending on the advise of their insurance agent as to cost to rebuilt might not be that smart.  My suggestion to all is: check your insurance policy and ask a local builder what it would cost to rebuilt your home. This will give you more realistic number and this number should be used to make sure you have the proper insurance coverage in case of a major disaster.

Mirjam

Purchase Real Estate with Bitcoin

By | Buyers, Economy, Sellers, Sonoma County info | No Comments
Bitcoin

Image source https://www.flickr.com/photos/100239928@N08/

An article on August 8 in WSJ online caught my eye: Lake Tahoe Property Sells for $1.6 Million in BitcoinsBitcoin is a software-based online payment system, a digital currency. Here is other article about this transaction in Martis Camp’s Lodge Estates. The transaction was paid using the bitpay service. 

At first it looks unusual but from a transaction perspective it is  more like a cash transaction. Instead of dollars, euros or yens, bitcoins are used. Similar to when paying with ‘foreign’ currency, an exchange rate is used. The property in Lake Tahoe sold for 2,739 BTC which was at the time appr $1,6 million.Dutch Euro

What currency or method is used to pay for property is something to agree upon between the buyer and the seller. Whether a buyer uses a mortgage, pays cash, uses a digital currency, or even an exchange -for instance an other property of equal value- doesn’t matter as long as the  parties involved agree and the method of payment is legally acceptable. Of utmost importance is to check with a CPA/financial advisor for tax consequences and an attorney as to possible legal consequences.

Bottom line: whether or not paying in bitcoin does not make a whole lot of difference to a transition as a whole. Buyers do their due diligence – the standard time for inspections etc in our local contracts is 17 days-, sellers do their due diligence -in this case whether the method of payment is acceptable – and upon agreement the deal closes.

Mirjam

Location – disclosures : Mold…

By | Buyers, Sellers, Sonoma County info | No Comments

GiethoornGrowing up in the Netherlands and living in older homes, mold was something we didn’t think to much about, clean the area thoroughly every so often and that was it… Now I am involved in selling property, I do look a little different at the subject.

Disclosures: when buying or renting in California, it feels like the amount of disclosures are never ending. One of them is the Residential Environmental Hazards booklet. It informs about hazards in and around the home. One of them is mold.

Blue cheeseRealize that mold is a hazard but also a friend… How so? Think about that delicious blue cheese… the blue stuff is… mold. And penicillin is made from mold. It is a fungus, in the same family as mushrooms.

But mold can also be an environmental hazard. There are several different types of mold. Black mold is toxic and an environmental hazard. Realize that mold can grow on virtually any organic substance, as long as moisture and oxygen are present. This means if the cause is remedied – lack of ventilation, moisture – and affected area is cleaned, mold will not come back.  

When selling property, sellers are recommended to have a “Pest Inspection” done prior to putting the home on the market. At that time items that need correction can be addressed prior to putting the property on the market. Buyers are recommended to also have an inspection done as part of their due diligence. The inspector will always have solutions when problems arise, or will recommend preventive maintenance as needed.

Mirjam

 

Making that move into your dream home

By | Buyers, Sellers, Sonoma County info | No Comments

There are quite a few people who’s situation has changed and their current life style does not match the home they are living in. It’s either to small, too big, the yard is to small or too big, to name just a few.

YardRight now there is not a lot of inventory in the wine country. Homes sell fast and quite often with multiple offers, sellers have a choice when offers come in.

So how about moving into your dream home?  Option 1:  Selling and moving into a rental means you have to move twice. Not so desirable.

Option 2: Making an offer contingent upon the sale of a home. This might not get your offer accepted. Why would a seller choose a more difficult transaction when there is the option of a sale without this contingency.

Option 3: A better option is this market is to sell your home contingent upon you finding a new home. This means that you might have to go with a little lower asking price to make sure that you have found a committed buyer who is willing to wait.  Then, when you find your dream home, finalize the sale of your current home and rent back for a week or 2. The money received from the sale of your home can be used to purchase your new home.

There are many options to consider when buying and selling real estate, your local Realtor will be able to help you sell your home and  move into your dream home, taking the local market conditions into account.

Mirjam

 

Mortgage debt relief act, and beyond…

By | HAFA, Making Home Affordable, Sellers, Short Sale, Sonoma County info | No Comments

You might not remember, in 2007 the Mortgage Debt Relief Act was passed, helping homeowners who sold their home for less than what they owed.

expired

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. The amount of forgiven debt in a short sale would have been subject to taxes as ordinary income, the Mortgage Debt Relief changed this. Initially it ended December 2012 but was extended for an other year till December 2013.  But what about next year? Some good news to report:

Recent announcement from C.A.R. :

C.A.R. has been working with California Sen. Barbara Boxer to protect distressed homeowners from debt relief income tax associated with a short sale in California.  As part of this effort, Sen. Boxer requested the Internal Revenue Service (IRS) to provide guidance on whether mortgage debt forgiveness in a lender-approved short sale would be taxable income under federal law, given California’s recent non-recourse laws for short sales, which were hard fought victories by C.A.R.

The IRS has clarified in a letter that California’s troubled homeowners who sell their homes in a short sale are not subject to federal income tax liability on “phantom income” they never received.  The IRS recognizes that the debt written off in a short sale does not constitute recourse debt under California law, and thus does not create so-called “cancellation of debt” income to the underwater home seller for federal income tax purposes.  This clarification rescues tens of thousands of distressed home sellers from personal liability upon expiration of the Mortgage Forgiveness Debt Relief Act of 2007 on Dec. 31, 2013.

C.A.R. is seeking a similar ruling from the California Franchise Tax Board (FTB), which has been awaiting the IRS action; C.A.R. anticipates the FTB will act promptly.  Short sales may raise other tax issues and, as always, REALTORS® should advise their clients to speak with their tax professional regarding the tax consequences of a short sale. C.A.R.’s Legal Department has prepared a Realegal to further explain the IRS’s clarification.
– end announcement
Although the state tax is not as high as federal tax, we are eagerly waiting for the response of the Franchise Tax Board.
Coming from the Netherlands where it’s normal to pay appr. 60% income tax it was a relief to find out that taxes are much lower here, yet paying taxes on mortgage debt that is forgiven is difficult since the one reason that you do a short sale is to avoid foreclosure, not a time of financial prosperity.
As mentioned many times, a short sale is a gracious alternative to foreclosure on so many levels, please consult a good realtor should you face a foreclosure or have a need to sell while still owing more than your house is worth.
Sunset Sonoma Coast
Besides this, enjoy the beauty of nature that surrounds us, take a hike and let the sunset take your breath away…
Mirjam
P.S. Thank you Mathew Schweifler for helping with the research for this blog posting 😉