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$ 8,000 Tax Credit, did you take advantage of it?

By | Foreclosure, Making Home Affordable, Sellers, Short Sale, Visit WineCountry, Wine Tasting | No Comments

Who doesn’t want to take advantage of Tax Credits? Remember the Federal Tax Credit programs offering $7,500 and later $8,000 to first time home buyers? A lot of Home Buyers did take advantage of it.

There are some hick-ups with the IRS as to claiming/repaying – see article LA Times -.  What if you  bought the house and ended up buying a house that was not the perfect fit?

Depending on what tax credit you used, it might be worth exploring what the consequences are for you, either selling and buying something else or turning the house into a rental.

The first one in 2008 -$7,500-, for those who purchased homes in 2008, was more like an interest free loan. It had to be paid back in 15 years. See link.

The second one in 2009/May 2010, didn’t have to be paid back but you had to live in the house for 36 months. For both programs, in case you either sell, loose the home to foreclosure, do a short sale, convert the home into a rental, i.e. it stops being your primary residence, you have to pay the credit back. There are some exceptions/rules. See link.

Sidenote: there were different programs for the purchase of new homes during that time. See link.

Depending on your situation, the option of repaying might not be that bad. It’s probably wise to talk to your CPA and discuss numbers with him, however, you might be pleasantly surprised. You may have losses or other situations that offset the ‘gain’ of the credit, if not, maybe paying tax on $8,000 is not the worst option. Remember there are  tax benefits of buying a home. In Sonoma County, home prices have come down a bit more, in general, we lost about 10% last year. Thinking about this, that will offset the fact that you have to pay back the credit.

And last but not least: Living in Sonoma County is great, the next Barrel Tasting weekends are the first 2 weekends in March, it’s the 34th one 😉

Mirjam

 

Title Insurance: a Scam?

By | Buyers, Disclosures, Economy, Investing in Real Estate, Sellers, Short Sale, Sonoma County info, Visit WineCountry, Wine Tasting | No Comments

When you buy a home and use a mortgage you pay for at least 3 insurance policies: Home Owners Insurance, Home Owners Title Insurance and Lenders Title Insurance. For an average home in Sonoma County, Title Insurance is around $1,800 for both policies. That is a lot of Peet’s Latte’s or paint, or carpet… And if you pay cash for a home, you can opt not to buy Title Insurance. A smart decision?

Last week I had an interesting conversation with Stewart Title, thanks to Jessica Smith, our Title rep. BTW, this was in preparation a presentation for the YPN Morning Buzz group They shared some interesting facts about Title Insurance. Side note : Title Insurance came into place because of inadequate US land record laws. When we moved from Netherlands to California, some friends where making jokes about us moving to the Wild West. When Paul started talking it made me smile, had to think of that.

• When the economy is bad there are more scams with Title/ownership. – One ‘popular’ scam in the Sacramento area has to do with home owners in distress who are upside down, not able to pay their mortgage. There is a company that promises to ‘take care of it’. In order to do this they have to take title to the house ;). This is how:  a ‘fake’ document is recorded, showing that a new private lender has taken over the mortgage. This ‘private lender’ receives the money at closing . The ‘real’ lender receives nothing and eventually will foreclose on the property… Think about the innocent buyer, busf_transamerica_.jpgying this property without Title Insurance… will loose that house. An innocent buyer buying the house with Title Insurance can go back to the Title Company for help…

• Every one knows the Trans America Building in San Francisco… Remember these beautiful Redwood trees next to it? Well that is because of an overlooked PG&E easement that was right underneath the footprint of the building. Apparently when about to start breaking ground, the company hired to do that knew about the PG&E easement and suggested it would not be smart to start digging because of the PG&E lines… Long story short:  The Title Company who had insured the property/loan had missed that easement, they ended up buying the strip of land that is now a small park and paid to have the PG&E easement go around the Trans America Building… Next time you walk to that park, realized that that was paid for by a local Title Company…

There were more interesting stories about easements, deeds and scams. Bottom line when you buy property, always pay for Title Insurance. Chances something goes wrong are not that high but when there is a problem, it is extremely expensive.

Have a great weekend, it’s grape harvest time in Sonoma County, a lot of wineries have great events this special time of year.

Mirjam

Sonoma County from a Dutch perspective…

By | Buyers, Sonoma County info, Visit WineCountry, Wine | One Comment

This week I had the honor to meet with Anthony Ebright, a lender who works for Wells Fargo. Anthony is not only specialized in FHA/VA loan products but is also a fervent blogger and integrator of social media. After brainstorming he mentioned that he would love to see my stories from my Dutch perspective.

This has gotten a lot of thought and I will take up the challenge. The theme of this blog will be changing a little: Real Estate and Real Living in Sonoma County from a Dutch perspective.

I know you all think all Dutch people wear wooden shoes -they are practical for yard work- and live in windmills. Well, there is more to Netherlands than that. More in the coming time.dutch-wooden-shoes.jpg

Did you know that Sonoma County has a lot in common with Netherlands? For one thing, both are dealing with levees to protect parts of the land.  However in Netherlands you pay for this through your property taxes as a special assessment.

Right now, real estate in Sonoma County is on sale, or affordability rate is around 67 %, a historic high, for many it is just as expensive to buy as to rent, upon request, I will supply you with examples, just send me an email.

As for today, enjoy this beautiful Dutch weather in Sonoma County with a cup of hot Van Houten Chocolate or a nice Seghesio Sonoma Zin , the best of both worlds.

Mirjam

Short Sales and every changing guidelines

By | Foreclosure, Making Home Affordable, Sellers, Short Sale, Visit WineCountry, Wine Tasting | One Comment

This week there were 2 interesting updates: BofA is going to announce a major change in the way they work with agents. They are changing their systems to approve short sales within 2 weeks of an offer. Currently I am working on 2 short sales with BofA and am waiting for approval of the authorization letter for 4 days now. CDPE will have an interview with a Short Sale Exec on January 20.

Next, the Making Home Affordable HAFA guidelines are changing per February 1st. The servicer is no longer required to verify any financial information as to monthly income exceeding 31%. The property can be vacant or rented out for up to 12 months prior to the Short Sale application -> still had to be your primary residence. The other changes have to do with release of subordinate liens, timing to respond, timelines and deed-in-lieu programs.

Short Sales are a dignified way to get out of a financial difficult situation, a seller stays in control, also as to the financial consequences, is able to negotiate to a certain degree and able to anticipate the consequences.

In 2010, about 50% of all the sold properties was either a short sale or a foreclosure. It is expected that the coming year will be about the same. It will be interesting to see what will happen this year.

On a  happy note: next week is the 19th Winter Wineland, check out the website. A great event with 140 wineries participating.

Mirjam

Foreclosures… How is our market?

By | Buyers, Economy, Foreclosure, Sellers, Short Sale, Sonoma County info, Visit WineCountry | One Comment

Only articles with spectacular-read bad news- titles sell. Quite often the perception is that every home sold is a foreclosure or a shortsale.  Our MLS keeps track of this and guess what??? In 2010 in Sonoma County,  about 50% of all the sold properties were distressed. While that is still not the way we like it to be, it brings perspective. Other fact to share: we already have a pretty stable real estate market in the last 3 years. Prices have remained fairly stable and it looks like it will stay that way. The higher end might come down some more, but the lower end of the market has been pretty much the same in the last 3 years, as a matter of fact, it has gone up a little bit. Numbers to follow.

Other myth: buying a distressed property is a better deal. While that is true in some situations, a foreclosed property is appraised as to the market value and then put on the market by the bank. And as to short sales: when a seller accepts your short sale offer, the bank needs to approve the loss and guess what? They have the property appraised to make sure it is sold at market value. So with this in mind, a regular sale might up being a ‘better deal’

Coming on the market in JC area in a few weeks fro now: it is a foreclosed property, we are waiting for the valuation -price-. This means that 2 local realtors will do a market

 Foreclosure in JC area

analysis and give the bank their opinion of the market value of the house. I will keep you posted.

2010 is not finished yet, the stats for 2010 will follow in the coming weeks. There are quite a few agents who do not sell distressed properties. Yours truly has specialized in foreclosure alternatives so 80% of the homes I sell are distressed/short sales.

Fun restaurant to try in Santa Rosa: Starks Steakhouse. Great bar area, great ambiance.

Mirjam