All Posts By

Mirjam

Feb 12
0

$ 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

 

Feb 05
0

Insurance Scam?… or???

By | Around the house, Buyers, Disclosures, Sonoma County info | No Comments

As we all know, news sells because it’s catchy and the person writing the headline for a story is usually not the journalist writing the story. With that said, last week one of my buyer clients asked me whether I new about the new Insurance Scam: banks placing forced insurance on properties. Example of a recent article about BofA accused of doing this.

Without going into great detail as to what exactly happened, there is something to keep in mind: Your lender has an interest in your property. When you signed your mortgage documents, you also promised to always keep your property properly insured. If not, the lender reserves the write to put insurance in place. That by itself is a fair warning, if you were the lender, you would want to make sure that there is money to rebuilt a house in case it burns down. Inherent to this, the lender’s first priority is their interest, not yours, so the insurance put in place is first covering the house, not your stuff etc. And they might have affiliations -which are disclosed when you signed the documents- who they will use. Since you are paying for this, they do not shop around for the best rates/coverage.

With that said, a lot of homeowners do not open all the mail they receive from their lender, some of it is advertizing, some of it is real. Word to the wise: ALWAYS open ALL the mail you receive from your lender. They will warn you when they feel the need to place insurance on your property so you can take action. AND also make sure that your lender is always mentioned as a beneficiary on your insurance policy. That is one of the reasons a lender wants to see proof of insurance when you purchase or refinance your home.

I talked to my insurance agent, Erin Temple of Vantreo Insurance about this and she confirmed that it happens quite a bit, main reason homeowners not opening their mail. She used even an example of a person who bought a home and told her ‘the title company just got me a policy’.

Insurance is important, depending on where you live, some coverages are more important than others: right now there is a 15 year record cold in Netherlands, good to have insurance coverage for this, in Sonoma County we have other priorities like high fire hazards or pools. Your insurance agent is aware of local hazards and will advise accordingly, locally I find Erin a great resource for all my questions/concerns.

Mirjam

Jan 22
0

Short Sale = not Bank Owned

By | Buyers, Disclosures, Sellers, Short Sale, Sonoma County info | No Comments

In general when you see overviews of Distressed Sales, REO/bank owned sales are put together with Short Sales. This might give the false impression that a Short Sale is a bank owned sale. However, a SHORT SALE IS NOT OWNED BY THE BANK!!!

Just to give a perspective: when a homeowner sells a home there may be several ‘contingencies’. Example: I’d like to sell my home but I need to find another home. In this case when an offer is accepted, the seller asks for some time to find an other home. This can be any amount of time agreed upon. When the seller finds the home they like, they release that contingency and the buyer can move forward with the purchase of the home. Another fairly common one is a builder who sells new homes: I am selling this home and you can buy it when it’s finished.

A short sale is similar: in this case a home owner likes to sell his home but the house is worth less than the mortgage amount. In case the seller is not able to come up with the difference (deficiency) he/she needs approval/agreement as to how the deficiency is handled. Once this approval is given, the contingency is removed and the buyer can move forward with the purchase.

Agreed, bank approval can be a little more complicated and yet that is not the point. In the case of a short sale, the seller is the legal owner of the property. Like a ‘regular’ sale, the seller provides all statutory disclosures as well as all other info pertinent to the house. Think for instance information about the trees in the yard, the history of the house/remodels, just name it.

So yes, a short sale is a distressed sale in the sense that seller is not able to keep their financial commitments. However if you talk about the house itself: any sale can be a distressed sale. I see short sales that have been very well maintained and show pride of ownership and I see regular sales that have been very poorly maintained.

So next time you see a short sale: it’s like a regular sale with a seller contingency.

Mirjam

 

Jan 16
0

Million Dollar Views!

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

Number one rule in Real Estate World Wide: Location, Location, Location. It’s all about the perfect location, either surrounded by trees, at the end of the cul-de-sac, next to a harbor or on top of a hill with the 180 degrees views. What is a view worth to you? When you buy a home, chances are that you will need a mortgage and thus an appraisal is involved. Recently I asked Eric Kirby, a local appraiser how much a view is worth. He explained that it is  about comparable properties,  maybe even in other neighborhoods,  calculate the difference – sometimes using a price per SqFt. But that it is not always easy to put a dollar value on a view.

A few years ago I sold a town home in Vista del Lago in Santa Rosa CA. It was the only one with the view. At that time, about $25,000 was given for the view. The town homes without the view sold for $400,000, the one I had listed ended up selling and appraising for about $425,000. Just asked the same question to a local mortgage broker (Seliga Financial), he mentioned a  sale in Marin County where about $200,000 was allowed for the views on a market value of $1,700,000. Both examples show that there is no set percentage, it’s all about the local market situation.

Sidenote: there are no guarantees that a view will stay the same: trees grow and might block a perfect view over time. And when these trees belong to your neighbor there is not a whole lot you can do. Something to keep in mind when you decide to buy a home, either on a bay/harbor in Zwartsluis, on a hill in Sonoma County or a hill in San Francisco.

How important is a view to you? And what would be your perfect view? I haven’t decided yet…

Mirjam

Dec 25
0

The Roof over your Head

By | Around the house, Buyers, Disclosures, Sellers, Sonoma County info | No Comments

Before I moved to California I was under the impression that roofs were either thatched or made of tile. My grandparents had a thatched roof made of reed. This was customary for the older farm houses. I had always lived in homes with tile roofs and these tiles usually last at least 50 years. My brother lives in a house that is over a 100 years old, he replaced the tiles on his roof about 6 years ago. The tile he replaced was the original…
Right now in Sonoma County roofs made of composition shingles are most common. The quality of the roof depends on the quality of the installation.
What I see is that cheaper is never better. Many roofers offer ‘deals’ on roofs: they offer the thinnest material available (lasting 15 years) and in order to work faster they quite often use stapes instead of nails.
Their ‘deals’ usually start having problems within 5 years… Shingles blow off during the stormy season causing leaks. Missing or improper installation of flashing will cause problems like for instance water intrusion in the walls…
And last but not least, there is a severe risk in using roofers who are not properly insured or don’t have a license. Should a roofer fall off the roof, the homeowner may be responsible. Depending on the insurance this may or may not be insured under your home owners insurance… You might want to talk to your insurance agent first before contacting a roofer. If you have been following my blog you know that I would recommend contacting Erin Temple with Vantreo Insurance – (707) 303-2574…

A good roof over your head is important if you need a referral to a reputable, local manufacturer certified roofer, just let me know.

Mirjam