Despite being in a seemingly insurmountable deficit, the great state of California has signed a new bill into law to allocate $200,000,000 new dollars toward aCalifornia tax credit for first time home buyers and new construction home.
This California tax credit will be for up to $10,000 for people that close escrow after May 1st of this year. If timed correctly, California home buyers will even be able to double up the California tax credit with the $8,000 federal tax credit for a whopping $18,000 on contracts that are signed by April 30th and close by June 30th.
Something to take note of is that the new California tax credit is for a set amount of money, in this case $200,000,000. Of that money, $100,000,000 is earmarked for first time home buyers and the other $100,000,000 is set aside for buyers of new construction. When this money has been exhausted that will be the end of the program. The first come first serve structure is intended to have the effect of creating urgency, which should provide a jolt to the California housing market.
Really, this is an extension of a $100 million California tax credit that was sign into law on February 2009, but ran out of funds after more than 10,000 home buyers claimed the credit in only four months.
If you are like most California home buyers, you probably did not even find out about that credit. It just kind of came and went without much publicity. This time I want to make sure you are aware so that you can take advantage of the program if it is right for you.
Over the last few weeks I have had many people ask me questions regarding short sales and the different terminology that usually goes along with it all. I thought it would be good use of all our time for me to lay out some of the more common questions with answers so they can be used as a reference. I will be happy to answer any additional questions left as comments.
Q: What Exactly is a Short Sale?
A: In very simple terms, a short sale is when a home owner sells their home for less than what they owe the bank. It's that simple. For example, if somebody owns a property that is worth $500,000 but they owe $700,000, which is quite common in today's market, the only way they could sell it would be to either come up with an additional $200,000, or to have the bank agree to a pay off $200,000 short of what they are owed. The latter would be a short sale.
Q: Does the bank own the property in a short sale?
A: No. The owner and seller of a short sale is the private individual or entity that has title to their home. If you were to sell your home as a short sale you would still be the owner, not the bank. The confusion is created because we always hear about how agents are going to send offers on to the bank, or that a short sale package will be submitted to the bank. This is because the bank does have the final say on whether or not to accept the short pay, which essentially controls your ability to sell the home. This makes sense when you consider that the property owner has no equity in the home and is asking the bank to take less money than they are owed.
However, unlike a foreclosure, which can be forced on a home owner, the bank has no right to force you into a short sale, no right to make you accept an offer from a short sale buyer, and no right to impose anything on you other than the legal foreclosure process.
Q: Is a shot sale or foreclosure worse for my credit?
A: From a pure lending standpoint, a foreclosure...
In the last few months I have had many investors approach me about purchasing a San Diego income property with two to four units. Some wanted to find something that was fully rented out and keep it that way. The really nice thing about that approach is that it is not hard to find properties that are fully rented and for what amount. That means that much of the cash flow guess work is eliminated for you and you can just judge it based on the math. At that point the numbers decide for you. It's hard to argue with math.
However, I have also been approached by plenty of potential investors that are also looking for a place to live and figure they can kill two birds with one stone. At first glance it almost seems like a no brainer to find a four unit property where the rent from the first three units will pay for your living expenses in the fourth unit. You get to live for free!.
But not so Fast. See what many potential investment property buyers don't consider is that if you live in one of your units you are most likely going to face two major downfalls. They are:
- Higher Maintenance Costs: This one may seem strange at first glance but it is pretty obvious if you spend a minute thinking about it. Picture yourself living in a rental as you either do now or have in the past. Now, what would you do if one of your doors was sticking just a bit? Nothing major, just a little tiny bit. I am willing to venture that you would have done one of two things. Fix it yourself or ignore it. Now picture the exact same scenario but with your landlord living in the unit right next to yours. If you are anything like me, you would run into him one day as you were coming home from work and you would ask him to come fix it. Now multiply that by the number of units the property you are interested in and by the number of little tiny things that would never merit a call to the landlord but may be mentioned...
Amazing new Listing. Call 858.337.7409 To View This San Diego Condo.
All we need is at least a two hour notice and we will arrange for you to have a private viewing of this luxury waterfront condo. There were many great custom modifications that were done to this already fabulous property that you will want to see in person.
There is a reason that real estate agents shouldn't count their commissions until they actually get the check and that's because sometimes real estate transactions fall apart when you least could expect it. Granted the advice and guidance of an experienced agent can help you avoid most jams and keep deals together, but that plays right into one of the top 6 reasons why real estate transactions fall apart (clients don't always listen).
If your list is different or you think I left anything out please let us know. We'd love to hear your thoughts and personal experiences!
Now for the list:
- Man vs. Woman In the current market environment buyers have too many options, which can cause some indecision. This is just a simple function of human psychology. Trust me, I know because I am in the market to buy a home with my new fiancee myself. You would think that as a real estate agent with years of experience I would be able to avoid a simple issue like this. Well let me tell you, having real estate experience does not equal automatically being on the same page as your loved one. One may think that it is more si-highlight--primary to have an extra bedroom while the other prefers larger room sizes. One wants a yard, the other wants a condo. One wants something fully updated, the other wants to do the remodel themselves. One wants modern, the other wants traditional....and on and on and on it goes. When you really sit and think of all of the potential differences in opinion it is amazing that men and woman can agree on a location, style, property type, bedroom count, etc. as often as they do. The problem is that many also do not fully discuss these issues, or one of the two parties do not voice their opinion as loudly as they should until it is too late and they are already in escrow. This obviously causes escrows to fall apart due to the buyer's lack of comunication with each other. To avoid this:Make sure you are honest with what elements are si-highlight--primary...
Not surprisingly, there is a lot of confusion among San Diego home buyers as to what it means when a short sale is in contingent status. The goal of this post will be to clarify what is means exactly for a property to be reported as contingent status, as opposed to pending. You can also visit our short sale questions and answers for more information on other related topics.
What Is A Short Sale?
Also known as short pays, a short sale takes place when a property is sold that is worth less than what is owed. Its that simple. For example, if has a market value of $300,000 but the loan against it is for $500,000 then the owner will need to attempt to sell it through a short sale, unless they were to pay the bank the $200,000 to make up the difference, which clearly most people do not have the ability or often the desire to do. Another way to look at it is when a property is sold that has negative equity. Understood? Good.
What is Contingent Status?
In a normal scenario property would be listed for sale and be active on the San Diego MLS. Theoretically, after few days, weeks, or months on the market it would receive offers and eventually accept one. The home would then go into escrow, or what is known in the MLS as pending status. At the conclusion of the escrow the home would be reported as sold.
Now in a short sale there is an extra step to that process because the sale is actually contingent on bank approval. This is because the owner has no equity and so it is the bank that must decide how low of a short pay they are willing to take vs. foreclosing on the property. In theory, other than some tax consequences, the owner of the property really has nothing to lose. They don’t care if the property sells for $270,000 or $300,000. The bank, however, not only has to decide how much of a hit they are willing to accept but also has an interest in protecting...
San Diego Home Finder is very proud to report that Daniel Beer, the site’s founder, has just been awarded theSan Diego Five Star Real Estate Agent Award for client satisfaction as reported in the March issue of San Diego Magazine for his service helping people buy and sell homes and investment properties in the greater San Diego area. Winner's of the San Diego Five Star Real Estate Agent Award are considered to be the best agents in San Diego County.
The award is given to agents that receive the highest marks for customer satisfaction from their clients. In essence, it is a people’s choice award, which really makes it that much more special.
The San Diego Five Star Real Estate Agent Award is given after an extensive survey across the county. The Best San Diego Real Estate Agent in each part of the city with the highest marks wins the award. Some of the larger areas will have more than one winner. Agents are judged on criteria that is meant to help future clients predict who is the Best San Diego Real Estate Agent with the highest level of service. We are very pleased to have Daniel Beer win the 2010 award.
We hope to continue exceeding the expectations of our clients and are very excited for the year ahead as we are already off to a great start.
Daniel Beer and San Diego Home Finder