Limited Time $18,000 in Combined Homebuyer Tax Credits

Wow! What an opportunity for first time California homebuyers and move-up buyers purchasing brand new homes. Between now and April 30, 2010, if a first time buyer enters into an accepted contract and closes before June 30, 2010, they may qualify for up to $18,000 total in Federal and California State tax credits during a brief window of opportunity.

Move-up buyers, who are not first-time buyers, purchasing a brand new home and have lived in their present home for at least five years, may also use the same time frames to receive up to $16,500 in combined tax credits as permitted under the federal law.

According to the California Association of Realtors, "Under a newly enacted California law, a home buyer may receive up to $10,000 in tax credits as a first-time buyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits."

California lawmakers allocated $100 million to first time buyers and another $100 million for buyers of brand new homes to be applied in equal amounts over a period of three taxable years. So the new tax credits will only be available until the funds run out and there are certain limitations. The funds are limited, so don't dally.

For more information and details, visit the official
California Franchise Tax Board website


--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
Direct (619)258-8585
DRE#01409760

Buyer's Representation is Free, Free, Free!

I recently had a friend call me after he had entered into a contract on a home, only he used the listing agent to represent him,as the buyer. He thought that by using the listing agent with a cash offer, that he was more likely to get his offer accepted. Which may be true, since the agent will be double ending it--walking away with the full commission rather than just half. Can't blame the agent. Dual agency is legal in California. In most cases, an agent can represent both parties fairly...or so it seems.

Regarding commissions, the standard of practice in Southern California is the seller pays the full commission to their listing agent who splits it with the buyer's agent. Therefore the buyer who believes he is saving money and still getting the best representation, may be sorely mistaken.

Ironically my friend called me, someone he trusts, to ask if I knew of someone that could look over his paperwork. He hadn't used agent in his last real estate transaction and didn't understand all the paperwork. I had to explain to him that I could not, nor would any ethical realtor, review the paperwork after hiring the listing agent to represent him. This would be interferring with their agency and could land myself or the other realtor in hot water. So I had to refer him to a real estate lawyer. And they aren't cheap.

I explained that the next time, he would be better off hiring a separate agent to represent him and then he would feel like someone is really looking out for his best interest. Often the listing agent has established a relationship with the sellers, making it difficult to be impartial; as well as it is often difficult to keep certain confidential information from slipping out.

While I have done dual agency in the past, and believe that in certain circumstances it may be a good way to sell a more challenging home. However, I firmly believe the best way to buy a home is with your own FREE representation.

--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
Direct (619)258-8585
DRE#01409760

Hidden Treasure

Tax day is just around the corner, and many homeowners forget that they’re sitting on a wealth of potential savings — in their home. Tax deductions for homeowners are plentiful, so keep these guidelines in mind as you prepare your return this year.

First, know that if you deduct home expenses, you have to file form 1040 (also known as the long form) and itemize your deductions on Schedule A. While it can be a headache, the rewards might be worth it.

Remember that the mortgage on your home is deductible — at least the real estate taxes, qualifying interest and premiums, for a loan up to $1 million, according to the IRS. Note that fire or homeowner’s insurance premiums and the principal mortgage amount are not deductible. Here’s how to calculate what’s deductible: Enter your total real estate taxes for the year, and enter the number of days in the property tax year that you owned the property. Divide the number of days by 366, and multiply that number by your total real estate taxes for the year.

Paid off your mortgage early? The penalty you might have received is tax deductible as home mortgage interest, as long as it’s not for a specific service performed or a cost connected with your mortgage loan.

You may have heard that home repairs can qualify for tax deductions, but home improvements are the real winners. An improvement is classified as anything that adds to the value of the home — for instance, making a room handicapped accessible or adding a deck to the back of your home. Always keep receipts and records — and remember, if you borrowed money for that improvement, the interest on the loan is tax deductible, just as it is with the mortgage payments.

Another item many homeowners forget is deductions for loan origination fees, better known as “points.” One point is equal to 1 percent of your loan. Depending on how many points you’ve accumulated, you may be eligible to deduct them. There are rules about deducting points, but a financial professional can help you sort through them.

And finally, don’t forget that if you upgraded to energy-efficient Energy Star windows, stoves or water heaters, those may be eligible for a tax credit. Check www.energystar.gov to see if your improvements are included.

Reprinted from The Residential Specialist "Your Home" March 2010

6 Tips to Get Rid of the Cigarette Smoke Smell

Yes indeed, the vacant home was beautiful. It had a manicured lawn and yellow daffodils lining the home entrance. However, when I opened the front door a wall of stale smoke took my breathe away.

After roaming through each orderly, well decorated room, when I asked the buyer what they thought of the home, the buyer said, "It is absolutely beautiful." He hesitated looking at his wife, "But we can't live with this smoke smell."

While some odors are easy to fix, empty the trash and litter boxes, eliminating the smell of smoke can be more challenging. Here are 6 Tips to help. Always be sure to test any products mentioned below on small areas that you are cleaning, before proceeding forward to avoid damage.

1. Stop Smoking In or Near the Home and remove all ashtrays.

2. Clean All Washable Surfaces including windows, screens, counters, etc. with 1 part vinegar and 3 parts water. Change all air filters. For all those surfaces that can't be washed, a couple of products that you can find online that have been recommended by others for eliminating smoke odors are "Smells Begone" or "Vamoose!" .

3. Prime and Paint Your Walls. First prepare all walls, by washing them with vinegar water and allow to dry. Then use KILZ primer before painting the walls. The KILZ is known to conceal stains, and seal the odors from emerging after painted.

4. Professionally Clean or Change Carpet and Upholstery. If you are unable to change the carpet or furniture, read the manufactures cleaning instructions first to avoid damaging them or voiding any warranties you might have. Again after testing a small area, sprinkle baking soda on your carpet and leave it for three to four hours before vacuuming. Leave boxes of baking soda open in the rooms to help absorb. Then have your carpets and upholstery professionally cleaned.

5. Replace, Wash or Dry Clean fabric window coverings.

6. Open Windows and Place Boxes of Baking Soda around the room and leave them for several days. Baking soda should absorb any lingering cigarette smoke odors. You may need to repeat this process several times to completely get rid of odors.

When buyers are looking at homes to purchase, they use not only their sight but they also their sense of smell. So don't let your home be remember for its cigarette smoke odor.

Virginia Hall
ABR®, CRS®, e-Pro®, GRI®
Coldwell Banker Residential Brokerage
Direct (619)258-8585
DRE License #01409760

Short Sale--An Oxymoron--A Word for Wait

People hear "short sale" and think "Great! It won't take too long". Unfortunately, the term short sale refers to the home selling for less than the sellers owe on it. So they will come up "Short" of what they owe.

Because the banks aren't anxious to take the loss, they mull over the sellers' financial records and the process takes anywhere from 3 months to 6 months on average to get an acceptance, if the bank approves it. There are circumstances where the bank won't approve the short sale, and the home moves into foreclosure.

What happens while you wait and wait for an answer to your offer? Once your offer emerges from the bottom of the piles, the bank starts by reviewing the seller's financial records. In variably, they are missing or need updated records. Next they order their own appraisal or a Broker Price Opinion (BPO) to insure the offer price is reasonable. Then they ask for the breakdown of the closing costs to see what they can cut there.

So you wait and wait, and then finally the day comes when they send an approval letter. Now the race is on. The banks will typically give you no more than 30 days to get it closed and will coerce you with late fines.

So is all the waiting worth it. If it is the home you have been searching for, it is usually worth it in the long run. You can usually get a home at a good price, and if nothing more you learn a valuable lesson in patience.

“Patience and fortitude conquer all things” Ralph Waldo Emerson

Virginia Hall
ABR®, CRS®, e-Pro®, GRI®
Coldwell Banker Residential Brokerage
Direct (619)258-8585

They're Back....Multiple Offers in the San Diego Housing Market

While the medium home prices in San Diego County may be climbing slower than in 2003 in, due to the uncertainty of the economy, the bidding atmosphere with Multiple Offers is back.

As the inventory of homes decreases below the normal 6 months of inventory in most areas of San Diego County to 2-to-3 months and the number of buyers increased 10%, compared to a year ago, the competition for good homes is driving buyers into a competetive bidding frenzy. Buyers are making offers on multiple properties, and sellers in the lower end of the housing market are getting multiple competing offers.

"My goal is to get a house this year," said one of my serious first time home buyers. Many are racing towards that goal before the $8,000 Tax Credit expires, before the giant carrot disappears from underneathe their noses April 30th. To add to the mix, the government added in a $6500 tax credit for repeat buyers. And then there are the investors buying while prices are low.

Sellers and banks are looking for the cash to back up those rising offers, should the appraisal not come in and the buyer may have to pay more cash to make up the difference.

So what are buyers to do?

1. Lite Fixer. Look for a home that may not be perfect. Look for the potential in a home. Cosmetic repairs can always be done one at a time. Look beyond the stained carpet and scuffs on the walls. Ask the seller to help with your closing costs so that you can use that money to replace the carpet and paint. Also, the tax credit can be used in the near future for needed repairs or updating. But beware, avoid homes that require too many "honey do's" unless you have lots of money to sink into the home. Watch "The Money Pit" with Tom Hanks and Shelley Long before jumping into a home with lots of issues.

2. Buy Low. Buy a home below your means, below your maximum preapproved price, so that you have room to bid up. While you think you are doing good by giving the seller his asking price, multiple offers pushes the price upward and you may need room to meet that higher price.

3. Be Realistic. Most importantly, listen to your Realtor's advice and be realistic. Listing agents toss the low ball offers aside, unless you have "all cash" for a quicker sale. Know what the comparable homes are running in the area and plan to make a fair market value offer.

For more tips on being a successful buyer in this challenging market, read 5 Tips How FHA and VA Buyers Can Succeed

--Virginia Hall
ABR®, CRS®, e-Pro®, GRI®
"2009 & 2010 FIVE STAR Real Estate Agent(SM)”.
Coldwell Banker Residential Brokerage
Direct (619)258-8585

5 Tips How FHA and VA Buyers Can Succeed

First time home buyers grow frusted! Good homes at good prices are being snatched up by All Cash and Conventional buyers. Homes that are priced well below the market value, a technique called Power Pricing, are meant to get multiple offers in record time. The frenzy created by a low priced home creates an atmosphere of desperation amongst buyers. Each buyer outbidding one another in an effort to secure the great deal.

Unfortuately, there is a heirarchy of loans: "All Cash" is the best, then Conventional, FHA and lastly VA loans. How is an FHA or VA buyer to compete?

1. Representation. Serious buyers must employ the help of a qualified Realtor who can help them catch the brass ring. However, they need the experienced agent to help them understand that everyone is looking for the elusive great deal! They need a representative that can help find a home with their needs in mind, at the same time being realistic.

When buyers are first exploring the market, there are many websites (i.e. Realtor.com, Trulia.com, Redfin.com, etc.) for them to investigate on. However most of these websites have a 48hr filter delay. In this market, those great deals may have multiple offers and not even available in 48hrs.

A Realtor can set up an automated search that is directly connected to the MLS, such as Gateway, notifying buyers immediately of new listings or changes.

2. Ready to Jump. Buyers need to check their personalized online searches daily. They have to be ready to go, to make a quick decision. While a buyer is thinking it over, another one has put an offer in on it. What buyers need to remember is that they can change their mind within a certain period of time defined in the purchase agreement without risk of losing any money.

3. Closing Costs.For sellers, FHA & VA buyers are less desirable when compared to "All Cash" and Conventional loan buyers. The FHA and VA buyers have less down and are less financially stable, often needing assistance from the seller with closing costs, and may not qualify for a loan at the end of the road. Where the all cash and conventional loan buyer may have more money and if the appraisal comes in low, they are more apt to pay the difference. So what is an FHA and VA buyer to do? The price and conditions are the only way to stand out.

The all cash and conventional buyers know they have an advantage and may make lower offers. However the FHA and VA buyer has to come up to the plate with a reasonable or higher offer. With a Realtor's assistance, carefully analyse the comparable home prices and consider the condition of the property and make a reasonable offer. The offer may be higher than the asking price.

If you have the money for closing costs, pay your own closing costs. While you are searching for a home, continue to save your money for the down payment. This will help give you an advantage. If you need the closing costs paid for by the seller, you will need to add those costs into the offer.

4. Ask for Less. When buying a Bank owned property or a short sale, the less a buyer asks for the better. In a normal market, the buyer may ask for appliances or additional items such as a home warranty that the seller would typically pay for. However, the banks don't want to give any frills.

While normally in Southern California, the termite inspection is paid for by the seller, in Northern California the buyer pays for it. In the case of Short Sales and Bank Owned properties, the tide seems to be turning. While VA buyers have to have a termite inspection and clearance, the buyer should put a maximum price tag on the repairs. Banks don't deal well with unknowns.

FHA buyers may want to avoid asking for a termite inspection with repairs altogether, if the appraiser will allow it. Especially, on condominiums where the HOA usually pays for the exterior termite inspections once a year. Buyers should let the home inspector know this so that they can look for any issues of wood rot under sinks.

In regards to houses, if the seller of the short sale home purchased it in the past few years it more than likely had a termite clearance at that time and less likely to have costly damage and repairs needed. However, if the house shows lots of signs of deferred maintence, this may not be the house for a first time home buyer. The bank wants to give you a great price for the house "as is".

5. Stand Out. Buying a home is an emotional purchase. By appealing to the emotional side of a seller, buyers may beat out the competition. In a letter, buyers should give the seller a little history of themselves and reasons for them to like them. Especially Veterans, they need to use their service to our country to their advantage to tug on those heart strings. Even add a nice photo.

These tips will hopefully help a FHA and VA buyer succeed. But the biggest tip is to patient and persistent.

--Virginia Hall
ABR®, CRS®, e-Pro®, GRI®
Coldwell Banker Residential Brokerage
Direct (619)258-8585DRE#01409760