Blog provided By Scott Harrison Bay Area Realtor of 30+ years
September 26th update On Sept.30, the statewide eviction moratorium enacted in response to the COVID-19 crisis will end. However, some state and county tenant protection rules will continue.
Rental properties in Alameda County are still covered by an eviction moratorium that will be in effect until 60 days after the Local Health Emergency ends. Property owners and managers cannot evict a tenant in Alameda County for failure to pay rent. Evictions are allowed if the property is being removed from the rental market - including if it is being sold. County officials can not predict when the Local Health Emergency will be lifted.
An eviction moratorium for rental properties in Contra Costa County ends Sept. 30. However, those properties will still be covered by the statewide COVID-19 Rental Housing Recovery Act.
According to the California Association of REALTORS® (C.A.R.), the new rules create an exemption from the just-cause eviction requirements for single-family homes and properties built within the last 15 years. They also establish new noticing requirements for rent due and applying for Emergency Rental Assistance.
September 12, 2021 Governor Newsom signed three bills that may increase the supply of housing throughout California
SB 8 (Skinner) limits local governments from rejecting new housing developments that meet local zoning requirements.
SB 9 (Atkins) allows owners of single-family detached homes to subdivide their lot and build up to four units. SB 9 prevents profiteers from evicting or displacing tenants by excluding properties where a tenant has resided in the past three years. Owner occupancy requirement, requires a homeowner to live in one of the units for three years from the time they get approval for a lot split.
SB 10 (Weiner) allows for higher-density residential development near transit centers.
August 1 st 2021 Alameda County has announced a new round of AC Boost, Alameda County’s Down Payment Assistance Program, and they are now accepting new pre-applications! The program offers loans of up to $210,000 to middle-income first-time homebuyers who live in, work in, or have been displaced from Alameda County.
The deadline to apply is August 30, so learn more TODAY or submit your pre-application at www.acboost.org or call (510) 500-8840. Applying is free, fast and simple. No payments due during the term of the loan, making your mortgage payment affordable, requires repayment only when (1) the 30 year term has ended, (2) the home is sold prior to the 30 year term ending, (3) the owner would like to take cash out of the home in a refinance or (4) the owner no longer wishes to occupy the home. At that point, the owner repays the amount that they borrowed plus a proportional share of the increase in the value of their home. details www.acboost.org or call (510) 500-8840
Covid 19 impacted us all in may ways. Renters Landlords court proceedings frozen, City State Federal and county rules implemented often until health crisis is lifted. The most recent June 30th 2021 when Gov. Newsom extend the state’s moratorium on eviction (AB 832) until September 30th, 2021. To offset burden from landlords this agreement includes $5 billion in federal rental assistance to landlords and tenants who were impacted by Covid 19.
San Leandro Measure VV, a property transfer tax measure passed November 3rd 2020
increase to the property transfer tax from $6 to $11 per $1,000 of the price, for city services including street repair, COVID-19 economic recovery, emergency response and youth violence prevention programs.
October 2020 Governor signs A.B. 3182 bill impacting Condo Rental restrictions restricting any association governing documents from restricting percentages of rentals lower than 25% .
September 2020 California state lawmakers passed a plan to protect tenants from eviction through January as long as they pay 25% of the rent due starting with the month of September.
This minimum of 25% of the rent can be paid each month, or it can be paid in delayed payments as long as all of it is paid by January 31, 2021. Gov. Newsom signed the legislation.
Tenants are still responsible for paying unpaid amounts to landlords, but other than the 25% of the rent due beginning in September, any rent unpaid between March 1, 2020, and January 31, 2021, because of a COVID-19 related inability to pay cannot be the basis for an eviction.
Landlords will be able to recover this debt in court, however, beginning March 1, 2021, and small claims court jurisdiction will be temporarily expanded to allow landlords to recover these amounts.
Passing of Prop 19 gives homeowners chance to transfer their existing property taxes anywhere in the state regardless of the price of the home. Those eligible include victims of wildfires and natural disasters, severely disabled and home owners over 55 years of age sale of principal residence.
Are Evictions back? The Judicial Council met and voted to end the unlawful detainer court freeze on September 1, 2020. Beware that between now and September 1st, expect emergency unlawful detainer legislation from California legislature, city or counties. These eviction moratoria don’t just freeze access to the courts, they prohibit landlord delivery of notices to pay rent, a notice of termination of tenancy, etc., with some having significant fines/penalties for breaches. Sound advice: Never undertake the deliver of these notices without first consulting a local landlord’s attorney. 08/26/2020
Alameda County Alameda County is now offering rent assistance to tenants impacted by the COVID-19 crisis. The Emergency Rent Assistance Program (ERAP) provides grants (paid directly to the landlord) for tenants in Alameda County earning no more than 50% of the Area Median Income. Other city programs with in Alameda County have their own local rent assistance programs including.
Alameda County Supervisors intends to implement an ordinance will allow tenants up to 12 months to pay over-due rent and also converts over-due rent into consumer debt that must be recovered via the small claims court process.
Alameda County staff have asked rental housing owners and managers to contact ECHO Housing, a local non-profit housing services provider, for more information about how the new eviction moratorium applies to your rental property and tenants.
You can reach contact ECHO Housing at email@example.com 06/09/2020
City of Oakland has enacted additional tenant protection February 4th 2020 Ordinance 13581 which makes it unlawful for Oakland landlords to consider criminal history in tenant screening rental housing. No background checks, no higher than advertised rent or deposits implementation or if they have criminal history they can accuse you of discrimination. There even may be a requirement to allow immediate family members addition to lease.
Who is excluded ? If you occupy as your principal residence a single family duplex or triplex or rent out rooms and are replacing an existing tenant. Call 510-238-6182 for more details.
March 28th 2020 Governor Newsom order prohibits landlords from evicting tenants for nonpayment of rent and prohibits enforcement of evictions by law enforcement or courts through May 31, 2020. It also requires tenants to declare in writing, no more than seven days after the rent comes due, that the tenant cannot pay all or part of their rent due to COVID-19.
The tenant would be required to retain documentation but not required to submit it to the landlord in advance. And the tenant would remain obligated to repay full rent in a timely manner and could still face eviction after the enforcement moratorium is lifted. The order takes effect immediately, and could provides immediate relief to tenants for whom rent is due on April 1st.
Federal Government orders the Department of Housing and Urban Development’s to halt foreclosures and evictions for 60 days on single-family homes with loans through the Federal Housing Administration plan. That would apply to roughly 8 million units, according to HUD.
That will not effect most Americans who rent, many of whom have lost their jobs in the sudden economic slowdown caused by the coronavirus outbreak they will not be eligible for eviction protections, despite what President Donald Trump says. 04/01/2020
New laws enacted on January 1, 2020, expand the ability for Californians to Construct a Second Dwelling in the backyard of their residentially zoned single-family residence, either attached or detached from the primary residence, or by converting a garage.
Another law will limit cities’ ability to prevent homeowners from building second and third units less than 16 feet tall provided there is enough space to build them at least four feet from property lines, while a third law limits the fees cities and counties can charge people who want to build additional units.
Under the new provisions, the new ADU must be secondary in size to the primary residence. A structure attached to the primary dwelling may be up to 50 percent of the size of the single-family home up to a maximum of 1,200 square feet, while an ADU detached from the residence may be up to 1,200 square feet regardless of the size of the primary residence.
In every case, the homeowner must obtain a building permit.
2019 New Statewide Rental Housing Laws Governor Newsom signed into law several bills that directly impact rental housing:
AB 1482 establishes statewide rent control and just-cause eviction requirements for all rental properties with the exception of single family homes and condominiums not owned by a corporation and only protect tenants who have been in possession for a year or more. Certain types of housing are exempt including: Single family homes and condos if:
Tenants have received notice of the exemption and,
The owner is not a REIT, corporation, or LLC owned wholly or in part by a corporation
Homes built within the last 15 years
Owner-occupied single-family homes where two or fewer rooms are rented out (exempt from just cause but not rent cap)
SB 329 prevents landlords from refusing to rent to tenants who have a Section 8 housing voucher. Landlords may no longer refuse to rent to a tenant solely on the basis of a tenant’s participation in a housing voucher program such as Section 8. Doing so would constitute illegal “source of income” discrimination.
However, landlords remain free to reject prospective tenants, provided they do so on otherwise lawful grounds that are not based on a tenant’s receipt of a housing subsidy. Landlords also remain free to charge rents as allowed under law and are not be required to reduce rents even if chosen rent levels would make a unit too expensive for a voucher holder to afford it. Further, landlords can continue to use appropriate financial and income standards in making rental decisions, like verifying income levels or checking creditworthiness. But landlords no longer have the option to forgo participation in housing subsidy programs when presented with a prospective tenant who is qualified to rent from them in all other respects.
AB 1110 requires landlords to give tenants a 90-day notice if their rent will be increased more than 10% during a 12-month period.
SB 644 creates a new cap on the security deposits and other protections for active-duty members of the armed forces.
2019 Transfer taxes: New city of Hayward and Oakland ordnances go into effect. Upon selling the Oakland city transfer tax is now a sliding scale based on sale price. Details at Transfer tax page
Oakland Measure M Vacant Property Tax act Penalizes owners for leaving residential and non-residential properties vacant if not unused for at least 50 days in the year. This includes town homes and condominium where a $3,000-$6,000 will be assessed on your property tax bill.
2019 Hayward and San Leandro brings First time buyer program back. Hello Housing is open a 45 - day application period to identify first 75 households to receive assistance in buying their first home in the city limits. 1-800-480-9020 ex 224
Castro Valley Sanitary District July 1st 2019 Any property sold is required to comply with ordnance #179. To inspect, repair or replace their sewer lines. CV San officials claim the inspections and repairs will help prevent rainwater from entering the sewer system and causing overflows at the Ora Loma processing facility.
There is a grant that could cover 50% of the cost of the sewer repairs required. www.cvsan.org/grants
Hayward Re-Regulates Thousands of Rental Units
On Tuesday, May 29, 2018 the Hayward City Council voted unanimously to re-regulate more than 7,000 rental units and place a moratorium on de-regulating units subject to its Residential Rent Stabilization Ordinance (RRSO).
Effective immediately, the City of Hayward will significantly limit property owners seeking exemption from the RRSO requirements. The Council also re-interpreted the RRSO so that it now applies just-cause eviction requirements to units that had been previously decontrolled.
San Leandro Targets Rental Property Owners
On Tuesday, Sept 5, 2017 the San Leandro City Council will take action on a Tenant Relocation Program that will require property owners to provide up to $7,000 in relocation assistance.
Tenants would be eligible to receive the relocation payment if their rent is increased more than 12% during a 12-month period and the tenant elects to not remain in the property.
The Relocation Program will apply to virtually all multi-unit rental properties in San Leandro including duplexes. Property owners who have more than one rental unit, including condominiums, may be subject to the Relocation Program.
There's still time to convince the City Council that rental properties with four or fewer units should be exempt from the Relocation Program. If you want to email the City Council or testify at the Sept 5 Council meeting.
Union City Has New rules for handling rental property in the city. New Ordnance requires a Just cause for eviction. It also requires all Land lords to give copy of the Ordnance to all renters with in 60 Days Of May 10th 2017 More details on the City Of Union City web site.
New Law 2017 Bed Bugs commencing July 1, 2017 and for existing tenants commencing January 1, 2018. Landlord is prohibited from showing or renting Effective 7/1/17 and 8/1/18 vacant units if the landlord “knows” it has a current bed bug infestation. The landlord must provide a written notice to the prospective tenant. And beginning January 1, 2018 this notice must be given to all other tenants. The notice must be in at least 10-point type and must include at least the following:......Contact me if you need the verbiage.
New Law in 2017 This law authorizes a city or county to provide by ordinance for the creation of junior accessory dwelling units ( Second Units) in single-family residential zones. It requires standards for the creation of a junior accessory dwelling unit, required deed restrictions, and occupancy requirements. Increased floor area of
an attached ADU must not exceed 50% of the existing living area and no passageways shall be required in conjunction. It prohibits an ordinance from requiring, as a condition of granting a permit for a junior accessory dwelling unit, additional parking requirements....
New Law 2017 FHA Federal Housing Administration to reduce its minimum owner-occupancy ratio to 35 percent in order for a condominium project to be acceptable for FHA insurance....
New Law in 2017 that effect real estate and land lords Deliver of the
Residential Environmental Hazards booklet. Under Civil Code 2079.7 when a seller or broker elects to deliver this booklet the information is deemed legally
adequate to inform the transferee regarding common environmental
hazards (unless the broker or seller has actual knowledge of a condition). Delivery of this booklet is optional but effective on “real property” which includes all commercial and vacant land properties, but not multi-unit residential rentals of five units or more. This law goes into effect on January 1, 2017.
January 23rd 2017 Homesnap, mobile app allows consumers to simply take a picture of a home with their phone and receive all kinds of information about it for sale, rent or neither.
I am not trying to have you do all the work but empower you with a tool on your smart phone that you can get 90% of what ever you wonder about when you see a home. It could be boarded up, in Beverly Hills virtually any where, for sale or not there is no longer a need to call a stranger and ask questions. It is easy and best when used on your smart phone just click and upload the app. You will never wonder what homes sell for in any neighborhood again.
December 2016 Foreign Nationals can purchase Real Estate in California without a social security number or coming in person to the United States if they are paying cash. California is open to investment if the state and invites Foreign investors to purchase.... More on this November 2016 Some form of Rent control is on the rise. Hayward, San Leandro, Union City, Oakland and other East bay cities have Regulations concerning Land lords and renters.... More info on this; October 2015 Market is shifted to a market we once know as a cyclical market. Typically after school starts things cool off, market times increase and prices tend to stabilize. This Fall is showing signs that we may have moved to that cyclical market that typically do not pick up till about April 15th the only thing that may stand out from this pattern is that in some areas inventories have shot up. The Bay East Association of Realtor Market Weather Reports say it is because many sellers who refused to sell while market was down are jumping into the market as prices have almost reached the top reached in 2006 with some markets have past peak driving inventories up. Though prices are still rising today it is at a slower pace. This has given first time buyers and others using government programs a window to ownership that was kept from them by all the cash buyers of last summer.
02/02/2015 Due to the change in the California marriage licence and gay and lesbian ownership of real property several changes were implemented regarding domestic partnership in transferring title , holding title, and related issues.
Market up date By Scott Harrison 2/22/2013
It has been some time since the market took off increasing prices with double digit numbers. Today the Market update is January 2012 to January 2013 the Medial San Leandro home price jumped 28.2%. Most communities we see this type of price range swing in the last year. Should you want the local numbers for your city call Realtor Scott Harrison 510-388-4536.
Today seller are demanding buyers not only to be pre-approved for a loan but proof of funds needed for down payment. The tables have turned so much from a buyer’s market to seller’s market that often listing agent are asking buyers to write offers "As Is" purchase contracts with no appraisal contingency.
It is a great time to sell whether you are doing a short sale or just cashing in on this HOT market. Who knows how long this market will climb before it turns again. Another good thing is I can generate offers on your home in one week and interest rates are at record lows.
San Jose joins the list of Bay area cities requiring land lords and others to pay a city business Tax. Along with Hayward, San Leandro, Union City, Oakland and others San Jose Has implemented an Annual City Business Tax. Amnesty is extended to March 29th 2013 and the city states that they are "not required to send notification to any person who is liable for the tax."
2013 Brings some new tax implications.
Several changes in how taxes have changed for those who own realestate.
A 3 % tax on those income earners who use the itemize deduction (Schedule A) who earn over $300,000 for married taxpayers filing jointly and $250,000 for single taxpayers.
There is a tax deduction for mortgage-insurance premiums in 2013, including FHA and private mortgage insurers.
Also there is a 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes in 2013.
Last capital gains rates will remain at 15 percent for those earning less than $400,00
Are home seller's is subject to the new 3.8 tax in 2012?
Individuals can exclude up to $250,000 in capital gains from the sale of their primary residence (or $500,000 for a married couple) as long as they have owned the home and lived in it for a minimum of two years. Even if they have to pay the tax which is due on individuals who earn Adjusted Gross Income (AGI) of more than $200,000 it will never be collected as a transfer tax on real estate of any type. It applies to Unearned income which is the income that comes from investing capital: includes capital gains, rents, dividends and interest income. It also comes from some investments in active businesses if the investor is not an active participant in the business.
September 30th 2012
Short sales just got a lot better for many sellers. I have seen both Chase Bank and Bank of America have given sellers incentives to do a short sale where the seller walks away with a $20,000 to 30,000 check at the closing table. Not every one will get this kind of money but so far in the last 4 months I have not seen any one who got turned down on the incentive.
Fanny May raises the 4 loan limit for non owner properties. Though they say the ban is lifted it may take big banks a long time to implement it. I has impacted me since I have 4 loans and with interest rates as low as I have seen them in 20+ years it is a good time to refinance or buy properties.
FYI the market under 500K is red hot. Multiple offers on everything that is priced fairly or makes a profit if rented.
Buying and selling a home can be a difficult process and you will get information form all around you. The best advise to follow is to carefully scrutinize the source and check it against what you have learned so far. Example. hear on the news housing starts or sales jumped 20% It this over last month, last year or from 5 years ago. It is Nationally, in California, or in the East Bay? Keep in mind that it did not say average price was rising or dropping.
Advise from Parents friends and others. Keep in mind or ask when the last time they bought or sold was, if it was in the last 65 days ask them the location and price range (your area and price may not have the same demand or inventory). Buyers should ask them how many homes they saw, how many offer they made and how difficult they felt the process was. What type of financing did they use? An all cash buyer may fee it was easy where as a VA buyer or FHA buyer may feel it was much more difficult. Seller should ask what pricing strategy they used, how did it work, did they feel open housed contributed to the sale and time on the market, was staging used, how much preparation and money did they put into it before it went on the market. Were there any incentives or price adjustments or concessions in the negotiations with the buyer? How much?
May 2010 California First Time Home Buyer Credit
The tax credits is available for the purchase of a principal residence between May 1, 2010, and closing on January 1, 2011.
The tax credit is limited to the lesser of 5 percent of the purchase price or $10,000. The tax credit is spread in equal amounts over 3 successive tax years. The tax credits are nonrefundable and unused credits can not be carried forward.
The total amount of tax credit for all taxpayers may not exceed $100 million and will be allocate on a first-come, first-served basis.
Should any of the following apply the taxpayers will not be eligible:
The taxpayer is under 18 years old.
The taxpayer received a 2009 New Home Credit.
The taxpayer or the taxpayer’s spouse/RDP is related to the seller.
The taxpayer is a dependent of another taxpayer at the time of the purchase.
You must occupied the property as your principal residence for a minimum of 2 years immediately following the purchase. For more see State of California web site http://www.ftb.ca.gov/forms/2009/09_3528.pdf
March 24nd 2010
Short sale What is in it for the Seller? Before today there was not much incentive for sellers to do a short sale instead of letting it go to foreclosure other than not damaging their credit report so severely.
HUD has revised rules for qualifying for a new loan In case of a Short Sales sellers are eligible for a new FHA loan if:
The Seller was current on the mortgage at the time of the short sale, and
The lender marks the short sale “as payment in full.”
Borrowers who were behind on payments at the time of the short sale will not be eligible for a new FHA loan for 3 years from the date of the short sale close date. Additional information check Handbook available at www.hud.gov
Department of Treasury 's Home Affordable Foreclosure Alterative Program (HAFAP) new rules Require lenders to answer a request for a short sale within 10 business days from receipt of purchase offer. The Home owners get a $1500 cash relocation incentive to assist in relocation deducted from the sale price starting in April 2010.
The California Home buyer tax credit bill AB 183, is providing $200 million for California home buyer tax credits. It allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes. You must closes escrow on a principal residence between May 1, 2010 and December, 31, 2010, or enter into a contract before December 31, 2010 and closes escrow before August 1, 2011, to be able to take the tax credit.
This credit is equal to the lesser of $10,000 or 5 percent of the purchase price to be taken over three consecutive years.You will have to live in the home as your principal residence for at least two years or forfeit the credit.
November 5 TH 2009
First time home buyer tax credit extended. They must have signed a purchase agreement by April 30, 2010 to qualify and home owners who have owner their home for 5 years or more can purchase another home could qualify for up to $6,500 Tax credit. There are income phase out limits starting at $125,000 and home price limitations are for under $800,000. If those limitations applies for non owner purchases is still sketchy.
September 28th 2009
Big question these days is “Is the worst of the housing crisis over?” Today we have a mixed plate at this point where Average sale price in some cities are up for the last 2 months while the cheapest homes are rising the upper end market has slowed this average change while it continues to drop.
I have seen Multiple offers on the lower priced homes since November 2008. Why have we not seen jumping prices due to many offers on some homes? I saw a home go up for $115,000 and when the agent marked it pending he had raised the asking price to $215,000 so if you study figures looking at asking price to sale price you see no change indicating a flat market. The appraisers are subject to new rules and regulations to separate banks from having any influence over appraisers so appraisers can state values with almost no effect on continues employment. If the list price to sale price looks flat why should they stick their neck out to start to raise values even if buyers are willing to pay 35,000 over asking. Many listing agents are directing sellers to avoid the highest offer in favor of offers with more cash down ( often excluding lower down FHA buyers from the market) to avoid the uncertainty of appraisal issues.
Is the market going to tank again or is it bent on a slow but steady recovery? November 30th 2009 the first time buyer tax credit expires but talk of extending and expanding it is out there today. The market generates multiple offers on much of the lower end homes, are the banks going to dump that vast amount of properties they are holding and stall or reverse this budding recovery? I will stick my neck out and say “ I do not see an seasonally adjusting market at this time and short of a 2 point rise in interest rates, this market will continue as it is today for another year or more.” By Scott Harrison Bay Area Realtor of 20+ years
May 19th 2009 Alameda county home prices this year.
Home prices countywide is mixed with a wide variance between the median sale prices over the last 2 months . I feel at this points the markets hit hardest are now raising and most of the markets not hit very hard are still dropping.
Single Family Apr. 2009 Feb 2009 Change $ Median Price Alameda $636,500 $545,000 + 91,500 Castro Valley $480,000$407,500+ 72,500 Danville $804,500$900,000 - 95,500 Dublin $602,500 $560,000 + 42,500 Fremont $484,000 $465,000+ 19,000 Hayward $245,000$260,000- 15,000 Livermore $391,000 $382,500+ 8,500 Newark $366,000 $380,000- 14,000 Pleasanton $665,000 $760,000 - 95,000 San Leandro $309,000 $337,500 + 28,500 San Lorenzo $287,600 $301,944 - 14,344 San Ramon $693,000 $599,500 + 93,000
What we are seeing is a lot less bank owned properties coming on the market and dropping home inventories this year.
March 12 2009 How the 2009 Stimulus plan can help you.
1. If your a first time home buyer and have not had a primary residence in the last 3 years but you can own rental property there is a tax credit if you buy.
2. If you own a home and have a mortgage which is hard for you to make the payment you may qualify even if your mortgage amount you owe exceeds your home's value.
Looking at foreclosure? The state of California just gave your bank incentive to participate in short sales. The California Legislature, as part of the recently-passed budget package, approved Friday, legislation SB2X-7 and AB2X-7, which provide for a 90-day foreclosure moratorium for those who first loan was recorded between Jan. 1, 2003 and Jan. 1, 2008
February 15th 2009 Stimulus Packages passes
On the housing front, the good news is that the legislation resets the conforming loan limit cap at $729,750, up from $625,500. Numerous counties in California experienced a marked decrease in their conforming loan and FHA limits on Jan. 1, and the stimulus bill reinstates 2008 loan limits through Dec. 31, 2009.
The bill also increases the first-time home buyer credit from $7,500 to $8,000, and removes the requirement that the credit be paid back if the buyer stays in the home for at least three years. It also extends the expiration date for the credit from July 1 to Dec. 1, 2009. Homebuyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009, to be eligible for the $8,000 credit
If you know someone who is having some trouble making your house payment specifics on how the Stimulus Package can assist you even if your home value is below your loan balance.
Everyone who is interested in the Real Estate market wants to know about their local market. Static's' for each city in Contra Costa and Alameda County can be viewed at http://scottgharrison.homestead.com/ScottInTheNews.html I have access to this info for other counties also just e-mail me your request.
September 30th While the economy and market wonders how the Congress will decide to fuel the economy and east credit worries. A new rules is due to go into effect in 2009 that effect the capital gains exemption of $250,000 or $500,00 on the sale of a principal residence. This could have a huge impact on some sellers who in the last 5 years have had some non qualifying use.
August 25th Housing stimulus package overview.
Encouraging First-Time Homebuyers to purchase – for primary residence only.
A. Gives a first-time homebuyer a REFUNDABLE Federal tax credit that works like an interest-free loan of up to $7,500 or 10% of the purchase price, whichever is smaller. (With a tax credit, you subtract the credit amount from the total you would otherwise pay to the IRS. So, if you owe $1,500 and you qualify for the credit, you would end up getting a $6,000 refund. But there are two big catches:
1. If you earn a modified adjusted gross income of more than $75,000 or $150,000 if you are married and filing jointly, the credit starts to phase out. For single people, it phases out at $95,000 of annual income, while for married people filing jointly, it phases out at $170,000.
2. You have to pay the credit back over the next 15 years, in equal amounts each year when you file your federal taxes. This makes it more like an interest-free loan than a true credit.
3. The tax credit is retroactive to home purchasers on April 9, 2008 and expires July 1, 2009.
B. Additional deduction – a homeowner who takes the standard deduction on their federal income taxes and does not itemize, can take an additional federal tax deduction of $500, or $1,000 if they are married and filing taxes jointly. This is gravy – you get it in addition to the standard deduction.
2. FHA A. Permanently increases the FHA loan limit in high cost areas to $625,000 after the stimulus bill expires on 12-31-08.
B. Increases the FHA down payment to 3.5% (Gifts allowed from family members, state and local bond programs)
C. Eliminates Down payment Assistance Programs as of 9-30-08. (Credit approval required by then).
D. 12 month moratorium on FHA risked-based premiums effective 10-01-08.
3. FHA Reverse Mortgages
A. Raises the loan limit nationally (not by count) to $625,000. Limits fees that can be charged on reverse mortgages…….
4. VA – increases VA Guaranty to raise no down VA loan • Prevents a lender from starting foreclosure against a returning veteran for 9 months after a soldier returns.
5. Neighborhood Stabilization
A. Provides $4 Billion in emergency assistance to communities hardest hit by the foreclosure and sub-prime crisis to purchase foreclosed homes at a discount and rehabilitate or redevelop the homes to stabilize neighborhoods and stem the significant losses in home values of neighboring homes. • These homes would be sold or rented to moderate income individuals and families whose income does not exceed 120% of the area median income.
B. Provides $180 million for pre-foreclosure counseling and $30 million in grants for legal counseling to assist homeowners in foreclosures.
6. Loan officer licensing – establishes a nationwide loan originator licensing and registration system that will set minimum standards for loan originator licensing to improve the oversight of everyone originating mortgage loans.
7. Re-negotiating mortgages (program expires 9-30-2011)
More details on these programs is available There just is not room to cover each aspect completely.
July 9Th 2008 Update: Local Lenders inform me that conventional lenders have labeled Alameda and Contra Costa Counties as "Declining Markets" and now many lenders are requiring a 25% down payment minimum.
A positive note I just added the AmeriDream down payment assistance program to my web site information on line. This program assists buyers with seller contribution to down payment allowing as high as 10 % of the sale price passed through a non profit for down payment and closing costs. Keep in mind that the down payment assistance programs are set to discontinue
Real life short sale experience.
This year I have closed 3 short pay sales. It is not always easy Example 1.
I have written 7 offers for buyer 1. wanting to buy those cheep homes that are Bank Owned or Short Sales. This is a update on the what has happened.
Short sale Via Corolla had 3 offers as of 5/18/08 and as of 9/3/08 it is Pending.
Short sale Via Vista had 3 offers as of 5/18/08 and as of 9/3/08 it is Pending.
Short sale Via Peidras has many offers on 6/18/08 and is Active as of 9/3/08.
Short sale Via Karl had 3 offers on 5/18/08 and is pending as of 9/3/08.
Bank owned St John status 5 offers 5/18/08 and is pending as of 9/3/08.
Bank owned Hacienda asking $329,900 offered 6/18/08 status Pending on 9/2/08
Hopefully this will not happen to you but on 8/30/08 the buyers lost his job. After 3 months and 2 weeks none of the 7 properties have sold.
This is not an isolated case. This week after waiting 3 month for the first and second lender to answer an offer from another buyer an agreement was reached but the seller got a work out offer from the bank and is going to keep the home and not sell and this buyer is out searching for a home again.
May 27th 2008 What I see today in one market.
I pulled up the numbers on all homes for sale in the zip code 94579 with the low of $299K and high at $825K and found about 1/3 were pending. I ran the homes under $436K and found 18 pending and 22 active which is almost 50%. These numbers reflect a hot market for the homes under $435K and is likely the beginning sign of the market turning around in this zip code.
Will you miss this market when it sling shots up again?
It is going to be easy to miss the signs that the market is turning around unless your Realtor is telling you the % of the short sales market and tracking them in each city your interested in. Some markets will not be so sensitive while others will shoot ahead in a big way. Since the number of short sales is held in the Realtor MLS confidential section which is not available to the public sites like Realtor.com, Zillo.com, Prurealty.com or any other public sites are allowed to display this info.
The markets which are not going to be so difficult to spot will be the markets with a low number of short sales and markets which has a high number of bank owned properties. The markets which have a high number of Short Sales will be the ones that surprise most when they sling shot into the over asking sellers market. To understand why consider that these short sales are taking 45-95 days for the banks to respond too. During that time the home shows active on the market and may have 3-7 offers awaiting a response from the bank. As the market heats up the bank owned and standard owner sales will almost all go pending leaving a large number of buyers awaiting the short sale bank decision on their offer. Most agents and buyers will see a large number of active homes so they will think there will be plenty of time to pick up on a deal because the inventory is so high. Lets assume this happens and 125 short sales are active and in 60 days 125 buyers get their offer accepted with a 30 day close (that is 90 days before people tracking sold prices will see it) and then the buyers who's offer did not get accepted go out looking again which would be about 625 buyers flooding out looking for homes in a small market of 100 active homes it will make a big impact. When you consider the number of buyers on the side lines waiting for the market to turn before the make offers jumping in it would sling shot things up in a big way.
Of course the accuracy of this prediction is only known after buyers market is gone.
Written 5/5/2008 By Scott Harrison Prudential Ca. Realty at that time.
Credit scores will be very important to future pricing on conventional loans.
Below are the increases FHLMC (Federal Home Loan Mortgage Company) will charge starting 6/1/08.
Credit score of 720 + best rates no adjustment.
680-720--.50 unless under 60% or less
660-680-- 1.25 from 70% up and .50 between 60 & 70%
640-660--1.75 from 70% up and .50 between 60&70%
620-640--2.50 from 70% up and .75 between 60-70%
620 and below--2.75 from 70% up and .75 between 60&70%
I would imagine that Fannie Mae will do this also. These costs just reflect the delinquencies the agencies are seeing in their portfolios at the moment. This is true risk based pricing.
1) Our loan agents can help improve your score and thus make pricing more affordable.
2) Consider FHA/VA/Cal Vet loans - no pricing adjustments as long as the middle score is over 620
from Tom Wardrope Vice President Cherry Creek Mortgage Company
Claudia Kim Loan officer 925-474-1115 3/12/2008
Why are we in this market, what is causing it and how long will this last ?
I have studied the home sale averages from today to 2005 and found that values is some cities are around the same as 3 years ago. This drop in prices has created a hardship for many and an opportunity for those looking to buy.
Some big factor contributing to this slow down is often buyers bought using a loan program allowing them to place 3% or less as a down payment to buy a home and used an adjustable rate mortgage (ARM) that was fixed for 3-5 years with the loan agent saying to the borrower “you can always refinance” when it starts to adjust. If their homes value has gone up and then dropped they often don’t have the equity in their home that would allow them to refinance since many of these loan programs have new rules or been eliminated.
Another contributing practice allowed borrowers to use stated income on loan applications which often led borrowers to sign papers with inflated income numbers. Today many of these home owners are trapped preventing them from getting out of these loans because they did not qualify when they bought or don’t have the equity needed to refinance. This will contribute to the market decline or cause it to persist longer.
Home owners trapped often use a short sales to get out of their situation. Short sales are often price below market by agents desperate to make a living and sellers who don’t care how much it sells for. A short sale is an alternative for those seller who owe more that what the property is worth and has stopped making mortgage payments. The seller can not make any money from selling the home and the lien holder (bank) has the say so if the sale can take place once an offer is made on the property.
The mortgage reforms that congress passed recently is going to extend the effect of this market by prevent those who used stated income loans from reusing that type of program to refinance trapping many in their ARM loans and preventing home buyers with less than 5% down from buying until they have saved up the down payment.
By Scott Harrison Realtor December 2008
"Why a dropping market is a good time to buy a home."
By Scott Harrison
If you already own a home and are looking to trade into a dream home now is the best time.
Moving your equity from a lower priced home to a higher is the best direction today. Since the higher priced home often looses more value in a recession than a lower priced home, you will come out ahead (see the example below). You also come out ahead because property taxes on the bigger home are going to be lower. If your next dream home is going to have a great location, be just the right size, floor plan and have the features you want, today is by far a better time because you have lots of selection and you won't be rushed into buying a home that is not really your dream home.
Don't own? Timing the real estate market can be more tricky than the stock market because of the size of the investment and other factors. Eight months from now will you still have the same amount of cash for the down payment? Or will that new car be in your drive way? Can you still qualify with the higher debit of the new car payment? Will the interest rates be reasonable or will high rates be the reason the timing is not right later? Will lenders continue to tighten up lending standards? Is an other child in the cards will the loss of the second income keep you back. In 8 months could some thing be looking uncertain at work and you will have paid 8 months more rent without any tax shelter or tax benefits. Just why are your waiting?
There are a lot of things that could come up and with too many buyers do come up. Over the long run "buying and holding real estate is much better than holding to buy real estate" You do not have to be a home owner selling to see the benefits of owning just look at any 30 year chart comparing real estate and any other investment.
Lets compare buying a more expensive home in 3 different market situations.
Sold value Difference Buy bigger
Flat market $100,000 $100,000 $200,000
Rising market +10% $110,000 $110,000 $220,000
Falling market. - 10% $90,000 $90,000 $180,000
Would you would want to sell when the Difference was smallest? If you feel you can’t afford it today what makes you feel you will be able too afford it when the market is up and more expensive? There are other factors to look at and I will be happy to discuss them with you. Call for your free consultation today Scott Harrison 510-388-4536
It is a good time to buy and you can start by calling Scott Harrison 510-388-4536 to take your next step into your dream home.
Find out about Scott G Harrison his accomplishments. A List of real estate sold can be viewed below as well as client referrals.