Real Estate Information Archive

Schwarzenegger Signs Extended Tax Credit for Homebuyers

By Jim Wasserman, THe Sacramento Bee,  FRIDAY, MAR. 26, 2010

Nearly 32,000 California homebuyers can claim state tax breaks of up to $10,000 starting May 1 under a bill signed Thursday by Gov. Arnold Schwarzenegger.

But the hopes of thousands of Californians for a shield against state taxes on forgiven mortgage debt will have to wait until at least April 5, when lawmakers return to Sacramento.

The same day Schwarzenegger approved the homebuyer tax credit bill, Assembly Bill 183, he vetoed a bill that would prevent the state from taxing mortgage debt forgiven last year for Californians who got loan modifications or sold their homes in distress sales.

Schwarzenegger vetoed the bill over an unrelated provision regarding tax refunds for the state's largest businesses. It was a repeat of a veto last year over the same issue.

The bill vetoed Thursday would have aligned much of California's tax code with that of the federal government. But even in vetoing it, Schwarzenegger expressed support for one of its most widely awaited provisions – the ban on taxing forgiven mortgage debt.

"I signed a law in 2008 that forgave this debt for two years and I am supportive of extending the law," he said in his veto message. Schwarzenegger immediately called for the Legislature to send him a bill to provide the tax forgiveness before the April 15 tax-filing deadline.

"Everybody agrees we need to do something about that," said Schwarzenegger spokesman Aaron McLear.

Schwarzenegger objected to a provision in the bill, SBX8 32 by Sen. Lois Wolk, D-Davis, that would have penalized businesses for seeking some state tax refunds. The federal government has penalties similar to those proposed in Wolk's bill.

What is a Short Sale?

A short sale in real estate occurs when the outstanding loans and liens against a property are greater than the proceeds from the sale of the home, after all closing costs are paid.  This occurs only when a home owner meets the qualifications, and the home owners lenders agree to allow a short sale.  In the event of a short sale, a lender can release you FREE AND CLEAR from the property, and fully forgive you of any deficiency! We can help make this happen, and our direct services are at no cost to you!

Do you meet the qualifications for Short Sale Help?

Are you in a financial hardship of any kind? This can include, but is not limited to relocation, divorce, loss of income or job, increased bills or increased living expenses Are you behind on your mortgage, or facing default or foreclosure? Can't get your home sold due a mortgage balance that is greater than the value of your house? Has your mortgage payment depleted all of your savings (if you have one)? Are you in any situation where you have to get your home sold?

If you answered yes to any of the questions above, we may have a solution for you

We have been professionally trained, coached and now specialize in helping owners who are in a difficult financial situation, by offering free home owner consultation services as well as short sale processing and brokerage services.  The short sales process is highly specialized, and it is very important to have a Realtor such as the Dave and Carla Higgins Team who is experienced in working them. 

Our services are entirely free to home owner and are here to look out for YOUR best interests!

Services we provide:

The Best part is that your lender will pay our fees! Contact us for a FREE, confidential, no obligation consultation!

888-627-4399 or Click Here

Our October Podcast is here.  This month is packed full of must know information for both buyers and sellers and focused on the economy as well as seasonal changes expected.  You can listen here!  Thanks - Dave and Carla

• It will be impossible to borrow money for another home with a foreclosure on your record.
  
• Many employers will want to see your credit report and avoid hiring you should you have a Foreclosure.
  
• Renting a home will become difficult since Landlords will access your credit report and consider you risky. 
  
• If a Landlord does rent to you, expect to pay higher than customary rent and heavy deposits due to reports that you could not pay your mortgage.
  
• Your Insurance rates will escalate with a Foreclosure on your record.
  
• Credit cards will be impossible to acquire or you will pay over 29% interest due to the Foreclosure on your credit report.
  
• A Foreclosure straps you with the entire debt of your mortgage, the bank can chase your for the rest of your life to collect.

If you know of anyone having trouble keeping there home, please have them contact us for a confidential, no obligation consultation of there situation.  (888) 627-4399 x84 (Dave's extension)

We recently received an unprecedented number of offers on a short sale that we listed here in Oakland. To be exact, a total of 55 offers were submitted after a two week process of marketing the home. In pricing this home we were looking at property values for the immediate area as we always do for a better understanding of current and immediate activity.  We saw five or six homes that had sold in the last four months that were of the same basic size and shape of the home we were listing.  Our house was fairly well maintained but needed some attention in the kitchen and the termite report was relatively sizable as well.  Now, Carla and I have been through quite a bit of training when it comes to marketing and selling short sales and the process of listing, pricing and marketing is not the same as selling a house that is not under any financial distress. 

Rule #1
 Price the house to get buyers attention because many will not want to make an offer on a short sale (the purchase process for a short sale is very long and many realtors will discourage buyers from making offers on them because it ties the parties up for an extensive amount of time without any end guarantees that the transaction will be allowed by the bank). Our training has taught us that 10% under the local norm will be effective to help your seller achieve the sale.

Rule #2
Do your best to get multiple offers and secure a back-up offer because often times the buyer who made the best offer will back out because they are not willing to wait as long as it can take (up to six weeks) to get a response from the bank on whether they will allow the sale or not.

With the house I am referring to we thought we followed these rules to a tee but the market responded with a fury of interest and took the property way higher than we ever expected it to go in value.  In this case hindsight tells us that we did obviously under-price it more then we meant to.

You may wonder why I am writing this journal and the reason is that our administrative person received a terrible phone call today from an outraged buyer (who refused to give their name) but went on and on about what terrible agents we were and that we under price homes.  I actually re-dialed this person’s number to personally discuss this situation with them, only to get a text back telling me not to communicate with them.

Our team does everything they can to represent both buyers and sellers to the best of our abilities and honestly, we do not want 55 offers on one of our properties, it causes us a tremendous amount of unnecessary work behind our doors as well as on the real estate community in general.  All we can do is do our best (which I think is very good) and continue moving forward.  To the disgruntled buyer, we apologize for your hard feelings and hope you find another great home to buy!

We have clients and friends that are looking to sell this Blue Water View Parcel in Timber Cove about 1hr North of Bodega Bay and we thought we would try and get the word out for them - Take a look at these pictures posted below!

Gorgeous, secluded, estate-sized land parcel on the Pacific coast with a filtered blue water view of the ocean. This 1.89 acre lot is located in Timber Cove, 1 hour north of Bodega Bay, 2 hours north of SF/Oakland.  Large redwoods grace the level lot that's ready for your Timber Cove water hookup and electricity at the lot line  Build a southwest facing home with plenty of sunshine, nicer weather than Bodega Bay and views of the ocean.  Comes with Sonoma County-approved 4 bedroom perc design.

If you or anyone you know is interested in this property, please contact us for further information.  The owners purchased the lot for $175,000.00 several years ago and have since got the septic plans approved (adding value).  They may consider some owner financing if necessary and are open to reasonable offers.

Map It Here!

Spectacular Timber Cove w/Blue Water Views!

Foreclosures can be costly in the long run!  We had a discussion recently with a home owner who had decided to let his home go into foreclosure.  We asked why he did not consider one on the multiple other options that are available in this market place.  He said, it was easier just to let it go. We then asked what was the majority issue to push him toward letting the home go.  His answer was loss of equity.  His home was worth 40% less then when he purchased it 3.5 years ago here in Oakland and he did not think it would ever catch up with his debt, especially if you factored in all the payments made on the home at a now defunct property value.  We then when into a quite lengthy discussion regarding what happens (or can happen) after a foreclosure, and all the other options that he may have chosen to pursue.  The options we discussed included Loan Modifications, Loan Modifications via a Forensic Loan Audit, Companies that will actually negotiate Principle Balance Reductions on the the property debt, and Short Sales.  By the time we were done with the discussion, he confessed that he wished he had run into us before now.  He said he would have chosen a different option.  If you know of anyone struggling with a home and how to proceed with it, please refer them to us for a zero obligation discussion of their personal situation.  It is always confidential and we hope we can be of service.

New home buyers could be eligible for up to $18,000 in tax credits under new federal and state programs.

The federal American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time homebuyers. To qualify a home must be the principal residence of the buyers and be purchased before December 1, 2009.

Buyers must not have owned a principal residence during the prior three years and must have annual income of not over $75,000 for single taxpayers and $150,000 for married taxpayers.

The tax credit is 10 percent of the home’s purchase price up to a maximum of $8,000. California lawmakers have approved a tax credit up to $10,000 for home buyers who purchase a new home between before March 1, 2010. They set aside $100 million for the tax credit. After 10,000 new homes are purchased the credit is gone so those wishing to take advantage of this program should act quickly.

The tax credit is good for 5% of the home’s price or $10,000, whichever is less and is for new homes only. Home buyers will receive the tax credit, in equal amounts, over 3-years. The tax credit applies only if the new home is your primary residence.

Unlike the $8,000 federal tax credit, the California state tax credit is not limited to first-time home buyers.
There also are no maximum income limitations so any buyer purchasing a previously unoccupied home can qualify for the tax credit.

Better still, the $10,000 state tax credit can be used along with the $8,000 federal tax credit for home buyers. So if you’re a qualified first-time home buyer, and you purchase a new home in California that costs more than $200,000, you’ll get $18,000 in tax credits.

Please contact us to discuss these two programs at  888-627-4399 x0

FULL REPORT ON THESE CREDITS AVAILABLE BY EMAILING INFO@DAVEANDCARLA.COM
(Please put - Tax Credit Report Request - in the subject line)

We’ve been fielding numerous calls from both clients looking to enter the home buying market as well as owners of properties here in the area wondering if, or when, they will be able to consider selling. The answer really depends on what type of property is being sold and what neighborhood it is located in. Some of Oakland’s neighborhoods with stood the current depreciation longer than others; therefore the devaluation has not been as drastic to this point.

Which areas and home types felt the hit first?
When discussing areas with the highest depreciation of value they tend to be the lower cost areas and neighborhoods that started to feel the slow down first. When looking at property types in more expensive areas of Oakland it was the condo market (starting with the smallest units first and moving up to the larger ones shortly thereafter).

Why did these homes and areas start dropping in value first?
When discussing which areas slowed first and why, you need to look at the lending market and the type of mortgage loans being sold to the public at the time. The zero down loans, 5% down loans and other loans being marketed to buyers who ordinarily would not be able to buy a home started to disappear. These loans tended to be a large majority of what was fueling the housing sales in these lower priced groups so when the loans began to dry up, these segments began to slow in sales.

When and why did the upper-end neighborhoods begin to slow in value?
The top three items that come to mind when I think of these contributors are as follows:
First, we have the media bombarding all of us over and over again with all the impending doom that was foretold as coming (a self fulfilling prophecy?). Second, stated income loans went away. A stated income loan is one in which you declare your income but do not have to prove it via traditional methods of bank verification. This type of loan is heavily used by investors, and self employed buyers (I know this first hand as a real estate agent because it was the catalyst for our last three home purchases). Lastly and probably the most aggressive is the market collapse and loss of portfolio wealth.

What caused some neighborhoods in the Oakland area that had larger more expensive homes start slowing down before others?
The answer to this question is relatively simple to goes back to the oldest adage in Real Estate about what the three most important factors are that drive value – “location, location, location”. Once buyers start to feel like they can be pickier, or that there is no hurry, they become more intent on buying a home that really fits all of their needs (not just some of their needs).   Therefore, buyers who would in some markets choose to sacrifice a level yard or perhaps sidewalks decide not to forego these requirements and start waiting for homes that meet all these potential wants.

Is there more to come – Will the market continue to fall?
The answer to this is most likely yes. Before I go any further with this info, I want to say that this is a great time to buy. Prices have certainly taken a majority of the total depreciation and combined with this, interest rates are truly at a historic low. These two situations combined have lined up to be the perfect storm for buyers to succeed in! Properties will most likely drop further, especially in the upper end sectors, but not nearly to the place homes have in the more aggressively impacted market segments (we can discuss why in a future blog). Another thing to note is that interest rates are predicted to go up in the next 12 to 18 months and when this happens it could counter any gains acquired by a buyer in that future market.

If you would like to discuss the purchase of a home in the greater Oakland area including the surroundings towns up the hwy 80 and hwy 580 corridors, we would be happy to help. We can be reached at 888-627-4399 x.0.