Homescopes

I just had a call from a prospective buyer currently living in SF with his wife and infant child interested in buying a home in Piedmont, CA.  He’s looking for a 3 BR home for under $ 1 M.   Six homes with 3 BR’s are currently available.  Descriptions/photos for a few of them:

 The $699K home is a major fixer but also an opportunity to transform a 1917 architecturally classic home in a $Million-plus neighborhood. 

 Priced at $1.08 M is a functional split-level located above Highland Ave which will shine  after cosmetic updating. 

$1.69 M, 3,400 sq ft Ranch on a 11,000 sq ft lot with 3 1/2 Baths on the “Estates” side of Piedmont.

For buyers that have been holding off, now is a great time to find your dream home!

The total number of homes sold in Piedmont CA for the most recent 12 months is off 18% from last year,  however Median Price in Piedmont is about 28% higher than in Oct 2007.   The Piedmont Real Estate Market is holding well through the “adjustment” period effecting other areas in Northern California.

In San Francisco, if a 2 unit building is being sold as 2 ”vacant” units with no past tenant issues - the highest possible price for a Seller is to sell to two owner-occupier Tenant-In-Common (TIC) Buyers with both TIC Buyers looking for the upside potential of condo converting the property after one year of owner-occupier TIC ownership.  

As a Seller’s agent, I would market the property 3 ways to attract 2-TIC Buyers, investors, and owner-occupiers with an income producing unit:

1. Two separate TIC units with two distinct “for sale” prices for each of the 2-units in the building.
2. One 2 unit building with combined for sale prices of the 2-TIC units in the building.

What gets tricky is how a Seller’s agent reports the sale prices accurately on the MLS at the close of escrow…without reporting all three sales prices (i.e. the 2 TIC sale prices and the one 2-unit building). 

Many times, I see with the San Francisco MLS, seller’s agents reporting that their 2-unit property was withdrawn from the MLS and the 2-TICs are reported as sold on the MLS with two sales prices. 

And then, many of these online public websites show the property’s sales price from the public records as a 2 unit building sold while other websites will show that there were 2 sales at on the property, yet not differentiating whether these two sales were condos or TICs sales.

Thus a 2-unit vs. the TIC market analysis both become rather complicated to determine whether a property is over or under valued to the for the unlearned, the novice, or misinformed.

The treat is understanding the value of buying a 2 unit building and the upside potential of buying in this market.

The beautiful new 10 townhome community in San Mateo called Barneson Place has been well received. This was our second weekend to be open to the public and 4 homes have been sold.  Buyers started arriving at 11AM and we finally closed the doors at 6:30PM today. This confirms that even in a challenging market, there is always room for a quality product. All floor plans have 3 bedrooms and 2.5 bathrooms and attached garages. Buyers love the beautiful kitchens, master suites, high ceilings, hardwood floors and design colors throughout. If you are looking for a quality townhome in the Baywood/Arragon school district, make sure you stop by this week. Prices start at $895,000 - $ 949,500. The sales office is located at 80 Barneson Ave in San Mateo and is open from 11AM-6PM every day. For pictures and floor plans go to: www.barnesonplace.com

“The First-time Home Buyer Tax Credit was passed this year as part of the Housing and Economic Recovery Act (H.R. 3221) on July 30 and targets any individual or household that hasn’t owned a home for at least three years.

Taxpayers can take the credit on their 2008 tax return if they bought their house this year after April 9. It’s worth up to $7,500 and can be taken in a single tax year.  Authorization for the credit ends July 1, 2009, so if prospective buyers wait to purchase their home in the first half of 2009 they can take the credit on their 2009 tax return.  The actual credit amount is set as a percentage of the home purchase amount. That percentage amount is 10 percent, so new homeowners can get 10 percent of the home price credited against their tax liability, up to a maximum $7,500.  Income limits are $75,000 for individuals and $150,000 for households.  Individuals whose income exceeds the $75,000 limit but isn’t more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000.” — Provided by Susan O’Driscoll, Princeton Capital.

This IRS page dedicated to explaining the new tax credit states that this in essence an interest-free 15 year loan. 

This N.A.R. informational handout (pdf) also states that if your income is over the limit, there is a phase-out formula.  In other words, not all of the credit is lost.

Real estate intersects with law, tax, finance, construction, and other specialties.  Find the appropriate specialist and create a team to work with and communicate together on your behalf.  It’s a win-win for all involved - especially you.  Please consult with your tax specialist on this issue to determine how H.R. 3221 will specifically apply to you - particularly if it may be in your best interest to modify your tax withholding sooner rather than later.

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 The local Realtor Board, Contra Costa Board of Realtors fought hard to get this great homeownership tool as part of the the Housing and Economic Recovery Act  HR3221 that passed on July 30, 2008.

It’s a single credit worth up to $7500 that has to be taken in a single tax year.  The actual credit amount is a percentage of the home purchase with a maximum of $7500.  Income limits are $75,000 for individuals and $150,000 for households.  If an individual makes more that $75,000 but less than $95,000 there is still a credit but it’s reduced.  Talk to your tax preparer for the actual amount.

Seven of the 100 homes currently on the market in lafayette are potential short sales.  Buyers and sellers are becoming used to the fact that shorts sales in Lafayette, Walnut Creek and on the 680 corridor are as common as a any other sale.

Banks are also getting used to negotiating short sales.  Using Trained Loss Mitigation Managers help all the parties involved communicate the best possible deal.  Whether you’re selling or buying, short sales offer tremendous opportunity.

Originally called “The Comers”, Walnut Creek became an incorporated city in 1914. The city received its present name from a term by the Moraga expedition to describe the creek that flowed through Diablo Valley, “un arroyo que llama los nogales” (a creek called the walnut trees), which was later changed to the English name of Walnut Creek.

Settlers were first attracted to the area during the Gold Rush era. During this period the valley’s principal crops were cattle, wheat, fruit and nuts. The Southern Pacific Railroad opened service to Walnut Creek in 1891, and in 1909 the Oakland-Antioch Railway opened commuter service from Walnut Creek to the metropolitan Bay Area. Completion of the Caldecott Tunnel into Oakland and the Bay Bridge to San Francisco made the area more attractive to those who commuted to San Francisco by automobile.

Since the 1950’s Walnut Creek has been one of the Bay Area’s most desirable residential communities. Today, Walnut is primarily a bedroom community, with about 64 percent of the city’s housing units occupied by homeowners. Attractive shopping areas and financial, service research and development, and light manufacturing establishments constitute Walnut Creek’s economic base. Despite the fact that a large portion of the community’s land has already been developed, Walnut Creek continues to attract new residents.

As of the writing of this post, there are 40 potential short sale residential real estate properties in Walnut Creek, California. The process has greatly improved over the past several months. Banks are very willing to attempt a “negotiated short sale” with their homeowner. This means that buyer and seller have a good idea what the bank will settle for in an approved escrow.

Some Walnut Creek real estate agents like myself have created relationships with responsible companies that have trained Loss Mitigation Manager that act on our clients behalf to do the negotiation with the banks and lenders.

If you are in a position that may require a short sale, there are a few simple documents that will be necessary. Make sure you are dealing with a real estate agent that has the knowledge and experience with this process.

Everyone is unsettled these days and no surprise.  There are a few questions or comments that I am hearing repeatedly from clients and friends.  The first is the question above.

With a cataclysmic world-wide banking crisis occurring over the last few weeks, I guess that is a logical question to ask.  Can I still get a home loan today?

Well, home sales are still occurring, especially at the entry-level as indicated in previous posts.  Jumbo loans are dicier and the larger jumbo loan limits expire at the end of December so we perhaps that is a cause of the flurry of real estate sales activity in our county in the mid-price ranges of $500,000 to $1 million.

While rules have tightened to sometime excruciatingly comical levels (some of the stories I have heard could fill another post or two) the flow of mortgage funds  has continued.  Kenneth Harney, in the San Francisco Chronicle on Sunday October 19th, gives a good overview of our current state of home lending.

 

Credit squeeze, credit freeze, credit system seizures: Everybody knows how severe and painful the global financial breakdown has been - with banks unwilling to lend even to other banks.

But what about mortgages and real estate? Can you still get a home loan with less than a 20 or 30 percent down payment? Or with a credit score below 720?

Absolutely. It would be a big stretch to label housing the sunny side of the market at the moment, but there’s a lot more light there than in most other financial sectors. Consider these facts:

– There is no shortage of money available for home mortgages, no freezing of credit to purchase or refinance a house. Why? Because the American mortgage market effectively has been federalized - at least for the time being.

More than 90 percent of new loans now are being made through the Federal Housing Administration insurance program, plus Fannie Mae and Freddie Mac. FHA is owned by the federal government, and Fannie and Freddie are operating under federal conservator-ship.

All three have unfettered access to global capital markets at rock-bottom costs because their borrowings are fully guaranteed by the Treasury.

Ginnie Mae, which is FHA’s pipeline to the bond market, recorded an all-time high of $29 billion in new mortgage-backed securities issued in August.

– Loan terms and credit underwriting standards have been toughened up, but you can still put down 3 percent (3.5 percent after Jan. 1) on an FHA-insured mortgage and 5 percent on certain Fannie Mae and Freddie Mac loan programs with private mortgage insurance.

FHA’s credit standards are generous and forgiving - the agency exists to help people with less-than-spotless credit histories. Fannie Mae and Freddie Mac have raised their credit score requirements over the past year, but buyers and refinancers with scores in the upper 600s can still qualify for loans carrying reasonable rates and fees.

– Despite the global financial system’s quakes, mortgage rates remain low by historical standards. Mortgage giant Freddie Mac reported Thursday that 30-year fixed-rate mortgages averaged 6.46 percent, and 15-year mortgages are at 6.14 percent.

– Maximum loans through FHA, Fannie and Freddie in high-cost local markets on the West and East coasts continue to be $729,750 through December. In January, the high-cost maximum is projected to dip to approximately $625,000.

– Home prices - pushed by foreclosures and short sales - have rolled back to 2003 and 2004 levels or lower in many of the former boom markets. As a result, growing numbers of buyers are coming off the sidelines, making offers and writing contracts. The pending home sales index jumped by 7.4 percent based on purchase contracts signed in August, according to the National Association of Realtors. The heaviest increases - pointing to higher closed sales in the coming two to three months - were in California, Florida, Nevada and the Washington, D.C., metropolitan area.

Housing and mortgage leaders say consumer worries about the stock market have obscured positive developments under way in real estate, where pricing pain and downsizing have been facts of the life for the past two and a half years.