$6,500 Tax Credit for Move-Up/Repeat Home Buyers

March 30, 2010 By Michael Koenig

Just a reminder, you do NOT have to be a First-Time home buyer to capitalize on the Fed’s tax credit!

If you are a Move-Up, Repeat or Second-Time home buyer, you may be eligible for up to $6,500 in Tax Credit’s from Uncle Sam.

Here are some of the details:

Who is eligible to claim the $6,500 tax credit? Qualified move-up or repeat home buyers purchasing any kind of home are eligible to claim this credit.
What is the definition of a move-up or repeat home buyer? The law defines a tax credit qualified move-up home buyer (“long-time resident”) as a person who has owned and resided in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. That is, both spouses must qualify as long-time residents, with at least five years of principal residency for each. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.
How is the amount of the tax credit determined? The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.
Are there any income limits for claiming the tax credit? Yes. The income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
What is “modified adjusted gross income”? Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine “adjusted gross income” or AGI. AGI is total income for a year minus certain deductions (known as “adjustments” or “above-the-line deductions”), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and the first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.

To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.

Filed Under: Buying A Home

$18k Tax credit for California Home Buyers! how…

March 24, 2010 By Michael Koenig

This is big news for home buyers in California!

The credit will apply to first-time buyers who purchase new or existing homes between May 1 and Dec. 31 of this year. It is for 5 percent of the purchase price, or up to $10,000.

Governator Schwarzenegger is expected to sign it into law soon.

Want to hear something REALLY crazy? It may be possible to combine this credit with the Federal Tax credit of $8,000, enabling a home buyer to potentially capitalize on up to $18,000 in tax credits! Wow! It’s a narrow window of opportunity: you would need to be officially in a contract by April 30, 2010, but close between May 1, 2010 and June 30, 2010.

If the extended tax credit follows the same guidelines as the previous tax credit (which ended in August 2009), here are the basic requirements:

Must purchase the home between May 1, 2010 and December 31, 2010.
Purchase date is the date escrow closes.
The home must be the principal residence of the home buyer
Home must be occupied by the taxpayer for a minimum of two years

There are additional requirements…and we’ll post them as soon as we get them from the top.

I thought we beat the horse to death already…but it’s time to prop it up for further beating…

UPDATE: We discuss this topic on Episode 15 of the podcast RealSpeak.tv

UPDATE #2: I hate to sound like a late-night infomercial, but we can’t stress enough how urgent and quickly you need to act in order to capitalize on this (we didn’t set the timeline; Uncle Sam and Uncle Schwarzenegger did .

Contact us ASAP to get the ball rolling!

Use the Quick Contact Form to the Below, or call (510) 270-2201. (In the meantime, checkout the Foreclosure Listings at the top of the page for homes available in the areas you’re interested in)

Filed Under: Buying A Home, News Tagged With: $200 million, AB 183, Caballero bill, california tax credit, federal plus california tax credit, Federal Tax Credit, First Time Home Buyer Tax Credit, governer, Not deduction, Schwarzenegger

Episode 14 – Dead Horse Walking

March 24, 2010 By Michael Koenig

Episode 14 of the Real Estate and Mortgage podcast RealSpeak.tv has just been posted.

Click here to get it

Here the topics:

Join us, as we now officially beat the poor dead horse to death and beyond: Why it is SO URGENT to get into contract, if you’re looking to capitalize on the $8k Federal Tax Credit.

What happens when you mix BofA, a Foreclosure and a parrot?

California Short Sellers Beware! (of the taxman)

FHA changing requirements, upping downpayment, upping fees.

A few more client pet peeves, and parting comments.

Filed Under: Podcast

Foreclosure Auction on the County Courthouse Steps

March 22, 2010 By Michael Koenig

Foreclosure Auction on the Courthouse Steps, Oakland, CA

We made a little field-trip to the Alameda County Courthouse in Oakland, California. Today was simply another day on the steps of the courthouse. There were about 110 properties scheduled for the sale. However, after all was said and done, I think only ONE property was actually sold to a high bidder

What happened to the other properties?? The majority were either canceled or postponed (usually due to an agreement between the borrower and lender) or due to bankruptcy. The rest, simply failed to receive a single bid, which then causes the property to become a Bank Owned property or REO.

Here’s a little video clip of the event.

Look for a follow-up post regarding this auction…and what I REALLY think about them.

: Foreclosure Auction on the Courthouse Steps, Oakland, CA

Filed Under: Buying A Home, Foreclosure, News, Oakland, Real Estate Tips, REO, Video Clip Tagged With: video

Pleasanton Housing Cap Lawsuit Update

March 19, 2010 By Michael Koenig

Downtown Pleasanton

The action on March 12, 2010 by an Alameda County Superior Court judge overturning the City of Pleasanton voter-approved cap on housing permits is the culmination of more than a decade’s worth of action and inaction related to how a community plans for its housing needs. The following is a brief timeline and summary of the events that led to the court action:

1996: Pleasanton voters approved measure GG which capped the issuance of residential building permits at 29,000 units. At that time there were approximately 21,500 units in Plesanton.

2001: As part of its General Plan Housing Element Update process, the State of California requires the City of Pleasanton to zone land to accommodate 5,059 units by 2007. This obligation to zone land for a specific number of units is part of the Regional Housing Needs Allocation (RHNA) process which uses a variety of factors to determine housing needs. All cities in California are required to plan for their respective RHNA.

2003: The Housing Element acknowledges there is not enough land currently zoned for residential development to accommodate the units called for in the RHNA. Policies in the Housing Element commit the City to rezoning land to meet the RHNA needs by June 2004.

2004: The City fails to rezone land as promised in the Housing Element.

2005: The California Housing and Community Department revokes its certification of the Housing Element. This action, among other things, draws the attention of local and regional affordable housing advocates.

2006: Lawsuits were filed by a public-advocacy law firm asking the city to comply with state law and to repeal measure GG – the 29,000 unit housing cap. The basis of the lawsuit is that, as noted in the 2002 Housing Element, the 29,000 unit cap would not allow enough units to be planned to meet the RHNA requirements.

2009: Attorney General Brown joins the lawsuit on the basis of Pleasanton’s jobs-housing imbalance (there are more jobs than housing units in Pleasanton) and his assertion that Pleasanton’s growth control policies limit the creation of “workforce” housing which force Pleasanton workers to commute from other communities and contribute to the creation of green house gasses.

NOTE: As of March 2010 there are approximately 27,000 residential units in Pleasanton leaving approximately 2,000 more that could be built under the voter-approved cap. This is less than half of the units called for in the RHNA.

March, 2010: An Alameda County Superior Court judge rules in favor of the plaintiffs and orders the City of Pleasanton to do the following:
- Zone land for residential development to meet the RHNA requirements; and
- Stop issuing non-residential building permits.

As of this writing, the City of Pleasanton has not yet responded to the court order.

This issue is relevant to real estate professionals in the following ways:

Zoning vs. Development: While the City of Pleasanton may be forced by the court to rezone land for either residential uses or “up-zone” current residential land to allow for higher densities, this action does not guarantee that actual residential development (at any density) will occur. The City is only compelled to rezone the land – not approve residential development. Furthermore, the City of Pleasanton is not a residential developer – it only has authority over land use decisions. Given the current economic and development environment it is unlikely that residential developers will rush in to take advantage of the court order.

Commercial Real Estate: The court order for the City of Pleasanton to stop issuing building permits could be problematic for commercial real estate. It is unclear whether the order applies to permits related to the construction of new, non-residential developments, or to all non-residential building activity. It remains to be seen if tenant improvements that would require a building permit would be subject to the court order.

Filed Under: News Tagged With: commercial, housing needs, permits, Pleasanton, Residential, zoning

Mortgage Rates Set to Rise in 2010

March 19, 2010 By Michael Koenig

Historical Mortgage Rate Chart

Is it time to rush out and buy a house before mortgage rates go up?

Some analysts believe mortgage rates will jump to around 6% by year end from 5% in recent weeks, while others see only a slight increase. As the Federal Reserve winds down its intervention in the mortgage market, rates on home loans are generally expected to rise at least modestly during the rest of this year from today’s unusually low levels.

Meanwhile, federal tax credits available for some home buyers are due to expire at the end of April, adding to the sense of urgency many shoppers feel.

“I’d hate to miss out on really low [mortgage] rates” or the tax credit, says Jennifer Hale, a veterinarian who is looking for a new home near Minneapolis with her fiance, Lawrence Nystrom.

If rates do go up sharply, that will have a big effect on home buyers. Richard Redmond, a mortgage adviser at All California Mortgage in Larkspur, Calif., offers the example of a couple with combined pretax income of $100,000 a year and debt obligations (excluding mortgage) of $500 a month. At a 5% mortgage rate, he figures, the couple could qualify for a loan big enough to buy a $590,000 house, assuming a 20% down payment. At 6%, that would fall to $540,000.

Since late 2008, 30-year fixed-rate mortgages have been available for people with strong credit records at around 5%, near the lowest levels since the 1950s, thanks to the Federal Reserve’s heavy purchases of mortgage securities. At the end of March, the Fed is due to stop buying the securities. Most mortgage analysts think the immediate effect of the Fed’s withdrawal will be modest.

Filed Under: Buying A Home, News, Real Estate Tips Tagged With: Chart, Graphic, Mortgage Rate

California Home Mortgage Protection Program

March 17, 2010 By Michael Koenig

Did you buy a home after April 2009? Or do you plan on completing a purchase this year before July 2010? If so, then you may qualify for a little extra peace of mind.

Due to popularity and demand, the California Association of Realtors (C.A.R.) has extended their Mortgage Protection program to June 30th.

What are the benefits, and how much does it cost? It’s dead simple: Qualifying buyers can receive up to $1,500 a month for up to six months in the event of job loss, a qualified co-buyer can also receive a $750 benefit for up to six months to help pay the mortgage. And the cost? NOTHING, other than the cost of the home you just completed!

Here are the basic qualifications:

Be a first-time home buyer – someone who has not owned property in the last three years. (includes co-buyer).
Open escrow April 2, 2009, or later, and close on or before June 30, 2010. (purchase agreement cannot be dated before April 2, 2009)
Use a California REALTOR® in the transaction (fee for referral does not qualify)
Be a W-2 employee (cannot be self-employed)
Purchase the property in California
To qualify for the program applications must be received within 30 days of closing escrow

Do you qualify (or will)? If so, what are you waiting for! Contact me for assistance and Download the Revised MPP Application followed by a list of Frequently Asked Questions.
( This must be submitted by an active California REALTOR®, such as me)

Filed Under: Buying A Home, News, Real Estate Tips Tagged With: C.A.R., H.A.F., Housing Affordability Fund, Mortgage, protection

No Market Untouched – High End REO Listing

March 16, 2010 By Michael Koenig

3860 San Antonini Way, Pleasanton – Quick Video Walk-Through. REO. Ruby Hill near Pleasanton / Livermore California. Luxury Home. Italian villa. Impressive Grand Foyer. Sweeping Spiral Staircase. Foreclosure.

We're sorry, but we couldn't find MLS # 40455301 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

Filed Under: $750k & Up, 5+ Bedrooms, Featured Properties, Foreclosure, Pleasanton, REO, Ruby Hill, Single Family Home, Video Clip Tagged With: REO, Ruby Hill, video

Federal Tax Credit Expiring Soon!

March 10, 2010 By Michael Koenig

Time to get your documents in order.

It would be a total shame to meet all the requirements and be eligible for the $8,000.00 Federal Tax Credit for First-Time Home buyers, and then fail to file the required documents.

Here are the requirements, as per the Internal Revenue Service website:

IRS First-Time Homebuyer Credit Documentation Requirements

Tax time is just around the corner and if you became a First-Time Homebuyer in 2009, you’re definitely looking forward to the First-Time Homebuyer Credit. However, are you confused about the documents required to claim the credit? The IRS has put together five tips to help clarify the documentation requirements.

Settlement Statement: Purchasers of conventional homes must include a copy of the Form HUD-1 or other executed Settlement Statement.
Properly Executed Settle Statement: A properly executed settlement statement shows all parties’ names and signatures, property address, sales price and date of purchase. However, settlement statements, including the Form HUD-1 can vary from one location to another and may not include the signatures of both the buyer and seller. In areas where signatures are not required on the settlement document, the IRS encourages buyers to sign the settlement statement when they file their tax return – even in cases where the settlement form does not include a signature line.
Retail Sales Contract: Purchasers of mobile homes who are unable to get a settlement must attach a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.
Certificate of Occupancy: For a newly constructed home, where a settlement statement is not available, attached a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.
Long-Time Residents: If you are a long-time resident claiming the credit, the IRS recommends that you also attach documentation covering the five-consecutive-year period such as Form 1098, Mortgage Interest Statement or substitute mortgage interest statements, property tax records or homeowner’s insurance records.

Visit IRS.gov/recovery for more information.

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Filed Under: Buying A Home, Real Estate Tips Tagged With: $8000, Contract, documents, Federal Tax Credit, HUD-1, IRS, required, Settlement Statement

So Where Are These REO Listings?

March 3, 2010 By Michael Koenig

So Where Are These REO Listings?
You are ONE click away from finding some REO listings in the East Bay area. Click here to see them.

Buying bank owned properties
There is a lot of interest in buying bank owned properties these days. A lot of information, some good and some bad, is floating around about the subject. Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”. The fact is that there are no secrets, and to make money does require effort.

What’s an REO?
REO stands for “Real Estate Owned”. These are properties that have gone through foreclosure and are now owned by the bank or mortgage company. This is not the same as a property up for foreclosure auction. When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you’ll receive the property 100% “as is”. That could include existing liens and even current occupants that need to be evicted. A REO, by contrast, is a much “cleaner” and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing. Do be aware that REO’s may be exempt from normal disclosure requirements. In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to tell you about any defects they are aware of.

Is it a bargain?
It’s commonly assumed that any REO must be a bargain and an opportunity for easy money. This simply isn’t true. You have to be very careful about buying a REO if your intent is to make money off of it. While it’s true that the bank is typically anxious to sell it quickly, they are also strongly motivated to get as much as they can for it. When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs or remodeling needed to prepare the house for resale. The bargains with money making potential exist, and many people do very well buying foreclosures. But there are also many REO’s that are not good buys and not likely to turn a profit.

Ready to make an offer?
Typically the REO department of a bank will use a listing agent to get their REO properties listed on the local MLS. Before making your offer, you’ll want to contact either the listing agent and find out as much as you can about what they know about the condition of the property and what their process is for receiving offers. Since banks almost always sell REO properties “as is”, you’ll want to be sure and include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it. As with making any offer on real estate, you’ll make your offer more attractive if you can include documentation of your ability to pay, such as a pre-approval letter from a lender. After you’ve made your offer, you can expect the bank to make a counter offer. Then it will be up to you to decide whether to accept their counter, or offer a counter to the counter offer. Realize, you’ll be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends. It’s not unusual for the process of offers and counter offers to take days or even weeks.