Tax Time!

Yes we are approaching spring time and in the financial world it means... drumroll... tax returns! Not usually the most exciting thing that happens all year but if you are informed about some of your claims you can save yourself a lot of money!

My best example of savings in 2010 are for the the tax payers, who were first time buyers or buyers of a new home, as their primary house in which they live, are receiving a tax credit for up to less then 5% of their purchase price not to exceed $10,000! Tax payers have to apply for the credit in equal amounts over the 3 successive tax years beginning in the year they purchased their home. That means they are receiving up to a $3,333 credit per year just from buying their first home.

This example of course is not to say to run out to buy your first home- as those come with a lot of their own expenses- but be aware of your tax credits! Ask your accountant or look at your state's website. Here in CA, find out information here: www.ftb.ca.gov.

All in a days work... sort of

Getting into the real estate gig has been a fun challenge. Coming from a much more casual work atmosphere in the past, I thought I'd share some of the 'behind the scenes' of a real estate agent.

1. Wearing 'professional casual' clothes. Seems simple: no jeans. It seems there is a fine line to getting real estate 'ready' for the day. I always have to think about what I have on tap for the day. Am I seeing clients? I am just stopping in at the office? do I have a meeting with the 'big wigs'? Not to mention my 'professional' repertoire is very limited so it requires a lot of mixing/matching.

2. Getting to the office requires some preparation. Computer: check. MLS card/token: check. Notes from previous days phone calls: check. Snack: check. Sweater when AC is blasting: check.

3. Arrival to office: say hi to everyone. Manager, other agents- usually 5-6, receptionist. Pretty much now need to know everyone on a first name basis. Lucky for me I have a good name memory!

4. Get to work: call prospective buyers back. Research some home sales for prospective clients/listings. Get a few general questions answered from manager. Do more research on how to gain clients.

5. Attend or host open houses. These are the most fun so far. I get to talk to complete strangers about their biggest investment they probably will make or have ever made. Not to mention I get to talk about 'home' amenities and other comparable properties on the market. It feels like I am a personal shopper for a home buyer. So much fun!

Other then the list above the behind the scenes is a lot of computer time at home. Which is very comfortable of course- it can be done in sweats with a hot cup of coffee!

A short sale solution? or not?

It is an interesting market right now. As I am trying to drum up some business I've researched a lot of homes that have received notice of default from not making their mortgage payment. These home owners, whether they like it or not, are in financial trouble if they cannot make their payments. With home values much lower then they have been in the past a lot of owners are upside down on their mortgage as well.

With past first hand experience in these types of situations we see home owners that have a ton of stress and are in fear of losing their homes. A lot of people we have found are going first to the lenders. They do not want to lose their home so they try to re-fiance their loan. If the home owners are qualified lenders can help. Sometimes they can help and other times home owners are waiting in the dark about the future of their property.

My first suggestion to the distressed owners is a back up plan. Home owners in default end up without a choice on whether or not they will get a loan re-financed. In many cases lenders cannot help. While home owners are waiting they should be looking into other options. Banks have been working with home owners in selling their home for less then the value of their loan. The short sale usually sells for 85% of what a similar, non distressed property would sell. Where as a foreclosure is only about 60% of the value.

While the short sale gives the home owners in default an option other then foreclosure it may create problems for prospective buyers. These short sale listings come with lower listing price however they also come with a much greater lag time. Buyers have to wait for the banks to approve their offer. Most times only full cash offers with highly qualified buyers are accepted. The lag time is not ideal for most buyers in the situation. Buyers do not have the patience to wait 4 months to find out an offer was rejected. In a more conventional sale waiting to hear about an offer should take only days. We have also seen frustration with buyers who are qualified with a competitive down payment but not a full cash offer. They are usually out bid by offers that are all cash. Investors and more fully qualified offers are the ones accepted.

Solution? You have to weigh the options. As a home owner in default I highly suggest a back up plan to sell. At least get your home listed on the market so you are prepared to show the banks you are trying to sell your house rather then let it go to foreclosure. Your credit score can be turned around in 24 months from a short sale. A foreclosure on your credit takes 7 years. As a buyer in this market you have to be realist about your expectations. A realtor helping you should be able to give you guidance in your specific situation if they have had experience dealing with short sales. Do not expect anything and be willing to play the waiting game. If not- buy something conventionally. Regular market value listings and interest rates are low making it a great time to buy.

Home Buyers Need Butt Kicked

An interesting way of putting it... the article here from Matthew Ferrara's website. Explaining that now is a great time to buy a home yet buyers are afraid of losing their investment. Real estate markets such as ours in southern california is fairly stable. Mostly in the past year but looking at some of my clients that have owned homes for the past 10 years still have maintained their equity and are way ahead of where they bought. Combine our desirable market with all time low interest rates and low costs on moving, inspections, etc. why not make a move and invest?

Carlsbad Makes Top 5 Places to Buy!

December is a great time to buy. The article here: realestate.msn.com explains that agents are less busy this time of year and there are less offers, so less competition for properties. Home prices are usually down this time of year as a result of the slower business compared to the spring time.

The article lists Carlsbad as the top place to buy a home. With 4% interest rates being low there is not really a better time to buy!

My own research has shown that sold properties have slightly increased in the Encinitas, Solana Beach and Leucadia coast neighborhoods. This market west of Interstate 5 had 144 properties sold last year with a median price of $506. per square foot. In the last 3 months 40 properties sold in these neighborhoods! The market is picking up on the north county coast!