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| Victor's Monthly Real Estate Newsletter |
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Short Sale in Mill Valley This 2 bedroom, 1 bath home is an esay commute to San francisco and an excellent condo alternative. http://www.mcguire.com/listings/195263-368-Shoreline-Highway-Mill-Valley-California-94949-Single-Family-Home-20931962 |
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San Francisco Style This updated 4 bed, 3 bath Victorian home is located 1 block from the shops of Caledonia St. http://5bonita.com |
Articles and Advice |
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| Closing costs vary by location By Dian Hymer Closing costs, the costs associated with buying or selling a home, can add up. It's wise to get an estimate of how much you're likely to pay in closing costs before you make an offer to buy a home or accept an offer to sell. Closing costs reduce the amount the seller nets from the sale. Buyers need to know in advance of entering into a home-purchase contract that they have enough cash to cover both the downpayment and closing costs. Closing costs vary with location. Often who pays what fees -- buyer or seller -- is dictated by local custom. For instance, in Northern California, buyers usually pay the title insurance premium, while sellers usually pay the premium in Southern California. HOUSE HUNTING TIP: Some real estate agents use 1 percent of the expected selling price to estimate a seller's closing cost. This might be close to accurate in some cases. But, there are so many variables that can affect the closing costs in any given sale transaction that it's preferable to have your real estate agent give you an itemized list of the costs you are likely to pay. Sellers' closing costs can include such things as the real estate broker's fee; transfer taxes, if there are any; costs associated with any mandated compliance requirements; title insurance, in some places; attorney fees, in some cases; closing or escrow agent fees; inspection fees, unless they were paid directly to the inspectors; a home warranty, if applicable; fees for drawing, notarizing, and couriering documents; recording fees; property taxes (if seller has overpaid, the buyer will credit the seller that amount); and homeowner association dues, if there are any. In addition to the closing costs listed above, the sellers pay off the liens secured against the property and any outstanding interest owed at closing. When you make a mortgage payment, it pays interest owed for the previous month. So, if you were to close on March 1, you would owe the lender interest from Feb. 1 through the date the lender receives the funds, which may not be until a day or so after you close. With short sales, where the sale price is insufficient to pay off the liens and closing costs, additional closing costs may apply, such as a short-sale process fee charged by the escrow or closing agent. If a third-party short-sale negotiation company is involved, there could be a fee as high as 1 percent of the sale price charged at closing. Sellers who live in an area where a property survey is required and who customarily pay the cost might have significantly higher closing costs than would a seller in Oakland, Calif., for example, where there aren't any expensive point-of-sale compliance requirements. Buyers' closing costs customarily cover such things as the fees associated with the buyers' new mortgage; transfer taxes, if there are any; title insurance, depending on the area; homeowner insurance premium for the first year (usually required by the lender); buyer's broker fee, if appropriate; attorney fees, in some cases; escrow or closing agent fees; miscellaneous fees for document preparation and notarizing signatures; and proration of property taxes and homeowner association dues, if there are any. Buyers' closing costs can differ significantly depending on how many points their lender charges. "Points" is a term used for the loan origination fee; one point equals 1 percent of the loan amount. On a $600,000 mortgage, one point would add $6,000 to your closing costs. It would add only $1,500 if you paid 1/4 point, but your interest rate on the loan would likely be higher. THE CLOSING: Even though local custom usually prevails, who pays a particular closing cost is negotiable. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| Tax time over, but many credits still available By Paula Hess If you’re a homeowner, it’s a given that you claim the mortgage interest deduction on your tax returns. If you are a green-minded homeowner, you may be eligible for a federal tax credit if you purchase or have purchased (keep those receipts) an energy-efficient product or a renewable energy system for your home. These credits apply to the following if purchased between Jan. 1, 2009, and Dec. 31, 2010: Biomass stoves; insulation; heating, ventilation, and air conditioning upgrades; windows and doors; roofs; and non-solar water heaters. The credit allows homeowners every two years to claim 30 percent of the cost of the system, for a maximum credit of $1,500. This credit expires Dec. 31, 2010. Please note that some of these tax credits do not apply to installation costs, and not all ENERGY STAR products qualify for the tax credits. Please consult http://www.energystar.gov/index.cfm?c=tax_credits.tx_index for specifics. If you’ve decided to purchase small wind turbines, a geothermal heat pump, or a solar energy system for your principal residence or a new home construction, you have until Dec. 31, 2016, to make the purchase. You also can receive a tax credit of 30 percent of the cost (no upper limit). Check out the following resources: • Database of State and Federal Incentives for Renewables & Efficiency (http://www.dsireusa.org/): Provides a comprehensive list of all local, state, and federal rebates, tax credits, and property tax reductions for green enhancements to homes and new construction. • Better Than a Credit: If you participated in the Cash for Clunkers program and purchased a more fuel-efficient car, remember, your $3,500 or $4,500 rebate is not considered taxable income. If you actually purchased a hybrid, you may qualify for an energy tax credit (http://www.fueleconomy.gov/Feg/tax_hybrid.shtml). Cars purchased after Dec. 31, 2010, are no longer eligible for the energy tax credit. • ENERGY STAR Rebates and Partners: Type in your ZIP Code and find tax exemptions, rebates, or discounts on ENERGY STAR-rated products in your local area--everything from DVD players to water heaters at http://www.energystar.gov/index.cfm?fuseaction=rebate.rebate locator. |
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| Short sale success strategies By Dian Hymer Some buyers have made offers on short sales, then waited as long as six months to a year, only to be denied lender approval. Approval from the seller's lender(s) of current loans secured by a short-sale listing is necessary if the proceeds from the sale aren't enough to pay back the lender and cover the seller's closing costs. About one in three short-sale listings never sell. The Obama administration is encouraging lenders to do short sales for their financially distressed borrowers rather than let the property go into foreclosure. Incentives are given to lenders who approve short sales. Slowly, the process has been improving, but it still involves more time and uncertainty than a conventional sale. The benefit of buying a short sale is that you might get a break on the price and be able to afford to buy in a neighborhood that would otherwise be unaffordable. HOUSE HUNTING TIP: A critical component to buying a short-sale listing is to pick the right property and the right agent to represent you. You don't want to set your sights on one of the short-sale listings that will never close. Your agent can help you make the decision about whether or not it's worth it to pursue a certain listing. Make sure that you select a real estate agent to work with who is up for the challenge of the short-sale process and understands how it works. A lot of agents have had little or no experience. Furthermore, many of them don't want to do short sales. You could be steered away from a property that might work for you just because the agent doesn't want to get involved. If you discover that you're missing out on short-sale listings that sell for a price you would have paid, ask your agent or a colleague who purchased a short-sale listing to recommend an agent who is willing and able to work with short-sale buyers. Before even looking at a short-sale listing, have your agent collect background information from the listing agent. You will have a better chance of closing a short-sale deal if the listing agent has experience doing short sales and has a plan for how to accomplish a sale. Have your agent find how many loans are secured against the property and if the sellers are in default. If there are more than two loans secured against the property, it will be difficult to close a short sale. The time clock is ticking if the property is already in default. Short sales have been approved the day after the property is sold to someone else on the courthouse steps. Find out if the sellers are mentally prepared to sell their house short -- because many sellers aren't. Does the listing agent have all the supporting documentation from the sellers that will be needed to submit a package to their lender after you and the seller reach agreement on the purchase contract? The documentation a lender will require from the sellers includes such things as a hardship letter, financial statement, copies of bank statements, IRAs, 401(k)s, W-2s, pay stubs, and an authorization letter giving the listing agent the authority to negotiate with the lender on the seller's behalf. A seller who hasn't provided this information to the listing agent may be uncooperative. Sometimes, concessions have to be made by buyers and sellers in order to obtain lender approval of a short sale. To close a recent short-sale transaction, the buyers needed to raise their purchase price by $5,000 and the seller had to contribute $9,000. THE CLOSING: Closing a short sale requires cooperation from all parties involved. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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