OC Realty Blog

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010.  Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied.  The new California law applies to certain purchases that close escrow on or after May 1, 2010.

For more information, C.A.R. offers a Homebuyer Tax Credit Chart with a side-by-side summary of the federal and California laws.  C.A.R. also offers a legal article entitled Homebuyer Tax Credit Update.

(Source:  CAR Reallegal)

Since May 29^th, when this program was announced, there have been changes with the way the program can be utilized. The biggest issue is the ability to receive the advanced tax credit and use it for the down payment.If you have not been made aware, FHA has announced a first time homebuyer may now amend their 2008 federal tax filing and apply for the $8,000 tax credit. They go to www.irs.gov and fill out Form 5405 to request the refund. A check will be sent and these funds may be used in conjunction with the purchase of a property. The borrower needs to use FHA financing for the new financing. This program would not make sense for a borrower with a down payment of 20% or more. FHA is basically mortgage insurance for borrowers with less than 20% down payment.  

The minimum down payment is 3.5%. Here’s the change. It was first reported the tax credit could be used for the down payment but FHA changed the initial release now saying the credit cannot be used for the 3.5% down payment. If the borrower wants to use it as additional down payment, that’s fine. However, the down payment may be a gift from relatives. The tax credit may be used for closing costs and buying the interest rate down. Note, there is a section that says a non-profit agency or a state housing program can advance the credit in the form of a second.  California’s budget problem precludes funds from being available.

An important fact to keep in mind is the deadline to receive the tax credit is 11-30-2009. The close of escrow must be on or before this date for the first time buyer to be eligible to have the tax deduction of $8,000. Plan accordingly.

If you’re looking for a home in the following cities, please give me a call - Laguna Niguel, Aliso Viejo, Laguna Hills, Mission Viejo. Rancho Santa Margarita, Coto De Caza, Dana Point, San Clemente, San Juan Capistrano, Laguna Beach, Corona Del Mar, Newport Beach, Newport Coast.

Here is some positve news from the OC Register and various internet articles over the past week:

Fed Plans Spark Drop in 30-Year Rates:  The average interest on a 30-year mortgage fell to a 38-year low of 4.85 percent during the week ending March 27 from 4.98 percent the prior week, Freddie Mac reported.  Need to ReFi, click below link for a quick online application with my local lender :

https://www.secureonlineapps.com/realtyexecapp.htm

Home Buyer Tax Credit Increases Activity:  NAR President Charles McMillan says home shopping activity has picked up with housing affordability at a record high. “The number of buyers looking for homes rose 5 percent in February, and also was 5 percent above a year ago,” he says. “It appears most of the increase in buyer traffic occurred in the latter part of the month after the $8,000 first-time buyer tax credit was put in place. At the same time, mortgage purchase applications have risen, so we expect to see sales picking up around late spring.”

1. Hire only licensed contractors.
2. Check contractor’s license number at 800-321-2752 or www.cslb.ca.gov.
3. Get three references & review past work.
4. Get at least three bids.
5. Get a written contract & don’t sign unless you understand the terms.
6. Pay 10% down or $1000, whichever is less.
7. Don’t let payments get ahead of work & keep records.
8. Don’t make final payment until you’re satisfied with the job.
9. Don’t pay cash.
10. Keep a job file of all papers relating to your project.

Federal Tax Credit for Home Buyers:.

• For first time home buyers (those who haven’t purchased in the last 3 years).
• Eligible for up to $8000 or 10% of purchase price, whichever is lower..
• Tax credit starts to phase out on income above $75K for individual/$150K for couples..
• Must live in the home as your primary residence for 3 years.  If not, must repay the credit..
•  Tax credit expires 11/30/2009. 

State Tax Credit for New Home Buyers:.

• This tax credit applies to all buyers and no income restrictions..
•  Eligible for up to $10,000 or 5% of purchase price, whichever is lower..
• The tax credit will be provided in equal amounts of up to $3,333/year for 3 years.
• Must live in the home as your primary residence for 2 years.  If not, must repay the credit..
• Tax credit effective 3/1/2009 to 3/1/2010 – or when funding is exhausted..
• You can take advance of BOTH tax credits if you meet the qualifications! 

Higher Loan Limits:.

More good news – the Conforming Jumbo loan amounts have been extended back to $729,750.. These loans will be eligible for less expensive rates than the “Jumbo” loans.

Steps to the ocean, this San Clemente community has 4 plans and 1BR-3BR, single-level detached condos with ocean views.

Type of Housing:  Single Family Detached, with homes ranging in size from 1,064 SqFt up to 1,260 SqFt and 1 car attached and detached garages.

Number of Homes in this Retirement Community:  approximately 50

Year Built Range:  1964′ - 1967′

Security:  Not Gated

Association Dues Range (subject to change):  $230 to $255

Association Amenities:  Club House and Rec Facility and swimming Pool.  

General Location:  West of Hwy 5, and close to Pacific Coast Hwy (PCH) and Camino San Clemente, and just 0.2 miles from the beaches.

(Source: OCRealEstateBlog.com) 

There are numerous senior citizen residential ownership communities in south Orange County that offer a wide variety of styles, floor plan options and prices.  There is only one such retirement housing community in Laguna Niguel, called Monarch Summit II.  One of the desirable attributes is the community of Monarch Summit II is only 1 mile from the Pacific Ocean and sits on top of one of the highest hills in Laguna Niguel.  Therefore about half of the homes offer some type of distant or panoramic view, and some of the homes offer majestic Ocean Views along will temperate Ocean breezes.

Monarch Summit II is located at  at the top of Pacific Island Dr., and was developed in the early and mid 1970’s by builder Lan Ron.  This community encompasses of about 180 attached single family homes, and incorporates 3 distinct floor plans as follows: 

• Plan A - 3 bedrooms, 2 baths, 1,670 square feet
• Plan B - 3 bedrooms, 2 baths, 1,650 square feet
• Plan C - 2 bedrooms, 2 baths, 1,400 square feet

All of the above floor plans are single story and come with a fireplace, and 2 car garage.  Over the years, many of these homes have had some major renovations and many fine upgrades added to the homes. Monarch Summit II requires that at least one occupant is 55+ years of age or older. By the way, the community of Monarch Summit I was built around the same time by the same builder, but this community is not 55+ restricted.

The Home Owners Association (HOA) for Monarch Summit II is well managed and includes;   Club House and Recreational Facility, swimming pool, spa.  The monthly dues are reasonable at around the low $200 per month level at the time of this writing (subject to change), and include:  Property Insurance, Earthquake Insurance, Landscape Maintenance, Pool and Spa maintenance, Trash service, exterior stucco maintenance.

If you are 55+ and are planning on downsizing and purchasing in the future, make sure you take advantage of transferring your existing tax base by using Prop 60 or 90  if they apply to you.

(Source: OCRealEstateBlog.com)

At the top of the most frequently asked questions’ list is, “How will we know when the market has ‘bottomed out’ and we should buy a home?”Historically, two major indicators that a market has bottomed out are: a decline in the number of listings and an increase in listing and sold prices. Obviously the key here is making your move at the right time-which would be right before these two items begin to manifest in the market.

Based on sales data provided by MLSs, it appears that we are beginning to realize a slight decline in listing volume. I say “appears” because with the factors affecting the market today-and the foreseeable future-this may be a seasonal issue or being caused by any number of things.

Tracking the listing volume over the next several months will provide additional information regarding this question. In regard to sold prices, this is more difficult. Real estate-owned property or property in some stage of the foreclosure process has been driving the price point for real estate for some time now. 

With a significant volume of lending institution-owned property on the market selling at what historically, could be viewed as discounted prices, we do not anticipate seeing an increase in sales prices in the near future.

With sales showing increases compared to last year in most areas and declines in listing volume, it would appear that the market is slowly changing from the buyer’s market we have experienced for the past several years.

However, a point to keep in mind is that self respect and common sense should remain at the top of everyone’s list. This has been-and remains to be-the basis of business success.

RIS Media, Walt Baczkowski, 8/5/08