Tag Archives: OC

Five things to know about a home before committing to buy

Your due diligence inspections should include more than hiring a home inspector to look at the home and reviewing a current termite inspection. And your due diligence should start as soon as you have serious interest in a listing.

Making an offer to purchase a home consumes a lot of time and emotional energy. Before your real estate agent or attorney puts pen to paper, find out as much about the property as you can. In particular, you want to know if there’s any reason you shouldn’t try to buy the house.

Seller disclosure requirements vary from state to state, as does real estate practice and protocol. Find out if there are any seller disclosure statements and presale inspection reports. If there are, ask to see copies before you write an offer.
buy homeIn some areas, it is standard procedure for listing agents to provide a disclosure package that includes any existing reports and disclosures to interested buyers before they make an offer. In other areas, reports are made available only after the buyer and sellers have negotiated the purchase agreement. Get ahold of as much information as you can about the physical condition of the property as soon as possible.

After you review the seller’s documents on the property, you may discover that the home you find so appealing requires a far bigger investment in repair work than you can handle or afford financially. In this case, move on to the next property with no remorse. You’ve saved yourself from hassle and heartbreak.

On the other hand, if the reports and disclosures fall within your expectations, move on to investigating the local neighborhood. On closer look, you may discover that there are several large apartment buildings that back up to the house you’re interested in buying. This might create a noise factor. If you’re sensitive to noise, you might not be happy living in the property you’re considering.

Buyers sensitive to crime should check with the local police department to see if the neighborhood is being hit by waves of break-ins. Drive by the property several times during daylight and evening hours to see if the complexion of the neighborhood changes in any way that is disadvantageous to you.

Commuters should drive from the property to work and back during rush hour, and check into all the public transportation options that are available in close proximity. If you’re intent on buying within walking distance to shops and cafés, find out how long it takes to get from the house you think you want to the nearest commercial area.

HOUSE HUNTING TIP: It’s wise to include an inspection contingency in your purchase offer so that you have a time period to complete whatever inspections of the property you deem necessary before committing to move forward with the purchase. This is recommended even if the seller has completed presale inspections.

Some buyers who have confidence in the seller’s home inspector hire that inspector to do a walk-through inspection with them so that the inspector can explain his report and answer any questions. The fee for this sort of inspection will usually be less than what the seller paid for the initial inspection and written report.

Don’t skip inspections to save money. It could cost you plenty in the long run if uninspected items turn out to be faulty and you have to pay to repair them.

Order a home inspection as soon as possible after your offer is accepted by the sellers. Most home inspections include recommendations for further inspections. If you don’t have the home inspection done early, you may not have enough time to complete all the further recommendations recommended, like roof or drainage inspections.

THE CLOSING: If you run out of time, ask the sellers for an extension.

Dian Hymer is a real estate broker with more than 30 years’ experience and is a nationally syndicated real estate columnist and author.

California targets property-tax payers

Beginning with the 2012 tax bill (due in April 2013), the state Franchise Tax Board will require property owners to break down their property taxes into deductible and non-deductible portions.

As many as 5 million California property-tax payers who have been taking the entire amount they pay off their state income taxes could see a major cut in their deductions when they file next year.

Beginning with the 2012 tax bill (the one due in April 2013), the state Franchise Tax Board will require property owners to break down their property taxes into deductible and non-deductible portions.

That means property owners who have been deducting their Mello-Roos fees — often running into thousands of dollars — will no longer be able to deduct those or any other special assessments like vector control or mosquito abatement.

In Orange County, 181,550 of the county’s approximately 900,000 parcels were subject to Mello-Roos in the 2011-2012 tax year, according to the auditor-controller’s office.  They were billed a total of $207.8 million.

The difference between deductible and non-deductible property taxes is not a new rule. Mello-Roos fees, which pay for roads, schools, fire stations and other public facilities in new developments, have not been deductible from state income taxes since the legislature authorized the special assessments 30 years ago.

Many property owners, however, routinely deduct the entire amount of their property tax bill from their state income taxes instead of only the parts that legally are deductible. Others just use the amount on the Form 1098 that their mortgage holder paid to the county tax collector on their behalf.

Until now the Franchise Tax Board didn’t to go after them. A new computer system being installed this year, however, will allow the agency to distinguish the portions of property tax bills that are deductible and non-deductible, said Daniel Tahara, a FTB spokesman.

He said the new scrutiny of property taxes is not due to any political pressure to increase tax revenues to close the state’s gaping budget deficit.

“Every year we look at areas of non-compliance and this happened to be one that came up,” he said.

Tahara said the agency is announcing the new rules now so taxpayers can make any adjustments this year for their 2012 state tax filing next year.

He said the FTB had planned to impose the new rules on 2011 tax filings due this April, but held off after getting “negative feedback” from tax preparers and the public.

Pat Yeckel, president of Canyon Tax and Bookkeeping Service Inc. in Rancho Santa Margarita, said that she and other tax preparers have known Mello-Roos and other fees weren’t deductible, but that clients usually don’t have the breakdown of their property tax bill.

It will be a particularly big deal for property owners in South County and other new developments where many of the public amenities were paid through Mello-Roos districts.

“This is going to be a big pain,” Yeckel said, noting that just getting the property tax paperwork can be a hassle.

Taxpayers will need a copy of their tax bills whether or not they pay their own property taxes or have them paid through their mortgage payment because they will need their parcel number in addition to the deductible/non-deductible breakdown for their 2012 state income tax filing.

For a full explanation of how the new deductible rules will work, CLICK HERE.

This article and information is from the Orange County Register: “State targets property-tax payers.”

2011 had lowest mortgage rates on record

You’ve probably been hearing all year long how mortgage interest rates were at record lows.

Now, the final data is in. And it shows that 2011 had the lowest average interest rates in the 41 years that mortgage giant Freddie Mac has been tracking loan rates.

Specifically, the U.S. average was 4.45% on the 30-year fixed-rate mortgage, Freddie Mac reported. That beats the previous low of 4.69% set in 2010.

The past two years are the only ones in Freddie Mac’s records in which the annual average rates were below 5% for a 30-year, fixed-rate loan. In 1981, 30-year mortgage rates averaged nearly 17%. As recently as 2008, rates were averaging above 6%.

Interest rates fell below 4% for the first time in Freddie Mac’s data in October – and stayed at or below 4% for the last nine weeks of the year. Thirty-year rates set six records last year, falling to an all-time low of 3.91% on Dec. 22.

Other types of mortgages were in record territory as well. According to Freddie Mac:

  • Fifteen-year, fixed-rate mortgages set eight records in 2011, falling to an all-time low of 3.21% on Dec. 15.
  • Five-year, adjustable-rate mortgages set nine records in 2011, falling to an all-time low of 2.85% on Dec. 22.
  • One-year, adjustable-rate mortgages set 14 records in 2011, falling to an all-time low of 2.77% on Dec. 22.

The record low mortgage rates failed to spark a revival in the housing market, with fewer buyers able to qualify for a loan or able to afford to purchase a home. Overall, local and U.S. home sales remain well below average levels.

This article is from the Orange County Register; read it here: 2011 had lowest mortgage rates on record.”

California housing affordability rises in Q3

California Building Industry AssociationHousing affordability increased in 22 of the state’s 28 metropolitan areas in the third quarter, according to the California Building Industry Association’s Housing Opportunity Index (HOI).

On a statewide basis, the HOI found that a family earning the median income could have afforded 63.5 percent of the new and existing homes that were sold during the third quarter, up from 61.3 percent in the second quarter.

The San Francisco, San Mateo and Marin County metro area was once again California’s least-affordable metro area for the twelfth consecutive quarter, and second in the nation, with just 32.9 percent of the homes sold being affordable to a family earning the median income, up from 27.5 percent in the second quarter. Orange County was California’s second least-affordable market and fifth in the nation (43 percent), followed by Los Angeles County (45.1 percent) and Santa Cruz County (47 percent).

Read the article from the California Building Industry Association here: “California Housing Affordability Rises in Third Quarter, CBIA Announces“.