Paradise Home Buying Negotiating Tips

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Paradise Home Buying Negotiating Tips

When it comes to buying a Paradise home, the ability and willingness to negotiate is a must for both the buyer and seller. In general, sellers ask for more than they are actually willing to accept and buyers offer less than they are willing to pay. The trick is to find the perfect balance so that you, as a buyer, feel good about the purchase price without leaving the seller feeling insulted.

Know Your Paradise Market

Real estate is a business that either favors the buyer or seller, hence the terms buyer's market and seller's market. When negotiating a purchase price, it's important to know which of the two you are in. As the buyer, you will have the best chance at a successful negotiation if you research the price of other comparable homes in the Paradise area before making an offer.

Make It Personal

When you make an offer, the seller will see nothing more than a piece of paper with some numbers on it that represent the price you are willing to pay. If you really want the seller to take your offer to heart, let them know why you want to buy the home. You can do this by preparing a handwritten letter expressing your interest and the reasons you fell in love with their house. If you have a family, tell them about everyone who will be living in the home. Let them get to know you and allow them to picture the happiness that you can bring to their house. Believe it or not, some sellers actually look at the process like finding a good home for a lost puppy. They want quality people to buy their home, so do your best to show them that you are sincere.

Nobody Likes Rejection

Not every offer is accepted, so don't be disheartened if your first offer isn't a winner. In some cases, the seller will make a counteroffer for your consideration. Have you ever heard the old saying, “never take the first offer?” The same is true in real estate and almost every seller thinks it. Your first offer is likely to be less than you are actually willing to pay, which leaves you some bargaining room.

Why Your Offer May Not Be Accepted

There are a number of reasons why a seller may choose to reject an offer, including a feeling that the offer was just too low, the house is newly listed on the market or another offer may be higher than the one you created. In some cases, sellers may also reject an offer that includes owner financing or other requests that are impossible to meet. One example may be an offer that requires the house be available within a certain amount of time. Most contracts require that the seller move out within 30 days, but anything less would require negotiation.

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

About the Author: Tammy Vertrees is a full service real estate agent serving the discerning needs of clientele throughout Butte County, California. Ms. Vertrees specializes in representing sellers and buyers of residential real estate in Paradise, Magalia, Chico, Oroville, Gridley, Biggs, Durham and the surrounding areas. Ms. Vertrees provides clients with a strong level of comfort, powerful negotiation skills and use of the latest technologies.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

Technorati Tags: Real Estate Negotiating Tips,Home negotiating tips Home,buying tips

Should you buy or rent a Paradise CA home? Cost gap narrows

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers 

Should you buy or rent a Paradise CA home? Cost gap narrows Affordable home prices and low interest rates have created an ideal time for many buyers to purchase homes, and now a new week-long look at homeownership confirms it. The national study, conducted for The Associated Press, shows that the difference between monthly rents and mortgage payments is at its lowest level in nearly 20 years. The analysis of 45 metro areas found the difference between the monthly mortgage payment on a median-priced home and the median rent has declined to $256. In some areas, the difference is as low as $100, according to the study. The last time the price gap was that close was in 1993, when it decreased to $264. The study, conducted by Marcus & Milichap Real Estate Investment Services, used median prices for the last three months of 2009 and calculated mortgage payments by assuming a 10-percent down payment and a 30-year fixed loan at 5.07 percent. It also assumed borrowers paid for private mortgage insurance and didn’t include repair costs and tax benefits. Although the difference between monthly rent and monthly mortgage payments is at its lowest level in nearly 20 years, more stringent lending standards have made the home-buying process more challenging. Home buyers can prepare by ensuring their credit reports are up to date and saving for a down payment of at least 20 percent. Borrowers putting down less than 20 percent likely will have to purchase private mortgage insurance. Owning a home has significant tax benefits, including deductions for property taxes and loan interest. Homeowners also can enjoy building equity and creating a means of forced savings as they pay down the principal on the home. Although home buyers should not focus solely on future home price appreciation, according to data collected by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) over the last 40 years, homeowners who purchase a median-priced house, live in it for at least five years, and sell it at the then-current median price, have averaged an annual rate of return of more than 11 percent.

Good timing could reap double tax credits

Good timing could reap double tax credits

Kathleen Pender

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Darryl Bush / The Chronicle

Home buyers Steve and Judy Lewicky of San Francisco peruse the dining room during an open house in San Francisco.

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Some home buyers in California could get a federal tax credit worth up to $8,000 plus a new state credit worth up to $10,000 if they time their purchase just right over the next three months. But double-dipping will be tricky and won't come without risks.

One couple who lucked out are Sibel Demirmen and Scott Henry of San Francisco, who are purchasing a home, their first, in San Rafael's Terra Linda neighborhood.

They were planning to close escrow on April 30, and knew they qualified for an $8,000 federal home-buyer tax credit.

To get the federal credit, buyers must - among other things - close before May 1 or enter into a binding contract before May 1 and close before July 1.

Last weekend, they learned that if they could delay their close until after April 30, they could also qualify for the new California home-buyer tax credit, which was signed into law last week. The state credit is worth up to $10,000, spread over three years.

The seller agreed, and on Monday they signed an addendum to their contract postponing the closing until May 4.

"I was elated. I was ecstatic. I was thrilled," says Demirmen, a singer, music teacher and mother of two.

Although the prospect of double-dipping will excite many house hunters, "I don't think a ton of buyers will get both and benefit from both credits," says Renee Rodda, editor of Spidell's California Taxletter.

To get both, buyers must meet two sets of strict criteria. Timing it right will be tricky, especially in foreclosure or short sales, which can involve long lead times and many parties.

People who have already locked in a rate on a mortgage could lose the rate, or have to pay an additional fee to keep it, if they postpone their closing.

Matt Duffy is buying a home with his wife in Santa Rosa in a short sale, in which the purchase price is less than the debt on the home.

The seller accepted their offer in January. Last week, they heard that both lenders agreed to the deal as long as it closes by April 26.

"We said, 'Cool, we can do that.' We have our mortgage and the federal tax credit," he says.

After reading my Sunday column on the state credit, Duffy realized he could get that too if he delayed his close.

"As it turns out, we are not going to be able to do that. The second lender is demanding we close by April 26 or somebody has to pay an additional $20,000," he says.

"I am of course upset we can't move the date. But we don't want to lose the house. We will still get the federal credit, which is the better of the two credits."

The federal credit: The federal credit is 10 percent of the purchase price, up to a maximum credit of $8,000 for first-time home buyers or $6,500 for longtime homeowners who buy a replacement home. Either type of buyer can purchase a new or existing home.

Buyers claim the federal credit when they file their tax return (or amend the prior year's return). This credit is refundable: The full amount will be paid out, even if you have zero federal tax liability or the credit is bigger than your federal tax.

You cannot get the federal credit if your income is too high or the home was purchased after Nov. 6, 2009, and cost more than $800,000.

The state credit: The California credit is the lesser of 5 percent of the purchase price or $10,000. First-time buyers can purchase a new or existing home but repeat buyers can only purchase a new home that has never been occupied.

The California credit is spread over three years, up to $3,333 per year. It is not refundable: If you owe less than $3,333 in one (or more) of those years, you lose the difference that year. Even if you owed $3,333 before you owned a house, you might owe less after because of all the new tax deductions.

The state credit has no income or purchase-price limits. But here's the rub: Some buyers who fall below the income limits for the federal credit might not owe enough California tax to get the full benefit of the state credit.

To get the California credit, you must close escrow between May 1 and either Dec. 31 or whenever the money set aside for the program runs out, whichever comes first. The money is likely to run out long before Dec. 31.

Alternatively, you can reserve a state credit for new construction by entering into a binding contract between May 1 and Dec. 31 and closing before Aug. 1, 2011. People who do this won't get the federal credit because they entered a contract after April 30.

Getting both: Both credits require you to buy the home as your primary residence. Both define a first-time buyer as someone who has not owned a home in the three years prior to purchase.

In short, to get both credits you must be in contract on or before April 30 and close between May 1 and June 30 - and meet all other requirements.

Buyers who are already in contract and want to postpone their closing need to get the seller and lender to agree.

"Sellers might be flexible because it's still a buyer's market, but they may want something in return," says Richard Redmond, a mortgage broker in Larkspur.

"If you have a loan locked in with a close date in April and you want to extend it, you may have to pay a fee or get a higher interest rate," Redmond adds.

Buyers should consult a well-informed tax person and make sure they understand both credits.

For more on the state credit, see links.sfgate.com/ZJLF.

For the federal credit, try links.sfgate.com/ZJLG or links.sfgate.com/ZJLH.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/04/01/BU9G1CNTVN.DTL&tsp=1#ixzz0mEcOAuiq

Energizing Foreclosure Mitigation Counseling

Energizing Foreclosure Mitigation Counseling

CalHFA is pleased to announce that it has just been awarded over $3.4 million through NeighborWorks® America to provide counseling to families and individuals facing the threat of foreclosure. This is in addition to previous CalHFA awards totaling $12.6 million, which have already provided nearly 50,000 counseling sessions for Californians who are struggling with their mortgage payments.

At a time when foreclosures continue to rise and unemployment figures reach near record levels, CalHFA recognizes the critical, ongoing need for this type of funding. The Agency will work with its long-time partner, RCAC, the Rural Community Assistance Corporation, to provide this vital counseling through dozens of nonprofit, HUD-approved counseling agencies.

Acting Executive Director of CalHFA, Steve Spears, is very appreciative of the scope of CalHFA's award. "Our allocation of $3,446,188 is the largest amount awarded to any of the 35 state housing finance agency recipients.  We will put these funds to immediate use to assist Californians in need."

For more information, see the NeighborWorks America press release here:
http://www.nw.org/network/newsroom/pressReleases/2010/netNews041610.asp

No More State Tax on Forgiven Debt

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

NO MORE STATE TAX ON FORGIVEN DEBT

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification.  Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law.  For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences.  The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence.  It includes both first and second trust deeds.  It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012.  Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions.  Most notably, taxpayers who are bankrupt are exempt from debt relief income tax.  Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage.  The full text of Senate Bill 401 is available at www.leginfo.ca.gov. 

C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest.  Some of the new or newly revised legal articles available at http://qa.car.org/ are as follows:

• Homebuyer Tax Credit Chart 2010.
• Internal Data Exchange (IDX).

__________________________________________________

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

 

Technorati Tags: Mortgage Debt,Short Sale advice,Real Estate Talking Points

Interest in real estate investment triples

Interest in real estate investment triples

Interest in purchasing real estate as an investment has more than tripled in the past year, according to a survey conducted by Move, Inc.  Nearly 17 percent of potential home buyers said they plan to purchase a home in the near future as an investment compared with 5.6 percent in March 2009, according to the survey.

The survey also found more than 10 percent of Americans planning to purchase investment property in the near future said they will pay for the property using 100 percent cash, and 12.8 percent will use cash for more than 50 percent of the purchase price and finance the remainder. Nearly half reported they will buy the property with less than 50 percent cash down and finance the remainder.  Nearly half of the potential real estate investors said they plan to own the property for six or more years; 16 percent expect to hold the property between two and five years; while 10.6 percent plan to own the property between six and 24 months.

While interest by potential home buyers in purchasing a foreclosure to live in has declined 31.1 percent in the past five months to 26.5 percent, the survey found interest in purchasing a foreclosure as an investment is on the rise, with interest in purchasing a foreclosure as an investment to fix it up and resell rising 42 percent in March.

Existing Home Sales - Market Update

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

Paradise Chocolate Fest Goes to Zero Waste! Volunteers Needed

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Paradise Chocolate Fest Goes to Zero Waste! Volunteers Needed

This year NRWS has teamed up with the Chocolate Fest to make this years Festival a Zero Waste Event. The goal is to compost and recycle over 93% of the waste. Vendors have been instructed to only use recyclable or compostable material. There will be 5 “Zero Waste Stations” on site with information booths and students from Evergreen 6 to help our
community learn more about the importance of recycling.

Volunteers are needed to help make this event a success. If you would like to
participate please contact Jennifer at 876-3345.

Together we can make a difference.

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

 

Technorati Tags: Chocolate Fest,volunteer,events,festivals

Paradise CA Weekly Real Estate Market Report – includes Magalia CA

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

About: Tammy Vertrees is a full service real estate agent serving the discerning needs of clientele throughout Butte County, California

Ms. Vertrees specializes in representing sellers and buyers of residential real estate in Paradise, Magalia, Chico, Oroville, Gridley, Biggs, Durham and the surrounding areas.  Ms. Vertrees provides clients with a strong level of comfort, powerful negotiation skills and use of the latest technologies.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

 

Technorati Tags: Weekly Market Report,Real Estate Market

Web Exposure – Sell your paradise or magalia CA home

Web Exposure. The Internet is the most powerful marketing tool in today's home selling business. Although chances are fairly high that your home will be sold to a buyer who used a local Real Estate agent, most buyers begin their home search long before they decide to work with a Realtor. Give your listing the maximum exposure it deserves. Call me to get your home this MAXIMUM EXPOSURE! 530-413-8383

CALIFORNIA'S TAX CREDIT MONIES MAY GO FAST

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

CALIFORNIA'S TAX CREDIT MONIES MAY GO FAST

The $100 million allocated for California's first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.'s Economics team.  California's Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have

never been previously occupied.  However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.

C.A.R.'s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters.  It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit.  If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.

Applications for the California tax credit must be faxed to the FTB after escrow closes.  The FTB will update its website when the 2010 application form and other information become available.

REALTORS® are reminded not to give their clients any tax or legal advice, such as the availability of funds under the California tax credit program.  Agents should encourage their clients to seek specific advice from an accountant, attorney, or other professional as they deem appropriate.

For more information, please refer to C.A.R.'s Homebuyer Tax Credit Chart 2010.

 

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

feather river hospital receives state recycling award

Feather River Hospital receives state recycling award 

CalRecycle, the states recycling & waste reduction agency has recognized Feather River Hospital for their recycling efforts for the second time with the Waste Reduction Awards Program (WRAP).

Under Director of Environmental Services Robert Crawford, the facilities
have increased their recycling program diverting on average 40,000 pounds
per month from the landfill. The environmental sustainable culture the
hospital has fostered required changes in daily routine and education.
NRWS & the Town of Paradise thanks Robert and the entire hospital
staff for this achievement.

NRWS staff assisted FRH in a tailored program that worked in the
heavily regulated hospital environment. NRWS is here to help you and
will at no charge help make a site specific plan for our customers. On average
commercial businesses recycle less than 17% of material. Increasing recycling beyond cardboard is easy and cost effective. Join our community efforts today for a better and sustainable tomorrow.

 

 

 

 

 

 

 

 

Robert Crawford
with three of the hospitals four 6 yard recycling bins, and one of
the multiple carts used to transfer material around the facility

Does Moving Up Make Sense?

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Does Moving Up Make Sense?

The following are some questions that will help you decide whether you’re ready for a Paradise home that’s larger or in a more desirable location than your current one.

If you answer yes to most of the questions, it’s a sign that you may be ready to move.

Have you built substantial equity in your current home?

Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.

Has your income or financial situation improved?

If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving.

Have you outgrown your neighborhood?

The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job, relatives, or live in a better school district.

Are there reasons why you can’t remodel or add on?

Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.

Are you comfortable moving in the current housing market?

If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.

Are interest rates attractive?

A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.

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Wondering What Your Home Is Worth? -- Let me show you.

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

Technorati Tags: Moving Up,Move-Up Buyers,Home Upgrading

May 1 - American Cancer Society Relay For Life in Chico CA

American Cancer Society Relay For Life

Saturday, May 1 8:00a

at Pleasant Valley High School, Chico, CA

Relay For Life®, the American Cancer Society's signature event, is a fun-filled overnight experience designed to bring together those who have been touched by cancer. At Relay, people from within the community gather to celebrate survivors, remember those lost to cancer, and to fight back against this disease. read more

Phone: (337) 356-3567

Age Suitability: All Ages

Tags: cancer fundraising volunteer teen community

Relay For Life®, the American Cancer Society's signature event, is a fun-filled overnight experience designed to bring together those who have been touched by cancer. At Relay, people from within the community gather to celebrate survivors, remember those lost to cancer, and to fight back against this disease.

Sign up today to become a part of the Relay For Life® effort in your community, and you too can fight back against cancer.

Technorati Tags: Relay for life Chico Events

Quit making your landlord RICH!

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Quit making your landlord RICH!

Yes You Can Own A Home!

Here’s How To Quit Making Your Landlord Rich and Put Your Hard Earned Rent Money Back Into Your Own Pocket

Helping another person pay off their mortgage does not make any sense, yet this is exactly what renters are doing each and every month. Your rent payment only helps your landlord. After only a few short years, most landlords have completely paid off their mortgages thanks to their renters. Now they own real estate free and clear. Is there any wonder why most landlords end up owning more and more apartment rentals!

But you can stop helping your landlord and begin helping yourself. All you need to do is simply find a home with a monthly payment roughly equal to your rent payment. And there are many homes that may just do that for you.

I offer a free, no obligation meeting for my rental clients where we explore this opportunity. I would be honored to meet with you to determine your home needs.

Please feel free to contact me by email or telephone to arrange a time best for you.

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2011. All Rights Reserved.

I am a full service real estate agent serving the discerning needs of clientele throughout Butte County, California

I specialize in representing sellers and buyers of residential real estate in Paradise, Magalia, Chico, Oroville, Gridley, Biggs, Durham and the surrounding areas.

Visit me on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

Technorati Tags: Home Buyers,Renters,Home Renters,First-Time Homebuyers

Median list price rises in March

Median list price rises in March

The median list price of homes increased by 1.07 percent in March to $263,754, and the median price reduction declined 3.02 percent to $20,200, based on homes surveyed by ZipRealty for its monthly review of Multiple Listing Services in 26 major U.S. markets.

San Diego and San Francisco were among the housing markets with the lowest percentage of price-reduced MLS-listed homes.  In total dollars, San Francisco, Orange County, San Diego, and Los Angeles were among the markets with the largest median price reduction.

Weekly Paradise California Real Estate Market Report, including Magalia CA

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

California expected to cancel tax on forgiven mortgage debts

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

California expected to cancel tax on forgiven mortgage debts

By Jim Wasserman
jwasserman@sacbee.com

Published: Tuesday, Apr. 6, 2010 - 12:00 am | Page 6B

Relief appears imminent for thousands of Sacramento homeowners hit with state tax bills for mortgage debts forgiven in 2009.

State lawmakers said Monday they plan to cancel the state tax obligations with a vote Thursday.

Shannon Murphy, spokeswoman for Assembly Speaker John Pérez, D-Los Angeles, said legislation will go before the Assembly Revenue and Tax Committee today and the Appropriations Committee on Wednesday, and will receive a full vote Thursday.

A similar Senate floor vote planned Thursday would send the bill immediately to Gov. Arnold Schwarzenegger, who has repeatedly stated his support. The new bill is similar to one he vetoed March 25. But this time it omits a part he opposed – financial penalties for businesses that routinely seek state tax refunds. Democrats removed the section despite their contention that some firms "fish" for refunds whether or not they're owed.

Monday, Schwarzenegger spokesman Mike Naple said the governor "hopes the Legislature fully addresses the concerns raised in previous versions of this bill."

The new movement means that Californians who got unexpected tax bills of $10,000 or more in recent weeks could soon be off the hook. Most are borrowers who received loan modifications last year or lost their houses in short sales, in which banks accept prices below what they're owed. In both cases, lenders forgave some of the debts owed them, a process that exposes borrowers afterward to taxes.

"We want to get it done before the (April 15) tax deadline," said Alicia Trost, spokeswoman for Sen. President Pro Tem Darrell Steinberg, D-Sacramento. "We don't want to have people jump through hoops."

Many across the state have anxiously waited for the state to resolve the issue before the tax filing deadline – or have filed extensions.

Typically the state and federal governments view forgiven home loan debt as additional income and tax it. But both have backed off amid the housing crash. The federal government has suspended taxes on forgiven mortgage debt from 2007 through 2012. California suspended it for the 2007 and 2008 tax years. But disagreements over the business tax refunds stalled a bill extending it to 2009.

The bill being considered this week, Senate Bill 401, would cancel state tax obligations for forgiven mortgage debt through the 2012 tax year. The Assembly planned Monday to rewrite SB 401 from a bill regarding tax shelters to one that aligns much of California's tax law with that of the IRS. That includes canceling taxes on forgiven mortgage debt and on recipients of federal renewable energy grants.

"We haven't done a tax- conforming bill for four years, so it's important to get that done," Trost said Monday.

Read more: http://www.sacbee.com/2010/04/06/2657410/california-expected-to-cancel.html#ixzz0kZb2uF5e

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

Tammy Vertrees is a full service real estate agent serving the discerning needs of clientele throughout Butte County, California

Ms. Vertrees specializes in representing sellers and buyers of residential real estate in Paradise, Magalia, Chico, Oroville, Gridley, Biggs, Durham and the surrounding areas.  Ms. Vertrees provides clients with a strong level of comfort, powerful negotiation skills and use of the latest technologies.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

 

Technorati Tags: Mortgage Debt,Real Estate Tax

Government launches effort to help homeowners in short sales

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Government launches effort to help homeowners in short sales

By Alan Zibel

Associated Press

WASHINGTON — The government launched a new effort Monday to speed up the time-consuming, often-frustrating process of selling your home if you owe more than it's worth.

The Obama administration will give $3,000 for moving expenses to homeowners who complete such a sale — known as a short sale — or agree to turn over the deed of the property to the lender. It's designed for homeowners who are in financial trouble but don't qualify for the administration's $75 billion mortgage modification program.

Owners will still lose their homes, but a short sale or deed in lieu of foreclosure doesn't hurt a borrower's credit score for as much time as a foreclosure.

For lenders, a home usually fetches more money in a short sale than a foreclosure. And the bank avoids expensive legal bills, cleanup fees and maintenance costs that follow a foreclosure.

"It's very traumatic and embarrassing and frustrating to go through a foreclosure," said Laurie Maggiano, policy director of the Treasury Department's homeownership preservation office. With a short sale, she said, "your financial issues are your own problem and not neighborhood conversation."

Falling home prices and lost jobs have forced many sellers into this position. For example, in Orange County short sales made up about 26 percent of the market in March, compared with 17 percent a year earlier, according to data complied by Altera Real Estate, a local brokerage.

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In the Minneapolis-St. Paul metro area, about 12 percent of all deals since October were short sales, up from about 8 percent a year earlier, according to the Minneapolis Area Association of Realtors.

The expanded incentives will help accelerate short sales, said Mark Zandi, chief economist at Moody's Analytics. He expects 350,000 homeowners nationwide to use the program through the end of 2012, more than double his earlier forecast.

A short sale appears to be the only way out for Brandee Chambers, 36, of Las Vegas. She got into trouble during the housing boom by taking out a risky loan against her home and using the money to buy two investment properties in Phoenix.

She later lost those two properties to foreclosure, and now she is trying to sell the home she lives in for $209,000, but the mortgage balance is $350,000.

Chambers, who owns two hair salons, says she would rather stay in her home, where she lives with her 14-year-old son. But she had no luck getting help with her loan. She said she's resigned to scaling back her lifestyle and renting out an apartment.

"I've had to accept a lot in the last year," she says.

For buyers, though, short sales can be a great opportunity.

Marco Cappelli, 49, a winemaker from Northern California, is planning to buy a short sale this month in the Sierra Nevada foothills. He and his wife are paying $214,000 for a property that had been listed at $270,000. The pair plan to fix it up, install a hot tub and rent it out to vacationers.

Along with the financial incentives, the new government program makes another key change. Mortgage companies will have to set their minimum bid before the house is listed for sale. If the offer is above that, the lender must accept it.

That's a big change from current practice. Lenders generally don't calculate how much money they are willing to accept on a short sale until they have an offer in hand, causing long delays before the sale is approved.

The new program "will give us a degree of efficiency that we have not had in the past," said Matt Vernon, Bank of America's executive in charge of short sales and foreclosed properties.

Under the new process, buyers who submit an offer to purchase a home in a short sale should get a response within two weeks, as opposed to months. If that happens as planned, it would be a big improvement. Real estate agents across the country have complained that lenders are often difficult to reach, sometimes only communicating by e-mail and infrequently at that.

"You're one of 400 properties on a screen," said Dave Bauer, a real estate agent in Danville.

Some real estate agents who specialize in short sales are optimistic. "It could be the first government program that actually helps Las Vegas," said Steve Hawks, a real estate agent there who specializes in short sales. Most borrowers in Las Vegas, he said, owe so much more on their mortgages than their properties are worth they can't qualify for a loan modification.

The Treasury Department outlined the plan in November, but doubled the original $1,500 in relocation money after realizing that many homeowners need more cash to move out. That's because landlords usually want large deposits from people whose credit records have gone sour after missing mortgage payments.

However, there are plenty of restrictions. To qualify, the home needs to be a borrower's primary residence. Homeowners either have to be behind on their mortgages or on the verge of becoming delinquent.

Currently, the program is not available for mortgages owned or guaranteed by mortgage finance companies Fannie Mae and Freddie Mac, though the two government-controlled companies will soon follow suit, said the Treasury's Maggiano.

_________________________________

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

: Tammy Vertrees is a full service real estate agent serving the discerning needs of clientele throughout Butte County, California

Ms. Vertrees specializes in representing sellers and buyers of residential real estate in Paradise, Magalia, Chico, Oroville, Gridley, Biggs, Durham and the surrounding areas.  Ms. Vertrees provides clients with a strong level of comfort, powerful negotiation skills and use of the latest technologies.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

Technorati Tags: Short Sale,Short sale advice,Sell your home

Common Misconceptions Among Home Buyers

Common Misconceptions Among Home Buyers

Misconception: If you pay list price, you're paying too much.

If you don't know what the current market value is for homes in the area and whether the market is appreciating or depreciating, you don't know what a fair price is and you're likely to miss out on a great deal by trying to low ball a house that's already priced well.

If the house meets your goals, is within your budget, and is priced competitively, it's a bargain and you should make a strong offer. Get assistance from a professional to help you recognize a good deal and grab it before it's gone.

Misconception: Foreclosures and short sales are the best buys.

Many buyers find out the hard way that foreclosures and short sales are full of headaches, may need extensive repairs, require great patience over an extended period, often don't have the criteria that's most important to you, and may never close.

Short sales abound in Butte County and many people are starting to avoid them because the pain isn't worth the gain. Foreclosures can be less troublesome, but often in poor condition with challenges that may take longer than normal to resolve. Market prices have corrected in many places, including Butte County, and it's possible to find great deals in homes that are priced like short sales, but don't have the headaches.

Misconception: You get a better price if you buy directly from the owner.

Bargain hunters sometimes avoid Realtors, thinking that they will get a better price if they buy directly from a FSBO. Meanwhile, the sellers are also trying to save on the commission, so they're not getting expert advice either and often price their homes above market value.

The end result is often that a buyer pays too much or the FSBO is unable to get the house sold. A savvy Realtor working on the buyer's behalf, armed with market data and great negotiation skills, is much more likely to get a great deal than buyers can by negotiating for themselves.

If you're buying a house, it's a great idea to find a good Realtor and listen to their advice.

Technorati Tags: Find a Realtor Find your home Foreclosures Home Buying mistakes

A Golden Opportunity In California for Homebuyer Tax Credits

A Golden Opportunity In California to Double Dip on Overlapping Homebuyer Tax Credits

If EVER there was a reason to get off the fence and BUY YOUR HOUSE in California, this is it. We're talking a once in a lifetime, 24 karat golden opportunity to have the government subsidize your home purchase for up to $18000 in tax credits.

But the window of opportunity is EVER so brief if you are going to attempt to double dip and get both the state and the federal tax credits.

Here's how the double dip works: The federal home buyer tax credit for first time buyers states you must be in contract to buy your house by April 30th and close before June 30th to be eligible for the credit.

But a newly enacted California stimulus for home buyers actually OVERLAPS the federal first time home buyer tax credit!

You can also receive $10,000 in tax credits as a first time buyer, from the State of California for transactions that CLOSE after May 1.

If you have followed me so far (and there are 18,000 reasons to pay attention and follow) you have probably figured this out:

1. By being in a RATIFIED CONTRACT before April 30, you can qualify for the $8000 first time homebuyer tax credit from the Federal government (as long as it closes by June 30)
2. By CLOSING that RATIFIED CONTRACT after May 1, you can qualify for the $10,000 first time homebuyer tax credit from the State of California.

ADVICE:

Already in contract and set to close at the end of April? A delay of close until May 3 will not endear you to your Realtor or to your seller, but could qualify you for $10,000 in tax goodies (May 1 and 2 are a weekend).

If you are NOT already in a contract, you are going to need to contact a mortgage professional and get thoroughly pre-approved NOW. Make sure closing the loan before June 30th will be possible based on your situation. (60 days is NOT unreasonable for most loans).

Once preapproved, seek out a great Realtor who knows the ropes, will work FAST, and will work as a team with your chosen mortgage professional.

Disclaimers: As a mortgage professional, I am not qualified to give tax advice. Please consult your tax advisor. Be aware there are income limitations on the federal tax return, and there could be other factors that limit your ability to receive the tax credits.

$10,000 California tax credit

$8,000 Federal tax credit

Written by: Janet Guilbault - California Mortgage Banker/Broker

Things Needed After Purchasing a Home

Things Needed After Purchasing a Home

Now that you've signed all the paperwork and your loan is approved, it's time to move in. But wait! Before you put your feet up, there are a few things that you will need in order to make your new house a home.

Locks

Regardless of whether you purchase a newly constructed home or one that was formerly owned by someone else, it's important that you have the locks changed. Everyone from REALTORS® and contractors to friends and family of the former owner may have a key, which is why getting new locks should be at the top of your list.

Furnishings

You can't hang your hat without a hat rack, so don't forget to add some necessary furnishings. Some homes may include appliances and possibly even some furniture, but most homeowners prefer to decorate their house themselves. After all, someone else's taste in decor may not necessarily be the same as your own. If you purchase from a furniture store, they will handle the delivery for you. Otherwise, you can hire a moving company.

Appliances & Cookware

Even if your new home is equipped with appliances, you may still need to add a few items into the mix. For instance, a coffee maker, toaster, microwave or blender may be items you want for your kitchen. You will also need flatware, tableware and a quality dish drainer to hold your dishes that require the hand wash method.

Tools

When you move into a new home, there will likely be some things to do that require the use of tools. Whether you need to assemble furniture, a desk for your office or just need to tighten some bolts here and there, a good set of tools is a necessity.

Personal Touches

No home is complete without personal touches that represent the new owner's taste, so don't forget to include them on your shopping list. Pictures, paintings, special window dressings, accent pillows, plants, decorative throws, accent rugs and bedding sets will create a custom interior that's all about you. Other things to consider include portable air cleaners, water filters, an answering machine, wastebaskets and a bathroom plunger.

Outdoor Décor

If you like to entertain, equipping your backyard accordingly is a must. Patio furniture, an outdoor grill, landscaping tools and garden supplies are essential to creating an outdoor atmosphere that your family and friends are sure to love. Speaking of the outdoors, don't forget to purchase a lawnmower and trimmer unless you live in a subdivision where lawn care is included in the maintenance fees. If you live in an area that's prone to snowfall, keep this in mind when shopping for maintenance supplies.

The best way to tackle a large list of necessities is to keep a pad of paper nearby and write down each item as you think of it. Think about each area of your new home and do a mental inventory of what is needed. There will always be new items to add to the list, but you will cover the basics with your handy checklist of necessary items for your new home.

For  information on Paradise, Magalia, Chico, California and surrounding areas, contact me directly at 530-413-8383 or check out www.TammysRealty.com or my Localism Blog.

Real Estate Consultant
Coldwell Banker Ponderosa Real Estate
530-413-8383
www.TammyVertrees.com

Technorati Tags: Home Decorating,After Close of Escrow

Selling Your Paradise Home In a Market Full of Foreclosures

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Selling Your Paradise Home In a Market Full of Foreclosures

Take a look in just about any Paradise neighborhood and you may find the sign of distressed times. Foreclosures are on the rise and that can cause a lot of panic for sellers who aren't in the same financial crisis.

The increase of awareness about Paradise foreclosures is stimulating buyers to keep fishing and pushing for even lower prices for homes.

So the sellers who are not in foreclosure or who are not in distress have to compete with those properties with the same pool of buyers. So there are two things that they can do; the two things are: pricing the property so it is competitively priced … and they have to make sure that the property shows in absolute perfect condition. The more choices the buyer has, the more critical the showing condition.

Get clear about your market-length time. Having an accurate picture of how long you can have your home on the market will help you to price it correctly. Remember, that buyers aren't going to pay a premium price out of sympathy simply because the seller owes more on the mortgage. Price your home based on it’s worth, not on what you owe.

Work with an agent. Now more than ever, an experienced agent can help provide the advice and knowledge sellers need to get their home sold. Agents can also help to aggressively market your home so that it doesn't get lost in a sea of foreclosure homes.

Price your home correctly from the start.

All too often sellers end up taking a humble ride down and diminishing their possible gain. They end up chasing the market down -- whether they realize it or not. Price is critical. When determining price, don't just look at computer screen shots of homes that are selling in your neighborhood, get in the car and take a ride around to view the exterior and interior of properties that your home will be competing against -- that's exactly what buyers will do. Overpricing your home will cause it to sit on the market for an extended period. Eventually your listing will become stale and you may receive many lowball offers from buyers who are simply fishing to see how low you'll go. If a home is slightly underpriced you can generate more attention and improve your chances of getting a qualified offer.

Choose the best methods to promote your home. Nowadays, advertising isn't really important because every buyer has access to almost complete information via the Internet -- everyone can find the properties. Advertising used to be important when buyers didn't have access to the property or a way of finding the property, but now buyers can do their own shopping, searching, and finding. They're going to do that based on their perception of value and how it's priced based on the other properties that they are looking at. However, that doesn't mean you shouldn't have virtual tours and lots of pictures loaded on websites that feature your home -- buyers like to preview before they actually see the home in person.

Make your home the best value - Buyers are going to look at all their options. We have to make it painfully obvious that we're the best value. It doesn't always mean the lowest price. It may mean a nicer house for the same price. It may mean having more goodies for the same price. It may mean having a lower price, but the buyers have the information and prices of what's available and they will choose the one that is the best value -- and we're either going to help sell the other homes or the other homes are going to help sell ours.

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Wondering What Your Home Is Worth? -- Let me show you.

Technorati Tags: Sell your home,Selling your home

12th Annual Kids' Fishing Day - Saturday, April 17th, 2010.

12th Annual Kids' Fishing Day - Saturday, April 17th, 2010.
at the Paradise Lake Parking Area

Come and Enjoy!
For kids' ages 3-15
Dutch Brothers Coffee, Snack Bar, Drinks, Free Raffles, Free Prizes!
Prizes for the biggest Trout!
Driving Directions

Donate to the Save-a-Can / Buy-a-Fish
For Kids' Fishing day and Receive a free

and take your Paradise water with you!

Minimum Donation $15.00 at the Paradise Irrigation District main office. 5325 Black Olive Drive, Paradise CA 95969

Would you like to be part of making this  free-for-kids annual event possible?

Look for the Donation Boxes Around Town!
Print and Display the Flyer
Letter to Donors

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New Playground Area at Paradise Lake

Young visitors to Paradise Lake can now enjoy the updated playground area. The rehabilitation project was presented to the lake committee in 2005 by Jennifer Barber as her senior project while at Paradise High School.

The surrounding cement block wall was built by the Paradise Rotary Club. The rubber bark which provides a safe area for young children was provided by a grant from the State of California Integrated Waste Management Board. The use of the rubber bark at Paradise Lake has stopped 3,325 tires from going to landfill.

 

Technorati Tags: Kid's Fishing Day,Paradise Lake

2010 Outdoor Living Trends for Paradise California

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

2010 Outdoor Living Trends

Spring has sprung and while snow still lingers on lawns, patios and backyards, thoughts are turning to the great outdoors -- around the home.

However, those thoughts of leaving in-house hibernation behind are edged with economic concerns as homeowners take a less lavish look at how to move indoor living outside.

Buzzwords are "low" and "less" as low-maintenance landscaping, low-frill entertaining, even less technology are common in outside home improvement plans homeowners will undertake this year, according to the American Society of Landscape Architects (ASLA).

Homeowners want to create a sense of place for their family, friends, and neighbors to enjoy outside, but an uncertain economy means many will dial back some of the extra features we've seen in past years.

From Jan. 25 to Feb. 12, when the ASLA surveyed 182 residential landscape architects about the popularity of various design elements for 2010 they found homeowners were avoiding more expensive, elaborate items in favor of more essential ones.

Given most outdoor living spaces are an extension of the kitchen, ASLA, not surprisingly, found the most popular kitchen features was an outdoor grill (94.4 percent) and counter space (73.5 percent).

More elaborate outdoor refrigerators (52.8 percent) and sinks (50 percent) were much less popular.

For entertainment purposes, instead of stereo systems (57.2 percent), wireless/Internet connectivity (44.1 percent), outdoor heaters (43.9 percent) and TVs (35.5 percent), there was much greater interest in more utilitarian seating/dining areas (95.6 percent), installed seating like benches and seat walls (90.6 percent) or weatherized outdoor furniture (77.1 percent). However, the fire pit/fireplace (94 percent) remained popular.

This year homeowners are also looking to go 'green' outside to save time and money on upkeep.

Popular landscaping elements include low-maintenance landscapes (94 percent); drip/water-efficient irrigation (85.2 percent); native/adapted drought tolerant plants (85.2 percent); and less sprawling lawn (73.9 percent).

Other popular features include fountains/water features (87.8 percent) and food/vegetable gardens (78.5 percent).

Among the more expensive outdoor architectural features that remain popular were spas (hot tub, Jacuzzi, whirlpool, indoor/outdoor sauna; 79.1 percent); decks (83 percent), porches (76.4 percent) and swimming pools (72.4 percent).

Among the least popular items were sleeping spaces (5.6 percent); geothermal-heated pools (28.2 percent); outdoor cooling systems (36.5 percent); outdoor heaters (43.8 percent); solar-powered lights (49.4 percent); and sports/recreational spaces (tennis courts, bocce ball, etc.; 47 percent).

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Wondering What Your Home Is Worth? -- Let me show you.

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Follow me on TWITTER

© Tammy Vertrees 2010. All Rights Reserved.

About the Author: Tammy Vertrees is a full service real estate agent serving the discerning needs of clientele throughout Butte County, California

Ms. Vertrees specializes in representing sellers and buyers of residential real estate in Paradise, Magalia, Chico, Oroville, Gridley, Biggs, Durham and the surrounding areas.  Ms. Vertrees provides clients with a strong level of comfort, powerful negotiation skills and use of the latest technologies.

Visit Tammy Vertrees on the web at www.TammyVertrees.com for real estate information and to view all available Butte County homes for sale.

Technorati Tags: Outdoor Living,Outdoor Decor,Living Outdoors

Spring has Sprung on Paradise Housing

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Spring Has Sprung On Paradise Housing

The past 7 days have brought a solid ray of sunshine to the housing market. Not only did the January S&P/Case-Shiller Home Price Index rise for the eight straight month but SUPPRISE, SUPPRISE, SUPPRISE, February’s Pending Home Sales beat market expectations 8.2% (a decline of 0.2% was anticipated. Steven A. Wood chief Economist at Insight Economics, LLC states:

"The S&P/Case-Shiller 20-City Home Price Index ROSE by 0.3% (seasonally adjusted) in January to 146.3, its eighth consecutive increase for the first time since September 2005 - April 2006 at the end of the boom."

“Home prices ROSE in January for the eighth straight month. This trimmed the year-on-year rate of decline to its slowest pace in 2 years. Although home prices are still falling on a year-on-year basis, there are increasing signs that home prices have begun to stabilize, even in some of those areas where the housing boom was quite substantial. In many regions, home prices have actually begun a modest recovery. Even in those areas where housing boomed the most, the rate of home price decline has slowed significantly. However, with unemployment remaining high, with mortgage delinquencies still climbing, and with more mortgage rate resets on Alt-A and Option ARM loans due to take place over the next year, home prices are still at risk for another dip.”

"Pending Home Sales ROSE by 8.2% in February to 97.6, compared with market expectations for a 0.2% decline. Pending home sales are counted when sales contracts are signed and a viewed as a leading indicator of existing home sales. This surge occurred despite the severe snow storms in mid-month and may reflect homebuyers' attempt to purchase before the expiration of the extended homebuyers' tax credit at the end of April. Pending home sales are 17.3% ABOVE their year ago level. The regional composition showed a huge increase in the Midwest, big gains in the South and Northeast, and a moderate decline in the West. However, in every region, pending sales are ABOVE their year ago level."

"Pending homes sales have plunged between October 2009 and January 2010 as the initial first time homebuyers tax credit expired. With the extended tax credit 'now set to expire at the end of April, homebuyers appear to be returning to the market. If that is indeed the case, another sharp run-up in home sales should occur through April before another sharp decline is experienced. A bottom has been reached in existing home sales and a recovery is underway but it is being heavily underpinned by government stimulus."

For more information, you can visit my Web site or feel free to give me a call.

Tammy Vertrees, Paradise California Realtor

530-413-8383 Direct
530-872-5428 Office

www.TammyVertrees.com

Top 10 Home Buying Mistakes for Paradise & Magalia CA

Real Estate for Today’s Magalia and Paradise California Home Sellers and Home Buyers

Top 10 Home Buying Mistakes

Buying a home is perhaps the most arduous, expensive and, ultimately, valuable acquisition you'll ever complete

Just one mistake could mean disaster -- perhaps the worst mistake you'll ever make.

In order to avoid titanic trip ups during such a trying transaction, Paradise and Magalia buyers should get to know the most common home buying blunders.

To know them is to avoid them.

Going solo: Buying a house is a complex transaction. It should be a team effort. You'll need a REALTOR®, lender, inspector, insurer, perhaps a lawyer, and other team members to help you through each step of the way. Team build before you start the search.

Love at first sight: If you believe in fairy tales you probably shouldn't be buying a home. You won't live happily ever after if you emote your way through the home buying process. Your home should fit your real needs, not your yen for drama. Buy a home that fits your budget and your lifestyle. Be sure the home is in a community and neighborhood you desire. Visit neighborhoods several times before you buy to check out schools, noise and traffic patterns.

'Loanless' shopping: Being pre-qualified gives you a general idea of how much you can afford to borrow. It's better to be pre-approved for a given loan. Sellers will take you more seriously. You'll stay on budget.

Overbuying: Home buyers buying more than they could truly afford, in part, led to the collapse of the housing market. Buy more than you can afford and your dream home will become the same nightmare. Analyze all your monthly costs including debts, food, transportation, entertainment, and savings. Your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Don't forget to budget closing costs (often two to five percent of the home's purchase price), plus moving, redecorating and maintenance. Look ahead and allow for increases in ongoing expenses such as utilities and taxes.

Misplaced trust: You are engaged in what's likely your most valuable acquisition ever. It's a business transaction. Ask family, friends, co-workers, professionals and others you trust for referrals, but don't take their word for it. Vet your team members.

Accepting oral agreements: Get it in writing. The rate lock, the home inspection, disclosures, the contract. Always. Should a dispute arise, you've got the details documented.

Skipping the fine print: Understand what's really in any document before picking up a pen. Get documents in advance, take time to read them and ask questions. Get copies of your mortgage and closing papers a few days ahead of closing.

Forgetting or betting on resale: Avoid buying a home that costs 50 percent more than neighboring homes. Reconsider buying the most expensive home on the block. Neighbors' lower home values will weaken yours. Buy intending to flip your investment only to have the market fail means when it's time to sell your price may not cover your costs.

Making an unconditional offer: Protect yourself with these contingencies:

1. Mortgage financing: You may be preapproved but is the house? A formal appraisal confirms -- or not -- that there is sufficient value in the home to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.

2. Inspection: Never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.

3. Insurance: Confirm you can get adequate insurance coverage. In some areas, or following certain disasters, it can be difficult to get types of hazard insurance.

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Wondering What Your Home Is Worth? -- Let me show you.

Technorati Tags: Home Buying Mistakes First Time Home Buyers Move Up Home Buyers