Eva Bradley's Blog

Purchasing a home is probably the single biggest investment you will ever make. Before closing on the house, you’ll want to know that no other individual or entity has a right, lien or claim to the property.

For a modest, one-time title insurance premium, you will receive continuous title insurance protection in an amount equal to the purchase price of the property or its current market value. This premium typically includes your “owners” policy as well as the “lenders” policy.

One of the marked advantages of title insurance is that prior to a policy being issued, the title insurance company completes extensive research into relevant public records, maps and documents to trace ownership of the property and determine if anyone other than you has an interest in the property. Through its research, the title insurance company can usually identify any title problems that may arise and have these problems cleared-up prior to closing.

This is extreemly important, escpecially these days, where many homes going trhough foreclosure, and changing hands rather rapidly.  As a home buyer, you want to make very sure that the tilte of the home you are buying is free of any leans!    

 

Homeowners win big with extension and expansion of federal tax credit

The U.S. House of Representatives today voted 403 to 12 to extend and expand the home buyer tax credit.  The bill passed the U.S. Senate late yesterday and now will go to President Obama for his signature, where it is expected to be signed this week.

The tax credit will be extended through April 30, 2010, with a 60-day extension if a binding contract is in place prior to the deadline.  First-time home buyers will continue to receive a tax credit of up to $8,000, while existing homeowners will receive a credit of up to $6,500.  Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years.  The bill also will increase the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers to $125,000 and $225,000, respectively.  The purchase price of the home is capped at $800,000.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit, provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

 For weeks, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R and its members have urged Congress and the U.S. Senate to extend and expand this crucial piece of legislation.

 Nationwide, more than 1.4 million first-time home buyers were given the opportunity to become homeowners as a result of the Federal Tax Credit for First-time Home Buyers.  According to C.A.R. research, nearly 40 percent of first-time home buyers surveyed said they would not have purchased a home without the federal tax credit, and approximately 70 percent said the tax credit was “the most important” or a “very important” factor in their decision to buy a home. 

To read stories about the extension and expansion of this valuable home-buying incentive, please visit the following:

Aid for jobless, homebuyers clears Congress
To read the full story, please click here. 

 Congress Extends Jobless Benefits, Home-Buyer Credit
To read the full story, please click here. 

Congress passes bill extending unemployment insurance, home buyer tax credit
To read the full story, please click here.

Check out my November Newsletter; it contains many real estate related, useful information and good housekeeping tips. Please feel free to comment on the issues, or ask questions.

I came across this article in the newsletter I receive  from First Tuesday, and I think it is worth to be shared.  Please read it carefully, as it does clarify some of the aspects of the whole foreclosure process and different types of it:

http://blog.firsttuesdayjournal.com/?p=1833

Tracy Real Estate market is waiting for the “shadow inventory “, a release of some of the already foreclosed homes.  As of today, November 3rd, there are 189 active homes for sale in Tracy and surrounding areas.  That is a combined number of REO”s, “normal” and short sale listings. 

In Tracy and surrounding areas we have sold 139 homes in the Month of October.  These sold homes were an average of 43 days on the market before selling.  The average listing price was $236,718 and the average sales price was $243,393.  As we see multiple offers on many of the homes listed, the offers coming in were over the asking price. 

As most homes are selling for more than they were listed for, it seems that the appraisers have their hands full with appraising the homes for the value. This is mostly do to the fact that the appraisers’ evaluation is based on homes that have been sold recently in the same neighborhood.  Many deals fell through because the value could not be justified by the recent sales on record.  As a result, many buyers are asked to pay out of pocket to make up the difference. 

Those buyers, who have been qualified for an FHA loan, have little chance to a fair shot to get an acceptance on their offer.  Many buyers are coming in with cash at hand.  Others are frustrated with this market and giving up on buying all together.  In general, this is a buyers market, home prices are favorable, interest rates are still low, many people who are ready to buy homes…. but we don’t have enough homes to sell. Go figure.

Click here to see a daily interest rate lock advisory.

How to Reduce Your Mortgage

One Additional Mortgage Payment a Year

There’s a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars. The trick is to make one extra mortgage payment a year and apply that payment toward your loan’s principal.

This is the method being used by “Bi-Weekly Mortgage Reduction Services” and “Bi-Weekly Mortgage Savings Programs“. Only, when you do it yourself, you don’t pay a third party unnecessary set-up costs and fees!

Example: $100,000 loan, 30-year mortgage, 6.5% fixed interest rate

 One-time Payment

It may not be possible for you to increase your monthly mortgage payment. Keep in mind that most mortgages will permit you to make additional payments to your principal at anytime. Perhaps, five-years after moving into your home you receive a larger than expected tax return, or an inheritance or a non-taxable cash gift.  You could apply this money toward your loan’s principal, resulting in significant savings and a shorter loan period.

Example:

With a $100,000, 30-year, 6.5% fixed interest rate mortgage loan, the borrower will pay a total of $227,542.98 to pay back the loan in 30 years. That equals $127,542.98 in interest payments.

If the same borrower makes a one-time $5,000 payment the first day of year 6, he/she will pay a total of $204,710.75 and pay off the loan in 27 years (324 months). That’s a savings of $22,832.23 in interest.

Before You Look at Your First House

Experienced home buyers know that one of the first-steps in beginning a successful search for a new house is taking a hard, objective look at finances. Determining how much money you can dedicate to the purchase of your new house affects almost every aspect of buying a new home – including how we write the offer, which mortgage programs you will qualify for, shopping for the best mortgage loan and which homes are truly in your price range.

The 28/36 Rule
No more than 28% of your gross income can be applied to your mortgage, real estate taxes and insurance. And no more than 36% of your gross income can be applied to your mortgage expenses plus your regular debt expenses (car payments, credit cards, other loans, etc.).

If I may suggest, though: when you are ready to purchase your first home, please do so with the assistance of an experienced Realtor®, who has the knowledge of the local market conditions and can help you make the whole process smoother and with less hassle.

Fixer-uppers

The oft heard phrase “Buyer Beware” is never more appropriate than when considering the purchase of a fixer-upper.You really need to know exactly what you’re getting into before buying.
It’s commonly believed that fixer-upper properties represent easy money that is ripe for the taking – that you can buy it, do a little work on it in your spare time, and then resell quickly for a large profit.  Usually, this simply isn’t the case. Although, with proper planning and foresight, good profits can be made by buying “distressed” properties at less than market value, making appropriate improvements and repairs, and then reselling.  And for many first time buyers who intend to live in the house while working on it, buying a fixer-upper can be the very best option. It’s less risky buying a fixer-upper when you can live in the house while fixing it. And of course, by living in the house for at least 24 months you should be able to avoid paying regular income taxes on the profits.

 The most important thing to know before making a decision on such a purchase is what needs to be fixed. Any time you are spending money on improving a home with the notion of selling it later, strive to spend your money on things that buyers can easily see. Things like new paint and removing trash from the property cost little but have instant impact on curb appeal. Houses that have only cosmetic problems like peeling paint, a trashy yard, bad carpet or wallpaper are the best bet. This is especially true for the first time buyer looking to live in the house for a while before reselling. Fixing and cleaning cosmetic issues is fairly easy and inexpensive. It virtually always gives gives a good return on investment, particularly when you can do the work yourself. Kitchen and bathroom remodeling usually pays a nice return. Don’t be afraid of buying a fixer-upper in need of this kind of repair. Properties with structural damage, or a floor plan that requires major work to remedy, usually can’t be “fixed up” at a profit.  

Always have an inspection for hidden damage performed by a home inspector or construction professional before buying a fixer-upper. Make sure that satisfactory completion of such inspections are a condition of purchase in any contract you sign. Then be sure to negotiate to try and get the seller to pay for all or part of the cost of needed repairs uncovered by the inspection. Often, sellers will be willing to lower the sales price to sell the home “as is” instead of paying for the repairs.

 Be careful that you don’t over pay. Especially if you plan to resell quickly, paying too much up front can doom your plans for quick profit. Research the market for reselling and have an exit plan for selling the house in place before making an offer.

The best advise is though, when buying a fixer upper, to always use a Realtor, who will look out for your interest and will assist you every step of the way!

I think this maybe a good article to pass on: its about loan modification, what is the trend and how banks are dealing with it.

http://blog.firsttuesdayjournal.com/?p=1772

 
At closing time, the last thing you want is a dispute over what goes with the house and what doesn’t. But it isn’t all that unusual for a buyer to think a particular item is included in the sales price, while the seller never had any intention of including the same item! Classic examples include window coverings, lighting fixtures and chandeliers. But just about anything which might be construed by a buyer as being “part of the house” has the potential for misunderstanding and disagreement.  

Generally, the law says that anything which is part of the land or attached to the house and is immovable, or can’t be removed without damage, or anything which is incidental or appurtenant to the land is real property. Personal property is basically everything else – the possessions you take with you when you move.  

The law recognizes the intent and manner with which an item is attached in determining whether an article or fixture is real or personal property.  Built-in appliances are usually considered real property, while free standing ones are usually personal property. If removing the item requires pulling nails, it’s probably real property. If it can be unscrewed and removed without leaving any damage, it might be an item ready to cause some disagreement!  

To avoid problems, both buyers and sellers should make detailed lists of any items to be included in the sale before closing.  As a seller, give your list of items to be included to the closing agent. If there is something you want to take with you, and it requires removing a screw or nail, put it in the contract.  

Remember, as with everything else in real estate, it’s all negotiable. If there is a unique item you want included in your purchase, you may be able to get it included at a reasonable price.  Especially if the item won’t fit in with the new home the seller is moving to.