The Homestead Law is technical in nature and complex in its application. A Declaration of Homestead, which is not

properly prepared, may be invalid. The following is for general informational purposes only and should not be considered legal advice. We therefore suggest that you contact an attorney for any legal advice on your specific situation.

What is the purpose of the homestead exemption?

The homestead exemption gives you rights against many debts you might incur through accident, illness or misfortune. However, there are limitations and exceptions. The policy underlying homestead laws is to provide a place for the family where they may live free from the anxiety that it may be taken from them.

How does the homestead exemption work?

Example: If the market value of your home is $120,000 and you have a first mortgage or deed of trust of $65,000 and a second mortgage of $25,000, you have an equity of $30,000 in your home. The homestead exemption protects this equity against creditors.

What is a judgment lien?

When you owe someone money he is considered your creditor. If a creditor sues and wins a judgment against you, he can file a lien against your home. The homestead exemption is protection against such liens.

What kind of property is covered?

A house, a condominium, a duplex, a mobile home, a community apartment project, or a planned development.  Who is eligible for this homestead exemption? Every homeowner who resides in his or her home is entitled to this protection. A person can only have one valid homestead at a time.

Who may file a Declaration of Homestead?

Every homeowner may file. A homestead will remain in effect until the house is sold, or the homestead is abandoned by recording an Abandonment of Homestead.  Are their limits to the amount of equity protected?  Yes, for married couples, or single parents with dependents living at home the homestead exemption is $75, 000; unmarried individuals, $50,000. For persons 65 years or older, or for persons physically or mentally disabled, the exemption limit is $100,000.

What situations are not covered by the homestead exemption?

Judgment liens recorded before you have recorded your Declaration of Homestead will attach to the house. Loans or debts secured by the property (mortgages, deeds of trust, etc.) are not covered by the homestead exemption. When you voluntarily put up your home as security against a debt, a homestead will not protect it. When a contractor or laborer puts labor or materials into repairs or improvement on your property, and you do not pay him, the homestead exemption will not protect against the mechanic’s lien. Tax liens by federal, state and local governments.

Can I remove the homestead exemption if I want to?

Yes. You can remove the homestead exemption at any time by filing a form called Abandonment of Homestead. Also, if you were to record a homestead on another property, it would remove the homestead on the first property. When you sell your home, the homestead on it is automatically removed.

info@WeSpeakRealEstate.com   for more questions?

Here are some key interest rate change indicators for your information. 

For current listing or current solds in your area - we invite to visit our website at

www.WeSpeakRealEstate.com. 

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Things that may raise interest rates.

Consumer Price Index Rises

Indicates rising inflation.

Durable Goods Orders Rise

Pickup in business activity usually leads to increased credit demand.

Housing Starts Rise

Shows growth in economy and increased credit demand. Fed tightens money supply by

raising rates.

Leading Indicators Up

Signals strength in the economy leading to greater credit demand.

Personal Income Rises

The higher one’s income, the more consumed, prompting higher prices of debt securities.

Producer Price Index Rises

Indicates rising inflation. Demand for, and prices of, goods rises.

Retail Sales Fall

Indicates stronger economic growth. Fed may tighten money supply.

What will lower interest rates?

hat May Raise Interest Rates

Gross National Product Falls

Reflect a slowing national economy. Fed loosens money supply by lowering rates.

Industrial Production Falls

Indicates slowing economic growth. Fed loosens money supply by lowering rates.

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Inventories Up

Indicates a slowing economy since sales are not keeping up with production.

Oil Prices Fall

Reduces upward pressure on interest rates, thereby enhancing prices of debt securities.

Precious Metal Prices Fall

Reflects decreased inflation. Demand for inflation hedges falls.

Unemployment Rises

Indicates stronger economic growth. Fed may tighten money supply.

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These are customary charges and in the case of FHA

(search for FHA info in our blog) loans “sellers” will have to pay

non-allowable buyer cost.  Many buyers request concessions

for closing cost.  A seller can credit a buyer with up to 3% of

purchase price for closing cost.  For FHA loan it can go up

to 6% closing cost.   In the case of seller’s competing with

bank own properties, these can be a plus for you.  Most

lender own properties and short sales will not allow for

such concessions.  

The Seller Generally Pays:

• Real estate commission

• Document preparation fee for deed

• Documentary transfer tax

• Any city transfer/conveyance tax (according to contract)

• Payoff of all loans in seller’s name (or existing loan balance-

  if being assumed by buyer)

• Interest accrued to lender being paid off, statement fees, -

  reconveyance fees and any preparation penalties

• Termite inspection (according to contract)

• Termite work (according to contract)

• Any judgments, tax liens, etc., against the seller

• Tax proration for any taxes unpaid at time of transfer of title

• Any unpaid homeowner’s insurance

• Recording charges to clear all documents of record against seller

• Any bonds or assessments (according to contract) Any and-

  all delinquent taxes

• Notary fees

• Escrow Fees

• Title insurance premium

The Buyer Generally Pays:

• Title insurance premium

• Escrow fee

• Document preparation (if applicable)

• Notary fees

• Recording charges for all documents in buyer’s name

• Termite inspection (according to contract)

• Tax proration (from date of acquisition)

• Homeowner’s transfer fee

• All new loan charges (except those required by lender for-

  seller to pay if applicable)

• Interest on new loan from date of funding to 30 days prior to first    payment date

• Assumption charge of records fees for takeover of existing lon

• Inspection fees (roofing, property inspection, geological, etc.)

• Home warranty (according to contract)

• City transfer/conveyance tax (according to contract)

• File insurance premium for first year

The distinction between personal and real property can be the source of difficulties in a real estate transaction. A purchase contract is normally written to include all real property; that is, all aspects of the property that are fastened down or an integral part of the structure. For example, this would not include potted plants, free-standing refrigerators, washer/dryers, microwaves, bookcases, swag lamps,

etc. If there is any uncertainty whether an item is included in the sale or not, it is best to be sure that the particular item is mentioned in the purchase agreement as being included or excluded.

We invite you to our www.infobankrepo.com 

Want a good deal?  Let us help you.

Many buyers are taking advantage of the low rates and lower home prices.  The Lowest priced homes are usually Lender Own properties which need some repairs.  Most buyers deplete all their investment funds leaving them with no funds for repairs .  This is where home seller can take advantage in doing the following suggestions to get the most for the sale of their property.  

• Clean it. Home buyers, it turns out, hate dirt more than just about anything else. So, give your home a thorough cleaning from top to bottom. Wash the walls, floors and windows. Rugs should be thoroughly cleaned unless you plan to replace them. Curtains should be washed by hand or taken to a dry cleaner. If you’re not up to the task, spend  a few bucks for a professional cleaning company to do the job right.

• Organize it. If your home looks too small for you, prospective home buyers are going to think it’s too small for them. So, take everything off of your kitchen and bathroom countertops, half the books off your bookshelves and the past season’s clothes out of your closet and pack them away. Not only will your home seem larger, but you’ll have made a good start on packing

for your future move.

• Repaint it.  You will get the biggest bang for your buck by repainting the interior of your home in bright white paint. White walls help home buyers imagine how their own stuff is going to look. If you have wallpaper that’s in good shape, choose a neutral shade of white or off-white to complement it. If your wallpaper is peeling or is dated, strip it off and

start over with paint.

• Mow it and plant it. Most home buyers today will spend about 10 seconds looking at a digital photo of your home on the Internet. If they like what they see, they’ll do a “drive-by” showing. You have approximately 6 seconds to impress them as they drive from lot line to lot line. Make the most of what you have by giving your landscape a power-lift. Trim hedges and trees, plant

colorful flowers, mow the grass and edge your beds. If you’re not up to it, hire a professional landscaper to get the exterior of your home into shape. Then, power wash, touch-up, or repaint the exterior of your home for an irresistible package.

• Fix it. If it isn’t working properly, you could pay dearly when it comes time to negotiate the price of your home. Today’s home buyer just wants to move in and get on with his or her life. So oil the squeaky doors, screw in the knobs, replace the rotting wood lintels, and repair the holes in the porch screen door. The better shape your home is in, the more a home buyer will pay for it

When you sell a stock, you owe taxes on your gain — the difference between what you paid for the stock and what you sold it for. The same holds true when selling a home (or a second home), but there are some special considerations.

How to Calculate Gain
In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate, follow these steps:

1. Purchase price: _______________________ The purchase price of the home is the sale price, not the amount of money you actually contributed at closing.

2. Total adjustments: _______________________

To calculate this, add the following:

• Cost of sale — including inspections, attorney fees, real estate commission, and money you spent to fix up your home just prior to sale.
• Cost of improvements — including room additions, deck, etc. Note here that improvements do not include repairing or replacing something already there, such as putting on a new roof or buying a new furnace.

.3. Your home’s adjusted cost basis: _______________________

The total of your purchase price and adjustments is the adjusted cost basis of your home.

4. Your capital gain: _______________________Subtract the adjusted cost basis from the amount your home sells for to get your capital gain.
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A Special Real Estate Exemption for Capital Gains
Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:

• You have lived in the home as your principal residence for two out of the last five years.

• You have not sold or exchanged another home during the two years preceding the sale.

• You meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.

We advise you to consultant a Certified Public Account for more

accurate information on your specific situation.

Free admission and seminars at the Los Angeles convention center April 12-13 2008 hours of 9 a.m. to 6 p.m. topics of interest include how to buy a home, how to monitor and fix your credit, how to avoid mortgage fraud, how to buy a home in foreclosure, how to invest in real estate, understanding the home inspection process, first- time home buyer assistance programs. This is a great forum for any one with concerns about the buying process. A first time buyer or first time investor may avoid future pitfalls by obtaining some helpful information.

Zero Down Program

If you qualify for a mortgage but are still lacking the funds to meet the minimum down payment the HART program may interest you. First the seller must participate in the program for buyer to receive the Hart funds and help support future homebuyers. The seller makes a contribution to the HART program after closing. The Amount of the funds from seller is equal to the amount gifted plus the HART processing fee. The contribution made to the HART Program is not a charitable income tax deduction. The HART funds will be gifted to the buyers down payment of an owner occupied property.

Chain of events

The buyers agent retains seller participation and prepares the purchase agreement.

The agreement shall be written to include the clause “ Buyer and seller agree to participate in the HART Program. The seller agrees to give $ (XXX) to the Hart program.”

The Sellers amount will equal to what the buyer’s HART Gift will be plus a processing fee.

The purchase agreement is fully executed and a loan originator will complete the process.

A loan originator will crunch the numbers and determine loan costs.

 Loan originator then request letter of gift funds from HART.

The HART processing department reviews the request and sends the gift letter to the loan originator.

Upon receiving the letter the loan originator contacts the settlement agent.

The settlement agent then sends the estimated closing statement to HART funding department.

Sellers non-income tax deductible contribution is sent to HART after the final closing of the transactions.

Looking to improve your credit score or maintain a high fico score. Understand how Equifax, TransUnion, Experian.  Rate your credit and generate a fico score.

35%Payment History- Do you pay on time?

30%Amount owed-Balances close to the credit limit.

15%Length of credit- How long have you had credit?

10%New credit-Do you have to much new credit?

10%Type of credit-Mortgage, credit, installment loans.

Three percent down (3%), Private Mortgage Insurance (PMI), seller can provide you  with up to 6% closing cost credit. 

One of the most effective ways to make sure your home looks the best is setting the stage for showings.

You may have already made some repairs, repainted, and cleaned the carpets. But the eyes of the buyers are in the small details.The power of the details start by removing the first thing in the way as you enter in the front door. Gradually a path opens up, and the features of the house start to emerge. The goal is to make the house look bigger, brighter, and more open.  You might just imagine your home not looking like “your home” but and Inviting and expensive penthouse.  Setting the scene in each room sells the house—A Buyer appreciates your personal involvement. It shows you care.You must remember to uncluttered.  Beautiful items but crammed to the rafters with collectibles, floral arrangements, antiques, tapestries, and other treasures.  Try to remove 25%-35% of those items- your home is still beautiful, but now you could see the space, features, and detailing.

Recap -

1. Depersonalizing the space by removing family photos, taking everything off the refrigerator, and stripping the kids’ rooms of posters and baseball trophies.

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2. Clearing high-traffic areas of excess furnishings to maximize feelings of space and comfort

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3. Highlighting the key features in every room–such as fireplaces or French doors–by making sure they’re not obscured by plants or furnishings.

Sometimes, when you’re selling a vacant house, you need to switch gears and add a little clutter. Add two table settings for the breakfast bar, wine glasses, decorative pillows, candles, floral arrangements, towels for the baths, and pretty items for the shelves and counters.

Remember -

  Begin with the living room. It is  often the buyer’s first interior impression and can make or break the sale. If extensive clutter exists throughout the home, do the living room first and the rest later.

   Partially clear off built-in shelves, cabinets, and countertops. These are important features that need to be prominently displayed.

  Be encouraging.  Removing clutter is a giant stress reducer as well as a good way to get a head start on packing.