The Right Way To Rent

With the economy struggling, every one is trying

their best to stay abreast of what the unknown future

holds. Most people our rethinking their once secure

futures. Many tenants are opting to downgrade their

apartments size, location, etc.. For landlords the tough

part is keeping tenants to live up to their contracts,

and keep units from becoming vacant for any extended

period. A new useful tool which may help with current

estimated comparable rental values is  www.rentometer.com

 

This site will let you know if your current rents are

competitive to the surrounding market. On the downside

these estimates do not give the ability to compare amenities.

To compare amenities, call the listed rentals and ask what

amenities are included with the rent. By being competitive

 in this tough market you will lessen your exposure to losses.

Hector Gutierrez,  Real Estate Broker, Investor, Contractor C-10 Licensed

www.wespeakrealestate.com

Housing and Economic Recovery Act of 2008

H.R. 3221, the “Housing and Economic Recovery Act of 2008,”

Passed the House on July 23, 2008, by a vote 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008.

The bill includes the following provisions:

 

• GSE Reform– including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
• FHA Reform- including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reform to the HECM program, and reforms to the FHA manufactured housing program. The down payment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
• Homebuyer Tax Credit- a $7500 tax credit that would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).
• FHA foreclosure rescue- development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value rowers would have to share 50% of all appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
• Seller-funded downpayment assistance programs- codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.
• VA loan limits- temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.
• Risk based pricing- puts a moratorium on FHA using risk- based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.
• GSE Stabilization- includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from GSEs to make sure that Freddie Mac and Fannie Mae could not fail.
• Mortgage Revenue Bond Authority- authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.
• National Affordable Housing Trust Fund- Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.
• CDBG Funding- Provides $4 billion in neighborhood revitalizing funds for communities to purchase foreclosure homes.
• LIHTC- Modernizes the Low Income Housing Tax Credit program to make it more efficient.

Loan Originator Requirements- Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

What is Homestead?

 

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?

 

 

 

Up, Down, Up, Down Interest Rate- So. Cal.

 

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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Understanding Capital Gains in Real Estate.

 

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 the purchase — including transfer fees, attorney fees, and inspections, but not points you paid on your mortgage.

• 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.

 

 

 

HOME BUYER’S FAIR

 

 

 

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.

info@WeSpeakRealEstate.com

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.

fico scoring breakdown

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.

FHA Limits Southern California

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

County Name	MSA Name	MSA Code	Division	SFR	2 unit	3 unit	4 unit
Los Angeles	Los Angeles– Long Beach-Glendale	31100	31084	$729,750	$934,200	$1,129,250	$1,403,400
Orange	Santa Ana-Anaheim-      Irvine	31100	42044	$729,750	$934,200	$1,129,250	$1,403,400
Riverside	Riverside-San Bernardino-Ontario	40140		$500,000	$640,100	$773,700	$961,550
San Bernardino	Riverside-San Bernardino-Ontario	40140		$500,000	$640,100	$773,700	$961,550
Ventura	Oxnard-         Thousand Oaks-   Ventura	37100		$729,750	$934,200	$1,129,250	$1,403,400

Stage it! Yourself.

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.