Are You a California Owner of A Timeshare Property? Beware of Fraud

Timeshares . . . can be a flexible vacation option for many people.  It's a form of property ownership shared with other owners, usually for resort condominiums and vacation home purposes, and can often be utilized in various states and even countries, and offer cheaper accommodations than staying in a hotel or B&B for a week.  The downside is, timeshare ownership may be tough to sell in a down market; there just isn't a huge demand for it when money is tight and/or the market values have declined.

The California Department of Real Estate has just issued a warning and consumer alert concerning the latest wire transfer fraud schemes being perpetrated on timeshare owners. 

Beware of websites, or any other marketers, promising and to buy or help you sell or rent a timeshare, after an upfront fee is paid.  Scammers are requesting payment by money order, wire transfer, bank cashier's check, or upfront cash by the victim, after which they disappear and no further sale or rental of the timeshare takes place.  Vacation timeshares are popular in California, Hawaii and Florida, but properties owned in Mexico are popular targets right now, so avoid dealing with telephone calls or e-mails.

Do not fall for something that sounds "too good to be true", and the DRE advises the owner to contact the timeshare resort developer concerning the communications he/she may be receiving.  The DRE states that amounts wired by gullible owners range from $3250 to $85,000.

Beware of any requests for upfront money to be wired to anyone's account for work not yet done!

Here is more information about who to contact and what you can do if you have been scammed (i.e., the California Attorney General; local district attorney and law enforcement; FTC; FBI, and others.

And, please be aware that in California, proper licensure for upfront fee payment must be obtained.

Please don't let yourself be taken in by fraudulent schemes.

Buying or Renting--What's Best for You?

What should buyers be considering BEFORE they buy?  Looking on the internet gets people into the initial stage of exposure, before they even call a REALTOR.   Most people think the property viewing stage is fun, both on the internet and in person, and it should be enjoyable.  But what about the advance homework?  Internet photos and marketing can get you hooked, but it can also be a nervous, even fearful time, coming to the decision to submit an offer when you're new to the process. Even if you're a repeat buyer, buyer's remorse or indecision will have far less impact if you think over some things in advance, and consider now what your fears may be (it's not unusual to have a few).

Sticker Shock:  Renting might be cheaper than owning -- do you have a mortgage pre-approval with estimated costs before you go out and look?

Home Maintenance: Are you prepared to spend time on painting, fixing leaks (or hiring someone), mowing a lawn, saving up for a new roof? Do you know how much it will cost to heat that pool every month--or just keep it clean? And then there's annual insurance premiums.  Just some of the things to think about.

Have you checked out all utility bill costs for a house vs. your one-bedroom apartment? It would be a smart thing to do now. 

Being a Buyer In An All-Cash Competition

I hear from buyers who put in offer after offer, but don't get the house because of losing out to the all-cash buyer or mostly cash buyer. 

What does such a buyer need to do?  First of all, be prepared to be persistent, and persevere. Next, be totally pre-approved with a good lender.  Know the difference between the average "pre-qualification" letter and a good pre-approval letter from a reputable lender with a local track record and who can close on time, and not surprise you with last-minute underwriting issues that could have been avoided up front.  A good REALTOR can be of tremendous assistance here by pointing you in the right direction, not only with all buyer preparation for an offer, but with the local market. See how quickly you can close, and be willing to negotiate with the seller on some extra days to accommodate their moving date. Be prepared to provide all necessary documentation at the time you submit your offer, sellers want to know they can close the deal with motivated and qualified buyers, not get stuck putting the house back on the market again.

Keep in mind that cash buyers may not offer a seller the most attractive offer, and that a good price from a well-qualified buyer who is getting a loan may stand a very good chance with a motivated seller.  Keep your offer terms clear and simple, and bear in mind that trying to change your contract terms after acceptance by the seller could cause them to cancel and go with one of their backup offers.

Let the seller know you are very interested in their property as your next home (presumably you are), and tell them that when you make an offer.

Last, but not least, review the 10 items to the right to remind you about being a successful buyer! I'm experienced with both 1st time and repeat buyers and can help you position yourself towards success for your next purchase, contact me at 562-896-2609.

People Still Want to Own Their Own Home



The majority of adults still think buying a home is the best long-term investment, and see homeownership as an important long-term financial goal. The majority of renters want to own in the future, and over half of first-time homebuyers bought because they were tired of renting. Over 90 percent of adults surveyed were happy with their decision to buy!

 

 

Are you ready to prepare for buying? Contact me, a Long Beach Realtor with 18 years' experience.

California's Housing Market Projected to Rise in 2013

The good news is that prices are rising in California and the share of underwater mortgages is dropping, but the fact is that 29% of California mortgages are still "underwater" and 15% of them are still more than 125% loan-to-value.

Housing affordability is at records highs with California still over the 50% mark, meaning more than half of California households can afford to buy. Mortgage lending is very tight and "defensive", and appraisals are problematic (example: Many 20% down borrowers are finding their new property doesn't appraise as high as what they agreed to pay for it, but if they can put down another 10% of the purchase price, the lower loan-to-value erases the appraisal issue), and listing inventory is down by more than half compared to one year ago, so opportunity is scarcer.  In fact, in Los Angeles County, we have an average of 2 months of inventory--down from 8 months 2 years ago.  For December, Long Beach had 1.9 months of inventory. 

Why is this?  One reason is that many sellers are stuck where they are due to underwater value, or they are skeptical of moving on, and also because large amounts of foreclosed inventory is being bought up by investors in bulk and rented out.   Distressed sales volume is decreasing gradually, and in California statewide, equity sales are now about 64% of the market.  But expect short sales to stick around, they have been about 23-24% of the market since 2011.

2013 California Market Recovery

There is a pent-up housing demand, and job creation is one thing that can loosen up the housing market--the prediction is that new housing construction will begin again in California with the improvement in jobs. 

Each city and each area has it's own local real estate market, but tight inventory, short sales, and loan issues are very much a universal picture in the local, state and national areas.  Overall, the California market is predicted to increase in 2013.


And, another important fact:  According to a REALTOR survey, buyers are more optimistic than ever before about buying, in spite of all these other factors -- because housing affordability still makes this a great time to buy (something seller need to think about also).  Thanks to Leslie Appleton-Young, California Association of Realtors, and her report of January 11,2013.

For an agent very familiar with the Long Beach/Lakewood/Cerritos areas, please contact me at julia@juliahuntsman.com, or my phone!

Benefits of the New (and Extended) Tax Laws for 2013

Much has been written about the last-minute passage of the "fiscal cliff" issues by the federal government.  But, remember there are state level issues as well, some of which are still being worked on in California., specifically SB 30.

In 2007, the new law provided, for five years, incentives for sellers to accept short sales by, in many instances, forgiving taxes that would have been due for the forgiven debt amount.

Previously, when a lender forgave a portion of borrower debt, the forgiven amount was, in many instances, considered taxable income for the borrower.

This tax incentive for sellers to participate in short sales was just extended by Congress for another year, expiring January 1, 2014; however, California's exemption under the Mortgage Forgiveness Debt Relief Act expired at the end of 2012, and currently forgiven mortgage debt is taxable state income.  SB 30 (Calderon) has been introduced, and if and when passed by the California legislature, it will make California conform to federal law, and will be retroactive to January 1, 2013.

Not all debt is forgiven in every instance. Sellers should check with their tax consultant for exceptions. For example: Maximum amount that can be forgiven is $2,000,000. To be forgiven, the debt must have been used to buy, build or substantially improve their principal residence

Other housing-related provisions brought into effect with the new laws are:

• A 10% tax credit up to $500 for homeowners' energy improvements to an existing home, and is retroactive for 2012.
• Capital gains rates remain at 15% for incomes under $400,000 (individual) and $450,000 (joint); above those income levels gains will be taxed at 20%.  On sale of principal residence, the gains rate remains at $250,000 (individual) and $500,000 (joint).
• An 2011 expired tax deduction for mortgage insurance premiums (MIP and PMI on loans) has been restored and is retroactive through 2012.
• The new "Pease Limitations", per California Association of Realtors, are at "$300,000 for married taxpayers filing jointly and $250,000 for single taxpayers (i.e., a married couple with an AGI of $400,000 would be $100,000 over the threshold; the couple’s deductions would be reduced by $3,000 which is 3% of $100,000). No matter how high a taxpayer's AGI, the Pease reduction cannot exceed 20 percent of the amount of itemized deductions otherwise allowable for the year." These were named after Ohio Congressman Don Pease and were first enacted in 1990.
• The first $5 million dollars in individual estates and $10 million for family estates are now exempt from the estate tax. After that, the rate will be 40%, up from 35%. The exemption amounts are indexed for inflation.
• More at http://www.toptennewhomecommunities.com/blog/fiscal-cliff-bill-addresses-some-key-housing-issues/

Summary for Recent Real Estate Trends at end of 2012

Happy New Year for 2013 -- there are positive signs in the housing market, and we hope that they will continue!

Pending home sales continue to rise (Pending means those in escrow, scheduled to close), as shown by the Pending Homes Sales Index which rose nationally by 1.7%, and is at the highest level in the last two-and-one-half years.  Pending homes sales have risen consecutively for the last 19 months.
The November median price for a single family home in the Los Angeles Metropolitan Area rose to $327,840 from $269,440 in November, 2011!  The share of distressed sales (mostly REOs and short sales) for single family homes in the Los Angeles area has decreased to 35% from 46% one year ago.

The market is not determined just by whether the prices go up or down, there are a lot of other factors, including whether or not sellers are motivated to sell because that in turn depends on other economic factors which create the movement in housing.  Inventory is a big issue right now, no question of it.

How will the "fiscal cliff" measures affect real estate (still not resolved as of this moment)?  An unrenewed date for the Mortgage Debt Relief Act will require homeowners who went through short sales, loan modifications and other resolutions to pay taxes on forgiven debt. And will the mortgage interest tax deduction be reduced or removed? That will affect most homeowners in the country if that happens.

Will borrowers be subjected to new mortgage rules in 2013? The lending environment is already stringent, making it difficult even for some 20% down borrowers, so buyers should be aware if how conventional vs. FHA loan opportunities could work for them in the future. The topic of "qualified mortgage" rules is being examined in the coming year, and the big question is will it mean that all borrower for conventional loans be required to put down a minimum of 20%--that's a tough hill to climb.

There is some good news in the housing market now, but it will need economic support in a variety of ways to keep that going.

If you have a reason to sell, please contact me for a free evaluation of your home's value! Find properties at www.juliahuntsman.com for the latest area listings of all residential properties.

Increase of 24% in November Home Values in California Since 2011

November median prices for home sales in California have increased by double digits compared to one year ago, and the number of sales have also increased on a year-over-year basis as well.

Higher priced homes sold at increased numbers in November, even as sales declined overall in lower-priced areas due to fewer homes available for sale. In the Long Beach/Lakewood/Cerritos area, homes under the $500,000-$450,000 range in particular have sold very fast with multiple bids.  The California statewide median price for a single family detached home increased in November to $349,300, up from October's median of $341,370, an increase of 2.3%.  November's median price was up 24% from the November, 2011, and that is the biggest year-to-year increase since June, 2004!

Additionally, California's inventory for single family homes is down to 3.1 months overall (in some areas such as Riverside County, it's far less), and this is a decrease from 5 months of inventory one year ago.

Interest rates have dipped further to a November average of 3.35% for a fixed-rate 30-year mortgage; and it's taking fewer days to sell a home: an average of 37 days compared to 56 days one year ago.

Long Beach Housing Inventory Graph
 

In Los Angeles County, the median price is $337,000, an increase of 15% from one year ago, with the unsold inventory index at 2.9 months, down from 5.6 months one year ago (that means all existing unsold housing would sell at the current rate of sale within 2.9 months if no new listings come on the market--six months of inventory is more the number we should have.) And, this picture on inventory is not unique to Long Beach, it is typical of the local cities, county, state and national status of housing inventory.

As a side note, appraisals and buyer's lender financing issues have not away, which are topics for another post.
With the increase in prices, more homes are getting a little more equity--to find out what your values could possibly be, please find out your home's value from current and complete information directly from our Realtor MLS and tax inventory.  Even if you have no intention of selling in the near future, you may need market information about your property for a variety of reasons, such as re-financing, planning an estate, or just for your own information.

P.S. For a little Christmas spirit, see my photos of a few decorated houses at www.facebook.com/longbeachhomesandcondos -- and "like" me too.

Open House - Alamitos Heights - Expansive Mid-Century

Open house today on fantastic remodeled mid-century style home. Dec. 16, 2012 noon-4 pm.

Take a break from Christmas shopping and stop by to see an amazing home! 5 bedrooms, 4.5 baths, pool.



795 Los Altos Ave., in the Long Beach neighborhood of Alamitos Heights.

See more open house information.

Julia Huntsman, Broker
01188996

The Fiscal Cliff - or Tax Breaks That Could Be Gone

At the end of 2012, depending on what happens between the political parties, there could be many expiring tax provisions that originated in the George W. Bush Administration, when 2012 was the sunset year for so many breaks.

Federal income tax rates are scheduled to increase in 2013, with tax brackets currently spread from 10%-35% changing to 15%-39.6%. Long term capital gains will increase from 15% to 20%, and other long term capital gains tax rates which apply to qualifying dividends will be taxed as ordinary income.

The 2% reduction in the payroll tax  for Social Security will expire, something which concerns many businesses.

Estate taxes will return to 2001 and the $1,000,000 exclusion for taxes, and the top tax rate increases from 35% to 55%.  (In 2001, there weren't nearly as many $1,000,000 properties to inherit as there are now.)

Earned income tax credits, child tax crfedit and the Hope tax credit will revert to lower limits.

Student loan interest will no longer be deductable after the first 60 months of repayment.

Have you been affected by the Alternative Minimum Tax? the exemption amounts will be lowered, affecting many more individuals (a tax that was only supposed to affect the highest income earners has been affecting more and more of the middle class).

Will tax rates for income earners under $200,000 or $250,000 (households) annually change, or will the tax rates for the vast majority of Americans be impacted as well?

And, once again, there are issues about the "debt ceiling", and what measures may have to be enacted in order to allow the government to meet its obligations.

The Mortgage Debt Relief Act is also set to expire; this act is what allows short sale sellers and individuals who took out a mortgage in a certain time period and were foreclosed on under certain conditions to not be taxed on the forgiven or cancelled debt. Should this Act not be extended, the tax burden of many distressed sellers will be increased.

And, last but not least, there is the issue of whether the mortgage interest deduction will continue and in what form--In California 89% of those who took the mortgage interest deduction earned less than $200,000. Losing the deduction would cost the average California taxpayer over $3,900.

Are you concerned? I hope you are and that you contact your Congressional representative to express your opinion.

www.juliahuntsman.com
www.longbeachrealestate.blogspot.com
www.facebook.com/longbeachhomesandcondos