SUMMERTIME DREAMS FOR LOWER POINT VICENTE, RANCHO PALOS VERDES

The local Realtor Boards were invited to a luncheon yesterday provided by the Annenberg Foundation at the new Terranea Resort in Rancho Palos Verdes. The presentation was on their new proposed DISCOVERY PARK at Lower Point Vicente. Discovery Park would annex the Point Vicente Interpretive Center combining with and adding a combination of exhibits and programs on topics relevant to the region and community: a Tonga village, an archaeological dig, flora and fauna, geology, weather, local pioneers including whalers and ranchers and much more. It will be a Gift to the Community provided by the Annenberg Foundation under the leadership of Wallis Anennberg. Ongoing operations and maintenance would be underwritten by the Foundation as well.

The presentation was lengthy and informative. The proposed projects and designs were awesome and beautifully articulated. Since there is too much information for my simple blog, click on the link to learn about the Lower Point Vicente Discovery Park Project and the Annenberg foundation.

You may already be familiar with some of their other Los Angeles programs, such as the Annenberg Space for Photography and Annenberg Community Beach House. You can also call with questions or concerns regarding the project at 310-406-3710 or email jjaakola@annenbergfoundation.org.

p.s. my dogs photos appear here because they are definitely in favor of the project. We walk the trails all the time and know this will be a wonderful addition (especially the Pet Adoption Suites) for the community and our families.

p.s.s. The Lunch was FABULOUS! I highly recommend the new Terranea Resort as well and their public access grounds are animal friendly!

GARDEN LIVING IN THE PINES!

Time to find a new place to live?  Not ready to buy yet and looking for a great lease?  We've got the hotspot in the Pines!  Beautiful Owner's Unit in a unique Triplex with huge private backyard, 2 large bedrooms, 2 baths, separate laundry room, workshop area, loads of storage, private one car garage plus carport ... what are you waiting for?  Check out the Real Estate Show Link:   26044-3/4 Oak Street

Owners will provide a refrigerator too (if you need one) for qualified tenants willing to sign a long term lease.  You can submit on pets too with a pet deposit. 

A good time to buy?

Many housing economists have said that for borrowers with stable incomes, good credit history, and FICO scores of at least 620, now is an opportune time to purchase a home. Although inventory rates are below the long-run average, there still are plenty of options available for buyers of middle to high-end homes.


Consumers trying to time the market and purchase their home when prices are likely to rise again are advised to take a different approach. According to one real estate consultant, while home prices have stopped declining in most areas, and even have risen in some markets, mortgage rates may rise, offsetting any potential savings.


Early last year, the Federal Reserve began purchasing mortgage-backed securities, which helped maintain low interest rates for consumers. However, the Fed’s purchase program ended in March, and some analysts forecast interest rates to increase throughout the rest of the year. One financial publishing company predicts that rates likely will rise to 5.5 percent by mid-2010 and close the year at 5.75 percent to 6 percent. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) projects rates on 30-year fixed-rate mortgages to average 5.6 percent this year.

Closely-watched indices, including the Standard & Poor’s/Case Shiller Index, indicate that the high end of the market didn’t experience the same dramatic price appreciation as the low end. Home prices in this segment have not declined as steeply as homes in the mid- to low-end of the market. Additionally, many discretionary sellers in the high end—those who do not have to sell their homes—are opting to wait until home prices rise before listing their homes for sale.


The high end of the market also is facing challenges with buyers qualifying for financing. During the height of the market, many high-end home purchases were fueled by exotic mortgage products. Now that those mortgages are no longer readily available, many lenders are requiring borrowers to provide proof of income, such as W-2s and recent paystubs, as well as demonstrate their ability to meet the monthly mortgage obligation.


This year is still providing many windows of opportunity. If you've been waiting to move into a larger home or waiting to downsize for retirement, this is a good time to move forward. As the market stabilizes, interest rates will rise. Use this time to meet your goals and make the most of the current market. Why wait 3-5 years to achieve the same result under different circumstances.


Call me with questions about your home value or for a list of homes to preview in your area. You know I'm never too busy to be of service in my community and never too busy for your referrals!

The home pictured above is a wonderful 3 bedroom home in the Lomita Pines area. Check out this home's personal website:  http://www.2077guyson.com/ for all the details or call me and I'll send a copy of the listing information directly to you.

Enjoy the beautiful Spring weather!

2010 FNMA LOAN LIMITS BY COUNTY IN CALIFORNIA

Wake up to some good news in 2010! It's a "piece of cake" to trade up in this market. Prices are low - interest rates are low and conforming loan limits are the highest they have ever been! There is a great window of opportunity that is wide open right now. Don't stay behind the curve and miss your chance to lock in a great deal on a home at historically low interest rates fixed for 30 years. Also, don't forget the $8000 first time buyer credit and $6500 move-up tax credit for current homeowners. They both require purchases by April 30th and closed escrows by June 30th 2010.


If you're struggling with your mortgage and want to sell your home - this is the right time to attract buyers too! Check out the conforming loan list by county below. Feel free to call with any questions and if you're thinking about moving out of your current area and need a great broker referral, let me know and I'll research the appropriate professional for you in your chosen city or county.


1- Unit 2-Units 3-Units 4-Units

 Los Angeles-Long Beach-Santa Ana
Component Counties: Los Angeles, Orange

$729,750   $934,200   $1,129,250   $1,403,400


Oxnard-Thousand Oaks-Ventura
Component County: Ventura


$729,750   $934,200   $1,129,250   $1,403,400



Riverside-San Bernardino-Ontario

Component Counties: Riverside, San Bernardino


$500,000   $640,100   $773,700   $961,550



San Diego-Carlsbad-San Marcos

Component County: San Diego


$697,500   $892,950   $1,079,350   $1,341,350



Santa Barbara-Santa Maria-Goleta

Component County: Santa Barbara


$729,750   $934,200   $1,129,250   $1,403,400


I have the entire list for California by county. If you don't see yours here, call or email and I'll send you the list for your area or any area of interest to you.

If you think your property's market value may be below your current loan amount, call me and I can show you how to work with that issue as well. I'm also a Certified Distressed Property Expert.

Once we isolate the problem, we can always find a solution!

Call Charlie @ Team South Bay Realty 310-534-3940

for all your real estate needs!

New $6500 Tax Credit for Repeat Home Buyers

Happy New Year! I just posted the South Bay and Palos Verdes Peninsula sales charts for 2009 on my Facebook. The stats are from November 2008 through November 2009 and the trends are quite obvious. We are heading back into market momentum. With interest rates still at an all time low and destined to begin a steep increase this year, this is really the right time for first time buyers and move-up buyers to secure a great home at a great price with long term 30 year fixed rate financing. It just won't get any better than this! Here are some "Good News" Facts:

Q: Who can claim the $6,500 tax credit?
Qualified move-up or repeat home buyers purchasing any kind of home intended as his/her primary residence are eligible to claim this credit. The tax credit does NOT apply to second homes, vacation homes, or investment property.

Q: What is the definition of a move-up or repeat home buyer?
The law defines a tax credit qualified move-up home buyer (long-time resident) as a home owner who has owned and resided in a home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. Repeat home buyers do not have to purchase a home that is more expensive than their previous home to qualify for the tax credit.

Q: When does the credit take effect, and how long will it last?
Transition buyers are eligible for all contracted purchases dated Nov. 7th, 2009 through April 30, 2010, with closing occurring on or before June 30, 2010.

Q: How is the amount of the tax credit determined?
The tax credit is equal to 10 % of the home’s purchase price up to a maximum of $6,500. Purchases of homes priced above $800,000 are not eligible for the tax credit.
Q: Are there any income limits for claiming the tax credit?
Yes. The income limit for single taxpayers is $125,000; & $225,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) above those limits. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts. (NOTE: I suggest you consult your CPA or accountant regarding your MAGI questions. There are several complications that are best defined by a professional.)

Q: If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
Possibly. It depends on your income. Partial credits of less than $6,500 are available for some taxpayers whose MAGI exceeds the phaseout limits.

Q: How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008? How is this different than the rules established in early 2009?
The previous tax credits applied only to first-time home buyers and were for different amounts of money.

Q: How do I claim the tax credit? Do I need to complete a form or application? Are there documentation requirements?
You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns.

No other applications are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and repeat home buyer tests. Note that you cannot claim the credit on IRS Form 5405 for an intended purchase for some future date; it must be a completed purchase. Home buyers must attach a copy of their HUD-1 settlement form (closing statement) to IRS Form 5405 as proof of the completed home purchase.

Q: What types of homes will qualify for the tax credit?
Any home that will be used as a principal residence will qualify for the credit, provided the home is purchased for a price less than or equal to $800,000. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences per the IRS.

It is important to note that you cannot purchase a home from — among other family members — your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse or your spouse’s family members. Please consult with your tax advisor for more information. Also see IRS Form 5405.

Q: I've heard that I could be required to repay the credit if I do not occupy the new home for at least 36 months from the purchase date. Is this true?
Yes. If, within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full amount of the credit is due at that time the income tax return for the year the home ceased to be your principal residence is due. The full amount of the credit is reflected as additional tax on that year's tax return. Form 5405 and its instructions will be revised for tax year 2009 to include information about repayment of the credit.

Q: Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
Yes. However, for the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been purchased on the date the owner first occupies the house, not when the lot was purchased or construction began on the property. In this situation, the date of first occupancy must be after November 6, 2009 and on or before April 30, 2010 (or by June 30, 2010, provided a binding sales contract was in force by April 30, 2010).

Q: I am not a U.S. citizen. Can I claim the tax credit?
Perhaps. Anyone who is not a nonresident alien (as defined by the IRS) and who has owned and resided in a principal residence in the United States for at least five consecutive years of the eight years prior to the purchase date can claim the tax credit if they meet the income limits. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. The IRS provides a definition of nonresident alien in IRS Publication 519.

Q: Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $6,500 in income taxes and who receives an $6,500 tax credit would owe nothing to the IRS.

Q: Is there a way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 or 2010 tax return?
Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.

Q: HUD allows monetization of the tax credit. What does that mean?
It means that (in theory) HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 or 2010 income taxes to receive a refund, provided the FHA lender offers the option of purchasing the tax credit in advance.

Q: For a home purchase in 2009 or 2010, can I choose whether to treat the purchase as occurring in the prior or present year, depending on in which year my credit amount is the largest?
Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in the present year and a larger credit would be available using the prior year MAGI amounts, then you can choose the year that yields the largest credit amount. (Again, your CPA or accountant should be consulted on this.)

Q: Where should I get the most reliable and up-to-date information from regarding the $6500 repeat home buyer credit?
From your tax advisor or the IRS directly. While the credit is specific to the purchase of qualified real property, it is still a tax issue, and not a real estate or mortgage matter. As such, it falls under the taxation and revenue codes of the IRS. Your tax professional or an advisor at the Internal Revenue Service is best equipped to provide you current information about this new credit.


Looking forward to working with you this year. Please feel free to call with any questions. I don't have all the answers but I generally know someone who does. And, I am NEVER too busy for any of your referrals!

LOVE THY NEIGHBOR ...

Being a Christian, I love the Christmas season. It brings hope and laughter and love, even in economic recessions. It reminds us to be kind, faithful, patient. After all, Jesus is the reason for the season!

We think about our neighbors more during the Christmas season. We reflect on their choice of decorations (indoor and outdoor.) We listen more intently to their declarations (in church and out .) We have expectations of their kindness and consideration. We are reminded of bible verses and hymns. Unfortunately, we are also sometimes reminded of the old addage, "keep your friends close and your enemies closer." This, my friends, is a "high profile" season. Whether you're a shopkeeper, neighbor, relative, teacher, fellow student, employee, sports fan, politico or zealot of one sort or another, this season shines a light on you in so many, many ways.

I recently wrote about my experience with a local business owner in my Facebook...how I felt wronged by his less than stellar business policy and questionable ethics...how I felt cheated by his treatment, not just financially but emotionally as well. I pledged a vendetta of negative marketing as my revenge. I had all the tools at my disposal. I devised a plan to bring him to justice. Then I realized how much energy it takes to wage such a war or to even envision it. I began to rethink my plan. How much better might it be to try to help people avoid being ripped off by simply educating them about the problem. How short lived my vendetta would have been versus how long lasting and far reaching my informational tips could be. I reflected on various ways to help others avoid being ripped off both during the Holiday Season and throughout the year instead. I relected on a quote by Isaac Bashevis Singer...

Life is God's Novel, Let him write it!

In that decision was my clarity. How we move forward in life is a statement of who we are and how we love. In checking our own perspective, we can influence others as well. As the cat in the photo teaches us, there's a lot more going on than we'll ever really understand individually. With the help of our friends and neighbors and relatives and yes, even those who disparage us or rip us off, comes life's lessons to be learned and shared for their worth and value - as opposed to their pain and suffering. In this season, as in all seasons, We Are Not Alone.

God Bless Us Everyone and

Merry Christmas!!

Oh, and by the way, if you want my recommendations for businesses and service people in the South Bay, please visit my Online Business Directory

and I'm NEVER too busy for your referrals!

Charlie and Team South Bay

Wish you a safe and joyous Holiday

and a Prosperous and Engaging 2010!

First Time Homebuyer Tax Credit Extended Into 2010!

Plus...A New Tax Credit for Certain Existing Home Owners!

It's official. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009.

In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time.

So,  Who Gets What?

The program that has existed for FTHBs remains intact with the one exception that more people are now eligible based on an increase in the amount of income someone may now earn.

Additionally, the program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Deadlines

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

Higher Income Caps in Effect

The amount of income someone can earn and qualify for the full amount of the credit has also been increased. Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible.

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

Maximum Purchase Price

Qualifying buyers may purchase a property with a maximum sales price of $800,000.

Frequently Asked Questions...

What is a tax credit?

A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual's primary residence.

What is the tax credit for first-time homebuyers (FTHBs)?

An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home is $100,000, the amount of the credit may not exceed $8,000.

Who is eligible for the FTHB tax credit?

Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible. This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

How do I claim the credit?

For those taking advantage of the tax credit in 2009, you may choose to either apply for the credit with your 2009 tax return or you may apply for the credit sooner by filing an amended 2008 tax return with Form 5405 http://www.irs.gov/pub/irs-pdf/f5405.pdf

Can I claim the tax credit in advance of purchasing a property?

No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a taxpayer claim a credit if the property is purchased from a seller with seller financing and the seller retains title to the property?

Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Examples of this would include a land contract, contract for deed, etc. According to the IRS, factors that would demonstrate the ownership of the property would include: 1. the right of possession, 2. the right to obtain legal title upon full payment of the purchase price, 3. the right to construct improvements, 4. the obligation to pay property taxes, 5. the risk of loss, 6. the responsibility to insure the property and 7. the duty to maintain the property.

Are there other restrictions to taking the credit?

Yes. According to the IRS, if any of the following describe your situation, a credit would not be due.

You buy your home from a close relative. This includes your spouse, parent, grandparent, child or grandchild.

You do not use the home as your principal residence.

You sell your home before the end of the year.


You are a nonresident alien.

You owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2009, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2006, through July 1, 2009.

Can you buy a home from a step-relative and be eligible for the credit?

Yes. Provided the person you are buying a home from is not a direct blood relative, the purchase would be allowed.

Can parent(s) who will not live in the property cosign for a mortgage for their child and the child that is a qualifying FTHB still be eligible for the credit?

Yes.

Can a separated spouse who has not owned a home for four years qualify for the FTHB tax credit if the spouse has owned a property anytime in the last three years?

No. However, the spouse may be eligible for the repeat buyer credit. The best path to take in any situation regarding income taxes is to speak with a professional tax preparer or CPA.

If you have any additional questions about the First Time Home Buyers Credit or any other real estate related questions please call me anytime. If your question needs to be answered by a CPA or tax preparer and you do not currently have one, I'll be glad to refer you to one in my network.

And of course, I am NEVER too busy for your business or referrals. Please let me know how I may be of service to you with any of your South Bay or Southern California Real Estate Needs. I also have a great network of brokers outside our area ready to handle your business as well.