Nancy Benvenuto Realtor

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Last week I wrote about “Sprinter” – that time of year which is clearly, still winter (CLEARLY this week in the mid-west and east where temperatures hit record lows!), but feels like Spring to those of us blessed with California Sunshine!

As I waded through the many articles I receive on Real Estate from various sources, they were all saying the same thing: Don’t wait!! Sell now – January and February are going to be a great time to sell or buy. And statistically, “Sprinter” is THE time to sell.

So now I want to talk about a Tsunami. Will we experience a Tsunami in home selling and buying in Sprinter – the first Quarter of 2014? I hope so!! But I’m not so sure. Like the Midwest and East Coast, and our ’49ers last week in Wisconsin, buyers and sellers seem pretty frozen in place.

Nothing seems very certain. The economy is improving, I guess, but then why, after the recession was “over” did some of my long term favorite restaurants in our area close? After weathering the worst, they closed in 2013? Lots of retailers and others who apparently survived the recession – didn’t. And that is such a personal and local indicator. So while the news tells us it’s getting better – I don’t see a Tsunami in Real Estate ahead.

Will we continue to experience a Drought? I hope not. Both in the weather and in the housing market. Rain is so wonderful and good for EVERYTHING in our world. As is the abundance of business raining down. We’ve been in a Real Estate drought for the past couple of years with record inventory lows and crazy pent up demand by buyers. Just like our hillsides and watersheds, we need rain (inventory) to fill the coffers of the demand in Real Estate.

And what about Global Warming? Things are surly heating up. For certain interest rates and home prices WILL be going up. There is just no two ways about that. There is so much pent up demand, and so little inventory that prices are being forced up out of sheer, and classic supply and demand (remember Economics 101?).

So, that’s good if you’re selling and bad if you’re buying. But with all the uncertainty – I always tell my clients the best time to buy or sell is when you want to, when you have to, or when you can. Hard to argue the common sense of that, although these factors are more about will and fate than just reason.

Throughout our Tri-Valley area, most neighborhoods are pretty unique, with the exception of some of the new development in the far Southeast end of our Valley. We can have a $600,000 fixer within in a stone’s throw of a $2MM mansion. Sometimes that is a non-issue, and sometimes that is a deal (or price) killer. It’s really important that you work with someone who knows and understands the micro-neighborhoods. I know that sounds a little corny, but it really is true.

So watch as “For Sale” signs begin to pop up like daffodils and gladiolas in the coming weeks – and call me if you are considering a buy or a sell. It’s my job to make sure you get your best Real Estate value – let me do my job for you!!

Happy New Year to you and yours. May the New Year be filled with blessings and great fortune in all you do!!

The highest compliment my clients can give me is the referral of their friends, family and business associates.

Thank you for your trust.

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The Clash

If I go it could be trouble, if I stay it could be double!! Remember those lyrics from The Clash? Wow – that has NEVER been more true regarding selling your home now – or not. If you are anywhere near being “short” (your home value is equal to or less than your loan amounts) get ready to sell NOW!! Here’s why . . .

California just passed CCP 580e (more on that in a second), and who knows, it could be repealed at any time. So if you need to sell short or just sell, DO IT NOW! It’s estimated that as many as 50% of the homes in California are now worth less than their loan amount. While our little world is probably closer to 20-30%, it’s still a huge number and something we should all be thinking about because the laws are changing and what could be a simple short sale now, could be a big financial mess in a few short months.

What is CCP 580e? Let me try to explain (a lawyer nor accountant am I)  . . .When one buys a home – the first loan is called a “purchase money loan”. There is no recourse on a purchase money loan by the bank. In other words, if you default or sell below the loan amount, if the loan is your first (purchase money) loan, the banks can’t come after you for the deficiency. But if you EVER refinanced – 1st, 2nd or wrapped – that is a recourse loan that the bank can come after you for the deficiency. They rarely did, but they COULD, and that possibility prompted CCP 580e.

The California legislature decided to protect the borrower and make second loans non-recourse too, by passing and implementing CCP 580e. So for now, if you sell your home for less than the loan amount owed, whether it’s a first, second or whatever kind of loan – it is now a non-deficiency loan. The bank can’t come back after you to repay the difference between what you owe and what you sell your home for.

Banks giving us the finger?How long do you think the banks are going to let that happen? Who knows, but better safe than sorry. If you know your home is worth less than the loan amount and you think there is any chance you won’t be in it “until death do you part” – it’s worth having a conversation with an attorney or accountant – or both. I can get you started, but I can’t answer legal questions. I just know things are changing – and fast – and there is a window right now for individuals to sell if they think they may need to do so in the next few years.

And here’s the other reason – the tax situation around these short sales is going to change too. As of now, the state and federal governments are not coming after borrowers to pay income taxes on the money they pulled out of their home. So if you got a $200,000 equity loan, and spent that money – on anything from home improvements, to college tuition to that new Porsche in the driveway, as of today you won’t pay income tax on that $200,000. But come December of 2012 – that is changing and both the IRS and state governments are expected to let that tax law expire so they can collect all the income tax on all that money that Americans pulled out of their homes.

As we all know, it’s virtually impossible to get a Home Equity loan these days – so there will be very little “new” money exposed to this expired tax law, but any money borrowed against a home could then be subject to a deficiency judgment (you may need to pay it back), but it could also be taxed as income. OUCH!!

Hmmmm – are we surprised that big banks and the government are aggressively seeking new avenues of income for their strapped divisions and agencies? I get it, and I even get that there is personal responsibility for those who over borrowed on their houses – but let’s not be naïve or ignorant and sit back and not be strategic and smart on how this entire financial meltdown could affect us.

So if you find yourself in a questionable circumstance – talk with someone who can properly advise you on your income, tax and liability surrounding your mortgage. I have several very specialized attorneys I work with who can coach you through your options.

There are also big credit rating ramifications on short sale v. foreclosure v. deed in lieu of etc. It’s all gotten sooooooo complicated, and I am far from the expert – but I know enough to know now is the time to be considering your options because while the freefall in pricing may have stopped, home values are not going back up any time soon, and the laws surrounding how that could affect YOU and your family and your family’s future are changing fast.

Information OverloadI know that was a lot of information to digest, so let’s reduce it to the bottom line. However much you may be emotionally attached to your home, you need to think strategically about your financial future for the long run. If you are not sure where you stand regarding your mortgage, home value and how the changing laws may affect you, pick up the phone and get some professional advise right now, rather than later.

If you need somewhere to start, start by calling me and I’ll send you in the right direction. You are important to me and I want you to know that I am always here to help.

IMPORTANT NOTICE: I am not an attorney or tax expert. Any comments I make in regards to tax/legal issues are of a general nature and should not be relied upon. Please seek expert counsel in these areas for specifics to your situation.

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