Real Estate Information Archive

As stated over the last several weeks, we are very concerned about interest rates going higher for the following reasons:

• In just 2 months, interest rates have increased by .500% in rate across the board.
• The Federal Reserve has stopped buying mortgage back securities which has kept rates down in the past.
• The Federal Reserve now plans on selling mortgage backed secrurities which will force interest rates higher.
• There is talk on the street that the Federal Reserve may increase the federal fund rate by .25 in after hours trading one of these days not to upset the stock market but would devistate the bond market and push rates higher.
• We continue to see more economic reports being released weekly that are indicating the economy is recovering which pushes interest rate higher.

As result of the above, the window of opportunity for locking in a low interest rate on your mortgage or refinance may be numbered.  Please contact me for more information.

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me
408-377-4123 Office
650-465-8957 Cell
560 S Winchester Blvd, Suite 500
San Jose, CA  95128
A Dept.of Real Estate - License # 01165697

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

I bought a property at a trustee sale, and the former owner refuses to get out!

Many real estate investors are taking advantage of great deals in the housing market when a property is being sold at a trustee sale.  Unfortunately, some of these investors are unknowingly buying more than just a house at a great price; they might be buying a lawsuit.  

What happens when the former owner refuses to vacate the property after you purchase it at a foreclosure or trustee sale?  In California, you are not allowed to do any “self-help”, meaning, you’re not allowed to do something like change the locks, cut off the power, or cut off the electricity to the property to force somebody out of the house.  

You must take appropriate legal action to remove a former owner or tenant from the premises.  

1. Provide the proper written notice for the person to vacate the premises.  If it’s the former owner, a three day notice is appropriate.  If it’s a tenant of the former owner, you must determine whether they stay in the property on a month-to-month basis or if they have a lease.
   
   
2. If the tenant refuses to vacate after the notice period is up, you must file an unlawful detainer action in the superior court of the county your property is located in.  There are strict technical rules to follow when filing and serving the lawsuit.  You must ensure you follow the appropriate service and notice periods in order to succeed.  
   
   
3. The unlawful detainer action is an expedited proceeding.  This means the defendant will have approximately five days to respond to your complaint.  If they don’t, you can request a default judgment taken against them in order to remove them from the property.  If they do answer, you should request a trial date and work on gathering evidence for the trial by requesting documents and sending discovery requests for anything you need to prove as part of your case.
   
   
4. The tenant is not allowed to file a cross-complaint, but they may say you have done something badly as an affirmative defense.  If the tenant says there was a problem with the foreclosure itself, that is a case against the foreclosing lender, not you.  Unfortunately, it is up to you to show this to the judge.  If the tenant has filed for bankruptcy, that will generally just delay things, but not stop the eviction itself.  If your unlawful detainer action is against the former owner, they do not have a legal right to remain in the property. 
   
   
5. After you prove your case at trial, the tenant will have a number of days to vacate the property.  If they still refuse to do so, you may now have the sheriff assist you based on the information in the “judgment for possession” that you should have received at your trial.

The good news about unlawful detainer actions is that they are very quick.  From start to finish, it generally will take about 30 days for a standard unlawful detainer action.   A regular civil action, like a quiet title action or an action for ejectment can take up to a year or more.  

For more information on real estate law, contact:

Elena Rivkin Franz,  Attorney at Law
Pratt & Associates 
1901 S. Bascom Avenue, #350
Campbell, CA  95008
(408) 369-0800 ext. 202

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

For a limited time - Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  

To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

The Federal Credit
Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010.  

The New California Credit
Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied.  The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)).  California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)).  Other terms and restrictions apply to both tax credits.

Got Questions?
Interpreting the rules for the two programs can be confusing (does one program limit credit when you close on a full moon or if the purchase contract has an odd number of page?) – call us to help you craft the best strategy to buy your next home at the best possible price (with the most tax credits possible!)

The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(877) 901-2121
CA DRE License: 01860743

____________________________________________________________________
The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

When a taxpayer sells an investment property and implements a 1031 tax deferred exchange, there are a few time period requirements the taxpayer must follow. 

1031 taxpayers have 45 days from the sale of the relinquished (old) property to identify new property to purchase. The deadline for completing the exchange is the earlier of

• 180 days from the sale of the old property or
  
• the due date of the taxpayer's tax return for the year in which the old property was disposed. 
  

If a taxpayer sold property after October 18, 2009 and utilized a 1031 exchange, the taxpayer's exchange period will expire on April 15, 2010 (assuming the taxpayer is a calendar year paying taxpayer).  In order to ensure the taxpayer has a full 180 days to purchase new property, the taxpayer must file for an extension.   For example, if the relinquished (old) property closed on December 2, 2009, unless the taxpayer files for an extension, the taxpayer will only have until April 15th to acquire their replacement (new) property.

However, if the taxpayer files for an extension of their tax return the taxpayer will have the entire 180 days (May 31, 2010) to complete the exchange.

 
Tax Forms You May Need

 It is important to note that, taxpayers must report their exchange on the tax return for the year in which the exchange begins.

•  Form 8824 is used to report the 1031 exchange. This form requests the date of the exchange transaction, the date properties were "identified" and financial information obtained from the closing/settlement statement.

• Form 4797   is used when depreciable rental or business property is sold.

• Form 1041 is used when non-depreciable investment property is sold.

• Form 4868 is used to file for an extension.

Ron Ricard, CES®
Assistant Vice President, Sales Manager
Investment Property Exchange Services, Inc.
(408) 483-1031
Email me

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Adding new solar panels to a home in a remodel is still quite expensive. If you are looking into adding solar panels to your home or even a backyard greenhouse, then consider going to commercial installers and asking them to let you have the solar panels they have replaced in commercial buildings. Panels that become chipped or scratched in commercial buildings are swapped out for new panels. Yet, even damaged solar panels can deliver most of their original output and still be perfectly safe for a home project or renovation.

Be prepared to ask politely and it is good form to offer to pay something. Getting rid of old solar panels will save commercial installers the recycling and disposal fees, but it is still good business to acknowledge their helpfulness.

You can purchase a multimeter that measures amps and watts and attach it to the used solar panels while they are in the sun to determine if they are still producing energy.

© The Dawn Thomas Team

The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(877) 901-2121
CA DRE License: 01860743

____________________________________________________________________
The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

(Part 1 of 3)

Balance in one's portfolio, as in life, is often easier said than accomplished.  Questions arise that include:

1)    Is real estate safe?  If so, when, what, where, how and why should I buy?
2)    Is the stock market safe?  Again…when, what and why should I buy and for how long?
3)    How do I keep balanced in my stock and real estate portfolio?

These, and many others, are questions we ask ourselves as investors on a daily basis.  Many of us may have had too much of one thing at one point in time, whether it was tech stocks in the late 90’s or real estate in  2006 through 2008 or now in 2010 with commercial property.

Many analysts have very complicated spreadsheets and graphs predicting what may happen or not happen in the future and based on these, investors must make hard decisions on what to do, how to proceed and what purchases they should make.  There is no real crystal ball that is 100% accurate.  If there was, I would not be writing this article, if you know what I mean!

One thing I have learned through my years of lending experience and course work on economics, lending and finance is something titled “The Four Cycles of Real Estate” which, based on my experience, repeats every 10 years or so and is applicable to investing in the stock market as well.

For real estate, every 10 or so years, each geographic area throughout the United States experiences a full circle, moving from a recessionary market (that we have experienced over the last 2 years) to a recovery market to a growth market to an oversupply market.  It appears that each cycle lasts between 2 to 2.5 years but can vary from area to area.  Based on my experience, an investor of real estate would should buy in the recessionary period when prices are low and sell in a growth market when prices are high.  This application could be used with the stock market as well.  Buy the stock (after researching it) when the stock is low and no one wants it and sell when everyone is buying it or when the stock is high.

With this model, you might not see the peak or the high point of real estate or stock prices but you certainly won’t see the low point either as so many investors experienced in 2001 and 2008 if they held on to the investment and had to sell.  In summary, it seems that one of the major keys to creating balance while providing a good return on investment is when you buy and when you sell and in the case of real estate buying in the recessionary period, holding in the recovery period, selling in the growth period, staying in cash in the oversupply period and then buying again in the recessionary period.

In relationship to what, where and why to buy, on Thursday 2/25/10 I will provide part 2  and explain the “what and why” part and on Thursday 3/4/10 I will explain the “where” part.

If you have any questions on the above or would like to determine your purchasing power and financing options for a home purchase or investment property in the future, please contact me.

All the Best,

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me
408-377-4123 Office
408-558-1422 (Renee Steff) Sr. Loan Coordinator
408-608-1921 Fax
CA Dept.of Real Estate - License # 01165697

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Great Teacher Loan Program

We recently helped a teacher purchase their home with the CalSTRS loan program.  Initially the buyers wanted an FHA loan but did not like the fees and mortgage insurance associated with the loan.  The CalSTRS loan which allowed them to forgo mortgage insurance, pay fewer points and significantly lower their cost of financing.  Below are some benefits in the CalSTRS loan program.  

If you know of a public school teacher or public school employee, please pass on this information.  Below are some of the details on the program:

•    Max purchase price of $670,103
•    No Mortgage Insurance required (unlike FHA loans)
•    3% down payment (1% can be from the borrower with the remainder from a family gift)
•    Credit scores as low as 620 on conforming;  680 on high balance conforming
•    Deferred mortgage payments on 2nd loan for 1st five years
•    Only 2 month's reserves required by lender
•    Must be a member of CalSTRS.

Have your favorite teacher call us for more information!

Rob McCarthy
Owner and Senior Mortgage Planner - 101 Loan
www.101loan.com
Email Me
408-377-4123 Office
650-465-8957 Cell
560 S Winchester Blvd, Suite 500
San Jose, CA  95128
A Dept.of Real Estate - License # 01165697

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Getting a group of interested parties together to purchase real estate can provide great advantages.  You can purchase real estate of higher value that what may be available to you individually.  It can also be a great way to get started with real estate investing.  However, there are some steps you should follow to avoid having problems down the line.

First, ensure your mortgage contains a non-recourse clause.  This provision keeps the personal property of each group member from being at risk in the event of a default.  The lenders recourse is limited to foreclosure and acquisition of the property.  This means your personal property, other real property, and income are out of the lender’s reach.

Second, ensure you have a clear agreement between the parties on how you will split mortgage payments, property taxes, insurance and maintenance on the property.  Include dates to comply with things like maintenance, and the possibility that unexpected repairs may need to be made.

Third, agree on how and when you will sell the property, including the possibility of a loss and how the loss will be apportioned.  Although real estate investment is historically sound as a long term investment, short term real estate investors have faced problems in our current economy.

Fourth, consider setting up an entity such as a limited liability company for holding the real property.  This will provide further liability protection and provide a clear way to spell out the parties responsibilities in the investment.

Lastly, make sure you do your due diligence in deciding who your investment partners will be.  Many friendships and families have been in turmoil because of the financial issues surrounding a real estate investment.  Understand your intentions, your exit strategy and your responsibilities before you make a decision.

For more information on real estate law, contact:

Elena Rivkin Franz,  Attorney at Law
Pratt & Associates 
1901 S. Bascom Avenue, #350
Campbell, CA  95008
(408) 369-0800 ext. 202

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

Here are the real estate market statistics for the Willow Glen area of San Jose, CA for January 2010:

Trends over the Last Year in Willow Glen - San Jose, CA

Data source:  MLSListings

Want more information about the market in your specific neighborhood?  Give us a call or email us!

Have a GREAT week!

Laura Powers, Realtor
The Dawn Thomas Team
Intero Real Estate Services
496 First Street, Suite 200
Los Altos CA 94022
(877) 901-2121
CA DRE License: 01860743

____________________________________________________________________
The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home

It is important to exercise due diligence when selecting and retaining a tax professional. Remember, you are legally responsible for what’s on your tax return even if it was prepared by an another person or firm.  Most tax return preparers are professional, honest and provide excellent service to their clients. However, unscrupulous tax return preparers do exist and can cause considerable financial and legal problems for their clients. Therefore, it’s important to find a qualified tax professional.  The following tips will help you choose a preparer who will offer the best service for your tax preparation needs.

1. Check qualifications. Ask if the preparer is affiliated with a professional organization that provides its members with continuing education and resources and holds them to a code of ethics.
   
2. Check professional record. Check to see if the preparer has any questionable history with the licensing authorities such as the IRS, the state’s board of accountancy for CPAs, or the state’s bar association for attorneys.
   
3. Ask about fees. Avoid preparers that base their fee on a percentage of the amount of your refund or those who claim they can obtain larger refunds than other preparers.
   
4. Determine accessibility. Make sure you will be able to contact the tax preparer after the return has been filed, even after April 15, in case questions arise.
   
5. Provide all records and receipts. Most reputable preparers will ask to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items.
   
6. Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
   
7. Review your return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
   
8. Make sure the preparer signs your return. A paid preparer must sign the return as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return. The preparer must also give you a copy of the return.

Anthony F. Earle, Esquire
Earle Law Offices
A Professional Corporation
19925 Stevens Creek Boulevard, Suite 100
Post Office Box 1925
Cupertino, California 95015

Main: 408.786.1060
Toll-Free: 800.515.7560
Email me
www.earlelaw.com

____________________________________________________________________
Author and Business are endorsed by The Dawn Thomas Team, Inc.
Silicon Valley and Beyond - our website
Silicon Valley Home Search  - find Silicon Valley properties for sale
What’s Your Silicon Valley Home Worth? - get current market information for your Silicon Valley home