carolynn santaniello

Like it or not, the Federal Government has extended and expanded the Home Buying Tax Credit. Considering the frenzy of home buying we have experienced in Orange County for the past few months it is clear that demand will remain high through the traditionally slow season. Homes often receive multiple offers even in the $600K to $800K range. Expanding the Tax Credit will bring more higher income Buyers into the market, thus increasing demand for higher priced homes.

Since a large portion of the inventory listed for sale are Bank Owned, or Short-Sales that may not even result in a close, Buyers have few choices. Seller's should be taking advantage of the low inventory and high demand for the expanded price points while Uncle Sam is pointing his finger at YOU!

The Tax Credit details are as follows: http://www.irs.gov/newsroom/article/0,,id=204671,00.html

• First Time Home Buyers (not owned a home in the past three years) get up to $8000 tax CREDIT, or 10% of home price.
• Move-up Buyers (owned a home in 5 of the past 8 years) get up to $6500, or 10% of home price
• Qualifying maximum incomes for both CREDITS are Adjusted Gross Income of $125,000 Single and AGI $225,000 Married
• The home must be in contract by April 30, 2010 and close by June 30, 2010.
• Credits-NOT deductions. If Buyer owes IRS $1000 they get a check back for up to $7000

Sellers and Buyers of ALL shapes and sizes Uncle Sam wants YOU. Share the word.

Lately I have had several people mention they are considering investing in real estate here in Orange County, CA. People want to live in Orange County, that is an undeniable fact, however investing in our Wild Wild West housing market is not for the feint of heart.

Getting a "deal" has increasingly become a challenge due to huge demand for homes/condos priced under $600,000. Cash is king, so if you can swing an all cash offer, you are golden. Banks will often take a low cash offer that can close quickly for their REO over a financed market value offer. There are a lot of people in OC purchasing all cash, so your offer may still be one of many. Condos in good areas can be had in the low to mid 100K's and single family homes start in the mid 300K's.

If you will be financing your investment purchase there are three different types of homes you can purchase.

• Bank-Owned homes: The trouble with these listings is that from my experience there can be 5-50 offers on them, so you have to put together a complete and "attractive" offer package. What I mean by "attractive" is that your offer price needs to be market value and the offer must include FICO summary, proof of down payment funds, a pre-approval from a direct lender, and any other addendum's the bank requires. If it is not all together in one package they won't even consider your offer.
• Short-Sales: Since you are not looking for a primary residence you have the time to wait out short-sale approval from the bank. From my experience this process may take 2-9 months. You never know if the banks who hold the mortgages will approve taking less than what is owed so don't hold your breath for "the one" to come through and keep looking for other options.
• Normal sale, or equity sale: These are the best, and hardest, homes to find. A normal sale should have less mystery components since they have to disclose everything they know about the home and have likely cared for the home more than a distressed property.

Bryan Shoup, Mortgage Consultant from Home Security Financial, says an investor needs to have a debt to income level of 45% or less, at LEAST 25% down payment (unless you are purchasing with a family member who will live in the home, then as little as 3.5% will work). No stated income loans and an individual can own up to ten properties (previously it was only 4).

If you intend to rent out your investment have your REALTOR run a search on closed leases for the size and type of home your intend to buy. This will be a good indicator of how much you could ask for. Rental prices have remained quite high even in this economic downturn so it is possible to be cash flow positive if you are financing 60% or less.

Do your homework, select a reliable REALTOR who will be a strong partner for your business success, and be patient with all the wackiness you will see in the market. Hold on for a bumpy ride in the Wild Wild West of OC Real Estate!

Share the word.

The REAL Tweeps of Orange County!

Despite our undeserved reputation induced by staged "reality" shows, Orange County is chock full of REAL people who freely give of their time, money, and knowledge. In the last few weeks I have had the privilege of getting to know some awesome Orange County Social Media Rock-stars. They may not be gifted musicians, but they are gifted with words and community.

Just Spotted, an Orange County website, hosted the OC Blog Awards at Wowzville in August. Much to my surprise, I was privileged to be nominated for a Micro-Blogging award (Twitter). The place was packed with OC locals blogging about everything from crafting (@thisiscarrie), fashion (@boutiquing), food (@fastfoodmaven) and everything in between. There were wonderful goodies donated by Dippen'Dots Fountain Valley, Daddy Cakes (pancakes extraordinaire), and BabyCakes cupcakes. Colleen and Kelly of Just Spotted organized this event to celebrate our powerful online community: http://www.just-spotted.com/2009/08/youve-just-been-spotted-oc-blog-award_20.html

A week later in Irvine another phenomenal event was hosted by Social Media Club of Orange County, Tweet Up Orange County, Style Week OC and sisters Rochelle, Haley and Chelsey Veturisa. The Irvine Peppino's bar was bursting at the seams as online personalities forged new offline relationships with fellow business owners, students, hobbyists, and plain old social media addicts. There were close to 90 Twitter "Tweeps" elbow to elbow with camera's flashing and video interviews being shot. http://www.ocregister.com/articles/twitter-networking-social-2541296-orange-county

The first OC Twestival will be held at Orange Hill Restaurant September 15th and will be raising money for Orangewood Children's Foundation. Entertainment is being donated by musicians and comics to benefit this very worthy cause. Hundreds of OC Social Media users will be there to support our local children. http://orangecounty.twestival.com/2009/09/02/move-over-america-twestival-ocs-got-talent/

Orange County has a rich pool of people who genuinely care about their community. If you need to know how to start a wordpress blog, or, simply, who has the best tacos in OC, there is a local online community anxious to share their knowledge.

I am proud to be a part of the REAL OC Tweeps!

Ah, my dear Federal Tax Credit, parting will be such painful sorrow. You have seduced my First Time Home Buyers with your irresistible offer of $8,000. They have been lined up waiting to catch a glimpse of your promising reward, but now they may not make it past the front door before you say goodbye on December 1.

Before seeking you out they made sure their maximum AGI of $95,000 single and $170,000 jointly met your requirements. For their patience and bravado you offered them up to 10% of their new homes purchase price not to exceed $8,000. They swore allegiance that they would maintain primary residence and keep it for three years.

First Time Home Buyers have showed up at your venues and tried to get your attention along with many other competitors, but your promise has eluded them. Hopes cannot be dashed so easily. They have until mid October to secure their escrow and until December 1 to close the sale.

In the end we must bid you adieu, but hopefully my First Time Home Buyers will wave goodbye with your treasures awaiting them at tax time!

Share the word.

On Facebook awhile back I asked for suggestions about what people want to know regarding Real Estate. The most emphatic reply was: "THE TRUTH!"

Well, here it is: "I DON'T KNOW!"

•· I don't know when the banks are going to release all the foreclosed homes they are holding.

•· I don't know when the market is going to bottom out.

•· I don't know what interest rates are going to be.

•· I don't know how many offers there will be on the Bank Owned home you really want, or if they will select yours.

•· I don't know if the short-sale will ever be approved by the bank.

•· I don't know if you will ever win the lottery!

Whew, now that we got that out of the way, let's talk about what I DO know:

•· I know I submitted 22 offers this year for clients and every one of the homes had multiple offers (clearly, a lot of people think it's a great time to buy).

•· I know people want to buy homes in Orange County: OC Register article Sales up in 51 O.C. ZIPs in mid-June http://lansner.freedomblogging.com/2009/07/10/sales-up-in-51-oc-zips-in-mid-june/29555/

•· I know interest rates are at historic lows.

•· I know every neighborhood is its own microcosm of supply and demand, which is reflected in varying home sale volume/price. Irvine's stability is a great example.

•· I know You have to understand that Federal, state, and local laws, customs, and practice are evolving at lightening speed.

•· I know You have to trust ALL the professionals representing your interests.

There you have it, the truth, in a nutshell. The bottom line is that home buying and selling in OrangeCounty in 2009 must be a reflection of what is best for you and your family/investment group/portfolio. The choice is yours.

Share the word.