Jeff Engle EnglePropertiesOnline

Hi Neighbors,

I came across a summary of an article published in the Chicago Tribune talking about short sales. With about 40% of the inventory in Placer County (with similar stats in surrounding counties) short sales are an important part of our housing market today. With around 7% of the inventory from REO/Bank Owned properties and 40% from Short Sales that means nearly half of the inventory is in the cateogry of 'distressed sales'.

Here's the link to the full article, and here's the summary from the NAR:

As more homeowners find themselves underwater -- owing more on their mortgage than their home is currently worth -- and unable to make the monthly mortgage payments, many are turning to short sales, which allow a homeowner to sell their home for less than owed on the mortgage. Short sales can be a win-win situation for all parties, because they enable home buyers to purchase properties in desirable neighborhoods and at favorable prices.

· Theoretically, short sales should be a win-win for the bank and the homeowner. Although the bank does not receive the full amount owed on the mortgage, it also does not incur the costs of foreclosure and/or eviction, if necessary. Many homeowners also prefer short sales because it is less damaging to their credit scores than a foreclosure. However, many real estate experts say that the majority of banks are reluctant to approve short sales, and often let properties go into foreclosure, even when there are reasonable offers on the property. In addition to considering the price, most lenders also take into consideration whether the homeowner can demonstrate financial hardship. If the homeowner is capable of making payments, many lenders will try to work out a loan modification, rather than a short sale.

· Unlike foreclosed properties, which may be run-down and vacant for many months, short-sale properties are likely to be better maintained, as most owners may still live in the home.

· Short sales often are more time intensive than traditional transactions and often require additional paperwork. Due to the large number of offers on short sales, many take as long as a few months to receive approval. If information or required forms are missing or incomplete, the bank may set the offer aside, which could delay the process and cause the property to go into foreclosure. To expedite the process, sellers should work closely with their REALTOR® to provide all of the necessary paperwork.

· Working with a REALTOR^® who has experience with short sales can help both sellers and home buyers during the transaction. A seasoned REALTOR^® will be able to serve as the mediator between the seller and the lender, and lead to a successful transaction.

· It is important to remember that in a short sale, although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what price, the property can be sold. Home buyers should work closely with their REALTOR^® to submit realistic offers.

The important factor when dealing with short sales is mental. It's not an easy or fast process most of the time, however these homes are selling and with the right attitude, when you know what to expect as a buyer it can be worth the effort.

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Hi Neighbors,

An updated tax credit chart has been published by the California Association of Realtors (CAR). It can be read in full here.

First, the California new home tax credit for First Time Home Buyers (FTHB) is no longer available as the funds have run out.

Secondly, the US tax credit is still available until November 30th of this year, for a 10% credit up to $8,000.

More details are available at the IRS web site here. Quoting from the IRS information: "The IRS reminds taxpayers the amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000, or $150,000 for joint filers. Taxpayers can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately."

Hope this has been helpful,

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Hi Neighbors,

Here is a great article about investing using your Self Directed IRA. The full article can be read here from the San Francisco Chronicle.

Key Points:

• You need to follow IRS rules - for example you can't live in the property
• The rental income can go directly back to your IRA
• You need to put down 30%

This could be a great way to save money on taxes today and build your retirement. Read the article for details, and consult your tax accountant before making this move. For some, it could be a perfect way to invest.

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Hi Neighbors.

I received a great article in a newsletter from a mortgage broker I work with - Chris Headrick. In it he states:

First-time homebuyers (FTHB) are taking advantage of one of the best real estate environments we have ever seen. Home affordability this year has been at an all time high with low interest rates and declining home prices. However, buyers on the fence should not be complacent.

The full article continues with great points about first time home buyer (FTHB) information. Included topics are:

• Why buy a home
• Financial reasons to buy
• Move in and watch it grow (appreciation and equity)
• The impact on your wallet - today
• Income tax credit
• Paying down points
• Mortgage interest tax deduction
• Private Mortgage Insurance (PMI)
• Real Estate Taxes
• Possibly more dough (not the bread)

And it sums up at:

If you or someone you know plans on purchasing a home in time to take advantage of the tax credit, there are some things to keep in mind. The last day to close to take advantage of the tax credit is Monday, November 30, 2009. Keep in mind, this follows Thanksgiving week. With the holiday offering a shortened work week for many, this will make closing at the end of the month more challenging.

You can read the full article here. Enjoy!

Jeff
Neighborly Realty
http://www.EnglePropertiesOnline.com

Hi Neighbors,

My daughter recently purchased a home, and included an Energy Efficient Mortgage (EEM) with her FHA loan. This is a great tool for homes needing a retrofit for HVAC or insulation. But, how much are you willing to pay so save some $$$$ on your energy bill? For the EEM it's pretty neat because you are given several options to choose from, and the energy savings must be more than the montly increase of your mortgage.

Here's an interesting article about energy savings - of special note:

Even though prospective home buyers want the benefits of new, more efficient homes, they are unwilling to pay much more for a "green" home, according to a recent member survey from the National Association of Home Builders (NAHB).

Read more: http://rismedia.com/2009-09-19/home-buyers-want-to-save-energy-but-only-at-right-price/#ixzz0Rqvhs5VQ

Jeff
Neigbhorly Realty
http://www.englepropertiesonline.com