| Would you skip a mortgage payment if you thought it could help you with the bank? | July 26th, 2009 |
|
I’m not surprised, although I think there’s a ‘back story’ here. Not all these owners are callous fools– some may be in tenuous economic positions. They can pay now, but are setting up their “Plan B” in the event they can’t afford their payments down the road. I also think some of those owners are making calculated moves towards negotiating a loan modification or short sale. In the Bay Area, this practice is probably more common, where sophisticated investors and owners are more adept at negotiating with their lenders. That said, I’m doing a deal right now (buyer-represented) with Sellers who can easily afford their monthly payments but are choosing to negotiate a short sale with their lender. It looks like Wells Fargo is going to let them walk, but only after they pay $15,000 to mitigate the lender’s losses. Add to that my own efforts towards a loan modification. After inviting me to apply for a ‘pre-emptive loan modification,’ Citibank has turned me down because I don’t make enough money. Evidently the bank would rather risk foreclosing on me than seemingly help me keep my home. Wacky reasoning, I know, but they tell me the Obama Administration has put restrictions on loan workouts, and I don’t meet Freddie Mac’s very conservative underwriting requirements. (Don’t worry– I won’t go homeless and can make the payments I have without too much trouble) So don’t think a loan modification or short sale is a slam dunk if you decide to go for it without demonstrating real hardship. Just sayin’. . . Read more. . .http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/12/REBF18JR7P.DTL |
|
|
|
A new study reveals that 26 percent of mortgage defaults across the country are based on strategic economic decisions to bail out of loans by owners who actually have the money to make the payments but can’t stomach the negative equity they’re carrying.| Tricks to Selling Tenant-Occupied Property in San Francisco | July 23rd, 2009 |
|
Why you should attend: Learn how to market tenant occupied and rent controlled properties. Speakers are: Daniel Bornstein. Daniel is a founding partner of Bornstein & Bornstein, was well as a realtor/broker, an affiliate member of the San Francisco Property Owners‘ Association, the Tri County Property Owners’ Association and the Professional Property Managers’ Association. Daniel has served as a professor of law and for over a decade and has conducted numerous legal seminars. Leonard Spoto. Leonard is a founding partner of the 1031 Exchange Qualified Intermediary, Asset Exchange Company. He is a frequent keynote speaker and an accredited course instructor on the subject of 1031 Tax Deferred Exchanges. He has presented his popular real estate and tax workshops to over 6,000 Realtors, lenders, title professionals and investors and is the author of numerous published 1031 Exchange articles. You must RSVP to attend. Call me at 415-577-0809 and I will get you on the registration list. |
|
|
|
Asset Exchange Company, a 1031 Exchange Qualified Intermediary, and the law offices of Bornstein & Bornstein will be hosting a real estate investment workshop on Thursday, July 30th from 10:00am - Noon at the Fort Mason Center in San Francisco. The workshop is a must for any real estate investor or professional doing business in San Francisco. | How to File a Property Tax Appeal in San Francisco | July 19th, 2009 |
|
If you need help gathering comparable sales data with which to make your case, call me at 415-577-0809 or email me at cblase@paragon-re.com , and I’ll whip up some ‘comps’ for you. Typically, the Assessor’s “valuation date” is January 1, 2009 and any sales comparables submitted must have closed before March 31, 2009. The City prefers sales dating right around the end of 2008/beginning of 2009, so I’ve tried to deliver comps dating from that period. Sometimes, When I can’t find enough sales during that time, I’ve gone all the way back to July in an effort to find the best comps to support your case. Some owners are looking to Zillow to find the best comps. Zillow can be a great resource, BUT the site is working only off tax records, which often reflect inaccurate square footage. The cost per square foot is a critical factor when estimating value– and Zillow’s comps usually don’t include rooms down or expansion of the home’s footprint. So call me if you find a comp that looks good but has smaller square footage than your own home. Often the MLS data mentions those additions or notes that the square footage in tax records is not accurate. Very generally speaking (it all depends on the neighborhood and other details of your purchase), homes purchased 2006 through mid-2008 probably have the best cases for a property tax reduction. The less affluent areas of the city typically peaked in value around 2006 and the more affluent in 2007 - 2008. Declines from peak value generally run in the 10% to 30% range, with the less affluent southern neighborhoods being hit with the largest reductions. (For a broad analysis of value changes by neighborhood, see the link at the bottom of this posting.) Please note: If your appeal is successful, the reduction in assessed value only applies to the 7/1/09 - 6/30/10 tax year. A decline-in-market appeal is only good for 1 year, the year for which it is filed. If you’d rather try for an informal review, the Assessor’s Office is now accepting, through 8/28/09, “Requests For Informal Review Of Assessed Value” for tax year 2009/2010. This applies only to single-family dwellings, residential condominiums, townhouses, live-work lofts and cooperative units. The SF Assessor’s website offers information regarding Decline-in-Value Informal Reviews: Links to Assessor’s Forms and FAQs: Formal Appeal The next open formal appeal filing period for San Francisco will be July 2, 2009 to September 15, 2009 — to appeal the 2009/2010 assessed value of your property. A formal appeal can be made for multi-unit and commercial properties, as well as for houses, condos & cooperative units. These 2 websites offer details regarding the filing of a formal appeal - the instructional videos are highly recommended for those who wish to proceed: • SF Assessment Appeals Board Warning on ScamsThere are a number of property-tax-appeal service companies, who have been sending out their solicitations on stationery that suggests a government agency affiliation. SF Assessor-Recorder Phil Ting has stated the following: “We’ve received reports from dozens of taxpayers who have received a letter from companies offering to facilitate the property tax reassessment for $179 [or more]. This is unnecessary and deceptive. Taxpayers can fill out a simple, one-page application for a review of their property in my office, free of charge, starting on April 15. There is no need to pay for this service.” Many of the solicitations received by San Francisco homeowners may be illegal. More on this subject: Excerpted FAQs and Facts from the Assessor’s OfficeHow is the amount of my property tax determined? In order for the amount of your tax to be determined, the Office of the Assessor/Recorder must first assess the value of your property. Generally, the assessed value is the cash or market value at the time of purchase. This value increases not more than 2% per year until the property is sold or any new construction is completed, at which time it must be reassessed. For more information on how the assessed value is determined, contact the Office of the Assessor/Recorder at (415) 554-5596. After the Office of the Assessor/Recorder has determined the property value, the Office of the Controller applies the appropriate tax rates, which include the general tax levy, locally voted special taxes, and any city or district direct assessments. The general tax levy is determined in accordance with State law and is limited to $1 per $100 of assessed value of your property. After applying the tax rates, the Office of the Controller calculates the total tax amount. Finally, the Office of the Treasurer & Tax Collector prepares property tax bills based on the Office of the Controller’s calculations, distributes the bills, and then collects the taxes. Neither the Board of Supervisors nor the Office of the Treasurer & Tax Collector determines the amount of taxes. Do I have any recourse if I disagree with the valuation placed on my property by the Assessor? Yes. If you disagree with the assessed value of your property you may contact the Office of the Assessor at (415) 554-5596. They can provide you with information on how the value was established. If you still disagree with the assessed value of your property after reviewing it with the Office of the Assessor/Recorder, you may contact the Assessment Appeals Board for the purpose of appealing your assessment. If you choose to appeal your assessment, you must still pay your property tax in full by the appropriate deadlines; otherwise, you will incur penalties while the case is on appeal. If your appeal is granted, a refund will be issued to you. Appeal applications and further information about the appeal process can be obtained by contacting the Assessment Appeals Board. Before You File a Formal Appeal with the Assessment Appeals Board. . . Beginning April 1, 2009, the Assessor’s office started accepting requests for an Informal Review of your 2009/2010 property value. The Informal Review forms can be obtained from the Assessor’s website. If the Assessor’s staff discovers an error, they may be able to correct that error, and you may not need to file a formal appeal with the Assessment Appeals Board. If, however, you and the Assessor’s office cannot reach an agreement, you can usually appeal your assessment to the Assessment Appeals Board during the appropriate open filing period. If you want to file a formal appeal for the value of your property, you must complete an “Application for Changed Assessment,” and your application must be filed with the Assessment Appeals Board in a timely manner. Who Can File a Formal Appeal An assessment appeal can be filed by the property owner or the owner’s spouse, parents, or children, or any person directly responsible for payment of the property taxes; this person becomes the “Applicant”. An application may also be filed by an authorized agent. If an application is filed by an agent - other than a California licensed attorney - written authorization, signed by the applicant, is required. How to File a Formal Appeal Obtain, complete, and return an “Application for Changed Assessment” from the Assessment Appeals Board of San Francisco. We do not accept versions of the form from other counties or the State Board of Equalization. Completed applications must be postmarked on or before the deadline date to be considered as timely filed. |
|
|
|
If you believe your San Francisco home may be eligible for a reduction in property taxes based upon a decline in value, there are two ways you might proceed: an informal review by the Assessor’s office and/or a formal appeal with Assessment Appeals Board. The formal appeal, in particular, can be a complicated and time consuming process but may be worth the effort for the savings in property taxes.| $775,000: 4br/2.5ba right on the water– | June 22nd, 2009 |
|
Ok, so it’s in Alameda: but still, those water views out every window have got to grab you– the home is also set along a birding trail with amazing opportunities to view wildlife in action. |
|
|
|
| Lovin’ the very cool mint.com | June 2nd, 2009 |
|
Artfully designed, Mint it comes off like a patient and discreet friend who knows your awkward financial secrets and stands by you anyway. It’s scary-easy to set up– with just my user names and passwords Mint instantly collated my mortgages, bank accounts, credit and debit cards, I.R.A.’s, 401(k)’s and more. Mint also showed trends in my cash flow– based on average spending, I went way over on groceries this month (we had a big party at home), but came in under on entertainment out (because we had a big party at home.) I’ve only scratched the surface of what Mint can do for me– I’m told it can send me weekly financial summaries via e-mail, and fire off alerts on unusually high bank fees or sudden surges in expenses. Mint’s most entertaining feature is the one that measures my spending against other people’s. Bar graphs compare my spending at Trader Joe’s and Target with how much people pay nation or statewide in those franchises. This gives me an opportunity to feel smug (because I drive a hybrid) or stupid (because I blew all that money on Starbuck’s lattes). There’s a mild debate on how secure your information is with Mint. Most experts say it’s safe– username/password info is encrypted and scrambled, and they use the same security technology as major online banks. I’ve also yet to hear about a Mint employee leaving a laptop with super sensitive information lying around an airport lounge. So I’d wager it’s worth the risk. Here is the full scoop on Mint from Heffernan: http://themedium.blogs.nytimes.com/2009/05/21/home-economics/ |
|
|
|
Attention to those who are inclined towards vagueness when it comes to personal finances: If you’re resistant to facing the music about what you have in your accounts and how you spend it, I’ve discovered a new, gentle, almost soothing online method for tracking my bank balances, debts and spending habits called | Before You Decide to Rent Your Home– Tax Consequences and Capital Gains | May 16th, 2009 |
|
If you own a home you probably know that when you sell you get to exclude up to $250,000 (or up to $500,000 for married couples filing jointly) of capital gains from income tax. However, a little-noticed provision in the Housing Assistance Tax Act of 2008 changes some of the rules: Now, the amount of profits from the sale of a house that can be excluded will now be based on the percentage of time when the house was used as a primary residence by the taxpayer. Under these new rules which took effect January 1, 2009, the amount of gain that will qualify for the exclusion is limited based on the amount of time that the house is actually used as a primary residence. If the house is used other than as a primary residence (such as rental property, or a vacation or second home), capital gains must be allocated between qualifying and non-qualifying use. To qualify for any portion of the $250,000/$500,000 exclusion, you need to own and live in your property as your primary residence for at least two years out of the five years ending on the date of sale. Under the new rules, the time that the taxpayer owns the home will be divided into “Qualifying use” and Non-qualifying use.” To figure out how much gain will taxable, you need to use the following ratio: Here’s an example of the allocation under the new law: Suppose you and your spouse buy a house on January 1, 2009 for $800,000. You rent it out for two years and then move in on January 1, 2011. At the end of 2013 you put the home on the market and complete the sale of your home on January 2014 for $1,200,000. Under the old rules, you would have enjoyed the $400,000 profit tax-free. The new rules, however, allow you only two years of use as a principal residence to qualify your for some portion of tax-free exclusion on the $400,000 gain. To figure it out using the ratio above, you divide the two years you rented the property by the by the total period of ownership (five years) and multiply that fraction (two-fifths or 40%) against your gain of $400,000. The resulting number is the amount that’s subject to capital gains taxation — $160,000 in this case. The remaining $240,000 is tax-free. If you find these calculations head-spinning, you are not alone. But a good CPA can help you figure out what the consequences are if you decide to rent your home out. |
|
|
|
| I’ll Never let you Know it, but my Little Legs are Churning Away. . . | May 5th, 2009 |
|
Other agents prefer to fill their clients in on all these dirty details. My goal however, is to make the buying or selling clients process as easy and stress-free as I can. Why cause anxiety when at the end of the deal, they wind up delighted because I made it all seem like it went off without a hitch? I do make a point, however, of setting expectations for all parties involved from the outset. Lately many of these expectations revolve around the lending process. Loans simply take longer to approve and fund these days. So when I write an offer, I usually put in a 21-day loan contingency (most agents do 14 days). Listing agents often push back on this, but roughly half my deals need the extra week, and I prefer to exceed expectations than fall short of them. To get the loan approved and funded easily, I strongly encourage all buyers to begin the pre-approval process before they even start to look. I also warn them that the lender will need a mind-boggling amount of documentation both on them and sometimes even the property. I’ve heard that one lender asked a doctor for a copy of his medical school diploma, and another out-of-state bank required buyers of a home way up in Ashbury Heights to obtain flood certification prior to close. Even after approval of the buyer and the appraisal, banks are not as reliable as they used to be about funding. Loans can be pulled right before closing because the lender decides the property is in a declining market, or the bank hits their threshold for the number of loans they can make in a single condo building. To avoid these scenarios, I try hard to make sure a back-up lender is in place to step in and save the day at the last minute. |
|
|
|
Sometimes this real estate business makes me feel like I’m one of those synchronized swimmers you see on television – my legs are pumping away furiously underwater, while above the surface I strive to make everything run as smoothly as possible. So I usually don’t report that the stager’s plants all died, the agent on the other side is an ego-maniac and it’s a 50-50 proposition whether the drug-addicted seller will show up at the escrow signing on time.| Wild and Crazy House for Monday, March 30 | March 30th, 2009 |
|
I’d love to tell you this is a real house, but it’s actually a building in a Polish shopping center. |
|
|
|
The “Crooked House” in Sopot, Poland. | Wild and Crazy House for Monday, March 23 | March 23rd, 2009 |
|
This is actually just one of many houses just like it on Taiwan’s north coast. Built in the 1980s, they were meant to be seaside resort homes, but the developer ran out of money and never completed the project. According to the Taipei Times, demolition of the homes began at the end of last year. |
|
|
|
The UFO House in Taiwan| Wild and Crazy House For Monday, March 16 | March 16th, 2009 |
|
I looked up information on this house twenty different ways online. All I found out is that it’s called The Mind House and it’s in Barcelona. Anyone care to share? |
|
|
|
