The home purchase must be for a principle residence and it can include a boat, motor home or traditional house, condo or townhome up to an $800,000 limit. There are income limits to the new benefits extention. They are $125,000/yr for a single person and $225,000 for a couple.  A purchase by a dependent is not allowed. See your tax advisor for more details.

The good news is that more people can get tax relief when they purchase their next home through April 30, 2010 or have a binding contract to purchase on April 30th and close by July 1, 2010.

The other good news for home buyers is the historically low mortgage interest rate and the reduced market values for homes. This is a combination that probably won’t be seen again in our lifetimes. Contact your realtor to find the best buying opportunites in your area.

I have lovely coastal homes in all price ranges from Orange County to Long Beach, CA. I will find the right one for you. I’m only a click away!

Many of these first-timers bought “starter” homes that were bank owned or in the foreclosure process or distressed “fixers” that needed TLC.  The investor-buyer has also benefitted with the significantly reduced values (down 25% to 40%), often buying distressed homes in “bulk”, fixing them and selling them for a profit.  The inventory of “low-end” properties in California is down and the demand is up.

All of this activity has put a floor (of sorts) in the Cailifornia market so that the CAR is now forecasting a slight increase in values for 2010.  All real esate is local and markets vary.  So, it’s important to find a knowledgeable realtor to assess your niche market value.

The bottom line for California going forward is an opportunity for the “move-up” buyer = someone who currently owns their home and wants to move into the next bigger, better, newer home while the “getting” is good.  Mortgage rates are historically low for everyone.  But they won’t stay low forever. Property values are low, but they are destined to go up again. First-time buyers are buying. That’s why NOW makes sense for the move-up seller.

Some economists predict an increase in interest rates as early as the second quarter of 2010.  Home values may or may not go down a little more in the coming months.  The banks are not dumping their “shadow inventory” of foreclosed homes, but releasing them slowly to maintain values or selling them in bulk to investors.  The window of opportunity will be open only so long.  Anyone who can buy a property and hold it for 2 to 3 years will be glad they bought in 2009/2010.

You don’t have to pay someone else to do this. The process is simple, but there is a deadline of Sept. 15th for an assessment review. Good luck!

There is a House bill, Neighborhood Preservation Act, passed before the summer recess which is a response to two important questions: 1.”When homeowners lose their houses to foreclosure, should they be able to stay in the property, leasing it back at fair market rent from the lender?” 2. “Should they also get an option to purchase the house from the bank at the end of the lease term, assuming they have the income to afford it?” 

The Neighborhood Preservation Act “would remove legal impediments blocking federally regulated banks from entering into long-term leases – up to five years- with the former owners of foreclosed homes. It would also allow banks to negotiate option-to-purchase agreements permitting former owners to buy back their houses”

If the bill is approved by the Senate, it would encourage banks to consider if it’s better to foreclose and take a loss now or to lease the property and then sell when values increase in a few years. There is a debate about who should own the home and control the lease agreement.

A San Diego realty broker, Al Hackman, and his partner, Tony Huerta, “contend that lease-backs with options to buy are the way to go – but not if banks run the show.”  They have a program called “the seamless short sale” where the homeowner can stay in the home before and after the settlement. The bank first sells to an investor who agrees “to lease back the house on a “triple net” basis - where the tenants pay taxes, insurance and utilities – for two to three years.”

The property value for the buy-back is pre-set to be more than what the bank sold to the investor and less “than the original price by the foreclosed owners.” For the investor according to Hackman “the internal rate of return . . . can depend on the rents and the buy back price but typically is in the 8% to 10% range. It’s a win-win. . . The owners stay in their houses. Private investors get a moderate return on what should be a safe investment and the banks are out of the equation.”

It is time to think outside of the box to solve the housing crisis of our time. The homeowner facing foreclosure should not have to bear the full burden of a lending experiment gone amok. For those homeowners who can afford the market rent rate, the seamless short sale is one solution.  Banks can slowly clear their books of toxic assets, investors can safely benefit and neighborhoods can remain intact while the country rights itself economically. 

As stated on the OC Assessor’s website, www.ocgov.com/assessor/, the Assessor will review the value of every property in the County between January 1 and June 2009, and will implement a temporary value reduction for all eligible properties. There is no charge for this service.

There is a question/answer feature on their home page that will explain the assessor’s process in determining property values and how you can appeal that decision. You can request an informal review if you believe that your Market Value is lower than your Taxable Value.

You can download the Request for Informal Assessment Review form from the website at  www.ocgov.com/assessor/.  Completed forms must be returned to the Assessor by April 30, 2009. You will need to provide up to three (3) sales or listings in your area that occur on or before March 31, 2009 to support your claim for a lower valuation. (Foreclosures may not be an indicator of market value.)  However, if your neighborhood has a preponderance of foreclosed and bank owned sales, then your market value may well be dictated by those recent sales.

If you need assistance with obtaining the form or the necessary recent sales information, contact me at 714-932-5529 or email me at pat@patmonahan.com. Remember the deadline to file the review is April 30, 2009.