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  • San Diego Castles Realty
  • 12265 Scripps Poway Parkway, Suite 115
  • Poway, CA 92064
  • P: 858.530.2374
  • F: 858.876.1701
  • E: info (at) sandiegocastles.com
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Say "Hey" to San Diego Castles Realty's Newest Agents!

This post is a week or so overdue. I have been channeling a bad circus act lately, trying to keep countless balls (or, are they flaming swords?) in the air. Somewhere in all of the insanity, four awesome and veteran agents joined our team, and we are honored.

Where to begin with my giddiness? First and foremost, they share our philosophy of progressive thinking, innovative business practices, unwavering ethics, and exceptional customer service. They are smart — scary smart — and passionate about real estate. Of course, they put the client first. Always. You would think that in San Diego, where real estate agents outnumber minivans and Golden Retrievers, it would be easy to find agents with these traits. Trust me; it is not.

Here are the elevator introductions for the Sunday Gover and Associates team. Formerly with a large national brokerage franchise, they had the courage to take a chance on our little enterprise and commit to helping us build our vision. You can read more at their web site, www.FeaturingSanDiego.com. If one of our three readers happens to drop by, I know they will take a moment to say “hey” and make them feel welcome.

sundaytn2

Sunday Gover is a San Diego native and the lead agent of Sunday Gover and Associates.  She grew up in Coronado and graduated from University of California at San Diego.  Having lived all over the county including Hillcrest, North Park, South Park, La Jolla, Solana Beach and Scripps Ranch, Sunday has a thorough knowledge of just about any neighborhood.  She and her family have lived in Scripps Ranch for nearly ten years. She is an accomplished buyer’s and seller’s agent and has extensive experience in military moves.

peggytn2

Peggy Webb grew up in New York and Atlanta and graduated from Fairfield University in Connecticut.  She specializes in homes along the I-15 Corridor with special emphasis on Scripps Ranch, Poway, Rancho Peñasquitos, Rancho Bernardo, Carmel Mountain and Mira Mesa.  Having lived in San Diego for 17 years, Peggy has been a part of the Normal Heights, Mira Mesa and Scripps Ranch communities.  Her family has  lived in Scripps Ranch for 11 years.

sashatn3Sasha Harvey was born in Guadalajara, Mexico.  She has a unique ability to service our Spanish speaking clients and is able to conduct all business, secure appropriate lending and write any contracts in Spanish.  Sasha and her husband have been in real estate with over 16 years’ experience.  Sasha graduated from the University of California at Davis in Psychology and Economics.  She has lived in San Diego for 25 years in Solana Beach, University Heights, UTC/La Jolla and currently lives in Rancho Penasquitos.

asancheztn2A San Diego Native, Audrey grew up in Oceanside.  She graduated from Western Washington University in Bellingham, Washington.  Audrey has lived in Vista, Hillcrest, North Park and now lives in Scripps Ranch with her family.  Audrey has a background in business and executive leadership and training.  The former branch manager for a large brokerage, Audrey heads up the team marketing for Sunday Gover and Associates.  She is also the team’s client care representative, coordinating all aspects of the transaction.

FHA News Short

(Thank you to Tim Fiero, sometime guest writer, all around great guy, and new Dad,  for this update on Federal Housing Administration (FHA) lending requirements.)

As many of you may have heard, the FHA funding fee is being increased from 1.75% to 2.25% on or around April 5th. While you may hear a number of lenders whining about this, this is a win and a big one.

The alternative was higher down payments. Some of the alternatives floated out there were increasing minimum required down payments to 5% — or even 10%.

The big thing here is that FHA helps a vast number of buyers in today’s market. My estimation is that, in some markets, up to 40% of home buyers are using FHA loans to finance their purchases.

With our current, more challenging lending environment, we need FHA, and we need it to be solvent. Increasing the funding fee has minimal impact on the buyer’s monthly payments, and it is a more affordable alternative to larger down payments. Given the conditions of Fannie Mae and Freddie Mac (and who knows in what direction they are heading), the fact that FHA is holding the line on the 3 1/2 down payment requirements, even at the expense of an increased funding fee, is very good news.

California Home Buyer Tax Credits on the horizon

California State Capitol Building
Creative Commons License photo credit: prayitno

(Update: The Governor signed AB 183 into law yesterday, so it’s official.)

In honor of National Copy and Paste Day (I made that up), following is from the California Association of Realtors:

The California legislature on Monday passed AB 183, providing $200 million for home buyer tax credits. The Governor is expected to sign the bill into law this week. C.A.R. supported this important legislation since its inception.  Part of a package of four bills passed at the request of the Governor, AB 183 is designed to help stimulate the economy and create jobs.  It allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.

The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit.

This credit is equal to the lesser of 5 percent of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

So there.

Tax implications of a short sale? In California, maybe — for now.

A condo full of freelancers?
Creative Commons License photo credit: magnetbox

I occasionally troll “Trulia Voices,” Trulia.com’s question and answer forum.  Usually, I end up averting my eyes. It goes something like this. Buyer or seller asks question; seventy-three agents respond, like someone fired the starting gun for the final heat, with all sorts of helpful advice and offers for their services.

I tend to avert my eyes because, so often, ethical and even legal lines are blurred.  Agents start blathering about their commissions in real numbers (an anti-trust no-no in a public forum), or dispensing legal advice absent a law degree. Recently a relatively benign consumer question about discounted fees resulted in an ugly food fight with agents talking smack about and to each other concerning their particular business models. And in cases like this, all I can think is, “Dudes! This isn’t a private water cooler. General Counsel is listening.” Or, in the words of Hill Street Blues‘ Sgt. Esterhaus, “Let’s be careful out there.”

This week I came across this question on Trulia from a San Diego homebuyer:

My husband and I opened escrow on an approved short sale a week ago. Today, our agent called the listing agent to confirm the appointments for the home inspector and the appraiser. The listing agent said he needed to call the seller to confirm, but when the listing agent called back, he said that we needed to hold off on the appraisal and inspection because the seller wants to see if the new California legislation regarding debt cancellation will be signed into law by the governor. If it’s not, the seller says he can’t (or won’t) short sale the property. We had our offer on this home accepted in January, waited 2 months for approval, and have been in escrow for a week. Can the seller cancel???? What recourse do we have????

My first reaction, of course, was to wonder why they are using their “Ask the Audience” chit rather than phoning a friend – say, their agent… or a real estate attorney – but it does raise an interesting, contemporary topic.

Now, as a real estate agent who doesn’t hold a Juris Doctorate, I am not at liberty to dispense legal advice, but that doesn’t mean I can’t talk around the issue, and it’s one I’ve been meaning to address here for a few weeks.

What the home buyer is referring to is the possibility of California taxation on forgiven loan debt. The San Diego Union-Tribune reported on this earlier this month:

The tax applies to what is called the “cancellation of debt” that occurs when property owners lose their homes through foreclosure or arranges (sic) a short-sale in which they sell for less than the mortgage balance. The lender sends them a form itemizing the forgiven debt, and the amount is subject to income tax… Congress exempted most homeowners from the extra federal tax through 2012, and the state followed suit for 2007 and 2008 but did not extend the provision last year.

The result is that, in California, there are currently a lot of short sellers who are getting surprise 1099s for the forgiven debt on a short sale and are faced with State tax bills they hadn’t anticipated. Bills are currently in review that would extend the mortgage forgiveness act, but to date there has been no resolution. Even if passed, the Governor could veto.

An important caveat is that this applies only to recourse loans — typically refinances, second mortgages or equity lines. Non-recourse loans in California are not taxable (according to people who are attorneys, which I am not). ALWAYS consult an attorney or or your favorite accountant for the final word.

There is a second issue in the buyer’s situation. Is the seller contractually obligated to sell? That would depend on their contract and whether or not their open escrow came with lender approval letters (upon which our standard Short Sale Addendum says the sale is predicated). Regardless, and keeping in mind that I am not an attorney, even with a valid contract, the buyer’s remedy would be to force the sale by suing for specific performance. Not being an attorney and all (and hoping I have made that really, really clear), my guess is that successfully litigating this, forcing a financially strapped seller who is in a distress sale situation from his home, would be a smidge dicey at best.

But what do I know? I’m not an attorney.

There are actually three morals to this story. First, short sales are a turkey shoot. The process is long and fraught with uncertainty, and there is a higher level of difficulty in ultimately getting that coveted date with the County Recorder.

Second, short sellers with non-recourse financing may be facing a tax event in California. Hopefully, the State will act to address the inconsistencies with Federal law, but for now we are in limbo.

Finally, be careful about advice you get online, particularly from agents attempting to practice law.

San Diego County Home Prices (and a little speculation on my part)

sidewalk
Creative Commons License photo credit: Sean_Scoggins

Not always a raving fan of the positive indicators spin we have been seeing coming from our local mainstream media lately, I thought this morning’s article in the San Diego Union-Tribune was quite on target.

If you missed class, the notes go something like this:

  • Sales are flat line sluggish.
  • In San Diego County, the median sale price was up approximately 13% year-over-year for February.
  • A spot-on quote was delivered from Chapman University’s Esmael Adibi, “I don’t believe a single home has appreciated by 10 percent over this time. It’s due mostly to changes in the mix.”

Dang. As far as that last one goes, I think I have heard that somewhere before. Oh, yes. It was me.

Other fun facts from the article included:

  • Foreclosure sales accounted for 42.3 percent of the resale market, below last year’s peak but several times the norm.
  • Federal Housing Administration-insured loans accounted for 38.5 percent, compared with 0.6 percent three years ago, an indicator of how shaky home financing remains.
  • All-cash buyers represented 18.9 percent of the market, down from 29.7 percent in January when investors dominated, but still above the 13.8 percent average going back 22 years.
  • Flipping rates — reselling the same home between three weeks and six months after purchase — stood at 3.4 percent, more than double year-ago levels of 1.6 percent, another sign of high investor participation in the market.
  • The typical monthly mortgage payment was $1,180, up from $1,172 in January and $1,114 a year earlier but 56.6 percent below the current cycle’s peak in July 2007.

And to further save you the trouble of reading the article, this is my favorite part. (It’s my favorite, because they agree with me.)

Putting all these factors together, (DataQuick President John) Walsh said home buying may not remain so favorable for long. “It’s possible the stars won’t line up this way again for many years,” he said. “With prices and mortgage interest rates this low, the cost of ownership is about as low as we’ve seen it in decades.”

The caveat is in the higher-priced home market. That, in my most humble opinion, will remain challenged for the foreseeable future until we work our way through the distressed sales at the low end representing a log-jam of dead-end moves. There is also the little matter of the employment rate. And our dependence on FHA loans. And interest rates.

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Office Location

  • San Diego Castles Realty
  • 12265 Scripps Poway Parkway, Suite 115
  • Poway, CA 92064
  • P: 858.530.2374
  • F: 858.876.1701
  • E: info (at) sandiegocastles.com
  • CA BRE# 01853496

Broker Information

  • Kris Berg, Broker
  • CA BRE #01241572