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    A Real Estate Agent with Real Solutions... 
TheBornSolution

The Born Solution
prides itself on supporting those looking to buy or sell property. Below you will find helpful resources that will help you on your journey.

If you have any questions, feel free to contact Suzette at
(714) 510-4848
for a no obligation consultation. 
I am here to support you!

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First Time Buyers Tax Credit Has Ended; However some military, federal employees get an extra one year to qualify:

Military service members and certain other federal employees serving outside the country have an additional year to to qualify for a homebuyer credit. Eligible taxpayers must enter into a binding contract to buy a principal residence on or before April 30, 2011.

NEW INFORMATION AS OF 4/28/10
Currently The New Home / First-Time Buyer Credits are available only for purchases that close escrow on or after May 1, 2010. 

These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010.  The purchase date is defined as the date escrow closes. Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010. However, taxpayers may not request a New Home Credit reservation if they have entered into the contract before May 1, 2010. (Updated 04/28/10)

These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.

We will allocate the tax credits on a first-come, first-served basis.  We expect it to take 3-6 months to notify taxpayers after an application or reservation is received. We need to develop a computer system to capture, verify, reserve or allocate, issue letters, and track the credits. Please be patient and do not fax an application more than once. Since the First-Time Buyer Credit is expected to be used up very quickly, we will provide estimates, based on sampling, of the number of First-Time Buyer applications and the related credit amounts that we have received beginning May 6, 2010.  This will allow First-Time Buyers to estimate whether they will be able to apply for the credit and allow us to determine when we have received enough applications to fully allocate the $100 million and stop accepting First-Time Buyer applications. Since the New Home Credit is not expected to be used up as quickly, we will wait until approximately mid-July after our computer system is available to post information about the New Home Credit usage. (Updated 04/28/10)

Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.

Taxpayers will not be eligible for either tax credit if any of the following apply:

  • The taxpayer was allowed a 2009 New Home Credit.
  • The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)
  • The taxpayer or the taxpayer’s spouse/RDP is related to the seller.
  • The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

New Home Credit:  A qualified principal residence, for purposes of the New Home Credit, must:

  • Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been "purchased."
  • Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.
  • Be eligible for the California property tax homeowner’s exemption.
  • Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

Tax credit allocation:

  • A Certificate of Allocation will not be issued if:
    • The seller does not certify the home has never been occupied.
    • We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow, regardless of whether a reservation request was submitted.
    • We receive the application or reservation request after the total tax credits available have been allocated.
  • FTB's determination may not be protested or appealed.

How to apply (Updated 04/28/10)

Applications: We will accept applications by fax only beginning May 1, 2010. Do not use the 2009 application. Applications received before May 1, 2010, or before escrow closes will be denied.

  • Within two weeks (14 calendar days) after the close of escrow:
    • The seller must complete Parts II, III, and also Part IV (if the home has never been occupied) of Form 3549-A, Application for New Home / First-Time Buyer Credit, and provide a copy to the buyer or escrow person.
    • The buyer will complete Parts I, V & VI of Form 3549-A.
    • Fax the completed Form 3549-A and the final settlement statement (generally the buyer's HUD-1 statement) to FTB at 916.855.5577. It is best that the escrow company, on behalf of the buyer, fax the completed application and settlement statement to FTB and provide a copy to the buyer. (The buyer retains ultimate responsibility to ensure the completed application and settlement statement are submitted timely to the FTB.)

Fax is the only delivery method: that will be accepted and considered for credit allocation by FTB, as the date and time stamp on the fax will determine the order in which credits are allocated. Check the fax confirmation to make sure you sent it to the correct fax number. The date and time applications are received may not be reviewed in any administrative or judicial proceeding.

  • Fax only one completed application per residence with all qualified buyers listed. Do not include information on nonqualified buyers. An incomplete application may delay or prevent credit allocation.
  • Do not fax the application to FTB before escrow closes.
  • Do not fax the application to FTB more than once. We will process the applications in the order received as quickly as possible.
  • Only send one application per fax transmission. Including more than one application in the fax transmission will cause delay and may even cause an application to be skipped.
  • The buyer keeps a copy of the completed Form 3549-A for their records.
  • Please use the online fillable Form 3549-A. Simply fill in all required information, print the form, and sign. If you fill out any portion of the form by hand, please print as clearly and neatly as possible using CAPITAL LETTERS and stay between the lines as the faxes can be very hard to read.

Reservation Requests: We will accept reservation requests for the New Home Credit by fax only beginning May 1, 2010. If you are applying for the First-Time Buyer Credit, you will not be able to request a reservation before escrow closes. Reservation requests received before May 1, 2010, or after escrow closes will be denied.

  • If a buyer wishes to request a reservation, before the close of escrow:
    • The seller must complete Parts I, II, & III of Form 3549-RR, Reservation Request for New Home Credit.
    • The buyer completes Parts IV & V.  
    • Fax the completed Form 3549-RR and the required pages of the purchase agreement to FTB at 916.855.5577. If escrow has opened, it is best for the escrow person, on behalf of the buyer and seller, to fax the completed Form 3549-RR and the required pages of the purchase agreement to FTB and provide a copy to the buyer. If escrow has not opened, the buyer may fax it to FTB. (The buyer retains ultimate responsibility to ensure the completed reservation request and the required pages of the purchase agreement are submitted timely to the FTB.)
    • Do not fax the entire purchase agreement. Only fax the pages which show:
      • Property address
      • Buyer's name
      • Seller's name
      • Purchase price
      • Deposit amount
      • Buyer's signature
      • Seller's signature
  • Fax is the only delivery method that will be accepted and considered for credit reservation by FTB, as the date and time stamp on the fax will determine the order in which credits are reserved. Check the fax confirmation to make sure you sent it to the correct fax number. The date and time reservation requests are received may not be reviewed in any administrative or judicial proceeding.
  • Fax only one completed reservation request per residence with all qualified buyers listed. Do not include information on nonqualified buyers. An incomplete request may delay or prevent the reservation.
  • Do not fax the reservation request if the contract was entered into before May 1, 2010.
  • Do not fax the reservation request to FTB after escrow closes or with the application (Form 3549-A).
  • Do not fax the reservation request to FTB more than once. We will process the requests in the order received as quickly as possible.
  • Only send one reservation request per fax transmission. Including more than one request in the fax transmission will cause delay and may even cause a request to be skipped.
  • The buyer keeps a copy of the completed Form 3549-RR for their records.
  • Please use the online fillable Form 3549-RR. Simply fill in all required information, print the form, and sign. If you fill out any portion of the form by hand, please print as clearly and neatly as possible using CAPITAL LETTERS and stay between the lines as the faxes can be very hard to read.

Claiming the tax credit:

  • The taxpayer must receive a Certificate of Allocation from us to claim the tax credit on their California personal income tax return. The Certificate of Allocation will state the maximum amount the taxpayer can claim listed by tax year.
  • The taxpayer should refer to the 2010 New Home / First-Time Buyer Credit Publication for instructions on claiming the tax credit (the publication will be available after December 15, 2010).
  • Special rules apply to married/RDP taxpayers filing separately, in which case each spouse/RDP is entitled to one-half of the tax credit, even if their ownership percentages are not equal. For 2 or more taxpayers who are not married/RDP, the tax credit amount will have already been allocated to each taxpayer occupying the residence on their respective tax credit allocation letter.
  • If the available tax credit exceeds the current year net tax, the unused tax credit may not be carried over to the following tax year.
  • The tax credit may not reduce regular tax below TMT.
  • The tax credit is not refundable.
  • Any disallowance of the tax credit may not be protested or appealed.

NOW is still a great time to buy a home...
I would be happy to discuss your needs, just give me a call...
(714) 510-4848

(If you are looking for more information regarding the 2009 New Home Credit, see
 FTB Publication 3528, New Home Credit)

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FHA loan limit increases

The American Recovery and Reinvestment Act of 2009 (ARRA) will increase FHA loan limits to $729,750 in high cost of living areas such as Orange County and Los Angeles County, and empowers the FHA to increase the loan limits even further on an area-by-area basis. This makes it easier to buy (and thus, sell) a home in a major metro area with a low down payment; currently FHA-insured mortgages require only 3.5 percent down.



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Top Ten Home Buying Mistakes

1.  Doing it alone. Buying a house is a complex transaction. Even if you don’t use an agent, you’ll need a complete, dependable team: lender, lawyer, inspector, insurer, as well as referrals and advice from friends and family. Enlist the help of these individuals early in the buying process.

2.  Buying at first sight. You may be in love with the place, but does it fit your family’s needs and budget? Make a list of your needs and wants and make sure the house fits your requirements. Check out the neighborhood and the community before you buy by visiting at different times of the day and week to learn about noise and traffic patterns. Even if you don’t have kids, check out the local schools to make sure your resale value will be good.

3.  Not getting pre-qualified and pre-approved. Being pre-qualified gives you a general idea of how much you can afford to borrow. Being pre-approved means a lender has verified your information and credit rating and agreed to provide you with a specific amount of money. You are in a better position to go house hunting knowing exactly how much you can afford and that you have financing.

4.  Overbuying. You may qualify to borrow more, but can you afford to? Analyze your monthly costs: debt, food, transportation, entertainment, and savings. As a general rule, your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Be sure to budget enough to cover closing costs (often two to five percent of the home’s purchase price), plus moving, redecorating and maintenance. Allow for increases in ongoing expenses such as utilities and taxes.

5.  Misplacing your trust. No matter how much you like the agent, sellers, inspector, or the guy down the block who vouches for them, remember this is a business transaction. Your decision is binding. Do your own research and know your support team’s roles and responsibilities.

6.  Relying on oral agreements. Get it right and get it in writing. Written agreements almost always trump oral ones when it comes to contracts. If the offer says the lawnmower is negotiable, but the agent says it’s included, get it in writing.

7.  Skipping the fine print. You need to understand what you’re signing before you pick up a pen. Ask for documents in advance, make time to read them and ask questions. Get copies of your mortgage papers a few days ahead of closing.

8.  Forgetting or betting on resale. Avoid buying a home that costs 50 percent more than neighboring homes and think before buying the most expensive home on the block. Your neighbors’ lower home values will weaken yours. Remember, markets change. If you buy intending to flip your investment and the market falls and you have to sell, your selling price may not be enough to even cover your mortgage.

9.  Making an unconditional offer. Protect yourself with at least two of these contingencies in your offer:

  • Mortgage financing -- You’re pre-approved, but is the house? Before a bank will lend you money, it will want a formal appraisal of the property to confirm that there is sufficient equity in it to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.
  • Inspection -- never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.
  • Insurance -- confirm you can get adequate coverage. In some areas, it’s difficult to get hazard insurance.

10.  Having buyer’s remorse. No place is perfect. There will always be surprises. Don’t let a few initial blips spoil the whole ride....And don’t miss a great house waiting for the perfect one!    

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Buying a Starter Home vs. a Forever Home

Buying your first home can be confusing. On the one hand, it can be tempting to stretch your budget to the limit and start off by buying the house of your dreams. On the other, you may be better off settling for something more modest to start with and then trading up in a few years once you’ve become more established financially.

Just because you can get the home you’ve always wanted right away, doesn’t mean you should. To weigh the pros and cons of starter homes and forever homes, and determine which option may be right for you, consider the following:

Immediate affordability
Buying a less-expensive starter home may be less stressful financially if you have only a limited amount saved for a down payment. You may also be able to avoid having to pay for private mortgage insurance if it means you’ll be able to put down at least 20 percent of the purchase price.

If you’re anticipating an increase in your earning power in the coming years, however, paying a little more to buy a home you’ll want to live in for the long-term may be well worth while. You may want to consider a mortgage such as a hybrid ARM that offers a lower initial payment for a fixed number of years before resetting to an adjustable rate mortgage.

Long-term payoff
When housing prices are on the rise, buying a starter home can be a great way to get your foot in the door of the real estate market. It allows you to build up some equity and hopefully resell your home for more than you paid for it. However, if the value of your property drops, you could end up living in your starter home for longer than expected or having to sell it at a loss, thereby reducing your chances of getting the home you really want.

You may be better off paying more for the home you really want now than hoping you’ll be able to squeeze some resale cash out of your starter home later on. Also, housing prices have recently come down a little nationally, and mortgage rates are still low, so now may be a good time to buy that home you’ve been dreaming about.

Future renovations
If you don’t plan on staying in your starter home for more than a few years, renovations may end up costing you in the long run. Small improvements such as a new deck or landscaping may add to your home’s resale value. But spending a great deal on major improvements may make it harder to recoup all the money you’ve invested. And if you end up listing your home for a few thousand dollars more than a similar home down the street, it may make it harder to sell.

If you do decide that you want to stay in your starter home for a long period of time, then it may make perfect sense to renovate. Over time, you can remodel it to suit your family’s evolving needs, eventually creating the house you wanted all along.

Family growth
Starter homes are typically small houses that don’t leave much room for an expanding family. But what if your situation changes suddenly before you can afford a new home? You may be forced to sell and move before you are ready to do so.

Purchasing a larger home to start off with may work well if you’re planning to have kids within a few years. The downside is that if you pay significantly more up-front and have higher mortgage payments, you may find it more difficult to support a growing family on less disposable income.

Cost of Living
Many first-time homeowners focus only on the down payment and underestimate how much it actually costs to live in a home. Some of the benefits of a starter home include lower utilities, maintenance bills and property taxes, and after a few years of coping with them, you will have a greater understanding of what living in a larger home will cost.

Buying a larger, forever home usually means all these cost-of-living expenses will be higher. However, purchasing one home, instead of two, will also mean paying only one set of closing costs, and being able to reap all the benefits of any money invested back into renovations or additions.

There’s no one right home-buying decision. The important thing is to take your time and consider all of the various available options. Buying a home is a serious financial commitment. You want it to also be one that will bring you joy for many years to come.

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Buying a Home? Look Carefully at What You Can, and Can't, Change

In many ways a home is like a blank canvas waiting for you to fill it with color, beauty and life. That’s part of the reason it can be so exciting to buy a home. You + empty house = magic.

To really see the magic of a home you’re considering buying, you’ll have to be able to distinguish between what you can change and what you can’t. Unfortunately, many buyers get turned off by things that can be easily changed, like carpeting, wallpaper, paint color or old, scuffed floors. Don’t forget that you can always refinish or replace the floors, or take down the blinds you hate.

But it’s also important to be realistic about what you can’t change -- before you start shelling out monthly mortgage payments.

When buying a home, consider things like:

Location
That railroad track or interstate highway isn’t going anywhere. Neither is the airport flight path. Is the commute something you can live with? Have houses in the neighborhood been losing value while others in the city have increased in value? Do you feel safe and secure in the neighborhood?

Lot size
There’s not much you can change about the size of the lot, short of buying the lot next store (which isn’t practical for most home buyers). If the lot is small, will your children be content to stay there when they play? On the other hand, a large lot can be nice, but are you prepared for all the maintenance?

Proximity of neighbors
It can be annoying and even disconcerting to hear what’s going on in the house next door. A neighbor’s view into your bedroom isn’t too great, either. Can privacy ever be yours in that location?

Street traffic
Buying a house on a busy street can be more than annoying. It can be dangerous, especially if you have young children. Consider if you will have to back out of your driveway into traffic or keep your windows closed on nice days to block out the traffic noises and exhaust fumes?

Square footage
Keep in mind that the square footage of a house can be changed but building an addition can be complicated and expensive (and may not be in your budget). If a house feels too small before you buy it, imagine what it will feel like once it is full of your things.

Number and size of bedrooms
If remodeling is not an option, you’ll have to learn to live with the bedrooms as they are.

Closet space
Storage is a huge issue, and not just in the bedrooms. (Although all you clothes horses know who you are.) It is very difficult to create storage in a home that doesn’t have much storage space already built in.

If you do find a home you love but think you might want to renovate, it would be smart to have a trusted contractor and/or architect tour the home with you before you buy. They can tell you whether a “can’t change” can be turned into a “can change” for a price you can afford.

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Ten Important Questions To Ask Your Home Inspector  
             
1. What does your inspection cover?
The inspector should ensure that their inspection and inspection report will meet all applicable requirements in your state if applicable and will comply with a well-recognized standard of practice and code of ethics. You should be able to request and see a copy of these items ahead of time and ask any questions you may have. If there are any areas you want to make sure are inspected, be sure to identify them upfront.

2. How long have you been practicing in the home inspection profession and how many inspections have you completed?
The inspector should be able to provide his or her history in the profession and perhaps even a few names as referrals. Newer inspectors can be very qualified, and many work with a partner or have access to more experienced inspectors to assist them in the inspection.

3. Are you specifically experienced in residential inspection?
Related experience in construction or engineering is helpful, but is no substitute for training and experience in the unique discipline of home inspection. If the inspection is for a commercial property, then this should be asked about as well.

4. Do you offer to do repairs or improvements based on the inspection?
Some inspector associations and state regulations allow the inspector to perform repair work on problems uncovered in the inspection. Other associations and regulations strictly forbid this as a conflict of interest.

5. How long will the inspection take?
The average on-site inspection time for a single inspector is two to three hours for a typical single-family house; anything significantly less may not be enough time to perform a thorough inspection. Additional inspectors may be brought in for very large properties and buildings.

6. How much will it cost?
Costs vary dramatically, depending on the region, size and age of the house, scope of services and other factors. A typical range might be $400-$500, but consider the value of the home inspection in terms of the investment being made. Cost does not necessarily reflect quality. HUD Does not regulate home inspection fees.

7. What type of inspection report do you provide and how long will it take to receive the report?
Ask to see samples and determine whether or not you can understand the inspector's reporting style and if the time parameters fulfill your needs. Most inspectors provide their full report within 24 hours of the inspection.

8. Will I be able to attend the inspection?
This is a valuable educational opportunity, and an inspector's refusal to allow this should raise a red flag. Never pass up this opportunity to see your prospective home through the eyes of an expert.

9. Do you maintain membership in a professional home inspector association?
There are many state and national associations for home inspectors. Request to see their membership ID, and perform whatever due diligence you deem appropriate.

10. Do you participate in continuing education programs to keep your expertise up to date?
One can never know it all, and the inspector's commitment to continuing education is a good measure of his or her professionalism and service to the consumer. This is especially important in cases where the home is much older or includes unique elements requiring additional or updated training.

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Suzette Born
DRE Lic # 01841704
HomePreviews Real Estate Network
Certified Notary Signing Agent
18619 Yorba Linda Blvd.
Yorba Linda, CA  92886
Cell (714) 510-4848
Fax (714) 701-1910
Suzette@TheBornSolution.com

 



Copyright . Suzette Born. All rights reserved.