No Payments For The Rest Of Your Life

What do a "Reverse Mortgage" and a "Paid up Life Insurance Policy" have in common? According to agent Bonnie Peabody, "You don't have to make payments on either for the rest of your life (if your are 62 or better)."

Bonnie offers Janet and Tom as an example. Both are 74 and they want to purchase another home after they sell the old family home up north. They agree on a sales price of $300,000 and want to keep some of the proceeds of the sale on their home in the bank. They do a reverse mortgage for $197,711. and put the remaining cash, $102,289, into their new home.

The couple now have NO monthly payments as long as they live in the house. This is without credit or income qualifications.

For further details you can contact Bonnie by visiting her website.

Buyer’s Federal Tax Credit Program Ends November 30th

First time homebuyers need to move quickly before the government sponsored tax credit goes away. This credit only applies to purchases closing before November 30, 2009.

The federal tax credit has been a great program for those seeking their first home. It can be used in many ways. To help first time homebuyers with down-payments and closing costs, the government will allow buyers who finance their purchases with a federal insured loan to apply their anticipated credit immediately toward the transaction. Others may choose to wait until they file their 2009 taxes for the refund. Still others may apply the tax credit via an amended return for 2008 taxes. Buyers with specific questions should always consult a tax professional.

In order to Close by November 30th?
Buyers should consider the following timeline. They must look for a house (10-20 days minimum), write the offer, wait for the acceptance (up to 4 days although see special note below regarding short sales), secure financing (7 days), do inspections (7-14 days), request the seller correct major or safety defects (2 days) wait for seller’s response (5-7 days). The escrow begins when there is communication of acceptance and approval. With the new requirements from the federal government and mortgage lenders, a traditional escrow now takes at least 30 days and more closely 45-60 days.

Special note regarding short sales: When buying a short sale, the full acceptance and approval process is currently taking 3-6 months plus the normal 30-45 days in escrow.

A buyer should be prepared to complete a simple transaction in 2-3 months. The buyer should also be prepared for minor delays to resolve issues that might arise and which might delay a closing. The buyer should also consider that November is really the shortest month of the real estate calendar. The Thanksgiving holidays at the end of the month mean there are fewer days to record and close escrows. The bottom line, buyers who want to receive the federal tax credit need to act now, or they will loose out on a great opportunity.

Who qualifies for the federal tax credit?
A first time homebuyer is defined as anyone who has not owned a principal residence in the last three years. If a married couple purchases a home, neither of the parties could have owned a primary residence in the last three years, in order to claim the credit on their joint return. Non-married joint owners who qualify may proportion or divide the credit on their taxes as long as it does not exceed the credit due for the purchase property.

What kind of property qualifies for a federal tax credit?
Only principal residences, new or re-sales are acceptable properties for the tax credit. The primary residence may be a condo, townhouse, single family dwelling, mobile or modular home, or even a house-boat. Vacation homes, second homes, and investment properties do not qualify for the tax credit.

How is the federal tax credit calculated?
The maximum credit is equal to 10% of the purchase price up to $8,000. Income is a factor in the final amount of the actual tax credit.

For a single taxpayer: With an income below $75,000 the credit is equal to 10% of the purchase price up to $8,000; With an income between $75,000 and $95,000 the tax credit is reduced on a sliding scale; With an income greater than $95,000 no credit is given.

For a married couple filing jointly: With an income below $150,000 the credit is equal to 10% of the purchase price up to $8,000; With an income between $150,000 and $175,000 the tax credit is reduced on a sliding scale; With an income greater than $175,000 no credit is given.

Conditions if you take the tax credit?
A home purchased during the specified time period cannot be resold within a year of purchase if the tax credit is taken. After that year, there are no conditions for the re-sale.

Mikel Springer is a full time Realtor in the Windermere Rancho Mirage Office and works in the communities from Palm Springs to La Quinta. Contact information: www.MikelSpringer.MyWindermere.com and email address mikels@windermere.com

Q & A About Heritage Palms Country Club

Here are two questions that Windermere real estate agent Bonnie Peabody says she gets from almost everyone looking to buy a home in Heritage Palms.

"You told me about the 6 month rental restriction, but what if I want to have guests or family visit my home at times when I am not there, will I get into trouble?"

"No," says Bonnie, "the rule was written by the developer and full-time residents really appreciate it. Your home can host your guests for any time with or without you being present. What they will not be able to do, however, is receive your full benefits, owner rate at golf course, use of the fitness center or pool. The golf course and restaurant are open to the public, though, and will be happy to take your credit card."

"The second question that I hear most," she says, is "How do you keep your HOA so low when you own all the amenities, golf, tennis, pools, fitness center, ball room and kitchen?"

"My answer is that the HOA has hired an effective manager and he, along with our elected board of directors, have been doing a great job of tracking and forcasting costs."

If you have a question for Bonnie, or would like to know more about Heritage Palms, please visit her website.

What Is An Accredited Buyer Representative (ABR®)? And Should You Care?

Buyer Representation means, that as a home buyer, you have someone on your side.

The Accredited Buyer Representative (ABR®) designation is the benchmark of excellence in buyer representation. This coveted designation is awarded to real estate practitioners by the Real Estate BUYER'S AGENT Council (REBAC) of the National Association of REALTORS® who meet the specified educational and practical experience criteria.

It is my opinion that buyers and sellers deserve full representation. If you are looking to buy, you should insist on full representation and not settle for limited service from the seller's agent.

Until you sign a Buyer’s Representation Agreement, the agent you meet at the open house, the listing agent, or the agent that is showing you houses is actually working for the seller. The non-listing agent is known as a sub-agent. Both the listing agent and a sub-agent have a duty to disclose any information shared by a potential buyer to the seller.

When the same agent is working for the seller and the buyer, this is called dual agency. A dual agent cannot share information or give full advice to either party because it might diminish the other side’s standing. This limits the service they can provide to both the seller and also to the buyer. When it comes to negotiating, this is especially true.

When you are considering buying a home, it is important to find an agent with whom you can work and one who knows buyers need their own representation. In California, you may get the representation you need without any additional fee, because it is the practice for the seller to pay for the buyers agent services. It just does not make sense not to have someone fully committed to your side through the entire real estate process – and especially during negotiations.

Mikel Springer has both the (ABR) as well as the Senior Real Estate Specialist (SRES) designations. He is a full time Realtor (for more than 7 years) is in the Windermere Rancho Mirage Office and works in the communities from Palm Springs to La Quinta. Contact information: www.MikelSpringer.MyWindermere.com and email address mikels@windermere.com

Photo: Mikel (left) with his clients

Top 10 Ways Staging Can Help You Sell Your Home For More

(Before and after photos above.)

1. Historically homes tend to sell in fewer days on the market when staged.

2. Homes generally sell for higher prices when they sell faster.

3. Professional staging accents the positive aspects of the home.

4. Negative elements can often be minimized or eliminated.

5. Staging leaves the impression that the home has been well-maintained.

6. It depersonalizes the residence, making it more inviting to a larger pool of potential buyers.People want to buy “their new home”, not someone else’s old home.

7. Eliminating clutter opens up the living spaces making them appear larger. A skilled designer knows just the right accessories to use to decorate and compliment for scale and style.

8. Specialized furnishing placement facilitates traffic flow and socializing areas.

9. Professional color analysis and consultation are keyed into current trends. Just as with clothing fashion, colors go out of vogue and need to be updated.

10. A staged property has the advantage over unfurnished homes since most buyers can not effectively visualize furnishings in an empty room. And, in this market, every advantage counts.

If you decide that Staging is the correct option for you, be sure to check around for the company that best suits your needs. Some stagers will only reorganize your own furnishings while others provide full decorating services and advise on everything from minor remodeling projects and paint color changes to even completely furnishing an empty residence.

The costs for Staging can vary from only a few hundred dollars for a simple redecorating plan that rearranges your own furnishings to a cost per square foot charge when staging the home with leased furniture and accessories. You can expect the square foot charges to be approximately $1.50 to $3.00 per foot of area.

Staging may also offer some tax advantages depending on your individual circumstances. The costs may be a tax deduction so check with your financial advisor to see if your property qualifies.

For more information on the benefits of staging you can contact me, John Kleppinger “The Staging Realtor” or www.raymondrobertdesigns.com.

Short Sale Or Foreclosure? How To Choose

Longtime resident and member of the Indian Wells Country Club, Realtor Anne Alexander is a Certified Distressed Property Expert (CDPE) who offers the following tips to homeowners considering a Short Sale vs. a Foreclosure.

Most homeowners are not aware that a Short Sale has less serious consequences for the homeowner than a foreclosure.

For example, a homeowner who loses a home to Foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years as opposed to a Short Sale which makes them ineligible for only 2 years. Investors are ineligible for 7 years compared to 2 years.

In addition, a Foreclosure will typically lower your credit score anywhere from 250 to over 300 points and will affect your credit score for over 3 years. A Short Sale will typically lower your credit score as little as 50 points if all other payments are being made and will affect the homeowner for as little as 12 to 18 months.

Foreclosure remain as a public record on a person's credit history for 10 years or more. A Short Sale is not reported on a credit history. The loan is typically reported "paid in full, settled."

Homeowners (and many Realtors) do not understand Short Sales and are mainly interested in the consequences to their credit and their life.

We advise them to do a Short Sale ... IF THEY QUALIFY. It's not a "get out of my mortgage free card," though. A homeowner must be able to demonstrate a verifiable hardship such as a job loss, death in the family, mortgage rate adjusting to the point they cannot afford it, illness etc. But, there is no point in listing a home as a Short Sale if the bank will not agree to it. The homeowner CANNOT have assets that could be used to pay the mortgage.

Most problems with Short Sales stem from Realtors who are not familiar with them. For example, a smart Realtor will only present ONE offer to the bank – the highest and the best. You must present all the rest of the offers to the Seller but you present only ONE offer to the bank. You also need to present a COMPLETE package to the bank.

For additional information, you can contact Anne at www.thealexanderteam.net or email: thealexanderteam@windermere.com