Good morning – I was speaking with a Realtor this morning and she was very frustrated with buyers saying they want to wait for prices to drop more. That got me thinking about the forecasts I am reading that say when interest rates start to rise, they will move fast. So…, I did some comparisons that took into account prices dropping but also show what higher interest rates will do as well. Bottom line is, the higher the loan amount, the better off they are to buy today and take advantage of the current low rates. I hope this will help you and your clients.

$200,000 loan at 4.00% interest:
Principal and Interest pymt = $955

What happens when prices drop but interest rates rise?

$150,000 loan:
RatePrincipal and Interest Pymt
5.50%$852
6.00%$899
6.50%$948
7.00%$998

$300,000 loan at 4.00%$ interest:
Principal and Interest pymt = $1432

What happens when prices drop but interest rates rise?

$250,000 loan:
RatePrincipal and Interest Pymt
5.50%$1,419
6.00%$1,498
6.50%$1,580
7.00%$1,663

Bob Veldkamp

“Your Premier Lender”

689 Tank Farm Rd Ste #230-B
San Luis Obispo, CA 93401
Cell: 805-801-8444
Office: 805-544-6133
Fax: 805-544-6149
bobveldkamp@gmail.com
CA DRE License # 01410661

 I will be conducting a Water Conservation Clinic at Farm Supply, SLO, on Saturday, June 5, from 10:00 AM to 11:30 AM.  The reason I am writing you about it is that the information provided should be very useful to Realtors and other professionals (not just home owners).   Given the cost of utilities, this short clinic should provide the attendee with the tools to help keep costs down. Recently, the first three businesses I visited during the day had significant water leaks – Totaling about $3,000 per month in water and sewer charges. That can be a huge hit, and two of the businesses were restaurants who were not aware of the ongoing leaks.  I have about 5,000 residential and commercial customer contacts per year regarding leaks and conservation issues, and will be explaining some of the things I have learned over the last 20 years.  There will be free gifts for all who attend, and a flyer is attached.  Hope to see you there!  Mary, I would appreciate it if you would pass the word around to friends and colleagues, and your customers. 
 
Bob Nicholson
City of San Luis Obispo
Utilities Department
440-6977

The Internal Revenue Service (IRS) recently issued new guidelines and clarified documentation that taxpayers must submit to successfully obtain the federal tax credit for home buyers.

The federal tax credit for home buyers was extended and expanded late last year.  Qualified first-time buyers may be eligible to receive a tax credit of up to $8,000 on homes purchased before April 30, 2010.  Repeat buyers may be eligible for a tax credit of up to $6,500.  

To receive the tax credit, home buyers must comply with the IRS’s documentation requirements, including a fully executed IRS Form 5405.  On the form, which is available on the IRS’s Web site, taxpayers provide information supporting their claim of eligibility, such as income and home purchase date. 

The IRS also requires home buyers to submit a copy of the closing or settlement statement that proves the transaction took place.  The IRS previously said that the statement should show “all parties’ names and signatures, property address, sales price, and date of purchase.”  However, since closing or settlement statements vary by state, and in some cases the form does not include both the seller’s and buyer’s signatures, the IRS has revised this requirement.  As long as the closing or settlement statement conforms to prevailing local practices, the IRS will accept it. 

One stipulation for repeat buyers is they must provide documentation they lived in their former property for a consecutive five years out of the previous eight years.  Accepted documentation may include property tax records, hazard insurance records, or copies of annual mortgage interest statements filed with their federal taxes.

KEEP THIS IN  MIND

 NAR’s Pending Home Sales Index (PHSI) is a barometer of future sales. Typically, there is a one- to two-month lag between the signing of a sales contract and the close of escrow. Although government incentives, low interest rates, and affordable home prices have lured many buyers, especially first timers, to the market, historically sales decline during the winter months and begin to rise in the spring.  Because of the government’s efforts to stimulate the housing market, some economists believe that housing prices will decline once the incentives come to an end. However, the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) closely watched “2010 California Housing Market Forecast,” projected that the median home price in California will rise 3.3 percent to $280,000 in 2010 compared with a projected median of $271,000 in 2009.

 According to C.A.R.’s Vice President and Chief Economist Leslie Appleton-Young, unlike the rest of the nation, home sales in California already bottomed out more than two years ago, and the median home price reached its trough in February 2009.

 Although home buyers should not focus solely on future home price appreciation, according to data collected by C.A.R. over the last 40 years, homeowners who purchase a median-priced house, live in their home for at least five years, and sell it at the current median price, have averaged an annual rate  of return of more than 11 percent.

Get a locally grown Christmas Tree!

In 2006 the Land Conservancy of San Luis Obispo County was honored to accept a conservation donation that permanently protects Fred and Pat Frank’s 60 acres of farmland, oak woodland habitat and nearly a mile of Graves Creek in Atascadero. 

The protected property includes a tree farm. If you are looking for a locally grown Christmas Tree, consider supporting the Frank family by purchasing your tree from Hidden Springs Tree Farm in Atascadero. Not only will your purchase support a sustainable multi generation family business on protected land, but 100% of your money stays in our community. That’s a whole new way of saying Happy Holidays in San Luis Obispo County-by supporting local people and local land.

Most people cannot believe that even though their property values have gone down over the last couple of years, their property taxes have stayed the same or gone up. In fact, property taxes have risen more than twice the rate of inflation this decade. What can you do? Appeal your taxes. Fewer than one in fifty homeowners do, even though 60% of properties are overvalued right now according to the National Taxpayers Association. Depending on how far you are forced to make an appeal, expect to spend from 5 to 20 hours on it.

1. Learn the system. Different taxing authorities use different methods to calculate your home’s value. Some look at recent sales of similar homes. Some look at costs to rebuild. Others use a combination of methods. Call your assessor’s office and ask how it pegs value.

2. Get your assessor’s evidence. Ask for the evidence the assessor used to value your home. Get the home’s property card, which lists basic details like the number of bedrooms, lot size, and square footage. Are these even correct? When the assessor revalues property every few years, they usually hire an outside consultant who looks at thousands of homes in a very short period of time. The assessor’s file should contain a worksheet that the consultant filled out during the inspection with addresses of homes he compared with yours. Are those properties a good match??

3. Build your case. Since you only have 60 days or less from the time your annual assessment was mailed (usually in late spring or summer) to file an appeal, you will have to start gathering evidence to help your case in advance. You’ll need recent comparable sales or assessments (get some from the multiple listing services, check public title records, and have a real estate agent help you) that shows that your house has been valued too high. Look up your neighbor’s home valuation at the assessor’s office too. Your ideal comparable should be of the same square footage and age of your home and have the same lot size. You should have at least 5 comparables, although 10 is better. Once you have the comparables, put together a spreadsheet with the following information: address of the comparable property, sales prices and dates of sale, price per square foot, description of what makes the comparable similar or different from your home, photograph of the exteriors, photos of your home, and a map of all properties.

4. File the appeal and meet with the assessor (if possible). Ask to set up an appointment with the assessor. Sometimes this is possible and other times it is not. At a minimum, hand deliver all your evidence and get a receipt or send it by certified mail. You should hear back within two weeks to a month. If you don’t, follow up with the assessor’s office.

5. You win / you lose. If you win your appeal, your tax bill will be adjusted. If your appeal is denied, you can appeal again. If your appeal is denied again, you may need the services of a lawyer and an appraiser and you should plan to go to court. If the lawyer takes the case on a contingency fee (they get part of the savings as their fee) and you can get the appraisal for around $400, it may be worth the effort because often the appeal, which goes from the assessor’s office to a state board, will simply be settled as the state board wants to close as many cases as possible. So try it. It can save you money.? Used with permission from Carol Rodoni, Real Estate Unleashed.