2. Don’t buy Carlsbad real estate unless you can afford to stay put.
Although property values have been on the upswing in La Costa and Carlsbad, there are still concerns about a coming wave of foreclosures.  We may have seen Carlsbad property values at their bottom, but that is still unknown.  Don’t buy Carlsbad real estate hoping to flip it quickly at a profit.  Now isn’t the time to take that kind of risk!

3.  Only buy what you can really afford
Most of our recent real estate problems have come from families buying homes they can’t afford.  The average family can afford a home that is 2 1/2 to three times their annual salary.  But take into consideration, your other expenses and debts before you commit to a monthly mortgage payment.

If you have any Carlsbad real estate questions, please contact us.  A home is one of the biggest purchases you may ever make.  Please be informed and make the best decision possible!

What To Do Next:
1.  Fill out the San Diego County Assessor’s form. 

2.  Provide all the necessary documentation – current Carlsbad property tax bill, opinion of new value, and your Carlsbad neighborhood comparables (back up of opinion of value).  Please contact us at (858) 205-2000 for your comparable values.  Please be prepared to provide your name, address, email address, home square footage, and number of bedrooms and baths.

3.  Mail to the San Diego County Assessor.
Upon completion, mail your forms to:
Clerk of the Board of Supervisors
Assessment Appeals Services
1600 Pacific Coast Highway Room 402
San Diego, CA 92101

Please contact The Mewborn Team for more information.

1. The tax credit expires on December 1st, 2009.  That means all real estate purchases have to be CLOSED before then.  You can not still be in escrow.

2. If you were hoping to use the tax credit – you can no longer buy a short sale.  Most short sales take about six months to complete.  There is no longer time to complete the short sale process and close escrow before November 30th.

3.  Because of the large amount of buyers, there are often bidding wars on properties under $400,000.  If this is your price range, be prepared to make full price offers, and often be forced to counter above asking price.

4.  Financing is still tight - and slow!  Most “easy” mortgages are taking around 45-60 days to fund. 

If you are looking to take advantage of this First Time Buyer Credit – please consider all these facts above.  In order to close by November 30th, you probably need to be in a contract by September 30th.  You need to be prepared to make strong offers, and you need to work with your professional team of real estate and mortgage consultants to keep the process moving quickly.

If you have any questions about Carlsbad, La Costa, Encinitas, Del Mar, Oceanside, or San Marcos real estate, please call The Mewborn Team.  We specialize in coastal luxury San Diego real estate.  We are happy to serve as your personal real estate advocate!

Rent-to-own contracts, usually require buyers to pay a premium on each month’s rent and sometimes an up front fee/deposit of about 5% of the purchase price. The regular rent then goes in owner’s pocket (presumably to pay the mortgage), but the additional payments are used to buy down the price of the home.

If done properly, a rent to own (or lease option) may be a great way for a buyer to build up down payments and improve their credit scores, while living in that home they wanted to buy.

An example that we have seen was this – On a $600,000 Oceanside home, the buyers paid $3,300/mo – $1,000/mo more than market rent. After three years, there would be $36,000 accrued in an account for their down payment and closing costs. If the buyer could not perform at the end of 36 months, the contract was void.

The real risks are to Carlsbad real estate buyers. The contracts are typically written to protect the sellers. Some specific risks:

Loss of your payments to date – often if you fall behind or can not perform, you are not entitled to a refund of any previously paid fees, deposits, or rent premiums paid.

Lack of Financing - Most Carlsbad, Oceanside, and San Marcos buyers are entering into lease option contracts because they can’t get financing in the current market place. If you can’t get financing at the end of the lease option contract, you forfeit everything you have paid to date.

Falling home prices - Most lease options establish a set price at the time the contract is signed. As we have seen over the past couple of years, prices don’t always go up. If after signing the contract, Carlsbad home prices fall, the buyer may not want to continue with the purchase, but that still doesn’t mean that they get their money back.

The House Going Into Foreclosure – Some Carlsbad renters have paid their inflated rent payments on time, only to find out the seller hasn’t been paying the mortgage. Instead the house goes into foreclosure, with the buyer/renter being evicted, never benefiting from their inflated payments.

Although these rent to own options seem like a great solution when it is hard to make a deal, there are plenty of pitfalls to consider.

If you have any questions about Carlsbad, La Costa, Oceanside, or San Marcos real estate or mortgages – please contact us.   Talk to a professional and make sure that YOUR interests are represented!   We are always happy to answer any Carlsbad real estate or mortgage questions.

What is the first time buyer tax credit?
It is a tax refund for 10% the purchase price of a primary residence (up to $8K). If you do not use the entire $8,000 on your 2009 tax return , the remainder will be refunded directly to you.

Who is eligible to receive the credit?
First-time home buyers and those who have not owned a principal residence in the last three years prior to purchase.

Are there income limits?
Yes. The full amount is given to:

Individuals with adjusted gross income less than $75k
Married filing jointly with adjusted gross income less than $150K per year

There is a phase out between:
$75K and $95K for individuals
$150K and $170K for joint filers.

Because a normal real estate transaction takes between 40 and 60 days to close, TIME IS RUNNING OUT! A short sale may already be too late.  If you want to discuss this further, contact us today.

The federal tax credit is 10% of the home’s purchase price (up to a maximum of $8,000). 

Please contact us to find out more about the benefits available to you ONLY until the end of 2009!

First let me tell you what a short sale is.  To put it most simply – a short sale is a lender allowing a property to be sold for less than is owed on it (due to a lower property value).  The home owner has normally missed a payment or two, and negotiates with the bank to sell the home for less than is owed to avoid a full foreclosure.

For a seller, this is a long arduous process because they must fill out paperwork similar to that of the home loan to prove to the bank that they just can’t keep up on the payments any more.  They then have to go through all the normal steps of the sale – EXCEPT that the bank adds in a few extra steps.

For a buyer, you would think that the bank would just want to sell the property, and they would move quickly to do it.  The most recent short sale we are working on – the offer was submitted about six months ago.  We have the highest offer (almost full asking price) and are STILL waiting on the bank to sign off that the offer is accepted.

Most short sales, you submit the offer, you sit, you wait, and you MAY one day get a call back.  Some as late as A YEAR later!!!!

1) Client submits short sale package

2) File is assigned to a lender representative

3) Lender requests an internal appraisal

4) Lender receives appraisal and approves the offer

5) Short sale package is signed off by “the powers that be”

6) If there is Private Mortgage Insurance, file goes to insurance company to approve

7) If there is a second loan on the property, file goes to the second to approve

During this time, this is happening behind the scenes, often with no communication to the client. In our opinion, a good agent will follow up on status on a weekly basis. But there are often no answers forthcoming from the lender representatives. And in the past year, the offer you submitted in March may not be what the property is worth in November, and you may have to start the whole process again.

So, even though that short sale looks like a great price. We caution you to stop and ask yourself if you have the time and patience that might be required to get that property. Look into a foreclosure. Look into another nearby property that is priced to compete with that short sale. You will save yourself MANY sleepless nights!

If you have any Carlsbad or San Diego real estate questions, please  contact us at any time.