Thanks to Zillow for providing a detailed video of “A Guide to the Zestimate” to explain how the home values are generated. I hope you will find this video helpful!

Posted by Annie W. Chang | www.TalkofRealEstate.com

What should she do? Her only experience with loan mod has been a nightmare. Who has had a positive experience with a loan modification firm? Should one stop making payments in order to be considered for loan mod? How would you advise her?
Thank you.

Shokoofeh Nowbakht, Realtor
www.shokoo.com

It seems like the inventory is low and some listing agents take advantage of the situation and list the properties below market value. This becomes very difficult for the buyers. How high should they offer? How can a regular buyer who is using a conventional loan compete with an investor who is buying properties all cash and waiving all inspections and financing contingencies?

After having said all that, my advice to buyers is to have patience and keep making offers on properties of your choice. And, you go as high as you  believe the property is worth to you. Keep in the mind the absolute value at which you won’t feel bad if you didn’t get the house.

Now, Let’s go out there and write your BEST and HIGHEST offers! Good Luck to all.

Shokoofeh Nowbakht

Federal Reserve Chairman Ben Bernanke has forecast an end to the US recession, which he believes will be kaput before 2010. Bernanke also told the Congressional Joint Economic Committee that the collapse in the housing market, which began three years ago, may have bottomed out, something we’ve been saying for the past month.

Forecasts, especially about the future, can easily go astray, so we don’t want to put too much faith in the Fed chairman’s prognostication. But many signs are appearing to suggest the recession won’t go much deeper. The latest comes from Mr. Bernanke himself, who said last week that “early indications” show that investor demand for the central bank’s loans to buy asset-backed securities, including mortgage-backed securities, will rise next month from May’s total, suggesting confidence in so-called toxic mortgage securities is growing.

The banks are another sign all might be well. They have been loosening their purse strings of late. Mortgages are more readily available, and so is consumer credit. This tells us that the banks’ balance sheets are improving, as has their outlook for the future. Our outlook, meanwhile, has already improved.

Tax Credit Can Be Used for Down Payment
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.

 Previously, most buyers wouldn’t receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.        

“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at “The Real Estate Summit: Advancing the U.S. Economy,” at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..

He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

Source: NAR http://www.realtor.org/RMODaily.nsf/pages/News2009051202

This is no April Fool’s Day joke!  When home values go south, one positive thing for current homeowners may be the chance to lower their property tax.  You might have seen advertisements that offer to lower your property tax for a fee anywhere from $100-$300…don’t be fooled

First, download the property tax appeal application from your county’s tax assessor office (see links below). Print out the form and complete the information about your property.  You will be able to find all of the information needed on your property tax bill.  Some counties websites allow you to submit the form online.   

Secondly, you will be asked to provide three sales information of similar properties in your neighborhood in support of your claim.  There are a number of ways you can search for this information if you are willing to spend hours on the Internet or go to County Treasurer’s Office to find public records.  A much easier solution is to call up your favorite Realtor who has the information readily available for you. 

There is specific time period which the application must be filed.  Generally speaking, the regular assessment filing period is July 2 through September 15; some counties may be through November 30.  Please be sure to check with your county’s assessor office.   

The appeal process may take anywhere from 4 weeks to 3 months depending on the volume the office is handling. It does not hurt to call and follow-up on the status from time to time. 

If you choose to appeal your assessment, you must pay your tax installments in full by the appropriate deadlines; otherwise, you may incur penalties while the case is on appeal. If your appeal is granted, a refund will be issued to you. 

For your convenience, I have listed the following links to the property tax appeal forms for counties in the Bay Area. Alternatively, you may Google “_____ county property tax appeal” – make sure you enter the official website of the county assessor’s office.  

San Francisco | San Mateo | Santa Clara | Alameda | Contra Costa

 For more details, here is a complete guide on California Residential Property Assessment Appeals published by California State Board of Equalization (Pub. 30).   

Don’t forget… your second installment of property tax is due on April 10^th!

Social Networking and The New Real Estate Sphere of Influence

 Actually, we’re not just talking about “social networks,” but business networking as well. The Internet has made dramatic changes in the way the world shops, locates information, and in how they communicate with each other. Of course, e-mail is the elephant in the room. But, as we become ever more mobile and in a hurry, networking will become a many-faceted activity.

 So, what do we mean by online or social networking? It’s all about sending messages to one another in real time, and getting back responses quickly. But, it’s also about introductions. We introduce our contacts to others, and they can introduce us to their network. It becomes an ever-growing circle, encompassing more people who in some way keep up with what we are doing or saying.

 A large part of these networking services is information retrieval as well. It isn’t just searching on Google, but also searching within a network for answers to questions, and sharing those answers with our circle of contacts. And, it seems that new services just keep popping up.

 The big names are:

 Twitter.com - This text and email communication tool has grown tremendously since it began. Leaving “tweets” as they are called, is placing short bits of information out via cell phone text message, RSS feeds or even voice to text conversion. It is used a lot to keep people who “follow” you posted as to where you are and what you’re doing.

MySpace.com - More for the younger set, but infiltrating older age groups as well, this is a social networking site for exchanging information, sharing music and just about anything else two people would like to share online.

Facebook.com – Facebook is a lot like MySpace, only for an older age group. It is also used to communicate over distance, send messages, and share information with a social network.

LinkedIn.com - This is a business and professional network of the first order. It is set up with a resume profile, connections to others in your field, business or company, finding employment and making deals. With more than 10 million users, it is a great place for a business person to network.

 There are some specific etiquette concerns when using these network resources. They may be free in most cases, but you shouldn’t abuse them. A recent example that was publicized was a home buyer who asked a question on Facebook. They received dozens of “USE ME!” e-mails and contacts from real estate agents. They were not amused. These weren’t productive answers to their question, but just hurled requests for attention, much like throwing a handful of business cards into a group of people.

 Your goal in working within these network sites is much the same as it is in personal networking at the Rotary Club. Be friendly and around. When a real estate related question is asked, be there with a courteous and informative answer. Just keep doing it, and you’ll build relationships over time that will bring you business. And, when consumers on these sites start to recommend you to their online connections, you’ve dramatically expanded your sphere of influence without shaking a hand or attending a meeting.

In my

On the flip side of the coin, $8,000 is unarguably a substantial amount of money – don’t we all wish to have an extra $8,000 in our bank account?  Since a tax credit is a dollar for dollar reduction in income taxes (e.g. if you have $8,000 tax credit, you will pay $8,000 less tax that year regardless of your tax bracket), it is essentially like “free money”. Therefore, for someone who intends to purchase a home this year, there could be a number of ways in which this money can be wisely applied toward the purchase.  Here are some examples:

1.  Down payment – Many buyers have admitted that coming up with enough down payment is the toughest part.  Nowadays, in order to get a loan from most conventional lenders, a buyer has to put at least 20% down.  For example, a $400,000 home, the down payment would be $80,000.  $8,000 would subsidize 10% of the down payments. For FHA loans, when the minimum down payment requirement is 3.5%, $8,000 can cover a large portion of it. 

2.  Closing costs – There are closing costs associated with every transaction. A buyer’s closing costs may be anywhere from 1%-3% of the purchase price.  For a $500,000 home, the costs would be $5,000-$15,000.  $8,000 would pay for, if not all, a substantial amount of the closing costs. 

3.  Points Buy-down – Interest rate can be reduced by buying down the points.  For example, if the loan amount is $400,000, the mortgage payment is $2,334 per month at 5.75%.  Pay 2 points (equivalent of $8,000) to buy down the interest rate, a buyer may save about $200 a month; that is, a saving of $2,400 per year. If the property is held for 10 years, total saving is $24,000.

4.  Property tax – Annual property tax is about 1.2% of the home value.  Deriving this mathematically, $8,000 covers one full year of property tax for a $650,000 home or two-years for a $350,000 home. 

5.  HOA fee – For people who are looking into townhomes or condos, the HOA fee runs about $300 a month on average.  By calculation, $8,000 covers over 2 years of HOA fee.  

6.  Renovations – Most new homeowners would be inclined update or remodel parts of the house.  Depending on the extent of the renovation, $8,000 may serve very well to give a kitchen or a bathroom a good facelift.  

In a nutshell, the tax credit in the Stimulus Package may not appear to be as attractive to some prospective Bay Area homebuyers at first. But for those who are willing, able, and ready to become homeowners in 2009, it definitely offers a better financial advantage.

Just a reminder: the $8K no-repayment tax credit applies to those who purchase home between January 1 and December 1, 2009.  Carefully planning the timing of the closing could be worth thousands of dollars.