About Redding
November 15th, 2008
Sandee and I made the decision a couple of years ago to purchase a home located at one of the trail heads to Lema Ranch. For several years each morning we had been driving to this McConnell Foundation owned trail system for our daily walk or jog. We enjoy the time spent on the trails so much that when our house came up for sale we knew it was the right choice for us.
With 8 miles of trails set on a combined 380 acres of open space the Lema Ranch and Churn Creek Trail system is an oasis of natural beauty and the ideal place to get a little exercise while enjoying the sights and sounds of nature.
Located on what was once a working mule ranch owned by Chuck and Peggy Lema the trail system and ponds were enhanced and developed by the McConnell Foundation in 1997 and is open to the public daily from dawn to dusk. The 4 paved miles of trails at Lema Ranch take you around several ponds and offer spectacular views of Mt. Shasta and the Western Ranges.
A number of Redding neighborhoods are fortunate to have direct trail head access including Hacienda Heights, Alder Creek, Blackhawk, Edgewood and College Highlands. For those who come from other parts of town the main parking lot is located across from Mt. View Middle School at Hacienda. There is a restroom located at the parking lot as well as on the opposite end of the Ranch at the Lema Road trail head. There are many benches set along the trail for those who need a rest or just to sit and enjoy the views.
The paved trails at Lema Ranch are reserved for walkers and runners only while the gravel trails in the Churn Creek Trail system are open to bicycles and allow dogs on leashes. To access the Churn Creek Trails park at either Minder Park in the Edgewood area or the end of Tidmore at the north end of trails.
The McConnell Foundation has been a great neighbor and the employees who work at Lema Ranch do a wonderful job in keeping the trail system maintained and are always ready with a smile and a wave. Give us call should you decide as we did that living on the trail is the right lifestyle choice for you. We will be happy to send you a list of homes for sale that access Lema Ranch.
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First Time Buyers
November 14th, 2008
As a first time buyer one of the big questions you probably have is how much more is buying going to cost you per month as compared to your current rent. You might think that is as simple as finding out what your total house payment, or Principal, Interest, Taxes and Insurance (PITI) will be and subtract from that your current rent in order to compare. Nope. By using that method you are not taking into account the income tax benefits of the mortgage interest and property tax deductions not available to renters. To help explain I put together this tax benefit calculator that can assist you in determining your true cost of renting.
| Loan Amount |
|
Rate |
|
Annual Interest |
|
Annual Prop Tax |
|
Tax Deductible |
|
Tax Rate |
|
Tax |
|
Monthly Savings |
| |
|
|
|
|
|
based on1.25% |
|
|
|
|
|
|
|
|
| $200,000.00 |
|
6.25% |
|
$12,500.00 |
|
$2,500.00 |
|
$15,000.00 |
|
20.00% |
|
$3,000.00 |
|
$250.00 |
In the example above I am using a loan amount of $200,000 and a fixed interest rate of 6.25%. With those terms the annual interest that you pay as part of your total payment (PITI) would be $12,500. In Shasta County our property tax rate works out to be about 1.25% so the annual taxes (PITI) are $2,500. Both of these are deductible items on your income taxes. In order to determine the monthly savings you will need to know your income tax rate (20% rate used in example above). You then take the Tax Deductible Amount X the Tax Rate and divide by 12 months. The resulting figure is the amount of money that you pay the IRS each month in addition to your rent. Using the example a person paying $1,000 per month in rent to the landlord is actually paying $1,250 per month in combined rent and tax. That amount is the more realistic figure to use when making a rent vs. buy comparison.
Keep in mind that this does not account for things like future rent increases, equity opportunities and the stability of ownership. I have to put the disclaimer here that I am not a CPA and you are encouraged to talk with a tax professional on how home ownership benefits you. Contact Us if you would like to have this tax calculator (excel spreadsheet) e-mailed to you.
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About Redding
November 12th, 2008
Recently we had the opportunity to attend the ”final dress rehearsal” for Bleachers Sports Bar & Grill set to open in Redding on Nov 12. Very impressed! The first thing you notice when you walk in are the video displays, large TV monitors everywhere with everything from football to MMA which can be viewed from any seat in the house. The decor is sports all the way with benches created from snowboards and zebra striped staff tending bar and serving food and drinks to the many tables located on the restaurant floor. The food menu has choices for everyone and the beverage selection is
huge. At our table we ordered fish and chips and gyros and both were very tasty. The fries are served hot and crispy and the beers are frosty cold.
Bleachers, owned by Travis and Tyree Bolton is
located at 2167 Hilltop Drive and is sure to be a popular hang out for locals as well as visitors staying at one of the many hotels on the Hilltop strip.
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The Art of Selling
November 8th, 2008
Losing a home through foreclosure is a personal tragedy with neighborhood and community consequences. The emotional impact of being evicted from your home so publicly is bad enough but the realization that your loss will have severe negative consequences for your friends and neighbors can be overwhelming. Friends next door, who you may have shared a weekend BBQ or even just a daily hello watch on helplessly while the neighborhood slowly changes for reasons beyond their control.
By now most people have seen the homes with the dead lawns and look of obvious abandonment throughout town. Notices tacked on the door or pasted in windows reinforcing the fact that these homes sit vacant as a result of foreclosure.
If you are unable to make arrangements with your lender to work out an agreement that allows you to stay in your home a short sale may be your best option. Not only will a successful short sale lessen the financial impact of a home loss it will also enable you to avoid the most devastating emotional consequences of this unfortunate event.
Homes being sold as short sales look no different then any other home for sale on the market. You live in and maintain the home just as any seller would. A successful short sale does require some specific expertise by the agents involved and there are a number of
steps involved in the short sale process that are critical.
A successful short sale is certainly no ones idea of a happy ending and working hard to keep owners in their homes should be the objective of ever
yone serving in the real estate industry. However, if you find yourself in a situation that can’t be resolved in a way that saves your home you may be able to lessen the impact on your neighborhood.
Contact Us for more details.
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Buying REO Homes
November 1st, 2008
Tolstoy could have been writing about foreclosures when he penned the famous lines in his masterpiece, Anna Karenina,
“All happy families resemble one another, each unhappy family is unhappy in its own way.”
So it is with the many individual stories that must be behind the numerous REO homes on the market today.
Many of our buyers shopping for homes in the REO market initially express mixed emotions on buying a home that has been lost to foreclosure. On one hand, they are very excited about the value that can be found in the market right now. On the other hand they are often troubled by the sadness of a home lost in this way by a previous owner.
We understand that feeling but we encourage buyers to think about the situation in a way that puts it in a little different perspective.
First of all, no amount of remorse or empathy will return the previous owner to the home. By the time the home is listed as an REO property the situation has long since passed the point of redemption. The only question remaining at that point is who will be moving in. The new owner has the opportunity to have a tremendously positive impact on their new neighborhood. Many of these neighborhoods have suffered during this process and welcome the new owners as saviors of a sort.
The vast majority of those who have lost homes through foreclosure have not become homeless but have returned to the rental market where they may very well have lived previously. With work they will be eligible to purchase again in about 4 years time and will be far better prepared for success.
Most of the REO buyers we work with are renting immediately prior to buying and in essence are “trading places” with those moving back to the rental market. As renters they don’t see their situation as tragic and we encourage them to consider that the displaced homeowner will be moving back into a situation not unlike the one that they currently live in. The opportunity to own again will come in time.
We see this market as a wonderful opportunity to improve your life. In buying an REO home you will have the chance to secure your future and bring much needed healing to your new neighborhood. Do so without guilt and with the joy of knowing that you have made a positive decision for yourself, your family and your community.
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First Time Buyers
October 26th, 2008
A common misconception regarding the purchase of REO or foreclosure properties is that all sales are “As-Is” and no repairs will be performed by the seller. It is true that these properties are advertised that way and generally you will be asked to sign an “As-Is Addendum” as part of the contract, but what exactly does that mean? On the face of it you would think it meant just that, no repairs. Because of this many buyers, and quite a few agents, pass on homes that might be the ideal choice. The fact is that Banks are open to performing repairs if the request is properly made and the reasoning behind the request is documented in a compelling manner.
It’s a bottom line business with banks. Most don’t care so much about the structure of the contract as much as the eventual net sales price after all costs are deducted. If that includes some repairs that are reasonable in order to close escrow many asset managers would prefer that over putting the house back on the market. How that goes often depends on the listing and selling agents willingness to work towards a positive outcome for all concerned.
Because many REO homes are put in contract well below what they will appraise it is not unheard of to make some negotiated adjustments to price that include seller repairs necessary for financing. Every situation is different and the important thing is that your agent is willing to look at creative solutions to expand your housing options.
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The Art of Selling
October 17th, 2008
I think everyone knows what a foreclosure is and by now most people are familiar with the term “short sale” and understand that it is a way to sell a home and avoid foreclosure. Why choose one over the other?
Whether you sell your house via a short sale or lose your home to foreclosure be prepared for a credit score reduction of 200 to 300 points. Either way you are going to have rebuild your credit and that will take time.
The primary advantage of a short sale vs. foreclosure is the amount of time you will need to wait before buying another house. Current Fannie Mae guidelines require only 24 months of seasoning before buying a new home vs. up to 72 months for those who lose their homes through foreclosure. With that in mind many people decide that selling via short sale is their best option.
Keep in mind that with a short sale there is the potential for a deficiency judgement on the difference of the loan amount and the amount paid. In California, purchase money (original) loans are not subject to deficiency judgements but many other forms of financing are. This is something that you should discuss with a real estate attorney or CPA prior to making your decision.
If you decide that a short sale is the right choice for you here are some of the things you will need;
1. Authorization to Release Information to Agent. This will allow your Agent to talk with the lender on your behalf.
2. Handwritten hardship letter showing compelling need to sell.
3. Short Sale Listing Agreement.
4. BPO of comparable sales from Listing Agent.
5. Last 2 years W2 Forms all borrowers.
6. Last two years tax returns all borrowers.
7. Last two months bank statements all borrowers.
8. Last two pay stubs all borrowers.
9. Borrowers financial statement. Be sure to accurately list all expenses, as unaccounted discretionary income can be an issue with lender.
10.Detailed estimate for any repairs needed.
11.Fully ratified Purchase Agreement.
11.HUD 1 statement or NET Sheet showing the lender what their NET figure will be and any other expenses owed on the property.
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First Time Buyers
October 11th, 2008
Racing fans have all heard the term “Racing back to the yellow flag”. This was the practice of taking advantage of a caution flag to pass other drivers who backed off during a wreck on the track. Many a race was won by drivers who accelerated when everyone else was braking. What does that have to do with real estate you ask? Well………..everything!
With all the uncertainty of our economy most people have “hit the brakes” and are taking a yellow flag approach to their finances. Nothing wrong with that I suppose. In fact, that is probably a reasonably safe way to make sure that you fall behind at the same rate as everyone else. Hold your position and when things turn around you might be right back where you were a year or two ago. If that’s where you want to be then its a great strategy.
There is another option. Right now may be the best opportunity you will ever have to leap frog ahead in life. The uncertain economy has forced housing prices dramatically lower and buyer competition has been significantly reduced. Because of this you are in position to make a move that would place you far ahead when the economy turns back around. For first time buyers this truly may be the chance of a lifetime. Some will hit the brakes and some will hit the gas. Which one will you be?
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State of Jefferson
October 2nd, 2008
Looking for something to do in Redding? The band “The Myriad” will be performing Saturday Oct. 4th at the Cascade Theatre. The Myriad was crowned MTV champions of the 2007 “Dew Circuit Breakout”. Check out their music video filmed at Redding’s historic Cascade Theatre.
Read the rest of this entry »
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First Time Buyers
October 2nd, 2008
As Lenders become increasingly selective about issuing loans it is more important than ever that you know your credit score.
One of the most important things you can do as you prepare to buy your first home is to obtain your free yearly credit report from
www.AnnualCreditReport.com. Be sure to look it over carefully for mistakes and contact the credit reporting agencies to dispute any errors. The three credit reporting agencies, Equifax -
www.equifax.com , Experian -
www.experian.com and TransUnion -
www.transunion.com are required to remove unverifiable negative credit from your record. Once you have made sure that your credit report is accurate there are a number of steps you can take to raise your credit score. It’s not an overnight process so even if buying a home is a ways off I would encourage you to start today. Here are some tips for boosting your credit score;
- Pay your bills on time. As this can count for one third of your credit score it is very important that you avoid late payments. Payments that are 60 days late will be reflected in your credit history and lower your score.
- Avoid opening new credit. That 15% discount offered if you apply for a card at your local retailer may cost you a bundle. Too many inquiries and too much available credit can have a negative impact on your credit score.
- Keep older credit lines open. Accounts with a long history tell lenders that you are a good credit risk. Use them regularly and pay in full each month.
- Use Credit Responsibly. Keeping a few active credit lines open with timely payments will go a long way to boost your score.
- Reduce your balances. For many this will be the biggest challenge. Avoid making just the minimum payment on your credit cards. It is critical that you work towards getting your cards payed down to no more than 20% of available credit. This may take some time but with discipline and planning will pay big rewards. Not only is a full one third of your credit score determined by this factor if you are making only the minimum payment you are losing incredible amounts of money that could be saved for a down payment.
I can’t stress enough the importance of checking your credit to remove errors and look for cases of identify theft. These are much more common than you might think. Don’t fall for any of the “Fix your Credit Fast” scams that charge you a fee to repair your credit. This is something you can do yourself. Feel free to
Contact Us to learn more about getting ready to buy your first home.
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