Irvine & Yorba Linda Named Best Places to Live

CNN’s Money Magazine just recently published their annual “100 Best Places to Live” in American small cities naming Irvine, CA #22 and Yorba Linda, home of President Richard Nixon, #38.

These two cities can attribute their placement due to excellent school districts, extensive dining and shopping, low crime rates, and plenty of community events.

Irvine is a growing business center and home to several Fortune 500 companies. In addition, the city is within minutes to the beach and major highways leading to Los Angeles and San Diego.

Yorba Linda is an equestrian’s dream with over 100 miles of trails, plenty of local parks and several golf courses. Plus there is the added benefit of being close to Disneyland, MLB Anaheim Angels, and the NHL Anaheim Ducks.

Yorba Linda is definitely one of the top choices for people of any lifestyle, especially those looking to raise a family. The homes in this area offer a variety of incredible panoramic views such as city lights, mountains, Catalina, and ocean. In addition, many of the homes are on large size lots great for children to run around and play. One of the premiere neighborhoods of Yorba Linda is the prestigious area of Kerrigan Ranch where there are custom built fine homes. Just take a look at our listing at 4021 Paso Fino Way or any of our listings in Yorba Linda and you can see why this is such a desired place to live.

We have been selling real estate in Yorba Linda for over 30 years, and time and time again we encounter buyers who only look at real estate in Yorba Linda and sellers who don’t want to leave this area.

To view the complete list, visit http://money.cnn.com/magazines/moneymag/bplive/2010/index.html

Q & A on Short Sales | Part 2

Continuing our mini series on Short Sales, I will now explain how a short sale will affect one’s credit among other topics.

How will a Short Sale affect my credit? 

• A short sale will drastically affect your credit score similar to that of a foreclosure.
• Expect a 200 to 300 point hit in your FICO. However, in most cases there is much less of a point reduction in your FICO in a short sale. A lot of this has to do with the amount of negative reporting history recorded by the lender.
• There is usually a lot less negative history reported in a short sale because the property is sold before the foreclosure.
• The key to retaining the most points in your score is to settle all bad debts and negative reporting activity as soon as possible.

What is the advantage of a short sale as opposed to foreclosure?

• The advantage to a short sale is that it usually does not cost you any money and the lender pays for all the real estate fees and closing costs.
• Your FICO score might not be affected as badly in a short sale.
• You will also be eligible by Fannie Mae guidelines to qualify for a loan at a reasonable rate after 24 months where it could take 5 to 7 years with a foreclosure.

How does a short sale work?

• A real estate agent will list your property subject to the lender’s acceptance of the deficiency or loss.
• They will obtain the highest possible price for the property and submit everything with the short sale package to the lender. You will be able to live in the property during the short sale process.
• It is extremely important to hire an agent that has short sale experience and who is very knowledgeable on short sales and negotiations with the lenders.
  • Because property owners cannot by law receive any compensation in a short sale, they tend to use anyone to facilitate this process.
  • The short sale is only an advantage if it is done successfully and as quickly as possible. Only use someone who is going to have the best possible chance of getting the short sale approved.

Short sales on investment and income properties?

• Since the 2007 Debt Forgiveness Act does not apply here, it is extremely important to hire a professional to represent the short sale.
• It is in the property owner’s best interest to obtain the highest possible amount for the property. If you are going to be 1099 on the loss, you want to make sure the loss is as little as possible.
• It is also important for the agent that represents you to try and negotiate the release of a deficiency judgment, where the lender sues you for the deficiency or loss.

*** It is best and highly advised, to contact your CPA to get all the information for your particular case and tax liability and filing information.

If you have any further questions on short sales, contact our office at 714.283.6649.

Update: Home Buyer Tax Credit

As previously reported, the Senate approved the extension for the home buyer tax credit closing extension to September 30th. However, the extension did not pass in the House nor did President Obama approve of it. Therefore, the closing deadline remains as originally stated when the tax credit was first extended June 3oth.

Senate approves closing deadline for Home Buyer Tax Credit

Q & A on Short Sales | Part 1

There are a  lot of homeowners out there who are underwater, and they just don’t know what to do but wait to hear about their loan modification. Being a Realtor, I’m often asked by homeowners regarding their their options and what they can do.  So I decided to shed some light on the situation and help out those homeowners who are in need.

The Pitfalls to loan modification? (Loan Modification or Short Sale?)

Getting a loan modification can be the best possible solution to a financial hardship, but could also potentially be the worst. A loan modification is only the BEST solution if the outcome resolves your financial woes and is permanent. If not, it becomes a band-aid to a wound that won’t ever heal and will become much worse.

• For Example, the 2007 Mortgage Forgiveness Debt Relief Act passed by the Bush Administration in 2007 expires at the end of 2012.
  • This bill forgives the property owner’s losses on their principle residence for federal income tax purposes.
  • Outside of this bill, the property owner would be 1099 on the loss that the lender incurred and taxed as income.
  • This could amount to an unbelievably large tax bill that could take years and years for the typical family to be able to pay off.
• Therefore by agreeing to a temporary modification which keeps you in the home for the next five or so years, you would eliminate yourself from the umbrella of this policy. If you owe $500,000 and the property sells for $300,000 then you would be 1099 and taxed on $200,000 of income. ***
• If you cannot obtain a permanent worthwhile loan modification, your best bet is to pursue a short sale.

What is a short sale?

A short sale is not a term that refers to the time frame of the sale but to the deficiency or loss on the loan. The lender accepts the loss on the difference of what is owed and what the current market will bring.

• In a short sale, the property owner is underwater and owes more on the property than it is worth. In most cases, an agent will sell the property at current value and negotiate with the lender to accept a loss at no cost to the property owner.

What is the Cost to do a short sale?

In most cases, short sale costs are absolutely free to the property owner as the lender will incur all the fees and costs.

What are the tax consequences of a short sale?

• The 2007 Mortgage Forgiveness Debt Relief Act forgives losses on principle residences for Federal tax purposes.
• The state act has since expired and as of right now state tax will be owed. The federal act does not cover investment properties, second homes and income property.
• On April 12, 2010 the California State Senate passed Senate Bill 401 that exempts distressed homeowners from state income tax liability with the short sell, foreclosure or loan modification on their home.
• It is very important in all cases to contact a CPA or tax attorney to find out what your tax liabilities are.

Stay tuned for the 2nd part of my short sale series to find out the advantages of the short sale,  how it works, and how it can affect your credit score. You can also contact our office for more information at 714.283.6649.

The Geronsins Honored With The Prestigious 20 Year Legend Award

The Geronsin’s genuine commitment to their clients and love for real estate has resulted in their consistent ranking as the top real estate team in Orange County.  They have received recognition through numerous awards, but the one that stands above the rest is the prestigious 20 YEAR LEGEND AWARD. Only three Prudential agents in the entire nation have ever been honored with this award. It is granted to an agent that has been in the top 2% in the Real Estate Network for 20 consecutive years. There is no greater achievement in the industry as it shows incredible sustainability and perseverance through every market!

While deeply humbled by the recognition, the Geronsins are clear that their success is measured by the relationships built with their clients and the outstanding customer service provided during every step of the home buying and selling process. Residents of Orange County for more than 35 years, Carole, George and Genelle are active in community organizations and outreach programs. Their extensive knowledge and experience with local schools and organizations, as well as their commitment to family, translates to strong and vibrant relationships with their clients. This has resulted in their ranking as the top real estate team for over two decades.

The Buzz on Google Buzz

Each day it seems like there is a new social media platform for us to try. For those who are not social media specialist, it can be daunting and overwhelming to navigate the social media sphere. Weeks ago, Google Buzz became the new platform and instantly became a trending topic on Twitter. With Gmail integration, Google Buzz is already superior to that of Google Wave. Other good features of Google Buzz is the ability to link Twitter, Picasa, Blogger, and Google Chat. Of course they are going to link most of Google applications together to streamline their services.

So while Google Buzz was a web sensation a few weeks ago, you barely even hear about it now. If you go onto Mashable.com and compare the stats between Facebook, Twitter, and Google Buzz. Twitter remains King for social media and viral news. Facebook is still more popular than Buzz. So why is that? Although there maybe millions and millions of Gmail users, you have to take into account that the majority of people work. Therefore, their main email is their work email address. In addition in the world of PC and Microsoft, most people use Microsoft Outlook, Thunderbird, or a Blackberry to access their email. If Google can find a way to create a desktop exchange or a “Text to Buzz,” it would most likely increase the usage on Buzz. Wouldn’t it be nice if Google Buzz was on Tweet Deck? Since real estate is so heavily communications driven, Google could be a useful tool.

For instance, real estate agents come into contact with a lot of people. Aside from those who work in Public Relations or is a Human Resource recruiter, real estate agents know a lot of people. Can you just imagine how many email addresses are in an agent’s contact? If they use Gmail, it would store ALL of the people they have ever emailed. So if an agent were to Buzz, it would notify all their contacts in their email: other agents, potential buyers and sellers etc. Pretty quick way to get the word out about a new listing before inputting it into the MLS right? This would be great if both parties used Gmail and that your contacts read your newest Buzz. Taking into account, email and phone are the primary form of communication in real estate, seasoned agents won’t be changing their email address anytime soon. Since most real estate agents use a Blackberry to access their email, it is less likely they will Buzz.

These Tax Credits Won’t Last Forever!!

With February coming to an end, many people and agents almost forgotten about the extended Homebuyer Tax Credit. The clock is winding down for homebuyers to purchase a home and file for tax savings to their 2009 income taxes. Buyers must enter into a contract by April 30,2010 and close escrow by June 30, 2010. To add to confusion, homebuyers need to know which tax credit they qualify for:

1. Original Homebuyer tax credit

* Bought a home from January 1, 2009 – November 6, 2009
* Purchased home is your primary residence, not for investment or vacation purposes
* Have not purchased a home three years prior
* Individual income not to exceed $75,000, joint not to exceed $150,000
* up to 10% of the purchase price of the home that cannot exceed $8,000

2. Extended Homebuyer tax credit

* Bought a home from November 7, 2009 – April 30, 2010
* Can be a first homebuyer or current homeowner (lived in primary residence for 5 consecutive years of the last 8 years)
* First homebuyers can receive a maximum credit of $8,000 or 10% the purchase price
* Repeat homebuyer can receive a maximum credit of $6,500
* Individual income not to exceed $125,000; joint not to exceed $225,000

Additionally, homebuyers will need a fully executed HUD-1 statement and a IRS Form 5405. It is highly advised that homebuyers speak with a tax professional to ensure they meet all the requirements and have the proper documentation to file for the credit.

Not only do homebuyers qualify for a tax credit, they might qualify for the Consumer Energy Efficiency tax credit. This credit allows consumers to buy some Energy Star products, such as windows, doors, water heaters, heating, air conditioning, to make their home more energy efficient while also upgrading their home. On top of the tax credit, some Energy Star products also have rebates! The energy appliance rebate program vary from state to state. Californians will not be eligible until April, 2010. To learn more, www.energystar.gov

The clock is winding down. These tax credit advantages won’t be around forever. What are you waiting for? Act now so you won’t have to compete with more buyers as the deadline approaches!!!

Higher Interest Rates Coming

Recently, the Fed announced that they will stop purchasing mortgage back securities on March 31st.  With that announcement, mortgage rates are expected to increase about 100-200 basis points after the Fed withdraws.  Only time will tell how high mortgage rates will increase. Therefore those who want to purchase a home, they need to start looking today.

Also to take into consideration is the deadline for the home-buyers tax credit extension which expires on April 30. Home-buyers need to be in escrow by April 30 and close by the end of June. Speculation has already started that the government might extend the home-buyers tax credit to aid in the recovery of the real estate market and economy. What else to keep in mind for potential home-buyers is when the Fed stops buying mortgage back securities, rates will increase. Then when the Fed decides to sell the securities they purchased, it is possible to another increase in rates. So while the market have experience low interest rates for the last year, interest rates are expected to rise this spring or early summer.  It cannot be stressed enough that buyers needs to take advantage and lock-in a low interest rates. Ask any loan officer and they will tell you that currently within the past few months, the rates are almost a historical low. Read more at CNN Money.

Making Sense of the Home Affordable Programs

On March 1st, the Government extended the Home Affordable Refinancing program to June 2011 to help those borrowers refinance at a lower interest rate than what is on their mortgage. The program was intended to help the 5 million borrowers, but in reality, it has helped only about 200,000. This extension will allow borrowers extra time to apply to get refinancing lower their payments to prevent them from defaulting and risk to be foreclosed upon. This program is set to expire in June 2011. Take into account that at the end of the month, the Fed will stop purchasing mortgage back securities. As a result, interest rates will most likely increase.

Not to be confused, the Government just announced the Home Affordable Foreclosure Alternative (HAFA) that will go into effect on April 5th.

George Geronsin comments, “The last thing a borrower wants is to be foreclosed upon. It is equivalent to filing for bankruptcy. If they are foreclosed upon, they will not be qualified to buying a home for at least 5 years. In addition, the borrower will receive a bill for taxes on the loss.”

Borrowers should not just depend on the lender to process their loan modification. There is another option for them. While in the process of getting a loan modification, owners can also engage in a “short sale.” A short sale is when a underwater borrower, one who owes more money than what the homes is worth, list their home for sale with a real estate agent and works with the bank to sell the home for a loss with the bank writing off the loss.

With HAFA, there are a few incentives to engage in a short sale

1. Less damaging credit rating – Borrowers can qualify to purchase another home in two years
2. Up to $1,500 Relocation assistance
3. Up to $1,000 incentive for the 1st and 2nd mortgage lender

Carole Geronsin, a seasoned listing agent who previously manged all the Chase’s REOs for California, further explains, “If a borrower is going to engage in a short sale, it is very important for them to list their home with the right listing agent who has experience and in depth knowledge of short sales. In addition, the agent needs to know how to market the home and get a buyer. From experience, the time frame to get a short sale approved will depend on who the lender is and if there is a 2nd mortgage.”

Watch this clip on from the NBC’s Today Show.