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Randy Stoker
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    Years of Experience: 5

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Coldwell Banker Associated Brokers
410 Century Park Drive
Yuba City, CA 95991
530-632-0094

Archive for October 2010

Buy Short Sale or Bank Owned House in Yuba City

Sunday, October 24th, 2010

            

yuba city house

Beautiful Yuba City Home

                                                     Have you heard the good news?

Real Estate prices and mortgage rates are very favorable for home buyers in Yuba City or Marysville CA. Banks and mortgage lenders are willing to write off thousands of dollars of bad mortgage debt, thereby lowering the value of homes they must sell! 

There are two types of distress sales now available: Bank Owned (REO – Real Estate Owned) and Short Sales. I will explain the unique differences between the two types of real estate transactions. 

Bank Owned, or commonly referred to as “REO” are homes that the bank has completed the foreclosure procedure and now owns the property. The Yuba City home is offered for sale at a price that the bank believes is the fair market value. All liens including; Second Mortgages (junior liens), Mechanics Liens, Delinquent Property Taxes, etc are eliminated in order to transfer a clean Grant Deed to the new owner with no encumbrances on the subject property. 

Short Sale properties are found in three conditions:

  1. The seller is negotiating with the bank to determine fair market value and a sales price that the bank will agree to. Many times a second mortgage is involved making this process even more difficult.
  2. The bank has already agreed to a fair market value and arrived at an acceptable sales price and terms of sale. Junior liens may or may not have been negotiated with in this instance.
  3. The seller has completed the HAMP (loan modification process) and was denied, then applied for the new HAFA short sale program and was approved. The bank can quickly agree to a fair market value and sales terms. Any second mortgages or other lien holders will receive a minimum payment. Clear title can be transferred to the buyer.  

The best situation for a buyer is conditions 2 or 3 whereby the bank has already agreed to a sales price. The optimum situation is condition #3 because the bank is required to respond to an offer within 10 business days; plus, the sales price and terms of sale are clearly stated so there is less confusion as to what the bank is requiring to close the sales transaction. 

When considering which Yuba City properties to consider purchasing, I recommend looking at those properties that are REO or HAFA short sale approved first. All other distressed property transactions are subject to long response times from the bank plus  issues dealing with other lien holders. 

I hope this information will lead you through the “Foreclosure – REO – Short Sale” jungle of confusion. Many fantastic homes are now available at ridiculous prices, banks and lenders absolutely need to get these properties off their liability records. Do not let this once in a lifetime opportunity escape you! Please contact me if you need further information. Thank you!

colonial yuba city home

Colonial Style Yuba City House

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Posted in Real Estate, Real Estate Short Sales | 2 Comments »

Yuba City or Marysville Farm Land Information

Friday, October 15th, 2010

yuba city or marysville peach orchard

Sutter County Peach Orchard

Sutter County California, which includes Yuba City, contains some of the most fertile farm land in California. Water is plentiful due to the close proximity of the Feather River and water control provided by the Oroville Dam.  A good supply of under ground water is also available.

Two types of farming are predominant in Sutter County; Rice and Orchard crops. Other farming crops in Sutter County include hay, wheat, corn, melons and tomatoes. 

The three largest types of orchards in Sutter County are; Peaches, Prunes and Walnuts. Over the last few years walnuts have become a preferred crop due to the relative ease of farming, a higher wholesale value and increased demand. Much of the local walnut harvest is exported to Europe and Asia where walnuts are gaining popularity and the climates due not support walnut farming. 

walnut orchard in sutter county

Walnut Orchard in Yuba City

The University of California, Agriculture and Natural Resources  (ANR), provides education and hands-on training for many types of farming. A local ANR office is located in Yuba City that provides services to the Sutter-Yuba County farmers. I have taken many courses at the ANR field office, including on-location orchard training that has been a large part of my farming education. All education services are provided with no cost to the local farmers. 

Farm land availability, especially orchards bearing walnuts, has held their value through this current recession. Good producing walnut orchards in Yuba City rarely come up for sale. Upon the rare occasion a walnut orchard is available, there are many buyers willing to pay a fair price. Yuba City is located just 45 miles north of Sacramento along Highway 99 which makes the Sutter County area a favorite for many farmers who also prefer to live near a larger metropolitan area. 

Peach or prune orchards come available more often than walnut orchards. Some farmers are willing to replant portions of peach or prune orchards to walnuts, maintaining some crop to cover the cost of developing a new walnut orchard. 

I was fortunate to locate a residence located on a walnut orchard a few years ago. I had no prior experiance farming but I have plenty of enthusiam. The walnut orchard has been profitable since the day I purchased my property. I would be happy to explain my experiances with anyone considering purchasing a walnut orchard. Here are some images of our 2010 Walnut Harvest.

If you are interested in Yuba City, Marysville or other areas of Sutter and Yuba County farm land please contact me. I constantly monitor the local farm land availability and can contact you when some farm land becomes available. Be ready to make an offer when I call, because Yuba City or Marysville farm land sells very quickly!

pear orchard in yuba city ca

Yuba City Pear Orchard

 

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Posted in buy farm land | 26 Comments »

Buyers Real Estate Market to Buy Houses in Yuba City

Tuesday, October 12th, 2010
Yuba City Ranch Style House

Yuba City Ranch Style House

For the first time in years the current real estate market is truly a Buyers Market. House values have depreciated as much as 50% during the last 3 years. Mortgage interest rates are the lowest levels in as much as 50 years. The interest in home ownership is gaining momentum again, so now may be the best time to start looking for a new home. 

How do you make the decision to buy? What are the reasons to purchase a home? I have provided some compelling reasons to become a homeowner. 

Renting vs. Ownership
If you are currently renting an average 1500 sq. ft home in Yuba City, your monthly rent is around $1000 to $1200 per month. What would it cost to own a home? Based on a good credit score your payment would be under $1,000 per month. You can own for the same price as renting! 

Tax Advantages
Mortgage interest and property tax expenses are tax deductible. In some cases, you can decrease your payroll tax deductions and thus increase your take home pay because of the tax benefits of home ownership. Contact your tax consultant for your individual situation. 

Future Benefits
Home ownership creates stability for your family. You can live in your home as long as you want, not subject to a landlord’s needs or objectives. Since you are buying a home in a Buyers Market, the opportunity for your home to gain value is increased. 

Down Payment
The average down payment required is only 3% of the purchase price. Many lenders offer first time home buyers incentives. Cash gifts used as down payment are accepted. This is a great time to buy a home!

Pricing Power
You, the Buyer, have Pricing Power in a Buyers Real Estate Market. Start your negotiations 5% less than asking price in most situations. Sellers, including Banks, need to move their real estate holdings quickly. Unless the property you are interested in is already priced under the current fair market value, always start your negotiations lower than the asking price. Consult your Realtor to establish fair market value. 

This may be an opportunity of a life time to own a home. Home ownership is a treasured dream of many Americans. The rush to own real estate will resume again. You can take advantage of the weakness in the housing market now and make the purchase of a lifetime!

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Posted in Buy a House | 51 Comments »

How to Buy Houses in Yuba City at Discounted Prices

Friday, October 8th, 2010

 

Yuba City Farm House

Yuba City Farm House

Purchasing real estate in Yuba City at discounted prices to fair market value is easier to accomplish than you may imagine. I have listed the steps below how to choose a home, negotiate the price and close escrow on real estate at discounted prices. 

  • Buyers Mortgage Approval, the important first step to home ownership!

All offers presented to a seller in today’s real estate market require the pre-approval from a recognized mortgage lender. No offer to purchase can be considered if the seller is not confident the buyer can complete the sale transaction! 

The mortgage pre-approval process can take up to two weeks to complete. A complete credit history will be researched along with the source of down payment funds. Your lender will give you the maximum mortgage amount available to you for your purchase.

Now that you know how much home you are qualified to purchase, you can narrow the search to only those homes in your price point. 

  • The Decision Process

Picking out your new Yuba City home can be simple and fun if you know what you are looking for. Try to be disciplined and do not let your emotions over take your desire to purchase a certain home. 

I have listed some of the most common considerations to a home purchase;                             

  1. Choose either a single or multi-story home. Will stairs be a problem for you or any family members? Do you like to look of a two story home over a single story home? 
  2. Bedrooms and living quarters. How many kids do you have, or plan to have? Plan ahead if you think your family size will expand. Will you need separate living quarters for adult (in-laws, adult children) family members?  
  3. Design of Home. Do you like the design of an open floor plan, such as great room or large open kitchen? Or do you prefer defined living areas such as: Kitchen, dining room, living room, etc.   Ask you Realtor to show you examples of either design type to narrow your search. 
  4. Yards and other features. Do you prefer a smaller low maintenance yard, or do you enjoy working in your large garden? How about a pool or outdoor entertainment center? Do you need a 2 or 3 car garage? Or how about a separate workshop for your hobby?  Make your requirements clear to your Realtor to narrow the search for your next home. 
  5. Neighborhood schools, Shopping and Community Features. You can research schools by visiting Great Schools web site. Choosing the Yuba City school you prefer your children to attend will also define the general area to look for your new home. Other things to consider are: Public Transportation, Shopping Centers and Community Parks.
  • Make The Offer to Purchase! 

Your Realtor has located “The Home” and you are now ready to make an offer. Below are some great tips on negotiating the best price and terms:

  1. Unless the property is already listed below fair market value (consult your realtor) start the negotiations at 5% less than asking price.
  2. Write a cover letter to accompany the offer to explain why you are offering 5% less and that you will not accept an offer (counter offer) to purchase at a higher price.
  3. Ask to close escrow in two weeks from date of acceptance of your offer.
  4. Accept the Yuba City home in “As Is Condition”. You should pay for a home inspection to protect your interests. Accept small repairs or damages. Refuse the property if serious repairs (dry rot, roofing, electrical issues, etc) are present.

A strong offer from a qualified buyer who is willing to close escrow quickly and accept small flaws will normally buy the house for less than the asking price. Sellers want to close escrow quickly as possible and look favorably upon strong offers to purchase. 

Please consider my services if you are considering to buy a house in Yuba City. I will provide all the services described in this article to assist your home purchase efforts.

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Posted in Buy a House | 1 Comment »

Yuba City Real Estate Sales Tax and Medicare Tax Rules

Monday, October 4th, 2010

The recent Health Care and Reconciliation Act of 2010, which was signed into law on March 30, 2010, includes a provision to impose a tax on profits from real estate transactions. Located in Section 1402 of the Health Care Bill is the “Unearned Income Medicare Contribution” tax of 3.8 percent. The tax is due from the sale of residential or investment property. The new tax starts January 1, 2013 and is targeted for high income earners. 

Rumors have claimed this is a sales tax; actually, it is a new income tax. The new tax is a Medicare Tax and will be used to fund the Medicare Trust Fund, which is also a part of Social Security. 

You can be exempt from this new tax if you qualify; 

  1. If your adjusted gross income (AGI) is $200,000 or less
  2. If you are married and file joint tax return with income less that $250,000
  3. If you are married but file single separate tax returns less than $125,000 each     

So who pays this new tax and how is it calculated? The exact formula is complicated; I will try to explain the process. The existing $500,000 tax free exclusion remains in effect along with the ability to deduct mortgage interest and property taxes. The tax is calculated on any gain realized from the sale of real estate or the amount which this gain increases your income, whichever is the least. 

Let’s look at an example using a primary residence to observe how the new tax can affect you. Let’s assume your income is $175,000 and the profit from the sale of your Yuba City home is $250,000. The existing tax formula is used:  Take your original purchase price, add the cost of major improvements (remodel, additions, etc) and subtract from the sales price. Assuming you are married and use the $500,000 tax free exclusion, there is no tax due of any type. 

The Medicare Tax is intended for tax payers in a high income tax bracket, so let’s look at that example. Let’s assume your income is $350,000 and the profit from the sale of your Yuba City primary residence is $650,000. The $500,000 tax free exclusion leaves $150,000 capital gains as taxable income. The current capital gains tax rate is 15%, leaving $22,500 capital tax due. But how much additional Medicare Tax is due? 

In this example, your income is above the Medicare Tax limit of $250,000 so the 3.8% Medicare Tax is also due. So how much do you owe for Medicare Tax? Your tax is based on the least amount of either: The real estate profit ($150,000) or the difference between your income ($350,000) and the Medicare tax limit of $250,000. In this case, the Medicare tax is due on the difference between your Income and the Medicare Tax Limit ($350,000 – $250,000 = $100,000) which is less than the $150,000 profit from the real estate transaction.  Your Medicare Tax bill would be 3.8% of $100,000 or $3800. 

The new Medicare Tax bill will most likely affect home owners in parts of the country where real estate values and incomes are higher than normal. This new tax law applies to all types of real estate transactions, so be sure to consult a certified tax consultant before you sell real estate to find out if you are subject to the new Medicare Tax.

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Posted in Real Estate Taxes | 31 Comments »

Short sale real estate HAFA program for distressed Yuba City home owners now available.

Friday, October 1st, 2010

Great news for distressed Yuba City home owners! The US Government recently announced a new program to assist home owners sell their homes and avoid foreclosure, even if the sales price is not enough to pay off their existing mortgage loans. The new program is called HAFA (Home Affordable Foreclosure Alternative) which started on April 5, 2010 and will end on December 31, 2012.

To qualify for HAFA, you must meet the following requirements: 

  • Property must be borrower’s principal residence.
  • Loan must be a first trust deed originated before December 31, 2008
  • Loan must be delinquent or default must be reasonably eminent.
  • Borrower must be eligible for, but unable to complete, a loan modification under the Home Affordable Modification Program (HAMP)Benefits of the HAFA short sale include:
  • $3,000 to borrower for relocation expenses.
  • No deficiency judgment against home owner.
  • New funds are not required by home owner to close escrow.
  • Seller’s credit rating is not affected, negative rating is not allowed.
  • Conventional financing for a new home available within 24 months after successful HAFA transaction with good payment history 

The first step for the distressed Yuba City home owner is to contact their lender and establish communication. Avoiding contact with the lender is a big mistake! The home owner must make clear to the lender exactly why continuation of the regularly scheduled mortgage payments will no longer be possible. Then, apply for a Loan Modification Plan. If the home owner is approved for a Loan Modification then a HAFA short sale will not be allowed. 

If a loan modification is denied, then the Yuba City home owner can apply for a HAFA short sale agreement. Once the HAFA short sale is approved, things can move very quickly. For example, once an offer is submitted to purchase a HAFA short sale, the lender must respond within 10 days. 

The new HAFA program is welcome relief to distressed Yuba City home owners and realtors alike. Real estate transactions can be streamlined and close escrow quickly and smoothly. If you are considering a short sale of your property please contact me for more information. 

                                                                        Update: October 7, 2010

The HAFA program applies to the Original first trust that was originated with the home purchase. Any refinanced loans do not qualify for the HAFA program.

In California, a bill to extend relief to refinanced loans SB 1178 (Corbett) was vetoed by Governor Schwarzenegger on September 30, 2010. The bill was intended to extend anti-deficiency protection to consumers who have re-financed their original mortgages and are now facing foreclosure. The Governor made clear that SB 1178 would interfere with an existing contract.

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Posted in Short Sale | 5 Comments »

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