Palm Springs Real Estate Information

Freddie Mac reports that the average interest on 30-year fixed mortgages slipped to an all-time low, for the third consecutive week, to 4.19 percent.

At the same time, 15-year fixed-rate loans and the five-year adjustable-mortgage rate both also hit record lows. Rates on the former were 3.62 percent, while the latter averaged just 3.47 percent.

Source: The Wall Street Journal, Nathan Becker (10/15/10)

Credit scores range between 200 and 800, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

1. Your payment history. Did you pay your credit card obligations on time? If they were late, then how late? Bankruptcy filing, liens, and collection activity also impact your history.

2. How much you owe.  If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, it’s a good thing if you have a good proportion of balances to total credit limits.

3. The length of your credit history. In general, the longer you have had accounts opened, the better. The average consumer's oldest obligation is 14 years old, indicating that he or she has been managing credit for some time, according to Fair Isaac Corp., and only one in 20 consumers have credit histories shorter than 2 years.

4. How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay them promptly.

5. The types of credit you use. Generally, it’s desirable to have more than one type of credit — installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, visit www.myfico.com.

•    Appraisals provide an objective opinion of value, but it’s not an exact science so appraisals may differ.

•    For buying and selling purposes, appraisals are usually based on market value — what the property could probably be sold for. Other types of value include insurance value, replacement value, and assessed value for property tax purposes.

•    Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value.

•    Appraised value doesn’t take into account special considerations, like the need to sell rapidly.

•    Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer.

Used with permission from Kim Daugherty, Real Estate Checklists and Systems, www.realestatechecklists.com

The tax deductions you’re eligible to take for mortgage interest and property taxes greatly increase the financial benefits of homeownership. Here’s how it works.
Assume:

$9,877 = Mortgage interest paid (a loan of $150,000 for 30 years, at 7 percent, using year-five interest)
$2,700 = Property taxes (at 1.5 percent on $180,000 assessed value)


$12,577 = Total deduction

Then, multiply your total deduction by your tax rate.
For example, at a 28 percent tax rate: 12,577 x 0.28 = $3,521.56
$3,521.56 = Amount you have lowered your federal income tax (at 28 percent tax rate)

Note: Mortgage interest may not be deductible on loans over $1.1 million. In addition, deductions are decreased when total income reaches a certain level.

1. Have a pre-sale home inspection. Be proactive by arranging for a pre-sale home inspection. An inspector will be able to give you a good indication of the trouble areas that will stand out to potential buyers, and you’ll be able to make repairs before open houses begin.

2. Organize and clean. Pare down clutter and pack up your least-used items, such as large blenders and other kitchen tools, out-of-season clothes, toys, and exercise equipment. Store items off-site or in boxes neatly arranged in the garage or basement. Clean the windows, carpets, walls, lighting fixtures, and baseboards to make the house shine.

3. Get replacement estimates. Do you have big-ticket items that are worn our or will need to be replaced soon, such your roof or carpeting? Get estimates on how much it would cost to replace them, even if you don’t plan to do it yourself. The figures will help buyers determine if they can afford the home, and will be handy when negotiations begin.  

4. Find your warranties. Gather up the warranties, guarantees, and user manuals for the furnace, washer and dryer, dishwasher, and any other items that will remain with the house.

5. Spruce up the curb appeal. Pretend you’re a buyer and stand outside of your home. As you approach the front door, what is your impression of the property? Do the lawn and bushes look neatly manicured? Is the address clearly visible? Are pretty flowers or plants framing the entrance? Is the walkway free from cracks and impediments?

Sellers think their homes are worth more than their real estate professional recommends, and buyers think these same homes are worth less.

It’s a difficult disconnect that makes selling properties a challenge. Successfully marketing a home requires that the price be set carefully -- or it will languish on the market. Among the considerations:

•    How many homes are for sale in the neighborhood? The more homes on the market, the more important it is to list at the lower end of the scale. "I want buyers to ask why is this house priced so competitively," said NAR President-elect Ron Phipps of Phipps Realty in Warwick, R.I. "I want the answer to be an offer."

•    Take short sales and foreclosures into consideration when pricing. If the competing properties are in lousy condition, they are less of an issue, but if they are well taken care of, yet priced 25 percent below market, they can be a serious factor.

•    Negotiate decisively. "Buyers are not interested in back-and-forth negotiations these days," Phipps said. "They are less emotional and more disciplined. They will walk away."

•    Cut the price when you have to. If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. That means it's time to make a meaningful price cut.

Source: The Washington Post, Associated Press (09/18/2010)

Not all real estate practitioners are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here’s why it pays to work with a REALTOR®.  

1. Navigate a complicated process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multipage settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

3. Help finding the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.

4. Negotiating skills. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5.  Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

6. Someone who speaks the language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.

7. Experience. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. Even if you have done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Objective voice. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll every make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

This year I am participating in the Coldwell Banker Charitable Foundation for this year’s community event.  We are combining our efforts with Animal Samaritans to put on the “2010 ARF AWARDS”  November 14, 2010 at the Westin Mission Hills in Rancho Mirage, California. 

The funds raised will be given to Animal Samaritans to support their numerous efforts with animals as well as a scholarship to a deserving student who plans to go to veterinarian school.  To participate in this event please call me at 760-413-2694 and I will be happy to give you further details.  To learn more about Animal Samaritans visit www.animalsamaritans.org.

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From time to time I thought I would highlight an area of the desert that would be interesting to those looking to visit and/or purchase here.

One of the most popular older estate areas is Old Las Palmas.  It boasts the largest number of celebrity homes in Palm Spings dating back to the mid 1920’s when it was first developed by New York builder Alvah Hicks and his son Harold.  The Old Las Palmas neighborhood, formerly a citrus grove, includes the area from Alejo on the South, North Palm Canyon on the East, Monte Vista on the West, and Stevens Road on the North.  The area offers many special advantages being within walking distance to the downtown Village. 

Some of the well known celebrities that have lived in Old Las Palmas include Edgar Bergen, Liberace, Sidney Sheldon, George Hamilton, Mary Martin, Joseph Barbera, Donna Reed, Harold Mirisch, Alan Ladd, William Powell, Rona Barrett, Rudy Vallee, Harold Robbins, George Randolph Hearst, Sidney Korshak, Kirk Douglas, Kitty Carlisle, Jack Warner, Leo Spitz, Lily Tomlin, and many others.

The Old Las Palmas area is recognized as one of the premier locations in Palm Springs and many of the older properties are being updated to enhance their unique properties.

There has been a flow of misinformation regarding this issue and it has been all over the Internet at a remarkable place.  Much of this information suggest that the Obama Administration’s health care legislation includes a tax on real estate. Many have gone so far as to call this a “real estate sales tax” or “point of sale tax.”

Quoting Kathy Mehringer, Director of Risk Management for Coldwell Banker:

“The fact is the new law does impose a 3.8% tax for households in the top tax brackets on unearned income.  This includes capital gains.  However, the legislation will not impact the exclusion on capital gains earned from the sale of a primary residence up to $250,000 for individuals, and up to $500,000 for married couples.  The 3.8% tax will apply only to capital gains above the normal exclusion.”

I can understand why there is a lot of confusion over this issue and that is why our National Trade Organization has produced the attached flyer.  Take a moment to read this information as knowledge is power!

Get more info here