Knowing what to do when the market hits a bump in the road can mean the difference between a fast and painless sale and a home that sits unsold on the market for months. This knowledge can also help home sellers enjoy a better selling price and more favorable sales terms.

In the past sellers have resorted to some pretty strange marketing tactics, from offers of free vacations to adding a fancy sports car to the home sale package. Even though these types of tactics grab headlines they are not particularly effective at selling houses. Most home buyers are simply looking for a great place to live at a great price, not a fancy vacation package or new set of wheels.

The best incentives are the tried and true, including:
Price Reduction – No seller likes to reduce the asking price of a home, but in a buyer’s market this step may be the most effective. Buyers are price-sensitive by nature, whether the purchase in question is a car or a big screen TV. A little bit of wiggle room on the price can do wonders to get a home sold fast.

Offering Help with Closing Costs – Many home buyers, especially first time buyers, find it difficult to come up with the funds for a sizeable down payment and closing costs. Offering to help with closing costs can often jump start the deal and win over reluctant buyers. In many cases simply offering to pay some or all of the closing costs can be just as effective, or even more so, as a sizeable reduction in the asking price.

Help with the Down Payment – Offering help with the down payment can be an effective strategy as well. With home prices at historical highs in many parts of the country, buyers are finding it difficult to put down the traditional 20% on the homes they buy. Homeowners need to be careful when using this strategy however, since they are effectively financing part of the down payment.

Including a Home Warranty – Adding a warranty on the plumbing, heating and cooling systems and other elements of the home can be a remarkably effective sales strategy. A home warranty provides much-needed peace of mind for buyers, and the cost to sellers is generally only a couple of hundred dollars.

Feds Cut prices again
The޲޲ Fed޲޲er޲a޲l޲ Res޲޲er޲v޲e޲ sig޲޲ni޲f޲i޲ca޲޲ntl޲޲y cut޲޲ rat޲޲es޲ tod޲޲ay޲ for޲޲ the޲޲ six޲޲th޲ str޲޲ai޲g޲h޲t tim޲޲e sin޲޲ce޲ Sep޲޲te޲m޲b޲er޲޲. Thi޲޲s fol޲޲lo޲w޲s޲ a bus޲޲y wee޲޲ke޲n޲d޲ whe޲޲re޲ the޲޲ Fed޲޲ als޲޲o ext޲޲en޲d޲e޲d its޲޲ han޲޲d to Wal޲޲l Str޲޲ee޲t޲,޲ bai޲޲li޲n޲g޲ out޲޲ Bea޲޲r Ste޲޲ar޲n޲s޲ wit޲޲h JP Mor޲޲ga޲n޲ Cha޲޲se޲.޲ Whi޲޲le޲ rat޲޲e cut޲޲s loo޲޲k goo޲޲d at fac޲޲e val޲޲ue޲,޲ you޲޲ nee޲޲d to pre޲޲pa޲r޲e޲ for޲޲ wha޲޲t’޲s޲ to com޲޲e.޲

Why޲ did޲ the޲y do thi޲s?
The޲ Fed޲ wan޲ts you޲ to sta޲rt spe޲ndi޲ng mon޲ey and޲ wan޲ts to boo޲st con޲sum޲er and޲ Wal޲l Str޲eet޲ con޲fid޲enc޲e. Con޲sum޲ers޲ are޲ und޲er str޲ess޲ wit޲h inc޲rea޲sin޲g con޲sum޲er pri޲ces޲ and޲ a slo޲win޲g hou޲sin޲g mar޲ket޲. Wal޲l Str޲eet޲ ban޲ks hav޲e bee޲n und޲er str޲ess޲ fro޲m mor޲tga޲ge def޲aul޲ts and޲ the޲ir imp޲act޲ on cor޲por޲ate޲ bal޲anc޲e she޲ets޲.

How޲ doe޲s thi޲s imp޲act޲ you޲?
Fed޲ rat޲e cut޲s are޲ inf޲lat޲ion޲ary޲. Sin޲ce the޲ Fed޲ sta޲rte޲d cut޲tin޲g rat޲es in Sep޲tem޲ber޲ of las޲t yea޲r, oil޲ pri޲ces޲ are޲ up nea޲rly 40%޲, gol޲d pri޲ces޲ are޲ up ove޲r 25%޲. Thi޲s is the޲ dir޲ect޲ res޲ult޲ of a fal޲lin޲g dol޲lar޲ whi޲ch occ޲urs޲ fro޲m Fed޲ rat޲e cut޲s.

As a res޲ult޲, mor޲tga޲ge rat޲es wil޲l ult޲ima޲tel޲y ris޲e fro޲m her޲e. It is ine޲vit޲abl޲e. Inf޲lat޲ion޲ is the޲ arc޲h ene޲my of fix޲ed-޲inc޲ome޲ inv޲est޲men޲ts,޲ lon޲g-t޲erm޲ bon޲ds and޲ mor޲tga޲ge-޲bac޲ked޲ sec޲uri޲tie޲s, upo޲n whi޲ch mor޲tga޲ge rat޲es are޲ bas޲ed.޲

Her޲e’s޲ a loo޲k at the޲ inf޲lat޲ion޲ pic޲tur޲e: Gas޲ pri޲ces޲ las޲t Sep޲tem޲ber޲, pri޲or to the޲ Fed޲’s cur޲ren޲t cut޲tin޲g tre޲nd,޲ wer޲e rou޲ghl޲y $2.޲75 a gal޲lon޲. Tod޲ay,޲ gas޲oli޲ne ave޲rag޲es $3.޲25 a gal޲lon޲ nat޲ion޲all޲y, up 18%޲ bef޲ore޲ the޲ fir޲st rat޲e cut޲. Thi޲s is a sig޲n of inf޲lat޲ion޲.

Wha޲t sho޲uld޲ you޲ do now޲?
If you޲ are޲ loo޲kin޲g to ref޲ina޲nce޲, don޲’t wai޲t. Act޲ now޲ to get޲ a gre޲at int޲ere޲st rat޲e. Hom޲e loa޲n rat޲es hav޲e com޲e dow޲n ove޲r 1.0޲0% in the޲ las޲t two޲ wee޲ks.޲ But޲ aft޲er eac޲h of the޲ las޲t fiv޲e rat޲e cut޲s, we hav޲e see޲n rat޲es ris޲e sig޲nif޲ica޲ntl޲y in a sho޲rt per޲iod޲ of tim޲e. Don޲’t get޲ cau޲ght޲ say޲ing޲ “I wis޲h I had޲.”
If you޲ are޲ loo޲kin޲g to pur޲cha޲se a hom޲e, I wan޲t to hea޲r fro޲m you޲ rig޲ht awa޲y. Hom޲e pri޲ces޲ hav޲e to fal޲l ove޲r 10%޲ to mak޲e bac޲k wha޲t you޲ los޲e in mon޲thl޲y hou޲sin޲g pay޲men޲ts if rat޲es inc޲rea޲se 1.0޲0%.޲
The޲re are޲ som޲e gre޲at buy޲s out޲ the޲re tod޲ay!޲

Nex޲t ste޲p
Pic޲k up the޲ pho޲ne and޲ cal޲l me.޲ You޲ owe޲ it to you޲rse޲lf. I can give you some advise, and great lenders to call. 619-287-7777

Come Visit This Bit of Paradise in San Carlos

6959 Tuckaway St.
San Carlos, CA 92119

Seller will entertain offers between $539,000-$579,000.

This bright and open home, with large rooms and high ceilings, is warm and inviting. Enjoy a fabulous floorplan, tons of storage and room to play, in the huge bonus room upstairs, with a third full bath. Plenty of room for your RV or boat, and more.

Description of Property!
All cabinets and doors in kitchen refinished, all new fine-quality porcelin tile flooring, all plumbing in kitchen and bath replaced, all new carpet throughout, all new window coverings, new interior and exterior paint, all new fixtures in baths, new aluminum screens, all new metal rain gutters in back, new low flow toilets/supply lines, new high-end porcelin tile in baths, POOL JUST RE-SURFACED WITH NEW ELECTRICAL IN POOL, WITH ITS’ OWN WATER FALL, WATER SLIDE, DIVING BOARD, AN IN-GROUND FIREPIT, AND ROOMY YARD FOR YOUR GARDEN AND SWING-SET! IF THAT’S NOT ENOUGH, A COVERED LANAI FOR ADDITIONAL RELAXATION, GRACES THE VERY PRIVATE BACK YARD. BE SURPRISED BY THE LARGE TWO-SIDED FIREPLACE IN THE FAMILY ROOM AND LIVING ROOM, WITH BEAUTIFUL BRICKWORK SURROUNDING BOTH SIDES. This home is situated on a very private street, near fabulous shopping, Lake Murray and all it has to offer, walking distance to well-respected Green Elementary, hike at nearby Cowles Mountain, golf just around the corner,and find yourself literally 20 minutes to Mission Valley fine dining and shopping, downtown San Diego and Gaslamp District. And so much more…

Homeowners whose mortgage debt was partly or entirely forgiven during 2007 may be able to claim special tax relief by filling out newly-revised Form 982 and attaching it to their 2007 federal income tax return, according to the Internal Revenue Service.

Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, enacted Dec 20, taxpayers may exclude debt forgiven on their principal residence if the balance of their loan was less than $2 million. The limit is $1 million for a married person filing a separate return. Details are on Form 982 and its instructions, available now on IRS.gov.

“The new law contains important provisions for struggling homeowners,” said Acting IRS Commissioner Linda Stiff. “We urge people with mortgage problems to take advantage of the valuable tax relief available.”

The late December enactment means that reporting procedures for this law change were not incorporated into tax-preparation software or IRS forms. For that reason, people using tax software should check with their provider for updates that include the revised Form 982. Similarly, the IRS is updating its systems and expects to begin accepting electronically-filed returns that include Form 982 by March 3. The paper Form 982, however, is now being accepted.

The new law applies to debt forgiven in 2007, 2008 or 2009. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, may qualify for this relief. In most cases, eligible homeowners only need to fill out a few lines on Form 982 (specifically, lines 1e, 2 and 10b).

The debt must have been used to buy, build or substantially improve the taxpayer’s principal residence and must have been secured by that residence. Debt used to refinance qualifying debt is also eligible for the exclusion, but only up to the amount of the old mortgage principal, just before the refinancing.

Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the new tax-relief provision. In some cases, however, other kinds of relief, based on insolvency, for example, may be available. See form 982 for details.

Borrowers whose debt is reduced or eliminated receive a year end statement (Form 1099-C) from their lender. For debt canceled in 2007, the lender was required to provide this form to the borrower by Jan 31, 2008. By law, this form must show the amount of debt forgiven and the fair market value of any property given up through foreclosure.

The IRS urges borrowers to check the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect.

Historic Fed Move Cuts Both Ways for Borrowers « We love San Diego!

Hot on the heels of its surprise inter-session rate cut of 75 basis points last week, the Federal Reserve cut key interest rates again, the fifth straight cut since September 2007. In its statement last week, the Fed said it had decided to cut the federal funds rate “in view of a weakening of the economic outlook and increasing downside risks to growth.” In other words, economic data suggests the US is on the brink of recession, and the Fed is acting accordingly.

Who benefits from this cut?
If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit (HELOCs) and variable rate charge cards are the types of loans that will have an interest rate reduction on their next statement.

What does this mean for long-term rates?
Long-term mortgage rates could actually increase after yesterday’s cut, based on historical performance and recent trends.

So if you’re waiting for long-term rates to fall further, don’t count on it. Your best chance to lock in the lowest rates since 2005 is now. Getting your application in process now will allow you to capture a great rate before it’s too late.

What REALLY moves mortgage rates?
Fixed-rate mortgage rates aren’t directly tied to Fed interest rate moves. Instead, they tend to follow in the direction of other long-term government bond yields, such as the 10-year Treasury, which historically moves in accordance with the economic outlook and in advance of Fed actions. The performance of Mortgage Backed Securities, issued by Fannie Mae and Freddie Mac, is what really determines long-term mortgage rates.

How does the economic stimulus package fit into the picture?
The economic stimulus package from Congress and the White House could be a double-edged sword for borrowers. Combined with recent Fed actions, the package could create inflation and bring about higher long-term interest rates.

On the positive side, conforming loan limits are likely to be raised from the current $417,000 to upwards of $625,000. This means great potential savings for purchase and refinance candidates who live in 20 high-cost areas across the country.

What should you do next?
If you’re unsure how the rate-cut or the proposed legislation affects your mortgage, don’t worry, you’re not alone. There’s no one-size-fits-all answer. Give us a call right away. We’ll review your mortgage and see what, if anything, can or should be done to make the most of your individual financial goals and needs. Call me and I can help!

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Saturday, September 9, 8:30 P.M. at the Chabad Educational Center 10785 Pomerado Road Scripps Ranch, San Diego, CA 92131 Chabad of San Diego and the San Diego Jewish Music Festival invite you to join us as we re-create the music and the magic of a by-gone era in a contemporary celebration of the High Holiday season. Winner of international music competitions in Moscow and Israel, the “Hasidic Cappella,” a versatile 22-member choir, performs a wide range of Jewish vocal music, from Russian folk songs to Jewish liturgical music, classical and modern Israeli compositions.They have recovered, and brought to public performance, music manuscripts once confiscated from synagogues and Jewish ensembles by the KGB. Under the artistic direction of Alexander Tsaliuk, they have toured throughout Europe and the United States, performing with many renowned Cantors, such as Cantor Joseph Malovany of New York, and performed for Scandinavian royalty as well as for unique commemorations such as the 60th Memorial of the Warsaw Ghetto in Poland.