New Perspective on Foreclosures

Sign Of The Times - Foreclosure
Image by respres via Flickr

There is a new may of thinking about foreclosure for the American homeowner,  especially the homeowner who is not in financial distress and is able to pay the mortgage payment.  These homeowners are viewing their homes as bad investments and are choosing to walk away rather than pay for years on a property that may never be worth what they owe.  Take a look at this video from the Today Show where homeowners who are doing just that, and notice the shift from the “guilty feelings” that generally go along with such a decision.  http://today.msnbc.msn.com/id/26184891/vp/36661157#36661157

I am not advocating a position either way on a “Strategic Foreclosure”, but rather, just wanted to make note of this amazing paradigm shift and what it may mean in this economic crisis.

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Move to Lake Tahoe and Bring Your Low Property Tax Base With You

Hot news for people 55 or over who are selling a house in another county of California and want to keep their low property taxes.  This is  a big deal.   Until recently this strategy was not available to residents outside of El Dorado County.  With this change you can transfer from any county within California to El Dorado County. 

My husband and I just were successful in utilizing Prop 90 within El Dorado County.  We sold a home and were able to keep the old property tax base on our new home.  It was a bit tricky because we sold our house and were in the process of building the replacement home and would not know the value until later.  The new house needed to be valued by the assessor at an equal or lower value in order to qualify.   We just heard from the County that we were successful.  It is generally not that much of a gamble.  If you sell a house and buy a new one, it is much easier to know that you qualify.  I am including the link to the El Dorado  County’s website http://www.co.el-dorado.ca.us/assessor/prop90info.htm.

On December 10th, 2009, the Board of Supervisors approved the introduction and 1st reading of the Proposed Prop 90 ordinance. On December 15th, 2009 the Board adopted the ordinance after its second reading. The proposed ordinance will have an estimated effective date of February 12th 2010, which is 60 days after the adoption.

As the ordinance is currently written and based on Revenue and Taxation Code Section 69.5 (Prop 90), in order to qualify for a base year transfer:

  • The replacement residence must be acquired after the effective date of the ordinance allowing base year value transfers from other counties.
  • As of the date of transfer of the original property, the claimant or the claimant’s spouse is at least 55 years of age or severely and permanently disabled. There is no age requirement for persons who are severely and permanently disabled.
  • The claimant and/or the claimant’s spouse has not previously been granted the property tax relief provided by section 69.5. The sole exception to this requirement is if relief was first granted for age, relief can be granted a second time if the claimant or claimant’s spouse subsequently becomes severely and permanently disabled, and has to move because of the disability.
  • The original propertywas eligible for the homeowner’s exemption or the disabled veterans’ exemption either at the time it was sold or within two years of the purchase or new construction of the replacement dwelling.
  • As a result of its transfer, the original property must (1) be subject to reappraisal at its current full cash value in accordance with sections 110.1 or 5803; or (2) receive a base year value determined in accordance with section 69 (intracounty disaster relief), section 69.3 (intercounty disaster relief), or section 69.5 because the original property qualified as a replacement property under one of those sections.
  • The replacement dwelling is purchased or newly constructed within two years of (before or after) the sale of the original property.
  • The replacement dwelling must be eligible for the homeowner’s exemption at the time the claim is filed.
  • The replacement dwelling must be of equal or lesser value as compared to the original property. This means that the full cash value of the replacement dwelling on the date of purchase or completion of new construction must not exceed:
  1. 100 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed prior to the date of sale of the original property,
  2. 105 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the first year following the date of the sale of the original property, or
  3. 110 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the second year following the date of the sale of the original property.The “full cash value of the original property” includes any inflationary factoring that occurs between the sale of the original property and the purchase of the replacement dwelling. The “full cash value of the replacement dwelling” does not include any inflationary factoring.
  • If the original property was substantially damaged or destroyed by misfortune or calamity and sold in its damaged state, the full cash value is determined immediately prior to the misfortune or calamity.
  • The claimant must file a claim for property tax relief under this section within three years of the date the replacement dwelling was purchased or the new construction of the replacement dwelling was completed.

Why Do I Live In Tahoe?

 

When I talk to people who live in Tahoe who are looking forward to moving away, I am amazed.  How can anyplace be better than Tahoe?  My whole family gets so excited when it snows and it is cold and travel is difficult and the snow builds up on the sides of the road and in the yard.  That means the skiing is good or even great.  I love living in Lake Tahoe, all year long.  From the winter skiing, springtime days warming up, long warm (not hot) days in summer and what about those spectacular autumn days.  That’s when  the bugs are dead  the trails aren’t dusty and certainly not crowded.   I took this photo on my phone on a wonderful ski day with my husband when other people were complaining about the hassle and mess of “all that snow”.

 

I Love My Job

I have had the recent pleasure of helping several families purchase their first homes. There is nothing more rewarding in my job as seeing the excitement that accompanies moving into your first home. This is the silver lining in the real estate market. Market conditions and historically low interest rates have created a high affordability index which is over 55%. That means that over half of the Californian population can qualify to make the payments on a home. Combine that with the recent extension of the first time home-buyer credit from the feds and we have a great time to be a first time home buyer.

I am loving the fact that I can be part of the process that places these first time home buyers into homes where they can put down roots and raise their families. Especially when their children will grow up here in Tahoe with my grandchildren – watch out when they start to ski.