THE TRUCKEE~TAHOE LIFESTYLE

WE HAVE IT ALL

Bonnie Jessee

530 412 3984

http://www.welcomehometruckee.com

Folks who haven’t been to Truckee lately are probably in for a big surprise.  Our formerly ‘small’ mountain town is on the ‘map’ thanks to the beauty of the area and an incredible abundance of activities.  While Truckee’s population hasn’t changed all that much and we still love our small town feel; we have new golf courses, improved ski hills, new town parks and recreation areas being built and the soon to be open, Ritz Carlton, in addition to numerous other new resorts, all for the pleasure of locals and guests alike.

In actuality Truckee survived after the railroad and lumber industries only because of the brainstorming of locals who loved it here and wanted to see the area grow and prosper.  Hence, the ice palace was born; along with a skating rink, toboggan run, ski jump and music festivals.  The idea of economic gain gleaned from winter sports was at the time, unheard of.  And now ~ there are so many more incredible activities to choose from ~ including boating, rock climbing, hiking, and on and on!

Come and join us ~ let me assist you in finding that perfect ‘lifestyle’ home from which to enjoy the clean blue skies and never-ending vistas of beauty!  Who knows?  You might be one of the ones that just never leave again.

Bonnie Jessee 530 412 3984

ON THE WATER AT LAKE TAHOE AND

DONNER LAKE

                 Bonnie Jessee, Realtor 530 412 3984www.welcomehometruckee.com

Yes, it is that awesome!  Clear depths that take your breath away, clean clear views to the surrounding mountains at either lake and for me in any case, even after decades, an incredible respect for the beauty.

Boating on Lake Tahoe can be experienced in various fashions, depending on your preference.  There is of course power boating, waterskiing and jetskiing.  Starting in the 1800’s power boating became and has been a favorite of the visitors and residents alike!  Wooden boats which are called ‘woodies’ became very popular and as sweet water boats and are still a part of the everyday scene.  Sailing ~ well, if you have an affinity for sailing there doesn’t need to be much said!  Get out there when the power boats are hampered by the winds and fly across crystal clear big blue…kayak or canoe, whatever your preference you will not be disappointed.  At Lake Tahoe rentals of every kind are readily available as well as professional guides.

The result of your day on the lake will be a truly enhanced perspective of this spectacular area and it will become a memory of a lifetime.

Boating on Donner Lake opens even more aspects for adventure!  Of course not as large as Lake Tahoe, (but just as cold) boating on Donner Lake is a visitor and residents regular pastime.  Any kind of boating, sailing, kayaking, canoeing can be thrilling at Donner Lake and there is a public launch available.  Along the sunny side (north) of Donner Lake there are numerous public piers from which you can tie up your boat and swim near the shore (where the water is slightly warmer)!

Your concept of Donner Lake and Lake Tahoe will be dramatically changed when you check out these lakes from deck of the boat ~ and for you “fisher people’ ~ have a great time.

Oh, and call me after your fantastic day to search out that perfect vacation home so your friends and family can join you the next time.  Bonnie Jessee, Realtor 530 412 3984

WHAT ARE THE TAX DEDUCTIONS FOR SECOND HOME OWNERS?

Bonnie Jessee, Realtor

530 412 3984

I like to believe that my buyers understand the best tax moves when it comes to structuring their real estate investments, so when writing this article I will assume that my friends and clients have some knowledge; however, not all. It’s not unknown that one can itemize expenses associated with owning a second home such as interest, taxes, upkeep, management fees, etc.

There are a few cloudy areas, however, that the Internal Revenue Service wants to be sure you are aware of before your tax person files that return. Do you completely understand the different between a second home and investment property?  This is typically the area where folks can get confused.  If you have tenants renting this property for a year at a time, it is NOT considered a second home. To qualify, you must spend time at this property for at least two weeks a year or at least 10% of the amount of time the property is rented out.   Also, before you itemize in this way, you might want to make sure that the standard deduction isn’t the most financially equitable way to go. In some cases being involved fractional ownership, it is more advantageous to take the standard deduction.

Just last week, a friend/client of mine and I were talking and I mentioned the second home deduction also applying to their new RV! That’s correct. Since they purchased a RV that has a kitchen, bathroom and bed, it can be designated as their second home and the interest, taxes and storage charges can be itemized deductions used for their benefit. If you have more than one second home, remember that you can only select ONE property to use for scheduling deductions each year.

Always utilize the professional services of your CPA or tax preparer each year to make sure you are in compliance with the current allowable deductions to avoid conflict with the IRS.

Happy Deductions!  Call me to check out some absolutely beautiful properties!

Bonnie Jessee, 530 412 3984

Escrow Exposed~Everthing You Wanted To Know!

Bonnie Jessee 530 412 3984

Escrow is not an everyday word for most of the population. It can be confusing as a word because in a real estate transaction it can mean many things.

When you made an offer on your new home,  you wrote an earnest money check that was to be placed in “escrow,” which meant it was to be given to an impartial third party while you and the seller negotiated a purchase contract. Your Realtor probably took care of creating this escrow.

Now your lender (bank) is talking about creating an “escrow” account, also called a “reserve” or “impound” account, where money for property taxes and homeowner’s insurance will be held.  The lender may have an in-house department that handles this type of escrow.

Even more confusing is that the “closing of escrow” is being described by someone called an escrow officer.

All of the above are accurate uses of the word. An escrow is something of value such as your earnest money check, or documents such as your purchase and sales agreement, that are given to an impartial third party to hold until specific conditions are met. When everything is finished — everybody paid and the deed recorded with the county, the escrow will close.

If you remember nothing else about the word escrow, remember the concept of the impartial third party — someone with nothing to gain or lose from your real estate transaction. Depending on where you live, that third party — an escrow agent, title agent, or closing attorney — is the person handling your escrow process.

They will juggle all incoming paperwork and money from buyers, sellers, agents, lenders, and assorted others. They will arrange the title search, give each party instructions, schedule the closing meeting, disburse all funds, and see to it that everything that needs to be recorded with the county is completed. 

Hold-Back Monies

There are circumstances when funds will continue to be held in escrow after the ownership transfers to the buyer.

For example, perhaps you’ve agreed to let the seller’s family stay in the house for another week until school is out. You signed a “rent back” agreement, and under its terms the seller is paying you a daily rate to stay in the house.  You likely were advised to have the escrow agent hold back a portion of the seller’s proceeds until they’ve moved out and left the house in the condition specified in your contract.
 
Or perhaps you found something requiring repairs on your final walk through the house. The seller agreed to make the repair, but the work couldn’t be completed by closing day. Money is then held back in escrow to cover the cost.

If you’re purchasing a new home, it is quite common to have funds held back in escrow until unfinished work is complete. 

Close of Escrow

When buyer and seller have signed all the paperwork and all the funds have come in, the closing agent disburses the funds and oversees the recording of the documents with the county.
When the deed is filed, title to the property is transferred to you, the new owner. The deal is complete. Escrow has ‘closed’.

You and the seller will receive a final closing statement and other documents in the mail.  Check the statement carefully and call the closing agent immediately if you spot an error. File the statement with your most important papers. You’ll need it when you file your next income tax return.

The Business Cycle and Buying a Home ~ Home Buying Advice

How to Time Your Home Purchase to the Market Cycle?

Bonnie Jessee, Realtor

530 412 3984

Ah, if only we had that special real estate crystal ball!  Then timing your purchase to the cycle would be an easy task!

Attempting to time your purchase to the “business” cycle is sometimes getting lucky and sometimes paying attention to the small signs.  Even economic advisors and consultants have inconsistencies accurately predicting the future economy. Even when these experts are relatively successful, the real estate market does not necessarily move in tandem with the economy as a whole.

Part of the reason is the timing and inconsistency of interest rates.

During periods of economic growth, interest rates are generally higher. Therefore fewer people can afford to purchase a home or second home unless they are cash purchases. When the economic situation is slower, interest rates fall, and more people can afford to purchase a home by obtaining a mortgage.

As you can see, this cycle does not move in conjunction with the remainder of the economy. It is also influenced by levels of employment, pay scales of various jobs, and consumer outlook for the future. Such facts make it difficult to know ~ ahead of the time ~ whether the housing market is going to be a wise investment.

The best advice is to preview the market where you intend to purchase, deal with a professional Realtor®, and plan on holding for as many years as possible. 

Unless, of course, you have a crystal ball!

The Differences Between REALTORS® & ‘Real Estate Agents’

Bonnie Jessee, Realtor® 530 412 3984

People use the terms REALTOR® and real estate agent interchangeably, however, this is not appropriate or correct. There are many differences between REALTORS® and real estate agents. The names alone are similar. Although both are licensed to sell and or list real estate, the basic difference between a real estate agent and a REALTOR® is that a REALTOR® is a member of the National Association of REALTORS®. Therefore, the main difference that we hear a lot about and might be confused by is that a REALTOR® must subscribe to the Realtors Code of Ethics. But what does this mean to you as the consumer or client of either?

The Code of Ethics is strictly enforced. It contains 17 Articles and various underlying Standards of Practice.

These are not ‘suggestions’ but rather rules that REALTORS® are sworn to uphold and adhere to at all times under all circumstances. The Standards are much more restrictive and confining as to conduct than those governing ‘real estate agents’ who simply hold a real estate license. Of course, there is no guarantee that all REALTORS® are morally and ethically better than unaffiliated real estate agents, it is a goal set by the industry to regulate and of course deserves recognition.

Here are 17 things that a REALTOR® promises, that a ‘real estate agent’ is not sworn to.

1) Pledge to put the interests of buyers and sellers ahead of their own and to treat all parties honestly and fairly.

2) Shall refrain from exaggerating, misrepresenting or concealing material facts; and is obligated to investigate and disclose when situations reasonably warrant.

3) Shall cooperate with other brokers / agents when it is in the best interests of the client to do so.

4) Have a duty to disclose if they represent family members who own or are about to buy real estate, or if they themselves are a principal in a real estate transaction, that they are licensed to sell real estate.

5) Shall not provide professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.

6) Shall not collect any commissions without the seller’s knowledge nor accept fees from a third-party without the seller’s express consent.

7) Shall refuse fees from more than one party without all parties’ informed consent.

Shall not co-mingle client funds with their own.

9) Shall attempt to ensure that all written documents are easy to understand and will give everybody a copy of what they sign.

10) Shall not discriminate in any fashion for any reason on the basis of race, color, religion, sex, handicap, familial status, or national origin.

11) Expects agents to be competent, to conform to standards of practice and to refuse to provide services for which they are unqualified.

12) Must engage in truth in advertising.

13) Shall not practice law unless they are a lawyer.

14) Shall cooperate if charges are brought against them and present all evidence requested.

15) Agree not to bad mouth competition and agree not to file unfounded ethics complaints.

16) Shall not solicit another REALTOR’S client nor interfere in a contractual relationship.

17) Shall submit to arbitration to settle matters and not seek legal remedies in the judicial system.

The National Association of REALTORS® was founded in 1908 and has more than one million members

NEGOTIATE LIKE A PROFESSIONAL – TRUCKEE REAL ESTATE

Bonnie Jessee 530 412 3984

Either working alone or working with your Realtor, negotiating can make you want to ‘get away’.  The seller’s may feel the same way, as might your Realtor!

However, in the goal of a successful purchase and closing, we can learn from the problems encountered during our first situation and negotiate a deal that leads to a satisfactory conclusion for all involved. Good negotiating is certainly not about ‘beating’ up the other side; rather it is about knowing and understanding the seller’s motivations and your own motivations, and concluding a deal that satisfies you both.

Beginner’s potential mistakes and how to avoid them.

Price is the only concern
Terms can matter more than pricing!  One might negotiate quite a bit of value into a contract besides the purchase price, so think about the best closing date, determining who would be motivated to pay closing costs, any personal items you might like the seller to leave behind, and options or upgrades for a newly constructed home – as well as any other thoughts on timing or additional terms.

Time is of the essence
Have your financing in order from the start of your house-hunting, and be ready to write immediately on the home you want. Make a firm, direct and clean offer to a motivated seller, including in your offer a time limit for a response, and you might get precisely the terms you asked for.

The immediate response
Yes, you want to move swiftly, however, never respond verbally to an offer or counter offer. Ask for it in writing, and respond in writing.

Lowball offers ‘just to see’ where the seller is
If you want a seller to reduce your purchase price, have factual reasons besides the amount of money in your bank account. For example, the market is down, the roof and carpeting needs replacement, or perhaps other similar homes in the neighborhood sold for substantially less than the current asking price on your choice. Increase your negotiation position by being prepared to justify your request.

Making the assumption the price is as asked
You might have heard, for example, that there’s no price negotiation room on pricing for new construction. Or you might think that there’s no way the seller would leave behind that fabulous grand piano. Not always so! Ask for what you want and be willing to be flexible on other requests.

Making it “personal”
The seller reacts to your offer by getting frustrated and yelling,  or oozing condescension and calling you honey or;  pretending he doesn’t understand it "Did you really mean this number right here? This must be a mistake."

Some experienced negotiators will try to set you off guard on purpose; others may just be rude. But stay calm and be consistently direct. Ask the seller to be specific about any terms he or she might not be comfortable with and to make sure you understand exactly what he means, ask questions!  If the seller appears to be totally uncooperative, be prepared to walk away from that particular house. Your philosophy so always be ~ This is business, and there are other houses from which to choose.

Waking, sleeping and totally focusing your being on this purchase
Of course you are working hard at negotiations and you should keep your cell phone on.  However, remember to take care of your physical and emotional self as well.   Staying calm, under control and consistent will assist to make this a smoother transaction and a pleasant experience for all.

Down Payment Assistance Planning Bonnie Jessee, Realtor

Truckee Real Estate

530 412 3984

We have all been taught to follow the rules that it is best to put down 20(%) percent on the home you are buying (or the loan you are obtaining). With a 20 (%) percent down payment, you will secure a loan on the best terms, without paying private mortgage insurance (PMI) or the FHA equivalent of PMI, also known as MI, and typically obtain a lower monthly or annual interest rate.

And as housing prices stabilize in most states, coming up with that kind of cash can be difficult for first time buyers.  Most first-time buyers don’t have 20(%) percent to put down on a home. Many buyers are attempting to get in to a property with as little as 3(%) percent to 10(%) percent.

While getting a 100 percent loan (no down payment necessary) is still possible, it can be difficult to find a good lender who will do it at a reasonable cost. And we know that getting that 20(%) percent down payment is important.

In conjunction with saving as much as possible for that 20(%) percent down payment there are other options to consider:

401K MONIES. If you work for a company that offers a 401(k) plan, it’s in your best interest to fund it to the maximum allowed for your income. Not only will you be able to tap into the power of compounding (and have your money work harder for you), but you’ll be able to more quickly build a sizeable nest egg for your retirement. When it comes to borrowing from a 401(k) plan, not every company allows it. Check with your plan administrator to see if your company will allow you to borrow, if there are limitations on what you can do with the cash, and what the interest rate will be on the money you borrow. You should also be aware that you’ll typically need to repay this cash within 5 years. But if you should leave the company, or be fired, you’ll need to repay the cash within 60 days, or it will be considered a withdrawal (and you’ll owe federal income taxes on that money along with a 10 percent penalty, if you’re under the age of 59 1/2).

IRA MONIES (UP TO $10k).  If you have an individual retirement account (IRA), the IRS allows you to withdraw up to $10,000 for the purchase of a first home. (For those of you who have purchased a home before but haven’t owned a home in the last 3 years, you’re considered to be a "first-time buyer" for this specific purpose and can make a withdrawal). When you withdraw cash at any time from a tax-deductible, tax-deferred IRA, you’ll owe federal income taxes on the amount you’re withdrawing at your current marginal tax rate. However, if you’re withdrawing for the purchase of a first house, you will not owe the 10 percent under-age penalty if you’re less than 59 1/2 years old.

Gifts. If you’re buying a house, your parents, siblings, other relatives or friends can give you a gift of funds to be used toward your down payment. However, for a lender to accept that this is a gift, and not a loan, you’ll need your friends and family to sign a gift letter that states that this cash is a gift and does not need to be repaid. That letter will become part of the documents that you provide to the lender who will be approving your loan.

Rent-to-own or lease/options. If you don’t have enough cash in your IRA or 401(k), and you can’t get your lender to give you a 100 percent loan, you might put your plans to purchase on hold for a year or two and find a seller who is willing to do a rent-to-own or lease/purchase arrangement for his or her property. Often, the seller will provide down payment assistance by giving you a credit for a portion of your monthly rent payments. In a year or two, you can easily build up a 5 to 10 percent down payment, depending on how much of a rent credit you’re given. For example, if you pay $1,000 per month, and the seller gives you a 20 percent credit, $200 per month will accrue toward a down payment on the property. After a year, you’ll have $2,400 for your down payment. If you’re going to go down this path, be sure to work with a real estate attorney who can help you negotiate the fine print. You may want to negotiate the purchase price of the property upfront, and you will definitely want to include the down payment credit terms as part of the lease.
 

TRUCKEE REAL ESTATE~INTEREST RATES ARE DOWN

HOME SALES ARE UP

Bonnie Jessee, Realtor

530 412 3984

Mortgage interest rates are down, while sales of existing homes are up - a welcome eventuality for consumers and real estate professionals. The awaited increase in sales is an important event, carried by all major news media. At this writing, the average rate for a 30-year, fixed-rate mortgage is 5.85 percent, down from 6.13 percent just a week ago. Last year at this time, the average interest rate was 6.16 percent. Borrowers pay an average of 0.4 points (percentage of loan).

"Mortgage rates fell as various actions were taken to improve market liquidity," said Frank Nothaft, chief economist for Freddie Mac, a major government-sponsored buyer of existing mortgages. "Also, the inflation report from the Consumer Price Index reflected weaker price increases than expected. It reported no change in February, including food and energy costs. That’s the first time the CPI did not report a monthly increase since November, 2006."

The lowering of rates sparked a sharp increase in the number of mortgage applications for home purchase transactions and refinances, according to a report from the Mortgage Bankers Association. "The Federal Reserve acted to bring stability to the mortgage-backed securities market and we saw an immediate impact with a drop in mortgage rates," said Jay Brinkmann, MBA’s VP of research.

Existing home sales, including single-family homes, townhomes and condominiums, rose 2.9 percent to a seasonally adjusted annual rate of 5.03 million units in February. That’s up from 4.89 million units in January. "We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing," said Lawrence Yun, chief economist for the National Association of Realtors. "Buyers are taking advantage of higher loan limits for both FHA and conventional mortgage, thus unleashing some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year."

About half of the nation’s metro areas are now showing home price increases, with healthy gains in some markets, he added. "In some areas, a recent rapid price decline has induced buyers to come into the market, and sales are now rising. The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers." Sales of existing single-family homes increased 2.8 percent in February, while sales of existing condominiums rose by 3.7 percent.

COURTESY OF SIERRA MOUNTAIN MORTGAGE, TRUCKEE, CALIFORNIA