www.welcomehometruckee.com

Lake Tahoe, California

WAITING FOR THE BOTTOM TO DROP OUT on HOME PRICES? 

Bonnie Jessee 530 412 3984

Whenever the market slows and prices decline as they sometimes do in certain areas, I have noticed some buyers are extremely tempted to wait on the bench to find that incredible bargain in terms of price, location and whatever other amenities you are searching for.

My professional advice is to not let yourself be tempted for too long!  Keep these things in mind - when prices turn, interest rates usually follow the upswing.  A home that appeared to have a bargain price and great financing can lose both those advantages as quickly as overnight.  Remember also, once the market has truly turned upward, history tells us it is likely not to descend again and if so that time period could be decades.

Also, there are considerations other than money when making that very important decision to purchase.  If you have found the home for your own future and the future of your family, risking the potential loss over a few hundred or even a few thousand dollars just isn’t worth it!

Purchasing your vacation or second home isn’t all about financial issues of course.  It means living your dreams and those of your family.  Waiting for the bottom might find you buying on the upswing! 

Please call me anytime and allow me to share our current market information with you.

Bonnie Jessee 530 412 3984

www.welcomehometruckee.com

ON A CLEAR DAY…

HIKING LAKE TAHOE AND TRUCKEE

Bonnie Jessee, Realtor www.welcomehometruckee.com

530 412~3984

Perhaps you are a little bit like me and don’t do marathon hikes!  But when I do have an hour or two there are fabulous places to take short distance and family hikes.  Here are just a few…

Paige Meadows in Tahoe City is a beautiful hike with a pathway connecting a series of meadows.  Twin Peaks is visible and the trails are lined with wildflowers and beautiful aspen trees.  Be certain to stay on pathways however, it has a reputation of being Tahoe’s Bermuda Triangle.

Martis Creek Wildlife Area in Truckee is a family friendly and dog friendly trail system which runs through a fabulous wetland area.  There is lots of wonderful wildlife to view for novices and seasoned viewers.  Take the long way or make it a lunch hour hike.

Eagle Rock in Tahoe Pines on the west shore of Lake Tahoe is one of my all time favorites.  It can be pretty steep however the paths are well worn and it is a 15 minute hike to the incredible volcanic rock outcropping.  Once you are there you will be amazed at the views!

Fallen Leaf Lake in South Lake Tahoe has numerous wandering trails around this neighbor lake and can be accessed thru Fallen Leaf Campground or the Angora Ridge Road.  Take a long or short hike – family friendly!

Spooner Lake on the East Shore of Lake Tahoe will give you lush, flowing meadows, delightful aspen groves and wildflowers.  It’s about a two mile hike all the way and you just might begin to believe in wood gnomes after taking this trail!

Happy Trails ~ contact me at any time for your real estate needs ~ Bonnie Jessee, 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.

Check out your new tax deduction at www.welcomehometruckee.com

Thanks!

Happy Deductions!

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

TRUCKEE REAL ESTATE~THE "DON’TS" OF NEGOTIATION FOR BUYERS!  WHAT A BUYERS REPRESENTATIVE WILL TEACH YOU AND WHAT YOUR BUYERS REPRESENTATIVE SHOULD NOT DO!

Bonnie Jessee, Realtor

530 412 3984

Don’t Make Negative Comments

 Don’t even bother trying to justify a very low offer.  The sellers and their listing agent already know the negatives of the property and have priced it accordingly.  If it hasn’t been priced properly for the location, lack of amenities and required repairs, your buyer’s agent will probably not even have shown you the property in the first place.  Negative comments will not get a lower price!

Don’t Consider What the Sellers Paid or How Long in Residence

Market value is what it is at the time the property is listed for sale.  It is of no consequence to you the buyer how much the seller might be making (or losing) on the home. When you decide to sell the very same home, you will not be willing to take less than your home is worth due to appreciation would you?

Don’t Disregard the Seller’s Desires~When Reasonable

Your buyer’s agent should know the hot buttons – timing, pricing, and lack of contingencies.  Your buyers agent will assist you in making a fair and reasonable offer based on your position that including the position of the seller.  You should know that considering the sellers wants and needs, can make a huge difference in an offer being accepted or rejected.

Don’t Bother With an Extremely Lower Offer

What I mean is that extremely low~balling the seller of a fairly-priced property can be a waste of everyone’s time.  And; if the property is overpriced you would be working against a seller who is unreasonable (and uneducated) and chances are that they will not accept your lowball offer in any case.

Don’t Be Inflexible

How severely does it really affect you if the seller needs a rent-back or needs to close a little bit early or a little later? Will it make or break the deal for you?  Be considerate and do consider all the options.  You aren’t ‘losing’ the game because of a few annoyances but you could lose the home!

Don’t Disregard Ethical and Normal Practices

 You want your buyer’s representative to present you, the buyer, in the best light as a sophisticated and knowledgeable buyer.  This prepares the way for a smooth transaction between buyer/seller and agents. If you know your offer will be out of the ordinary for the area, have your agent call the listing agent ahead of time to explain that they understand the terms might be unusual and/or why you need the unusual terms why your offer should be accepted despite being somewhat unusual. 

Don’t Assume Your Deal is “IT”

It isn’t your property until your initial offer has been accepted, regardless of how good the offer might be.  Don’t assume you are done until such time as you are completely done with the transaction!

Don’t “Haunt” the Property

If this home/property is meant to be yours, you and your agent will make it happen.  My advice is not to ‘haunt’ the home, Open Houses, and never ‘haunt’ the listing agent. If you need to haunt anyone, haunt your own buyer’s agent~Realtor. She understands the situation and that is part of the job your buyer’s agent does for you, the buyer!

Happy Home Hunting and Have Fun!