Best Realty's Lake Oroville Real Estate Blog

For all of those who are renting and may be considering buying a home..this article,  from California Association of Realtors, has very good information in it. If you are looking for real estate in the Lake Oroville – Oroville area, there are some awesome deals right now making it more affordable to own your own home than to rent. 
Renting Versus Buying: 2011
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This year California housing market conditions make a strong and compelling case for homeownership. With prices still well below the historic highs of just a few years ago and attractive mortgage rates, qualified buyers have a unique opportunity to own their own home. As seen below, a rigorous analysis of renting versus buying hears this conclusion out. As shown in the following chart, the monthly housing costs (principle, interest, taxes, and insurance or PITI) associated with buying a median-priced home of $301,430 is $1,590 (Fourth Quarter 2010 median priced home in California).  This assumes the buyer is making a 20 percent downpayment and financing with a 30-year fixed rate mortgage at 4.62 percent. In comparison, the median rent on a three-bedroom two-bath apartment with renter’s insurance in California is $1,810. That means buying a home would save the homeowner $220 per month when compared to renting and the homeowner would save over $2,600 a year.
                        click on graph for larger view  
In addition, existing tax laws allow homeowners to itemize and deduct the mortgage interest and property taxes from their taxable income. For example, compare the tax implications for two households both earning $63,430 a year, the minimum income required to purchase the statewide median-priced home of $301,430.* The household that purchases the home with a 20 percent downpayment and finances the mortgage at the current rate of 4.62 percent will receive a tax deduction of over $14,000 in the first year of ownership. The renter household will most likely utilize the IRS Standard deduction of $11,400, $2,600 less than their homeowner counterparts. The homebuyer reduces their total tax liability by $400 compared to the renter in the first year of ownership. Accounting for the out-of-pocket savings as well as the tax savings, the homebuyer saves over $3,000 in their first year of ownership.
                         click on graph for larger view

The mortgage rate is a significant factor in determining just how much a homebuyer can afford. Today’s low mortgage rate environment tips the scale—for some—in favor of buying versus renting. For a home priced at $400,000, with a 20 percent downpayment and a 4 percent mortgage rate, the monthly PITI will be $1,990 for the homebuyer. The monthly PITI jumps to $2,180 at 5 percent and to $2,380 at 6 percent. For each one percentage point increase in the mortgage rate, the payment goes up by almost $200 under these assumptions. Even for a lower priced home at $200,000, the difference in the monthly payment is significant as each percentage point rise in the mortgage rate tacks on $100 to the monthly PITI.
                       click on graph for larger view

Of course, there are many other socioeconomic benefits that homeownership brings to communities. And there are other costs associated with homeownership above and beyond the downpayment and monthly PITI. So as long as one has considered all of the costs and benefits of owning a home and is in the financial position to do so, there are some pretty compelling reasons to strive for the “American Dream.”
Other resources you may find useful for your clients:
NY Times Interactive Rent versus Buy calculator:
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
Bankrate.com’s questionnaire for potential homebuyers on whether or not to buy a home:
http://www.bankrate.com/calculators/mortgages/rent-or-buy-home.aspx
The National Association of REALTORS® resources for clients on renting versus buying:
http://www.realtor.org/library/library/fg301
 
*Assumptions:
1. Underlying assumptions for the Mortgage Interest Deduction and Property Tax (1 percent of the purchase price) deduction are based on the Traditional HAI Q4-2010 assumptions of: The prevailing median price in the 4th quarter 2010 (Median Price $301,430), effective FRM interest rate of 4.62%, a 20% downpayment, and a $241,144 loan amount.
2. Incomes are based on the underlying assumptions for the Traditional HAI. The same income is used for both Renters and Buyers and is assumed to be the Minimum Qualifying Income needed to purchase a median priced home in the 4th quarter 2010.
3. Tax rate based on 2010 IRS Schedule Y-1 Married Filing Jointly in 15% tax bracket (latest available from the IRS) assuming no changes over the 5 year horizon
4. Interest deduction based on the Traditional HAI Q4-2010 underlying effective FRM interest rate
of 4.62%, a 20% downpayment, and a $241,144 loan amount.
5. Property taxes are assumed to be constant over this 5 year analysis, thereby assuming the underlying market value remains unchanged. If the home value were to increase, under Proposition 13, the property tax assessment would increase at a rate of 2 percent per year. Along these same lines, income is also assumed to be constant over this 5 year analysis in order to keep the analysis simple and determine the basic 5 -year tax benefit of buying a home in 2010.

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I am re-posting this information for all of the homeowners and landlords out there.  As a real estate professional in the Lake Oroville area, I will try to make sure that you are advised of important changes that could affect your real estate investment.  I hope you find this helpful!
California Law Now Requires Carbon Monoxide Detectors
Owners of California dwelling units, especially rentals, that have (i) a fossil fuel-burning heater, appliance or fireplace (for example, a gas stove or water heater) or (ii) an attached garage, need to be aware of a new law passed in 2010 regarding carbon monoxide devices.  Under newly-enacted sections 17926, 17926.1, and 17926.2 of the Health & Safety Code (part of Senate Bill No. 183), owners of all such properties (excepting properties that are, generally-speaking, owned by or leased to the government) must install carbon monoxide alarms by the following deadlines:  (1) July 1, 2011, as to single-family dwellings, or (2) January 1, 2013, as to all other dwellings.
(The deadlines are subject to extension for up to 6 months if the State decides more time is necessary to make approved alarms available; if such postponement were made, the Department of Housing and Community Development must post a public notice on its website).
 
To satisfy the requirements of the new law, alarms must be approved by the State Fire Marshal.  The State Fire Marshal’s web site maintains a listing of carbon monoxide alarms and detectors; it appears as though the alarms and devices on this listing meet the requirements of the new law, but this should be confirmed by owners.  The new law imposes a $200 maximum fine on owners for each violation of the installation requirements, provided that a 30-day notice must be provided to cure the violation.  Perhaps more important, however, would be the implication or presumption of negligence created by a violation of the new law in any case where persons or property are injured or damaged as a result of a carbon monoxide leak.
Health & Safety Code section 17926.1 covers requirements specific to rental units, including the owner’s (or owner’s agent’s) maintenance requirements.  Also covered are permission-to-enter and device-failure notification requirements imposed on tenants.  With the law now clear on the required presence and maintenance of carbon monoxide alarms in qualifying rentals, it is critical for any rental unit owner to meet all applicable requirements of this new law

I just signed up with this really cool new Newsletter service provided bt the National Association of REALTORS®. I will be using this service from time to time to bring important real estate topics to all of you in the Lake Oroville, Chico, Paradise, Yuba City, Marysville real estate markets and the real estate markets surrounding these areas. I would appreciate your feedback on this service as I always want to be bringing you the most pertinent real estate information available. Afterall, shouldn’t you have the most current information available to you as contemplate selling or buying a home?

Buying a House at Foreclosure Auction is Risky Business
You can buy a home at a significant discount at a foreclosure auction, but you’ll face a host of challenges. Don’t get burned; be solutions-ready. Read

Water Damage: 8 Ways to Dry Out and Move On
Take steps to dry out quickly in order to mitigate water damage and save your possessions. Read

Foreclosure Alternative: The Short Sale
A short sale is far from hassle-free, but it’s a better alternative than foreclosure. And now you’ve got a little help from your friends in D.C. Here are the facts about short sales and how to get started. Read

Visit houselogic.com for more articles like this.
Copyright 2011 NATIONAL ASSOCIATION OF REALTORS®

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Hi,
For 8 US postage stamps which is $3.52 by today’s price— and a little of your time and energy —you can send this letter to those in charge and ask them not to make unnecessarily high down payment requirements.
Plain and Simple.
Ask yourself this—Can you and your children (if you have any) afford a 20% down payment to buy a home?
That is what is undergoing discussion.
Most Americans Can’t.
Take Charge and Let them Know How You Feel.
http://www.realtor.org/wps/wcm/connect/3949fd804629380ba1ecb9ce195c5fb4/government_affairs_joint_letter_LTV_031611.pdf?MOD=AJPERES&CACHEID=3949fd804629380ba1ecb9ce195c5fb4
Buy Buy Now

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It’s almost been a month since I chatted here. Boy time, she does fly.  Of course busy is a good thing especially in this business since it does not come with a regular pay check. — I will continue with my story from last posting. Ready, here we go.  Turns out the appraisal was disputed by the loan officer. The appraiser rebutted the appraisal and yet did not change the appraisal. The Lender agreed with the dispute and then told the appraisal management company that the appraisal was unacceptable and they had to provide a new appraisal at no cost to the borrower. Yeah. — So then another appraisal was completed by a different appraiser who did the correct appraisal which was an as-repaired appraisal. Holy cow—The sorry part about this is, by not receiving the correct appraisal in the 1st place, the purchase was delayed which harms the buyer and the seller. There is also the  possibility of increased fees to the borrower when it is not the borrowers fault. — Oh don’t we love HVCC and it’s glitches.
Buy Buy Now