First-time buyers are being wooed from many different directions these days.  As I discussed in a previous post, the IRS is offering a first-time buyer tax credit to real estate buyers who meet certain stipulations.  In addition to this federal tax credit, Santa Clara County is offering a Mortgage Credit Certificate Program to first-time buyers.  And, as I explain in the federal tax credit post, a first-time buyer is defined as real estate buyers who have not owned a principal residence during the past three years.

A few highlights of the Santa Clara County program:

• It is a dollar for dollar tax credit against the borrower’s federal income tax - currently 15% of the interest paid
• The remaining 85% remains as a standard tax deduction
• The home must be purchased in one of the participating cities in the county - all south county cities are participating
• The home purchased must be owner-occupied
• The buyer’s income cannot exceed $97,800 for 1-2 persons and $112,470 for 3 or more persons
• The MCC Program doesn’t allow co-signers
• Maximum purchase price is limited to $570,000 for resale homes and $630,000 for new construction
• There is a possible recapture tax if the property is sold within the next nine years after purchase
• The County maintains a public list of participating brokers and funding lenders
• Applications for MCC are processed on a first come, first serve basis and there is an application fee of $275

For those interested in taking advantage of the MCC Program, you will want to make sure you are working with a paricipating funding lender.  For recommendations on lenders, call me at 408-892-9015 or email me at GMerrick(at)InteroRealEstate.com.

When serving real estate buyers, the question of which school the residents of a particular home at a particular address would go to often comes up.  Although I feel I know the school boundaries pretty well, I don’t like to rely on my own knowledge in case the boundaries have changed, which they occasionally do.  I go online to find the answer.

The southern portion of Santa Clara County is home to two school districts:  Morgan Hill Unified and Gilroy Unified.   Morgan Hill’s school district covers a large area.  From the MHUSD website,

“The Morgan Hill Unified School District encompasses nearly 300 square miles and serves the ethnically diverse population of Morgan Hill, San Martin, portions of San Jose, and unincorporated areas of the county. We are comprised of 15 schools: nine elementary, two middle, two high school, a continuation high school, and a community adult school as well as a Home Schooling Program.” 

Gilroy Unified serves the residents of the City of Gilroy and consists of eight elementary, three middle, currently one high school with a second scheduled to open next fall, one community day alternative and one continuation high school.

To find which school boundaries a particular address feeds into in Morgan Hill and San Martin, click on:

http://www.locatemyschool.com/WebLocator/WebLocatorForm1.aspx

From that website, choose “Morgan Hill” from the drop down window under “School District” on the left-hand side.  Then enter in the address and then click “search.”

For addresses located within Gilroy Unified School District, use the following website to input the address you are interested in:

http://schoolvisionsoftware.com/schoolfinder/GilroyUSD/

These website are a great tool for me and for my buyer clients to get the straight scoop on which schools belong to which addresses.  If you have any questions about this please contact me.

I have many great repeat clients and two of them have called me within the past week to help them in locations other than Santa Clara County.  I suggested to each of them that they may want to use a Realtor who is located closer than I am to their property sale or purchase, but both sets of clients insisted on working with me.  And who am I to refuse?!  Not only do I know that I can do a “way beyond expectations” job for them by doing a lot of research up front along with the excellent service I always offer, but I also get to spend time with some wonderful people and help them achieve their real estate goals.

The first call came from some previous clients who asked me to do our sixth transaction together.  They’d like me to sell some investment property they have in Santa Cruz.  I sold this home to them several years ago.

  They now have some very fortunate tenants living there from UCSC who are lucky enough to live in a beautifully remodeled home with a lovely backyard.  This home has a wonderful floorplan with 4 bedrooms and 2 1/2 bathrooms.  The choices in colors and finishes are incredible.  Look for it on MLS sometime early next week.

So yesterday I had lunch at Cafe Sparrow in Aptos (so delicious!) with the Santa Cruz clients.  Life is good.  Then today, I trek off to Los Banos with my investment buying clients.  Life is still good.  I hadn’t been to Los Banos in a while and it has grown into quite a city.  Many new businesses and nice housing developments.

My clients and I both did a lot of research on the city regarding investment property prior to our house tour today.  I talked with several people who gave me first-hand accounts on the excellent rental market in Los Banos.  My clients and I saw 10 homes today that met their criteria:  5 years or newer, 4 bedrooms, and priced under $150,000.  Homes meeting the age and bedroom criteria in 2005 would have been selling in the $400,000s.  We found some homes that may fit the bill for my clients.  We’ll see how the REO negotiations go….

Most of the homes we saw in Los Banos were bank-owned homes and, although this home pictured above was also bank-owned, most of them had dead grass in the front yard, and no landscaping at all in the back yard.  And most appeared to be in good condition, with a few exceptions.

Obviously, I travel far and wide for my clients.  If you need help anywhere in the Bay Area, I can help you with advice, with agent referrals or with my very own expertise!

 

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

2. Develop your home wish list. Then, prioritize the features on your list.

3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.

4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment?  Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.

9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.

When I represent sellers in a transaction, they often ask me what they need to leave with the house.  Unless negotiated otherwise, all fixtures attached to the house must remain, as according to contract.  Most Realtors have a story about the dining room chandelier “accidentally” disappearing or the $1000 custom copper kitchen faucet that is replaced with a shiny new stainless steel faucet from Home Depot just before close of escrow.  Obvious no-nos.

Beyond this, I always hope that the sellers and buyers can briefly meet at the property shortly before close of escrow.  I have attended many of these meetings with my clients and it is very advantageous for the buyers to hear all of the seller’s tips regarding the care of the home and the property.  Sellers like these meetings also because if they have a prize rose bush, for example, that needs special care, this is an opportunity to give the special instructions to the buyers.  Then I recommend that the sellers never return to the property just in case that rose bush is replaced with a built-on barbecue….

I always give my buyers the necessary utility and media numbers they need to get everything up and running right away.  But in addition to this it’s nice if the sellers can leave the following for the buyers of their property:

• Owner’s manuals and warranties for appliances left in the house.
• Garage door opener.
• All sets of house and mailbox keys.
• Code to the security alarm and phone number of the monitoring service if not discontinued.
• Any personal property that the seller and buyer agree on such as paint, spare tiles, etc. that the buyer may need in the future.

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

 5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

 7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity. Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at http://www.ginniemae.gov/.

The reasons for using a real estate agent are both many and very significant.  They include, but are not limited to the following:

1.  The seller of the home will have a qualified Realtor looking out for their best interests.  They do not pay their Realtor to look out for you.  That is my job.

2.  Real estate is all that I do.  I am constantly monitoring the market and actively looking on your behalf daily.  Through my networking, I often have information on new listings before they hit the market.   

                       

3.  As a Realtor, I have access to information that the public often finds difficult to obtain.  I can research any home on the market before my client writes an offer to ensure that my client isn’t paying too much.

4.  Negotiating isn’t much fun for the average home buyer.  This is one of my strengths and I love to do it.  I negotiate on property all the time when an average home buyer will only negotiate on a few homes throughout their entire lives.  I save my clients money.

5.  Besides price, there are other terms in the contract that also require negotiation.  I am completely familiar with the real estate contracts in use and know the ins and outs of negotiating the various terms.

6.  Contracts can sometimes seem overwhelming and confusing.  I work with these contracts on a daily basis.  I will assist you with understanding the components of the contract and ensure that you are protected.

7.  There are many other details relating to the purchase of a home to deal with.  I align myself with other professional service providers to make the purchase easy.  I have great alliances with mortgage brokers, title and escrow officers, and home inspectors.  You don’t have to worry about much of anything…I do it for you.

8.  My services don’t cost you anything.  I work on your behalf for free!

Gretchen Merrick, CRS, GRI Phone:408-892-9015 DRE#:01317499 Intero Real Estate Services gmerrick@interorealestate.com Featured Listings 16868 De Witt Ave Morgan Hill, CA 6 BR | 4.50 BA $849,999 More Details 1845 Silverwings Ct Morgan Hill, CA 4 BR | 3 BA $1,025,000 More Details

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