Credit Scores for Homebuying

Minimum Credit Scores

Credit scores are crucial to the homebuying process. Not only does your FICO score determine if you can qualify for a loan in the first place, it will also have an impact on your mortgage terms. Your credit will affect getting the type of loan that will fit your family budget. You should also plan ahead in getting credit card debt paid down and correcting any inaccuracies in your credit report.
What credit score is needed to buy a house? Learn more at: https://bit.ly/CreditScore2Buy

Above List Price = New Norm in Sacramento Housing Market

As reported in the June 11 issue of Sacramento Business Journal,  properties throughout the Sacramento region have sold, on average, 4% above their original list price, according to Metrolist data and local appraiser, Ryan Lundquist. For example, in Roseville buyers paid $32,182 over list price on average whereas Rocklin is $22,238 over list.  This data justifies the recommendation that homebuyers need to factor this “over-list” percentage into their home-buying budget as they are investigating properties and outlining offers.

June 2021 Sellers Market

For the full article, click here. 

Proposition 19

Prop 19

Understanding how Proposition 19 affects property tax implications tied to your property transfer is an important consideration when buying or selling a home.

Starting April 1, 2021, homeowners who are 55 or older or those who lost their home in a natural disaster are allowed to transfer the taxable value of their primary residence to a new home in California. If you purchase a more expensive home, the tax bill will go up but by a lower amount than for other buyers.  This kind of tax transfer can be done three times and homeowners have two years to sell their current home and buy a new one.

The prior rule limited this exemption to a one-time transfer within the same county or between certain counties and only if the replacement property was of equal or lesser value.

Can my client buy/sell now and take advantage of the tax portability benefits before April 1, 2021?

If you wish to obtain the tax benefits of Prop 19 for a transaction that closes before April 1, 2021, whether it is buying or selling a property, I would recommend speaking to a qualified California real estate attorney.

If the replacement property is of equal or lesser value, does the tax basis of the replacement property change?

No. The taxable value of the original property may be transferred and become the taxable value of the new one.

If the replacement property is of greater value, how is the new taxable value calculated?

The new taxable value is calculated by adding the difference between the full cash value of the replacement property and the original property to the original taxable value. For example, if a seller of an original property has a $300,000 taxable value and a full cash value of $1M and then buys a replacement property for $1.5 M, the taxable value of the replacement property would be $800,000.

Can a replacement property be purchased prior to the original primary residence being sold?

Yes. This is how the current rule under Prop 60 works and Prop 19 uses nearly identical language.

How does Prop 19 affect the rules on intergenerational transfers to children or grandchildren?

Prop 19 eliminates the ability for a home to pass from a parent to a child or a grandchild without reassessing the home value unless it’s the child’s or grandchild’s primary residence. If the child or grandchild doesn’t live in the inherited home and instead chooses to rent it out, the tax value can be re-assessed. Right now, family members can transfer a home and the property value won’t be reassessed. They can also transfer other rental or commercial properties and exempt up to $1 million of the assessed value.

If the property is more than $1M over the original tax basis, what is the new taxable basis?

The new taxable basis will be the assessed value of the property at the time of transfer minus $1M.

When do these new rules on intergenerational transfers apply?

The new changes to property transfers among family are set to begin on February 16, 2021.

Where may a claim to transfer a tax basis be made?

Claims may be made with forms provided by the local county assessor’s office.

Source:  California Association of REALTORS®

Interest Rate Buy Down

An interest buy-down is a real estate financing option that Buyers can use to offer list price AND retain an affordable mortgage. By providing a credit to the Buyers, it allows Sellers to get their List Price from a qualified deal. It’s a win-win for both parties. If you have questions, please let me know and my favorite Lender will be happy to explain the details and determine if it will work for you!

Home Buyer’s Guide

 

 

Whether you’re a first-time homebuyer, purchased several homes but it’s been a while, or you’re looking to buy an investment property, “Your Complete Guide to the HOME BUYING PROCESS,” can help you explore your options and answer many, if not all, of your questions.  This is NOT a 50-page book (who has time for that)?  It’s an easy-to-read eleven pages that will be your ongoing reference as you proceed to purchase a residential property.

Still have questions?
Don’t hesitate to reach out via call, text, or email.  Also, let’s stay in touch via social media  — look for the flying icons and click away.

 

 

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Krysta Weikel Testimonial

 

For more HAPPY CLIENT TESTIMONIALS

Additional Resources:  Home Buyer Process Infographic

To order your easy-to-read guide that steps you through the home buying process, provides a glossary of terms, timelines, explains the standard costs involved, and de-mystifies the pre-approval process, COMPLETE THE FORM BELOW:  


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Verification of Property Condition

It’s one of the last steps in purchasing a home and an important one — Verification of Property Condition. Don’t skip or waive this opportunity to see the condition of your soon-to-be home prior to the close of escrow. #realestate #whosnext

 

 

Buyer’s Inspections – Part of the process!

What’s an Escalation Clause?

ContractLaw

Beyond what it is, should you use it in your offer to purchase a home?  As a REALTOR representing a Buyer, we can get pretty excited about the opportunity to utilize this tactic. Also known as a “Sharp Bid”, an escalation clause is used in the circumstance where multiple offers are highly likely.  This likelihood is usually generated when you see a Listing that states something to the effect of, “All offers to be reviewed on Monday at 5pm” or the property has been priced below market. The intent of this competitive bidding strategy is usurp all other offers by offering a $dollar amount (usually $100 to $1000) above the next highest offer received by the Listing Agent with a cap “not to exceed $dollar amount.”  I usually recommend that we request proof of the highest bid.

If you’d like to learn more, please don’t hesitate to reach out.