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TemekuT
ParticipantWarning! Warning!
If this is a older wood-framed structure, you will hear the upstairs neighbors walking. You will even hear their bed creaking…and speaking of creaking, the older wood subfloor will definitely creak.
Buy in a concrete building for peace of mind. (but don’t buy yet)
Participanttemecula guy:
I do have access to the MLS. I am a RE Broker but not active in the business. I lived in O.C. during the 1989-1995 downturn and kept an eye on Temecula. I heard lots from relatives and friends in the business out here in Temecula. I am fiscally conservative (because I’m also a CPA) and although I hesitate to give an opinion, here goes:
In no way do I think that prices will revert to a level where the average house price is $200K in Temecula. FYI, that 200K price point was average in late 2000/early 2001 for an 1800 sq. ft. 3/2. I think the less nice or more desperately needing to be sold houses you have listed in Fairway Classics could hit 300K at the trough, which is about what they sold for in 2003. I think there will be some form of government bailout to prevent the entire U.S. housing market from crashing. In a way that’s too bad for those of us who played by the rules and with integrity, but on the other hand if there’s a severe crash we will all be affected financially…kiss your 401K goodbye!
Remember that the average price now is based on a substantially larger house than in 2000. And remember that prices for the exact same house within a tract will vary due to amenities. No matter how much we laugh about “pergranteel”, buyers will pay more for a more luxurious home. What do you prefer, builder white 4 x 4 tile, or verde butterfly granite?
Regarding the houses you listed: I do the best I can on the MLS to ascertain indebtedness. The total loans can be difficult to decipher. I would know 100% accurately if I ordered a broker’s package from the title company. I’ve gotten pretty good at sifting through and getting the numbers. On some, I think a non-exercised Heloc may cause it to look like there is indebtedness in excess of the asking price.
33288 Alagon – 174 DOM, first sold 12/22/03 @ $318,500, current indebtedness is $402,500, asking $445,000.
45269 Almora – 97 DOM, first sold 03/23/04 @ $321,000, last mortgage total was $495,000, lender took back at $421,676 (probably just the 1st), vacant, asking $429,000.
45260 Escalon – 83 DOM, first sold 10/20/03 @ $288,000, current indebtedness is $451,600, asking 425,000.
33312 Alagon – 86 DOM, first sold 12/24/03 @ $296,000, current indebtedness is $260,000, vacant, asking $414,000.
45337 Escalon – 119 DOM, can’t get first sold price, Lender owned First Franklin Tenancy by Entireties & transferred at $389,581, last mortgage prior to foreclosure was $460,000, asking $403,900.
I think if you wait a year or two you will have lots more choices in the $300-350K range. I don’t think you should buy yet. I also don’t think Temecula will be as brutally affected as other areas in the I.E.
Now the rest of you Piggington people, please don’t roast me for my opinion!
And this P.S. to the Harveston guy – you are suffering from “analysis paralysis” and lack of cash. Don’t buy yet – rent for $1400K and if your landlord sells it, rent somewhere else in Harveston. Frankly, if you don’t have the downpayment, you shouldn’t buy! Save your money and wait until you can afford to buy.
Participanttemeculaguy, your first link has 75 DOM. It’s a short sale.
The 2nd link is listed as of today. The listing comments say it’s not a short sale, which I don’t understand – purchased 11/23/04 @ $452,500 w/ 80/20 financing New Century, and then added $145,000 on 03/22/06 w/ Loan 123 LLC. So at a minimum it is indebted for the purchase price of $452,500 and with the 3rd it looks like $597,500 is owed. Plus, it is vacant.
ParticipantIt looks like Splash Canyon is on Ynez across Winchester by the business park/gov’t buildings, but on the FWY side. I think it’s that stretch of land on the 15 North between Winchester and the 215. That’s a bit far from Harveston and a bit of a stretch as to motive of your landlord! You must have bionic ears!
As for the business park, i think that developer is Pacific Century Homes and they are pretty big here in town – think The Reserve, 3 projects in Redhawk, the development across from Promenade Mall on Margarita, Overland Business Park I and II, and that’s just in Temecula. Plus, they are breaking ground on a 55+ community at Margarita and HWY 79.
BTW, what’s going on with your postings about buying in Harveston and also your other posting about looking elsewhere here?
ParticipantGifting is a bad idea for the donor and here’s why:
In 2007 an individual may gift $12,000 annually to others without having to file a gift tax return. So assuming both buyer and buyer’s wife are gifted $80,000, $24,000 is the gift ceiling and the donor (seller) has to report a gift of $56,000 to the IRS in 2007. That’s o.k. now, except – that $56,000 eats into the seller’s eventual (at death) exclusion from estate tax. This exclusion is called the Unified Credit and you can read about it in IRS Pub. 950. So, assuming the seller dies with an estate, then $56,000 of that estate that should have been free from estate tax will now be subject to estate tax. Why in the world would the seller want to give a gift to a stranger that would eat into their Unified Credit?
ParticipantIt’s for the Harveston house, right? Don’t do it. That is mortage fraud and you are complicit. And, run from that loan broker and tell everyone you know not to use him/her.
You shouldn’t have PMI with an 80/20 loan. I take it you don’t have a down payment, so you ethically have to accept the lender guidelines and pay a higher rate on the 2nd. Instead of participating in a mortgage fraud, either pay the higher rate on the 2nd and figure out how to pay it down early, or don’t buy.
I sympathize with you in that it’s easy to fall down the “slippery slope” because “everybody else is doing it”, but you can take the high road here.
BTW, the difference in the prop tax at 1.9% Harveston rate on 20% of 430,000, or $86,000, is $1634 annually for year 1. Then you can expect the 2% assessed value increase annually so the incremental tax basis year 2 would be $87,720 and the prperty tax would increase to $1686. You can expect this increase yearly, unless property values tank and are reassessed down. And, while the general public merrily deducts that entire property tax bill on form 1040 schedule A, the amount is not entirely deductible – the portions relating to special assessments and considered by the IRS not to be taxes. But that’s another story because the IRS is auditing prop tax bills and many people in Mello-Roos areas are going to be unhappy campers when audited. 🙁
The difference on a 1% rate increase on 20% of $340,000, or $68,000, is 70 cents per thousand monthly, or 47.60 per month, or $571 annually. It seems to me you are better off paying the higher interest rate on a 2nd, even if it is 3 points higher than the 1st, as the interest is 100% deductible, decreases annually, and can be paid off entirely.
Participantwaiting hawk – all registered w/ permits to carry? 🙂
ParticipantHold on a minute folks! Is she receiving her license for the first time? If so, there is no deduction for becoming qualified for a new line of work or training for a new profession.
Or, is she licensed in another state or country? If so, you may be able to deduct expenses on schedule A as unreimbursed employee business expenses to the extent they exceed 3% of AGI, or deduct on Schedule C if self employed as a dentist already. If she is a dental hygienist qualifying as a dentist, that is not a qualified expense as she is training for a different profession in the eyes of the IRS.
Or, is this continuing education? If so, you may be able to deduct expenses on schedule A as unreimbursed employee business expenses to the extent they exceed 3% of AGI, or deduct on Schedule C the total amount.
Regarding the FAQ, just go to the IRS website and search the topic, find the appropriate IRS publication, and follow the bullet by bullet instructions.
Better yet, go to Turbo Tax online and the software will ask the failsafe questions for this common inquiry and guide you to place the appropriate answers in the blanks so that you comply with the tax code.
Be careful – as an example you mentioned lodging. What do you mean by lodging? Is it the lodging you need when you go out of area to take the boards? If so, that would be a qualified expense if you are already licensed in NV and are getting licensed in CA. However, if you aren’t licensed yet at all, that would not be a qualifying expense as you are completing the requirements for a new profession.
Any other CPA’s out there – please comment. I am not current in the field, but I do know the basics here.
ParticipantBostonAndOC_RE_:
Thanks for the area clarification. I think you’ll have an easier time getting into Almaden, which is beautiful, than Cupertino, which is still experiencing bidding wars. The high schools for Cupertino and Almaden greatly increase the desireability of both. And you’re right about San Jose, Fremont, Newark and Milpitas. We just loved San Jose because we lived the empty-nester lifestyle in “downtown Disneyland” until the bar problem was so egregious that we couldn’t take it anymore.
My daughter and her fiance want to live in Palo Alto, but can’t afford it YET. They recently found a townhome there, a nice 2 bdrm/2 bath with a patch of yard front and back, as well as a 2 car garage, for $740K. The problem was the location backing up to a major road and under power lines. I just keep encouraging them not to settle for anything old thing and to keep saving and to be patient. Things will change.
ParticipantUh, Grant Thornton is trying to dodge grappling with the “going concern” issue, you think?!
ParticipantBostonAndOC_RE_:
My heart was definitely left in San Francisco by way of Silicon Valley when my husband and I left there after living in the center of downtown San Jose from 1996 through 2005. I also grew up in the O.C., but I have no allegiance there and would never live there again. Though I am currently languishing in Temecula, it is a more palatable alternative than the O.C.!
All I can say to you is the same thing I say to my daughter (who lives in Fremont) and her affianced (who lives in San Jose)- BE PATIENT! My Silly Valley colleagues in real estate tell me how prices have stagnated and inventory has increased subtantially in most of Santa Clara County, but it is also true that bidding wars are taking place in Los Gatos and Saratoga in the South Bay, as well as in Palo Alto on the Peninsula. Please remember that when you reference all of those, that is like saying that you want to live in Newport Beach or Monarch Bay i.e., the very best and most expensive neighborhoods, and not Costa Mesa or Tustin . I am convinced that the effect of the subprime and ALT-A meltdown is delayed by at least a year due to the higher Bay Area salaries, but that there will be repercussions there, though not, I believe, at the level that will be seen in the O.C. I know factually from working for a developer for 9 years there that most buyers the last 3 years used stated income loans (Alt-A, lots with neg-am options that they utilized), on a wish and a prayer that their actual income would rise substantially. I fear their wishes may be ashes as house values erode, even if slightly.
As far as the job market being on fire, please visit patrick.net, and then visit the Bay Area sites that are found on Sacramento Landing (link from Housing Doom) for housing and price information. And, I am curious – the median price in the O.C. is very close to that of both San Francisco County and Santa Clara County. Where would you like to live that would be a 2 hour commute from Silicon Valley? – all I can think of is Los Banos or Hollister. That would get you an IE sized monster house with a hellacious commute. And, I don’t see the extreme restrictions on building. My experience is that most new developments are infill, but that the cities are happy to have new homes at a higher tax base.
As for me, I dream of the day when prices drop significantly in the Bay Area and I can return and feel comfortable buying again. If I were to return there now, I wouldn’t consider buying yet.
March 31, 2007 at 9:25 AM in reply to: Free gas for a year with the purchase of this house in Murrieta #48835Participanttemeculaguy:
That Centex house had 100% financing on it in late 2005 consisting of a $400,000 1st and a $100,000 2nd, both with Centex Mortgage. The house went to foreclosure and the loan servicer, Quality Mortgage, transferred the loan/property via a “Tenancy by Entireties” deed to Nationstar Mortgage on 01/10/07. The amount of the deliquent 2nd and accumulated penalties and interest must be $109,646, which is the amount of indebtedness that shows in the tax records, which is what Zillow is showing.
March 31, 2007 at 9:15 AM in reply to: Free gas for a year with the purchase of this house in Murrieta #48833ParticipantFormerOwner:
What a coincidence – that house was listed 02/15/07 with 3% commission, then changed to 4% commission 02/26/07. Like the other listing with the same out-of-area agent, there is no keysafe or mechanical dial lockbox, and the property is shown by appointment only. I can’t find any tax history with this property. I wasn’t able to access that via the MLS, I got an error message “no properties found”. This happens occasionally. Could be the database is scrambled at the County of Riverside.
March 30, 2007 at 11:29 PM in reply to: Almost back from vacation and wondering about something #48820Participanteffect! I go crazy when people confuse “affect” and “effect”
sorry, it’s been a long day and week of trying to convince family members to sell now!
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