Ventura County homebuyers have less than 60 days left to select a Realtor, pre-qualify for a loan, choose a home, and open escrow in order to qualify for the federal government’s homebuyer’s tax credit.

The tax credit for Ventura County homebuyers is:

• $8,000 Tax Credit for 1st Time Home Buyers.
• $6,500 Tax Credit for Current Homeowners.

The catch? You have to be in contract (in escrow or open escrow) on a home before April 30, 2010 in order to qualify for any of the tax credits mentioned above.

Time is running out for those of you who have procrastinated. The competition to open escrow before April 30, is fierce and at times an emotional roller coaster.

If you need any help locating a home in Ventura County or would like to learn more about the homebuyers’ tax credit please feel free to contact me, Mana Tulberg: 805-443-8898.

The Federal Housing Administration (FHA) has introduced new rules for the FHA home loan program which will ultimately have a huge impact on Ventura County’s home buyers and consequently, Ventura County’s real estate market.  Due to a significant rise in the number of defaulted FHA loans, the FHA’s cash reserve has fallen below the Federally mandated level.  This has prompted new FHA home loan guidelines to ensure that the new FHA home buyers are in a better financial position and have greater equity at the time of purchase.

The new FHA guidelines will introduce new restrictions for FHA borrowers.  Below is a list of a few of these conditions and restrictions:

• Downpayment for borrowers with a credit score above 580 will remain at 3.5%.  However, home buyers with a credit score less than 580 will have to provide 10% downpayment towards the purchase of their new home.  This rule will go into effect in early summer 2010.

• All new FHA borrowers’ upfront mortgage insurance premiums will increase from 1.75% to 2.25%.  The FHA mortgage insurance is a cost borrowers pay because they are able to purchase a home with less than 20% downpayment.  This rule will go into effect in Spring 2010.

• Home sellers’ concessions, which is the amount home sellers contribute to the FHA home buyers’ closing cost, will be reduced from 6% to 3%.  This means home buyers will have to come up with the additional money for their closing costs.  This rule will go into effect in early summer 2010.

Some Ventura County home buyers may see these new FHA guidelines as an additional hurdle in their road to homeownership.  Many FHA home buyers who were relying on FHA’s low closing cost and low downpayment will have to come up with some additional cash.  In today’s economy where cash and revenue is scarce, coming up with additional cash may be more difficult for some FHA home buyers.   Therefore, Ventura County may experience a thinning in FHA home buyers during the summer season where traditionally the real estate market is at its busiest.

I would like to read your thoughts and feelings on these new FHA guidelines in the comment area provided for you below.

Starting February 1, 2010 the dream of home ownership will become easier for many FHA home buyers.  For the next year the Federal Housing Administration (FHA) will lift its’ 90 day seasoning requirement in order to expedite the sale of foreclosed and flipped properties.  This new guideline will allow Ventura County FHA home buyers to have access to a much larger inventory of homes.

How Do The FHA New Rules Help Ventura County FHA Home Buyers?

Current FHA guidelines prevent FHA home buyers to purchase a home that has been owned by a seller for less than 90 days.  Therefore, FHA home buyers are not eligible to purchase foreclosed properties and/or flipped properties unless the home has been owned by the seller for more than 90 days.   Many prospective home buyers with FHA mortgage insured loans and many Realtors can attest to the frustration associated with the FHA home loans 90 day seasoning requierment.

However, the new FHA guidelines will allow Ventura County FHA home buyers to have just as much access to all properties as do cash buyers or buyers with conventional loans.  No more 90 day seasoning will also help neighborhoods with a high volume of foreclosed homes to become occupied sooner.

At the 2009 Realtors’ Expo I was invited to participate in Realtor.com’s Ask a Realtor event. I was asked the question “What do I need to know if I buy and sell a home at the same time?” Below is yours truly and my answer to the question above:

“Could someone please give me a good explanation for the low housing inventory?”

Recently I posted the above question on both Facebook and Twitter.  The responses I received were varied and insightful.  I was informed that the low housing inventory is not exclusive to just Ventura County, rather the whole country is experiencing this frustrating situation.  The scarce selection of homes has left many Realtors and their clients disappointed.  This has generated an aggressive housing market.

Some of the home buyers in Ventura County have lost the excitement of home shopping.  The low inventory of homes in every city of our county has caused a bidding war on many properties.  Homes that are priced well receive multiple offers within the first couple of days of being on the market.  In my recent experience, many of these homes sell 3-5% over the asking price.  Cash buyers, and home buyers with 10-20% downpayment, have a strong advantage of being much more likely to have have their offers accepted.  This leaves FHA home buyers probing and watching the housing market more vigorously, but that is another post by itself.

Back to the question at hand: What is the reason for the low housing inventory in Ventura County?

The majority of the responses that I received agreed that, no matter the market condition, the inventory of homes normally declines during the holiday seasons.  Starting in October, both home sellers and  home buyers tend to pause their home selling or home buying activities.  However, I believe there are more explanations for the decrease in Ventura County’s housing inventory than just the normal seasonal slow down.  The rapidly increasing rate of unemployment and the compelling rise in shadow inventory of foreclosed homes may provide a better explanation for the low housing inventory in Ventura County and the rest of the country.

Teresa Boardman, an amazing photographer and Realtor from Saint Paul Minnesota, brought up a great point during our Facebook discussion.  Teresa and I both know some homeowners who refuse to place their home on the market in order to purchase a newer or larger home due to job insecurity.  The current economy and the rise in unemployment has left many homeowners cautious and uncertain about their future.  A newer or larger home usually means a larger mortgage and an increase in property taxes.

Another great colleague of mine, Irina Netchaev of Pasadena CA, pointed out the so called, “shadow inventory” of properties.  These properties are homes that have been taken back by the lender or homes where the home owner is 90 days behind on the mortgage.  According to a report published in September 2009 by First American CoreLogic 1.7 million homes are currently in shadow inventory across the US.  The overwhelming number of foreclosures have delayed the lenders in processing these homes for sale therefore delaying the entry of these foreclosed homes into the local markets.  It is unclear when and how the lenders will unleash their inventory of foreclosed homes.  However, there are some that argue lenders are holding on to their foreclosure inventory until the housing market stabilizes.

I am very interested to read your intake on this matter so please feel free to leave your thoughts and opinion in the comment area provided for you below.

For the past few years I have used social media as a tool to build, enhance, and promote my real estate business.  Like any other new adventure in my business, social media had a slow but tangible impact.  These days I not only use social media as a tool to grow my business, but also as an instrument to expand my networking all over the country and especially right here in our own Ventura County.

In an article by Lisa McKinnon of the Ventura County Star titled “Local businesses put social networks to work” the power and influence of social networking in real estate and other industries in Ventura County has been well defined. You can read the whole article on the VCStar.

I have met, worked with and often befriend many great people using my online connections. My business has flourished and continues to grow as I use the social media tools in ways that are beneficial to my real estate business and my clients.

While looking to purchase a home in Ventura County you might have come across the term Mello-Roos.  What is a Mello-Roos and why do only some neighborhoods demand this extra fee?

In Ventura County there are a few communities where the home owners are bound to a Mello-Roos.  A Mello-Roos community refers to a neighborhood where a special property tax, in addition to the normal Ventura County property tax, is imposed on the home owners.  This extra tax assessment is a means for the community to repay the bond that was used to fund the infrastructure within that community.

What is the Mello-Roos amount?

The amount differs from one community to another.  Unlike your annual property taxes, Mello-Roos can not be based on the value of your property.  There is a special mathematical equation that calculates this tax amount which is based on the square footage of the property, lot size, and the use of the property.  However, the normal property taxes in Ventura County plus the additional Mello-Roos should not exceed 2%-2.5% of the home’s market value.

When is the Mello-Roos Due?

The Mello-Roos tax is collected usually annually or semi-annually. You can choose to combine this tax assessment with your normal property tax payment at the close of your escrow.

How long does Mello-Roos last?

The time frame for Mello-Ross varies from community to community.  The Mello-Roos tax will stay in effect until both principal and interest are paid on the bond.  However the tax period should not exceed 40 years from the original built date.

What is the benefit of living in a community with Mello-Roos?

Communities with Mello-Roos offer newer schools, parks, and recreation centers which are very important to some home buyers.  Due to community and property amenities the homes in these neighborhoods are usually very popular amongst home buyers.

Ultimately every home buyer needs to consider that the cost of living maybe increased due to this extra tax.  Also by purchasing a home with a Mello-Roos you are limiting the number of potential home buyers you might attract once you consider to resell your home. However, the final purchase decision is yours and only yours.

If you have been shopping for a home in Ventura County you may probably know how hard and exasperating it has been to purchase a bank-owned home. Below is a fun video that demonstrates many buyers frustration with the current real estate market. Enjoy:

There is no doubt that the $8000 first time homebuyers’ tax credit has helped many all over the US fulfill their dream of homeownership.  According to the California Association of Realtors, in August of 2009 home sales increased by 9% in California compared to the same period of time last year.   Although it is hard to attribute the increase in the sold number of homes solely to the first time homebuyers’ tax credit, it is fair to assume that the $8000 tax credit had a huge impact on the Real Estate market.  Nevertheless, I truly believe that pumping money into an economy that is experiencing a monthly increase in unemployment is merely a band-aid.

In Ventura County, like the rest of the country, the idea of receiving $8000 from the Federal Government was widely received and many homebuyers outbid each other in order to secure a home and the subsequent tax credit.

2009 is not over yet, having said that, a few days ago as I was searching the Ventura County Regional Data Share for new listings I noticed a few of the 2009 purchased homes back on the market for sale and listed as Short Sales, amazing I know!!!

Unlike the early 2000s, the mortgage guidelines are so strict now that we can hardly blame the mortgage industry for the loss of these homeowners’ kingdoms.   One can only assume that the owners of these newly short sale homes lost the means to pay their monthly mortgage.   And we are back again to the unemployment issue.

Although many trust that the benefits of the $8000 tax credit by far outweigh its negative impact, I tend to view the benefits as only a small part of the solution.  Without jobs, no matter how many tax credits are issued to the American people, mortgages will still default and the real estate market will continue to fall.

I look forward to hearing what you have to say with regard to the first time homebuyers’ tax credit.

According to the California Association of Realtors (CAR) in the 2009 First Time Home Buyers Tax Credit Survey, nearly 40% of the first time home buyers in California claim that the $8000 federal government’s tax credit had a significant impact on their decision to purchase a home before the end of this year.

In Ventura County there has been an 18% increase in the number of homes sold from January-August of 2009 compared to the same period of time in 2008.  Since there have not been any significant positive changes to our county’s economy, the increase in the number of homes sold in Ventura County has consequently been correlated to the first time home buyers tax credit.

Therefore, CAR and the National Association of Realtors (NAR) are urging Congress to extend the December 1, 2009 deadline and to include all home buyers in the $8000 tax credit program.

We care strongly about our readers’ opinions and would like to know if you believe that:

• The Congress should extend the first time home buyers tax credit?
• The Congress should offer the tax credit to all home buyers?

Stay tuned for the Congress’s final decision on the first time home buyers (or all home buyers) tax credit.