Scripps Ranch Real Estate and Community Blog

SHOULD YOU KEEP THE FAMILY HOME AFTER DIVORCE?

Splitting up after years of marriage?  The family home is often seen a place of refuge and emotional stability and one party would often like to keep the house. But should you keep the house? More often than not the answer is no, for a variety of reasons.

Property division in divorce is one of the most important decisions.  Unlike issues such as child custody or support, property division is almost always final and cannot later be undone.  Decisions need to be made before the divorce is final. In making these decisions the divorcing spouses must consider the following items:

1. What is the true value of the home now and in the foreseeable future?  There is a lot more involved than just the appraisal minus the mortgage. What is the true condition of the home? Any other liens?
2. The costs of continuing home ownership may be greater than it seems at first. Maintenance costs and taxes can skyrocket.  The home may decrease or increase in value. Future costs of selling the home may not be allowed by the court.
3. Keeping the home can be risky if there is co-ownership or even just both names on the mortgage.  Even if the title to the property is transferred, both parties remain liable for the mortgage and other liens placed against the property. This can adversely affect either person's credit.
4. It may be impossible for either party to get a new mortgage either to refinance the existing property or to purchase a new home.

In deciding whether to keep the family home the divorcing parties need to protect themselves in this adversarial situation.  To protect your self you need a good lawyer, a good accountant or financial planner, and a real estate agent specially trained to handle the sale of real estate during or after a divorce. 

Claude and Rochelle Braunstein are some of the very few Real Estate Agents in San Diego who have received specialized training in this area and have earned the RCS-D (Real Estate Collaborative Spcialist-Divorce) designation from Vanderbilt University Law School and the Collaborative Continuing Education council.  This enables us to help guide you through the decision making process.  We can help you protect yourself by making sure you know what you own, know what you owe, and know what you need to do before it is too late. 

For more information about how Claude Braunstein & Associates can help help guide you through the decision making process,  help you sell your home for the highest possible price, or to search for your new home any where in San Diego or Scripps Ranch, contact Claude Braunstein  or phone our team at 858 271-7770.  A Coldwell Banker affiliate with over 30 years of experience, Claude and his team will help you find the right home at the right price and help you to take advantage of the current home purchase tax credits.  Additional information is available on our website www.ClaudeBraunstein.com , where you can also search the MLS for a suitable home. 

Homeowners selling their homes for less than they owe on their mortgages or trust deeds (Short Sales)  often ask "How long  must I wait before I can purchase a new home?"

Well finally there is some good news! Beginning July 1, 2010 Fannie Mae has changed the rules for homowners who have gone through a short sale or participated in a deed-in-lieu of foreclosure arrangement.  Buyers who have gone through a short sale may qualify for a new mortgage in as little as two years from the recording of the short sale or deed-in-lieu of foreclosure. (Currently the penalty period is four years). 

The requirements for qualifying for the new loan after the two year penalty period include:

    *A down payment of 20% or more toward the purchase of the new home

    *Reestablishing a good credit score under Fannie Mae's credit scoring system (FICO scores are important here.)

Under Special circumstances it may be possible for a homeowner to qualify for a new loan after the two year penalty peiod without a full 20% down payment if they can prove that the short sale  was due to exceptional circumstances such as:

     *Job Loss

     *Divorce

     *Extraordinary Medical Expenses

Fannie Mae, Freddie Mac and the FHA are taking these steps towards keeping some of the existing homeowners in the market in order to serve as a source of demand to absorb the excess housing inventory coming onto the market.  This excess inventory will be caused in part by retiring boomers looking to downsize as well as foreclosures.

There are a number of other requirements for qualifying for these programs. Contact Claude Braunstein & Associates to learn more about reestablishing credit to facilitate purchasing a new home.

For more information about how Claude Braunstein & Associates can help you buy a new home anywhere in San Diego County, sell your home for the highest possible price, or particpate in a short sale contact  Claude Braunstein  or phone our team at 858 271-7770.  A Coldwell Banker affiliate with over 30 years of experience, Claude and his team will help you find the right home at the right price and help you to take advantage of the current home purchase tax credits.  Additional information is available on our website www.ClaudeBraunstein.com , where you can also search the MLS for a suitable home. 

SAN DIEGO REAL ESTATE NEWS YOU CAN USE

The Scoop:

(1) Entry level properties (homes, condominiums and townhouses)  are in high demand and when properly priced and marketed are selling quickly.  This may change with the tightening of FHA loan requirements.

(2) Mid level home prices are stabilizing and when properly priced and marketed are selling in a reasonable amount of time. Luxury houses and condominiums are selling more slowly and are still attactively priced. 

(3) Interest rates are still being kept low by the Fedral Government but are likely to rise again,  either as the economy improves or because of changes in the availability of capital.

(4) The $250,000. ($500,000. if you are married) Capital Gains Tax Exemption when you sell your home is still in effect.

(5) Most homeowners who have lived in their homes for five of the past eight years are eligible for a $6,500. Federal tax credit when they purchase a new residence. First time buyers and buyers who have not lived in their own homes for three years get an $8,000. tax credit. Buyers must be under a binding contract by April 30, 2010. Other restrictions apply.

(6) The State of California has promulgated a tax credit of up to $10,000. for home buyers beginning May 1, 2010 and ending December 31, 2010 or until the $200 million funding runs out. The tax credit will be paid out over 3 years. First time buyers may purchase and occupy as their primary residence a resale home or a new home. All buyers of new, unoccupied homes are eligible for the state tax credit.  They must also live in their new home. For more information click here

What it means:  

(1) Now may be an excellent opportunity and time to buy a home or trade up.

(2) Now, current homeowners of entry level properties get to sell their homes quickly.

(3) Now, is a good time to cash in on that Capital Gains Tax Exemption.

(4) Now, buyers can negotiate a terrific price on a midlevel or luxury home.

(5) Now, buyers can continue to lock in a 30 year mortgage at a low interest rate.

(5) Now, buyers who act quickly can qualify for up to $8,000. in Federal tax credits and up to $10,000 in State of California Tax Credits. 

For more information about marketing your home, state and Federal real estate tax credits, short sales or to search for your new home any where in San Diego or Scripps Ranch, contact Claude Braunstein  or phone our team at 858 271-7770.  A Coldwell Banker affiliate with over 30 years of experience, Claude and his team will help you find the right home at the right price and help you to take advantage of the current home purchase tax credits.  Additional information is available on our website www.ClaudeBraunstein.com , where you can also search the MLS for a suitable home. 

IMPORTANT NEWS

Buyers of Scripps Ranch homes and condominiums now have the opportunity to receive as much as $18,000 in Federal and California State Tax credits. 

The State of California is instituting a new housing stimulus bill granting $10,000 in state income tax credits to home buyers  known as AB 183. This bill allocates $200 million dollars for additional tax credits for buyers of homes in California, $100 million for first tme buyers of existing homes and $100 million for any one who buys a new unoccupied home.  This bill applies to escrow closings after May 1, 2010. This California State tax credit is limited to the lesser 5% of the purchase price of the qualifying home and must be taken in equal tax credits over over 3 years.  This $10,000. state tax credit can be combined with the $8,000. Federal Tax Credit but combining them can be tricky and the timing must be precise.

THE DETAILS:

To be eligible for the California tax credits, first time buyers (taxpayers)must be at least 18 years old and unrelated to the seller.  First time buyers are defined as those who have not owned a home in the past three years.  Buyers of new, unoccupied homes do not need to be first time buyers.

Buyers must live in the home they buy (principle residence) under the rules of AB 183. They must live in the home for at least 2 years or may be requred to repay the tax credit to the State of California. 

This California State tax credit is limited to the lesser 5% of the purchase price of the qualifying home or $10,000. and must be taken in equal tax credits over 3 years. 

To be eligible for the California State tax credit buyers who must close escrow between May 1, 2010 and December 31, 2010.  Buyers in an enforcable contract by December 31, 2010 have until August 1, 2011 to close escrow.

To be eligible for the Federal Tax Credit,  purchasers must be in a non contingent escrow by April 30, 2010 and close escrow by June 30, 2010.

For the California State Tax Credit buyers the cannot close escrow on their new home before May 1, 2010.  There is only a short window of time,  May 1 2010 to June 30, 2010 to close escrow and be eligible for combining both tax credits.

Buyers must act quickly because the funds allocated to the 2010 California Tax Credit are expected to be rapidly depleted.  The 2009 California State home buyer Tax Credit allocation was used up in only four months.

To purchase a home using these tax credits or for more information on these Federal and California  State Tax Credits contact Claude Braunstein  or phone us at 858 271-7770.  A Coldwell Banker affiliate with over 30 years of experience, Claude and his team will help you find the right home at the right price and help you to take advantage of the home purchase tax credits.  Additional information is available on our website www.ClaudeBraunstein.com , where you can also search the MLS for a suitable home. 

LAST CALL for HOME PURCHASE TAX REBATES

There are ONLY 30 days left to locate and purchase your next home if you want to take advantage of up to $8,000 in government tax rebates for home purchasers.

The rebates are available to both first time buyers (no personal residence owned in last 3 years) and repeat buyers (current home owners who have owned their homes for five of the last 8 years).

In order to qualify, the home buyer must be locked into a binding contract by April 30^th 2010.  Although you will have until June 30^st 2010 to complete the transaction, you must be in a binding escrow by April 30^th 2010. 

Don't fall into the contract language trap.  Most real estate purchase contracts contain contingency clauses to protect the buyer.  For example, the purchase contract may give the home buyer 17 days to inspect and investigate the home, obtain an appraisal and secure a loan.  This makes it a contingent contract, which will not qualify you for the home buyer tax rebate.  In order to be eligible for the rebate, you must have removed ALL buyer contingencies provided in the contract by April 30^th 2010.

So to be safe, you really need to locate your next home by April 15^th 2010, unless you want to give up your contingency protections.  That's ONLY 30 DAYS from TODAY!  Inventory is limited in many areas, such as Scripps Ranch houses and Rancho Penasquitos houses.  Short Sales will not work because they take too long to process.  That means that you have to locate a home owner with equity in their home, or a foreclosed property whose owner is willing and able to process the transaction in the next 30 days.

Since you probably will not be the only purchaser scrambling to purchase a home in the next 30 days in order to take advantage of the tax rebates, you will most likely face competition from other similar minded purchasers.

 If you have not yet started looking for your next home, you better start looking immediately.  If you see a home that has 80% to 90% of the features you want, grab it as another one may not come along in time for you to take advantage of the tax rebates.

To look for a home and take advantage of the federal tax rebate program, call Real Estate Broker Claude Braunstein at 858-271-7770 ( Claude@ClaudeBraunstein.com.)   A Coldwell Banker affiliate with over 30 years of experience, Claude and his team will help you find the right home at the right price and help you to take advantage of the home purchase tax rebate.  Additional information is available on our website www.ClaudeBraunstein.com , where you can also search the MLS for a suitable home.  CA Broker Lic # 590130.