Santa Barbara Real Estate Blog

TIGTA Report

The First-Time Home Buyer Tax Credit was a significant motivating factor for Santa Barbara home buyers up until its expiration earlier this year. The tax credit resurfaced in the news recently regarding IRS errors that you, or anyone who utilized the tax credits, should be aware of. An audit by the Treasury Inspector General for Tax Administration (TIGTA) found some individuals receiving the First-Time Home Buyer Tax Credit had incorrect purchase dates recorded on the IRS system. This can cause some taxpayers to receive incorrect notices and for other taxpayers to not be identified that are required to repay the credit. Anyone who received the credit should be aware of this potential incorrect notice in the event that they did have the correct purchase dates.

The IRS is developing a comprehensive strategy to identify individuals with First-Time Home buyer repayment requirements as a result of the TIGTA’s recommendations. Here is what Santa Barbara home buyers need to know about the incorrect notices:

- An estimated 4.1% (73,119) of the estimated 1.77 million individuals receiving the Credit had incorrect purchase dates

- Of those who had incorrect purchase dates, an estimated 59,802 had purchase their homes in 2009, but the IRS incorrectly recorded the purchase as 2008 or the years were not recorded

- If a receiver of the Credit falls into this category, they could incorrectly receive a notice requiring repayment

Additionally, the TIGTA report found that the IRS made an error in had providing the credit to approximately 800 fraudulent tax claims using social security numbers of deceased citizens. A full copy of the TIGTA’s report can be found here.

If you’d like to learn more about the now expired home buyer tax credit program, visit one of the many blog posts on the Santa Barbara Real Estate Blog posted prior to the expiration. If you would like to begin a new, customized Santa Barbara real estate search, contact Daniel Zia (805-637-7148 or Daniel@ZiaGroup.com) or visit our comprehensive Santa Barbara real estate website. Thank you for visiting the Santa Barbara Real Estate Blog.

Santa Barbara Interest Rates

Current and potential Santa Barbara home buyers should find this to be great news: mortgage rates are at their lowest since records began. Both fixed-rate and 5-year adjustable-rate mortgages have fallen to record lows this week (Source: Freddie Mac’s weekly survey of conforming mortgage rates).

CURRENT RATES: The 15-Year fixed-rate averaged 4.13% (was 4.87% last year and 4.20% last week), while the 30-year fixed-rate averaged 4.69% for the week ending today (June 24th). The 30-year fixed-rate is down from 5.42% last year and 4.75% last week.

For more information on how interest rates impact your monthly payment, including a chart to compare rates, visit the Santa Barbara Real Estate Blog’s January post on Santa Barbara interest rates titled “Two-Minute Drill.” If you are interested in finding exceptional mortgage brokers, contact Daniel Zia directly for recommendations to interview personally. Take a few minutes to search the Santa Barbara MLS, where you can create your customized Santa Barbara real estate search based on neighborhood, price, schools, and much more.

The Zia Group recently had a client that placed an offer on a Santa Barbara home, and, like many properties in our current “fast paced” market, the property had multiple offers on it.  The sellers really connected with the Zia Group buyers and liked their offer, but unfortunately there was a buyer with a higher offer (Price) and a higher down payment. In today’s market, buyer qualifications are paramount. From the seller’s point of view (or bank for Santa Barbara REOs), a higher down payment can translate to a higher chance of securing a loan and closing escrow. The Zia Group client experienced the “back-up” position first-hand as the seller of this particular property decided to accept another offer  and extend my buyer a counter offer for back-up position.

Santa Barbara Home

A “back-up” position is essentially a full acceptance subject to the cancellation of the first buyer’s contract. So, if the buyers who are moving forward in escrow decide NOT to purchase the home during their contingency period, the buyers in back-up position would move directly into escrow. In this case, the home would not come back on the market and other interested parties could only place offers on the property subject to back-up position to the buyers who had been waiting in the first back-up position. It can be confusing, but there can be as many “back-up” positions subject to the cancellation of the buyer in line in front of you as the sellers and buyer agree to.

Santa Barbara Property

Now, being in a back-up position can be a double-edge sword. On one hand, the property is locked up in contract. For a hot property that is getting lots of interest, this could prevent a potential multiple offer and re-negotiation situation that you could encounter. That said, if you just happened to place an offer at the same time as one other party, you could run the risk of giving the seller more leverage with their current buyers by waiting in back-up position. The seller may not be as agreeable to the current buyers’ (who are in escrow) demands as far as requests for repairs, and the like.  If you are considering being in a back-up position, it’s often wise to be aggressive in your price and terms to try to “sweeten the deal” for the seller and increase their desire for the first buyer to fall out of escrow. If your offer is less attractive (and most likely would be as they chose another offer), the seller has less reason to want the first buyer to fall out of escrow and may agree to small request for repairs and other items requested by the buyers.

Bottom line, it’s best to consult the qualified Santa Barbara Realtor you are working with as it really comes down to a case by case basis given the property, its relative value, your interest in it, and the current market climate. For more Santa Barbara real estate information, visit the Zia Group’s comprehensive Santa Barbara real estate website. Thank you for visiting the Santa Barbara Real Estate Blog.

Below is an excerpt from Prudential’s market report. A year end market narrative report will be posted at the end of January 2010.

HOME SALES: On a national basis, existing home sales rose 7.4% in November to a seasonally adjusted annual rate of 6.54 million units from 6.09 million units in October. On a year-over-year basis, sales of existing homes increased 44%, the largest gain on record. The inventory of unsold homes on the market fell 1.3% to 3.52 million, a 6.5-month supply at the current sales pace, and the lowest level since December 2006.

If you are interested in Santa Barbara Real Estate, contact Daniel Zia, your Santa Barbara Realtor. Or, search the Santa Barbara MLS for free with our comprehensive MLS search tool.

Daniel Zia (daniel@ziagroup.com – 805-637-7148)

Good news on the Real Estate market front–New Construction home sales last month were the highest they have been in 8 years. On a local level, there are some strong signs as well as a good amount of general consensus that February was the “bottom” of the market. We continue to see multiple offers on properties all the way up to $1.5 million and decent activity in the mid range and luxury market

I am very pleased to announce that on Thursday, April 2, C.A.R. launched a new program designed to provide peace of mind to first-time buyers who are hesitant to enter the housing market due to concerns about potential job loss, and subsequently being unable to meet their monthly mortgage obligations.

Through the C.A.R. Housing Affordability Fund Mortgage Protection Program (C.A.R.H.A.F. MPP), first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month for up to six months to help make their mortgage payments. A qualified co-buyer also can participate in the program, for a reduced monthly benefit of $750 per month for up to six months in the event of a job loss. Program benefits also include coverage for accidental disability and a $10,000 death benefit. C.A.R.’s Housing Affordability Fund is dedicating $1 million to the program this year, and estimates that as many as 3,000 families will benefit from the program throughout 2009.

To qualify for the Mortgage Protection Program, applicants must:
. Be a first-time home buyer – someone who has not owned a home in the last three years
. Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
. Use a California REALTOR® in the transaction
. Purchase the property in California
. Be a W-2 employee (cannot be self-employed or military personnel)

First-time home buyers must request an application for the H.A.F. Mortgage Protection Program from their REALTOR®. For applications and other information on this exciting new program, go to www.car.org/aboutus/hafmainpage/ or contact Monica Rodriguez at (213) 739-8380 or monicar@car.org.

The Mortgage Protection Program is a proactive approach by C.A.R. to address consumers’ concerns about the real estate market and their ability to make their mortgage payments should they loose their jobs.

Thinking about buying a home this year? There is a federal $8k First time home buyer tax credit and a $10k California New Construction Credit. They can be combined for $18k of tax credits + the extra deductions of owning a home. Call/Email for more info. 805-637-7148 or