FAQ
       
  Appraisal Basics

An appraisal of Real Estate is the valuation of the rights of ownership, the appraiser must define the rights he intends to appraise.

The appraiser does not create value, the appraiser interprets the market to arrive at a value estimate. As the appraiser compiles data pertinent to a report, consideration must be given to the site and amenities as well as the physical condition of the property. An appraiser may spend only a short time inspecting the property, however, this is only the beginning.

Considerable research for collecting general and specific data must be accomplished before the appraiser can arrive at a final opinion of value.

Due to the many types of value, such as Fair Market Value, Insurance Value, Tax Value and Value In Use, the need to precisely define the purpose of the appraisal is readily indicated.

Questions You Should Ask Yourself When Shopping For A New Home:

Ask yourself a few basic questions as you start shopping for a new home.

What kind of neighborhood are you looking for?

  • Do you want to live on a quiet street?
  • Will you need access to public transportation?
  • Do the schools and day-care facilities meet your needs?
  • How close are police, fire, and medical services?
  • Is there adequate parking for your vehicles?
  • Are there places of worship in the area?
  • Are the neighbors likely to be compatible with your tastes and lifestyle?
  • Do the property taxes fit your budget?
  • Is garbage collection adequate?
  • Does the community have a reliable source of drinking water?
  • Is the home sheltered from nearby sources of noise, smoke, or odors?
  • Is the neighborhood safe from potential hazards such as large gas or oil tanks or streams that may cause floods?
  • Are any development plans under consideration that could substantially change the nature of the community?
What kind of lot are your looking for?
  • Large or small?
  • Extensively landscaped or easy to maintain?
  • Will you need a yard where children can play?
  • Are trees important to you?
  • Do you plan to have a garden?
What characteristics do you want in your new home?
  • A large or small home?
  • A detached home?
  • A town house, condominium, or cooperative?
  • One story or multilevel?
  • How many bedrooms do you need? How many baths?
  • Do you prefer open spaces or smaller, cozy rooms?
  • Is a large, well-equipped kitchen important?
  • How about a family room, a study, a nursery, a computer room, an entertainment center, a workout area?
  • Would you like special amenities? Hardwood floors? A fireplace? Skylights? A porch? A deck?
  • What do you know about your builder?
  • How long has the firm been in business?
  • Are your builder's previous clients satisfied with their purchase?
  • What type of customer service program will the builder provide?
  • What responsibility does the builder assume for the work of subcontractors?
  • Who will be responsible for correcting problems with major appliances?
  • What type of warranty protection does the builder offer?
  • Does the builder belong to the Building Industry Association of Superior California (affiliated with the National Association of Home Builders)?

How Barrett-Leber Can Help You

For most of us, a home is the single biggest purchase in our lives. The enormity of the financial transaction aside, finding the right home to fit our particular needs and wants is no easy undertaking. Just as you wouldn't buy a car, computer or camcorder without doing some research into various models and prices, you shouldn't consider purchasing a home without some expert advice and guidance from your professional Realtor®. Though some people may think of using our services only when selling their homes, we can be invaluable when buying one as well.

For instance, we can help you determine how much home you can afford based on your financial situation, help you get prequalified for a loan, and even inform you about available financing options. We are also experts on the neighborhood, and can provide detailed information about schools, transportation, local taxes and community characteristics. Using our services is also one way of gaining access to homes listed on the Multiple Listing Service (MLS), an important marketing tool used by REALTORS® to inform other REALTORS® about available properties. That means that we can give you information about a wide range of available homes from which to choose. When it comes to finding out if you're paying too much, we can provide you with market analyses comparing asking and selling prices of homes in Dixon. Finally, we will serve as the liaison between you and the seller, bringing to the table unmatched negotiating expertise and knowledge about required disclosures and the local housing market.

Benefits Of Home Ownership

Owning a home can bring financial rewards as well as a personal satisfaction that comes with knowing that you have a piece of the American dream. The financial benefits of homeownership range from the tax breaks that the owner can enjoy by writing off interest to the possible appreciation in the equity of the home over time. To understand the full extent of possible tax benefits, it is strongly suggested that you contact your local IRS or speak with an accountant about your particular situation. Some of the financial benefits include:

  1. Appreciation - Real estate values generally rise over a period of years.
  2. Tax advantages - Homeowners may deduct mortgage interest and property taxes as an expense against income, while residential investors may write off cost recovery or depreciation.
  3. Being a tangible asset, Real Estate is seen by lenders as low risk, durable and marketable. Therefore, lenders are more willing to loan a high percentage of value. This allows owners to benefit by having control over an entire high-value asset with a low initial investment or down payment.
  4. Real estate is marketable - it can be sold at a predictable price to a dependable group of available buyers, provided enough time is allowed to expose the property to those buyers.
  5. Real estate provides its owner with valuable control and management of its value. Insert the page that is already on-line. It deals exclusively with financial benefits:

The personal benefits are less easy to translate into a specific list, but are in many cases equally compelling as a reason to buy. The following is a list of common motivations that inspire people to own their own homes. Take note of those comments that appeal to your situation:

  • Owning my own home provides me with a deep sense of security. I need to own in order to feel that I have roots and really belong to my community.
  • I can make my own decisions about design and decor.
  • I can invest in upgrades that will not only bring me pleasure but can also add to the value of the property over time.
  • I have control over the piece of property. I am not answering to a landlord.
  • Usually the question is whether a person should rent or buy. There are many factors that influence this decision such as how long a person intends to stay at one certain address. If there is a possibility that occupancy will last only a year or two, then it is probably advisable to rent unless you are willing to lease the property out as a rental once you move on. The only time it makes sense to buy with the intention of a quick turn around is if the property purchased was under-valued or if the Real Estate market is appreciating so rapidly that the increase in equity will exceed the cost of selling the property.
  • Another approach is to buy the property and lease it to tenants when it comes time for you to move on. This makes sense only if you can rent the property at a level that will cover your mortgage payment. You must also be certain that you will have the time and patience to act as a landlord. And finally, be sure to assess what the impact of holding onto the property will be on your financial statement. It is possible that by holding onto the first property to rent, you will not qualify to take a mortgage on a second property.

The decision to buy has as much to do with your personal needs as it does to do with the financial reasons that can motivate a buyer. Do the math to understand the monetary ramifications. Take time to understand your own motivations before you rush into this decision. Homeownership has its definite rewards. Pursue them with wisdom!

Question?

What is the Mello-Roos Tax?

Answer:

In 1978 Californians enacted Proposition 13, which limited many local public agencies ability to finance new projects. In 1982, Senator Henry Mello and Assemblyman Mike Roos effected the passage of the Community Facilities District Act (CFD). This act authorized local governments and developers to create CFD's for the purpose of selling tax-exempt bonds to fund public improvements. Subsequently, property owners that participate in the CFD's pay a "special tax" to repay the bonds. Mello-Roos is this "special tax."

Background:

In 1978 Californians enacted Proposition 13, which limited many local public agencies ability to finance new projects. In 1982, Senator Henry Mello and Assemblyman Mike Roos affected the passage of the Community Facilities District Act (CFD). This act authorized local governments and developers to create CFD's for the purpose of selling tax-exempt bonds to fund public improvements. Subsequently, property owners that participate in the CFD's pay a "special tax" to repay the bonds.

Mello-Roos Community Facilities District Act:

The Act allows any county, city, special district, school district or joint powers of authority to establish a "Community Facilities District" which allows for the financing of public services and facilities. The services and facilities Mello-Roos Districts can provide include streets, police protection, fire protection, ambulatory, elementary schools, parks, libraries, museums, and cultural facilities.

A requisite for the Mello-Roos districts' establishment is that it be approved by two-thirds margin of qualified voters in the district. If there are fewer than twelve registered voters within the proposed district, the vote may be passed by current landowners. At the close of legal proceedings, an established Mello-Roos District has all the legal privileges of a legally sanctioned governmental body.

Responsibilities of Property Owners in the Mello-Roos Districts:

Property owners in Mello Roos District are responsible for payment of the "special tax". The amount of the "special tax" is not (directly) based on the value of the property. Special taxes are based on mathematical formulas that take into account property characteristics such as square footage of the home and parcel size. The special tax is typically included in the annual County tax bill, however it can also be paid off on a monthly basis.

Legal Rights of the Community Facilities District:

A Mello-Roos District has the legal right to adopt stringent penalties and foreclosure priorities; in the event that the special tax payment is delinquent. Ergo, if the "special tax" is not paid, the District may exercise its legal right to foreclose and sell the property. Foreclosure rights can be initiated after 150 - 180 days in arrears.

Disclosure: (California Civil Code §§1102.6)

Seller shall make a good faith effort to obtain a disclosure "Notice of Special Tax" from local agencies which levy on the property a special tax pursuant to the Mello-Roos Community Facilities District Act, and shall promptly deliver to the prospective buyer any such notice made available by those agencies. If the Transfer Disclosure statement or the Mello-Roos disclosure notice is delivered to Buyer after the offer is signed, Buyer shall have the right to terminate this Agreement within three (3) days after delivery in person, or five (5) days after delivery by deposit in the mail, by giving written notice of termination to the Seller or Seller's agent.

Question?

What is the difference between pre-qualification and pre-approval?

Answer:

Pre-qualifying includes analyzing your income, assets and present debt to estimate what you may be able to afford when buying a home. This essential step will give you an idea of your budget when you begin shopping for your new home. Pre-qualifying is informal and non-binding.

Getting pre-approval for your home loan is another thing entirely. Pre-approval means that you have in hand a lender's written commitment to put together a loan for you (subject only to the particular house you want to buy passing the lender's appraisal). Pre-approval makes you a strong buyer because you now have a commitment from a lender to finance your purchase.

 
 
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