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All Encompassing Mortgage and Real Estate Thread


UTPhil2006

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1.25% tax rate in most of San Diego County.   And we have Prop 13, so your taxes only go up a minimal amount, they don't really follow market appreciation.  Seller on this property paid 1,272 last year, based on original purchase price.  My buyer will pay about 5,600 annually, impounded in the mortgage. 

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to further clarify:  My city adds sewer fees to the  property taxes, about 500 per year.    In the PIQ above, that particular City adds sewer fee to the water/trash bill, which goes through the City.  I'm the next town over, but a bit more rural (I'm on 2 acres), so I have an irrigation district doing water, and a private contractor (Waste Management) doing trash.  SDGE fucks almost all of us for power and gas, without a solitary drop of lube.   

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Just now, tx 3 putt said:

 

i think i used to pay $175 the couple of times i played there

 

I had to get in a lottery and I think I paid $225 but it could have been $175. Worth every penny. Prettiest course I ever saw. Played it from the tips (south course- the hard one) and shot 82 or 83. 
In a lot of ways it’s not a hard course- it’s just really easy to make bogey on every hole, but there wasn’t a lot of trouble or

opportunity to really blow up on any holes, if that makes sense. I want to say I had 10 bogeys and 8 pars or something like that. No others though for sure. Just a lot of 3 or 4 irons into every green seemingly, and then it’s a question of if you get up and down for par or chip it on and two putt for bogey. 
feeL like I hit something like 3 or 4 greens is all, but was never really out of position. 

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Also- the taxes out there on real estate are way lower. So a $500,000 house out here will carry a $15000 a year tax bite. My guess is it’s half that out there typically- right? 
The real benefit is California has a very restrictive two percent annual cap on increases in assessed value. A home is reassessed on sale, so you don't start with a huge tax advantage, though taxes are lower than, say, Texas with its relatively property tax rates. But if you're holding it for a long time that tax benefit really starts to compound.
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Just now, gmr548 said:
10 hours ago, Wulaw Horn said:
Also- the taxes out there on real estate are way lower. So a $500,000 house out here will carry a $15000 a year tax bite. My guess is it’s half that out there typically- right? 

The real benefit is California has a very restrictive two percent annual cap on increases in assessed value. A home is reassessed on sale, so you don't start with a huge tax advantage, though taxes are lower than, say, Texas with its relatively property tax rates. But if you're holding it for a long time that tax benefit really starts to compound.

It won't happen in the next decade because it would be political suicide for the group that gets it passed, but eventually the State will be forced to remove or lessen the benefit of that provision of the code.  They are already considering removing it for commercial businesses over a certain amount.  Probably not an issue for home buyers now, but will be a concern in the next 20 years when more fixed asset type businesses and higher net wealth individuals move out of the state forcing the state and local governments to look for money elsewhere.

3 minutes ago, troph said:

I think the CA prop tax laws are far superior. Doesn’t prevent gentrification but does allow someone to stay if they want. In Austin the property tax bill alone can force you to sell.

Bolded part is definitely true and I think was the major driver for passing it. It's just a means to an end though - what the state provides in way of favorable property tax law - they hammer you on state income tax and other taxes/fees. 

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5 minutes ago, Enchubben said:

It won't happen in the next decade because it would be political suicide for the group that gets it passed, but eventually the State will be forced to remove or lessen the benefit of that provision of the code.  They are already considering removing it for commercial businesses over a certain amount.  Probably not an issue for home buyers now, but will be a concern in the next 20 years when more fixed asset type businesses and higher net wealth individuals move out of the state forcing the state and local governments to look for money elsewhere.

Bolded part is definitely true and I think was the major driver for passing it. It's just a means to an end though - what the state provides in way of favorable property tax law - they hammer you on state income tax and other taxes/fees. 

It was a citizen initiative. There was no reason for passing it other than people hate paying taxes. 
for that reason o don’t believe it can be removed by legislature. It’s part of the state constitution. 
note- I could be wrong twice here, but I think that’s the deal. 

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Bolded part is definitely true and I think was the major driver for passing it. It's just a means to an end though - what the state provides in way of favorable property tax law - they hammer you on state income tax and other taxes/fees. 

The split roll proposal wherein commercial caps will be removed for high value prop is on the ballot for Nov. If passed that shit is going to blow up Cali CRE in ~5 yrs once it’s phased in. Those investments were all underwritten with current tax law.
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Bolded part is definitely true and I think was the major driver for passing it. It's just a means to an end though - what the state provides in way of favorable property tax law - they hammer you on state income tax and other taxes/fees. 
I'm not taking the CR bait on the merit of the policy but Wulaw is correct that it was an amendment to the constitution. A quick Google says amendments have to be approved by voters, so I very much doubt the exemption for residential property is going anywhere. Probably about as likely as Texas establishing an income tax after the measure on that passed a couple years ago.
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45 minutes ago, gmr548 said:
1 hour ago, Enchubben said:
Bolded part is definitely true and I think was the major driver for passing it. It's just a means to an end though - what the state provides in way of favorable property tax law - they hammer you on state income tax and other taxes/fees. 

I'm not taking the CR bait on the merit of the policy but Wulaw is correct that it was an amendment to the constitution. A quick Google says amendments have to be approved by voters, so I very much doubt the exemption for residential property is going anywhere. Probably about as likely as Texas establishing an income tax after the measure on that passed a couple years ago.

Thanks for confirmation- I was pretty sure I was right. 
basically- that law is used as the biggest/best argument against citizen driven ballot initiatives like that. That law will essentially strangle the state budget, from here to the end of eternity, and never get repealed. 
I seriously, even in California, can’t imagine people ever voluntarily opting to somewhere between triple and sextuple their taxes. 
That law lasts until bankruptcy, insolvency and the end of the world happen, and a couple years added afterwards just to be safe. 

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When Prop 13 went into effect, High School shop classes and music classes disappeared almost overnight. 

4 hours ago, troph said:

I think the CA prop tax laws are far superior. Doesn’t prevent gentrification but does allow someone to stay if they want. In Austin the property tax bill alone can force you to sell.

In some CA counties, Seniors can move (downsize) and keep their old tax liability.   So, the house you paid $50,000 for 35 years ago is now worth $500,000, you aren't forced to stay in it because of the low tax bill.  You can move into that $300,000 condo and keep paying the same tax you paid on the $50,000 house.

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2 hours ago, Gil Bang said:

When Prop 13 went into effect, High School shop classes and music classes disappeared almost overnight. 

In some CA counties, Seniors can move (downsize) and keep their old tax liability.   So, the house you paid $50,000 for 35 years ago is now worth $500,000, you aren't forced to stay in it because of the low tax bill.  You can move into that $300,000 condo and keep paying the same tax you paid on the $50,000 house.

which is just political pandering.

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20 hours ago, Gil Bang said:

Put one in escrow 7/1/20.   Initial offer 6/28, dicked around with counters a couple of days. 

Scheduled close today, 7/30.  This is the first time my escrow calendar tracked with the actual calendar (day 1 of escrow 7/1, day 30 of escrow 7/30).  Loan docs were at escrow today.  Buyer couldn't sign today so she's signing tomorrow at 9 AM.  Title rep is waiting at signing, and is couriering (sp?) note to lender and Deed of Trust to title.  Tomorrow being the last day of month, I doubt that they will fund in time to close.   Lender sent CD on Monday 7/27, and docs were dated for today.

So, the county recorder isn't recording walk-ins due to COVID, so basically, whenever title gets the deed and the cash, they are calling the deal "closed".  They somehow efile the deed...how  I don't know, nor do I need to know. 

First time buyer.  740 credit, good income (MRI tech with a large regional healthcare system).  5% CONV, 2.75 interest.  $1400 processing fee, no points.  Purchase price 449,900.

Here's where you Texas boys shit your pants:  977 sf.  2/2 twinhome. Single car garage. Nicest lot in the subdivision at 5,333 with prime elevation.  This was originally a senior  community, and went all-ages in the late 80's.

Wu, I'm happy to PM you the address so you can see it on redfin or something, but not putting any shit on blast on this board publicly.  

So, buyer signed docs at 9 AM.  The entire closing team went the extra mile today.  The escrow got the buyer signed quickly, and got the relevant docs faxed to the lender.  The title rep hand-carried the deed of trust from Temecula to San Diego.   The lender, despite having to confirm buyer's employment (again) on the day of funding, managed to get the wire out.  Right now, I'm drinking a Cold Bud Light*  waiting on confirmation of recording.   Closed in 31 days during COVID.  Not bad.   The weird thing is, the buyer lost all enthusiasm the last few days, and didn't really seem to GAF if it closed today or Monday or next week or whenever.   It's a shame, because handing someone the keys to their new home is usually really fun. 

 

 

*And for the record, @Steel Shank, I intend to lay some pipe later this evening.

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Can I just vent here for a second? I'm not sure why this is the case, I'm sure it has to do with government. But I've had to write multiple chapters of a book explaining movement between bank accounts. We have a lot of movement between my business, my personal accounts, retirements, and my bank accounts and my wife's. Just for budgeting/bucketing type reasons and other stuff. 

"Sir, this line item right here on your bank statement we're going to need you to write a letter explaining what that item is"

"You want me to write you a letter stating that the line item on my bank statement that is very clearly marked 'S-CORP DISTRIBUTION TO OWNER' is a distribution from my S-Corp?"

"That's right"

"What about this transfer from my wife's checking to my checking that says "WIFE PORTION OF JULY BILLS" - do you need me to write you a letter explaining that that's my wife sending me money for our July bills?"

"Yes sir"

I get why the industry is regulated and has oversight, but got damn. The entire process sucks.

Edited by BradInATX
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10 hours ago, BradInATX said:

Can I just vent here for a second? I'm not sure why this is the case, I'm sure it has to do with government. But I've had to write multiple chapters of a book explaining movement between bank accounts. We have a lot of movement between my business, my personal accounts, retirements, and my bank accounts and my wife's. Just for budgeting/bucketing type reasons and other stuff. 

"Sir, this line item right here on your bank statement we're going to need you to write a letter explaining what that item is"

"You want me to write you a letter stating that the line item on my bank statement that is very clearly marked 'S-CORP DISTRIBUTION TO OWNER' is a distribution from my S-Corp?"

"That's right"

"What about this transfer from my wife's checking to my checking that says "WIFE PORTION OF JULY BILLS" - do you need me to write you a letter explaining that that's my wife sending me money for our July bills?"

"Yes sir"

I get why the industry is regulated and has oversight, but got damn. The entire process sucks.

I deposited 5k in cash I had at the house since I sold my Jeep and they freaked out on me.  They want me to get a notarized letter stating that it came from the Jeep sale even though I have the bill of sale signed and dated.

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11 hours ago, BradInATX said:

"What about this transfer from my wife's checking to my checking that says "WIFE PORTION OF JULY BILLS" - do you need me to write you a letter explaining that that's my wife sending me money for our July bills?"

Always interesting to get a look into how different marriages handle their finances. 

 

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13 hours ago, BradInATX said:

Can I just vent here for a second? I'm not sure why this is the case, I'm sure it has to do with government. But I've had to write multiple chapters of a book explaining movement between bank accounts. We have a lot of movement between my business, my personal accounts, retirements, and my bank accounts and my wife's. Just for budgeting/bucketing type reasons and other stuff. 

"Sir, this line item right here on your bank statement we're going to need you to write a letter explaining what that item is"

"You want me to write you a letter stating that the line item on my bank statement that is very clearly marked 'S-CORP DISTRIBUTION TO OWNER' is a distribution from my S-Corp?"

"That's right"

"What about this transfer from my wife's checking to my checking that says "WIFE PORTION OF JULY BILLS" - do you need me to write you a letter explaining that that's my wife sending me money for our July bills?"

"Yes sir"

I get why the industry is regulated and has oversight, but got damn. The entire process sucks.

When closing on my first house, underwriter freaked out about a transfer from MY savings to MY checking that I had done to get the cashier's check for the down payment. Same bank, same account holder (me), clearly marked as "transfer from savings." 

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Proposition 15 Update for CA since we were discussing 13 previously:

Proponents of an overhaul were successful in getting a measure fully qualified for the November 2020 ballot. If approved by a majority of California’s voters, the measure, Proposition 15, would establish a “split roll” property tax regime wherein a different assessment scheme would apply to commercial and industrial property, as compared to residential property.  Spoiler because of the length, but I tried to highlight the key considerations.  Supposed to increase revenues by $11.4B, but most of that would not be for several years down the road.

Spoiler

The text of Proposition 15 states that it shall be known as “The California Schools and Local Communities Funding Act of 2020.”  If approved by voters, the California Constitution would be amended to require commercial and industrial properties to be assessed based on their fair market value, rather than purchase price, at least every three years.  Affected property would include commercial and industrial property, and vacant land not zoned for residential use and not used for commercial agricultural production. Residential properties, whether occupied by a homeowner or renter, would be excluded from the scope of Proposition 15. Special rules would apply to mixed-use real property, and the Legislature would be required to ensure that only the portion of the property used for commercial or industrial purposes would be assessed based on fair market value. There is some debate regarding whether Proposition 15 would apply to remote workers who use their homes as their offices. Importantly, business owners who have commercial and industrial properties holdings in California with a fair market value of $3 million or less would not be subject to reassessment under the revised regime. This means that if the owner of the property’s total commercial and industrial property (in the aggregate) owned in California is valued at $3 million or less, the property would continue to have Proposition 13’s protections, i.e., initially assessed based on the value at the time of purchase price, and the assessed value each year would be subject to a maximum 2 percent increase. Note that Proposition 15 would not change the constitutional property tax rate, which is generally limited to one percent of the assessed value of the property.

The change in California’s property reassessment regime would generally be implemented beginning with the fiscal year that runs from July 1, 2022 to June 30, 2023, although there is a delay to the 2025-2026 fiscal year if 50 percent or more of the occupied square footage of a real property parcel is occupied by small businesses, as defined by Proposition 15.  Proposition 15 would require the Legislature to establish a task force on Property Tax Administration that would develop a statutory phased-in approach for reassessing a percentage of commercial and industrial real property within each county over a three-year period beginning with the 2022-2023 fiscal year. The lien date for that fiscal year is January 1, 2022, and the first installment of property taxes for properties reassessed in the first year of the three-year phase in would be due on November 1, 2022.

Due to the phased-in approach, there will be a few years where some property owners within a country are obligated to pay taxes based on the new assessed value, while others will continue to pay under the Proposition 13 value.  The phase-in legislation is required to provide taxpayers with a “reasonable period of time” within which to pay the increased tax due to reassessment. After the initial reassessment, commercial and industrial real property would be periodically reassessed at fair market value at least every three years.

The Legislature would also be required to develop a process for hearing appeals resulting from the reassessment of such properties. This process would include switching the burden-of-proof regarding a property’s assessed value from the assessor to the property owner and repealing the rule regarding automatic acceptance of a property owner’s assessed value if the property tax appeal is not acted upon within two years.

Proposition 15 would also revise how personal property, including business equipment and fixtures, is taxed.  For certain small businesses with less than 50 annual full-time equivalent employees, all tangible personal property owned and used for business purposes would be exempt.  All other businesses would have an exemption up to $500,000 on personal property and business equipment (combined).

TLDR version - this measure made it to November 2020 ballot. Will impact commercial and industrial properties over $3M. Not sure how they plan to implement all of these exemptions but it smells ripe for some tax planning. 

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I’m about 4 years into a 30 year mortgage at 3.625 right now. Have about $250k outstanding principal. House value about $525k. Plan to stay in house for at least the next 15 years. Very good credit.

 

1) should I refi? I assume yes.

2) what rates could I get on a 15 year fixed? Closing costs?

 

Any brokers feel free to PM me. I’m in Houston.

 

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3 hours ago, Mantis Toboggan, MD said:

I’m about 4 years into a 30 year mortgage at 3.625 right now. Have about $250k outstanding principal. House value about $525k. Plan to stay in house for at least the next 15 years. Very good credit.

 

1) should I refi? I assume yes.

2) what rates could I get on a 15 year fixed? Closing costs?

 

Any brokers feel free to PM me. I’m in Houston.

 

PM sent.  I buy beers for clients too so ignore all other PM's.

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How does asking for compensation related to closing delays work? Our buyer has completely botched the process; somehow they didn't get required paperwork to the underwriter until yesterday, which is three days prior to close date. That's pushing back our close date on the new house as well, which is creating all sorts of logistics problems. It will likely mean that we won't have internet at the new place for awhile.

I'm pissed, the buyer has been a complete prick and a hot mess the entire time. What's my recourse here? What can I reasonably demand if the close date gets pushed back even further? Can I ask for 8 hours of my hourly work rate if I can't work due to no internet? Day care reimbursement, etc.? Does missing our close date put the buyer in breach? If I wanted to go nuclear, what are my options?

Thanks in advance. Texas, FYI.

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45 minutes ago, BradInATX said:

How does asking for compensation related to closing delays work? Our buyer has completely botched the process; somehow they didn't get required paperwork to the underwriter until yesterday, which is three days prior to close date. That's pushing back our close date on the new house as well, which is creating all sorts of logistics problems. It will likely mean that we won't have internet at the new place for awhile.

I'm pissed, the buyer has been a complete prick and a hot mess the entire time. What's my recourse here? What can I reasonably demand if the close date gets pushed back even further? Can I ask for 8 hours of my hourly work rate if I can't work due to no internet? Day care reimbursement, etc.? Does missing our close date put the buyer in breach? If I wanted to go nuclear, what are my options?

Thanks in advance. Texas, FYI.

Not a real estate attorney but have been through the property sale wringer a few times.

I would think the only things you can do are deal with it or move on to another buyer.  

 

As a “warning”, I was involved in a transaction helping my aunt sell a property she had.  She took a back up offer during due diligence of a initial offer. When the initial buyer didn’t close she closed with the back up.  Initial buyer showed up a few weeks later with a lawsuit for the amount of the property.  She won the case and attorneys fees.  However the attorneys fees were reduced after appeal by initial buyer. She did the whole sales process under the advice of an attorney so she had all her shit lined up really well for the lawsuit. All in all a gigantic clusterfuck.

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I know I've asked this before but I have 150K left with 7 years 8 months left on 15yr at 3.25. 150K principle and 19K interest.

I keep thinking if I could get a 15 year at 2.25 with minimal closing costs I should do it even though it would cost me approx 7k more in interest over the 180 months.

my payment would drop 850.00 a month.  I know the 150K balance is low.

I know cash out refi might be a better option but the rates are higher for those correct?

any advice?

 

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1 hour ago, dcar00 said:

I know I've asked this before but I have 150K left with 7 years 8 months left on 15yr at 3.25. 150K principle and 19K interest.

I keep thinking if I could get a 15 year at 2.25 with minimal closing costs I should do it even though it would cost me approx 7k more in interest over the 180 months.

my payment would drop 850.00 a month.  I know the 150K balance is low.

I know cash out refi might be a better option but the rates are higher for those correct?

any advice?

 

Cash out would have higher rate. Probably about 3/8 of a point- maybe 1/4, maybe 1/2 depends on ltv partly and where markets are that particular day. 
at 2.25% you aren’t going to get “practically no closing costs”. Figure $3500 probably best case. 
so? The question is more about- are you interested in terming out your loan to save money every month or aren’t you. 
my suspicion would be that your interest rate savings would probably be a push with your closing costs (or a slight benefit) so if you are staying in the house it’s not a bad deal per se for you in the sense you are going to lose money by doing it- it’s more about how long you are comfortable having a mortgage and where you want your payment to be. 

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18 minutes ago, Wulaw Horn said:

Cash out would have higher rate. Probably about 3/8 of a point- maybe 1/4, maybe 1/2 depends on ltv partly and where markets are that particular day. 
at 2.25% you aren’t going to get “practically no closing costs”. Figure $3500 probably best case. 
so? The question is more about- are you interested in terming out your loan to save money every month or aren’t you. 
my suspicion would be that your interest rate savings would probably be a push with your closing costs (or a slight benefit) so if you are staying in the house it’s not a bad deal per se for you in the sense you are going to lose money by doing it- it’s more about how long you are comfortable having a mortgage and where you want your payment to be. 

yeah when I refi'd to the 15 year at the 3.25 8 years ago it was with about 500 in closing costs but I know that was a different market.  ltv is very low.   staying in the house at least for 10 years.  I was thinking better to have lower payment now and I can most likely pay off the balance of the note in 10 years(or sooner) if i want to anyway.  money is so cheap right now so that is why I was thinking about it. agree it is probably financially a push but having the extra 850 a month now might be a good thing.

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20 minutes ago, Dbeasy said:

Austin real estate market is insane right now. House on the market for two days has 12 offers over asking price. This govt spending is really distorting the capitalistic markets. This isn’t going to end well I don’t think.

I just need it to hold out until mid September so I can cash in on my current home before the bottom falls out.

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Austin real estate market is insane right now. House on the market for two days has 12 offers over asking price. This govt spending is really distorting the capitalistic markets. This isn’t going to end well I don’t think.
Neighborhood?

We are getting ready to list in Crestview, realtor has photos happening Thursday.
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46 minutes ago, APMP said:

Neighborhood?

We are getting ready to list in Crestview, realtor has photos happening Thursday.

We have friends who just sold in Crestview. They had an open house the first Saturday and had 6+ offers before the end of that day, most being over asking price. You'll be in good shape if your house is modern.

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We have friends who just sold in Crestview. They had an open house the first Saturday and had 6+ offers before the end of that day, most being over asking price. You'll be in good shape if your house is modern.
Good to know, yeah total rebuild in 2013 and some more new stuff a couple of years ago.
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