In my previous posts, I mentioned that Los Angeles County Assessor is working on reassessing Pasadena California homes purchased between July 1, 2004 and June 30th 2007. 

ALSO READ:  Property Tax Increases on your Pasadena Home

                         How are Property Taxes calculated in Pasadena California

                         Get your Property Reassessed by the LA County Tax Assessor

Rick Auerbach, Los Angeles County Assessor just released a press statement that this project has been completed by his office.  128,000 Los Angeles County homeowners will be notified in writing by June 30th of this year that they will be paying lower real estate taxes.

The average reduction in assessed value is about $73,000, he added, amounting to an average property tax savings of approximately $750.

Below is the full press release for your review:

NEWS

RICK AUERBACH

 LOS ANGELES COUNTY ASSESSOR

CONTACT: ROBERT KNOWLES MAY 27, 2008

(213) 974-3101 FOR IMMEDIATE RELEASE

DECLINE IN VALUE REVIEW

Los Angeles County Assessor Rick Auerbach today announced completion of a decline in value review of homes in Los Angeles County. Auerbach said that due to the declining real estate market, it was his responsibility to review values to make sure homes are properly assessed.

"We looked at homes and condominiums that were purchased between July 1, 2004 and June 30, 2007, based on our analysis of market trends in Los Angeles County," Auerbach said. "The review included 318,000 homes and condos. Our analysis will result in lower assessments on 128,000 homes and condos and will be reflected on the tax bills to be issued in October."

The average reduction in assessed value is about $73,000, he added, amounting to an average property tax savings of approximately $750.

"In addition, this review will eliminate the need for many taxpayers to go through the formal appeal process," Auerbach said. The 128,000 homeowners who will be receiving a value reduction will be notified in writing by June 30 of this year. If they disagree with the amount of the reduction they should contact the nearest Assessor's District Office and discuss the results. If owners still disagree with the value, they may file an appeal with the county's Assessment Appeals Board. The deadline for filing an assessment appeal is November 30.

Homeowners who purchased their properties outside of the time period for the review (July 1, 2004 to June 30, 2007) and believe that their property is assessed above its actual value as of January 1, 2008, should file the simple, one-page Decline-in-Value application. The form can be downloaded from the Assessor's Website at http://assessor.lacounty.gov or an application can be requested by calling 888-807-2111.

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Decline-In-Value

5/27/08

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Auerbach also noted that there are several private companies offering their services to homeowners to pursue a reduction in property taxes. These companies may charge hundreds of dollars to file for a reduction in value on behalf of the property owner.

"Solicitations of this type may not be illegal," he said, "but property owners should be aware that their property may have already been reviewed and the value reduced.

"There is no reason for someone to pay for a review that has already been completed by my office," Auerbach said. "Even if their property was not included in this review, the Decline-In-Value form is easy to complete and readily available from our offices or on our website."

Pasadena home buyers asking home sellers to pay for some of their closing costs need to be very careful at how the California Purchase Contract is written.

There are two types of closing costs.  They are Recurring and Non-Recurring costs.

Recurring Closing Costs are charges or fees which will occur more than once.  For example, home property taxes, fire insurance, mortgage insurance, HOA (Home Owner Association) dues.

Non-Recurring Closing Costs are charges or fees which only occur one time during the purchase of your Pasadena home.  These charges include escrow fee, title insurance, recording fees, notary public fees, loan origination and discount point fees.  In essence, anything that is a one-time fee and will not be paid again.

The reason that it is important to specify the types of closing costs a buyer is asking the home seller to pay is because as a buyer, you'd want to use the full amount of closing costs allocated to you by the seller.

For example, your offer is asking the Pasadena home seller to pay $5,000 of your closing costs.  The costs are not described as recurring or non-recurring.  Most lenders will allow the escrow company to credit you non-recurring closing costs only.  If these non-recurring closing costs come up to only $4,000, you will not be able to apply the remaining $1,000 towards your Pasadena home purchase.

Make sure to work with your lender and Pasadena Real Estate agent to understand what kind of closing costs your mortgage lender will allow and the percentage of the sales price that can be applied towards these costs.

Don't be caught unawares.  Be an informed home buyer!

READ MORE:  How much can you expect to pay in closing costs and what are they?

If you are ready to start your Pasadena home search, please call me at 626-627-7107 or email me at irina@irina4realestate.com.

FHA loans have been in the news recently due to the increase in the FHA mortgage limits, up to $729,750 for single family homes and the fact that buyers can get an FHA loan with a much smaller down payment - as low as 3% down.

READ MORE:  Distressed markets and FNMA announcement

If you are a Pasadena home seller, it is critical to be aware of the following:

• Pasadena home buyer with less than 20% down in almost all instances will need PMI insurance (Property Mortgage Insurance.) 
• PMI rates are going up quickly and making it more expensive for home buyers which in turn makes the home that they want to purchase NOT affordable.  Most home buyers are not aware of these changes in the lending/mortgage industry until they are already in escrow. 

FHA loans have very specific requirements for home buyer expenses.  These fall into allowable and NON-allowable expenses.  Non-allowable expenses are usually paid by the SELLER!

To qualify for an FHA loan, Pasadena home buyers can NOT pay for the following expenses:

• Sub-Escrow Fee to Title Company
• ALTA Endorsement Fees
• Some Inspection Fees
• Recording Assignment Fees
• Processing Fees
• Document Preparation Fees
• Tax Service Contract
• Any Messenger Fee including Overnight Delivery
• Loan Tie-In Fee
• Bring-Down Fee
• Title Binder
• Tax Stamps/City Transfer Tax Charges
• Homeowner Association Transfer Fees
• Repairs or work required on FHA appraisal (unless approved in advance by lender in writing)
• Home Warranty Program - (unless stipulated in escrow instructions and approved by lender in writing)
• Photo Fee/Photo Inspection Fee
• Reconveyance Fee
• Preliminary Change of Ownership Report
• Commission
• Transaction Coordination Fees

If you are a Pasadena Home Seller and you receive an offer from an FHA home buyer or are in escrow with an FHA home buyer, please be aware that these fees will most likely come out of YOUR pocket.

FHA loans offer a very viable financing option for many buyers and I think that we will see more home buyers with FHA financing in the coming months, but Pasadena home sellers need to understand the financial impact to them. 

Make sure that your Pasadena Real Estate Agent provides you with an estimated closing costs statement so that you know your home sale bottom line.

Remember information is KING!

Questions?  Comment below.

FNMA announced today that it's raising its Loan to Value (LTV) limits.  This means that home buyers can put a lot less money down to buy their dream home. 

It all sounds great, right?  Fabulous news!

NOT Really!

Well it's not as it seems just like all the other announcements that have been made recently.  FNMA is trying hard, but we need to look at other factors.

• Yes... FNMA will allow you to get a loan with as little as 3% down. 
• Any loan amount or a combination of loans, if you're fortunate to find a bank that will offer a 2nd trust deed at this time, over 80% will require Property Mortgage Insurance (PMI).
• Word in the banking industry is that there are announcements from PMI companies indicating significant mortgage insurance retractions that impacted a host of programs - meaning that beginning immediately it will be much more difficult and more expensive to get PMI insurance.

If you are a home buyer in the Pasadena and surrounding cities, be prepared to still come up with a significant downpayment between 20% and 25% down.

There are investors that are offering programs with less money down, but they require FICO scores higher than 700 and at least 6 months of payments in reserves.

Mortgage industry guidelines and programs are changing on a daily basis. 

It is critical that buyers are speaking with a Mortgage Professional early in the process.

Sellers make sure that your Real Estate Agent doesn't just show you a pre-approval letter for a potential buyer, but gets on the phone and speaks with the lender to understand if the buyer is truly qualified and approved to purchase your home.

Be aware of the changes in the market place and stay tuned.  I'll be posting more information on mortgage industry changes as it becomes available.

In the meantime, if you have questions or would like me to address specific issues, please do no hesitate to comment here or send me an email at Irina@Irina4RealEstate.com

Every Thursday from 10 am until 2pm, Pasadena real estate agents showcase their new listings - homes that just hit the market.  This is specifically for brokers to preview all new homes for sale for their clients. 

Although serious buyers have been known to put in an appearance to get their first peek at the available homes.

If you are interested in being the first to preview these homes, send me a quick email at Irina@Irina4RealEstate.com and I'll send you a list of all Pasadena homes open at that time.

Thursdays are also Broker's Open House days for South Pasadena homes, San Marino homes, Alhambra homes, Arcadia homes, Sierra Madre homes, San Gabriel homes, Altadena homes and Monterey Hills homes and condos for sale.