Endre Barath,Jr.'s Blog

Are you familiar with the latest $150 Fire Prevention Fee that home owners will be assessed in CA?

Did you know that effective August 13th you might be receiving a $150 Fire Prevention Fee in your mail box? Owners of California real property located in a state fire responsibility area &  wild land fire zone (“SRA”) that have been assessed a fee of $150.00 per habitable structure . You should expect to receive a bill from the Board of Equalization (BOE) before the end of this year.

Governor Brown of California signed AB 29 of the First Extraordinary Session (“ABX1 29”) into law on July 7, 2011. ABX1 29 imposes a $150.00 annual fire prevention fee for each habitable structure for property owners in State Responsible Areas (SRA). SRA lands cover about 31 million acres in 56 counties, and include an estimated 1.1 million to 1.5 million individual parcels, and approximately 800,000 habitable structures.

 Public Resources Code Section 4210 provides a legislative finding and declaration that the presence of structures within SRA can pose an increased risk of fire ignition and an increased potential for fire damage within the state’s wild lands and watersheds and that the costs of fire prevention activities should be borne by the owners of these structures.

The Board of Equalization (BOE) is required to annually assess and collect the fee from property owners on behalf of the California Department of Forestry and Fire Protection (CDF) in accordance with the Fee Collection Procedures Law. CDF is responsible for providing the BOE with a list of property owners who are liable for the fire prevention fee and the amount to be assessed.

For additional information about this issue please click on the enclosed link   http://www.boe.ca.gov/abx129.htm

On a side note if you are considering selling a property which falls into the SRA I would think you might want to disclose this annual fee so the buyer does not get surprised. My understanding is that there are some Natural Hazard Disclosure companies that add this disclosure into their packages. My advice is make sure it is in there!

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Playa Vista, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 or email me at homes@endrebarath.com or visit one of my websites at http://www.endrebarath.com Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations

Are you familiar with the: New Gas Pipeline Disclosure Law?

If you are a seller or a buyer in California you need to be familiar. This new Disclosure law makes it clear, that if you are buying a property, than during the transaction there will be a disclosure which will address information about pipelines of gas and hazardous liquid transmission pipeline.

This is encouraging buyers to view the National Pipeline Mapping System also known as the “NPMS” website on their own. The NPMS Internet Website is maintained by the United States Department of Transportation at   http://www.npms.phmsa.dot.gov . The website encourages the potential buyer to seek further information about possible transmission pipelines near the property they are considering by contacting the local gas utility or other pipeline operators in the area.

This disclosure law has been brought about by AB 1511 (Assembly Bill 1511) and it will go into effect after July 1, 2013.

I suspect this law went into effect because in 2010 in San Bruno a San Francisco suburb there was a pipeline explosion which killed eight people and destroyed 58 homes.

There are various Disclosure Companies who generally provide the natural gas transmission pipeline disclosure to their clients, check out the disclosure company that you use and make sure they are in compliance so you do not pick up a potential problem down the road when it is too late.

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 or emails me at homes@endrebarath.com or visit one of my websites at http://www.endrebarath.com Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations.

What is FIRPTA? Understanding the facts about FIRPTA

FIRPTA is the acronym for Foreign Investor Real Property Tax Act. The disposition of US Real Property interest by a foreign nations is subject to the Foreign Investment in Real Property Tax Act of 1980 (also know by most as FIRPTA) income tax withholding. Basically what it means is that the United States is authorized to tax foreign person on the sale of US Real Property.

If you have a Foreign National who is selling Real Property at least in California, most Escrow Companies will follow the instructions of the principals in withholding and remitting the payments to the Internal Revenue Service (IRS) on their behalf.

Most reputable Escrow Companies will have a process in place for accommodating the ability “to hold back funds” if the seller has applied for a Withholding Certificate.

On the other hand keep in mind not all Escrow Companies comply to the FIRPA  requirement, hence it is imperative if you are representing a seller who is a foreign national in a transaction that you protect your Broker, yourself as well as the interest of your government.

The last thing you want is a call from Uncle Sam that you did not protect their interest. Just saying check with your Broker as well your legal advisors so that you do not bring Pecuniary Liability on yourself.

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 email me at homes@endrebarath.comor visit one of my websites at http://www.endrebarath.com Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations.

What is a Qualified Mortgage and Why should you care what will be done with it?

The purpose of a Qualified Mortgage was to reduce the risk of a future housing market crash. This was to be accomplished by having standardization in the lender’s qualification of potential home buyers.  This was to tighten the reins on lenders and insure that there would be good loan qualification standards. This was going to be done by larger down payments and other standards to ensure a higher probability that the mortgages will not default

The goal is altruistically very good: to prevent another housing market crash similar to what happened in 2008. The legislators proposed that lenders take on 5 per cent of the risk of mortgage defaults. The objective was for lenders to have “skin in the game”. In other words legislators wanted lenders to have a financial stake in the game.

The Federal Deposit Insurance Corporation (FDIC) wanted buyers to have a 20 per cent down payment of the home sales price. On the surface this sounds like a brilliant idea. After all that is how my father bought his house in 1973. The purchase price he paid was $41,500.00 and his income was $38,000.00.

Today the median purchase price in my market place is around $650,000.00 and the average income is around $65,000.00.

My father needed around $9000.00 to buy a home. The average buyer now needs to have around $135,000.00 to buy the home.

Let’s be realistic how many of you have over a $100,000 in your savings account? I am all for responsible ownership, but basically this would eliminate middle to lower middle class home ownership in my market.

So what is your thought on this subject? Do you realize what effect this will have on our fragile economy? I would love to hear what you think? Also what solution you could offer to meet the Objective what legislators had in mind?

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 or email me at homes@endrebarath.comor visit one of my websites at http://www.endrebarath.com Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations.

How to prepare for a Short Sale before you begin the Sales Process?

As some of you know, I have written what a Short Sale is from a Seller’s Perspective at the end of August. Just in case you missed it I am enclosing a link to that post (http://actvra.in/GWv ) Now I would like to focus on how to prepare for the Short Sale Process.

The First Step: The Realtor & the Seller should have an extensive, truthful discussion about the Seller’s financial status. Honesty and full disclosure are essential to the successful closing of a short sale transaction.

The Second Step:   The seller & the listing agent need to work together. Now with that said the Seller needs to contact the lender and feel out the Lender how open are they to a Short Pay Off? This is a complex transaction and both Seller & Listing Agent have to work harder to get a successful closing of the transaction.

Keep in mind the Process consists of convincing the Lender to reduce the loan balance and close the transaction. This is not that easy and is very challenging. What you need is good negotiation skill from both the Seller and the Listing Agent.

The Third Step:  This is the hardest part Working with the Lender determine the Lender’s Guidelines. The best thing you can do is anticipate the list of required documents at the begin  be prepared at least with the following:

1.    The listing agreement

2.     The evidence of financial hardship to the Lender (strong evidence is key)

3.    Proof of income or the lack of

4.    Two years worth of Tax returns & W-2s

5.    Latest personal checking account statement

6.    Copies of all past due secured and unsecured debt notices

7.    Latest mortgage statement

8.    Current Tax bill

This will put you in the right direction to a successful Closing of a Short Sale. There are a lot of other things to consider. Most of all have a skilled and trustworthy Realtor to help you through the difficult challenges of a short sale.

If you are a consumer who is considering buying or selling a home, investment real estate, vacation homes, or beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Culver City, Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 or emails me at homes@endrebarath.com or visit one of my websites at http://www.endrebarath.com Your Pet Friendly Realtor. I contribute a portion of my commission to Local Animal Rescue Organizations.