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Can I deduct from the security deposit for carpet stains left by the vacating tenant?

Carpet Stains…

One of the most confusing and misunderstood items is the effect of the security deposit held by the owner of rental property and to the extent that deductions can be made from that deposit.
Each state has its own laws of course and the civil code relating to security deposits in California is,  California Civil Code 1950.5 – Security Deposits. Please see entire code below.

Bottom line is that you can deduct for damage caused to carpet like a hole, just like this one I found recently in a home in Livermore  CA recently vacated by “careful tenants”. What was it that caused this? I don’t know nor do i really want to know, but I had the entire room replaced by “like kind”, quality carpet by a local professional outfit and submitted a copy of the invoice to the tenants.

The law is clear about wear and tear however. You cannot deduct from a security deposit for carpet stains which are “normal wear and tear”. I have encountered many homeowners who want to have the tenant rebuild their house when they vacate, its just no on. The law is fair and reasonable. Here is the entire code. I f you need legal advice seek out an Attorney specializing in real estate.

CCC_security-deposits

 

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5 Tips to avoid being scammed during a short sale.

So you are considering a short sale, you are told this is the best action to take as you can no no longer afford your house  payments and your lender will not cooperate on a loan modification for you. Unfortunately there has been a huge increase criminals who are looking to make a fast buck  and they will come to you like a bee around honey!  Here are 5 ways to avoid being ripped off by fly by night companies who have said they can help you.

I’m a short sale expert!

 

1/ If you hear the phrase “quit claim deed”,  run and run fast! Many companies convince sellers to quit claim their property to them stating that they will be able to stay in the house and simply pay rent to the company while they ‘negotiate’ on your behalf with your lender. Don’t believe it and don’t do it.
2/ Cash up front. If anyone asks for cash up front either to renegotiate on your behalf because they are experts or have ‘insider lines of communication’ with your bank, say no. Nobody should be paid up front for any reason. Many companies are asking for and being paid this fee, likely you will never hear from them again.
3/ They have no DRE (Dept of Real Estate) license! You may be approached by a company or individual who is has no license…big red flag. Lenders usually recognize this as a sure fire scam when a non DRE individual is negotiating a short sale. Check a license status at the CA DRE.
4/ You are approached by a company or individual who says they have a buyer already for your house. This buyer has never seen it mind you. The plan is to have you transfer title to this intermediary at a very low price (see #1) and then ‘flip’ the property on the open market at a much higher price and pocket the difference. This is lender fraud, beware.
5/ Being approached to negotiate a short sale where you are paid money outside of the escrow.For example you are told you will be paid $100,000 for your outdoor furniture in cash as an incentive to work with and sell to a buyer at a far reduced price. This again is lender fraud, its happening and the FBI knows it so be cautious!

Ok so what should I do? Contact your Realtor! They are licensed, trained in expediting short sale transactions and really are the only people you can rely on.

At the Scotsman Realty Group we have helped dozens of distressed sellers and can help you too. Give us a call  925 290 8410

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• Buying a Home After Short Sale or Foreclosure (massrealestatenews.com)

Short Sales..an appeal to the banking Industry

An important message from the CALIFORNIA ASSOCIATION OF REALTORS®:

I write on behalf of the CALIFORNIA ASSOCIATION OF REALTORS®, whose 170,000 members continue to witness the devastating consequences the home foreclosure crisis is having on California’s families, neighborhoods, and communities on a daily basis.

The number of families affected by foreclosure is staggering. During the past three years, more than 640,000 Californians have lost their homes. With the number of homeowners who owe more than their home is worth hovering at 30 percent, experts predict there will be many more foreclosures in 2011 and 2012. Unless we take immediate, aggressive action to assist these homeowners, any meaningful recovery in the housing market and overall economy will continue to be delayed.

Tragically, only a fraction of those who face foreclosure will remain in their homes when all is said and done. Those whose incomes and financial circumstances meet strict guidelines may qualify for a loan modification that will reduce their monthly payment to more affordable levels. Yet the federal Home Affordable Modification Program (HAMP) is expected to prevent only 700,000 to 800,000 foreclosures nationwide before it expires at the end of 2012, and the program does little to help those homeowners who are unemployed or otherwise no longer able to meet their financial commitments. Their last hope is to sell their home, which often means convincing their lender or the investor who “owns” the loan (and, in many cases, the holder of a second mortgage lien and the mortgage insurer) to accept a “short sale.”

With a short sale, homeowners with a proven hardship negotiate an agreement to sell their home for less than the balance owed. Although not every homeowner or mortgage is eligible, those who are able to finalize a short sale avoid a foreclosure on their credit record and can move on with their lives. Last year, 20 percent of home sales in our state involved short sales.

Short sales can play an important role in our state’s economic recovery by accelerating the pace of home sales and reducing the inventory of bank-owned homes on the market. There are other benefits as well. Homebuyers who can qualify for a mortgage at today’s low interest rates also are able to purchase a home at below-market prices. Banks get a nonperforming asset off their books and avoid the headaches associated with disposing of assets they don’t want to own in the first place. Neighborhoods have fewer abandoned homes, and local businesses have more customers with money to spend.

Unfortunately, many homeowners are unable to successfully negotiate a short sale. According to a recent survey of 2,150 California REALTORS® who have assisted clients with a short sale, only three out of five transactions closed – even when there was an interested and qualified buyer.

What’s the problem? For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures. Many homeowners have second mortgages, which further complicate matters. Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process. Poor and slow service by many banks and servicers has only exacerbated the problem. Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times. These delays discourage potential homebuyers from considering a short sale purchase and undermine the process for those who short sales are intended to benefit – the hundreds of thousands of families facing foreclosure.

Increasing the number of closed short sales by speeding up and streamlining the short sale process is one important way we can help California families avoid foreclosure and move our economy closer to recovery. That’s why the California Association of REALTORS® is taking steps to enable more families to arrange a short sale. Recently, we advocated for improvements to short sale guidelines established under the federal Home Affordable Foreclosure Alternative (HAFA) program. We’re meeting with major banks, U.S. Treasury officials, government-sponsored entities (including Fannie Mae and Freddie Mac), and others to urge them to standardize processes, comply with federal guidelines, improve communication with other stakeholders and increase staffing with the goal of eliminating service issues. We’ve also offered our members training in every aspect of the short sale process so they can assist their clients.

But we can’t do it alone. That’s why we’re focusing the spotlight on short sales and calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to resolve this issue and others that get in the way of a recovery. It won’t be easy, and some compromises will be required. The important thing is that we need to act today. Our families and our communities can’t wait any longer.

Sincerely,

Beth L. Peerce
President
CALIFORNIA ASSOCIATION OF REALTORS®

California pending home sales rise in January

California pending home sales rise in January

LOS ANGELES (Feb. 23) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) today debuted its Pending Home Sales Index and released key distressed property data.

Pending home sales index:

Pending home sales in California increased in January, according to C.A.R.’s Pending Home Sales Index (PHSI)*. The index was 93.6 in January, rising 13.6 percent from December’s index of 82.4, based on contracts signed in January. Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

“Pending sales typically rise in January from a seasonally slow November and December,” said C.A.R. President Beth L. Peerce. “January’s pending sales should be reflected in higher existing sales activity in February and March and serve as a precursor to the spring home buying season.”

Distressed housing market data:

* The total share of all distressed property types sold statewide in January was 54 percent, up from 50 percent in December, but down from 56 percent in January 2010.

* Conventional sales made up the remaining share at 46 percent in January, down from 50 percent in December, but up from 44 percent in January 2010.

* Of the distressed properties sold statewide, the total share of REO (real estate-owned) sales was 32 percent in January, up from 30 percent in December, but was down from 37 percent in January 2010.

* The statewide share of short sales increased to 22 percent in January, up from 20 percent in December and up from 19 percent in January 2010.

* The median price of homes sold in the state differed dramatically depending on the property type, with non-distressed properties selling for much higher prices than short sales and foreclosures.

* The statewide median price of conventional properties sold in January was $367,150, 38 percent higher than the short sale median price of $265,500 recorded in January, and 85 percent higher than the January REO median price of $198,000.

Multimedia:

* View a video of C.A.R. Chief Economist Leslie Appleton-Young discussing highlights of the January sales and price report, which was released Feb. 15.

* View a chart of pending sales compared with closed sales.

* View a chart showing the price differential by sales type.

Share of Distressed Sales to Total Sales
Type of Sale Jan-10 Dec-10 Jan-11
REOs (real estate-owned) 37% 30% 32%
Short Sales 19% 20% 22%
Total Distressed Sales 56% 50% 54%

Distressed Sales by Select Counties
(Percent of total sales)
County/Region Jan-10 Dec-10 Jan-11
CA 56% 50% 54%
San Diego 34% 28% 33%
Marin 37% 34% 43%
Orange 41% 38% 43%
San Luis Obispo 49% 46% 47%
Los Angeles 54% 50% 54%
Mendocino 49% 57% 55%
Napa 68% 54% 59%
Sonoma 54% 55% 61%
Kern 69% 71% 70%
Sacramento 68% 66% 73%
Riverside 78% 67% 73%
San Bernardino 76% 72% 74%
Solano 76% 74% 81%

*Note: C.A.R.’s pending sales information is generated from a survey of more than 70 associations of REALTORS® and MLSs throughout the state. Pending home sales are forward-looking indicators of future home sales activity, offering solid information on future changes in the direction of the market. A sale is listed as pending after a seller has accepted a sales contract on a property. The majority of pending home sales usually becomes closed sales transactions one to two months later.
The year 2008 was used as the benchmark for the pending homes sales index. An index of 100 is equal to the average level of contract activity during 2008.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Related articles

• Foreclosures make up 26% of home sales (money.cnn.com)
• Investors, not first-time buyers, lift home sales (msnbc.msn.com)

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California home sales hit seven-month high in December!

California home sales rose in December, posting their highest level since May, according to a report from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), as the inventory of unsold homes dwindled.

MAKING SENSE OF THE STORY

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 520,680 units in December, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. December’s sales were up 5.9 percent from November’s revised pace of 491,590 units, but were down 6.8 percent from the revised 558,840 sales pace recorded in December 2009. The statewide sales figure is adjusted to account for seasonal factors that typically influence home sales.

Following three consecutive monthly declines, the median price of an existing, single-family detached home sold in California increased 1.7 percent from a revised $296,690 in November but was down 1.6 percent from the revised $306,860 median price recorded for the same period a year ago.

“December’s sales increase reflects buyers taking advantage of rock bottom interest rates and improved affordability since the first half of the year, when prices were higher,” said C.A.R. President Beth L. Peerce. “Most of December’s sales opened escrow in October and November. Rates hit their absolute lowest in October but began edging higher in November, prompting buyers to get off the fence,” she said.
For more about the California housing market, watch a video of C.A.R. Chief Economist Leslie Appleton-Young as she discusses highlights of the December sales and price report.

What are the best “bang for your buck” improvements to a house?

This one is easy, I get asked it all the time. The answer is fresh paint and new carpeting. Both can be relatively cheap (do the painting first) and should return at least $2 for every $1 spent. Remember when you paint interiors no need go go pure white through out the house. Visit new home developments, deeper colors are in fashion, sometimes painting one wall a contrasting color looks great. Exterior paint the trim a contrasting darker tone and make the house ‘pop’. For carpet go with neutral tones mid range quality. Ask for a remnant and you may get a better deal. Do not

get too carried away installing granite counters and new windows especially if you are going to sell soon, as you likely will not get that money back.

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Short sale… why does my lender tell me different things?

One of the biggest frustrations are lenders who seem to be confused themselves about what their policies are, during a short payoff sale negotiation. Often a lender will accept a standard amount as a negotiated payoff on the mortgage, then appear to change their mind. Why?

One of the main reasons for this could be whether the loan is still held ‘in house’ or has been packaged along with other loans and sold as a financial instrument to an investor. In the case where the loan has been sold, the lender needs approval from the investor as to the agreed payoff amount and this takes time and may be different from what you have been told prior.

Best to find out up front whether the loan is subject to investor approval and expect delays!

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