A professional home inspection cannot only provide a great education about systems in the home but is also a crucial tool in negotiating repairs. “Our experience and research shows that approximately 40% of resale homes have at least one defect that can cost a home buyer at least $500 to repair,” said Kathleen Kuhn, President of HouseMaster, one of the first and largest home inspection franchisors in North America.

According to the National Association of Realtors, in 2009, 47% of homes sold were purchased by first-time buyers. A professional home inspection not only educates these buyers on the condition of the home but can minimize costly surprises in the future.

Here are some tips about your home inspection:

1. Inspect the Inspector:  Only hire a home inspector with an excellent reputation and credentials. Ask how long the company has been in business, ask about training and credentials, and verify the inspector carries professional liability insurance. Interview more than one inspector before you make a decision.
2. Ask for a Sample of a Report: Watch for a poorly prepared report without pictures of clear, concise details addressing all systems and accessible elements of the home.
3. Inspect Ancillary Systems:  If the home has a septic system, a professional home inspection company may coordinate that inspection for you. Other common services offered by home inspectors are termite inspections, mold screening, water testing, and radon testing.
4. Accompany the Inspector During the Inspection:  If the inspector discourages you for tagging along and asking questions, find another inspector. In addition to documenting issues and needed repairs that may exist, a professional home inspector will also show the new buyer how to operate the various systems in the home and provide tips on improving energy efficiency and maintaining the home in general. And if you’re there, the report will become that much more meaningful.

A successful home inspection begins with choosing the right inspector. Choose carefully and wisely.

The CA State legislature passed a bill on April 8th that will help many CA homeowners who were hurt by the housing crisis to save thousands of dollars in taxes.

The bill helps homeowners who received loan modifications, or who sold their home in a short sale or foreclosure. It prevents the cancelled debt from being treated as taxable income.

Currently, these debts that are forgiven are still considered income and taxed by the state.

The U.S. Congress addressed the problem with the Mortgage Forgiveness Debt Relief Act of 2007. This state action makes CA law conform to the Federal law which runs through 2012.

Governor Schwarznegger said yesterday that he will sign the bill. “We want to give people the relief that they need, and we want to do everything we can for businesses, also for homeowners,” he said.

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification.  Enacted in law yesterday, Senate Bill 401 generally aligns California’s tax treatment of mortgage debt relief income with federal law.  For debt forgiven on a loan secured by a “qualified principal residence,” borrowers will now be exempt from both federal and state income tax consequences.  The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.

“Qualified principal residence” indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence.  It iincludes both first and second trust deeds. It also includes a refinanced loan to the extent the funds were used to pay off a previous loan that would have qualified.

The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.

For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board’s Mortgage Forgiveness Debt Relief Extended webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.

The Case-Shiller home price index came in last week with 9 out of the 20 cities in the survey posting year-over-year gains.  On a seasonally adjusted basis, the 20-city composite index rose from December to January by .3%.

Another report showed that the price per square foot for homes in 8 out of 25 U.S. markets rose in January compared to a year ago. And a third survey revealed that 23% of real estate agents and brokers are expecting price hikes in the next six months.

Buyers who want to take advantage of the homebuyer tax credit (along with today’s low mortgage rates) only have until the end of April to sign a contract — by April 30th — and need to close by June 30th.

Finally, last Wed., March 31st, the Fed ended its $1.25 trillion buying program of mortgage backed securities, which helped keep mortgage rates down. Buyers should note that most industry observers expect those rates to creep back up.

In San Diego County, we are noticing increased home prices with more “regular” sales compared to short sales and foreclosures. There are more buyers out looking and more multiple offers for aggressively priced properties. Now is a great time to buy if you’d like to live in San Diego’s North County!

The annual rate of home-price decline improved in January in the 10-City and 20-City Composites tracked as one of the S&P/Case-Shiller Home Price Indices released yesterday. The 10-City Composite remained unchanged in January copared with a year ago, and the 20-City Composite declined .7 percent compared with Januay, 2009. All 20 metro areas and both composites showed an improvement in the annual rates of decline in January compared with December. As of January, 2010, home prices nationwide averaged levels similar to those of autumn of 2003.  From the peak in June/July of 2006 through the trough in April, 2009, the 10-City Composite declined 33.5 percent and the 20-City Composite 32.6 percent. The peak-to-date figues through January, 2010 indicate declines of 30.2 percent and 29.6 percent, respectively.

Los Angeles and SAn Diego showed slight improvements in actual index levels fro the previous onth to the current month. All other metros and the two composites showed a slight decline from their December, 2009 levels.

“The report is mixed. While we continue to see iprovements in the year-over-year data for all 20 cities, the rebound in housing prices seen last fall is fading,” said DAvid M. Blitzer, chairman of the Index Committee at Standard & Poor’s.  “Fewer cities experienced month-to-month gains in January than in December, 2009 on both a seasonally adjusted and unadjuste4d basis.”

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state home buyer tax credits. To take advantage of both tax credits, a first-time home buyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow before June 30, 2010. Buyers who are not first-time home buyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law.

Under the federal law, first-time home buyers may receive up to $8000 tax credits, and a long-time resident may receive up to $6500.  Additionally, under a newly enacted California law, a home buyer may receive up to $10,000 in tax credits as a first-time home buyer or buyer of a property that has never been occupied. The new California law applies to purchases that close escrow on or after May 1, 2010.

So if you qualify and close your escrow between May 1st and June 30th, you may qualify for both tax credits. Check with your qualified tax representative to see if you qualify. If you do, it’s an excellent time to think about buying a home in Cardiff, Encinitas, Carlsbad, Vista, or Oceanside.