You can prevent water damages in your home by inspecting regularly your bathroom for water damages can save you a lot of money when it comes time to have your house inspected for a sale.  Bathtubs, toilets and sinks increases chances and risks of leaks and structural damages.

1- Check the tiles and replace them if cracked.  They will leak water below and eventually damage the structure of the floor.
2- Replace the grout between tiles, for the same reason mentioned above.  It’s easy and costs very little.
3- Replace cracked caulking at joints between walls and floors or the bathtub.
4- Clogged drains and pipes prevent the tub and shower from drying and can cause serious damages below.
5- Pay attention to discolorations or soft areas around bathtubs and showers.

Plumbing
1- Pay attention to the flooring and walls for any moistures, warped wood.

Simple tricks that can save you a lot of money comes crunch time to sell your home.

Most people know they can deduce income taxes for a new home loan, however few know about the intricacies.  This post cannot go into details, and a certified accountant should be used for your particular case.

To deduce the loan from your income tax, the new home must be a residence and the person claiming the deduction must be on the title and loan documents.  Another deduction that can be made on a personal residence in most cases are interest paid on a second home loan. 

Homes purchased or substantially improved after 1987 are limited in terms of loan amounts that can be used for interest deduction.  They cannot exceed $1 million for an individual or couple filing jointly.  Married couple filing separately are only allowed $500,000.

Some Home Equity Loans can be deducted and can be added onto the above mentioned limitations for n additional $100,000, or $50,000 is filing separately.  Home equity loans are not a purchase/improvement loan and is usually a junior one.  Normally, any interest paid on any portion if the loan balances, greater than "fair market value" of the residence is not deductible.  The IRS allows you to use a current lender appraisal to assess a property’s increased value.

Thank you Cardinal Pacific Escrow for this tip.

The new tax Alternative To 3.33% California Witholding.

As January 1st, 2007, sellers are required to have 3.33% of the sale price of their new home for income tax purposes as an alternative witholding.

What that means is that the alternative witholding is an estimate of the seller’s taxable liability calculated by multiplying the real capital gain (recognized) by the highest state tax rate for individuals taxpayers.  It also applies for corporate tax rate for corporations and both are regardless of the taxpayers bracket.

This does not affect a 1031 exchange transaction but it applies to non-exempt sellers who may elect to have less then 3.33% witheld. 

You can read more about in CAR’s website under the Standard Forms Advisory Committee or the Assembly Bill No. 2962

It seems everywhere you turn your attention to in the specialized press, lenders are getting a bad rap.  It’s a shame as I know a few who are truly, genuine good people who do not push wrong programs and sincerely work for their clients, no the other way around. 

The management of Coast Financial Holdings Inc., believe they might not have sufficient funds for the loans given to 482 borrowers to complete
construction on the homes.   This is important, as we have seen, construction of new homes influences our economy and trickles down to real estate, effecting prices.  And this time, mortgage fraud is to blame as it inflates home values.

I have already pointed out a few weeks ago in this post about the latest scams and the consequences can be felt far and wide. 

Click here to read more about it at Calculated Risk.

Not new news as DataQuick reports Bay Area home prices flat last month and the sales pace  slowest pace in a decade.

New, and resale houses and condos were up 3.9 percent in the Bay Area
last month but  down
19.9 percent from December last year, according to DataQuick
Information Systems.

Sales declined since the last 21 months.  With tThe median price in the
Bay Area home  $612,000 in December, it was down 0.6 percent from
November and up 0.5 percent from December a
year ago as it peaked last June at $644,000.

Calculated Risk.

The Arcane Art of Predicting Recessions

Predicting a recession or anything in a market is a question of observing the market and making a guess. 
By Prakash Loungani

Assistant to the Director

External Relations Department, IMF

Financial Times

December 18, 2000

Predicting a recession or anything in a market is a question of observing the market and making a guess.  You might as well use a crystal ball which whatg I have been saying for a while.  It is a number game and the lucky can get to brag for a while, but it was still a guess. 

Prakash Loungani wrote a great article on the subject and says that
private forecasters’ record of failure to predict recessions is virtually
unblemished.  With only two of the 60 recessions around the world in 1990s were predicted.  In other words, two-thirds of the recessions remained un-detected seven months before they occurred.

You can read his entire article here which should be a sober humility test for many of us who insist on predicting things that we have, frankly said, little data to compute a real case scenario.

DataQuick reported California had its slowest home sales since 1996.  On a positive note, that was the last year of the ’90s crash in California.

New, resale houses and condos were up almost 5% from November and down
22.2 %  for December 2005.

Statewide, the
median price paid for a home last month was $474,000, up 1.1
percent from November, and up 3.5 percent for
December a year ago.

Calculated Risk.