Needed Repairs vs. Short Sale

Our Veteran buyer had an approved short sale contract on a Hollister home.  The bank’s approval limited the amount they had to net from the sale.  There was NOT enough to cover all of the repairs from the termite company’s report.

The seller had no money.  Our buyer could not pay for any of the repairs.  The listing agent and I had already agreed to put up a portion of our commissions toward the cost.  Yet there remained a list of repairs to do.  At the close of escrow no more options were available.  We were at a stalemate.  

The seller offered to help to fix a couple of repairs with materials he already had.  I took the remaining list of items and figured out a plan to get them done.  I bought the necessary supplies, rounded up 3 others and on the Saturday before it was to close we spent 7 hours doing those repairs. 

With Western Exterminator’s pre-set re inspection on Monday morning and e-mailed clearance to the lender that same day we funded on the very last day possible. IT CLOSED!  The seller was freed up. My buyer bought a great home at a great price.  The listing agent and I got a little bit for our 4 months of work. Everybody came out okay.

Winston Churchill’s famous, 5 word speech comes to mind: “Never, never, never give up”.

Hollister Band Going to New York

Texas Tech University's Goin' Band from Raider...
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Little ole Hollister’s marching band will represent CA in a 10th Anniversary of 911.

The marching band from San Benito High School will be one of only two schools from California to march in the 2011 New York Veterans Day Parade. 

The Free Lance Newspaper article provides some of the basic information but is lacking one, very important angle: when and where are the fund raisers going to be? 

Sending all of the band members, their instruments and leaders to New York will not be an inexpensive event.

A recent change in the typical fund raising events, however, is going to cause some interesting challenges.  It seems that band member families and supporting friends will not be allowed to have bake sales.  No more homemade cookies, pies and cakes.  Something to do with health code issues?  Could it be that the First Lady’s influence has already affect our little community?  Or, is it local bakeries complaining about competition?

Are we going to have to devise a different slogan?  It’s always been: “Good old mom and apple pie”.  Will we have to say: “Cellophane-wrapped, expiration date stamped, virtual pie”?

We are thrilled about our home town band being selected!   There is nothing like the sound of horns and drums blaring down Main Street USA.  Couldn’t we keep some of the same emotional foundations like home made goodies?  And, by the way, who says my wife’s killer homemade fudge can’t help the tuba player go to New York?

What are your thoughts?

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Buyers: Take the Leap of Faith & Reap These Benefits

A veteran buyer was looking at looking at some nice homes in Hollister.  There seemed to be a disconnect between their enthusiasm for the homes and making the comment to buy one of them.  It wasn’t that they didn’t qualify.  I had already pre-approved them for much more than they were looking at.  As we talked the light bulb came on!  The transition from their comfortable rent to a significantly higher payment was a quantum leap for them and it was hard to swallow – until…….

I sat them down and shared what many homeowners have learned over the years.  Your accountant can tell you what your new tax liability will be if you buy that tempting home.  In most cases the amount  you will be required to pay in income tax will DROP because of the larger amount paid toward interest and taxes.  Some of us have figured that it is better to reduce our income tax withholding from our paychecks each payday rather than get our refund in a lump sum (with no earned interest) at the end of the year. 

Here is their example:  Sales Price: $650,000; New VA Loan: $591,800; Total Principal, Interest, Taxes and Insurance: $4,210; Income Tax Deduction at a 26% tax bracket: $898/mth; Net “House Payment” after income tax deduction: $3,312. 

Same home, same terms but a house payment that feels like $3,312.  That made the difference.  They will simply need to take a new W4 form to their employers and have them reduce their withholdings by $898 so they will have that much more to take-home each month.  While they still make the actual payment of $4,210 the additional take-home pay makes the leap in house payment more palitable. 

They will break even at the end of the year: they won’t owe much income tax nor will they get much of a refund.  HOWEVER, they will have received their refund during the year to help offset their new, higher payment. 

Everybody was happy and moved forward with what they really wanted to do. 

I love solving problems for people!  Have you done this yet?