If you look at the real estate market in the flats of Beverly Hills, there are great deals to be found.  But, how do you know when you’ve found a deal? Let’s start by taking a look at the real estate market statistics.

There are currently 21 homes on the market right now under $7,000,000, with six in escrow and six others sold in the last three months. And if you are looking for a big lot – i.e. something above 30,000 square feet – and you’re interested in just buying the dirt, the average price per square foot in the Beverly Hills Flats is around $220.

Now that we know the averages, we can take a look at specific homes to see how they fare in relation to the overall market trends.  Let’s take 618 N. Beverly Drive, which is listed at $6,499,000.  It has a lot size of 35,960 square feet.  So when you do the math (don’t worry, I brought a calculator) the price per square foot come out to $180.  Now that’s 18% below the fair market value based on what’s been sold in the last three months and the average lot size.

Keep your eyes peeled and you’ll find that when you crunch the numbers, there are many more deals out there on the market.

What you have is a glass that contains 50 percent of its maximum volume in water, right? That’s an easy mathematical model.

Now, let’s see what people think. Some of them will say it is “half full,” while others will say it is “half empty.” The amount of water in the glass did not change, but those people have different takes of what it means. The information remained the same, but their perceptions varied.

Got it? Good. Please keep reading.

Fannie Mae recently (late 2009) did a survey of 3,000 Americans. They did a very similar survey in 2003. In 2003 83-percent of those surveyed thought that buying a home was a good investment, while the most recent survey showed that 70-percent felt the same way now.

So, on one hand it looks like people in 2003 were far more optimistic about home ownership, right? Ok. But 70-percent of Americans are still optimistic. That’s still a lot of optimistic people, especially considering the worldwide economic meltdown of the last 18 months.

And here is the kicker:

In 2003, people were enjoying the sixth or seventh year of recovery after a huge housing market crash that started in the late ‘80s and continued through about 1996. So, of course they were super optimistic! Over six years of continued growth is a great trend. But to have an overwhelming majority of the people surveyed still optimistic in early 2010 after the worst financial and housing crisis of a generation? This is amazing!

Do you see where I’m going with this whole “perception” thing?

Everything has its pros and cons. Living in Pacific Palisades, one enjoys the comforts of living in Southern California: the amazing weather, the proximity to both beaches and mountains, the quality of the schools. One also has to deal with constantly clogged traffic, soaring gas prices, and cough-inducing smog. If you focus only on that negative 30-percent, you could be missing the bigger picture.

Comparing people’s real estate feeling from late 2009 to early 2003 may not be fair. Perhaps we should instead look at late 2009 to early 2009: in early 2009 most people were reeling from huge financial hits. But just a few months later they were feeling optimistic again. I think this says great things about the spirit of the American people.

But back to Fannie.

The most recent survey also shows that 65-percent of Americans prefer owning their own home; they see home ownership as much more than a financial investment. They also strongly feel that homeowners should uphold the financial commitment made when buying a home, even if home values have dropped and when they themselves are behind in their payments.

Eight out of 10 respondents think owning a home is important to the economy. While only 31-percent felt the economy was on the right track, 44-percent expected their personal finances to improve in the next year. Americans are optimistic. Americans rock.

And while home values have dropped (by huge percentages in some areas), 70-percent of respondents still believe that buying a home is one of the safest financial investments.

I must agree.

So what do you think: is the glass half full or half empty?

Important Update (04/07/10): The 2010 New Home Credit and First-Time Buyer Credit begins May 1, 2010.

Applying for the 2010 New Home/First-Time Buyer tax credits: Applications must be faxed after escrow closes. The new application will be available by May 1, 2010. We will deny the application if the 2009 form is used or if we receive the 2010 application before May 1, 2010.

Check this page often. We will add updates as they become available.

General Information: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes. Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.

These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for the First-Time Buyer Credit. However, since many taxpayers will not be able to utilize the entire tax credit, the legislation specifies that the $100 million cap for the New Home Credit will be reduced by 70 percent of the tax credit allocated to each buyer and the $100 million cap for the First-Time Buyer Credit will be reduced by 57 percent of the tax credit allocated to each buyer. For example, if a taxpayer is allocated $10,000 for the New Home Credit, the $100 million cap for the New Home Credit will only be reduced by $7,000. If a taxpayer is allocated $10,000 for the First-Time Buyer Credit, the $100 million cap for the First-Time Buyer Credit will only be reduced by $5,700. The 70 and 57 percent reductions do not impact the amount that can be claimed by the taxpayer.

We will allocate the tax credits on a first-come, first-served basis.

Only one tax credit is allowed per taxpayer. If a taxpayer qualifies for both tax credits, the law specifies that we will allocate the amount under the New Home Credit.

Taxpayers will not be eligible for either tax credit if any of the following apply:

The taxpayer was allowed a 2009 New Home Credit.
The taxpayer is under 18 years old. (A taxpayer who is married as of the date of purchase will be considered to be 18 if the spouse/registered domestic partner (RDP) of the taxpayer is 18 or older on the date of purchase.)
The taxpayer or the taxpayer’s spouse/RDP is related to the seller.
The taxpayer qualifies as a dependent of any other taxpayer for the tax year of the purchase.

New Home Credit: A qualified principal residence, for purposes of the New Home Credit, must:

Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been “purchased.”
Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.
Be eligible for the California property tax homeowner’s exemption.
Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.

Tax credit allocation:

A Certificate of Allocation will not be issued if:
The seller does not certify the home has never been occupied.
We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.
We receive the application or reservation request after the total tax credits available have been allocated.
FTB’s determination may not be protested or appealed.

First-Time Buyer Credit: A qualified principal residence, for purposes of the First-Time Buyer Credit, must:

Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home. A home constructed by the taxpayer is not eligible since the home has not been “purchased.”
Be eligible for the California property tax homeowner’s exemption.
Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.
A first-time buyer is any individual (and the individual’s spouse/RDP, if married on the date of purchase) who did not have an ownership interest in a principal residence, either in or out of California, during the preceding 3 year period ending on the date of the purchase of the qualified principal residence. If the buyer is married on the date of purchase and either the buyer or the buyer’s spouse/RDP had an ownership interest in a principal residence during the preceding 3 year period, the buyer does not qualify for the First-Time Buyer Credit even if the spouse/RDP is not going to be on title.

Tax credit allocation:

A Certificate of Allocation will not be issued if:
We do not receive the application and a copy of the properly executed settlement statement within 2 weeks (14 calendar days) after the close of escrow.
We receive the application after the total tax credits available have been allocated.
FTB’s determination may not be protested or appealed.
Applications: We will accept applications by fax only beginning May 1, 2010. Do not use the 2009 application. We will post more information by May 1, 2010.

Reservations: Taxpayers who qualify for the New Home Credit may, but are not required to, reserve a tax credit prior to the close of escrow. Reservations will become important as we near the $100 million cap for homes that may not close escrow before the cap is reached, as a reservation will “hold the taxpayer’s place in line” until 2 weeks after escrow closes. To reserve a tax credit, the taxpayer and seller need to complete, sign, and fax to us a reservation request to certify that they have entered into an enforceable contract on or after May 1, 2010, and on or before December 31, 2010. A copy of the signed contract must be included with the reservation request. Taxpayers who reserve a tax credit still need to fax an application and a copy of the settlement statement within 2 weeks after the close of escrow. Taxpayers may not reserve a tax credit if the contract was entered into before May 1, 2010. We will post the reservation form and details about the process by May 1, 2010.

If you are only applying for the First-Time Buyer Credit, you will not be able to reserve the tax credit before escrow closes.

Claiming the tax credit:

The taxpayer must receive a Certificate of Allocation from us to claim the tax credit on their California personal income tax return. The Certificate of Allocation will state the maximum amount the taxpayer can claim listed by tax year.
The taxpayer should refer to the 2010 New Home / First-Time Buyer Credit Publication for instructions on claiming the tax credit (the publication will be available by December, 2010).
Special rules apply to married/RDP taxpayers filing separately, in which case each spouse/RDP is entitled to one-half of the tax credit, even if their ownership percentages are not equal. For 2 or more taxpayers who are not married/RDP, the tax credit amount will have already been allocated to each taxpayer occupying the residence on their respective tax credit allocation letter.
If the available tax credit exceeds the current year net tax, the unused tax credit may not be carried over to the following tax year.
The tax credit may not reduce regular tax below TMT.
The tax credit is not refundable.
Any disallowance of the tax credit may not be protested or appealed.
Contact Us
888.792.4900 (press 1)
916.845.4900 (not toll-free)
Email: wscs.gen@ftb.ca.gov

I happened upon this article on how to enjoy life and I thought I’d share it with you because it says everything way better than I can.

1.  Learn to be positive! If you keep moaning about your life, other people will only notice the bad aspects of your character and categorize you as a person who is ‘Boring’ – or worse! Who wants to spend time with a wet blanket! Go to places where people are positive and support you with positive thoughts. If you want to learn to be positive, this site might be a good start.

2. Be generous. A little generosity goes a long way. Give and people return the favor to you and you will be known as a generous person.

3. Make a list of all the things you want to do and do them! If you’ve always wanted to audition for theater, then go ahead and do it! This will help to reduce ‘hanging around’ and wishing. This even applies if you want to be an astronaut: you might not effectively become one, but becoming savvy in astrophysics and space will make you realize that you’re capable of it.

4. Keep trying. One of the key things that you need to remember is to never be discouraged; failure is a part of life, and it happens naturally. If you are so disillusioned that you never want to try again, at least be comforted by the fact that you made an attempt.

5. Stop doing things that you do not enjoy. Make a list of the things that you are doing that you don’t enjoy, and try to stop doing them. Naturally, this shouldn’t mean that you should drop out of school if you don’t like studying, but you might consider working for a new company if you are constantly stressed and pressured by your job. If it’s not possible to stop, try to see the positive side of those things and find ways to make them entertaining. Nobody enjoys cleaning the kitchen fan or the toilet but if you do these chores with full awareness and make them into a meditation, you will be surprised how quiet your mind will become and how much happiness these chores will give you.

6. Find a hobby. You might take up collecting stamps or coins, or you might learn more about photography or art. You don’t have to spend your entire life doing it; the whole purpose of the hobby is to vary your routine and do something worthwhile.

7. Singing is a wonderful way to make life more enjoyable. Try to pick up some of your favorite songs and learn the lyrics by heart. When you feel bored, sing those songs and you would feel much better. Singing karaoke, taking some singing lessons or listening to music would make your life more interesting.

8. Limit the amount of time you spend watching TV. Enjoyment in life comes from trying and doing things yourself, not watching other people do them. Watching people swim is not the same as swimming. Watching other people hike or climb mountains is not the same as hiking or climbing mountains.

9. Ask questions. It’s not bad to ask questions. Ask as many as you can no matter what people say or the relevance of them. Don’t doubt yourself because there’s a good chance somebody else is wondering the same thing.

10. Enjoy feeling proud. If you’re proud of something be it: an essay, a new deck you built, a promotion, or a song you composed hold on to it for dear life because there’s nothing more important than your pride. Do not let anybody take it by demanding more.

11. Stay healthy. Make part of your life eating right and exercising because it helps keep the body running at the top of its game.

12. Be open to change. Changes in your job, friends, and the government. With practice you will be able to anticipate it.

13. List the items you want to keep. This will help you realize what you have and you are so lucky to have it.

I find that if you slowly integrate some of these tips into your life, one a a time, it’s easier to adapt to your new outlook on life.  I’m still working my way through.  What are some of your tips on how to live happily?  Feel free to share in the comments below.

Don’t panic.

What many buyers don’t realize is that, when writing an offer on a property, their purchase contract actually provides them with a whole list of protections.

Before going into all of them, let’s first clearly define the word contingency. (You’ll notice that this term comes up quite a bit in the contract.)

Contingency = Depending on

Contingency = A condition that most can satisfy.

Contingency = An out at the client’s discretion.

In layman’s terms: contingency is the dependence upon a stated event which must occur before a contract is binding. For example, the sale of a house is contingent upon the buyer obtaining financing means that the transaction will only go through once the buyer gets a loan from the bank. So what does this mean for you? It means that when you write an offer on a property, you’re not signing your life away; in fact, you actually have 17 days to investigate the property and pull out any time you want during that period.

Contingency clauses (sometimes called “Jump Out” Contingencies) can protect you from a host of possible problems or events. The major protections for the buyer are:

* Loan Contingency: If you cannot secure the loan, mortgage terms, and maximum interest rate you are willing to pay, you can legally withdraw your offer.

* Appraisal Contingency: If the appraised value is less than agreed upon purchase price, the contract can be voided and full deposit refunded or the contract renegotiated.

* Property Investigation: Which include the Physical Inspection, GO, Drainage, Electrical, Roof, Plumbing, HVAC, and the Chimney.

* Seller Disclosure: Which includes Transfer Disclosure Statement (TDS), Seller Property Questionnaire (SPQ), Natural Hazard Disclosure Statement (NHD), Lead-paint disclosure if built before 1978, Industrial use and military ordnance location disclosure (SSD).

* Wood Destroying Pest Protection: This is normally paid for by the seller.

* 9A City Report: This will tell you if the property is connected to the sewer or septic. It will also show the pending assessment, if any. (Ex: If there’s no sidewalk and the city decides to add one, you will be taxed for that.)

* Clue Report (Combine Loss Underwriting Exchange): You have access to the past FIVE years, if there were any insurance claims on the property. And if people have sued in the past, it could be really expensive to insure. They can also say: Sorry, we can’t insure you.

* Normally, the seller has to provide a one-year home warranty plan to the buyer.

* Government Requirement and Retrofit: Which the seller shall pay for smoke detector installation, make sure every toilet flushes properly, and the water heater is braced to the wall.

* Subsequent Disclosure: If the seller forgot to mention something that was not in the TDS, you have THREE days to approve or disapprove.

* Final Verification of Condition: This is the final walk-through of the house. It is to check if the repairs – if any – have been done. If there are some major negative changes or it’s dirty, you can sue to repair the damages.

* Dispute Resolution: mediation and arbitration of dispute.

When you’re to the point where you’re about to sign a purchase agreement for a home, be sure to go over all of these provisions, preferably with your trusted real estate professional with you. These contingencies are there specifically to protect you from signing your life away for something that you didn’t agree to.

Buying a home is one of the biggest, most important purchases you’ll ever make and being aware of these protections will give you the peace of mind to go into this transaction with the confidence knowing that you won’t be taken advantage of.