When G. Allan Hancock developed Hancock Park in 1920, he allowed two outstanding private sports clubs to be established; The Wilshire Country Club and the Los Angeles Tennis Club (LATC).
Located at 5851 Clinton Street, the tennis club has 16 lighted tennis courts, making it one of the largest private tennis clubs in Los Angeles. Members rarely have to wait to play a match, and often arrive without booking a reservation ahead of time.
The club has played an important role in establishing the sport of tennis. It hosted the inaugural Pacific Southwest Open tournament in 1927, the world’s first hard court major tennis championships. The Spanish Colonial Revival style clubhouse was built that year also.
Club House built 1927
Bill Tilden won singles in the first tournament. Many of the top players in the world during the 20th century have competed on these courts.
A great amenity for members is the 25-yard-long pool and spa that is great for swimming laps or water aerobics classes. There is also a fitness center equipped with state-of-the-art weight training and cardio equipment with personal trainers available by appointment.
Paulas*****: is going crazy (short trip) waiting for an appraisal to come in. Everyone, I need your good thoughts & luck (nothing else works these days!)
Lately, have you heard people tell you their appraisal horror story? 3 days before closing they found out that the appraisal was $100,000 below contract price! The appraisal process has become a big component of making a deal happen. That’s because of the HVCC agreement (No- not Heating and Air Conditioning silly!)
The Home Valuation Code of Conduct (HVCC) is the result of New York State Attorney General Andrew Cuomo’s 2007 lawsuit against Washington Mutual’s preferred AMC (Appraisal Management Company) eAppraiseIt LLC. The lawsuit was brought after eAppraiseIt was supposedly forced into providing WaMu with inflated values for properties WaMu was making loans on— eAppraiseIt also allegedly benefited from the extra business WaMu provided because of their alleged willingness to be coerced into providing inflated property values.
The Home Valuation Code of Conduct (HVCC) sets standards for solicitation, selection, compensation, conflicts of interest and appraiser independence. According to the agreement mortgage brokers and real estate agents are prohibited from selecting appraisers. However, realtors and lenders can talk to appraisers including requests to consider additional data or to correct errors. Important information that may effect value that an out of area appraiser might miss are: located on busy street, was tenant occupied before sale and needed repairing, Investor purchase, home being used as a comparable had a bad floor plan etc.
Attention Buyers; Make sure your lender gets your real estate agent the appraiser’s information and the date of the appraisal, so that your real estate agent can talk with the appraiser about the market and provide comps during the appraisal.
HVCC took effect May 1, 2009, and applies to conforming loans, of 1-4 unit single-family, up to the conforming loan limit amount of $729,750, that will be sold to Fannie Mae or Freddie Mac. Conforming loans make up, according to the NAR, over 71% of the total loans originated in the United States. Note FHA loans do not apply under the HVCC rules. R
The National Association of Realtors (NAR) recently put out a survey to members asking what impact, if any, the new Home Valuation Code of Conduct (HVCC) has had. Here are the results:
• 75% of Realtors representing buyers or sellers said that the time to obtain a completed appraisal increased after May 1st (when HVCC took effect). 69% reported an increase of over 8 days.
• Lost sales were reported by 37% of Realtors trying to get a sale to closing with 20% reporting more than 1 lost sale.
• Reports of lost sales will impact the fallout rate in pending home sales although some of these sales may be completed after a delay of who knows how long.
• Increased use of out of area appraisers was reported by 70% of Realtors trying to complete a sale.
• NAR appraiser members say they now obtain over 50% of their appraisal management companies (AMC).
• Around half of NAR appraiser members say their fees have been reduced by AMCs. 70% says consumers are now paying higher fees. Of course the AMCs are getting the difference.
• 85% of NAR appraiser members reported a perceived reduction in appraisal quality!
• NAR appraiser members reported that a ‘significant’ number of their assignments were in unfamiliar areas. 16% said that 11% of their assignments were in unfamiliar areas.
Why is the quality of Appraisals going down under the HVCC?
Appraisers that work with AMCs loose 40-60% of their income in fees splits with AMCs. Also, there is twice as much paperwork for appraisers to fill out to complete an appraisal according to HVCC rules. That means, appraisers are working twice as hard for half as much money, stated another way, appraisers are making about a fourth of what they were making 1 year earlier. It is a very tough time to be an appraiser!
AMCs assign appraisals on a first come, first served, rotation basis without regard to an appraiser’s experience. You may get assigned an appraiser who is from out of area and has no experience working in your local marketplace. This means, it takes longer to close escrow- I am recommending to all my clients 45 day escrows, and that you have to micro manage the appraisal process so that you can give yourself the absolute best chance to have your appraisal come in at contract sales price. Call me for a referall to my appraiser- he is a true professional 310-388-7332 or email James at firstname.lastname@example.org
The FHA Loan program is administered by The Federal Housing Administration (FHA).
The FHA was created in 1934 as part of the National Housing Act during the great depression to stabilize the housing market.
FHA Loans work great for first time home buyers because they require only a 3.5% down payment (coming up with the down payment is usually the hardest part of buying a home for the first time home buyer). FHA Loans are fixed-rate loans. FHA Loans allows 100% of the buyer side closing costs for a transaction to be a gift. Qualifying for an FHA loan is flexible, even if, as a buyer, you do not have great credit. A downside to buying with less than 20% down payment is that there will be mortgage insurance (also called M.I.) which is an additional monthly expense. FHA loans require the borrow to pay mortgage insurance.
FHA Loans requires an FHA appraiser to inspect the property. FHA loans qualify two things- they qualifying you as the buyer and also the property. the FHA will not loan if the property is in substandard living condition- the appraiser will send a list of items that need to be fixed in order for the loan to go through- once the work has been completed another appraisal will be done and the loan can fund. If you have had an FHA loan in the last three years you will have to wait until 3 years after the loan date to qualify for a new FHA loan. Visit this link for a helpful checklist of information you will need to gather to apply:http://www.fha.com/loan_checklist.cfm
People who can put down 20% or more can get a better rate from a conventional loan instead of using the FHA program. That’s because rates are about one-eighth of a percentage point higher for FHA loans than conventional loans. Plus, FHA borrowers must pay mortgage insurance of a half percent each year and an upfront fee 1.5% of the loan amount upon origination. The half a percent a year mortgage insurance fee is about half the price of mortgage insurance on a conventional loan. After five years or when the loan balance reaches 78 percent, the mortgage insurance goes away automatically.
The Mills Act is a complicated program. I recommend hiring a Mills Act Preparer to prepare your application. Consult with a Mills Act Preparer about whether your home qualifies for the program, and how much it costs to have your Mills Act prepared. I know of some people who have done their own application- though I think that most will not have the inclination to research up on the process and DIY, when hiring a Preparer is quite affordable, in comparison with the reduced taxes from even you very first year under the Mills Act.
The Mills Act program was created by the State of California to preserve Historical Properties. The Mills Act provides property tax reductions by as much as 60% or, in some cases more! (I have seen a 90% annual tax savings once). The Act is named for the author of the legislation — historian, statesman, and writer Jim Mills. To qualify for the Act your property may be either:
1) an existing City of Los Angeles Historic-Cultural Monument
The city of Los Angeles has 24 HPOZ with many more under consideration. Properties within an HPOZ are divided into contributing and noncontributing structures. The average percentage of dwellings within an HPOZ that is considered contributing is 65.8%. The percentage range of contributing dwellings within individual HPOZs can vary from a high of 98.6% in the South Carthay HPOZ to a low of 48.5% in the HighlandPark HPOZ.
If you live in an HPOZ, there is a great chance you qualify automatically for the Act by being a contributing Structure, so long as your assessed value is below $1,500,000 for Single Family Residential and $3,000,000 for multifamily.
It is important to hurry and complete your contract if you are considering to apply for the program because the city of Los Angeles is capping the amount of property tax revenue it will lose from Mills Act contracts at $1,000,000. I can tell you that we are somewhere near $750,000 at the moment, and at the current rate of applications, Los Angeles will reach its Cap- so don’t wait, if you don’t get your application finished in the next two years, the opportunity to participate in this program may be gone.
In LA, if your Single-Family dwellings has an assessed value above $1,500,000, or if your Multi-Family/Commercial/Industrial Building is above $3,000,000- then you will need to apply for an exemption with the Cultural Heritage Commission.
Your Mills Act preparer can handle filing your exemption form along with your application. When it gets into the details of the exemption process I must admit I am a bit lacking, since last year there were some changes introduced into the process. If your property is above the $1.5M threshold send me an email email@example.com and I’ll put you in touch with my Mills Act preparer who will be able to explain the entire exemption process to you in detail.
Mills Act contracts are 10 year rolling contracts, meaning a contract automatically renews each year on its anniversary date and a new 10 year agreement becomes effective. This means you have to give 10 years notice to opt out of the Mills Act. You do this by giving notice of non-renewal. Canceling and going through the process of non renewal are different. Note: The cost of canceling the contract is immense- 12.5% of the assessed value of the property, you should avoid canceling your contract.
Mills Act Contracts are selling points for homes. Mills Act contracts transfer with the property to the new owner when the property is sold. A property that has low property tax because it has a Mills Act contract makes it more attractive to buyers.
The responsibilities you have as an owner of a Property with a contract are that you agree to restore, maintain, and protect the property in accordance with specific historic preservation standards and conditions identified in the contract. Periodic inspections by City and County officials ensure proper maintenance of the property. The city conducts a drive by inspection once a year- unless the city has reason to believe you are in violation of the contract, in which case the city may conduct a full inspection. The City may impose penalties for breach of contract or failure to protect the historic property. The contract is transferred to new owners if the property is sold, and is binding to all successive owners.
The contract changes your assessed value from a comparable sales method of valuation to an income based method of valuation- which leads to the large tax savings.
When property values decline the state of California allows homeowners to adjust their assessed value downwards if it is higher than the market price. This is made possible by California’s constitutional amendment passed in 1978, known as Proposition 8.
Lowering your property’s assessed value means paying less property tax.
Everyone wants to pay less taxes- so…. how do you take advantage of Prop 8?
You need to fill out a Decline-in-Value Reassessment:
Make sure you submit the form before this year’s deadline of November 3oth 2012. Applications may be submitted without two comparable sales to support your opinion of value. If you send in an application without two comparable sales the assessor will look up the comparable sales for you. The comparable sales must have occurred between January 1 and March 31st of 2012. I would strongly recommend you provide 2 comparable sales with your application, because this will allow you to select comparable sales that will be to your advantage.
You can search for comparable sales yourself using the assessor’s database here:
Too difficult? Ask your local real estate agent or title rep to help you find them. If you would like my assistance preparing your application and finding the best 2 comp’s contact me.
Once your application is submitted an appraiser will review the information and make a decision. It is important to understand that filing a Prop 8 can never hurt you by making your taxes higher. Let me explain why:
*If the current market value for your home is greater than Base Value trended, no change in assessed value will be made.
A property was purchased for $500,000. During a three-year period, the real estate market declined and recovered. The property owner filed for a decline-in-value reassessment. The following table shows the trended base value of the property, the market value of the property, and the assessed value of the property. Assuming a 2% Annual C.P.I.:
Base Value Trended
Because you can never exceed your base value trended, you only stand to lower your taxes by attempting to adjust your assessed value. In the example above, if you had not filed a prop 8 in year 2 you would have been taxed on an assessed value of $510,000 instead of $480,000, assuming a 1.25% property tax on the $30,000 difference in assessment, you save $375 in year 2.
You may file a Prop 8 every year (although in a rising market there is no benefit) and your base year trended values increases by an annual inflation factor of no more than 2% per year.