Supplemental property taxes can confuse a buyer

Have you recently purchased a home and been thrown off by getting bills about “supplemental property taxes?” Our friend Jay Vorhees at JVM Lending breaks it down for you:

Supplemental property taxes often create significant confusion for new homebuyers. When someone purchases a property in California, the County Assessor is required to immediately re-asses the property for property tax purposes. This re-assessment usually correlates to the purchase price and can take up to six months to complete.

JVM Supplemental property taxes

When a home is purchased, property taxes are usually based on the property tax bill of the current owner or seller. But usually, their property tax bill correlates to the price the seller paid for the property – often much less than the buyer is paying. Then, buyers mistakenly believe the property tax payment estimate when they purchase is an accurate reflection of their actual property tax. Usually, that’s false.

Anywhere from three months and beyond, buyers should expect a “supplemental tax bill” from the County Assessor. Even if a buyer has an escrow or impound account, they have to pay for the supplemental taxes, which can be sizable. As soon as a supplemental bill is received, a buyer should contact their loan servicer.

Also, when new buyers refinance into a new loan less than a year after a purchase, supplemental tax bills can cause confusion. Even if a borrower is refinancing into a lower rate, the housing payment can appear to increase. This is because lenders are basing the new housing payment on the new property tax liability, while borrowers are still basing their housing payment on the seller’s property tax liability, which is too low.

Art Town: City Hall

I saw this untitled sculpture from 1962 in Walnut Creek City Hall recently and thought it was beautiful! Check it out:

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It was created by Stephen De Staebler, a nationally recognized sculptor from the Bay Area, whose work is based on the expressive potential of the human figure. Clearly, that theme is present in this piece. De Staebler learned to exploit the inherent tendencies of clay as a student under Peter Voulkos in the early 60’s.

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De Staebler worked in clay, but also is well-known for his work with bronze. His quote on the public art plaque is very interesting: “We are all wounded survivors, alive, but devastated selves, fragmented, isolated – the condition of modern man. Art tries to restructure reality so that we can live with the suffering.”

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Even though this structure is indoors and not likely to be seen by as many people in Walnut Creek, try to remember to stop and check it out next time you’re near City Hall!

Don’t get delayed flying in and out of the Bay Area

According to Travel + Leisure, only 71.82% of flights in and out of SFO are on-time. That’s the worst rate in the entire country. Yikes!

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I try to travel to and from Oakland as much as possible, which is more convenient from the East Bay anyway, but they also experience fewer delays. The BART ride from Walnut Creek to Oakland isn’t bad, especially now that they have the little connection from the Coliseum station straight to the airport. And it’s definitely quicker than going to SFO on BART! I also have a great driver that is more reasonable than Uber who is on time and a pleasure to drive with. E-mail or call me if you want his name and number.

Another great trick was getting my Known Travelers ID, which gives me TSA Pre-Check so I don’t have to take off my shoes in security and I can cut to a shorter line for my screening. It’s well worth the effort and $85 to get if you can!

Obviously, the big holiday season is over, and you might not be traveling as much now, but this is still good to know. As nice an airport as SFO might be, flying in and out of it can cause all sorts of headaches.

The Ultimate Guide to Tahoe

Let it snow, let it snow, let it snow! You know what all this Bay Area rain has meant for Tahoe, right? Take a look:

Diablo Magazine has written an “Ultimate Guide to Tahoe” for those who are planning trips to the area for some winter fun. And given all the fresh snow over the last couple weeks, who wouldn’t want to take a weekend to Tahoe? I know I will!

I grew up in Reno and two of my favorite ski resorts are Mt. Rose and Kirkwood – both get more snow than the rest of Tahoe, and Mt. Rose has some really challenging runs with the development and opening of the chutes.

If you want to stay at a great resort with short walks from the lift to the lodge, Sugar Bowl is your spot (and it doesn’t hurt that it’s one of the easiest resorts to get to from the Bay Area). If you’re not much of a skier or snowboarder, head to Old Town Truckee for some shopping.

No matter what you do, get up to Tahoe this winter and take advantage of the epic snowfall. It’s a beautiful place to spend a few days! 2017 is shaping up to be a stellar ski season, and I am off to Mammoth soon to celebrate my birthday!

The 2017 Walnut Creek Citizens Institute

A few years ago, I participated in the Walnut Creek Citizens Institute classes. It was a great experience educating me about the ins and outs of the way the city runs Walnut Creek, and a way to get involved with various city initiatives.

Credit: walnut-creek.org
Credit: walnut-creek.org

For those who haven’t heard of it, the Citizens Institute is a 7-session class that includes tours, presentations and Q&A gatherings with City Council members, the City Manager, the Police and Transportation departments. It gives a good chance to get up close and personal with those who make decisions for our town.

Topics for 2017 will include city finances, getting to know the WCPD, the role of public works and how to improve one’s quality of life in Walnut Creek. The final class meets on Apr. 1 for a graduation of sorts, including a neighborhood showcase and lunch.

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If you live in Walnut Creek or are thinking about moving here, it’s a good opportunity to further increase your knowledge of this wonderful city and how it operates. If we learned anything from the Presidential election, it’s that every level of government is essential and it is important to be involved and participate!

If you want to join in 2017, the sessions will take place from 6:30-9:30 p.m. every Thursday from Feb. 16-Mar. 30. There is a $25 fee, which you can pay on the first day of class. For more information, check out the details here.

How rate increases affect your payments

We’ve seen rates increase since Donald Trump won the election. Now, the Fed is saying they’ll do three rate hikes instead of the expected two in 2017. This caused rates to bump up about half a percent. What do interest rate increases mean in regards to a buyer’s payment and the overall market?

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According to The Wall Street Journal, if we adjust for inflation since 2006, housing prices are actually 16 percent below their 2006 peaks in most areas.  Many economists are saying the demand for housing remains as strong as ever and that recent rate increases will have a minimal effect.

However, people usually make home purchases based on payment. So as interest rates increase, somebody thinking of purchasing should know a 1/2 percent increase in rates for a $500,000 loan, increases the payment about $140-$150 (and even less after “tax benefits”).

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Should buyers and borrowers wait to see if rates fall before moving forward with transactions? Jay Voorhees of JVM Lending says absolutely not. Borrowers can easily take advantage of no-cost refi’s if rates fall.

And, as Gary Shilling wrote in a Forbes column on Dec. 6, he thinks the markets massively overreacted to Trump’s election. He points out that the root causes of weak economic growth (that have kept rates low) will remain. He also says that Trump’s proposed tax cuts and stimulus programs will be watered down by Congress; the expectations of an economic boom are overblown.

What do you believe? Are you bullish or bearish? This election reinforced the notion that nobody has a crystal ball and sitting on the fence waiting for one outcome or another may be the worst thing you can do.

Art Town: The Reader

I love this utility box art on Locust St. and Cypress St. by Ruth Kolman Brophy. She is an Austrian artist living in the Bay Area. As you can clearly see by this beautiful mural, she is very influenced by working with bold colors. What a great piece!

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Pantone “Color of the Year”

Everything’s coming up Better Homes and Gardens right now. Even Pantone’s Color of the Year is “Greenery,” which is very similar to what we use here at BHG.

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Picture Credit: Pantone.com

Check out the story on the Color of the Year, which Pantone describes as “a fresh and zesty yellow-green shade that evokes the first days of spring when nature’s greens revive, restore and renew.” As an outdoor enthusiast and BHG realtor, I love this. But, I probably won’t be painting my walls this color – I think it makes a great accent color!

My favorite part of Pantone’s description, though, is this at the end: “A life-affirming shade, Greenery is also emblematic of the pursuit of personal passions and vitality.”

As we near the end of 2016 and move into 2017, it’s a good time to reflect and consider what we’ve accomplished and what there is to look forward to. I have a few resolutions: up by 6, work out Monday through Friday and in bed before 11 (no more falling asleep on the couch)! And of course, the time to lose some weight needs to become a reality versus just thinking about it. I am also going to start a remodel and add an in-law unit to my current house; I’m thinking about setting myself up for retirement. What is on your New Year’s resolution list?

East Bay New Year’s Eve events

This New Year’s Eve, there seems to be a ton of fun events at local establishments for you to ring in 2017 with.

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For me, New Year’s is a time to reflect on the year that has just passed and to focus forward with new resolutions – what can be improved, how to get into shape and what can I do better. I tend to struggle with the idea that one has to have a special celebration for this event, as I always find the hype does not live up to the expectation, and I am left with disappointment.

My best New Year’s celebrations have always been the unexpected. My favorite was a last-minute ski trip to Sugar Bowl where we scored a small room due to a cancellation. Our kids had the run of the lodge because the only way in was by gondola, and we could walk out the door to the lift.  To our surprise, they had night skiing, champagne and sparkling cider at the hut atop the hill. Then, at 11:30, those who wanted to participate did the torch run, and when all were safely down, the fireworks exploded! So as the clock hits midnight, we all turn the page and start looking forward to new adventures in 2017.

If you feel that you have to do something and have made no plans, but don’t want to venture all the way to San Francisco, take a look at a couple of local events taking place on New Year’s Eve:

  1. The Groove Doctors at San Ramon Marriott (8:30 p.m. for $77/ticket)
  2. Phantom of the Opera Masquerade at Nica Lounge in Concord (8:30 p.m. for $15-50/ticket)
  3. New Year’s Eve at Jack’s in Pleasant Hill (9:00 p.m. for $40/ticket)

Of course, you could always do something unexpected and maybe have the best New Year’s ever! No matter what you choose, I wish you a delightful evening and a prosperous 2017!