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ATTENTION LOS ANGELES & VENTURA COUNTY HOMEBUYERS: Very Important Info You Need to Know Before Buying That New or Newly Built Property (30DC14)

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Mortgage and Lending with Los Angeles & Ventura Counties in CA

I subscribe to the daily webcasts of Think Big, Work Small (TBWS), which is hosted by these two guys, Brian Stevens & Frank Garay.  TBWS was founded a couple of years ago by a bunch of real estate and mortgage people who wanted to teach others in the business how to work smarter to grow their business. 

This mornings video was especially interesting because there was a segment on the latest real estate scam.  Apparently, many new home builders are attaching 99yr home resale fees to the title of new home sales and quite often, the new homebuyer is not aware of the repercussions and consequences of allowing these fees when they signed the purchase contract on those new homes.

These transfer fees are fees that kick in on every single sale of the home for 99yrs.  These fees are typically 1% of the sales price of the home and the fee that is collected goes back to the home builder.  This happens every time the home is sold and the builder just keeps collecting and collecting and collecting.  Furthermore, Fannie Mae and Freddie Mac have announced that they are taking steps to stop lending on properties that have these transfer fees clouded on title.  

If you are currently looking to purchase a new or newly built home, you definitely need to learn about whether or not the property has one of these seller resale fees before making an offer on the property.  Anyway, here is the video regarding the segment I was referring to and I hope you enjoy it as much as I did. 

I want to also suggest checking out some of their more recent ones too as well as their blog threads.  Very interesting discussions going on. 

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 Donne Knudsen

Realtor® - CalState Realty Services

DRE#: 01364050 / NMLS#: 249822 

 

805.2069123

 

E-mail   My Blog  

Serving low-medium income individuals and families as well as first time buyers with both their real estate as well as their mortgage needs including down payment assistance

Los Angeles County  --  Ventura County

© 2010 - All Rights Reserved

Comments (5)

Leslie Ebersole
Swanepoel T3 Group - Saint Charles, IL
I help brokers build businesses they love.

Morning Donne: You're amazing, new material every day. In any case, I've never heard of this. Is it a California thing? Is it the same as an SSA? In my area we have funded infrastructure development in many new subdivisions with Special Service Areas. Essentially, the municipality sells bonds that are paid back by home buyers on their tax bill for 20 or 30 years. This moves the $30,000 per house (eg cost of roads, sewer and water lines) out of the initial purchase price and into the cost of ownership for the 20 or 30 years.

Sep 09, 2010 04:58 AM
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

OH my word.  That's the craziest thing I've ever heard.  Hello, if you can't "develop", then don't try to be a "developer"

Sep 09, 2010 05:15 AM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Donne, Never heard of this before. Hard to believe it would be legal!

Sep 09, 2010 05:17 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Thanks for the heads up, Donne.  I reblogged.

Sep 09, 2010 07:24 AM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Leslie - I'm trying to get in the habit of blogging more but rest assured, I'm not writing every day.  I have so many posts in draft mode, I'm just starting to move some over to public.  As for this practice being a Cali thing, I don't think so because I've been reading about it happening nationwide.  It also sounds very similar to your SSA fees only these seller resale fees typically run for 99yrs and not 20-30yrs.

Tammy - AMEN!!!  I can see this for maybe the first buyer but 99yrs?  SERIOUSLY???

Bliz - I have just recently been hearing about it and apparently it is legal - for now!  There are several agencies and organizations that are now working to make them illegal.

Jane - As if things weren't bad enough already - right?  Thx for passing the message along.

Thx for stopping by folks; I really appreciate it.  Have a good day.  :)

Sep 09, 2010 07:58 AM