Wednesday, May 27, 2009
What the Heck is a "Miner's Inch?"
Dear Sue,
I appreciated the information you provided in you article on buying country property. I have been looking for a piece of land where I can plant an orchard and a good size garden.
I am told that it would be best to find a parcel that has irrigation water so that I don’t have to use the well. I was also told that not all country properties have access to irrigation water. Where do I find properties that do?
In my search I discovered that irrigation water comes from NID or PCWA. I have heard that I can buy irrigation water by the miners inch. I have no idea what this means.
Can you enlighten me?
Farmer Fred
Dear Fred
The picturesque and meandering canals that wind their way through the Foothills carry raw irrigation water to approximately 750,000 acres of agricultural land.
The source is the snowmelt from the Sierra Nevada Mountains.
During the Gold Rush days, all of the major rivers and streams from the snowmelt were diverted into canals to be sold to the mining companies for hydraulic mining.
The turn of the century brought the agricultural era to the Foothills. The mining canals were converted to serve the foothill farmers.
After World War II and well into the 1960’s, licensing districts were formed to control and convey the water. Local companies include the Nevada Irrigation District (NID) and Placer County Water Agency (PCWA).
These districts sell the water by the “miners inch”. A miners inch, described by one source as a quantity of water that will flow through a 1 inch opening in a two inch plank, with a steady flow of water standing six inches above the top of the hole. A miners inch does not represent an exact quantity of water flow. Different ditch companies have different standards.
A miners inch amounts to a flow of about 1.5 cubic feet per minute. That’s 11.25 gallons per minute if you live in Northern California and only 9 gallons per minute if you live in Southern California.
The water is sold by the season. It is possible to get summer or winter water or both.
Irrigation water is less expensive than treated city water. The use of irrigation water also prevents over use and possible depletion of one’s well. Irrigation well is also used for fire suppression, filling ponds and irrigating lawns and crops.
The water districts have maps available that show the parcels that they serve. It’s very important that you check in with PCWA or NID to make certain that the water will be available. Just because there is a canal running through a property does not mean that it can be tapped into.
Irrigate with gravity whenever possible. I once lived on a property that had NID that was piped from about a mile from its source. The water was under pressure due to the fall and distance. By the time it reached my house the pressure was measured at 90 pounds per square inch. I never once had to use electricity to irrigate.
I now live in an area where the NID canal actually runs through my property. The NID water gravity flows into a pond. I pump water from the pond for irrigation. The electric meter is running every time the pump clicks on.
Visit your local NID or PCWA office for more information including availability and cost of irrigation water. It’s a matter of Good Home $$’s and Sense.
I appreciated the information you provided in you article on buying country property. I have been looking for a piece of land where I can plant an orchard and a good size garden.
I am told that it would be best to find a parcel that has irrigation water so that I don’t have to use the well. I was also told that not all country properties have access to irrigation water. Where do I find properties that do?
In my search I discovered that irrigation water comes from NID or PCWA. I have heard that I can buy irrigation water by the miners inch. I have no idea what this means.
Can you enlighten me?
Farmer Fred
Dear Fred
The picturesque and meandering canals that wind their way through the Foothills carry raw irrigation water to approximately 750,000 acres of agricultural land.
The source is the snowmelt from the Sierra Nevada Mountains.
During the Gold Rush days, all of the major rivers and streams from the snowmelt were diverted into canals to be sold to the mining companies for hydraulic mining.
The turn of the century brought the agricultural era to the Foothills. The mining canals were converted to serve the foothill farmers.
After World War II and well into the 1960’s, licensing districts were formed to control and convey the water. Local companies include the Nevada Irrigation District (NID) and Placer County Water Agency (PCWA).
These districts sell the water by the “miners inch”. A miners inch, described by one source as a quantity of water that will flow through a 1 inch opening in a two inch plank, with a steady flow of water standing six inches above the top of the hole. A miners inch does not represent an exact quantity of water flow. Different ditch companies have different standards.
A miners inch amounts to a flow of about 1.5 cubic feet per minute. That’s 11.25 gallons per minute if you live in Northern California and only 9 gallons per minute if you live in Southern California.
The water is sold by the season. It is possible to get summer or winter water or both.
Irrigation water is less expensive than treated city water. The use of irrigation water also prevents over use and possible depletion of one’s well. Irrigation well is also used for fire suppression, filling ponds and irrigating lawns and crops.
The water districts have maps available that show the parcels that they serve. It’s very important that you check in with PCWA or NID to make certain that the water will be available. Just because there is a canal running through a property does not mean that it can be tapped into.
Irrigate with gravity whenever possible. I once lived on a property that had NID that was piped from about a mile from its source. The water was under pressure due to the fall and distance. By the time it reached my house the pressure was measured at 90 pounds per square inch. I never once had to use electricity to irrigate.
I now live in an area where the NID canal actually runs through my property. The NID water gravity flows into a pond. I pump water from the pond for irrigation. The electric meter is running every time the pump clicks on.
Visit your local NID or PCWA office for more information including availability and cost of irrigation water. It’s a matter of Good Home $$’s and Sense.
Wednesday, May 20, 2009
Buying Country Property
Dear Sue,
We are finally making our move to the country! Building our own home has been a dream of ours for as long as we have been married. (Fifteen years!) We can’t wait to get out of the Bay Area!
We have been looking on the Internet for some acreage. We know that buying rural property is different than buying in a sub-division. We were wondering if there were any special things that we should be aware of.
Country Connie
Dear Connie,
I moved from the Bay Area to Auburn in 1974 and have never regretted it for a single second!
It did take some doing to get acclimated to country living. I didn’t know a GPM from an RPM.
Before beginning your property search I would recommend that you gather as much information as possible. My first trip would be to the County offices. Pay a visit to the environmental health department.
This is where you learn that before a building permit can be issued, the property in question must be able to handle sewage disposal and provide a potable water source.
The sewage disposal system known as a septic system can only be installed if the soils meet certain pre determined county standards. The testing, known as “perc and mantle” is conducted by a soils engineer.
Different soils will require different systems. Each system will vary in cost. The cost can be as low as $6500.00 for a standard system to as high as $30-50,000.00 (sometimes more) for an engineered system. For obvious reasons it pays to have a county approved soils test and septic installation estimate as a condition of your purchase.
A potable water source is required before the issuance of a final building permit. If public water is not available a county approved well will be required. A wise buyer will make a potable water source a condition of the purchase.
A power source is also necessary. Determining the location of the electrical lines and the estimated cost to hook up is very important. Installing power poles will add thousands of dollars to your building costs. While solar is a wonderful option, many lenders are reluctant to finance property that doesn’t have access to a public utility company.
Zoning is another area of concern. Verify with the planning department that the property is zoned for your intended use. For example, you may want horses for the grandkids and find out that the current zoning ordinance prohibits horses. Don’t assume that if the property is rural that horses are allowed.
Check for legal access to the property with the department of public works. I remember selling a rural property many years ago to a young family. The public works department wouldn’t allow ingress and egress to the property because it didn’t meet the county’s line of site requirements. A portion of a hillside was restricting the view of oncoming traffic. The permit was finally issued after costly excavation.
The verification of property lines is essential. Just to illustrate the importance, I once had an out of area client who sold a rural property that they had inherited and never seen.
A buyer made an accepted offer and relied on a cousin to verify the property lines. The buyer drilled a well. He received a thank you note in the mail from his new neighbor who greatly appreciated the new well that had just been drilled on his property. Enough said.
Easements are a consideration. They will show up on the title report along with any other recorded documents including liens and encumbrances that affect the property. I recommend sitting down with the title officer and going over the title report. It’s a good idea to have title prepare a color- coded map for your review.
If you have selected a potential builder, it would be wise to have him/her do a feasibility study before completing the purchase. The topography, soils and building location can have a major impact on building costs.
I am very excited for you. Doing the research before acquiring any property will be a matter of good Home $$s and Sense!
We are finally making our move to the country! Building our own home has been a dream of ours for as long as we have been married. (Fifteen years!) We can’t wait to get out of the Bay Area!
We have been looking on the Internet for some acreage. We know that buying rural property is different than buying in a sub-division. We were wondering if there were any special things that we should be aware of.
Country Connie
Dear Connie,
I moved from the Bay Area to Auburn in 1974 and have never regretted it for a single second!
It did take some doing to get acclimated to country living. I didn’t know a GPM from an RPM.
Before beginning your property search I would recommend that you gather as much information as possible. My first trip would be to the County offices. Pay a visit to the environmental health department.
This is where you learn that before a building permit can be issued, the property in question must be able to handle sewage disposal and provide a potable water source.
The sewage disposal system known as a septic system can only be installed if the soils meet certain pre determined county standards. The testing, known as “perc and mantle” is conducted by a soils engineer.
Different soils will require different systems. Each system will vary in cost. The cost can be as low as $6500.00 for a standard system to as high as $30-50,000.00 (sometimes more) for an engineered system. For obvious reasons it pays to have a county approved soils test and septic installation estimate as a condition of your purchase.
A potable water source is required before the issuance of a final building permit. If public water is not available a county approved well will be required. A wise buyer will make a potable water source a condition of the purchase.
A power source is also necessary. Determining the location of the electrical lines and the estimated cost to hook up is very important. Installing power poles will add thousands of dollars to your building costs. While solar is a wonderful option, many lenders are reluctant to finance property that doesn’t have access to a public utility company.
Zoning is another area of concern. Verify with the planning department that the property is zoned for your intended use. For example, you may want horses for the grandkids and find out that the current zoning ordinance prohibits horses. Don’t assume that if the property is rural that horses are allowed.
Check for legal access to the property with the department of public works. I remember selling a rural property many years ago to a young family. The public works department wouldn’t allow ingress and egress to the property because it didn’t meet the county’s line of site requirements. A portion of a hillside was restricting the view of oncoming traffic. The permit was finally issued after costly excavation.
The verification of property lines is essential. Just to illustrate the importance, I once had an out of area client who sold a rural property that they had inherited and never seen.
A buyer made an accepted offer and relied on a cousin to verify the property lines. The buyer drilled a well. He received a thank you note in the mail from his new neighbor who greatly appreciated the new well that had just been drilled on his property. Enough said.
Easements are a consideration. They will show up on the title report along with any other recorded documents including liens and encumbrances that affect the property. I recommend sitting down with the title officer and going over the title report. It’s a good idea to have title prepare a color- coded map for your review.
If you have selected a potential builder, it would be wise to have him/her do a feasibility study before completing the purchase. The topography, soils and building location can have a major impact on building costs.
I am very excited for you. Doing the research before acquiring any property will be a matter of good Home $$s and Sense!
Labels: country property, property lines, rural land purchase, septic, well
Thursday, May 14, 2009
Does a Short Sale Mean Debt Free?
Hi Sue,
I had a question I was hoping you may be able to help us with. I have a family member that is losing their home. They are being advised to do a short sale on the property. They have been told that if the house is sold through a short sale they will not be responsible for paying the second attached to that property. So, in essence by doing the short sale, they will be "debt free". They have also been told that it should have minimal impact on their credit and they would be able to purchase another house in six months. That sounds WAY to good to be true!
As you can imagine the Internet is FULL of various information. What the big question at this point seems to be is:
If someone does a "short sale" on their home, are they still responsible for paying the second? And:
Does the short sale have just as much impact to their credit scores as a foreclosure would?
It seems to me that if the short sale affects the credit scores as much as a foreclosure, why wouldn’t you just do the foreclosure?
Hope that makes sense. It's my mom that's losing their house. My husband and I have tried to help out, but as you can imagine, we can only do so much. I just hate to see them getting in to something without enough information.
Please help!
Anxious Anne
Dear Anne,
You are asking very good questions!
It is true that short sales don’t have the same negative impact on one’s credit. In a best case scenario a borrower can purchase a home the day after a short sale. That assumes that all of the borrowers other financial obligations have been paid on time and there is no other negative credit reporting of any kind.
The least desirable scenario is that the borrower must wait a minimum of five years before being able to purchase another home.
In contrast, if a borrower loses a home in foreclosure the waiting period before being able to purchase is typically seven years.
A short sale is when the lender agrees to retire the mortgage debt for less than what is owed. This process literally creates a “debt free” result for the borrower.
Lenders are learning through experience that short sales make more sense than foreclosures. A short sale is easier to manage and less costly than a foreclosure. Sales statistics show that short sales net approximately 20% more than a foreclosure which is also known as an REO or bank owned property.
The second lien holders are generally willing to cooperate in a short sale negotiation because they would get absolutely nothing if the property were to go into foreclosure.
An area of concern when dealing with second lien holders is determining whether or not the loan is recourse or non-recourse. If the loan was a purchase money loan it is generally non-recourse. If it is a re-finance or line of credit loan it is probably a re-course loan. Have a qualified tax professional or real estate attorney make this determination for you.
If the second is a recourse loan, meaning the lender would have the right to recover or go after the borrower for any deficiency because the money wasn’t purchase money, it would be wise to have the negotiator get the lien holder to sign a full release.
The current administration introduced a plan that subsidizes the losses that second lien holders are required to take for loan modifications. The plan has been expanded to cover short sales.
The tax impact from a short sale is also an area of concern. A bill duplicating the Federal Governments stance on taxing debt relief has been introduced. If passed, it would prohibit the State’s from taxing borrowers on debt relief. Always consult your tax professional before entering into a short sale agreement. It’s a matter of good Home $$’s and Sense.
I had a question I was hoping you may be able to help us with. I have a family member that is losing their home. They are being advised to do a short sale on the property. They have been told that if the house is sold through a short sale they will not be responsible for paying the second attached to that property. So, in essence by doing the short sale, they will be "debt free". They have also been told that it should have minimal impact on their credit and they would be able to purchase another house in six months. That sounds WAY to good to be true!
As you can imagine the Internet is FULL of various information. What the big question at this point seems to be is:
If someone does a "short sale" on their home, are they still responsible for paying the second? And:
Does the short sale have just as much impact to their credit scores as a foreclosure would?
It seems to me that if the short sale affects the credit scores as much as a foreclosure, why wouldn’t you just do the foreclosure?
Hope that makes sense. It's my mom that's losing their house. My husband and I have tried to help out, but as you can imagine, we can only do so much. I just hate to see them getting in to something without enough information.
Please help!
Anxious Anne
Dear Anne,
You are asking very good questions!
It is true that short sales don’t have the same negative impact on one’s credit. In a best case scenario a borrower can purchase a home the day after a short sale. That assumes that all of the borrowers other financial obligations have been paid on time and there is no other negative credit reporting of any kind.
The least desirable scenario is that the borrower must wait a minimum of five years before being able to purchase another home.
In contrast, if a borrower loses a home in foreclosure the waiting period before being able to purchase is typically seven years.
A short sale is when the lender agrees to retire the mortgage debt for less than what is owed. This process literally creates a “debt free” result for the borrower.
Lenders are learning through experience that short sales make more sense than foreclosures. A short sale is easier to manage and less costly than a foreclosure. Sales statistics show that short sales net approximately 20% more than a foreclosure which is also known as an REO or bank owned property.
The second lien holders are generally willing to cooperate in a short sale negotiation because they would get absolutely nothing if the property were to go into foreclosure.
An area of concern when dealing with second lien holders is determining whether or not the loan is recourse or non-recourse. If the loan was a purchase money loan it is generally non-recourse. If it is a re-finance or line of credit loan it is probably a re-course loan. Have a qualified tax professional or real estate attorney make this determination for you.
If the second is a recourse loan, meaning the lender would have the right to recover or go after the borrower for any deficiency because the money wasn’t purchase money, it would be wise to have the negotiator get the lien holder to sign a full release.
The current administration introduced a plan that subsidizes the losses that second lien holders are required to take for loan modifications. The plan has been expanded to cover short sales.
The tax impact from a short sale is also an area of concern. A bill duplicating the Federal Governments stance on taxing debt relief has been introduced. If passed, it would prohibit the State’s from taxing borrowers on debt relief. Always consult your tax professional before entering into a short sale agreement. It’s a matter of good Home $$’s and Sense.
Labels: non-recourse loan, recourse loan, REO, short sale tax debt, Short Sales
Wednesday, May 6, 2009
I Need a Loan Mod! Who Should I call?
Dear Sue
My mother suggested that I write to you.
My wife and I got an ARM loan about a year ago and it has become way too high for us to afford. We are now 90 days behind in our mortgage because our lender told us they couldn’t modify unless we were 2 months behind.
I went through HOPE and they referred me to an attorney who wanted $4000.00 for a Loan Modification with no guarantee of success.
Do you suggest I go this route? Can you recommend any other attorneys that do modifications who might be a little more reasonable?
Stressed Steve
Dear Steve
The current administration has developed a website that is designed to assist the borrower in doing their own loan modifications for free.
The site, http://makinghomeaffordable.gov will guide you through the process.
Most people think that they have to pay someone to do their loan modification. It is true that it is a time consuming, patience-testing, detailed process.
If you keep this in mind and approach the loan modification process with the right attitude, I believe that anyone can be successful.
If you absolutely feel that you are not capable of the objectivity and patience that the process requires, I strongly recommend that you engage the services of a “fee for service” loan modification company.
Legislation has been introduced that would prohibit advance fees for loan modifications because of the rampant scamming by so-called loan modification companies who insist on money up front with no guarantees.
The Federal Trade Commission is watching approximately 71 companies that are running suspicious ads for loan modifications. These fake mortgage modification and foreclosure relief companies are robbing Americans of their savings, their homes and their futures.
Some of these perpetrators have even charged homeowners facing foreclosure fees for services never delivered and then filed fraudulent bankruptcy petitions on their behalf. Similar operators got homeowners to sell their homes to “straw buyers” on the false promise that they would get their homes back after they were saved from foreclosure.
At the very least, companies have taken advance fees and then disappeared before they have delivered any promised services.
Of course there are reputable loan modification companies with attorneys that have received permission from the Department of Real Estate to charge advance fees. You can get more information (and cautions) at: http://www.dre.ca.gov/cons_adv_fees_alert.html
Try it on your own and see how you do before paying anyone. It will be like paying yourself for a job well done. Good luck!
It can be a matter of good Home $$’s and Sense.
My mother suggested that I write to you.
My wife and I got an ARM loan about a year ago and it has become way too high for us to afford. We are now 90 days behind in our mortgage because our lender told us they couldn’t modify unless we were 2 months behind.
I went through HOPE and they referred me to an attorney who wanted $4000.00 for a Loan Modification with no guarantee of success.
Do you suggest I go this route? Can you recommend any other attorneys that do modifications who might be a little more reasonable?
Stressed Steve
Dear Steve
The current administration has developed a website that is designed to assist the borrower in doing their own loan modifications for free.
The site, http://makinghomeaffordable.gov will guide you through the process.
Most people think that they have to pay someone to do their loan modification. It is true that it is a time consuming, patience-testing, detailed process.
If you keep this in mind and approach the loan modification process with the right attitude, I believe that anyone can be successful.
If you absolutely feel that you are not capable of the objectivity and patience that the process requires, I strongly recommend that you engage the services of a “fee for service” loan modification company.
Legislation has been introduced that would prohibit advance fees for loan modifications because of the rampant scamming by so-called loan modification companies who insist on money up front with no guarantees.
The Federal Trade Commission is watching approximately 71 companies that are running suspicious ads for loan modifications. These fake mortgage modification and foreclosure relief companies are robbing Americans of their savings, their homes and their futures.
Some of these perpetrators have even charged homeowners facing foreclosure fees for services never delivered and then filed fraudulent bankruptcy petitions on their behalf. Similar operators got homeowners to sell their homes to “straw buyers” on the false promise that they would get their homes back after they were saved from foreclosure.
At the very least, companies have taken advance fees and then disappeared before they have delivered any promised services.
Of course there are reputable loan modification companies with attorneys that have received permission from the Department of Real Estate to charge advance fees. You can get more information (and cautions) at: http://www.dre.ca.gov/cons_adv_fees_alert.html
Try it on your own and see how you do before paying anyone. It will be like paying yourself for a job well done. Good luck!
It can be a matter of good Home $$’s and Sense.
Labels: advance fees, ARM, HOPE, loan mod, loan modification, makinghomeaffordable
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