Be aware that there are many people sending letters to home owners offering to reduce their property tax bill for a fee. This is unnecessary! The Office of the Assessor is proactively reviewing property values and is reducing tax bills based on currently declining values. YOU DO NOT NEED TO PAY ANYBODY!

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Home owners can go to the office and request a review or can download the request from the website www.cccounty.us/assessor or can call the Public Service Division at 925/313-7400.

For example, if you purchased your home for $450,000 seven years ago and now the home has declined in value to $375,000 based on other similar homes selling in your area, then according to the assessor’s office, your home’s tax basis can be temporarily reduced to that value. The assessor in Contra Costa County is very proactive about reviewing the property values and sending homeowners a valuation assessment before the new tax bill comes out. If for any reason, you disagree with the assessment, you can provide comparable values to the assessor’s office to prove the value you think your house should reflect for the coming tax year. Check their website as a lot of the forms are located on the internet.

Keep in mind however that as soon as values start to increase, the assessor’s office will proactively review these temporarily reduced values and start to increase them again until they are back at the purchase value. However, based on current trends in the real estate market, prices in Real Estate for Sale are not expected to trend upwards on a consistent basis until 2012.

Due to this fact, you may consider a short sale. A short sale is when you owe more on the mortgage for your home than you can sell it for on the Real Estate Market. As a result, other solutions such as refinancing or selling the home as a regular sale are no longer available to you as a homeowner. In the above scenario, a seller who owes $450,000 on a home that they can only sell for $375,000 is $75,000 or more in the hole with the home. Although the property tax bill has gone down, the principal, interest and insurance payment has probably stayed the same.

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If you are a homeowner and find yourself in a situation where you have lost your job, are going through a divorce, must relocate for a job or other hardship situation, you may be a great candidate for a short sale. Provided you have checked with a cpa or attorney, and have confirmed that the consequences of a foreclosure would be more detrimental to you than a short sale, that may be the better and more honorable option.

A short sale is when an owner owes more on their home than the home will sell for on the open market but needs to sell regardless. The seller must obtain permission from the lender(s) to sell the home for less than the market value. The lender may or may not agree to forgive the portion of the loan not repaid at the time of the sale. A short-sale is typically a pre-foreclosure activity. Many short sales are taking place in the California Real Estate Market.

The seller should obtain a short sale package from their lender. Sellers should also check to see if the lender will forgive the debt and agree not to come after them when the short sale has occurred. If the lender will not agree to forgive the debt without recourse, a foreclosure may be a better option financially. Even if you are in the process of a loan modification with your lender, you may want to list your home simultaneously to obtain a short sale. You may  not like the modification terms the lender gives you in which case you will have a jump on the short sale process. Until you receive an approval from the bank, you are not in contract and can cancel the purchase should the loan modification meet with your approval.

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Short sales in the California Real Estate Market have notoriously taken a long time to complete; a waiting period of 60-90 days has been typical for a response from the lender. Some lenders such as Wachovia (now Wells Fargo) are streamlining the process. Hopefully other banks will follow. There is some direction from the current administration to encourage banks to shorten their process. A lender will typically conduct a broker price opinion (BPO) and an appraisal to determine the market value of a home in short sale. Provided the offer is in line with current sales, the bank will likely agree to the short sale.

Again, the seller must determine if a short sale is financially better than a foreclosure. The IRS website has some very specific definitions which will help you determine if you will be responsible for the debt. Typically, if you are short selling your primary residence, you will be fine. If you are short selling an investment property in the California Real Estate Market and you either have your original purchase loan or you can prove you are financially insolvent, you may not be on the hook for the debt. Please make sure to check with a financial advisor. As a general rule, your long term financial health will recover faster from a short sale rather than with a foreclosure.