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Tracy King's Blog

With over 30 years experience in helping clients buy and sell homes in Northeast Los Angeles, Tracy King has a depth of real estate knowledge that makes her the go-to for both the first-time home buyer and the seasoned real estate investor. When she's not holding open houses or negotiating offers, Tracy enjoys wine tasting, cooking, and planning he...r next trip to Paris. More

Today is Earth Day!

Today is the 39th anniversary of the first celebration of Earth Daywhy, it's as old as I am! But you know that I'm a child of the 60's, don't you. There are lots of great links to explore including http://www.stopglobalwarming.org/default.asp , www.planetgreen.com , http://www.epa.gov/pick5/ .

If you want to celebrate Earth Day with a crowd, today is the grand opening of a new exhibit in the Rose Garden at Exposition Park called Cool Globes, Hot Ideas for a Cooler Planet. Check out the details at www.coolglobes.com/la.php.

Just for fun and also because it seemed like the right thing to do on Earth Day if I were to attend a fight global warming event, I wondered if I could easily take public transportation from near my home in Eagle Rock to Exposition Park. First, be sure to go to www.Metro.Net, not www.Metro.com. After you click on Maps, the planner is very simple to use if you are open to taking the bus. Forget rail for now. Sigh. Maybe next year, if the Expo line is completed on time. But today, for $2.50 round trip, you can go from the corner of Eagle Rock and Colorado Blvd to Exposition Park in about an hour each way on Metro Local 81. The Metro Trip Planner estimates that the cost if you drove your car would be $6.82 each way if you use the estimate of 54.1 cents/mile. So you would save money as well as pollution if you took the bus.

If you want to celebrate by using rail travel, you can hop on down to Union Station and catch the free noon concert performance by Carina Ricco on the South Plaza. Check it out at http://metro.net/news_info/press/metro_063.htm

Happy Earth Day!

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1290 Hits

How can I get the CA $10,000 tax credit in Eagle Rock?

Read my friend Kendyl Young's blog about how you can get up to $18,000 in state and federal tax credits if you buy a home soon. Briefly, if you're a first time buyer (you haven't owned a home in 3 years) you have until November 30 to close escrow on a home. You don't have to be a first-time buyer to qualify for the California $10,000 tax credit for new construction, but the money is limited and it is already 25% gone!

So where in Eagle Rock can you find a home that qualifies for the new home tax credit? Easy! The Rock Row development on Yosemite, that's where! Check it out at the website. I wrote about the grand opening that took place there a couple of weeks ago, remember?

Rock Row, 1546 Yosemite Drive, 90041

Rock Row, 1546 Yosemite Drive, 90041


If you aren't already working with a Realtor, call me if you want more information, or to see the units: 626-827-9795.

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  1181 Hits
1181 Hits

My Latest Restaurant Guide to Eagle Rock and Environs

Oinkster Eagle Rock

Oinkster Eagle Rock

Here is my freshly updated and very subjective Restaurant Guide. Feel free to share it and to comment on it.

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  1287 Hits
1287 Hits

Are you upbeat enough for Eagle Rock?

It was a rockin' day in Eagle Rock March 21, so much was happening I didn't have a chance to twitter it so you could join in the fun!There wasthe Bughouse Spring Cleaning Sale, the street sale by Lady, Read Books, Cactus Gallery and Toro's Pottery, then there was the Jose Vera Fine Art & Antiques' artist's reception for Gilbert Reyes,and the main event of the evening was the Rock Row opening party.
Rock Row, 1546 Yosemite Drive, 90041

Rock Row, 1546 Yosemite Drive, 90041

The groupbuilding and marketing this development hastheir fingers on the pulse of what Eagle Rock is all about: style, fun, diversity, affordability, and a really cool and green vibe. You can read all about the development at http://www.leangreenlivingmachine.com, and in a future blog from me, but here's a recap of the great party you missed...

There was wine from our local Colorado Wine Company to start, with just enough appetizers served upto make us really hungry for something more. There was a DJ spinning lively tunes. There was a finished model staged by my neighbor, Eric Lee, who really made the space look terrific.
Living Room Staged by Model 7 Studio

Living Room Staged by Model 7 Studio

Bedroom staged by Model 7 Studio

Bedroom staged by Model 7 Studio

The bar opened at 7 for the beer and whiskey folks, then came the Koji Taco Truck! Now, if you follow Koji on Twitter, you would have known about this! Somehow we managed to end uptowards the start of the line so we didn't have to wait too long. Wow, it lives up to the hype, is all I can say. Here's what's in the short rib taco straight from their website, www.KogiBBQ.com:

This is our signature taco. We get the best trimmings of short ribs we can find, let it swim in our own special marinade, and chop it nice and small so the flavors just dance on your taste buds. Once on the grill, the fat melts away to create that soft and tender texture everyone loves and the sugars just caramelize to give the meat that deep and savory flavor. This is the Kogi crowd favorite.

All our tacos are topped with:

  • sesame-chili salsa roja
  • julienne romaine lettuce and cabbage tossed in Korean chili-soy vinaigrette
  • cilantro-green onion-lime relish
  • crushed sesame seeds
  • sea salt
  • garnished with lime wedge, orange wedge and red radish wedge
Kogi Taco plates

Kogi Taco plates

They make spicy chicken, tofu, and pork tacos too. I tried all but the tofu (just because I didn't want to be too piggy), and each was fabulous. Perfect with beer. White wine was ok too. Heck, the whiskey would have worked.
Hey, this was such a happening event that Fox News showed up! They interviewed the developers, Kevin and Hardy Wronske, as well as Shellie Collier, the LEED project manager. I watched the newscast and I am quite sure there are journalists out there who could have captured the spirit of the day much better, but still, Eagle Rock made Fox News with an upbeat and positive story.
I applaud and celebrate the indomitable spirit of all the local businesses who have decided that a little creativity is called for around here. The sales were brisk at Bughouse when I stopped by for my free brownie and milk, and I picked up a great print at a bargain price. I'm sure the street sale andartist's receptionwere just as fun. When the economy gets depressing, let's have a party! Alright!
Party at Rock Row!Party at Rock Row!

Party at Rock Row!

Party at Rock Row!

Party at Rock Row!

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1636 Hits

Eagle Rocks Saturday!

Art is happening in Eagle Rock! Spend your Saturday enjoying several of our unique art/craft/antique venues. Eagle Rock Business Model Rides Again! Bargains! Cool Stuff! Great Style!

bughouse-ad

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1392 Hits

Back on the Market Deal!

This 2-on-a-lot is tenant occupied and impossible to show, but make an offer subject to inspection and get yourself a deal!

Call me, 626-844-2256.

1317 Hepner Ave Los Angeles, CA 90041

1317-hepner1

Price: $289,900
Beds: 3
Baths: 2
Sq. Ft.: 1,522
$/Sq. Ft.: $190
Lot Size: 6,976 Sq. Ft.
Property Type: Multi-Family
Style: See Remarks
Year Built: 1950
Area: Eagle Rock
County: Los Angeles
MLS#: 12121088
Source: i-Tech MLS
Status: Active
On Redfin: 41 days
House back on the market. Fell out of escrow at no fault of seller due to buyer not succefully acquiring financing. TWO HOUSES on 1 LOT under 300K in TRENDY Eagle Rock 90041! Front 2bd 1 ba unit tenant occupied paying $1000.00 per mo in a RENT CONTROLLED AREA. Rear 1 bd 1 ba unit VACANT and can be seen.
Listing Price Information
Lot Information
Multi-Family Information
  • # of Units: 2
  • Rent Control: Rent Control
  • Type of Business: Residential 2-4 Units
  • Lot Square Footage: 6976
  • APN: 5480021019
  • Lot Size Source: Assessor
  • Original Price: $289,900
  • Search Price: $289,900
  • Price Per Acre: $1,811,875
Bathroom Information
Location Information
Financial Information
  • Terms: Cash
  • Terms: Cash to New Loan
  • Terms: Real Estate Owned
  • Cross Street Address: Wiota St
  • Map Book: Thomas Guide
  • Map Page: 565
  • Map X Coordinate: C
  • Map Y Coordinate: 7
  • # of Baths (Full): 2
Building Information
Property Information
  • Land: Fee
  • Property Disclaimer: Information has not been verified, is not guaranteed, and is subject to change.
  • Square Footage Source: Assessor
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  1132 Hits
1132 Hits

Deal Alert!

3171-larga3171 Larga Ave
Los Angeles, CA 90039
Price: $306,900
Beds: 5
Baths: 3
Sq. Ft.: 1,776
$/Sq. Ft.: $173
Lot Size: 5,404 Sq. Ft.
Property Type: Single Family Residential Detached
Style: Other
Year Built: 1956
Area: Los Angeles
County: Los Angeles
MLS#: 12119852
Source: i-Tech MLS
Status: Active
On Redfin: 70 days
Fixer-upper

Bank Owned property. Two houses on a lot. Front house has 2b/1b, no kitchen and is in need of some repairs. The back house is a major fixer upper, some work has been done but not completed. Great opportunity for investors or cash buyers.

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  1826 Hits
1826 Hits

How I Bought My First Piece of Real Estate, or What Do You Mean There’s No Foundation?

When I was nine years old, my father proclaimed that we were going to buy a house in Springfield, Missouri, and I should draw a plan of what I wanted it to look like. That never happened, but the seed was planted and I thought and dreamed and schemed for the next 15 years. At one point right after I had graduated from college and started my first job, I went into a local bank and asked how I could go about getting a mortgage to purchase a home. I was told that single women didn't buy homes usually, and that they didn't offer any loans to people like mefresh out of college, not long at my job, no real assets except my 1960 Volkswagen bug with the McGovern sticker still on it.

In 1975, I had just received my final divorce decree, had $3,000 in my savings account, and was working for the Monterey County Department of Social Services as a caseworker. I lived in Pacific Grove, a foggy little town on the Monterey Bay that had started life as a Methodist beach retreat. Many of the lots were about 20 by 40 feet and were originally for people to come and pitch their tents on for their beach vacation. Later, little board and batten cottages were built on those same little lots. I rented one, but I couldn't afford to buy a house in my neighborhood because they were selling for $35,000 and up. I watched the ads in the paper and eventually found one of the least expensive homes on the entire Monterey Peninsulajust around the bay, in Seaside, for $20,000.

It was a Victorian cottage behind a white picket fence and it had a guest house in the back. And here was the best partthe seller was willing to carry the loan on the property! I could put down $2,000, the seller would carry the first loan of about $16,000 plus he'd carry a second of $2,000, and I'd have $1,000 for closing costs and incidentals. Sounds perfect, right? Well, the house was rented to a guy who had lived there for many years, didn't take care of the property, and apparently did little besides smoke, drink and play cards. I think the seller figured the best way to get rid of the guy was to just sell the property.

My real estate agent (the listing agent who ran the ad in the paper) helped me write up a contract that included a clause that the property had to be vacant before I would close escrow. We didn't do things like property inspections back then, but I had my stepfather look the place over and he thought it seemed ok. Also, I had a friend who was a plumber and he looked at the place for me. I remember we were all amazed that it had a basement, which was rare in that area. We worked out all the details, I waited about 4 months for the tenant to finally move out, and then I took possession of my first property! Now, you probably thought when I said it was a Victorian with a white picket fence that it was a cute charming cottage and I would move in and live happily ever after? Not hardly. It had lots and lots of deferred maintenance. I had no intention of moving into the place anyway because it was in a pretty sketchy neighborhood not far from a commercial area, in what was known to be about the poorest neighborhood on the coast between Los Angeles and San Francisco.

I rented both the house and the guest house for just enough to cover my monthly mortgage expense, to people who were willing to do a little fixing up in exchange for cheap rent. It was a good deal for everyone involved. Then a few problems came up, mostly because the two sets of tenants had trouble getting along. So the first tenants in the house moved out, but the second tenants were even better because the husband was a house painter by trade and agreed to paint the house as part of his rent. Unfortunately, the new tenants didn't get along too well with the back house tenants either, so I received complaining phone calls from one or the other tenant on a pretty regular basis.

Oh, then my landlord decided that I had to move out of the place I was renting in Pacific Grove. So now I had spent my savings on this first place and I needed to move. I went to my mother and asked her for help. She lent me some money for another down payment and co-signed on a real bank loan, and I bought another house in Seaside for $27,000, that was further up the hill and I could move into it. It was a stressful situation and I have to tell you, I was often afraid that the whole arrangement would unravel and leave me with some big expense I couldn't handle.

It worried me enough that I finally decided I should just sell the rental. The real estate market was pretty hot at the time, so we listed the Victorian for $33,000 and immediately got 3 full price offers, so I sold the place, also agreeing to carry back a 10% second. Now, remember how when I bought the house there was no bank involved? Well, this time there was a lender who sent out an appraiser, plus the title company sent out some kind of inspector, and lo and behold, we discovered that the house had no foundation! What? It had a basement, how could it not have a foundation? It turns out that the house had been moved onto the property at some point and set over an old basement from some previous structure that had been removed. Who knew?

Before you get too carried away with how stupid you think I was, you have to know that many houses in Carmel, Monterey, and Pacific Grove had no foundations. They were built on what they called aœmudsill,which was pretty much a redwood frame with the house built on top, and gravity keeping everything in place. Remember, this was originally a vacation home for the most part, near the beach. Years later I found out that it had been moved from Pacific Grove by floating it across the bay on a barge and that was why it was the only Victorian home in Seaside.

So a crew jacked up the house and poured a foundation, which cost me about $3,000. After all was said and done, I netted about $8,000 on the sale, $3,300 of which was a second which I didn't get for about 5 years, so it was kind of a forced savings account that paid a bit of interest at the end. Doing the math, I spent about $3000 to buy the place and I netted about $8000 at the end, meaning I made about 270% on my initial investment. So I paid my mother back for the down payment on the other house and still had money left over. Not too bad for a kid from the Ozarks, don't you think? Here's the kicker: this whole drama took about 9 months from the time I closed escrow in the beginning to when I closed escrow at the end. It was intense, but it all worked out and I ended up owning the home that I lived in, though not in the neighborhood I wanted, and I had been thoroughly bitten by the real estate bug. Here was the germ of my motto, Interesting Homes for Interesting People.

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1320 Hits

How Can I get a Handle on This Financial Crisis?

For those of you who want a better understanding of how we got into this global economic mess, National Public Radio has several programs that have podcasts you can read, watch, or listen to that summarize and define a lot of the terms we see tossed around in the news today. They posit some non-accusatory and intelligent explanations both of how financial systems work and where things went wrong. I'm not saying I agree with every word, but I think it's well-balanced and worth absorbing. Knowledge is power. Check it out at:

This American Life

How Stuff Works:

Planet Money:

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1746 Hits

Are You Ready for a Deal?

Are You Ready for a Good Deal?

What constitutes a good deal to you?

“I'll know it when I see it, you say. Well, maybe you think you are in the market for a good deal, but you just told me that you are not. What?! Well, do you have a list of what fits in your criteria for a good deal? Do you know what your numbers are for purchasing, monthly expenses, possible repairs? Do you have your financing lined up and your investment money ready? Whether you plan to buy your primary residence or an investment property, you need to have worked out a number of issues before you're ready to look for a good deal.

Right now, we are in the best market for finding a deal that we have experienced in probably 12 years. This doesn't mean that prices are at 1997 levels, but that there are affordable properties available to buy that can make real financial sense in terms of potential for equity building as well as immediate neutral to positive cash flow on your investment.

For example: A property with two 2-bedroom, 1-bath houses on a street-to-street lot in a decent neighborhood of Eagle Rock listed for $269,900. If you put 25% down, even at under-market rents of $800 each, you could have immediate positive cash flow plus real potential for appreciation over time. If you want to live on the property as your primary residence, you can use FHA financing and purchase with as little as 3.5% down! I don't know if you've been able to buy a deal like this since they changed the tax law in 1987! And this property was a good owner-occupied candidate with privacy for both units—it even had separate yards. Wow, does that sound like a deal? Sign me up, let me go talk to my lender.

Nope. Too late. That place had 6 offers within 4 days and is in escrow. And it took that long only because the tenant was uncooperative about showing any other day than Saturday.

If you are looking for a good deal, you must be ready to jump on it right away with no hesitation. Here is your list of what it takes to be ready:

  • Financing: You must be prepared with a pre-approval letter, documentation of your down payment, A liquid funds available for a deposit, and very likely with a copy of your credit score. Pushy, huh? Invasive, eh? Well, that is what these foreclosing bank sellers of great deals want to see from you, because they know how they got into this mess.
  • You must be open to doing whatever you need to do to get your offer accepted.

A. That might mean you make an offer without seeing all of the property. With tenant-occupied properties, you often can't see inside them unless you have an accepted offer. Think about it, the tenant has no incentive to cooperate with people coming through their home. All they see is a good chance they'll have to move or at least to have their rent raised. Why should they make it easy for you? The odds are good you won't buy the property and they will have been inconvenienced for nothing. You will see the entire property when you do inspections, so don't stress out about it. This tenant-showing subject deserves an article of its own, so look for that soon.

B. You might need to reduce or remove all your contingency periods up front. A harrowing idea, but some lenders are beginning to require this because they are overwhelmed with offers. How can you make this work for you? You might need to go so far as to do an inspection before you know that you have the deal. Is it worth $500 or $600 to make sure that your sewer line isn't crumbled and rusted away under that driveway, or that the systems are safe enough to make the house habitable?

C. Most important, you must be able to act instantly. If there are two or more partners going into this deal, the ideal plan is to assign one person to be the ultimate decision maker, even to the point of giving them a real estate power of attorney to sign for all the parties. Don't you trust that person? Then why are you thinking you're going to invest with them? If you want to have Mom and Dad approve your purchase, you should have them come with you to look at the property first. There is no time to line up a viewing next weekend for them. If it's a good deal, it may well be gone. That's part of it being a good deal!

There is a series of excellent books you should read about real estate, written with Gary Keller, one of the creators of Keller Williams Realty. I'm not interested in their real estate brokerage model, but this guy has co-written some really excellent, knowledgeable books for Realtors, investors, and even one for first time buyers. Shift just came out this year and is right on for understanding and profiting from the current market. Your First Home is for—you guessed it—first time buyers. The Millionaire Real Estate Investor was published in 2005, so don't take the easy financing ideas seriously, most of them are history. But the fundamentals of investing are quite good. I do have some thoughts on some of the concepts, such as always buying 10-20% below the current market. In Los Angeles, some of these rules just don't apply, but the eventual increase in equity will more than counterbalance that. Yes, even with the economy crashing down around us, I believe that.

You can go to the website, www.millionairesystems.com, click on the Free Downloads, and access worksheets that will help you organize yourself and help you plan how to accomplish your goals. Give them a try and then maybe you really are ready to find a good deal.

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944 Hits

The 2009 First Time Buyer Credit Details Revealed

This was sent to us by the president of our region of Coldwell Banker,Betty Graham:

Frequently Asked Questions

In 2008, Congress enacted a $7500 tax credit designed to be an incentive for first-time homebuyers to purchase a home. The credit was designed as a mechanism to decrease the over-supply of homes for sale.

For 2009, Congress has increased the credit to $8000 and made several additional improvements. This revised $8000 tax credit applies to purchases on or after January 1, 2009 and before December 1, 2009.

Tax Credits -- The Basics

What's this new homebuyer tax incentive for 2009?


The 2008 $7500, repayable credit is increased to $8000 and the repayment feature is eliminated for 2009 purchasers. Any home that is purchased for $80,000 or more qualifies for the full $8000 amount. If the house costs less than $80,000, the credit will be 10% of the cost. Thus, if an individual purchased a home for $75,000, the credit would be $7500. It is available for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009.


Who is eligible?

Only first-time homebuyers are eligible. A person is considered a first-time buyer if he/she has not had any ownership interest in a home in the three years previous to the day of the 2009 purchase.


How does a tax credit work?

Every dollar of a tax credit reduces income taxes by a dollar. Credits are claimed on an individual's income tax return. Thus, a qualified purchaser would figure out all the income items and exemptions and make all the calculations required to figure out his/her total tax due. Then, once the total tax owed has been computed, tax credits are applied to reduce the total tax bill. So, if before taking any credits on a tax return a person has total tax liability of $9500, an $8000 credit would wipe out all but $1500 of the tax due. ($9,500 - $8000 = $1500)

So what happens if the purchaser is eligible for an $8000 credit but their entire income tax liability for the year is only $6000?

This tax credit is what's called refundable credit. Thus, if the eligible purchaser's total tax liability was $6000, the IRS would send the purchaser a check for $2000. The refundable amount is the difference between $8000 credit amount and the amount of tax liability. ($8000 - $6000 = $2000) Most taxpayers determine their tax liability by referring to tables that the IRS prepares each year.

5. How does withholding affect my tax credit and my refund?

A few examples are provided at the end of this document. There are several steps in this calculation, but most income tax software programs are equipped to make that determination.


Is there an income restriction?

Yes. The income restriction is based on the tax filing status the purchaser claims when filing his/her income tax return. Individuals filing Form 1040 as Single (or Head of Household) are eligible for the credit if their income is no more than $75,000. Married couples who file a Joint return may have income of no more than $150,000.


How is my income determined?

For most individuals, income is defined and calculated in the same manner as their Adjusted Gross Income (AGI) on their 1040 income tax return. AGI includes items like wages, salaries, interest and dividends, pension and retirement earnings, rental income and a host of other elements. AGI is the final number that appears on the bottom line of the front page of an IRS Form 1040.

What if I worked abroad for part of the year?

Some individuals have earned income and/or receive housing allowances while working outside the US. Their income will be adjusted to reflect those items to measure Modified Adjusted Gross Income (MAGI). Their eligibility for the credit will be based on their MAGI.

Do individuals with incomes higher than the $75,000 or $150,000 limits lose all the benefit of the credit?

Not always. The credit phases-out between $75,000 - $95,000 for singles and $150,000 - $170,000 for married filing joint. The closer a buyer comes to the maximum phase-out amount, the smaller the credit will be. The law provides a formula to gradually withdraw the credit. Thus, the credit will disappear after an individual's income reaches $95,000 (single return) or $170,000 (joint return).

For example, if a married couple had income of $165,000, their credit would be reduced by 75% as shown:

Couple's income $165,000

Income limit 150,000

Excess income $15,000


The excess income amount ($15,000 in this example) is used to form a fraction. The numerator of the fraction is the excess income amount ($15,000). The denominator is $20,000 (specified by the statute).

In this example, the disallowed portion of the credit is 75% of $8000, or $6000

($15,000/$20,000 = 75% x $8000 = $6000)

Stated another way, only 25% of the credit amount would be allowed.

In this example, the allowable credit would be $2000 (25% x $8000 = $2000)

What's the definition of principal residence?


Generally, a principal residence is the home where an individual spends most of his/her time (generally defined as more than 50%). It is also defined as owner-occupied housing. The term includes single-family detached housing, condos or co-ops, townhouses or any similar type of new or existing dwelling. Even some houseboats or manufactured homes count as principal residences.

Are there restrictions on the location of the property?

Yes. The home must be located in the United States. Property located outside the US is not eligible for the credit.

Are there restrictions related to the financing for the mortgage on the property?

In 2009, most financing arrangements are acceptable and will not affect eligibility for the credit. Congress eliminated the financing restriction that applied in 2008. (In 2008, purchasers were ineligible for the $7500 credit if the financing was obtained by means of mortgage revenue bonds.) Now, mortgage-revenue bond financing will not disqualify an otherwise-eligible purchaser. (Mortgage revenue bonds are tax-exempt bonds issued by a state housing agency. Proceeds from the bonds must be used for below market loans to qualified buyers.)

Do I have to repay the 2009 tax credit?


NO. There is no repayment for 2009 tax credits.

Do 2008 purchasers still have to repay their tax credit?

YES. The $7500 credit in 2008 was more like an interest-free loan. All eligible purchasers who claimed the 2008 credit will still be required to repay it over 15 years, starting with their 2010 tax return.


Some Practical Questions


How do I apply for the credit?

There is no pre-purchase authorization, application or similar approval process. All eligible purchasers simply claim the credit on their IRS Form 1040 tax return. The credit will be reflected on a new Form 5405 that will be attached to the 1040. Form 5405 can be found at www.irs.gov.


So I can't use the credit amount as part of my downpayment?

No. Congress tried hard to devise a mechanism that would make the funds available for closing costs, but found that pre-funding would require cumbersome processes that would, in effect, bring the IRS into the purchase and settlement phase of the transaction.


So there's no way to get any cash flow benefits before I file my tax return?


Yes, there is. Any first-time homebuyers who believe they are eligible for all or part of the credit can modify their income tax withholding (through their employers) or adjust their quarterly estimated tax payments. Individuals subject to income tax withholding would get an IRS Form W-4 from their employer, follow the instructions on the schedules provided and give the completed Form W-4 back to the employer. In many cases their withholding would decrease and their take-home pay would increase. Those who make estimated tax payments would make similar adjustments.

What if I purchase later this year but can't get to settlement before December 1?

The credit is available for purchases before December 1, 2009. A home is considered as purchased when all events have occurred that transfer the title from the seller to the new purchaser. Thus, closings must occur before December 1, 2009 for purchases to be eligible for the credit.


I haven't even filed my 2008 tax return yet. If I buy in 2009, do I have to wait until next year to get the benefit of the credit?

You'll have a helpful choice that might speed up the process. Eligible homebuyers who make their purchase between January 1, 2009 and December 1, 2009 can treat the purchase as if it had occurred on December 31, 2008. Thus, they can claim the credit on their 2008 tax return that is due on April 15, 2009. They actually have three filing options.

If they purchase between January 1, 2009 and April 15, 2009, they can claim the $8000 credit on the 2008 return due on April 15.

They can extend their 2008 income-tax filing until as late as October 15, 2009. (The IRS grants automatic extensions, but the taxpayer must file for the extension. See www.irs.gov for instructions on how to obtain an extension.)


If they have filed their 2008 return before they purchase the home, they may file an amended 2008 tax return on Form 1040X. (Form 1040X is available at www.irs.gov)


Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on their 2009 return. Their 2009 tax return is due on April 15, 2010.


I purchased my home in early 2009 before the stimulus bill was enacted. I claimed a $7500 tax credit on my 2008 return as prior law had permitted. Am I restricted to just a $7500 credit?


No, you would qualify for the $8000 credit. Eligible purchasers who have already claimed the $7500 credit on a 2008 return for a 2009 purchase may file an amended return (IRS Form 1040X) for the 2008 tax year. This amended return will enable them to obtain the additional $500 credit amount.


If I claim my 2009 $8000 credit on my 2008 tax return, will I have to repay the credit just as the 2008 credits are repaid?


No. Congress anticipated this confusion and has made specific provision so that there would be no repayment of 2009 credits that are claimed on 2008 returns.


I made an eligible purchase of a principal residence in May 2008 and claimed the $7500 credit on my 2008 tax return. My brother, who has never owned a home, wishes to purchase a partial interest in the home this spring and move in. Will he qualify for the $8000 credit, as well?


No. Any purchase of a principal residence (or interest in a principal residence) from a related party such as a sibling, parent, grandparent, aunt or uncle is ineligible for the tax credit. Since you and your brother are related in this way, he cannot qualify for the credit on any portion of the home that he purchases from you, even if he is a first-time homebuyer.


I live in the District of Columbia. If I qualify as a first-time homebuyer, can I use both the $5000 DC credit and the $8000 credit?


No; double dipping is not allowed. You would be eligible for only the $8000 credit. This will be an advantage because of the higher credit amount, plus the eligibility requirements for the $8000 credit are somewhat more easily satisfied than the DC credit.


I know there is no repayment requirement for the $8000 credit. Will I ever have to repay any of the credit back to the government?


One situation does require a recapture payment back to the government. If you claim the credit but then sell the property within 3 years of the date of purchase, you are required to pay back the full amount of any credit, including any refund you received from it. A few exceptions apply. (See below, #24). Note that this same 3-year recapture rule applies, as well, to the $7500 credit available for 2008. This provision is designed as an anti-flipping rule.


What if I die or get divorced or my property is ruined in a natural disaster within the 3 years?


The repayment rules are eased for many circumstances. If the homeowner who used the credit dies within the first three years of ownership, there is no recapture. Special rules make adjustments for people who sell homes as part of a divorce settlement, as well. Similarly, adjustments are made in the case of a home that is part of an involuntary conversion (property is destroyed in a natural disaster or subject to condemnation by eminent domain by an authorized agency) within the first three years.


26. I have a home under construction. Am I eligible for the credit?


Yes, so long as you actually occupy the home before December 1, 2009.


WITHHOLDING EXAMPLES:


Note: The impact of estimated tax payments would be the same.


Situation 1:Sally plans her withholding so that her withholding is as close as possible to what she anticipates as her income tax liability for the year. When she fills out her 1040, her liability is $6000. She has had $6000 withheld from her paycheck. She also qualifies for the $8000 homebuyer credit.


Result: Sally's withholding satisfies her tax liability and reduces it to zero. She will receive a refund of the full $8000.


Situation 2: Nick and Nora file a joint return. Nick is self-employed and makes estimated payments; Nora has taxes withheld from her salary. When they compute their taxes, their combined withholding and estimated tax payments are $11,000. Their income tax liability is $9800. They also qualified as first-time homebuyers and are eligible for the $8000 refundable tax credit.


Result: Ordinarily, their combined estimated tax payments and withholding would make them eligible for a refund of $1200 ($11,000 - $9800 = $1200). Because they are eligible for the refundable tax credit as well, they will receive a refund of $9200 ($1200 income tax refund + $8000 refundable tax credit = $9200)


Situation 3:> Cesar and LuzMaria both have income taxes withheld from their salaries and file a joint return. When they file their income tax return, their combined withholding is $5000. However, their total tax liability is $7200, generating an additional income tax liability of $2200 ($7200 - $5000). They also qualify for the $8000 first-time homebuyer tax credit.


Result: Cesar and LuzMaria have been under-withheld by $2200. Ordinarily, they would be required to pay the additional $2200 they owe (plus any applicable interest and penalties). Because they are eligible for the refundable homebuyer tax credit, the credit will cover the $2200 additional liability. In addition, they will receive an income tax refund of $5800 ($8000 - $2200 = $5800). If they owed penalties and/or interest, that amount would reduce the refund.


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First Time Buyers Rock!

First Time Buyers Rock!

 

 

Oh to be a first-time buyer today, you lucky folks. The American Reinvestment & Recovery Act was signed into law by President Obama last Wednesday. This bill provides for an $8,000 tax credit if you buy your primary property by November 30 of this year. This credit does not have to be paid back if you live in the property for at least 3 years. There are all sorts of details regarding this, and I will bring them to you as I discover them. Check out Kenneth Harney's column in the Los Angeles Times today.

 

 

I have begun working with several first-time buyers lately, and they have some interesting things in common:

 

They were either working with another Realtor associated with a large discount real estate firm, or with a part-time Realtor, or with a relative who had their real estate license.

 

They have written several offers that haven’t worked out and they’re not sure why.

 

They have been lurking on my website, reading my blogs and they like what I have to say.

 

They are ready and eager to buy.

 

 

First, please know that if you are ready, I am ready. There is no need to hem and haw and wonder if this is the right time or if you should call me. This is the biggest home buying opportunity we have seen in many years. Have we hit bottom yet? Who knows? If you can afford to buy now, the time is right for you. Why?

 

Historic low interest rates.

 

The above mentioned $8,000 tax credit.

 

Properties that are actually in your price range.

 

Available inventory. And on this note you should know that several of the large banks have again announced a moratorium on foreclosing on owner-occupied homes. This part of the inventory is going away, and quickly.

 

 

My question to you is, are you ready to buy now? As the story President Obama told during his campaign, you need to be fired up and ready to go! What else would you like to see here to help you get ready?

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Making Sense of the Numbers in Eagle Rock, Highland Park & South Pasadena

What’s happened over the last 8 years to median prices in South Pasadena, Highland Park and Eagle Rock? Here is the table:

 

 screenhunter_10-feb-21-1943 

 

Remember that the median price is the midway point—half the homes sold cost more and half cost less than the median.

 

What’s noteworthy here is that while Eagle Rock and Highland Park median prices went sharply up from 2000 to 2005, then sharply down in 2008, South Pasadena’s median price continued to go up. But the numbers to look at are the total dollar volume and the number of units sold in South Pasadena in 2008: both dropped by more than half. In my opinion,  that means that only the very best properties were selling. We can’t see here whether those properties sold for more or less than they would have in previous years.

 

Here’s another interesting number:  the incredible spike in the total dollar volume and number of sales in Highland Park in 2005. As fewer could afford the more expensive areas, Highland Park was an attractive alternative.  But since many of these folks were stretching to buy anything, they were hit by the subprime and Alt-A  meltdown in a big way. The only area where the number of homes sold was higher in 2008 than in 2000 was in Eagle Rock. But what does that mean?  Is Eagle Rock recovering? In the sense that sales are going up it is, but only because sales prices have dropped significantly.

 

One meaning is what we’ve been saying all along, that real estate is local and prices vary according to location from block to block to zip code to city, county, and so on.  Another interpretation is that with the economy being so challenging not just in one area, but in the entire world, we are experiencing a rolling wave of market challenges. While our problems began with the mortgage crisis for those who took out the subprime loans, that wave has washed over people on the financial edge in every economic class and the continuing loss of jobs coupled with losses in investments is affecting the real estate values at every price point. Now with the financial markets so chaotic, many retirees are wondering if they can live on their Social Security or if they must sell their homes because they have little else. Whew! Where will it end?

 

In every situation there is an opportunity.  There are many opportunities here. Stay tuned…

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Help for Mortgages held at JPMorgan Chase

Do you have a mortgage with Chase Bank, Wamu, or EMC? Are you having trouble making your mortgage payment? Chase is opening a Homeownership Center in Glendale at 400 N. Brand Blvd., Suite 120, phone (818) 548-2280. The center will be open from 11 a.m. to 8 p.m. Monday through Friday and 9 a.m. to 1 p.m. Saturday.

“We created these local Homeownership Centers as a place for our borrowers to sit down and discuss their situation face-to-face with trained loan advisors in these challenging times, said David Schneider, head of mortgage servicing at Chase. “They are part of a wide-ranging initiative to help families stay in their homes whenever possible.

“During these tough economic times, it is the responsibility of leaders in government and the private sector to do everything within their power to help residents and get homeowners back on-track, said Los Angeles Mayor Antonio Villaraigosa. "I can only hope that banks and lenders of every stripe follow (Chase's) suit and offer services to protect our residents.

This Center will offer:

- Trained advisors. To assist customers whose circumstances have changed and are no longer able to make their scheduled monthly payment, who want to avoid foreclosure and stay in their home. The trained advisors will evaluate their finances, review possible workout options and answer any questions.

- Scheduled appointments. To reduce wait time, customers are encouraged to set up an appointment in advance. They should bring documentation, including recent W-2s and tax forms, recent pay stubs and bank statements and monthly expense documentation. Also, they should bring any information, such as a hardship letter, that will help explain their current financial challenges.

- A track record of helping. Since 2007, Chase has helped prevent 330,000 foreclosures of Chase, WaMu and EMC loans, primarily by reducing interest rates, extending the term of the loans and providing principal deferral. In late 2008, Chase announced initiatives designed to help a total of more than 650,000 families, and expects to modify more than $110 billion of home loans.

Customers who would like to receive more information can call 1-866-550-5705. For the complete article, check out http://rismedia.com/2009-02-13/chase-opens-four-homeownership-centers-in-los-angeles-orange-and-san-bernardino-counties/.

Here's my 2 cents: loan modifications start with your lender, not with some company who charges you a fee. Be very careful if you are solicitated by someone other than your own lender to change the terms of your loan. If it sounds too good to be true, it is. There are a lot of people out there who are preying on the unfortunate.

If you are not in financial trouble but you are upset because you don't think it's fair that you should pay more for your house than the guy that just bought the ratty foreclosure down the street, these counselors are not going to help you. But you also should watch out for the scammers, because they will appeal to your sense of unfairness and you are likely to have more money to lose than the desperate people about to lose their homes.

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Eagle Rock Real Estate Report

Eagle Rock Real Estate Report February 13, 2009

What's the story with short sales? (Again, a short sale is where the owner owes more to the bank than they can get for the property, so they can't sell unless the lender agrees to take less).  Are they working out for people?  In Eagle Rock, 17 of the 47 active listings are short sales, 7 of the 22 properties in escrow are short sales, and 1 of the 9 closed sales so far this year was a short sale. So the percentage of each goes from 36% of the actives to 32% of the pendings to 11% of the solds are short sales.

Contrast that with foreclosures: 7 of the 47 active listings, 9 of the 22 pending, and 5 of the 9 closed sales are REO. The percentage goes like this: 15% of the actives, 41% of the pending, and 55% of the closed are bank-owned.

So there are a number of short sales that try to close escrow, few that actually do. On the other hand, foreclosures are selling like hotcakes. And, though it's a very small sample, two-thirds of the closed sales in Eagle Rock so far this year, 2009, were distress sales, which is almost as high a number as in Highland Park (see my February 7 blog). And actually, one of the "regular" sales was a trust sale, so that reduces the "normal" number even more.

My view is that the short sales you see clogging up the active listing inventory are confusing the general buyer public. You see these artificially low-priced homes, like the one at 4911 Townsend listed for $250,000, and everyone thinks they are going to get a deal. Well, let's follow that one and see how it pans out. It will be a learning experience for us all. My prediction: if it ever sells as a short sale, it won't sell for $250,000, it will be more, because the house is too big to sell for that little, even though it needs a lot of work. It will get bid up to a higher price. Will the bank approve that price? Or will it eventually go to foreclosure? Let's watch that one and find out.

**UPDATE** Today (November 14, 2010) I looked up the MLS record on 4911 Townsend to see what did ever happen to that property, and the answer is... nothing!  It expired on the MLS July 29, 2009, which means that it either did not sell and the seller decided to keep making payments, or the listing agent never updated the listing.  Looking up the property in the title records I see that it hasn't changed hands since 2006, so I'm assuming the lender did not give short sale approval and so the seller has kept making his payments and kept the house.

Here is an example of what pricing right will do: I saw 5420 Mt. Helena, which came on the market at $559,000 with a list date of 2/6/09 and by 2/10/09, the listing agent told me it had received 4 offers and was now in escrow. It was a trust sale and the family just wanted it sold. I'll bet that one sold for more than its list price as well, because you cannot underprice a home, even in this price-conscious market. If it looks like a deal, more than one buyer will think so.

Of course we all want a deal, we don't want to pay more than something is worth, especially in today's market. Which gets us into the whole discussion of value, of what is a fair market price? Is the price today the same price it will be worth in a month? If the buyer and seller can't agree on a number today, then we don't have a sale. What will the property be worth in two months? Is the market going up or down? If you are overpriced today, what does that make you in two months if you still have't sold? Or is it just that the right person hasn't come along?

It's not simple buying real estate today, is it? Unless you just want to buy a home, need to move, find a place you can afford, and buy it. Oh, that sounds simple. Why is all the rest going on?

And that's why we have the whole real estate industry, my friends. What should be a simple transaction is full of so many questions to be answered.

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Donate Your Good, Clean Clothes to a Good Cause

From a community member who loved our $1/clothing item sale at  The Neighborhood Green Fair last weekend:

You may be interested in this opportunity in East LA:  This is a long-time organization that was founded by the Methodist Episcopal Church. The industrial department of the Plaza Community Center became the Goodwill Industries of Southern California in 1919. Their website lists needs for their Esperanza Drug and Alcohol Treatment Program, Child Development Program, Family Services, and Youth Services programs: http://www.plazacs.org

Plaza Community Services is collecting thousands of clothing items to help the thousands who have lost their homes and jobs over the last two years. On Valentine's Day, Saturday February 14th from 9 a.m. to noon, the clothes you give will be given FREE to hundreds of families throughout East Los Angeles and neighboring communities. Remember, the clothes will be distributed for FREE!

During this time of change, we all want to know how to help. Here are three ways:

1. Forward this post to those that need the assistance.

2. If you have clothing to donate, deliver it to 4108 City Terrace Drive on Thursday, February 12th and Friday, February 13-From 9am-5pm.

Please only bring clean items on their hanger. E-mail This email address is being protected from spambots. You need JavaScript enabled to view it. or call (323) 267-9749 and ask for Cecilia.

3. You can donate directly to Plaza Community Services to assist us with our newest effort to assist those most in need. Any donation will do and will be helpful!

While this recession is affecting us all, we can all do more. E-mail me directly at This email address is being protected from spambots. You need JavaScript enabled to view it. if you have any questions. Have a great day!

Thank you!
Gabriel Buelna
Executive Director

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Market Update Highland Park 90042

From our spiffy Multiple Listing Service that has all the listings in one place, no matter what far-flung MLS an agent might put a listing in, our sales data are now much more complete. The following table is a sales overview comparing 2007 to 2008:highland-park-2007-to-2008

Highland Park has really been through the wringer, as we say in professional Realtor terms. From the beginning of 2007 to the end of 2008, the number of sales dropped 36%, and the lowest sales price dropped 56%! Wow, though the low sales price isn't as meaningful as the median and average prices which dropped by about 30%. The high sales prices of $950,000 in 2007 were mostly in the new development in the Monterey Hills, and that wasn't the case in 2008. In fact, the last house that sold over there was a foreclosure that closed at $705,000, a very significant 25% drop in price in one year.

What I think is really interesting about the trends in Highland Park is that the number of units sold appears to have bottomed out in the first half of 2008, with the second half showing an increase of 43%! The prices actually dropped close to 15% in the last half of the year. This indicates to me that we saw some kind of a bottom at that time in Highland Park, buyers perceived that there were deals to pick up, and the sales numbers, not prices, finally started to pick up.
In 2007, 7% of the sales were foreclosures, 1.6% were short sales, and 2.4% were trust or probate sales, for a grand total of 11% distressed sales. Compare that to 2008, when the sales were 45% REO, 10% short sales, and 2% trust sales, for a total of 57% distressed sales. Whew!

So what do we have going on in 2009? Of the 127 active listings, 39 are REOs, 31 are short sales, and 3 are probates, so 57% of the listings are distress sales. Of the 30 listings that went into escrow since January 1, 2009, 17 are REOs, 6 are short sales - 77 % are distress sales. Of the 18 closed sales, 11 are REO and 2 are short sales, which means that 72% of the sales are distress sales. What does all this mean?

- The bargain hunters are out and are buying. If you are a seller and you have to sell, you'd better be really well-priced and ready to negotiate further if you want to sell in this market.
- If you are a buyer and you see something you like, you'd better jump on it. The days of having your parents come the following weekend to approve your choice before you make an offer are over. In fact, if you need your parents' approval before you buy, you'd better bring them with you when you look at stuff.
- If you are waiting for prices to drop further, you may miss your chance to buy anything. Why? Because you won't know when the prices have bottomed out until you see that they have started back up. The minute that happens, sellers will be less negotiable and will wait to put their homes on the market. Simply put, there won't be anything good for you to buy.
- If you are a seller and you want or need to make a move, now is a good time because the buyers are out looking, but prices are still dropping, so price it right to start. That means price it under what the recent sales show. Yikes! (I know).

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Sweet Buttertart

New Business in the Community

I put this new cafe in my restaurant guide based on rave reviews from some friends of mine, but you know, dear Reader, that I do try to experience the fruits of our corner of the city myself at every opportunity. Buttertart: coffee & treats. Yum. You have to go there. Located in Sagamore Park, a nifty little neighborhood wedged between Eagle Rock and Glendale, it's named after its signature dish, "a Canadian treat of a soft pastry shell filled with a savoury butter and sugar filling."  They have the regular kind plus a bacon Buttertart. I can't even imagine how much cholesterol that might contain. If the plain one is any indication, you will fall down gasping with your heart attack in complete bliss.

Here's their contact info which I obtained from their website, www.myButtertart.com:
4126 Verdugo Road
Los Angeles, CA 90065
Phone: (323) 258-TART (8278)
Office: (323) 254-5040
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Besides serving superb treats, sandwiches and coffee, Buttertart plans to decorate with local art, helping local artists be seen and hopefully be paid:

On Friday, Feb 13th, Butter Tart Presents... Fill in the Blank Gallery opens its doors & fills its blank walls with an inaugural group art show curated by Frank Ryan. What a better way to spend your Friday the 13th of February & Valentine's Day Eve? Next door, Butter Tart Cafe will be open during the show for your thirst & snacking desires. The show goes from 7pm - 10pm, then we mosey on over to Verdugo Bar to continue the freaky activities.

Artists:
Joshua Aster
Nathan Danilowicz

Kate Barclay
Alex Lee Harris

Jamie Chan
Frank Ryan

David D'Andrade

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Monday Morning Eagle Rock Real Estate Report February 2, 2009

The Eagle Rock

The Eagle Rock

Good morning! Good week! Starting off February, there are 47 single family homes showing as active on the market in the 90041 zip code, with 15 of them declaring themselves as short sales, and 7 as REO, or Real Estate Owned, which means foreclosure. So, almost one third of what is on the market is subject to lender approval, with another 15% bank-owned, which leaves us with 53% of what is on the market today as "normal" sales. In truth, several more of the "normal" sales are under duress. What does this mean?

1. A short sale is a swamp sale, by and large. By that I mean trying to do one is like slogging through a swamp, where your most likely result is that you'll get mired in mud, maybe even quicksand, and you'll come away with a peculiar rotten smell that's hard to wash off. It is subject to lender approval, which means that you make your offer to the seller, his agent in turn submits it to the bank. You might even open escrow. Then you wait, your agent calls daily, time passes as you think that any day now your sale will be approved and you'll buy this house. Unbeknownst to you, the listing agent is still taking offers and submitting them to the bank. Some poor clerk who makes minimum wage and who couldn't care less that you are salivating over your great deal is buried under a mountain of these and decides to take a few sick days. So many times, the offers trickle in until the property goes to foreclosure sale, the listing agent is out of luck (but many times won't admit it), and some time later the property shows up sold to someone else. Some person who is related to some officer of the bank. (Oh how cynical of me!) Basically, most short sales are a fiction and they clutter up our inventory with what look like great deals and they just aren't, they are no deals at all. My research shows maybe 1 in 20 have been going through, though that number is increasing as the economy has worsened. If you are incredibly persistent, you might end up with something. But don't think you're going to get it at that bargain basement price you saw on the MLS.

2. Foreclosures are almost as hard to do. Strange how the really good deals come on sold or you can't get an answer for days and then it comes up sold, or other frustrating scenarios. In truth, most REO listing agents get piles of offers, have lots of listings and do not behave like human being Realtors like me. They seem to wait for the highest offer to come in, counter that one, and open escrow. Sometimes that one doesn't work out and it goes back on the market and the same system goes on again. They don't take backups, they don't return phone calls, they don't care about you and your offer.

If you are a buyer and you want to buy a home to live in - you know, like a regular person who just wants to buy in this great market, you will find that the ones that are actually for sale that you can actually negotiate for and purchase number maybe 15 to 20 out of that 47 on the market. And the ones in your actual price range number maybe 3 or 4 at best. But you see these 47, priced from $240,000 to $899,000, and you think there are all these deals and there will be more, and you listen to all your friends that the market will drop another 20-50%, and you are stymied. Do you want to buy a house or do you want to sit on the sidelines?

An interesting exercise would be to look at what sold in the last month and see if you would have bought those deals. Would you be interested in a blog post about that?

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Green Community Event this weekend

Come to the Green Fair!



This Saturday, January 31, from 10 till 4: The Neighborhood Green Fair, at Neighborhood Church in Pasadena, located next to the Gamble House at 301 N. Orange Grove, 91105. Admission is free, there's lots to look at, to think about, great music to listen to, and of course there will be lots of things to buy from baked goods to clothing to silent auction items, and raffle tickets for great prizes! Check out the website at: www.NeighborhoodGreenFair.com. See you there!

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