Starting your search for property in pine mountain lake?
A RE/MAX Yosemite Gold Guide

What are the current prices and Pine Mountain Lake homeowner dues?
Contact one of our Realtors to provide you a current list of ALL houses or lots for sale in our Multiple Listing Service. It takes them just a couple of minutes to print or e-mail a list in your price range. The list can show the # of bedrooms, baths, and levels; house, lot and garage sizes; whether it is on the lake, golf course, or greenbelt; and just about any other feature of the house. They can give you a 19 inch by 24 inch map showing all the streets, units and lot numbers in Pine Mountain Lake (PML). We can (and will!) show you any property listed by other brokers, including discount brokers and For Sale by Owners (with their permission). You can also pick up a Pine Mountain Lake News monthly newspaper and look at the house ads in there. Or online go to our area homes for sale page   for current listings, or for recent sales prices, click here.

Can we just drive around and look at the outside of homes for sale?
Once you have a list and a map you can explore different neighborhoods and see the houses on your own, as long as you do not bother the occupants. The exception is if there is an Open House sign out front, which are allowed on weekends. There are 52 miles of roads in PML, and lots of wonderful hidden courts and side streets. There may be a fabulous view from a house up on a hill hidden in the trees. Some pictures just don’t do a house justice, and of course others frame the nice part and don’t show the 3-story house looming next door. So it is useful to get out and look if you are not ready to go with a Realtor yet.

What are all these numbers for each property?
Each lot in PML is located in one of 15 UNITS, shown on the PML map by thick black dividing lines. Each LOT has its own number, from numeral 1 to 598. The unit and lot are commonly shown as “13/260” for example, and must be on a sign at every lot or house. In addition, the County requires the address number to be on every house to aid firemen and police in finding it. The address number is a 5-digit number.  Each property listed for sale also has a 5-digit MLS number that shows up on web searches.

Why are there no FOR SALE signs on properties?
Since 1996 almost all of the real estate brokers agree not to have company signs anywhere on the property. We agree with the Homeowner’s Association that it looks much nicer that way, and protects vacant homes from mischief. In exchange for our voluntary cooperation to eliminate signs, PML puts our company signs at the main entrance gate and puts a link to each of our websites on PineMountainLake.com. Individual sellers who choose not to use an agent can put up a 12 X 18 inch standard PML FOR SALE by owner sign.

How can we tell where the property lines are?
Since fences are not allowed on the lot lines in PML and each lot is a different size, it can be hard to see the boundaries. Look for water meters and power poles. These are placed near the street close to the side lines dividing each lot. Concrete Christy boxes holding water meters are placed on every other lot line, and each serves the two lots on either side of it. The latest 19 X 26 inch PML maps show which of the 500+ lots have been merged together with another to create one lot. If the owner of lot 201 bought 202 and combined them into one lot, the lower number is used to identify it, or lot 201. (PML was developed in 1969 with 4,181 lots, but the number is closer to 3660 now, after all the mergers). The front boundary of each property is usually set back from the street curb or asphalt between 5 and 25 feet. The paved streets are only 22 feet wide, but the PML-owned rights-of-way are 50+ feet wide. Where there are cut embankments above the road, or dirt fill banks below the road, PML owns and maintains that property, too. So the front lines of the private lots usually start at the top of the cut banks or the toe of the fill banks. Where direct driveway access from the street is impossible because of the terrain, there are hundreds of driveway easements providing access across the front 20 feet of neighboring lots. The property corners are marked by ¾” diameter re-bar iron posts that extend 2 feet into the ground but may only show above the ground a few inches (or may be buried by leaves and silt).

What utilities are available?
All lots have public water from Groveland Community Services District (GCSD) and fire hydrants every 300 feet. About one-third of the lots have public sewer hookups, and the rest use individual septic systems. Electricity is from Pacific Gas & Electric and phone service from AT&T. Cable television is available to all lots. Individual propane tanks on each lot are used because piped natural gas is not available. Moore Brothers Scavenger Service provides several levels of garbage pick-up, or some people take their own loads to the dump on Wednesdays and Saturdays. Fire protection is provided by a full-time department, also administered by GCSD.

Are there townhouses, condominiums, manufactured homes or apartments?
Country Club Village is a complex of 32 multi-story townhouses near the pool, tennis courts, and Country Club restaurant and Pro Shop. Four condominium complexes are located nearby on Dyer and Salvador Courts. The age, condition, sizes, and amount of homeowner’s association dues are all different. The big advantages are no yard maintenance and great location. Manufactured homes on permanent foundations are allowed in PML if they meet certain design guidelines regulating roof pitch and length of eaves. Mobilehomes that aren’t on foundations are NOT allowed. No apartments or duplexes are in PML.

What if we want just lake frontage or golf course properties? These websites don’t allow that kind of search choice.
If you are only interested in specific features, such as parking for a 32 foot long RV, a fireplace in the living room, or airport access, or at least half an acre, or full Southern exposure, you should call us to help you. We’ve usually seen all the houses for sale, and we also have access to much more detailed SEARCH functions through the MLS. If you come in the office we can show you all the interior pictures of each house, and if it is our listing, sometimes dozens of photos of the property. Our job is to weed out the unsuitable houses and save you time.

If I buy a vacant lot, what are the costs to build a new house?
            The Tuolumne County building permit fee is based on the size of the house. The fee for a 2000 square foot house costs $975. For this fee you get a check of your plans for building code compliance and five inspections. But the County won’t check your plans until you pay the biggest fee: the SCHOOL MITIGATION. Started in 1986, this fee is also based on square footage and varies with each school district. Our Groveland-Big Oak Flat District charges the maximum allowed, $2.05 per square foot. So on a 2000 sq ft house, that is $4,100. It goes directly to the County Schools Office.
            The next largest fee is to maintain our County roads. The Traffic Mitigation fee is divided into two single-family residential categories:
2+ acre parcels pay   $3,080 and < 2 acre parcels pay  $2,279, which is the amount you would pay for a PML house.
            The next fee is for every other County service and makes up for the lost property tax increases that Proposition 13 took away in 1978. It is called the County Service Impact Mitigation Fee. If you are in the GCSD fire protection district, as PML is, you pay $1,463. Both the Traffic Mitigation and the Service Impact Mitigation fees are due prior to issuance of a building permit.
To get water from GCSD you will pay $1,700, which includes the application, meter, and “participation” fees. A standard sewer connection is $7,000. If the sewer main has to be extended to “add” your lot on to the existing system, you will pay for the engineering and extensions costs, several thousand dollars more. Be very sure when offering on a vacant lot whether it is already served by a sewer line in the ground, or is an “add-on”  lot.
Two-thirds of PML lots are served by individual septic systems with their own holding tank and leach lines. For a standard septic installation, County fees are $450. The septic system itself may cost between $5,000 and $7,000 to install. If it requires an engineered design, it could cost $8,000 to $20,000 to install. Pacific Gas & Electric has a minimum charge of $250 for electricity hookup, but they can charge up to $14 per linear foot of distance to the nearest power pole.
Pine Mountain Lake has another layer of fees, plan checks, and inspections, and that is the Environmental Control Committee, or ECC. The fee for a new home is a bargain at $295, and the turnaround time on your plans is fast, usually one week. They also collect $1,000 to ensure your compliance, but that is refundable when the house is completed.
The total for all the dollar amounts above in bold? About $18,000.
You actually get direct value from portions of these fees, and that is for the inspections of the building project. A new house gets inspected about 12 times by the County Departments and Pine Mountain Lake Association. Before it is complete, your lender, the title company, an appraiser, PG&E, GCSD and the insurance agent will look at it, too.
What can you expect to pay a contractor for a 2000 square foot custom home? Some are keeping it around $120 for the livable square footage. At this low cost it will be very basic quality. For higher quality or more difficult building sites, expect to pay $150 to $200 per square foot. This usually includes everything but the lot: permits, site prep, utility connections, garage, light fixtures, etc
When a builder quotes you a figure for “permit costs”, ask what he is including. The utility connections for sewer and water and PG&E are not “permit fees”. Site preparation costs for the septic system, driveway, or tree removal aren’t either. If he pays the fees for you, be sure to get the receipts.
The total for the 2,000 square foot house at $150 price PSF is $300,000 + $18,000 (utility connections, PML fee, County fees) + the cost of the lot. Do the math based on the price of your lot and the anticipated quality of the house.
If you want a new house, but don’t want to hassle with the lender, contractor, and selecting everything, buy a “spec” house. It is built “on speculation” by the contractor, or an investor who hires a contractor.

What are the RE/MAX Yosemite Gold sales office hours?
Our office at 18583 Highway 120 is open every day, 7 days a week from 9 am to 5 pm, and often later in the summer. Call 962-4080 to make an appointment to see property with one of our Realtors.

Why should we choose your company to help us buy a home?

• RE/MAX is the top real estate franchise in the world. It leads the industry in technology, innovation, and quality of its 120,000 agents in 63+ countries. We here in Groveland have access to an incredible array of tools from RE/MAX International and our region, RE/MAX of California and Hawaii.
• RE/MAX agents work harder and smarter because we get 100% of the commission after paying a fixed office fee. This system attracts more independent agents who are committed to their careers.
• We respond quickly on offers, follow up diligently on the paperwork, and solve problems creatively.
• We are NOT beginners, part-timers, or semi-retired! Our “newest” agent has 8 years experience and two of our agents have 30 years each. To serve you better, we never stop learning.
• Our rental department is the largest in town, with three full-time staff. If you want to put your new home on our vacation or monthly programs, we can help you maximize your income.
• Our goal is to give you all the information to make the best decision for you. Our reputation for integrity is our greatest asset. We hope that when you are ready to sell your property, whether in two years or twenty years, you’ll come back to us. In the meantime we will welcome you to the town we love.

Interpreting classified ads for real estate for sale

The jargon of house descriptions sometimes doesn’t exactly match the property when you go to see it. Here’s what that headline might really mean

Old World Charm = Has some woodwork. Needs cleaning
Contemporary Feeling = Has no woodwork. Needs cleaning
Picturesque Setting = Abandoned cars and waist-high weeds on neighboring lots
Wide Open Floor Plan  = Previous owner removed supporting walls
Updated Kitchen = Sink no longer overflows
Close to the Lake = Impossible to park near from May to September
Neutral Décor  = No murals of nudes or Elvis
Move In Condition = Front door missing
Unique Design = Bizarre looking
Cozy = No room larger than 9 X 6 feet
Mint = Someone spilled mouthwash on the carpet
Motivated Seller = Has been on the market for 3 years

The agents at RE/MAX Yosemite Gold came up with some interpretations for common Pine Mountain Lake ad headlines:

ABOVE THE WORLD  = The driveway is so steep, your relatives will never come back
CUTE AS A BUTTON = Tiny kitchen, no closets, only 1 bathroom
ROOM TO ROAM  = You will spend most of your time clearing brush, whacking weeds and raking pine needles
LAKE VIEW   = See a small patch of blue from an upstairs bedroom balcony
NEEDS UPDATING = Gold shag carpet, avocado sink, dark brown paneling, no insulation
2 MINUTES TO BEACH  = If you drive 80 miles an hour down Pine Mountain Drive
ATTENTION BARGAIN LOVERS =This is a real dump

Here are some recent headlines that aren’t misleading, but don’t tell a prospective buyer anything

Nice Home, Nice View = Ho Hum
Great Home, Great View  = A little greater than nice
You Deserve It  = Like a kid deserves a spanking?
Cabin in the Woods = Groveland has a thousand cabins in the woods
One of a Kind = Of what?
Ranch Style Home = At least we know it has only one story
Clean & Comfortable = At least we know it’s clean
A Best Seller = If it was it would already be sold
This One Won’t Last Long=Is it going to fall over soon?

Community Property with Right of Survivorship
By Lauree Borup, April 2003

TRUE: Community Property ownership of real estate reduces the capital gains tax the surviving spouse would pay if they sold it
FALSE: Joint Tenancy is the best way for surviving spouses to avoid probate.
NEW: Community Property with Right of Survivorship (CPROS) combines the automatic survivorship rights of Joint Tenancy with the tax advantages of Community Property for married couples in California. It may be the “better” way.
Joint tenancy is a popular device for avoiding probate, since upon the death of one joint tenant the decedent’s interest terminates immediately leaving the survivor holding title. The drawback is that only the decedent’s half of the value is stepped-up in basis. Under Community Property ownership, if a couple paid $100,000 for a home, and at the time of death the home is worth $300,000, the tax basis is stepped-up to the fair market value of $300,000. The surviving spouse could sell the property then without paying any capital gains tax.
Alternatively, if the property were held in Joint Tenancy, only the interest of the first spouse to die would be stepped-up and the basis would be $200,000 (Half of the invested $100,000 + half of the $300,000 current market value). The surviving spouse would pay capital gains tax on $100,000, which would be around $24,000 combined for Federal and State.
If this example were a primary residence it would make no tax difference because the surviving spouse can exclude up to $250,000 of capital gain (not $500,000, since there’s no “couple” any more). So the most tax-helpful use of CPROS is on second homes and investment properties, which abound in Pine Mountain Lake.
For example, Joe and Linda buy a second home in PML for $100,000 and enjoy it on weekends with their family for several years. Their kids go to college, and to generate income, they convert it to a rental. They start taking depreciation write-offs which reduce the tax basis to $40,000. The house would now sell for $300,000 (after paying sales commission and closing costs).
Joe becomes terminally ill. Linda needs to make some careful decisions about how to take title and when to sell. Here are three scenarios:

1. Quick Sale: Linda sells the house before Joe dies. The profit of $260,000 ($300,000 minus $40,000) is fully taxable, so she pays about $75,000 in capital gains tax.
2. Joint Tenants: The basis in inherited property is stepped-up to market value at the date of death. Linda inherits Joe’s half of the property, so his half is stepped-up in basis from $20,000 (half of $40,000) to $150,000. Linda’s half stays the same, $20,000, for a total basis of $170,000. When she sells after Joe’s death, only $130,000 is taxable. So she pays about $38,000 in capital gains.
3. Community Property With Right of Survivorship: Linda owns the property immediately and the basis is stepped-up to 100% of market value. When she sells for $300,000, she pays NO tax.

Linda could also hold the property with the stepped-up basis as a rental and enjoy greater annual depreciation.
            Be aware that the tax basis is totally separate from the loan amount. If you have refinanced a house up to the hilt, spent the money, and then sell it soon after your “joint tenant” spouse’s death, you may barely have enough money left over after paying the mortgage debt to pay the capital gains tax.
Upon a spouse’s death the survivor records an Affidavit, which memorializes the termination of the decedent’s interest in the CPROS property in the same manner as a Death of Joint Tenant Affidavit. The surviving spouse inherits the property outright regardless of what they say in their wills.
When is CPROS not appropriate?
-You hold all your real estate in a trust
-You want to dispose of real estate through a will to people other than your spouse
-The only real estate you own is your primary residence and you are not even close to exceeding the $250,000 capital gains exclusion.

Couples owning appreciated real estate may want to use the new law. Check with your attorney to ensure that it is consistent with your entire estate plan. A blank form of the grant deed for use with CPROS can be printed from the website www.wwlaw.com/cpform.htm. You must also file a Preliminary Change of Ownership form with the County after changing to CPROS. These are available from the Recorder’s Office or your title company.

Incredible, affordable acorn home loans

Interest Rates are .75% less than other current 30-year rates. The current rate as of January 15 is 5.75%, and loan fees are very reasonable, about $1,000 and zero points. The bank loans you 97% of the purchase price. And for the first ten years you can pay interest ONLY. If you must borrow the remaining 3% the interest rate on the whole loan is .25% higher. Or, the state of California will loan you the other 3% (called the CHDAP, California Housing Down Payment Assistance Program) at a measly 3% interest rate if you don’t exceed a maximum income. The maximum in Tuolumne County is $44,050 for a single person. And the 3% State loan doesn’t have to be repaid until you sell the house! The interest accrues, but for such a small amount at a 3% rate, it’s not much. The other qualification for the 3% CHDAP second loan is that you can’t have been a homeowner in the last three years.
Credit History can be almost nonexistent, as long as you have not abused credit. You can provide cancelled rent checks or a letter from the landlord, or your monthly cell phone bills, car insurance or utility payments. Almost any track record of paying monthly bills on time can be used, if you have the records. So if you have never had a credit card or a car loan, you can still apply. There is no minimum FICO score requirement.
Gifts of Funds are allowed as long as the “donor” signs that the money does not have to be repaid. You do have to have at least $500 of your own money in the bank for closing costs. Closing costs cannot be financed, but in your offer to the Seller you can ask them to pay for some of the usual buyer closing costs. Another advantage of ACORN is they don’t require 2 to 3 months of mortgage payments paid up front, like most “high ratio” loans of 97% to 100%.
Mortgage Insurance. There is none. This keeps your payments down. A conventional loan requires costly premiums for mortgage insurance if they loan you more than 80% of the price. Not under this program.
Loan limit is $500,000, and it must be an owner-occupied primary single family home, townhouse, or condominium. It can’t be used for a construction loan.
Manufactured homes on permanent foundations are allowed under the ACORN program, but it must be pre-existing and meet FHA requirements.
What’s the catch? It’s a small one. You have to make an appointment for an Intake Seminar with an Acorn representative. Offices are in Fresno (559-221-0217) and Sacramento, and they also meet with prospective borrowers in Modesto once a month. They do an “affordability assessment” and provide counseling. Then you take their written referral to a lender for your letter of pre-qualification. The lender still must approve you as a borrower and appraise the house. The majority of ACORN loans in California are underwritten by Bank of America. Another “catch”: you cannot own any other real estate.
What’s ACORN? ACORN is short for Association of Communities for Reform Now. It is a non-profit nationwide organization that has provided counseling and homebuyer seminars since 1987. HUD-certified and Fannie Mae-approved, they have helped over 50,000 families to achieve homeownership. Visit their website at AcornHousing.org. Phone numbers of all the offices are listed there.
Thanks to Duane Marsh of Bank of America (888-612-4360) for information.

1031 tax exchanges for vacation homes

1. Make it your primary residence on your tax return for two years and then sell it.
2. Put it on a vacation rental program for a year or two and then do an Internal Revenue Code (IRC) 1031 tax-deferred exchange in which you put all the equity into a “like kind” property such as another vacation rental, a vacant lot, or a commercial or multi-family property
3. Claim that you “held it for investment” and use a 1031 exchange to buy a different vacation home.

That last one is the most controversial, but many tax advisors believe it is possible to do an exchange on a second home which has no rental history. Vacation homes around the country have gone up in value, and the IRS has allowed this type of “equity preservation” or tax deferral. There are no regulations, statutes, or court cases which give a definitive answer on the exchange of vacation homes, but IRC 1221 and IRS Letter Ruling 81-031171 give a strong indication.
To clarify the terminology, a “second” home is held for personal use only, and not for future profit or rental. A “vacation rental” home is occupied for personal use but also rented out at fair market rent some time during the year. It is a “vacation rental” if the owner stays there less than 15 days in the tax year or less than 10% of the rental days (whichever is greater, which only becomes an issue when you rent it out for 150 days or more). In twelve years of managing vacation rentals, the IRS has never asked to see our reservation records to prove how many days an owner used their home. And how else would the IRS know? Even if you stayed there 60 days, you can document that you were “maintaining” the property for rental use by raking leaves, re-decorating, replacing a faucet washer, etc.
But what if you never rented your second home?
If you can substantiate that you acquired and held “unproductive real estate”, even if it was for personal enjoyment, because you expected its value to appreciate, you may qualify for a 1031 exchange. Write a letter to your CPA when you buy a vacation home saying you are acquiring it as an investment. To show further intent, get a loan for “investment property” (at a slightly higher interest rate.) Document the actual annual appreciation in the area as your basis for a reasonable expectation of gain. And when you sell, put in the listing agreement that you may do a 1031 exchange. The sales contract must also have a clause that you are doing a 1031 exchange
How long do you have to own it before selling? This is uncertain. Two years would be a minimum, and the longer the better. Time is only one factor in determining the qualification of a 1031 exchange; proving intent is probably more important. For example, did you try to sell the property, especially during the early years of ownership? This might make your claim to “hold” it hard to swallow.
Another red flag for the IRS is if you refinance the second home, pull out a lot of cash, and then sell it as a 1031 tax deferred exchange. They may disallow it on the basis that you had “use of the equity money”.
A valid 1031 exchange must use a “qualified intermediary”, also called an accommodator, who holds your equity money and then puts it in your next escrow. Some well-known companies in California that provide this service are:
Asset Preservation (apiexchange.com) (800) 282-1031
Starker Services (starker.com) (800) 332-1031
Equity Preservation (epi1031.com) (800) 336-1031
Timcor (timcorfinancial) (800) 966-1031

Not every accountant or accommodator agrees with the above interpretation. RealtyExchangers.com flatly states that vacation homes do not qualify for a 1031 exchange if used solely for personal use. Consult with your tax and legal advisors in making your decision. Real estate agents are not qualified to advise on tax matters.
Here’s another idea: exchange one second home for another, and sometime down the road, retire and turn your second  home into your primary home
However, in 2005 new legislation imposed a 5-Year holding requirement for principal pesidences formerly held as investment property. To quote from a tax exchange newsletter from Old Republic Exchange Company (OREXCO) “As many investors are
aware, property acquired in an IRC §1031 exchange may be converted
from investment property to the taxpayer’s principal residence. In short, a taxpayer could buy property in an exchange—having deferred gain from the sale of other investment property—and later convert that property to a principal residence. The previously deferred taxes may never be owed when the property is subsequently sold because the taxpayer is entitled to a principal residence exclusion under IRC §121. IRC §121 provides a taxpayer with an exemption from taxes on the gain from the sale of the taxpayer’s principal residence if the taxpayer used the property as a principal residence for periods aggregating 2 years or more within the previous 5 years. The gain excluded from the payment of tax is $250,000 for individuals or $500,000 for married couples
The new legislation—H.R.4520—provides, in pertinent part, as follows:
If a taxpayer acquired property in an exchange to which a §1031 applied, §121(a) shall not apply to the sale or exchange of such property if it occurs during the
5-year period beginning with the date of the acquisition of such property.
Now, pursuant to this new legislation, a taxpayer intending to take advantage of the §121 exclusion with regard to property originally acquired in a §1031 exchange, will
not be entitled to the §121 exclusion, unless the property has been held by the taxpayer for more than 5 years and used as the taxpayer’s principal residence for at least 2 of the 5 years.