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| HOT Real Estate Tips from the Desert - Sept. 2010! |
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Palm Springs Condo! Don't miss this short sale opportunity in La Palme... http://www.stephanietaylor.mywindermere.com/index.cfm?fuseaction=Listing.ListingDetail&ListingID=76671668 |
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Charming Home in Palm Springs! This charming 1950's home is situated on a cul-de-sac and centrally located in Palm Springs... http://www.stephanietaylor.mywindermere.com/index.cfm?fuseaction=Listing.ListingDetail&ListingID=76217813 |
Articles and Advice |
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| Tell us what you love about living in California What’s not to love about living in California--eternal sunshine, miles of gorgeous beaches, majestic mountains, and beautiful stretches of desert – this state has something for everyone. With so much to offer, it’s no wonder everyone would like to own a piece of California. Now you can tell the world about your piece of California .Leave a short comment at www.yourpieceofcalifornia.com via your Facebook or Twitter account and join others in sharing the love for California neighborhoods, beaches, and mountains. Looking for the right home is a big task, and the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) has created the perfect resource to help you find the home of your dreams. Visit www.yourpieceofcalifornia.com where you’ll not only find many great tools – from homes for sale to neighborhood information – you’ll also be able to share your thoughts about your piece of California, and see what others have said about our state. |
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| Playing the real estate waiting game By Dian Hymer Buyers often are reluctant to make an offer to buy a home they find early on in their search. After looking for months and not finding anything comparable, some buyers regret not having moved quickly on a listing even though they saw it early on. In most cases, you should consider yourself lucky if you find the home you want to own for years relatively quickly. It's not uncommon in some low-inventory markets for buyers to look for a year or more before they are able to buy. For the last few years, sellers who haven't had a pressing need to sell have been waiting for a better market before putting their homes on the market. In one case, the inventory was so paltry that buyers who purchased in the Upper Rockridge area of Oakland, Calif., looked for four years before finding the house that would work for them in the long term. In high-demand niche markets, there can be a shortage of listings and a lot of buyers waiting for the same kind of home. A couple who purchased in the Oakland Hills looked for more than a year in an area where not much that suited their needs was available. They made two offers during that time and ended up losing in multiple-offer competitions before they were finally able to secure a new home. HOUSE HUNTING TIP: Buyers who find the right home soon after starting their search need to get a quick education about the local market in order to be able to keep from making a bad decision. You don't want to pass on a house and kick yourself later for doing so. You also don't want to buy a house that doesn't work out for you, particularly in the current market. You'd be unlikely to sell the home again soon and break even. Find out how often a listing like the one you're considering comes on the market. High-quality, well-located homes in coveted locations come on the market infrequently in some areas. Ask your real estate agent how many listings like the one you're interested in came on the market in the last six months or one year. How long did it take them to sell? Were there multiple offers? In other areas that have lots of homes for sale similar to the one you like, you have the luxury of shopping the market awhile. If someone else buys this home, you'll be able to find another in a reasonable period of time. There's no urgency, unless interest rates are rising and locking in a low rate is key to being able to afford the home you want. To ease your concern about buying a home before you've seen many, scour the Internet for other similar homes for sale in the area. Ask your agent to show you any other homes currently on the market that might work for you. This is how to determine the range of housing options in the area as well as understand local pricing. Buyers from out of the area are at a disadvantage if they are not familiar with the housing market in the new location. The Internet helps buyers gain information about what kinds of homes and how many are available in the new location. THE CLOSING: Although no one likes to make an interim move to a rental before buying, it does have the benefit of letting you live in the new community and decide which neighborhood will work best for you. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist. |
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| Pricing to sell in today's market By Dian Hymer Putting yourself in the right mindset to sell is essential. It's the most difficult aspect of selling for most sellers. Your home is worth what a buyer is willing to pay, which may not be what you think it is worth. Detaching yourself emotionally from your home is difficult. Clearing out years of clutter, depersonalizing your home by removing personal memorabilia, and staging your home for sale can help you step back and view the home as a commodity that needs to be sold rather than as your personal sanctuary. Putting your home on the market at a price that reflects what you want and not what the market will bear can cost you time and money as it sits on the market unsold. The home-sale market is a localized phenomenon. The only way to get a clear picture of what your home is likely to sell for is to find out which listings are selling in your neighborhood and for how much. The most recent sales -- those that closed within the last three months -- will be the most informative. Be sure to take a hard look at the list prices of homes that are new on the market. If the list prices are lower than they were two or three months ago, this indicates that prices are declining. This needs to be taken into account when you select a list price. HOUSE HUNTING TIP: Pay close attention to your competition. Don't fall into the trap of pricing your home higher than your neighbor's home because yours is better. If your neighbor's price is too high for the market, neither of your homes will sell. Ask your listing agent to call the listing agents of properties similar to yours to find out what kind of showing activity they are receiving. Have they had offers? If so, why weren't they accepted? Were the offers too high? If so, you should set your sights lower. Some listing agents recommend that you list considerably under market value in order to stimulate multiple offers. In some cases, this can be an effective strategy. For example, in the low-end foreclosure market, this was common practice at the end of 2009. Some listings priced way below market value received more than a dozen offers. However, it can be risky to price significantly lower than market value on a more expensive property for which the demand is lower. You could end up with more than one offer, but you could also receive under-market price offers. Your home needs to be perceived as a good value to a buyer to sell in this market. However, you could shortchange yourself by discounting the price too much. Your home is most marketable when it is new on the market. Buyers wait anxiously for the new crop of listings. Listings that don't sell relatively quickly often languish on the market. Price reductions often follow as the sellers try to find market value. A listing that has been on the market for months is likely to receive a low offer -- if a buyer makes any offer. A listing that receives a lot of showing activity when it first hits the market but gets no offers is probably overpriced for the market. In this case, it's best to lower the price to market value as soon as possible while the listing is still fresh in agents' and buyers' minds, even if this is within two to four weeks of the listing date. THE CLOSING: Listings in neighborhoods where sales activity is slim require a longer marketing period. Even so, pricing right for the market is imperative. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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| Loan modification “blackmail” By Benny L. Kass DEAR BENNY: My wife and I received from our lender a repayment agreement for our original mortgage. This was a result of the bank initiating a foreclosure sale, which was temporarily suspended because we agreed to enter the Home Affordable Modification Program. But the bank is asking us "to acknowledge that they are the legal holder and owner of the Note and Security Instrument and further acknowledges that if Lender transfers the Note, as amended by this Agreement, the transferee shall be the 'Lender' as defined by the agreement." It should be noted that this is not the original bank we signed the mortgage with. We obviously won't sign this amendment and supplement to the original mortgage until we have an attorney review the documents. What do you think we should do? --Brian DEAR BRIAN: Your lender is trying to protect itself by having you sign that document. Over the past several years, lenders sold their mortgage loan papers in bulk to such groups as Fannie Mae or Freddie Mac who "securitized" those loans and resold them to investors all over the world. No one knows the whereabouts of the original promissory note that you initially signed.. And many judges throughout the country have told lenders, "If you cannot show me the original note, I will not let you foreclose on the property." So, your lender is basically "blackmailing" you. If you want the loan modification, you have to sign the agreement. You really should get a lawyer to assist you. The lawyer will determine whether judges in your state require the original note. If they do, you may be in stronger bargaining position with your lender. It should be noted that not all courts have adopted this position. The bottom line: You don't want your house to be foreclosed upon. Only you can make the decision, but get some legal advice before you sign that agreement. DEAR BENNY: In 2006, the assessed value of my house had climbed to $756,000 and then dropped to $714,000, trailing the declining market. I filed an abatement based on erroneous information that my town was using, and was successful. My house was reassessed at $531,300, very close to my suggested valuation. About the same time, I refinanced my house based on a bank appraisal of $678,000. Since then, my house valuation has decreased each year and it now has an assessed value of $442,600; our area is being re-evaluated this year. Here is my dilemma: I firmly believe, based on almost daily research, that the market value of my house is somewhere in the low $500,000s. I think by filing this abatement, I shot myself in the foot. I know buyers look at the assessed value, which is easily accessed on our town Web site. In my case, this differs dramatically from two years ago as well as the appraisal I had during the same month my abatement went through. Can I realistically list my house at what I consider to be market value and expect a real estate agent to explain these events to potential buyers, or am I stuck with an asking price closer to the current assessed value? --Karen DEAR KAREN: I don't think you shot yourself in the foot; in fact, you have been paying real estate tax on the lower assessed value. You can list your property for any amount you feel it is worth. Some real estate agents may balk if your valuation is too high, but if you have the research (comparables) showing what other similar houses in your area are selling for, you should be able to convince the agents of the value of your house. From my experience, assessments in many parts of the country are not consistent with a home's true value. Many older homes are not carefully inspected, so the government assessor does not always know what kind of improvements have been made. Keep in mind that based on today's economy we are in a buyer's market. Regardless of the price you set for your house, potential buyers will lowball their offers. Obviously, you do not have to accept any offer and have the absolute right to counter with a higher price. When an offer is made either to a seller or a buyer, the recipient has three alternatives: you can accept it, you can counter, or you can reject it outright. One suggestion: Because most buyers do not pay all cash, they will need to get a mortgage. Lenders will obtain an independent appraisal before committing a loan, and appraisers are coming in very conservatively with their valuations. So, to satisfy yourself, I suggest that you consider obtaining your own appraisal before you sign up with a real estate agent. It will be worth the $300-$500 dollars that most appraisers will charge you. DEAR BENNY: I own a condominium unit in a fairly large association. Over the years with good management, we have amassed a sizable reserve account. Recently, the board announced that because we are earning only a very small amount of interest on this account, it wants to start investing these funds in the stock market. The announcement stated that with interest rates starting to increase, the board believes that the stock market will be a good place to earn more money for our association. Can the board do this? --Charles DEAR CHARLES: If absolutely every owner in your association agrees to go to Las Vegas and gamble with your reserve account, I would reluctantly have to say this would be legal (although clearly inappropriate). Notice that I said that every owner must affirmatively agree. Your board of directors has a fiduciary duty to all of the owners who elected them to their positions on the board. If they want to spend their own money on the stock market -- or in Las Vegas -- that of course is their business. They certainly have the right to spend their own money as they see fit. But your reserve account does not belong to the board; it belongs to every owner in your association. The clear obligation of the board of directors is to invest your money in secure, insured investments -- even if that means that your money may not be earning as much as everyone would like. Reserve accounts are very important to the well-being of any community association. If, for example, your elevator or your roof needs replacement, and if the association does not have enough money in reserve to pay for these matters, each owner -- including you -- may be faced with a special assessment. This may cost you a lot of money. More important in today's market economy, lenders are insisting that a condo association have adequate reserves before they will commit to a mortgage loan. Indeed, the FHA loan -- which today is probably the most important mortgage around -- requires associations to have a minimum reserve requirement of 10 percent of the annual budget. For example, if your association's budget is $400,000, you have to allocate $40,000 annually for future reserves. A reserve simply means that the association should have money set aside "in reserve" to cover the cost of future emergency or major repairs. Reserves are (or should be) an essential part of every community association. Benny L. Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. |
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| Pay attention to home inspection By Paul Bianchina For just about anyone, a home is the single-most expensive and single-most complex thing that you'll ever own. So when making that purchase, you certainly want to do everything possible to be an informed buyer and to protect yourself and your investment. One of the ways to do that is to have a home inspection prior to closing the deal on the purchase. A home inspection will give you a lot of information about the physical condition of the home you're considering buying, and should alert you to any potentially serious problems. But as a potential home buyer, it's important that you understand what a home inspection includes and doesn’t include. There are certain things you legitimately can expect your inspection to provide for you, and certain things that it won't. And you also need to understand that the more you participate in the inspection process, the more you'll get out of it in return. Finally, understand that just like there are good and bad contractors, there also are good and bad home inspectors. Expect to have to do a little homework to find one of the good ones. What is a home inspection? A home inspection is a visual inspection of the home you're thinking of purchasing, performed by an objective third-party inspector. The inspector will examine the physical structure of the home from top to bottom, as well as the home's operating systems. Typically, a home inspector will look at the following things: • Outside: The exterior home site; general condition of the foundation and basement walls; condition of the exterior walls, including the siding, exterior trim, windows, exterior doors and exterior paint; type and condition of the roofing; condition of gutters, downspouts, flashings, and vents. • Inside: The condition of the attic, roof support structure, attic insulation and attic moisture issues; condition of the basement and crawl space, including insulation and moisture issues; garage and carport; electrical system; visible plumbing system; heating, cooling and ventilation system; general interior condition of the home. A short time after the end of the inspection you'll receive a written report detailing the inspector's findings. Any defects the inspector identified will be noted. Inspectors never should attempt to sell you anything, such as their services to come in and fix anything that was identified in the report. To do so would be a clear conflict of interest. It's important to understand that inspectors do not do what is known as "destructive testing." In other words: they don't cut holes in walls or otherwise open up inaccessible areas to look inside. Everything is based on their visual inspection of whatever they can access. They're also not there to comment on anything that's readily apparent from a cosmetic standpoint, such as a sloppy paint job. What types of things does the inspection not cover? It's equally important to understand what a home inspection doesn't cover, because this is where you need to be sure that you continue with your due diligence when you're buying your home. For example, your home inspector will point out any obvious signs of visible mold or mildew in the home. However, he will not be performing any type of actual mold inspection. If you suspect a mold infestation in the home, you need to have testing done by a trained hygienist. Home inspectors will point out structural problems that have been caused by insect damage. But they're not there to perform a complete termite inspection. They also don't do inspections for the condition of the well, septic tank, or any type of soil contaminants. You also need to be very aware of the fact that a home inspection has nothing to do with code violations or zoning issues. You need to check those things out for yourself with the local building and planning offices. It's up to you to assure yourself that any prior work on the house was done with the necessary building permits. It's also up to you to check that there are not any issues when it comes to how the house is currently zoned, or how the current zoning might affect your use of the property in the future. What do you need to do? You have a couple of other responsibilities in this process as well. First of all, know who your inspector is, and what's required of him. Different states have different regulations pertaining to how home inspectors are regulated, so find out what's required. Interview the inspector before you hire him. Be sure he complies with all those requirements, including whatever license, insurance and bond is needed. Ask for and verify references. Ask for and read a sample report. Be sure it gives you the type of information you need, in a format you can understand. Find out if the inspector belongs to any professional trade organizations, and what their standards and codes of ethics are. The other important thing is that you need to attend the inspection. Follow the inspector around, even up into the attic and into the crawlspace if you're physically able to do so. See what he's looking at. Understand the potential problems. Ask questions and take notes. When you get your report, read it over from cover to cover at least twice, and be sure you understand it. You paid for it, and it's one of the most important documents you'll ever have. So if you don't understand any of it, be sure someone explains it to you. |
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| Formaldehyde By Paula Hess Formaldehyde. The word alone recalls memories of the Hurricane Katrina victims housed in FEMA trailers and sickened by the “off-gassing” or vaporization of formaldehyde gas from the plywood and pressboard used in the trailers’ construction. If you think only trailer park residents are affected by off-gassing, guess again. Formaldehyde is found in pressed wood (plywood, particle board, and medium-density fiberboard), cosmetics, permanent-press clothing and draperies, glues and adhesives, and some paints and coating products. Furniture and housing construction materials are the biggest source of formaldehyde exposure, so there’s a good chance that your child’s crib, your low-cost bookshelves, and countertops, and cabinetry all contain formaldehyde. While older furnishings may contain formaldehyde, the good news is that the majority of off-gassing occurs in the first two years of product life and older furnishings and materials do not pose a health threat. The bad news is that formaldehyde is recognized as a carcinogen by the International Agency for Research on Cancer and the Environmental Protection Agency (EPA) recognizes that exposure to high levels (above 0.1 parts per million ppm) of formaldehyde can cause watery eyes, burning sensations in the eyes and throat, nausea, and difficulty in breathing; the EPA notes that in homes with significant amounts of new pressed-wood products, these levels can be greater than 0.3 ppm. In July 2010, President Obama signed into law The Formaldehyde Standards for Composite Wood Products Act. This act establishes standards for formaldehyde in composite-wood products. The EPA now is writing the rules for the law and sorting out how to enforce the law, which will comply with California’s standards. California stores can sell furniture and cabinetry with formaldehyde limits that surpass the legal limits until Dec. 31, 2011. Some manufacturers are complying in advance of the law and their products are marked as meeting “sustainable” standards. Meanwhile, as you stare around your home and at all the pressboard furniture, the following tips may prevent or mitigate exposure to off-gassing: * Look for products endorsed by third parties, such as Green Seal, a non-profit that promotes the manufacture of environmentally responsible products (http://www.greenseal.org/). * Use “exterior-grade” pressed-wood products in your remodeling and do-it-yourself projects and avoid the use of bare pressed-wood products made with urea-formaldehyde resins. * Use air conditioning and dehumidifiers to maintain moderate temperature and reduce humidity levels; high humidity increases off-gassing. * Increase ventilation, particularly after bringing new sources of formaldehyde into the home. If possible, allow new furnishings to off-gas outside for several days or weeks. * Seal existing composite wood/particle board furniture with a non-toxic sealant. If you want to test your home’s formaldehyde levels, a passive formaldehyde monitor, can be used. The monitor is placed in the home for a set time and mailed back to the vendor for analysis. Search the Internet for “formaldehyde test kit.” More Information http://www.usatoday.com/money/industries/environment/2010-07-18-formaldehyde-free-furniture_N.htm http://sierraclub.typepad.com/scrapbook/2010/07/success-in-sierra-clubs-fiveyear-formaldehyde-fight.html http://online.wsj.com/article/NA_WSJ_PUB:SB10001424052748703816204574487412817324226.html |
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| Real estate contingencies make comeback By Dian Hymer During the recession of the early 1980s, when mortgage interest rates hovered near 18 percent, few home buyers could qualify for financing, particularly if they already owned a home that needed to be sold before buying a replacement home. Offers made contingent on the sale of the buyers' current home were popular. Contingent-sale offers are increasing in the current housing market. Most buyers who want or need to make a move to a home that better suits their current lifestyle can't qualify to buy before selling their existing home due to stringent mortgage-qualifying criteria. Sellers don't like offers that are contingent on another property selling because it increases uncertainty. If the buyers don't price their house right for the market and it doesn't sell, the sellers are back to square one searching for another buyer. Most buyers aren't keen on selling their current home before they know where they will be living next. This can limit buyers' prospects because many sellers won't accept contingent-sale offers. The best houses at the best prices usually sell quickly, sometimes with multiple offers. Sellers usually reject contingent-sale offers if there's another qualified buyer who doesn't have to sell a home. As always with homebuying and selling, compromises must be made. In areas where home sales are slow and there are many homes on the market, a contingent-sale offer may be better than no offer. A drawback is that once the sellers accept a contingent-sale offer, this fact must be disclosed to other interested buyers. This can slow the showing activity. Aggressive marketing, like continuing to hold Sunday open houses, can counteract this to some extent. Sellers who accept contingent-sale offers can continue to entertain offers from other buyers for backup position, subject to the collapse of the primary offer. But when there is plenty of inventory for buyers to choose from, there's not much incentive for a buyer to make an offer on a listing that already has an accepted offer -- even though it is contingent on the sale of another property. HOUSE HUNTING TIP: Sellers who accept contingent-sale offers can maximize their chance of selling by including a release or escape clause in the contract. This clause allows the sellers to notify the contingent-sale buyers that they have accepted another offer in backup position and that they are invoking the release clause. The release clause has a time frame -- often 72 hours, but it's negotiable -- within which the primary buyers must remove the contingent-sale contingency and provide evidence that they can close the sale of the replacement home without having their home sold. If they are unable or unwilling to do so, the first contract is canceled and the backup buyers move into primary position. Recently, buyers who were in contract to buy a home contingent on the sale of their home were delivered a 72-hour notification. The buyers who were kicked out of contract had their home on the market but hadn't found a buyer in time. It's tempting for buyers who lose a home they want to another more qualified buyer to pull their home off the market and wait for a better time to sell. However, it's near impossible to buy contingent on the sale of another home in a seller's market when buyer demand is high. THE CLOSING: It's inconvenient for most buyers to move to an interim rental if they sell their home before they find a suitable replacement home. But, with cash in hand, they have the luxury of waiting for the right house. They can make a stronger offer and probably receive a price concession compared to the premium usually paid to entice sellers into accepting a contingent-sale offer. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
| Seller financing for today's market By Dian Hymer During the recession in 2001, a strong home-sale market was instrumental in pulling the economy back on track. The opposite may be the case now. The economy, particularly employment, needs to improve before the housing market stabilizes. Low interest rates are helping the home-sale market today, but the housing market is far from stalwart. Unemployment is high; mortgage qualification is difficult; and most buyers can't afford to buy a new one without selling their existing home first, creating a logjam in the repeat homebuyer segment of the market. Interim or bridge financing that buyers used routinely in the past to buy a new home before selling their current home is virtually nonexistent in today's market. An interim loan is a loan secured on your current home to generate cash for a downpayment on a new home. Homeowners who have a home equity line of credit (HELOC) secured against their property can tap unused funds to convert equity to cash in order to buy a new home before selling first. HOUSE HUNTING TIP: Seller financing could be the answer for some homebuyers. One possibility would be to ask the sellers of the home you want to buy to carry financing until you sell your home. If the sellers have no mortgage secured against the property -- i.e., they own it free and clear -- they might be willing to carry a first mortgage. Compared to other investment options, 5 percent or so from a buyer with good credit and a decent downpayment could be attractive if the seller doesn't have an immediate need for the proceeds from the sale. As with all terms of a purchase agreement, the terms of seller financing are negotiable -- everything from the interest rate, when the loan is due, how and when payments are made, the amount of the late fee, etc. Interest on the mortgage can accrue and be due when the loan is paid off. Or payments can be amortized and paid monthly. Particularly with a first mortgage, sellers will probably want to receive periodic payments. However, it lowers the buyers' carrying costs while they own two homes if the seller will defer payments until the note is paid off. A more common scenario than a seller-carry first mortgage would be to find sellers of a home you'd like to buy who have enough equity to carry a second mortgage secured either against your current home or on the home you are buying from them. This wouldn't work if the sellers have already committed their proceeds from the sale, like to the purchase of another home. If the sellers carry a second mortgage on your home, it should not require approval of your first mortgage lender. However, you would need to be able to qualify for a first mortgage on the new home. In order to be approved for that loan, your overall debt-to-income ratio will be scrutinized by the lender's underwriters. The underwriters will factor in the cost of the seller-carry financing into your overall debt. Most lenders will also want the term or due date of the seller's loan to be not less than five years from closing. Check with your mortgage broker or lender before making an offer that will include seller financing to find out what the first lender on the new home will require. The sellers will want their loan paid off when your current home sells. The first mortgage lender might allow a seller-carry second mortgage with a due date in five years or when your home sells, whichever occurs first. THE CLOSING: The lender wants to make sure the buyers aren't faced with a large balloon payment due months after closing. Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author. |
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