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| ********CLINT FREEMAN******** Determined To Be Your Favorite Realtor! www.RidgecrestCaHomes.com |
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| JULY 2010 MARKET STATS Buyers are slowly returning while more homes are entering the market. more... http://images.agentcenter.com/client/3/4/7/30743/JULY_2010_MARKET_MONTHLY_STATISTICS.pdf |
| CREDIT MATTERS Knowing your credit score will help with your home purchase http://ridgecrestcarealestate.com/CREDIT_20_MATTERS.html |
| CONFIDENTIAL LOAN PRE-APPROVAL Let me know how I can help you with a loan! http://www.ridgecrestcahomes.com/Confidential_20_Pre-approval_20__26__20_Application2.html |
Articles and Advice |
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| THE LEVERAGE OF LOWER MORTGAGE RATES After the $8,000 federal tax credit expired last April 30 many buyers again sit on the fence in an indecisive mode, wondering what instant advantage there is in homeownership. Why buy now? Why not wait? The new advantage: low interest rates. Ever since April 30 mortgage rates have slowly dropped to record lows not seen in almost 40 years. The 30-year fixed-rate mortgage averaged 4.49% for the week ending Aug. 5, according to Freddie Mac's weekly survey of conforming mortgage rates. It averaged 4.54% last week and 5.22% a year ago. It is now at its lowest since Freddie Mac started tracking the rate in 1971! What do these figures actually mean in real savings? Well, if a home was purchased a year ago at $200,000, at 5% interest over 30 years, the loan principal and interest together will add up to a payment of about $1073.64 per month. If a $200,000 home is purchased now at 4.5% interest over 30 years, a monthly payment of principal and interest would total about $1013.37 per month. Purchasing with the lower interest rate--in this case 4.5% rather than 5%--a total of $21,698.15 in interest will saved over the life of the loan. This equals a monthly savings of $60.27. Keep in mind these figures do not include property taxes and insurance, which however, can be written off on income taxes come April 15. Compare the savings on interest to a one-time $8,000 rebate and the argument for waiting slowly comes tumbling down. The flip side is that lower interest rates now allow buyers to purchase more home. For instance, if a buyer is already pre-approved to carry payments of $1073.64 per month (as described for a $200,000 home above) that buyer could now purchase a home for up to $212,000. It is incredibly advantageous to be able to move up a price increment of $12,000. Home prices at the lower range may not have the upgrades, features, or square footage a buyer may be looking for. Also, $12,000 can make it or break it when it comes to negotiating power. For instance, buyers who are maxed out with their initial offer price may not receive the home of their dreams if a seller counters back, and requests the buyer to roll all, or part, of their closing costs into the loan. |
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| RIDGECREST FACTS AS OF AUGUST 2010 • To date there are 191 site built homes on the market ranging from $27,900 to $589,900. • Past three months’ price per square foot average of sold single family homes: College Heights $162; NW $116; NE $123; SE $92; SW $115; RC Heights $115. • The median home price decreased 9.4% last month from $168,500 to $159,450 |
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| CALIFORNIA FAST FACTS • California median home price – $311,950 • Lowest median home price – High Desert $125,620; Ridgecrest $159,450. • Highest median home price – Santa Barbara So. Coast $914,760 (Source: C.A.R.) |
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| Sellers face new dilemma in timing the market By Dian Hymer Some sellers have been biding their time for three years and now wonder if they should continue to wait or bite the bullet and sell now. Karl Case, co-creator of the widely followed S&P/Case-Shiller Home Price index, thinks there's a 50-50 chance that we're at the bottom of the market and that we'll see improvements in the months ahead. Unemployment remains a concern. An increase in the number of new households is predicated on an increase in jobs. Even if we have seen the worst of the recession, most analysts believe the housing recovery could be rocky for years. A quick turnaround is probably not on the horizon. The home-sale market is generally better this year than it was last year at this time. Interest rates are lower by about 1 percent. Mortgages are much more readily available. Home prices have dropped significantly, making it possible for buyers to afford to buy a long-term home. An increasing number of fence-sitters have turned into motivated buyers. However, they are focused on value, condition and location; they aren't overpaying, as they did in 2006. It's still a buyer's market and could remain so for some time to come. Sellers who purchased within the last five years might need to sell for less than they paid. One couple bought a home in Crocker Highlands, a coveted Oakland, Calif., neighborhood. They paid just over $1.1 million in 2005 and made improvements to the property. They sold in 2009, after investing more to prepare the property for sale. They received multiple offers, over the list price. The home sold for $905,000. These sellers weren't happy about the loss. But, their goal was to own only one home. They bought a retirement home near Sacramento and were spending most of their time there. Holding onto the Oakland home was a financial drain, particularly since they were there only part time. They couldn't rent the property out for enough to cover the ownership costs. Another homeowner realized before the recent economic downturn that she couldn't afford to continue to make hefty mortgage payments due to a drop in her income. Emotionally attached to her home that she'd improved over time, she decided not to sell then, which would have resulted in a profit. Instead, she rented the property for a few years and moved in with a friend to lower her overhead. Although the rent reduced her monthly debt load, it didn't cover the carrying costs. When she finally sold in January 2010, prices had dropped to a point that the property sold for less than the amounts of the mortgages secured against the property. To get lender approval on a short sale, the seller had to contribute cash at closing. Clearly, she would have been better off financially if she had sold years earlier. HOUSE HUNTING TIP: Deciding whether to sell now and take advantage of an improved home-sale market or wait for a better time is complicated. First, you need to know the approximate selling price of your home in this market. How much work needs to be done to get the property ready to sell? Does the house have any defects or deferred maintenance that will impact the sale price or make the property harder to sell? If so, this would negatively impact the price. This information can be obtained through your real estate agent. THE CLOSING: Low inventories of good homes in some niche market gives sellers an edge. Even so, you'll be successful in today's market only if you are realistic about the current market value of your home. 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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| Seven rules for room additions By Paul Bianchina If you're happy with your home and your neighborhood but are craving a little more space, maybe adding on is a better alternative to moving out. Room additions can be a terrific alternative for many homes, adding space for a growing family and adding resale value at the same time. But be forewarned. A good room addition involves a whole lot more than just slapping on some additional square footage. Here are some important rules to keep in mind as your planning gets under way: 1. Know why you're adding on: This is the first rule, and it happens before you lift a hammer. Why do you need to add on? And no fair cheating and saying, "I need more space!" Do you need another bathroom? Bedroom space? A laundry room or mud room? An improved kitchen flow? More space to entertain? Better accessibility due to health issues? More storage? A larger garage or hobby area? The only way the addition will meet your needs is to know what those needs are in the first place. 2. Good additions never look like additions: This is the other top rule of room-addition planning. When you're done, the addition -- no matter what its size or where it's located -- should never look like an addition. The architectural styles of new and existing need to blend. The exterior materials need to blend as well, or at least complement each other. To the extent possible, use the same type of windows, roofing, doors, siding and other materials. If the original home has wood windows, using new vinyl windows in the addition screams "add-on" and lowers the appeal and the value. Don't overlook the need to blend landscaping and hardscaping as well. 3. Out, up, down, or a combination: The how and the where of a room addition is always a fun and exciting challenge for everyone involved. Some homes are situated on larger lots and lend themselves very nicely to adding out. Others seem best suited to adding up by building on a second or even a partial third floor. Some houses are even laid out in such a way that it's possible to excavate under them and add new living space in the form of a daylight basement. Or it could be that a combination of two or even all three of these options makes the most sense for your particular home. Keep your mind open to the possibilities. Work with a good contractor and a good designer and you'll be amazed at what you can come up with. 4. Don't let the interior become an afterthought: I've seen a surprising number of additions that look great from the outside but seem to have no thought put into them on the inside. Flooring doesn't match. Trim doesn't match. Sometimes even the interior floor heights don't match. Remember that how the interior of your addition looks and flows on the inside is just as important as how it looks and flows on the outside. Use the same materials or the same style of materials. Match up ceiling, floor, and wall levels. Here again, no matter how you view the addition, inside or out, it should never look like an addition. 5. Create convenient access: This is another afterthought in a lot of additions. Let's say you have a three-bedroom, one-bathroom house, and you want to add a second bathroom. Typically, that's an addition that's going to have a good payback. But then you build the addition so that the only access to the second bathroom is through the kitchen. You now have a three-bedroom, two-bath house, but since the layout is lousy, you've actually gone backwards in terms of desirability and resale value. Are you going to create a beautiful second-floor master suite that can be accessed only by a tiny spiral staircase from the family room? Is the only way into your great new kitchen via a convoluted hallway that leads through the laundry room? When planning your addition, never lose sight of how you're going to access the new spaces, and make sure that access is both convenient and inviting. 6. Don't overwhelm your lot: Granted, room additions are expensive. So when you're doing one, and all those workers are onsite, there's a temptation to get as much square footage as you can. But don't cram your lot full of house. Remember that open space is important as well, both to you and your family, and, later on, to potential buyers. This is a good time to go back to Rule No. 1 and reconsider the "why" part of your room addition. Don't add space just to add it -- stay focused on your overall goals. 7. Understand the legalities: There are lots of rules and regulations that come into play regarding room additions. These include property line setbacks, zoning restrictions, and restrictions imposed by homeowner associations and architectural review committees. In some historic areas, your addition may have to comply with certain historic guidelines. In other areas, there may even be solar shading restrictions that limit the height or the orientation of your roof line. Be sure you check into all of this before you get too far along with your planning. |
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| Good Faith Estimate contains some 'quirks' By Dian Hymer As of Jan. 1, 2010, the Department of Housing and Urban Development (HUD) required lenders to provide mortgage borrowers with a new three-page Good Faith Estimate (GFE) to protect consumers who are applying for a mortgage. The intent of the GFE is to educate consumers about the key terms and costs of a mortgage, both at origination and ongoing. A loan originator completes the form, giving the borrower a summary of the loan particulars and information necessary to shop rates and to be sure they're comparing like-type mortgages. Although there's grumbling, mostly from mortgage brokers, lenders and closing/escrow agents, the format and information included in the new GFE is a step in the right direction. There are, however, some quirks. For example, the GFE doesn't provide a complete and accurate account of the borrower's costs. Page two provides an itemization of loan origination and settlement costs. The origination charge is itemized as one lump sum; it's not broken down. So, you don't know how much you're paying the appraiser for the appraisal, the loan originator for the origination fee, or other miscellaneous fees. Another shortcoming is in the way transfer taxes are disclosed. The entire amount of any transfer taxes is entered on the GFE, even if the sellers pay part or all of it. This could inflate the buyer's estimated settlement costs. To get around having to generate a GFE for buyers before they have committed to a given loan originator, some mortgage originators have developed worksheet quotes for buyers to use if they want to shop rates. HUD is adamant that these worksheets can't be used instead of a GFE. Furthermore, they provide the borrower no protection. HOUSE HUNTING TIP: The new federally mandated GFE provides protection for borrowers against being charged extra fees at closing that weren't disclosed on the GFE. An informal worksheet provides no such protection. Origination and settlement fees are grouped into three different categories. The first category is fees that can't increase between the time the GFE is issued and closing. Included in this category are the lender or mortgage broker's origination fee, transfer taxes and adjustments to loan origination charges after the borrower locks in an interest rate. Loan originators who miscalculate, causing fees to run higher at closing, have to make up the difference out of pocket. To cover themselves, some loan originators pad the Category one figure. The second category of fees can increase up to 10 percent at closing and includes such things as government recording charges and title insurance -- if the title insurer is identified by the lender, not by the borrower. This is done to encourage lenders to shop for the most cost-effective coverage for the consumer. The third category of fees can change at settlement and includes homeowners insurance and title insurance coverage if the borrower, not the lender, identifies the title insurer. The new GFE also includes a tradeoff table that shows what the interest rate would be if you paid a higher origination fee vs. a lower origination fee: the higher the fee, the lower the rate; the lower the fee, the higher the rate. Finally, there's a loan-shopping chart to use the mortgage information provided by one lender to compare with other lenders. There is no obligation to use a loan originator who completes a GFE for you. A loan originator can't refuse to provide a GFE to a prospective borrower who asks for one. As soon as a prospective borrower provides essential application information, such as Social Security number, property address, etc., the originator is to provide a GFE. THE CLOSING: Lenders are required to provide a GFE within three days of receiving the borrower's application. 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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| Water audits prepare you for the future By Michelle D. Alderson Despite a very wet season this past winter, the increase in rainfall didn’t make up for many years of below-average water levels. In 2009 California Governor Arnold Schwarzenegger declared a state of emergency in an effort to manage the drought crisis. Since then, many water companies have put into place mandatory water rationing with financial penalties for homeowners who don't comply. Before you find yourself paying more for your water, be prepared for the future by conducting a water audit (don't worry, you don't have to find all your water bills from the past two years). A water audit analyzes a home's water use and identifies ways to make it more efficient. A water audit's primary focus is to check for leaks in plumbing fixtures, appliances, toilets, faucets, hoses, and sprinklers (as well as ponds, fountains, and pools, where applicable). A water audit also can determine if older appliances and faucets need to be replaced with newer energy-efficient products, which can save both water and money on your monthly utility bills; Simply installing a low-flow showerhead you can save 8,000 gallons of water a year per person. Beyond doing a physical check for water leaks, a water audit also looks at how much water you can save in daily tasks. Do you take long showers? Do you use the dishwasher and clothes washer only when they are full? Do you turn off the water when you are brushing your teeth? According to the American Water Works Association (AWWA), the average indoor water use per person is 94 gallons of water per day. Simply adjusting everyday habits can cut back on water usage by as much as 30 percent. That’s more than 30 gallons a day per person. With global warming and droughts plaguing the West, water rationing will become mandatory by most utility companies. California's state water department forecasts that the Sierras, which are one of California’s main water sources, will have 25 to 40 percent less snow by 2050. A water audit saves money, saves water, and prepares you for an inevitable future. To find out how your household's water use compares to the rest of the country, go to H2O Conserve's website (www.h2oconserve.org) or the Water Use It Wisely site (http://www.wateruseitwisely.com/100-ways-to-conserve/home-water-audit.phptry) for their user-friendly H2O calculators. They will show how much water you use and give tips on ways to conserve. For more information on water audits, visit the AWWA website (www.awwa.org). |
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