Friday, December 30, 2011

FSBO (For Sale By Owner) successes continue to decline

In 2002, 24 percent of all Real Estate sales were conducted without the assistance of a REALTOR®. After hovering in the 12-14 percent range for the last few years, the share of for-sale-by-owner home sales reportedly shrank to an estimated 10 percent. Of those FSBO sellers, 40 percent knew the person to whom they sold their home.

Putting it a little bit differently, 60 percent of the home sellers who chose to sell their home by owner were successful in selling their home to someone they did not know.

Part of the reason may be due to the results that REALTORS® produce as opposed to those who are selling by owner. The profile reports: “The typical FSBO home sold for $150,000, compared to $215,000 among agent-assisted home sales.”

Thursday, December 29, 2011

Home Prices Dip In 62 Of 83 Orange County Zip Codes

For calendar month November — DataQuick’s freshest stats — the Orange County real estate market had homebuying patterns showing:

62 of O.C.’s 83 ZIP codes with declines in their respective median selling price. Overall, buyers’ prices were -8.0% vs. a year ago.
Taking sales volume in consideration, home-sale pricing is up in ZIPs representing 79% of the Orange County market.
5 of 83 O.C. ZIPs with median sales prices above $1 million in the period vs. 11 million-dollar ZIPs when the county median price peaked in June 2007. Since that pricing pinnacle, there’s been a 38% drop in the countywide median price!
Current million-dollar ZIPs were 3% of all sales in the most recent period tracked.
There were 4 ZIPs with medians under $250,000 vs. 4 a year ago. ZIPs with medians under a quarter million had 4% of all sales in the most recent period.
42 of 83 O.C. ZIPs had year-over-year sales declines in the period — or 51% of the market.
Overall, countywide sales were up 1.8% vs. a year ago.
4 of 83 O.C. ZIPs has sales gains of 100% or more in the period at the same time as 1 had sales drops greater than 50%!
NOTE! 7 local ZIPs had both sales gains and price gains in the period. (Highlighted in green below!) These double-gainers had combined sales volume equal to 9% of the Orange County market.

Wednesday, December 28, 2011

An FHA Loan Can Sometimes Be A Good Option

In a market of rules and restrictions it is nice to have a loan available to clients that do not fit into an every day conventional box. FHA is that loan. With low down payment options and more flexible guidelines, FHA is helping get new buyers into homes every day. Without FHA our housing market would be 12 times worse off.

The Basics of FHA
1) Only 3.5% down and with special grant programs as little as .5% down. Yes, 1/2% down with special grants. You can buy a $400,000 house with only $2000 down
2) Seller concessions up to 6%
Which means when you buy that $400,000 house you can get the seller to pay all your closing costs so that seriously you are only bringing $2k to the pot if you have a grant program or $14,000 if you do straight old FHA
3) Debt to income as high as 55% on the back end. That means that your housing payments + credit payments can be as much as 55% of your pre tax income. With a conventional loan where you are putting down 20% the maximum back end is 50% in special circumstances but generally caps off at 45%.
4) Credit not that great? No problem. As long as you can squeak by with a 580 (most lenders require 640) you are good. Foreclosure 3 years ago? No problem, FHA is for you.
5) No reserves Required: If all you have is that 14k for that $400,000 house that is A OK with FHA

Tuesday, December 27, 2011

Why You Need a Comparative Market Analysis

A Comparative Market Analysis (CMA), also referred to as a home evaluation, is a report prepared by a real estate agent comparing your property to similar properties on the market. Included in the report are homes currently for sale, recently sold through the local listings database, and possibly For Sale By Owner (FSBO). It is NOT an appraisal, merely an estimate of value based on features and the condition of your home compared to other homes in your area. We can provide a free Comparative Market Analysis so you are aware of the value of your home in today's real estate market and as a valuable document required for a short sale application.

Monday, December 26, 2011

Gauging A Price On A Short Sale

How do you really know what to offer on a property listed as a short sale? Well, there really is no way to answer that question with 100% accuracy. But a few here are a few helpful tips if you are considering making an offer.

  • The bank will normally accept 85% of their appraised value because at 85% they are making more on the short sale than the foreclosure and at the end of the day it's all about what is going to net them the most money.
  • It depends on what the banks "b.p.o." or "broker price option" came out at. If the listing price is 215K that is typically made up by the listing agent who does his own market analysis and sets the list price from that.
  • The bank can entertain any other offers it wants to. Their goal is to get as much money as it can for the home after all.
  • Make sure that your realtor is a short sales specialist!

Thursday, December 22, 2011

Newport Beach Real Estate Is Getting Hot!

Newport Harbor from CDM

Newport Beach CA is a famous Orange County ocean and beach, surf and sand, harbor, and back bay oriented residential and thriving commercial city.

Newport had 43 homes resold this year during November 2011 – average sold price of $1,450,658.

Newport Beach had 51 homes resold last year during November 2010 – with average sold price of $1,171,427.

So the number of Newport Beach at Orange County CA homes resold this year during November 2011 was down from last year while the average sold price was up.

Newport Beach has 436 homes now listed for sale – with average asking price at $2,492,225.

Wednesday, December 21, 2011

U.S. Housing Starts Jump 9.3%, To Highest In Year

Builders broke ground in November on more houses than at any time in the past 19 months, led by a surge in multifamily units, signaling the market is stabilizing heading into 2012.

Sam Allen Real Estate Agent Sacramento

Starts increased 9.3 percent to a 685,000 annual rate, exceeding thehighest estimate of economists surveyed by Bloomberg News and the most since April 2010, Commerce Department figures showed today inWashington. Building permits, a proxy for future construction, also climbed to a more than one-year high.

Work on multifamily units like apartments and townhouses is growing as the rental market improves. Single-family-home construction may be starting to strengthen as lower home prices and borrowing costs near record lows draw in some buyers, even as builders face competition from existing houses as another wave of foreclosures throws more marked-down properties on the market.

Tuesday, December 20, 2011

Is Your Rental Property In Foreclosure?

More “accidental” landlords are surfacing as home owners turn their underwater homes into rentals to try to come up with some extra cash. But some of these accidental landlords are still unable to keep up with their mortgage payments and may become delinquent on their mortgage.

So what’s this mean for the person renting their property?

Some renters may suddenly be served with an eviction notice when they discover the property they are renting is being foreclosed upon, and only having days to vacate.

One new web site,, allows renters to check rental properties in the U.S. to see if there are any notices of default filed against the property.

Renters … or real estate professionals who represent them … can check with the county recorder’s office to see status of a property.

Monday, December 19, 2011

Payroll Tax Cut Hurts Homeowners

The Senate approved a two-month extension of a payroll tax cut Saturday which would also extend jobless benefits through February 2012 and a two-month freeze of scheduled cuts to Medicare payments to doctors.

The Senate version of this bill would be paid for by increasing home loan guarantee fees charged to Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac as well as the Federal Housing Administration (FHA) by one-tenth of 1 percentage point.

The increase would amount to about $15 a month more for a $200,000 mortgage.

The fee is passed on to home buyers and will apply to many new purchases and home refinancing agreements starting January 1st 2012. The money raised would go to the Treasury Department, however, not to Fannie and Freddie.

The Mortgage Bankers Association, National Association of Home Builders and National Association of Realtors sent a letter Thursday to Sen. Bob Casey (D., PA.), the author of the tax package, saying the fees “should not be diverted for purposes unrelated to the safety and soundness of the housing finance system. “

“Fannie and Freddie are already floundering under the weight of the ongoing housing crisis and I fear this could only further worsen their ability to help struggling homeowners.” says Rep. Dennis Cardoza, D-Calif.

Friday, December 16, 2011

How To Stop The Foreclosure Process #3

3. Scrutinize the Options - After contacting your lender, or in some cases the servicing company that handles the loan for an investor, you may have other options that are readily available. As a rule, lenders are not obligated to make modificaions to your loan, but many will take it into account as a viable option--one that is a benefit for the lender and you and can include refinancing as well. Acceptable options to talk over with your lender include:

  • Deed in Lieu of Foreclosure - In this option, your lender may accept the return of the title to your home, but be aware that the lender may still sue for loss and report any uncollected funds due to loss to the IRS as taxable income to you. This alternative may have negative effects on your credit report.
  • Claim Advance - If you have a private mortgage lender, they will occasionally provide a cash advance to bring your mortgage payments up to date. Often this money is interest free and may not have to be repaid for years.
  • Re-Amortization - In this option the payments you have missed are added to the loan balance, bringing about a current account. Your debt will be higher and your monthly payments will increase unless the lender also agrees to prolong the term of the loan.
  • Loan Modification - The objective of a loan modification is to lessen the amount of payment to a degree where the borrower can routinely make their mortgage payment in addition to paying other bills. In this scenario the payments you have missed and any extra fees are appended to the balance of the loan.
  • Short Sale - Acknowledged by most one of the best alternatives available to circumvent foreclosure, the short sale is a more and more popular option. In this scenario, the lender agrees to take less than what you owe on the property, alleviating the homeowner of debt. Lenders are often more than willing to accept a short sale mainly because it considerably diminishes the expense and time involved in foreclosure proceedings. In the majority of cases, a short sale does less devastation to your credit than a foreclosure. A qualified REALTOR will be exceedingly helpful in finalizing the short sale process with you.

One note of warning, beware of any company claiming that they guarantee they can stop any foreclosure no matter what you owe. A short while ago, The Federal Trade Commission compiled a list of warning signs that a "foreclosure fixer" company may be a scam. Those warnings include any company that requires you to pay for services upfront, tells you to send mortgage payments to it directly, requires you to hand over the property deed, or tells you to refrain from contacting your lender directly.

Thursday, December 15, 2011

5 Great Things About Ownership

If you've been on the fence about home ownership, now is the time to take a leap! Don't let the negative press deter you from one of life's greatest joys.
Take a look at five short and sweet reasons that home ownership is great!
1. Equity. When you pay rent, you never see that money again. It is lining the landlord's pocket. Yes, buying a home may come with some hefty initial costs (down payment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Home ownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today's market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it's predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Home ownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you'll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Home ownership means you "own" your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart's desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It's a great time to buy. Interest rates are at historic lows. We're talking 4.0 percent instead of 6.0 or higher. This means big savings for today's buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a down payment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Wednesday, December 14, 2011

Buying Is Better Than Renting!

According to a recent article in the Wall Street Journal, “Home prices and mortgage rates have fallen so far that the monthly cost of owning a home is more affordable than at any point in the past 15 years and is less expensive than renting in a growing number of cities.”

What this means to renters is “as a result, monthly mortgage payments on the median priced home—including taxes and insurance—are lower than the average rent levels in 12 metro areas, according to data compiled for The Wall Street Journal by Marcus & Millichap, a real-estate brokerage that tracked 27 metro areas.”

Tuesday, December 13, 2011

How 1st -Time Buyers Can Avoid Scams

The state of the current real estate market has brought out a number of real estate scams that have targeted first time home buyers and renters.

First time home buyers are especially susceptible to scams, because they’ve never been through the process and it makes it easy for scam artists to separate them from their hard earned money.

Here are some tips from the Better Business Bureau on how to avoid scams.

The email addresses they use usually are from yahoo, ymail, rocketmail, fastermail, live, hotmail and gmail, and they also post ads under anonymous craigslist addresses. They frequently change their aliases.

• The deal sounds too good to be true. Scammers will often list a rental for a very low price to lure in victims. Find out how comparable listings are priced, and if the sales price or rental comes in suspiciously low, walk away.
• They use photos stolen from other property advertisements or from home furnishing catalogues or hotel websites.
• They use fake names, often stolen from Facebook profiles or networking sites. Often they assume the identities of previous victims.
• What they all have in common is that sooner or later you get a request to transfer funds via Western Union, Moneygram or some other wire service.
• Never under any circumstances, wire money at the request of any prospective “landlord” via Western Union, Money Gram or any other wire service. Even if they tell you to wire the funds to a friend or relative’s name “to be safe,” it’s a trap!
• Never send a scan of your passport or other ID. These thieves will use your identity to scam others. Ask to see the landlord’s ID – record all the information you can from it.
• Use a browser to search for the person’s name who you’re dealing with. Be sure to add quotes around their name. You could add the words “fraud” or “scam” at the end of your search terms.
• Use reverse directory look up if the person has given you their telephone number. It’s important to double check that they are who they say they are.
• Visit the local county courthouse to look up property ownership for the apartment in question. Who really owns it? Is it the person you’re dealing with? Or someone else?
• Scan any provided photographs carefully. Do they match up with what you’ve seen in person? Do they look like they all came from the same place?
• They don’t ask for an application or permission to check your credit? That’s a red flag!
• Considering the current state of our economy and the rise in foreclosures, ask the landlord if they’re current on their mortgage payments, and then get their answer in writing.
• Consider using another method for obtaining a rental, i.e. real estate agent, going through a rental agency, etc.
• Always check to see if the “company” has any complaints.

Monday, December 12, 2011

How To Stop The Foreclosure Process #2

2. Contact Your Lender - If you have run through all of your options for creating cash-flow to pay your mortgage, then it's time to reach out to your lender. Do this as soon as you possibly can! Your paramount goal in making contact with your lender is to create an agreement that will adjust your mortgage so that foreclosure proceedings can be halted before they are implemented.

Prudential California Realty
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Friday, December 9, 2011

How To Stop The Foreclosure Process

There are an innumerable amount of ways that unexpected hardships can switch the happiness of owning a home into an unimaginaible burden. Perhaps you've become unemployed, or have unforeseen medical bills that are piling up, or your monthly mortgage payments have exceeded your current budget. No matter what the reason or cause of your troubles,turning a blind eye to the problem won't help, it will only make it worse. You must act immediately to fix the problem.

Here is one example of how to stop a foreclosure on your home:

1. Seek Out Other Sources - Most homeowners don't recognize the fact that they have a multitude of resources to draw from that can help in making mortgage payments to prevent foreclosure. Take into consideration the revenue created by unemployment or disability insurance and your savings as possible cash-flow resources. Other examples might include cutting the household budget by trading in expensive items like cars, boats, and motorcycles for cash or lower payments. Even retirement funds can be used, but be aware that many people with access to their retirement funds can be penalized for early withdraw and face increased income taxes.

Prudential California Realty
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Tuesday, December 6, 2011

FHA Loan Limits Reinstated by Congress

That U.S. Congress on November 17, 2011, restored the loan limits for the Federal Housing Administration (FHA) and its lending programs for two years should be good news for real estate.

The reinstated FHA loan limit formula and cap change will help make mortgages more affordable and accessible for families and buyers in 669 counties in 42 states and territories, where the average loan limit reduction after the reset last month was more than $68,000.

This reinstated the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets (the floor will remain at $271,050.)

However, Congress did not apply the loan limits restoration to Fannie Mae and Freddie Mac, and Fannie and Freddie-backed mortgages will remain at 115 percent of local area median home prices up to $625,500.

This bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011.

Prudential California Realty
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Monday, December 5, 2011

What Should You Do With A Distressed Property?

Trying a short sale is what we recommend for Orange County CA distressed property owners ~ as long as they get needed information, including consultation with income tax professional or attorney about alternatives and consequences.

A sometimes overlooked choice for distressed property owners is to rent out all or part of their property ~ while making required payments to lenders, lien holders and for property taxes ~ and waiting out the changing market until equity can be possibly be recovered.

Prudential California Realty
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Thursday, December 1, 2011

Short Sales Are Moving Faster In Orange County

Buyer demand for Orange County CA homes is changing with the market adjusting to new normal of after government tax incentives for home buyers (tax incentives ended last year).

Active listings of Orange County CA homes for sale inventory was down as of August compared with same time last year, and sellers might be wondering whether they missed the best time to sell. HOME SELLERS

Expected average market time for Orange County CA homes to sell as of August 2011:

Orange County overall – 3.5 months
Homes under $500k - 2.5 months - hot market favors sellers
Homes $500k to $750k - balanced and does not favor buyers or sellers
Homes Above $1 million – cold market and favors buyers

ORANGE COUNTY CA homes sales average market time is 3.5 months, based on number of PENDING SALES as compared with number of listings.

Prudential California Realty
For more info/details on this and other properties,
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