Sunset on Calle Miramar Jan 2010

January 28, 2010 – check out this amazing sunset we were priviledged enough to view the other evening out on a walk!  We are so lucky to live in such a beautiful neighborhood.  The beach is so close as is the very quaint Riviera Village for all your shopping, caffeine and culinary needs.  It’s the end of January and we’re able to head out, take a walk and enjoy an amazing sunset like this one!

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Coming just weeks before the April 30 deadline for the Home Buyer Tax Credit and just days after the March 31 expiration of the Federal Reserve Board’s mortgage backed securities purchase program (which has kept home loan rates artificially low for over a year), these FHA changes make it even more important to act now to save big.

Here are a few reasons why:

On April 5th, the cost of required up-front mortgage insurance for loans guaranteed by the FHA will increase from 1.75% to 2.25%. For a borrower purchasing a $200,000 home with a $7,000 down payment, the up-front mortgage insurance will increase by $965. Up-front mortgage insurance is typically financed in the final loan amount so the impact to a monthly payment will be minimal but overall, the increase is still borne by the borrower both upfront and monthly.

Later this spring, the amount of money that a seller can return to the buyer from their sale proceeds will be reduced from 6% to 3%. The reduction in these “seller concessions” can increase the amount of cash a buyer will be required to pay at closing by $6,000 for a home purchase of $200,000.HUD feels that by allowing a 6% concession to continue will cause property prices to become inflated and the end result in their mind in another “Housing Bubble”.  Is that far fetched?  Of course it is.  Would a 3% reduction avert something like this if it were possible, NO! FHA loans are 40% of the nations market today.  That figure is lower in the higher cost states like California and New York however it does represent a sizeable portion of the market and what FHA does at this point will effect what the market does.

Today the Fed announced that they will indeed stop the practice of buying Mortgage Backed Securities.  The stock market loves this news and the bond market hates it!

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS
Measure to help bring stability to home values and accelerate sale of vacant properties

WASHINGTON - In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website.

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HUD is the nation’s housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at http://www.hud.gov/ and espanol.hud.gov.

http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-011

It is Friday again!  Some good news for interest rates here at the expense of the stock market.  The bond market will have a battle ahead in order for rates to get much lower yet it looks as if it will happen and here is why.  The Stock Market has and will continue to dip or perhaps plunges the President outlines his sketchy new proposals for the Banking Industry.  The Presidents comments about this process have come under plenty of angry fire from both political sides.  NYC Mayor Michael Bloomberg has been very vocal about the changes the President wants to see take place and has said it will cost many Americans their jobs.  Thats the only comment that I have heard him make that I agree with and it will cost Americans their jobs.  It will also make the U S Banks far less competitive in the global market.  Another reason we are seeing the stock market fall is because of the  U S  Senate and the lack of a vote to confirm Ben Bernanake as the Fed Chairman.  I thought this confirmation would have been voted on a month ago.  It now seems the Senate is looking to hang some one for the economic melt down.  They are looking into what the Fed’s roll was and if there was anything they could have done differently that would have had a better result.  All of this is pushing interest rates downward.  Keep in mind this is not a event  that will keep rates down for an extended period of time.  It is the bump in the road that I look for when trying to get you the consumer the best rate possible. 

I think we could see this continue well into next week

Earlier today I was searching the MLS looking for condos to show a client. I came across one that looked particularly nice and, from the photos, appeared to have a very spacious living room.  But as I looked closer, I realized that I have seen this floor plan many times and the living room isn’t that large.  In fact, it is rather small.  But the picture had been taken in such a way that it made the room look much bigger than it really is.  Had I not been familiar with that particular floor plan, I would have wasted my buyers’ time showing them this unit. I know they want a bigger living room.

Another time I was looking for a house for a family who wanted a large kitchen and family room.  I pulled up one listing that in the photos looked like it had a huge kitchen. It was quite believable as this was a fairly large home, almost 4000 square feet. Fortunately, I previewed the home before taking my buyers out and found that the kitchen really wasn’t all that big. Other photos of the same home made the entry hall look spacious and very elegant when it actually wasn’t anything to write home about. So, needless to say, I did not show this home to my buyers.

Having pictures of your home is a must when you list it for sale. Most potential buyers searching the Internet will just skip over listings that do not have photos. But be careful not to make your house look better than it really is. If so, when buyers actually come to see the home, they will be upset and disappointed that the house isn’t what they thought. It is hard to get an offer from an upset and disappointed buyer.

Make sure your pictures look like what the buyers will see when they view your home. For example, my backyard is really pretty (at least in my opinion) and this could be a plus if I ever decide to sell my house. I have a beautiful picture of the yard that was taken from just outside the dog-run at the side of the house. But how many buyers are going to look at the yard from the dog-run? My back porch looks really nice when you stand at the back fence, but again, are buyers really going to stand at the back fence when they are considering my house? No. Buyers are going to first look at the yard while standing in the house looking out a window.

The point is, don’t let your photos mislead buyers because you will lose buyers. Try to reach a happy medium. Have photos that will entice buyers to want to see your home but not disappoint them when they get there.

Here is something you can do to quickly help the earthquake victims of Haiti.   Take your gently worn shoes to any Sport Chalet store and they will get them to the earthquake victims.  My closet feels a bit more spacious and I feel good knowing I am helping someone out.

There are two upcoming workshops for people who are worried about foreclosure or are going through the foreclosure process. The event is presented by OC HOPE (Orange County Home Ownership Preservation Collaborative) and sponsored by the Orange County Association of REALTORS. The workshops are free and will be in both English and Spanish. You will have an opportunity to speak to lenders and housing counselors in a confidential one-on-one meeting.

Please refer to the event notice to see what documents you should bring to the workshop. Also, please note that they will only assist the homeowner whose name is on the loan. Therefore, please do not send someone else in your place.

The workshops are open to Orange County homeowners and reservations are recommended. RSVP by emailing myhousingforall@aol.com.

Realtor Magazine January 2010 issue has a great article I wanted to share entitled, “10 Big Impact, Low Cost Remodeling Projects.”  I found it interesting as Laura and I specialize in getting our sellers’ homes ready for sale and more often than not a lot of these projects + a list of our own is included here.  Nice to get some affirmation that our list matches up in most cases with this list.  Here it is:

1) Tidy up the Kitchen Cabinets - Potential buyers do open the kitchen cabinets.  Homeowners can add roll out organizer trays so that when buyers peek in, they feel like there’s lots of room for their stuff.  (This holds true for your closets too - adding closet organizing systems are well worth the investment.)

2) Add or replace tile - By retiling very inexpensively, you make a room look way cleaner than it was.  Wake up a tired kitchen backsplash or bathroom vanity with new tile.

3) Add a breakfast bar - When a wall separates a kitchen from dining or family room, cut out an opening between the two rooms, add some granite or tile countertop, pull up a couple of barstools and voila - breakfast bar.  Taking the entire wall down may also bring back some of the expense as well, as open floor plans are one of the buzz words these days.

4) Install granite tile instead of a slab - Everybody likes a “granite kitchen.”  Installing granite tiles can be a much more budget friendly way to perk up that kitchen than the higher end slab material.  Although in our higher-end market, it may be worth the money to install the slab.  There are many “pre-fab” granite installers these days, that can do granite counters for much less than the custom guys.

5) Freshen up a bathroom without retiling - With a dated bathroom, putting in a new medicine cabinet ($100-$150), light fixtures ($75- $100), a faucet ($75 - $100), and a vanity ($200 - $300) can bring back your investment right away.  Add a new glass shower door for extra panache.  Bathrooms are on the “highly important” list of most buyers.  This is somewhere you really want to spend money and make it right.

6) Freshen up the basement - a finished basement is very well received vs. a cement block storage room (like most basements.)  Most of us here in Southern California don’t have basements however - so this isn’t on the top of many lists here.

7) Add a room - Look for large spaces that can be enclosed to create a new bedroom for just the price of creating a wall.   Especially when it’s a 2 bedroom home, a 3 bedroom is much more desirable in today’s market.  With more and more people working from home a 4th bedroom is even more desirable.

Spruce up cabinet fronts - painting, re-facing, re-conditioning, adding new hardware are all great ideas for cleaning up the kitchen and adding that “updated” look.  In this same vein, how are the appliances in the kitchen?  Adding a new appliance suite (matching finish) can be quite affordable as long as you stay in the mid-range of choices.  This highly appeals to buyers.

9) Replace light fixtures - In foyers, bathrooms, kitchens, dining rooms, bedrooms - all those old overhead light fixtures - change them out for newer, more modern fixtures.  And if the kitchen has one of those fluorescent light boxes - get rid of that and put in new drywall and can lights.  This is big bang for the buck.

10) Tech up the garage - Replacing the garage door opener with a remote touch pad entry system ($425) makes it look like a high end system.  Also consider a new roll up garage door and opener in place of an old manual door.  Those really date a house.

I am going to add #11 to the list as well as a few other important light remodeling projects that will reward you with big returns upon the sale of your home.  #11 to me is one of the most important projects any homeowner can embark upon to bring big returns!

11) Painting - inside and out.  Wow, now this really can update a home instantly as well as clean it up and make it ready for a new buyer.  This will bring you the biggest bang for the buck!

12) Landscaping - get rid of those old 1950’s shrubs and put in some more up-to-date environmentally friendly plantings.

13) Front door - the curb appeal of your house is so important and as the buyers stand at the front door awaiting their agent getting the keys they notice the front door and patio.  Make this area shine.

14) New interior door hardware - Do your door handles match?  Are they working?  This really updates a house - believe it or not.

15) De-Cluttering - this requires little monetary investment - merely time packing or giving away.  The less the buyer has to focus on that is not your house, the better!  Put it away and save time packing after your house is sold!

If you need us to come and help you get your house ready for sale, we will go through room by room with you as to the many changes you can make to help get your more bang for the buck!

Who might buy your house?  Who is out there in great numbers becoming our workforce right now?  The Millenials - the people born between 1980 - 1995.  What are some of their characteristics so you know who you need to appeal to? 

Millenials are a tech savvy bunch having grown up with computers, cell phone, text messaging and multi-tasking as an everyday function.  They were doted on by their parents, part of team sports, mommy & me groups, and laden with trophies from participating in sports where there were no winners or losers.  Their priorities are simple - they come first.  So how does one prepare to sell their home to a “Millenial, Generation Y’er?”

First of all, you need to reach this group via tech savvy marketing materials - posts on blogs, Facebook, Tweet’s on Twitter, and other internet based marketing.  Traditional flyers and newspaper ads don’t titillate this group.  That means great (not just good) photos and virtual tours are a must for this group.  It must be “app-able” for the phone.

Millenials are very clever, resourceful and hard-working.  They also know what they want and see no reason why they shouldn’t have it.  Buying a home at an early age does not discourage them, especially in today’s “buyer’s market.”  They are happy to throw out a “low-ball” and see no other way to get a property for the price “they” want to pay.  As a seller, you must not be discouraged and take these offers personally.  Any offer is a good place to start the negotiating process.  It is important to remember this, as the Millenials are happy to keep searching.  They will walk away from a good job if they feel the circumstances are not right, so a home purchase is not any different.

Millenials are “family oriented” and “tech savvy.”   They often want to work from home, so a home office is important to the Generation Y’er.  Keep this in mind when preparing your home for sale.  If you have an extra space in the house that is being un-used, it would be a good idea to stage it as a home office showing off your wireless computer technology is also a good idea.

It’s 2010 - Happy New Year!  “Twenty-Ten” is bound to be a good year.  To get things started the Hollywood Riviera neighborhood has 18 properties currently for sale.  11 of those are single family residences, 2 condos and 4 townhouses.  $525,000 gets you a 2 bedroom/2 bathroom condo near the bluffs and the Palos Verdes border.   Bring $675,000 to the table and enjoy a 3 bedroom, 2 1/2 bathroom ocean view townhouse close to Torrance Beach!  Just under a million and you can “play ball” with the bank on a short sale for a nice 3 bedroom/2 bathroom single family residence.  On the high end - $3.5 million dollars - you can own a 22+ thousand-square-feet-piece of the Torrance Beach bluff and the house that goes with it.  Nothing in the way of those ocean views!