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The Real Estate Times, They Are A-Changin’

The Real Estate Times, They Are A-Changin’

Realtors® and active buyers are always 30 to 60 days ahead of the media when it comes to real estate street smarts and the pulse of the market. So, I’m giving you  advance notice: Things are a-changin’. What is happening in Laguna Niguel and south Orange County? In Laguna Niguel, inventory is down and sales are up. In the second week of January 2011 there were 320 active homes on the market of all prices. In the second week of January 2012 there were 257 active homes on the market. As of March 30, 2012 there are 219 active listings. That is a 15% drop in inventory in two and a half months this year. It is also a 31% drop in inventory from Jan 2011. Our normal listing months are March, April, May and June Sales are up. There are roughly 20% more sales first quarter this year as compared to the first quarter of 2011. The number of homes in backup and pending status is also up over last year. If you are a buyer looking in any price range you know the inventory is down. If you are an entry-level buyer you are probably very frustrated right now. I hope we see inventory increase in the second quarter. Short sales may be on the way out as well. There are several things happening. First the HARP2 program is allowing some underwater homeowners to refinance at lower interest rates. As a result of the “Robo-Signing” scandal, the banks and the government have come to a complicated settlement that is going to result in some underwater homeowners being...

What Should Home Buyers Watch For?

Probably the most emotional factors for buyers are beautiful upgrades and staging. While these are very nice, please keep in mind that the staging goes away when you buy and the upgrades while nice can be reproduced on another home. DRE real estate contracts give buyers a time period to inspect and fulfill their due diligence. This is true of a short sale that you have waited four months for, and it is even true of a bank-owned property. Almost all banks will have a generic addendum that the buyer MUST sign before opening escrow. This addendum will most likely change some of the time frames but there will almost always be an inspection clause and an appraisal contingency clause. Buyers, especially low-down-payment buyers, should be aware of excessive HOA fees, private community transfer fees, Mello-Roos bonds and base tax rates. All of these items will raise the monthly payment. Of course it goes without saying that location is most important because you can’t change that. If you are attracted to beautiful views, which are abundant in Laguna Niguel, remember trees can grow up and block views and new structures can sometimes be built in the way of your view. Third party inspectors, worth their weight in gold, charge in the range of $300 to $600 for the average home. This is a chunk of change but a pittance compared to buying an existing major problem. Geological conditions are beyond the scope of inspectors generally so if you are concerned, a basic geo report is in the neighborhood of $1200. Mold inspectors are sometimes a good idea if there...

2012: The Year to Short Sale Your Home

FORGIVENESS OF DEBT Traditionally if a person had a debt forgiven by a creditor then that forgiven debt was considered as income by the IRS. That forgiven debt would be taxed at your normal short-term tax rate. Currently there is a special dispensation by the IRS forgiving or waiving any tax on the debt the bank is shorted and the customer is forgiven. This expires at the end of 2012. While the National Association of Realtors is working hard to lobby congress to extend this policy – there is no guarantee of an extension. HAFA PROGRAM Under the national Housing Affordable program, you may qualify for $3000 cash to move out of your home when you complete your sale. You will usually qualify if you are living in your home or have only recently moved out. BANK FULL SATISFACTION Those in past years who sold their homes as short sales had to worry about a possible deficiency judgment by the banks being shorted unless they were “insolvent” at the time of sale. In early 2011 the California legislature passed a law which said that a first mortgagor who allowed a short sale had to accept it as “full satisfaction” for the debt. Then in July of 2011 the legislature passed another law which applied to second mortgage companies. It is very typical for a second mortgagor to accept around 6% of their debt as satisfaction. As of now, if approved, neither lender can come after the former homeowner for a deficiency. (If the second has been charged off to a debt collector, negotiations are more difficult but the same...

Multiple Offers on Homes – Are they back?

It might come as a shock to you but multiple offers are back in the picture again. Well-priced homes are the targets, most often in the larger town homes or entry-level detached homes. Why that price range? Because there are three groups interested – first time buyers, investors and former short-sale owners returning to the purchase market. Here are a few pointers from the buyer’s standpoint. 1. Run the comparable sales and active listings in that price range and area. You must know what the market value most likely is. Why would I say this? Because the home maybe overpriced or under priced. or is maybe the only property for sale in that range. Here’s a real-life example: last week in Laguna Niguel, a detached view property was listed at $430,000 as a short sale. Since the true market value was clearly $500,000 or more, the agent received fifteen offers in the first two days. All but one of the offers exceeded list price. 2. Have your financing as solid as humanly possible. The pecking order is first cash then 20% conventional, followed by 10% conventional, FHA and VA. Also keep your lender letter updated and have proof of funds readily available. Consider the possibility of gifts from family. 3. Place backup offers on pending properties. Many short sales will fall out and become available. If your offer is ready and waiting and your agent is communicating regularly with the listing agent, you may be accepted without competition. 4. If at all possible, meet with the listing agent in person and if possible meet the seller. In 2003 and...