Archive for July, 2012
Monday, July 30th, 2012
If you haven’t heard, the latest “brilliant” (feel the sarcasm) plan proposed by some state officials is for their counties to “take” homes that are in imminent danger of foreclosing. This would be done under the government’s powers of eminent domain.
Eminent domain literally translates as the taking of private property for public use. It allows the government (federal and state, as well as local authorities in many states) to seize your home in order to build things like railroads, utilities, highways or bridges, and is supported under the 5th Amendment. There must be a “public use” involved, and the taking must be accompanied by “just compensation.” It is a rarely used power, and in my lifetime I have seen it used only once. But now officials are simply going too far in trying to apply the rights of eminent domain to prevent foreclosures.
To be fair, the arguments FOR this crazy idea are that such actions will help homeowners and prevent neighborhood blight. Ok, so maybe some homeowners will be “helped” by getting out of a mortgages that are sinking them, but there are other ways to do so – loan modification, short sale, and possibly the new rent back programs some lenders are embracing. Other than that, I do not see how eminent domain will help our housing situation in the slightest, nor should it. Here is why:
1. Definition. Eminent domain does not require the owner’s consent, but does offer monetary compensation. This action is also allowed to be delegated to third parties who will take the property and devote it to public or civic use. The question in taking people’s homes is whether doing so will fit within the definition.
The counties that are proposing using eminent domain (like San Bernadino County in California) to help underwater borrowers would like to delegate the taking to third parties. These parties will likely be private lenders or others who will take over the debt, pay it off, and then put the property to “public” use. What I don’t understand is specifically how they might do this. For example, if there are properties in a residential neighborhood that qualify, it’s not like they can just take the homes and turn them into railroads or highways. There are all kinds of challenges in such situations, not to mention zoning codes. So realistically there are many neighborhoods (I would think the majority of them) that may not truly fit within the definition. We would have to learn more details to fully understand this one.
2. Lawsuits. There is most always a lawsuit with eminent domain – not many property owners are going to peacefully walk away and let the government take their home. If this is to be done on a large scale, it will further congest our overburdened court systems, costing lots of money and time – more for the taxpayers to dish out. The only ones who stand to benefit here are the lawyers.
3. Too much power. Obviously this is a situation subject to LOTS of abuse. And with abuse of power comes more lawsuits, uprisings, and people just plain fed up with the government. Can we really stand for more of that? Not to mention, letting the government become involved in private contracts (a mortgage is a private contract between a homeowner and the lender) creates a plethora of issues.
4. The compensation issue. Under eminent domain statutes the government must pay compensation to the property owner upon the taking of the property. Usually this means the owner will get fair market value. However, in cases where there are loans on the property in excess of fair market value, what will happen? Are we to assume the homeowner will walk away with nothing? We need more information here, but I honestly don’t see how this one will play out. Another point is that the “fair value” will rely on appraisals – what if they are incorrect?
Plain and simple, using eminent domain to “take” homes in order to help the housing problems is a bad idea. Until we get to work by really helping those who qualify for loan modifications, short selling the homes of those who do not, and selling the shadow inventory, along with other possible ideas (like changing the bankruptcy laws so mortgages are treated like other forms of debt), we will continue to see more bad ideas like this one spring up.
Thursday, July 26th, 2012
Lately I have been involved in quite a few multiple offer situations, both as a listing agent and as a buyer’s agent. As a listing agent I always feel sad for the people whose offers do not get chosen, especially when they have expressed how much they love and want the home. As a buyer’s agent I have to get creative, to give my buyers the best shot possible of having their offer accepted. There is no guarantee that adhering to the following advice will get your offer accepted over other offers, but it will definitely put you in the best position possible.
Here are my suggestions to make sure you present the strongest offer possible in any situation – as a listing agent I know that when I see an offer with these qualities, it has a much higher chance of being accepted by the seller and myself.
1. Put your best offer on the table. In such a market where multiple offers are common, and especially when you find a great property, it is imperative that you write the strongest offer. By this I do NOT mean you should write an offer way over asking price. Instead, your agent needs to thoroughly review the comparable sold properties with you, take into consideration condition and location, upgrades and amenities, and then write the best offer possible.
As an aside, if you know there are multiple offers and you are getting a loan, coming in with an offer that is much higher than asking, although it may seem like a great idea, could actually end up sending your offer to the bottom of the pile as well. I would rather have a strong offer at market value, taking into considerations any upgrades/improvements, etc., as there is a better chance for appraisal and closing on time.
2. Submit a pre-approval letter (not just a pre-qualification) AND proof of funds if you are getting a loan. A preapproval letter is stronger than a prequalification letter, so discuss with your mortgage professional about getting one. For a good explanation on the difference click here. Also, if you are obtaining financing I highly advise you to submit proof of funds that you will use for your initial deposit and downpayment, to show that you can do what the contract states. Likewise, if you are paying cash submit that up front as well.
3. Have your agent call the listing agent and get all pertinent information before writing an offer. This is very important, and makes for less of a chance of a counter offer. Your agent needs to find out whether there is anything that the seller or bank would like to see in the offer, who they prefer to use for title and escrow, whether a short sale lender will pay for certain items like termite work and home warranties, and anything else that may be beneficial (such as items that do not convey with the sale, or whether there is a preference for the length of escrow, or an amount that is preferred for the initial deposit, etc.) Finding out about any of these items could give you an edge over other offers that may have been submitted, as yours will not require such items to be countered.
4. Write a “clean” offer. This is always good advice, especially in a situation that may warrant multiple offers. By “clean” I mean to keep your contract simple, and only ask for things out of the ordinary if you have to.
5. Submit a letter to the seller or bank with your offer. I never submit an offer without some kind of letter. If it is a traditional sale, I always encourage my buyers to write the letter to the sellers, explaining why the home is perfect for them. It really makes the offer more personal. If it is a short sale or a bank-owned property, I write the letter. I submit comparables and a complete analysis, photos (if necessary) to back up our offer price, and information about the sellers – nothing personal here, just facts and numbers, as that is what the bank cares about.
It is always important to do your homework before submitting any offers…if you take the time to do so, and follow the above advice, you will have a higher chance of successfully purchasing your new home or investment property. Best of luck, and let me know if it works for you!
Photos courtesy of Dreamstime
Sunday, July 22nd, 2012
If I had a dollar for every time someone asked me how the housing market is doing, I would be a very happy lady. Right now there are a lot of stories and speculation out there as to the status of the housing market. There is definitely a lot of positive news, and that seems to be the majority. But nevertheless, when I report on it I still get comments from people claiming that their area is still hard hit, rife with foreclosures, etc. Can we answer the question, “how is the market?” in general terms?
The answer is “not really.” Although most areas of the country are in a better place than they were say, two years ago, the answer to the housing market status question is still area-specific. Some areas – like many parts of California and Arizona (due in part to inventory shortages) and Idaho – are experiencing positive signs, like increased sales, multiple offer situations, lower foreclosure numbers, and construction booms. Yet other areas, such as New Jersey, have thousands of empty homes that have not hit the market yet (New Jersey has one of the highest “shadow inventory” rates in the country – the number of homes owned by lenders but not yet active on the resale market).
So in some areas of the country we are seeing housing improvements on different levels, while in other areas we are not seeing such signs. Therefore, looking at housing from a national perspective really does not provide an adequate picture as to what is going on in your area. As I always say, it is more important to focus on your specific area and ignore the media reports on housing (unless they are hyper-local reports). So let’s take a look at what’s going on locally.
The California housing market improved 8.5% in sales in June from the same time last year. Prices also increased 8.1% from the same time last year, according to the California Association of Realtors (CAR). Low inventory rates in many areas, as well as low interest rates and ready buyers, combined to jack up the competition and bring more offers and more closed escrows.
Here in San Diego county, the median price for all North County homes – attached and detached – increased $13,000 from May to June, 2012. Wow! That is a big increase in one month. Among detached homes, North County experienced the highest median price recorded for single family detached homes since 2010 (a 4.68% increase in price from May to June of this year). Attached homes in North County also increased – 1.97% from May to June of this year. [Data complied by NSDCAR via HomeDex]
The number of sold homes in North County increased for the 5th month in a row, while the number of single family detached home listings decreased from May to June by 6.15%, with a fall of over 35% from June 2011. Normally the busiest selling time of the year, this Spring and Summer have definitely been different in the local housing market. The lack of inventory and the demand for such continues to strengthen the local market in terms of price and sales.
Outside of North County (the rest of San Diego county), detached home prices increased 0.87% from May to June, and attached home prices remained steady from May to June (at $210,000).
Locally, we are definitely seeing a housing market rebound. For those who have to purchase it can be trying, due to the low inventory and fierce competition, including investor buyers who often can present cash offers. What we need locally is more inventory. Although prices are down from the heyday of the market, it still can be a great time for sellers who need to sell or have equity in their homes.
When focusing on the housing market and whether it is truly “recovering,” my advice is to ignore the national media and look at housing reports in your area, or the area in which you would like to purchase. If you would like a copy of the HomeDex report, please send an email to me at Rachel@LaMarRealEstate.org, and I will be happy to send it to you. I am also happy to provide a thorough market analysis of any San Diego neighborhood.
Photos courtesy of Dreamstime
Monday, July 16th, 2012
Most people who live here, love it here. I am a 100% California girl, have lived here since the day I was born, and have no desire to leave. See what others think of California via moving trends.
Infographic courtesy of C.A.R.
Wednesday, July 11th, 2012
It is official – today California passed the controversial Homeowner Bill of Rights. The controversial bill, which actually consists of a series of bills, was created to protect the rights of mortgage borrowers and those caught in the foreclosure process. The law will take effect January 1, 2013, and focuses on the following:
Single point of contact with lenders: The bill will ease borrower access to their lenders by guaranteeing them a single point of contact in their communications throughout the pre-foreclosure process. Oftentimes borrowers (and agents alike) get the runaround and speak with a different person every time they communicate with the lender. One person may provide information, but on the next call a different person may say something opposite. A single point of contact with the lender could be beneficial.
Dual track foreclosures prohibited: Banks will not be allowed to foreclose on a property while the borrower is attempting to seek a loan modification. Oftentimes, borrowers who have been attempting loan modifications find their home is sold at auction while they are waiting to see if they will qualify. This is due in part to the lack of communication between the different bank departments – the right hand not knowing what the left hand is doing. Many see this as unfair to the homeowner, who is trying to do the right thing to avoid foreclosure.
Homeowner right to sue banks: The bill will allow homeowners to sue their banks under certain circumstances for wrongful foreclosure. This is the most controversial part of the legislation. Many feel it will create frivolous lawsuits, which will lengthen the foreclosure crisis and in turn prevent the housing market from recovering.
Rescue money for blighted neighborhoods: The bill also will provide money to local governments and receivers to fight blight, which resulted from numerous foreclosures and abandoned homes. This is meant to increase property values in these neighborhoods, which in turn will improve local real estate markets.
Protection for renters: The bill will offer protection to renters who live in homes that have been foreclosed upon. Purchasers of these rented homes will be required to honor existing leases, and will be required to give renters 90 days to find a new rental property. Under the current law buyers of tenant-occupied foreclosed homes can refuse to honor leases and even kick out the tenants.
Extension of National Mortgage Settlement provisions: The new bills will extend coverage beyond the 5 lender servicers who were named in the National Mortgage Settlement – if your loan is not covered under the settlement because it is not serviced by one of these 5, the new law will ensure that many of the main provisions of the settlement will apply to your loan.
Despite the controversy, the Homeowner Bill of Rights has noble goals and may actually benefit many borrowers. The lawsuit provision could be disastrous, and it remains to be seen how effective it would be even if used appropriately. All eyes will be on California after January 1 to see how these new laws play out.
Photos courtesy of Dreamstime
Friday, July 6th, 2012
Housing Affordability is Up: The National Association of Realtors has reported that housing affordability is at it’s highest level since the 1970s, when such record-keeping started. The Housing Affordability Index measures the relationship between median home price, median family income, and average mortgage interest rates. As the index climbs higher, household purchasing power grows. An index of 100 is the place at which a household with median income is able to qualify for a purchase of a median-priced home; the index in January scored 206. Great news for buyers.
Vacation and Investor Purchases Grow: Rising to the highest level since 2005, vacation home and investor purchases are heating up the market. The National Association of Realtors (NAR) reports that investment purchases rose over 64% last year from 2010 levels. Vacation home purchases rose 7% from 2010. I have definitely felt this to be true, as the majority of my sales in 2011 and again this year have been to investors and those purchasing second/third homes – it’s a great time to negotiate for these buyers.
Fixed Mortgage Rates Keep Falling: Fixed rates have continued to drop, according to a Freddie Mac survey, with a fall again this week for 30 year fixed rates, to 3.62% (compared to 4.60% this time last year). Similarly, 15 year fixed rates and 1 year ARMs also dropped. For more details click here.
California Homeowner Bill of Rights Closer to Approval: The California Homeowner Bill of Rights -which actually encompass two bills – passed by the State Assembly and Senate on Monday, and now go to the Governor for final approval.
The bills will address two main issues: (1) protection from foreclosure of homes while homeowners are working with their lenders on modifications (allowing them to stay in their homes), and (2) establishing a single point of contact with lenders for homeowners in their communications (so they are not passed around to numerous people while trying to work out their modifications – an act that would have a big impact on getting these modifications approved).
The bills will also prevent robo-signing by imposing fines on the lenders for filing any unverified documents, and will allow homeowners to sue before a foreclosure. Lenders of course have been fighting these laws and are against passage. The laws are expected to be passed and would take effect January 1.
California Officials to Use Eminent Domain to Help Restructure Underwater Mortgages: Eminent domain, the process by which the state can take your property for public use, is being considered in a new light in an attempt to help underwater borrowers. The plan would allow seizure of underwater mortgages at a low price, based on fair market value, and would then refinance them (to the homeowner) at a slightly higher amount. The venture capital firm that is financing the seizures would make a profit on the new mortgages, and homeowners would be allowed to participate if they were current on their mortgages. Homeowners would stay in their homes and have new mortgages based on current market values. It will be interesting to follow the path of this clever but controversial plan.
Photo courtesy of Dreamstime
Tuesday, July 3rd, 2012
Infographic printed with permission from the California Association of Realtors
Sunday, July 1st, 2012
Every Saturday in July
Stagecoach Days: Celebrating The West On The Move
This celebration includes children’s activities, historic interpretation, cannon and anvil firing and more. In addition to the permanent collection of historic wagons on display at Seeley Stable museum, coaches and wagons will be out in the plaza. Stay the day and enjoy activities that reflect life in San Diego during the mid-1800s. Each week will offer a different theme and activities. The activities are free.
Time: Every Saturday 12:00 pm – 4:00 pm
Location: Old Town, San Diego State Historic Park
Annual Big Bay Boom Fireworks Show
A display of some of the most technically advanced pyrotechnics will be fired from four barges floating in the bay off Shelter Island, Harbor Island, Embarcadero, Seaport Village/ Coronado Ferry Landing, and Imperial Beach Pier, and will last more than 17 spectacular minutes. Good viewing areas:Shelter Island, Harbor Island, Spanish Landing, Seaport Village, Embarcadero
Marina Park North, Tuna Harbor, Coronado Landing, & Coronado Tidelands Park, or on your own yacht on the bay.
Time: 9:00 pm – 9:30 pm
Location: B Street Pier off Seaport Village, North Embarcadero
Historic 4th of July Celebration
An historic 1800s 4th of July celebration in Old Town San Diego State Historic Park! Free admission. Parade, crafts and activities of early San Diego. Wagon rides, period games, music, food specials, pie-eating contest and more. Flag raising, keynote speakers, and military involvement.
Time: 11:00 am – 4:00 pm
Location: 4002 Wallace St., Old Town San Diego State Historic Park
July 6 – 8
Robert Egger South Bay Recreation Center Carnival
A 4-day community carnival–fun for the whole family. There will be traditional carnival rides, challenging games, snacks, and a portrait novelty booth. Small admission fee of $2.00. Free for age 6 & under.
Time: Weekdays: 5:00 pm – 11:00 pm / Sat & Sun 1:00 pm – 11:00 pm
Location: Robert Egger South Bay Recreation Center, 1885 Coronado Ave.
Bay to Bay Rowing & Paddling Regatta
An excursion race for kayaks, paddleboards, and outrigger canoes. There will be long and short courses for any type of human powered water craft. Post race activities include lunch, raffle giveaways, local business vendors, entertainment, and an award presentation to the winners of each category. Cost: $45.
Time: 8:00 am – 2:00 pm
Location: Refer to website for course maps
July 12 – 15
Comic Con International 2012
Comic Con International features special guests, exhibitors, panels, seminars, previews and more on the world of comics, movies, television, animation, art. Artist’s Alley , art auction, art show, autographs, film festival, and more. This is the largest comic book and pop culture event in the United States. See website for admission fee & details.
Time: Refer to website for schedule
Location: San Diego Convention Center, 111 W Harbor Drive, Downtown San Diego
59th Annual World Championship Over-the-Line Tournament
Over fifty years of adult sandbox play. A form of softball, limited to 1,200 teams of three persons each, playing almost 2,400 games in two weekends with close to 50,000 expected to attend. Admission is free.
Time: 7:30 am to dusk
Location: Fiesta Island, Fiesta Island Road, East Mission Bay
Descanso Days Parade & Fair
Parade, games & rides, food, vendor booths, arts, crafts, dancing & live entertainment (2-6 pm). There is a new parade route this year: starts on Viejas Grade Road and ends at the elementary school. The fair helps raise funds for the preservation of the historic town hall.
Time: Parade: 10:00 am, Fair 10:00 am – 6:00 pm
Location: 24536 Viejas Grade Rd., Descanso Town Hall
July 18 – September 5
Del Mar Racing Season
Hold on to your horse hat…The Del Mar Racing Season Begins!
Time: Refer to website for schedule
Location: 2260 Jimmy Durante Blvd., Del Mar Fairgrounds
38th Annual LGBT Pride Parade, Rally, and Festival
The mission of this event is to foster pride in and respect for all LGBT communities, locally and globally. The annual San Diego LGBT Pride Parade is the 4th largest in the United States attracting over 197,000 cheering spectators. The festival is held in historic Balboa Park on Saturday, and includes live entertainment, farmers market, beer gardens, children’s garden, youth zone, Art
of Pride, over 300 vendors and much more.
Time: Refer to website for schedule of events
Location: Refer to website for various venues
Bolt to the Q 5K & Kids 1K Fun Run
Join this 5K event that begins at the Chargers Training Facility
and finishes at the 50-yard line in Qualcomm Stadium. The Kids 1K Fun Run will start and finish at Qualcomm Stadium. Presented by Kaiser Permanente. Proceeds will benefit the Trish & Ryan Mathews Door of Hope Chest. See website for registration fees.
Time: 7:00 am – 10:00 am
Location: 4020 Murphy Canyon Rd., Chargers Training Facility
Golden Hill Street Fair
The community of Golden Hill will present a street fair to showcase the creative local talent within the neighborhood. There will be musical entertainment, games & activities, goods & services, crafts, food, craft beer, and a fire truck display. A free event.
Time: 10:30 am – 6:00 pm
Location: 25th Street between B & C Streets, Golden Hill
For more information call 619-261-7411
Movie in the Park
Free family fun in La Mesa. Movie in the Park will feature
How to Train Your Dragon.
Time: Pre-show: 7:30 pm, Movie: 8:00 pm
Location: 8855 Dallas St., La Mesita Park, La Mesa
July 28 – July 29
American Cancer Society’s Vista Relay for Life
Team members take turns walking the track throughout the 24 hours.
At Relay for Life, cancer survivors are honored for their courage and
strength. Caregivers are recognized for their encouragement and support.
Paper bag luminarias bearing the names of cancer survivors and those who
are no longer with us line the track, are lit at dusk, and glow all night.
Fight back today by volunteering or forming a team.
Time: 9:00 am 28th – 9:00 am 29th
Location: Vista Magnet Middle School, 151 Civic Center Dr., Vista
San Diego Blood Bank 5K Walk/Run
The San Diego Blood Bank is hosting a 5K running and walking event along a waterfront route near the downtown area. Get some healthy exercise and enjoy scenic views of San Diego Bay. Proceeds benefit the Blood Bank’s programs & services. Enjoy delicious food and visit the family fun zone with games for all ages. There’s something for everyone and fun for the whole family. See website for details.
Time: 8:00 am
Location: Embarcadero Marina Park North, Downtown San Diego
Courtesy of Lawyer’s Title