home advice

Home values rise for first time in 5 years


Here’s a great CNN article I just read that does a good job spelling out what is happening in the market. Home prices hit a bottom and are finally bouncing back, according to an industry report released Tuesday. Nationwide, home values rose 0.2% year-over-year to a median $149,300 during the second quarter…

Click here to read full article

FREE $500 Gift Certificate Toward Escrow or Moving Costs

By now if you live in the City of Lake Forest, you should have received a Shop and Dine Passport with coupons for deals all across the city.  I have a Real Estate coupon in the book for a $500 certificate toward escrow or moving costs.  

If you would like the certificate (and a valuable stamp in your  “passport”) this is all you have to do:

1) View one of these four short videos and comment on what you like best about my real estate methods.

Selling SFRS for Top Dollar in One Day

Selling Condos for Top Dollar in One Day

Client Testimonial

Lake Forest Community Video

 

2) Email me at Jenean@JeneanHill.com and give me your name, address and phone number so I can get you your $500 certificate (which will be good for the next year).

3) For an added bonus, “like” me on my Facebook business page, Jenean Hill’s “Live in Lake Forest” and you will receive a Starbucks gift card, and if you share me with your friends, I will put you in this month’s drawing for 2 SeaWorld Tickets.

Thanks, and I look forward to serving you in the future.

Jenean Hill  – (949) 583-1331
Broker Associate, First Team Real Estate
Director, Orange County Association of Realtors, 2006-2011, 2013-2015
Lic# 01312003

Borrowers spend less time researching a home loan than a car purchase

used-car-salesmanDespite the credit freeze of 2008, borrowers have not changed the amount of time they spend researching a home loan. The survey found that borrowers who obtained a home loan in the past five years typically spent five hours researching their options, unchanged from March 2008. Nearly one-third (31 percent) spent two hours or less. This is on par with the typical time spent researching a vacation or computer purchase, and half the time consumers typically allocate to research a car purchase.

In the past five years, 16 percent of U.S. adults report they have obtained or refinanced a home loan and two-thirds (65 percent) of those admit they want to do things differently when shopping for their next home loan, according to the survey.

I cannot tell you how important it is to do your due diligence in selecting a lender.  Tomorrow one of my sellers is due to close escrow.  The buyer had originally agreed to use my dependable lending partner, but changed his mind at the last minute because he found some ‘punk’ to give him better pricing.  Well, here it is, one day away from closing and his lender hasn’t sent loan docs into escrow.  It will take about 3 days after he does so to be able to close escrow.  We cannot close on the weekend so add another few days onto that. The buyer may be subject to a per diem fee for every day that he closes late – that is IF he closes escrow.  The seller could also accept one of her many back-up offers and the buyer would lose out completely.  It just isn’t worth it to go with a lender that doesn’t come recommended by your Realtor.  If you would like to be hooked up with the kind of lender that even helps get your offer accepted, give me a call and I will send you the right direction.

Lake Forest / Mission Viejo Real Estate Investors pay “More or Less”

Investors Pay More vs LessInvestors Pay Less

Last night I spoke to a Saddleback Valley man who wants to invest in a condo.  He (like so many others) is receiving terrible returns on his traditional investments.  After he passed on a property that I told him would make a perfect rental, I spoke with him in detail about the differences between buying a home that you will reside in verses a home that will become a rental.  We also spoke about what kind of home will ultimately cost him more and what kind will cost him less.  See above. 

Here are few more tips:  When you buy an investment home, don’t go in and upgrade it with crown molding, high end flooring or perfectly matching appliances.  Instead make sure you have a home warranty that you keep in place year after year.  Make it clean, change flooring between tenants if it needs it and use the home warranty to replace unfixable appliances as they break down over the years. 

While many home owners shy away from homes that have street noise, most renters do not as they have been living in apartments that traditionally are built by busy roads and freeways.  Also renters want to live near work and have many rental options to do so.  On the other hand, buyers are willing to live farther from work to achieve the “American Dream”.

If you would like to work with a Broker that practices what she preaches and owns and maintains profitable rentals, I’d be happy to share my expertise with you.

Lake Forest & Mission Viejo: Time to Buy a Bigger House.

Take a look at these two Lake Forest homes.  The first one would be considered an entry-level detached single family home.  It has 3 bedrooms, 1600 square feet, a 2-car garage and a small 3800 s.f. lot in a ‘OK’ area.  This home just sold for $485,000.  Buyers paid about $299 per square foot for the living area. 

The 2nd home is has 4 bedrooms, 2600 square feet, a 3-car garage and a 5927 s.f. lot in a very nice area.  The new owner paid $590,000 which amounts to $229 per square foot. Keep in mind that back yards and number of garages do not play into this number.

What is going on here?  How can you get almost twice the house and neighborhood for only a $100K difference?  The reason is because the first home could be purchased with 20% down or less with a conforming loan of $417K .    These loans are the easiest to get and have the lowest interest rates.  Homes that sell for $521K or less with 20% down fall into the conforming loan category.  These are our entry level homes in Orange County and are the hottest proerties.  They command top dollar and receive multiple offers in hours.

The other home  – priced at $590K – would require 30% down to take advantage of a $417K conforming loan.  There are less people who have 30% down which means there are a smaller pool of buyers for these larger homes.  Less competition = lower sales prices.  These homes are the only true deals left in the market place as home prices continue to creep up.

If you are thinking of selling your 3-bedroom condo or single family residence for a larger home, now would be the time to do so.  You will receive today’s top dollar for your place and can get a real deal on a large 4-bedroom home.  If you don’t have cash to bridge the gap between your current home’s proceeds and your new place, go ahead and get a jumbo loan.  You can enjoy your larger home for many years to come without having to go through moving into a ‘bridge home’ only to later outgrow it and pay real estate costs to sell it and move into the home you ultimately wanted.

So,…How’s Your Day Going?

Hows your day goingIn case it feels like your week is starting out like this, here are some household hits that can help you with everyday smells and stains:

1) Are your shoes smelly?  Here’s a solution.  Put some tea leaves into a pair of stockings and stuff each into a shoe.  Leave for a day or two and the smell vanishes.

2) Dusting with a paintbrush can be an effective way to get into those hard to reach doorjambs, etc.

3) Treat stubborn bathtub stains with a mixture of cream of tartar and hydrogen peroxide.  By the time the paste dries, the stain should be gone.

4) To remove sticky residue/glue, try one of these: mayonnaise, peanut butter, nail polish remover, “Goo Gone”, or any oil.

5) Erasers will remove black heel marks on floors and Artgum erasers will clean bone colored shoes.

What kinds buyers are closing escrows in Lake Forest and Mission Viejo? / AKA the problem condo buyers are having with FHA loans

cute condo photoI spent a frustrating week phoning listing agents of Active Lake Forest, Mission Viejo and Laguna Hills condo listings to see if their listing was truly available and to ascertain what kind of buyer’s offers they thought they would be considering.  For one, out of 22 listings, fifteen agents never returned my phone call.  By default, I could tell that they weren’t seriously soliciting offers or they would have responded to my buyer with an 800+ FICO score.  I was able to speak to about 7 of the 22.    Four of them told me that they already had multiple offers and that the properties were available for backup offers only.  The other three told me that the homes were available, but that the buyer would need to pay between $3,900 and $17,000 of the seller’s back HOA fees to be able to close escrow.  This caused me to want to research what kind of buyer is closing escrow nowadays. 

Take a look at the chart below of Lake Forest sales in 2009.  I divided it up into 3 categories.  Low end (entry level) condos under $225,000; Medium-priced condos between $226,000 and $375,000 and single family residences priced over $376,000. Lake Forest 2009 Sales

Amongst entry level condos, the conventional loan (20%+ down) buyers made up 38% of the closed sales. Cash buyers came in at 30%.  This means that 68% of the buyers had at least 20% down.  FHA buyers made up 29% of the purchases.  For Medium-priced condos, 60% of the buyers had cash or at least 20% down while 35% of the buyers used FHA loans.  81% of Single Family homes went to cash and conventional loan buyers while 16% of the keys to these homes went to FHA buyers.

The competition is getting even tougher in 2010.  So far FHA buyer s as a group have a 1-in-6 chance of getting their offer accepted on a home under $375,000.  Not only is the fact that strong, high cash buyers are buying up homes, it is because condominium complexes are beginning to lose their FHA status.   

There are 2 main ways that a condo community loses FHA status:

1)       Once there is less than a 51% owner occupancy rate in a community, FHA loans will no longer be approved.  This means that as investor buyers close escrow (with their cash or high cash offers) and put a tenant in their property, the ratio of owner to tenant occupancy goes down.  Once it hits 50/50 owners or less, it is all over for the FHA buyer.

2)      The other factor at play is delinquency rate.   With the high number of distressed properties, Homeowners Association Dues are behind on many properties.  Once it hits 15%, FHA loan approvals cease.

Communities that were known for their FHA approvals are now losing them.  The agents that sell in them are apprehensive to accept an offer from an FHA buyer because they fear that during the many month short sale process, the complex will lose its FHA standing which would cause the buyer’s loan not to fund.

So what’s a FHA buyer to do so that they don’t miss out on these low priced homes?

  1. If you are close to 20% down, borrow the extra money from a friend or family member to get to that point so that you are not bound to FHA guidelines.
  2. If there is no way to reach 20% down, ask me what we can do together to extract – from the marketplace – sellers who own condos in (highly competitive) FHA-strong communities.  If we can get to the seller before it gets listed, we have a much higher chance of securing the home.

It’s true.  It is a tough time for buyers with low to average down payments.  There is one surefire way to overcome this challenging time.  That is to wait until home prices double again.  The investors will stop buying and much of the competition will be on the fence.  We will once again be able to swoop right in and grab over-priced homes all day long!

Lake Forest Ranks as #8 and #10 Safest City in the Country

Americas Safest Cities 2009The City of Lake Forest is the 8th safest city in America for cities with a population between 75,000 and 99,999, and the 10th safest city overall, according to recent CQ Press City Crime Rankings.  The survey compares FBI crime statistics among American cities with populations over 75,000, in categories such as homicide, sexual and aggravated assault, robbery, vehicle theft, larceny, and burglary.  These categories are known as Part One crimes.  According to O.C. Sheriff’s Department (OCSD) crime statistics, the majority of Lake Forest’s Part One crimes are thefts and burglaries.  Chief of Police Services Lieutenant Doug Doyle reminds residents that “Many Part One crimes are preventable crimes of opportunity.  Make sure doors to homes and cars are locked and valuable items are not left in plain sight.”

Lake Forest has moved up two spots in the rankings for safest cities in both categories from 2008.  Lt. Doyle credits the dedicated Police Services personnel, as well as the support of the community and the City Council, for the low crime rate in Lake Forest.  Police services are provided to the City by OCSD, with 55.5 fulltime sworn officers and professional staff assigned to Lake Forest.

CQ Press is a Washington D.C. independent publishing and research group.  To view the entire City Rankings list, visit www.cqpress.com/pages/citycrime2009.Most unsafe cities

Here are the 20 cities that rank at the very bottom of the “safe city list”.  What do you say that I leave these out of your home search?

The “YOU GET WHAT YOU PAY FOR” Real Estate Company

I spoke to a homeowner recently who told me that another agent was willing to list their home for a total of 4%.  I explained that that agent had nothing to offer other than their inability to stand up for the right price for themselves AS WELL AS their client’s home’s value.  I tried to imagine that agent’s ability (or lack thereof) to market the home with professional looking photos that would generate 400 open house guests vying for the property and 48 offers in 48 hours with a sales price 24% over the last model match.  I went to the MLS to see if I could find this cluelesss real estate agent.  I am pretty sure that I found them and here is the one photo (blue bed) included in their listing!

Oak Canyon Ellsworth Bed from right 1

The proactive seller that grasped the new rules of real estate and sold their home for significantly more than it was worth.

Bed in Unstaged Home

The seller that listed with the bargain basement agent and sold their home for less than it was worth

 

Less competition in the market over holidays!

Timing Timing is everythingcan be everything! Recent good news about the housing market has many home buyers wondering whether now is a good time to buy. For example, home sales activity increased 9.4 percent nationally in September, a 26 percent increase from a low point in January, according to the National Association of Realtors.

However, this doesn’t mean that the housing market has bottomed out or that we’re heading toward a seller’s market. It could take years for the market to level out and turn around to where it was in 2006.

The $8,000 first-time buyer tax credit has stimulated the market, and it has been extended. A credit of up to $6,500 is now available to repeat home buyers who qualify. Income restrictions apply. To take advantage of these credits, the buyer needs to have a deal in place no later than April 30 and close no later than June 30. The home-price limit for both credits is $800,000.

An active first-time buyer market helps the move-up market as sellers move from smaller to larger homes. Low interest rates make it possible for the middle-level home sellers to sell and move up or scale down. Lenders are processing home mortgage applications more quickly than they did earlier in the year, and there is more jumbo financing available.

Many buyers wanting to take the ‘bull by its horns’ are having difficulty finding a home to buy. The inventory of good listings on the market is low in many areas because prospective sellers who don’t have to sell now are waiting for a better market. To aggravate the situation, many sellers who need to sell now often take their home off the market after Thanksgiving and will bring it back on the market next year.

Buyers may find there’s very little on the market to choose from for the next several months. However, they may also find that many buyers will drop out of the market over the holiday season, leaving less competition for the listings that are on the market during this period.

Tip: To have an edge over your buyer competitors, ask me to search for listings that were either temporarily taken off the market or canceled. I’ll find out if these sellers still want to sell and ask if they would be willing to show you their home and entertain an offer.

Keep in mind that some homes that were withdrawn from the market didn’t sell because they were priced too high. The appeal of not having to put one’s home back on the market is a big draw for many sellers, perhaps enough to persuade a seller to accept a realistic offer.

No one knows what the housing market will look like in 2010. There may be more foreclosures and short sales and increased unemployment. This may or may not force home prices lower. Interest rates are expected to go up next year, according to many analysts. If rates increase significantly, this will make it more difficult for buyers to qualify and will might cause monthly payments to increase more than they would if prices went up. In other words, there’s a lot of uncertainty going into 2010.

This just might be the season for you to buy as long as you have job stability and you buy for the long term. If you wait to buy, you could end up paying more.

The above article was edited from a piece written by 30-year  S.F. Bay Area real estate expert, Dyan Hymer.