Friday, March 30, 2007

Foreclosure "Rescue" Scams - DON'T FALL PREY!

What’s a Foreclosure "Rescue" Scam?

These scams revolve around heavily-promoted deals supposedly designed to save the homes of people facing foreclosure, those who've fallen behind on their mortgage payments.

But with frightening regularity this "help" from a "rescuer" either drains off the property’s built-up equity or leaves the "rescuer" owning the house outright – and the family evicted from their home.

In many cases it’s hard to escape the conclusion that that’s exactly what the "rescue" is designed to do.

The predominant foreclosure "rescue" scams appear to come in three varieties.

The first might be called "phantom help," where the "rescuer" charges outrageous fees either for light-duty phone calls and paperwork the homeowner could have easily performed, or on a promise of more robust representation that never materializes. In either event the homeowner is usually left without enough assistance to actually save the home but with little or no time left to prevent this grievous loss by the time s/he realizes it. The "rescuer" essentially abandons the homeowner to a fate that might well have been prevented with better intervention.

A second variety of the scam is the "bailout" that never quite works. This scenario includes various schemes under which the homeowner surrenders title to the house in the belief that s/he is entering a deal where s/he’ll be able to remain as a renter, and buy it back over the next few years. Homeowners are sometimes told that surrendering title is necessary so that someone with a better credit rating can secure new financing to prevent the loss of the home. But the terms of these deals are almost invariably so onerous that the buyback becomes impossible, the homeowner permanently loses possession, and the "rescuers" walk off with all or most of the home’s equity.

The third variety is a bait-and-switch where the homeowner does not realize s/he is surrendering ownership of the house in exchange for a "rescue." Many homeowners later insist that they believed they were only signing documents for a new loan to make the mortgage current.

Source: National Consumer Law Center Report

Richard's notes... If you are in financial trouble and your home is in foreclosure, don't wait until it's too late. Consult with a real estate professional, tax advisor, and the lender to find a solution to your problem.

Tuesday, March 27, 2007

U.S. Housing Sales Make Surprise Upswing

Peter Morton
CanWest News Service; Financial Post
Saturday, March 24, 2007

WASHINGTON -The struggling U.S. housing market took an unexpected bounce last month as sales of previously owned homes jumped the most in three years.

In what analysts say could be a key turning point, the U.S. National Association of Realtors said sales of homes jumped 3.9 per cent in February to an annual rate of 6.7 million, thanks largely to low interest rates on mortgages and pent-up demand.

"We expect the drag on the economy from housing will be gone by mid-year," said Dean Maki, chief U.S. economist at Barclays Capital in New York. He said the rebound is "an important development."

There were worries that huge unsold inventories and the continued deterioration in the subprime mortgage market would drag out the recovery in the housing market for months to come.

But February's sales figures seem to have put some of those worries to rest.

"Most of the housing adjustment is completed," said Eric Green, chief market economist at Countrywide Securities in Calabasas, Calif. "We're just not seeing the subprime problem in these numbers yet."

Analysts had expected February sales to fall by 2.5 per cent to 6.3 million from January's sales of 6.46 million.

Other economists are not convinced the worst is over.

"Sales cannot be sustained at this level, which is way above the pace implied by mortgage applications," said Ian Shepherdson, chief economist at High Frequency Economics.

Other economists said a return to warmer weather would be needed before the underlying health of the housing sector would become apparent.

"You will have to roll into March and April to get a good feel for the strength of the housing market," said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla.

However, the build-up in unsold homes - up nearly six per cent in February to 3.8 million homes or a 6.7-month supply - will continue to weigh on the market.

"We think the housing market will be a drag on the economy for most of this year," said Gary Thayer, chief economist, A.G. Edwards and Sons in St. Louis.

David Lereah, the Realtors' chief economist, said the problems in the subprime market could limit house sales by as many as 250,000 homes over the next two years.

"It will spill over into the overall housing sector, but will be somewhat contained," Lereah said. "With the economy being healthy, this is a problem, not a crisis."

Meanwhile, the median price of an existing home fell 1.3 per cent last month from a year ago to $212,800 US, the Realtors group said.

Financial Post

Sunday, March 25, 2007

Don't Expect a Bailout if You Overpaid

The lender won't reduce the note just because values dropped and the house is worth less now.
By Jack Guttentag, Inman News
March 25, 2007

Question: After being in my house for a year, the market value is considerably less than the appraised value. I feel I was deceived by the builder and the appraiser. Who do I talk to about this?

My mortgage was for the full appraised value. I want to stay in my house, but I don't want to pay for a mortgage with a balance that is more than the house is worth. Is there any way I can get the lender to reduce my note to the real value of the house? I thought about selling, but the new appraisal is for considerably less than the mortgage balance.

Answer: You may have paid more than the house was worth at the time, as builders typically charge what the traffic will bear. There is no law against charging more than something is worth if a buyer is willing to pay it.

Being unduly influenced by an appraiser who is working for a builder is a terrible mistake, but an understandable one for a home buyer to make. It is less excusable when made by a lender, who is supposed to know better.

An alternative and perhaps more plausible explanation is that you bought when prices in your area were at their peak, paid the market price at the time and prices have since declined. Nobody is to blame for that — house prices usually rise but occasionally they drop — and you were unlucky enough to be caught.

I advise people to avoid 100% loans if they can because a price drop is always possible. If it happens, you owe more than the house is worth, making the mortgage payment a torment and a sale impossible without finding another source of cash.

The lender is not voluntarily going to share your predicament by writing down the size of the mortgage. If your house had appreciated, you wouldn't have shared the capital gain with the lender, and now that it has depreciated, the lender is not going to share the capital loss with you. Of course, if you default, the lender will indeed share your capital loss, but it will be involuntary.

Richard's notes.... If you bought your home in the last few years with 100% financing, unless you made some changes to your home to increase its value (kitchen, bathroom upgrades, etc...), its possible you might be at a loss if you sell now.

Don't panic! I suggest you first contact a local real estate professional who will look at your home and provide a comparable market analysis which will detail whats available, pending, and sold near your home. But keep in mind your house is worth what the market will pay for it.

A professional Realtor will assess your financial situation and give recommendations on what is the best coarse of action to take. Selling, refinancing, renting, short sale, etc.... You should also consult with an accountant for any tax implications when selling short.

Friday, March 23, 2007

California Quick Facts

Mortgage rates - week ending 3/15:

30-yr. fixed: 6.14%; Fees/points: 0.4%
15-yr. fixed: 5.88%; Fees/points: 0.4%
1-yr. adjustable: 5.42%; Fees/points: 0.7%

(Source: Freddie Mac)

If you have not been pre-approved for a loan, please contact Tom Cortesi with First Financial at:

Wednesday, March 21, 2007

Building A Better Credit Record

If you've ever applied for a credit card, a personal loan, or insurance, there's a file about you. This file contains information on where you work and live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy.

Companies that gather and sell this information are usually called Credit Reporting Agencies (CRAs). The most common type of CRA is the credit bureau.

What exactly is a credit file?

Your credit file is created when you first borrow money or apply for credit. On a regular basis, companies that lend money or issue credit cards to you - including banks, finance companies, credit unions, retailers - send specific factual information related to the financial transactions they have with you to credit reporting agencies.

The credit reporting agencies organize and store this information so that it can be referred to in the future, with your consent. Your credit file contains all the information that a credit reporting agency has received from companies that have extended credit to you.

For example, it might include a listing of your credit cards or lines of credit, along with a history of whether or not you have paid on time. If you have declared bankruptcy, that fact will also appear. If you did not pay a bill and your account was sent to a collection agency, that will show on your credit file. In summary, your credit file is a report of your financial history and performance with credit grantors.

Why is my credit file important?

When you apply for credit or want to open an account, the credit grantor wants to be sure that if they lend you money they will be paid back. The more your credit file demonstrates that you pay your debts on time, the more desirable you become as a potential customer.

If you have fallen behind in the past, a credit grantor wants to see how you have been managing your debt since then. Your credit file also shows how much you have already borrowed. Credit grantors want to evaluate your financial capacity to make monthly payments. No responsible lender will want to over-lend or encourage customers to take on more debt than they can pay back.


Monday, March 19, 2007

13 Extra Costs to be Aware of Before Buying a Home

Whether you're looking to buy your first home, or trading up to a larger one, there are many costs - on top of the purchase price - that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing day if you're not informed and prepared.

Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every situation, however it's better to know about them ahead of time so you can budget properly.

Remember, buying a home is a major milestone. Whether it's your first, second or tenth home, there are many important details to address during the process. The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home.

Read through the following checklist to make sure you're budgeting properly for your next move.

1. Appraisal Fee.
Your lending institution may request an appraisal of the property which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$300.

2. Property Taxes.
Depending on your downpayment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid.

3. Survey Fee.
When the home you purchase is a resale (vs a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $700-$1,000.

4. Property Insurance.
Home insurance covers the replacement value of your home(structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan.

. Service Charges.
Any new utility that services your hook up, such as telephone or cable, may require an installation fee.

6. Legal Fees.
Even the simplest of home purchases should have a lawyer involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience ofthe lawyer.

7. Mortgage Loan Insurance Fee.
Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% - 3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment.

8. Mortgage Broker's Fee.
A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost.

9. Moving Costs.
The cost for a professional mover can cost you in the range of:* $50-$100/hour for a van and 3 movers, and* 10-20% higher during peak demand seasons.

10. Maintenance Fees.
Condos charge monthly fees for common area maintenance such as groundskeeping and carpet cleaning in hallways. Costs will vary depending on the building.

11. Water Quality and Quality Certification.
If the home you purchased is serviced by a well, you shouldc onsider having your water checked by your local experts. Depending upon where you live, determines whether or not a fee is charged, to certify the quantity and quality of the water.

12. Local Improvements.
If the town you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a property’s taxes by thousands of dollars.

13. Land Transfer Tax.
This tax is applied whenever property changes hands and the amount that is applied can vary.

To search the San Fernando Valley & Santa Clarita Valley for available properties, visit:

To search the Westside for available properties, visit:

Sunday, March 18, 2007

L.A. housing market holds its ground

Never mind a sales slump and now sub-prime uncertainty, prices are on the rise.
By Diane Wedner, Los Angeles Times Staff Writer
March 18, 2007

Whom do you believe? Last week came the gloomy news that the number of U.S. homes entering foreclosure is rising, and with it, more experts are predicting a meltdown of the sub-prime lending market.

But that stares in the face of median home prices in Southern California still climbing the first two months of 2007, compared with 2006. In L.A. County, the median rose 8.2% in the two-month period, to $525,000. Yes, fewer houses were sold, but the number remains well above the mid-'90s slump.

Conventional wisdom late last year was that a downturn would stretch across the board by now — and most segments have seen appreciation declines and sales drop-offs — but the high-priced market, usually the first to head south, still is "doing just fine," said John Karevoll, chief analyst at La Jolla-based DataQuick Information Systems, a research firm. The low- and mid-ranges, he added, are performing satisfactorily.

Experts are not sure why the L.A. market is doing better than expected. One explanation is that sellers have been pricing their homes more realistically, and buyers get that sellers aren't giving away their homes in a fire sale, said Leslie Appleton-Young, chief economist for the California Assn. of Realtors. As a result, the sales dropoff has slowed, giving everyone a breather.

"The year 2006 was a steep learning curve for buyers and sellers, but we didn't plunge into the abyss," Appleton-Young said. "Buyers who were on the sideline in 2006 are back in."

In the six counties of Southern California, the median price of a home — the point at which half the homes sell for more and half for less — was $489,500 in January and February combined, up 5.5% from the same period a year ago, according to DataQuick. San Diego County reported the steepest decline: 5.9%, to $475,000.

"Prices are still cooking," Karevoll said. They hit a record for L.A. County in February, rising to $528,000, up 7.8% from a year ago. Orange County's median price, however, dipped 0.4%, to $620,000.

Sales continued to fall the first two months of this year, but at a less torrid pace than in mid-2006. Sales in the Southland's six counties fell 18% from a year ago. The Inland Empire posted the steepest decline, at 33.1%.

Some housing experts believe the market may be nearing the bottom. This spring and the next six months will be "very informative," said Delores Conway, director of the Casden Real Estate Economics Forecast at USC.

"Much depends on how much the supply of existing homes go up, which could push prices down," Conway said. "If there are sufficient buyers out there, though, that won't happen."

All of this is small comfort to the borrowers with bad credit who jumped at the chance for easy money and signed up for mortgages much larger than they could handle. They figured their homes would appreciate and D-day (due day) wouldn't come. Well, it did.

The big question swirling around the water cooler today is how big an effect the sub-prime lending industry's burgeoning meltdown will have on home buying and Wall Street. First-time buyers, especially, will have difficulty pulling together the 20% down payment required for conventional loans, experts say.

The percentage of U.S. mortgages entering foreclosure during the fourth quarter last year rose to 0.54%, according to the Mortgage Bankers Assn., the highest since the group began issuing reports in 1972. Of California's 5.6 million mortgages, 0.15% entered foreclosure and 3.25% were delinquent.

Among California's 806,022 sub-prime home loans, nearly 11% were delinquent, compared with 13% nationally. To put this into perspective, a small percentage of homeowners who are late with their payments end up in foreclosure. The majority refinance or sell.

Not all experts are worried.

"The fact is, the vast majority of those who buy homes do it with straightforward mortgages," Karevoll said. "Sub-prime lending is a sub-category of a sub-category. There is a ton of mortgage money out there."

Fears prompted by the rising numbers of homeowners entering the foreclosure process — a glut of such homes could spark price declines — also are overblown, Conway said. Although there are more today than during the 2004-05 boom, she said, delinquencies are at historically normal levels.

The bottom line, experts say, is that no one can predict exactly which way the market will go this spring, traditionally the top season for buying and selling.

"There's a lot of uncertainty floating out there," DataQuick analyst Andrew LePage said. "It's hard to be bullish or bearish at this point."

Thursday, March 15, 2007

Housing Recovery Likely This Year, But Timing Isn't Clear

National Association of Realtors

Unusual weather patterns and problems in the subprime lending marketplace are creating challenges in assessing housing market conditions, but a recovery is likely this year, according to the latest forecast by the National Association of Realtors®.

David Lereah, NAR’s chief economist, said there is some ambiguity about the current housing market. “Our goal each month is to fine-tune the forecast based on the latest housing data and a variety of economic indicators, but extraordinary weather variations are skewing home sales and clouding the picture,” he said. “Underlying trends point to a housing recovery in 2007, but it will take a couple months for us to get a better handle on it. Existing-home sales are expected to slowly improve from what appears to be the cyclical low last fall, but we think there will be some additional pain in the new home market, which hopefully will start to rise later in the year.”

Existing-home sales are projected at 6.42 million this year and 6.66 million in 2008, compared with 6.48 million last year. “Although existing-home sales will be marginally reduced due to subprime lending restrictions, they should be gradually rising this year and next. However, total sales this year will be fairly close to 2006 because last year started high and ended low,” Lereah said.

“Lending problems in our nation's subprime marketplace are building, which could inhibit future housing activity and further dampen our forecast. Even so, these problems are likely to be contained and not spill over into the prime mortgage market.”

New-home sales are forecast at 950,000 in 2007 and 981,000 next year, down from 1.06 million in 2006. Housing starts will probably total 1.50 million this year and 1.56 million in 2008, in contrast with 1.80 million units last year.

The 30-year fixed-rate mortgage is expected to rise to 6.7 percent by the end of the year. Last week, Freddie Mac reported the 30-year fixed rate dropped to 6.14 percent. “Over the last few years, mortgage interest rates have moved in surprising directions – the unexpected dip we’re seeing now, and a rise in mortgage applications, are positive signs,” Lereah said. “With soft home prices and lower interest rates, affordability has improved for home buyers and that is encouraging them to get into the market.”

The national median existing-home price is projected to rise 1.2 percent to $224,500 this year, following a 1.0 percent gain in 2006. The median new-home price should grow 1.7 percent to $249,600 in 2007, following a 1.9 percent increase last year. Stronger gains are probable in 2008, with existing-home prices rising 3.1 percent and new-home prices growing 3.0 percent.

For critics who don’t understand the weather impact on seasonally-adjusted sales, Lereah explained we’re likely to be reminded about the consequences throughout this spring. “Here’s what’s happened and how it’s likely to play out. In December, unusually mild weather brought out shoppers and January existing-home sales rose,” he said. “However, a sudden chill in January slowed shopping activity relative to December and pending sales, based on contracts, fell.
“We have yet to see the biggest weather impact – February’s winter storms brought markets to a halt in much of the country, and it was the coldest February since 1979 – that should drag sales down in March,” Lereah said. “This means we may not see an upturn in closed transactions before May 25 when we report sales for April.”

The unemployment rate will probably average 4.7 percent this year; it was 4.6 percent in 2006. Inflation, as measured by the Consumer Price Index, is forecast at 2.1 percent in 2007, down from 3.2 percent last year, while growth in the U.S. gross domestic product is seen at 2.5 percent this year, compared with 3.3 percent in 2006. Inflation-adjusted disposable personal income is expected to rise 3.1 percent in 2007, up from a gain of 2.6 percent last year.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Existing-home sales for February will be released March 23; the Pending Home Sales Index is scheduled for April 3 and the next forecast will be April 11.

Subprime Lenders in Trouble

By Richard M. Johnston, RE/MAX

If you have recently applied for a home loan, you may have heard that the sub-prime market has made some recent changes. It's possible that you may not qualify for a loan which may have been available to you a week ago. The sub-prime market caters to those individuals who might have poor credit or wish to disclose less information (W2, Bank Statements, etc...) when applying for a loan.

I suggest you contact your mortgage broker for an update asap. These recent changes may or may not affect you. A recommended mortgage specialist is Tom Cortesi with First Financial. His website is here:

To search the San Fernando Valley & Santa Clarita Valley for available properties, visit:

To search the Westside for available properties, visit:

Monday, March 12, 2007

Thinking of Low-Balling the Seller?

By Richard M. Johnston, RE/MAX

It seems every day I receive a call from a home-buyer who for some reason or another thinks they can low-ball a seller anywhere from 30%-50% off the asking price. It's possible these are the same people who sit and watch those late night infomercials where they tell you how to buy homes below market value with no credit and no money. GIVE-ME-A-BREAK!

I do respect the buyer who looks for a great deal. In fact, great deals happen all the time. But the real question is, how do you find a great deal. Low-balling sellers is what I consider counter-productive. Not only will you be wasting a lot of your time and money, the agent is most likely not to want to work with someone who is unrealistic.

The first thing I can recommend is to work with a professional real estate agent who will search the MLS system on a daily basis for fixers, short sales, and pre-foreclosures. If your an investor, you'll also want to partner with an agent who has close relationships with lenders and other real estate agents who are notified by the lender when a homeowner is in default.

This way, when a home is in default and the seller is willing to sell their home quickly and at below market value, you will be the first to know.

To search the San Fernando Valley & Santa Clarita Valley for available properties, visit:

To search the Westside for available properties, visit:

Friday, March 09, 2007

What is a Pocket Listing?

By Richard M. Johnston, RE/MAX

A Pocket Listing is commonly referred to when a real estate agent knows of a property which may be listed on the Multiple Listing Service (MLS) soon. This property may or may not be under contract.

By having a pocket listing, an agent can promote the property through his broker alerting other agents to a new listing. Please keep in mind that most MLS Boards have time limits to entering properties under contract into the MLS system.

How do you as a home-buyer profit from agents who have pocket listings?

I recommend you have a close relationship with your real estate agent. If you are a serious buyer, demonstrate your commitment to your agent by getting pre-approved and also signing a buyer-broker agreement. If a property your looking for becomes available, you'll know about this home before the general public does.

It's also possible to get a deal on pocket listings as the listing agent has not incurred the cost of advertising the home. Plus, most agents prefer to work with agents who are from the same broker.

To search the San Fernando Valley & Santa Clarita Valley for available properties, visit: or or

To search the Westside for available properties, visit:

Tuesday, March 06, 2007

10 Ways To Know When The Market Is Up -- or Down

by Peter G. Miller
The past year saw a slowdown in real estate markets across the country. But the term "slowdown" is relative and should be used with care: The vaunted housing "bubble" predicted by many never happened and some areas have seen price increases.
What did happen is what you would expect in any normal market: Local supply and demand determined marketplace trends. You can see this most clearly by looking at the data for 149 metro areas compiled by the National Association of Realtors. Seventy-one areas showed price gains, 73 had declines and five broke even in the fourth quarter.

The localized nature of real estate becomes even more dramatic when you compare individual areas. For the San Fernando Valley & Santa Clarita Valley areas, visit this link:

Given the localized nature of real estate, it pays to ask if there are any clues which suggest that the market is moving in one direction or another. And usually, if you know where to look, such clues exist.

Here are some of the measures and issues to consider:

Population. People have to live somewhere, if the local population is growing that means there is more demand both for owner-occupied homes and for rentals. Check with your local economic development office for specifics

New Home Starts. While more people create demand, more units create supply. Check with the local home builder's association or the economic development office and ask about construction permits and starts.

Prices. Most communities have local brokers who produce customized pricing data for neighborhoods, HOA and communities. Such information is often available from broker newsletters and from online localized market reports.

Days On The Market. An important measure of local activity concerns the length of time it takes to sell a typical home -- some will take longer, some will sell faster but there is a general average which gives some sense of market activity. Be careful to compare like periods -- summer versus summer or January versus January -- to get comparable results. For details, speak with local brokers.

Drill Down #1. When looking at general statistics you have to use care. For instance, broad market trends may include both condos and fee-simple properties. It may be that the local market is doing well generally but condo prices have stalled -- or vice versa. Speak with local brokers for specifics.
Drill Down #2
. Recorded sale prices may not reflect actual transaction values. If a home sells for $500,000 but the owner pays a 3 percent "seller contribution," then the real price to the owner is less than what the records show. To make sense of recorded information you need to speak with the local brokers who actually negotiate prices and terms.

Watch Those Interest Rates. Whether you're a buyer or seller, lower rates are good for real estate while higher rates constrict demand and reduce sales. Today's rates, roughly 6.25 percent, are at the low end of the rates seen during the past four decades -- but such rates are also a full 1-percent higher than what we saw in the summer of 2003.

Check For Jobs. Most people finance the homes they buy and therefore most people need jobs. When local employment is rising that's a good sign for real estate, when the local job count goes down look for fewer sales and moderated prices.

Read The Local Paper. Local newspapers are filled with coverage that impacts real estate. Look for new road openings, planned malls, new factories, school construction and building permits. All suggest where local growth is headed.

It's Not A Sure Thing. Regardless of what the statistics say, real estate demand is in part a by-product of factors which cannot be quantified so put away the charts and graphs and go party. Speak with friends and neighbors. Chat with brokers. There are lots of shrewd, insightful local people who may have interesting ideas and opinions. Hear what other people have to say, especially people with different views so you can test your ideas.

To search the San Fernando Valley & Santa Clarita Valley for available properties, visit:

To search the Westside for available properties, visit:

Sunday, March 04, 2007

Top 7 Reasons to Use a Buyer's Agent When Purchasing Your Home

by Eric Bramlett

Purchasing a home is a big step, and a big decision. The average person spends around 1/3 of their income on their home. The home that you choose has a big impact on your life, and can have a big impact on your finances, as well. It always surprises me when Buyers attempt to "go at it alone" because of the possibility of mistakes. A good Buyer's Agent is invaluable to a Buyer, and can be the difference between a wonderful transaction, and a nightmare.

1) Full Access to the MLS

The Multiple Listing Service (MLS) is a powerful tool that only Realtors have access to. When listing agents market a home for sale, they typically allow any Realtor to present the home to potential buyers, and to present contracts for purchase. The MLS is a database of all homes listed by Realtors, and represents roughly 99% of the homes for sale in any given market. As technology advances, so does the MLS. It has evolved into an extremely powerful search engine that allows your buyer's agent to enter in search criteria, and returns only homes that match those specific parameters. Buyers can find a lot of this information online through IDX feeds available on many websites, but this information is a "watered down" version of the MLS because the IDX search engines aren't quite as powerful, and don't return as detailed profiles as the MLS.

Richard's note.... You can search the San Fernando Valley & Santa Clarita Valley for available homes here...

To search the westside... visit:

2) Maximize Your Time

While driving neighborhoods is an excellent idea to help you decide which locations you prefer, it's not a very efficient way to find your new home. Gas is expensive, and your time is valuable. Your Buyer's Agent will listen to your needs, make fantastic suggestions based on your likes & dislikes, and provide you with a list of homes that ALL match your wants & needs. Your Buyer's Agent has helped MANY new homebuyers through MANY purchases, and will help you better organize your search & decision making process – saving you valuable time.

3) Representation

Listing Agents enter into legally binding agreements that require them to ALWAYS act in the best interest of the seller. They are the seller's "coach" and will make sure that their clients' best interests are looked after. Luckily, your Buyer's Agent is there to make sure YOUR best interests are accounted for. With your expert Buyer's Agent in your corner, you can rest assured that you're on, at least, even ground with the home seller. A football team would be at a pretty significant disadvantage without a coach – just as you would be without a Buyer's Agent.

4) Negotiating Power

The MLS maintains a record of, not only all homes listed by Realtors in a given market, but also the sales price of those homes. Your Buyer's Agent will run a Comparative Market Analysis (CMA) to determine a prospective home's Fair Market Value (FMV). In simpler terms, your Realtor will look at similar homes in the same neighborhood that have sold recently. This way, you will know whether or not the seller has their home priced fairly. If the home is priced over Fair Market Value, your Buyer's Agent can present your "under asking price" offer with plenty of firepower – and a greater chance that the offer will be accepted.

5) Experience

The average person buys 3-5 homes in their lifetime. A good Buyer's Agent will assist in 3-5 home purchases every month. What might seem complicated and intimidating to you is fairly common and familiar to your Realtor. Your Buyer's Agent will know what to expect, and will know when to alert you if anything out of the ordinary occurs.

6) Industry Contacts

It takes a lot of people to close a real estate transaction – Buyer's Agent, Listing Agent, Loan Officer, Inspector, Appraiser, Insurance Agent, General Contractors, and sometimes more! A good agent will come with a strong closing team that has performed in the past, and will continue to perform. A transaction is only as strong as its weakest link – with your strong Buyer's Agent & their closing team, you can rest assured that you will have plenty of support.

7) Piece of Mind

If you are like most people, your home is the largest purchase you will ever make. The average person spends around 1/3 of their total monthly income on their home. This is a big decision and you don't want to go at it alone. When you use a trusted Buyer's Agent, you know that your best interests are accounted for, and that you can feel confident in your purchase.
Purchasing a home can be a fun and exciting process. However, the home buying process can be intimidating, and mistakes are possible. A Realtor who specializes in working with Buyers can help alleviate the fears & possibilities for mistakes. Make sure and use a Buyer's Agent on any real estate transaction, and you will help ensure that you are making the right decisions.

Richard M. Johnston is an Accredited Buyer Representative. View more here...

Saturday, March 03, 2007

Can't Pay the IRS? What You Can Do

Taxpayers who can’t pay what they owe the IRS have limited options — and all of them can be costly.
The best idea may be dealing straight up with the taxman. The IRS will agree to an installment plan as long as the taxpayer doesn’t owe more than $10,000, and the taxpayer has filed his or her returns and paid tax due in a timely fashion over the previous five years.
Anyone who owes more than $10,000 must get approval from an IRS district office and furnish the government with additional financial information.
Apply for an installment agreement by filing Form 9465, Installment Agreement Request. There is an application fee of $105, along with late payment penalties and interest.
Another possibility is to raid a retirement account, but taxes, penalties, and interest on that transaction can be higher than the IRS assesses. Using a home equity line of credit is another option as long as taxpayers can do it without putting their home at risk.

Source: The Associated Press, Joyce M. Rosenberg (03/01/07)

Richard's notes... To apply for a home equity line with a loan specialist here in the San Fernando Valley, contact Tom Cortesi with First Financial at 1-323-791-8145 or visit his site and apply online...

Thursday, March 01, 2007

Mortgage rates hit 2-month low

By Holden Lewis •

Mortgage rates dropped this week in a classic illustration of a phenomenon known as the flight to quality.

The benchmark 30-year fixed-rate mortgage fell 9 basis points, to 6.2 percent, according to the national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.32 discount and origination points. One year ago, the mortgage index was 6.27 percent; four weeks ago, it was 6.42 percent.
The 15-year fixed-rate mortgage fell 9 basis points, to 5.95 percent. The 5/1 adjustable-rate mortgage fell 12 basis points, to 6.03 percent.

The 30-year fixed hasn't been this low since Dec. 20, when it was 6.2 percent.

The freakish week began with a prediction from Alan Greenspan, former chairman of the Federal Reserve, that a recession could hit the U.S. economy this year. A bomb killed 23 people in Afghanistan, and the visiting vice president was close enough to hear the blast. Then there was a rout in Chinese stock markets, where a prominent index dropped by 9 percent. After that, the Dow Jones industrial average fell 3.3 percent.

That keening you heard Tuesday afternoon from the direction of Manhattan was the sound of Wall Street investors loudly lamenting the jolt in the stock market. A lot of them pulled money out of stocks and used the cash to buy the safest investment they could find: U.S. Treasury bonds.

"You've got a whole 'flight to quality' thing here, where people are exiting stocks and riskier kinds of issues," says Bob Walters, chief economist for Quicken Loans. "People are dumping their money somewhere safe. That's why it's going to Treasuries."

When you buy a Treasury bond or note, you're lending money to Uncle Sam to finance budget deficits. You're guaranteed repayment, because the federal government doesn't default on its debts. It will pay you back, even if it has to print money to do so. When investors take wing and flock to the safety of Treasuries, it's called a flight to quality.

Investors were so eager to buy Uncle Sam's IOUs that the yields on Treasury bonds dropped precipitously. After all, when people are lining up to lend you money, you can get away with paying a low interest rate. Yields on the 10-year Treasury fell 13 basis points Tuesday, to 4.5 percent.

Mortgage rates didn't fall as far. That's because mortgage securities are considered safe investments, but not as safe as Treasury bonds. "Last I knew, the mortgage market doesn't have the authority to print money," is how Walters puts it. "People are looking at home price appreciation dropping. Even though they understand that these bonds are safe, they know that they might not perform as well as they had expected."

The difference, or spread, between the 10-year Treasury yield and Bankrate's average 30-year rate widened to 1.64 percent this week. That's the biggest spread since the week after Thanksgiving.

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