Tuesday, December 23, 2008

Short Sale Secrets

There are NO secrets to buying a short sale home in the San Fernando Valley if you work with a professional real estate agent. However, if you intend to confront home-owners who are in mortgage default or pre-foreclosure without professional representation, the losses can add up.

In fact, the process can be smooth and risk-free if you know how to eliminate the risks involved. I'm going to outline the greatest risks and what you should do to protect yourself.

Seller Says, "YES! It's Yours!"
The truth is, the seller can say whatever they want and accept your offer. But if the current owner owes more than the home is worth, the seller does NOT have the final word if the deal will be approved. The lender(s) will make that determination after they have reviewed the short sale package and have performed their own appraisal and have paid another agent to perform a Broker Price Opinion (B.P.O).

How to protect yourself here: Keep in mind that the home is not yours until all the lenders have agreed in writing.

Months & Months
The greatest risk is waiting for months to find out if the home is yours. This is usually the case when a home is listed on the market as a short sale and the agent is still waiting for any offer to come-in so he can package the deal and submit for approval to the lenders. Keep in mind some agent will send any deal just to get the lenders bottom line for approval. During this time, more offers will made on the home because the home will still be advertised in the MLS system as agents are reluctant to pull the home as SOLD even when they have an accepted agreement between buyer and seller. Why? Because the chance of the original buyer falling through is great because some buyers get tired of waiting for the bank to approve the short sale and having other offers as back-up will help sell the home.

How to protect yourself: Don't place any money in escrow until the deal has been approved by all lien-holders on title. This will allow you to write offers on other short sale homes giving you the chance to purchase another home which may already be closer to getting approved.

Bottom line, be sure you are working with a short sale specialist. There are so many twists and turns buying a short sale home is that if you don't work with someone who knows what they are doing, you can risk losing the home and the initial deposit you place in escrow.

To search for short sale homes in the San Fernando Valley, click here.

Written by: Richard Johnston, Rodeo Realty
Short Sale Specialist and Bank Owned Specialist
818-730-4128

Mortgage Rates Los Angeles

The Fed meeting last Tuesday was a watershed event in monetary & fiscal policy, and could perhaps signal the bottom of the credit turmoil plaguing the financial system. The Fed announced its new Fed Funds target of between .25-.50% from 1.00%, and more importantly announced other stimuli to lower the cost of credit.


The media have been doing a good job of keeping the public informed of the significant drop in mortgage rates of late, and the opportunities it presents for those who can take advantage either by purchasing a new home or refinancing at the lowest rates in recent history. Please keep in mind that while the trend of mortgage rates is downward, the daily and weekly volatility are likely here to stay for awhile.


I am encouraging all of our agents to inquire about how these rates can benefit your clients as soon as possible, even if they think rates are likely to drop more. It is best to be ahead of the curve to not only ensure credit and value qualification, but also as capacity becomes an issue as lenders get busier. Preparing and planning ahead will enable you to execute the best terms and fees possible.

Additionally, while the drop in rates has been confined to Conforming loans (loans up to $625,000 in Los Angeles County), we believe that the overall health of the credit markets are improving significantly , and it is just a matter of time before we see Jumbo rates follow suit.

Feature Program - Conforming 30 Year 4.750% @ 4.88% APR
On loan amounts up to $417,000


Jeff Fink
LA Mortgage Inc.
15300 Ventura Bl. #101
Sherman Oaks, CA 91403
818-723-1638
E-fax 206-203-4720
jefffink@lamortg.com

Monday, December 22, 2008

Prudential Studio City Shutting Down



Prudential Studio City is scheduled to shut down by the end of the month based on two sources. Here is another victim of the housing meltdown. Why am I not surprised?

I recommend all Prudential agents to drive themselves over to Rodeo Realty asap or join our Sherman Oaks office which is located on the corner of Sepulveda and Ventura Blvd.

Friday, December 19, 2008

No MLS Photo? SoCalMLS Responds

Logging into our MLS system today, the message below was displayed concerning for sale homes with no pictures:

A Picture is Worth a Thousand Words





Many agents are reluctant to show properties without first seeing a photo on Tempo. Photos capture the attention of potential clients viewing Web sites such as, HomeSeekers.com and Realtor.com. Leaving photos off your listings is truly a disservice to clients and your fellow real estate practitioners.

The most common listing violation reported is NO PHOTO. Photos are not only a valuable marketing tool,but are a requirement on all listings.Each association has a rule requiring that photo(s) must be entered within a certain number of days - that number varies from Association to Association. If you are not sure of your association's MLS rules and regulations, please call them directly.

Richard's Notes: If your home is listed without photos, do yourself a big favor and find another agent.

Monday, December 15, 2008

Interest Rates & Purchasing Power

A few weeks ago 30 year fixed was at 6.5%, now 4.875%.

You just got a raise!

For a $200,000 loan P&I payments at 6.5% are approx $1264.14. Now at 4.875% the are $1058.42 a savings of $205.72 /mo or almost $2500 per year!

You just increased your purchasing power!

At 6.5% your P&I payments for a $200,000 loan are approx $1264.14. Now at 4.875% your P&I payments for a $239,000 loan are approx $1264.81! That's $39,000 more in purchasing power for about the same payment!! You cannot have a better time to make your move into this Real Estate market. RATES ARE AT ALL TIME LOW'S AND PRICES ARE AT ALL TIME LOW'S.

Tuesday, December 09, 2008

Current Market Conditions

GENERAL MARKET INFO

· The main constraint on market activity at this time is the lack of funds available for loans because of the credit crunch, which has been compounded by tighter underwriting standards.

· Historically, mortgage rates on jumbo loans are 0.2 percent to 0.4 percent higher than those on conforming loans, but the spreads since the onset of the credit crunch have been double or even triple that.

· The lack of available funds for loans, even for qualified buyers, has resulted in a dearth of buyers who can close on a home purchase.

· The time a home remained on the market prior to selling improved to 46.1 days in September 2008, compared with 56.7 days (revised) for the same period a year ago.

· In September 2008, it would have taken 6.5 months to sell all the homes on the market at the current sales rate, an improvement compared to a year ago, when it would have taken 16 months (revised).

· Although the Federal Reserve Bank's action to reduce the federal funds rate to 3 percent will have little near-term direct effect on the housing market, the rate cuts should result in more favorable real estate finance rates as we move through the year.

· Successful passage in the U.S. Senate of the economic stimulus package approved by the U.S. House of Representatives should positively impact the market as buyers who previously would have to take out a jumbo loan will qualify for more affordable conforming loans, thanks to the proposal's plan to increase the conforming loan limit from $417,000 to as much as $729,750.

SALES ACTIVITY

· Sales continue to rise year-over-year, with sales in September increasing 96.7 percent in California, compared with the same period a year ago. Sales soared above the 500,000 unit threshold for the first time in more than two years.

· Month-to-month sales also continue to increase. Sales in September 2008 increased 2.3 percent compared with the previous month.

HOME PRICES

· The statewide median price of an existing, single-family detached home in California was $316480, a 40.9 percent decline from the revised $535,760 median for September 2007.
· The September 2008 median price fell 9.6 percent compared with August's revised $350,140 median price.

· One reason for the large year-to-year declines in the median price is the dramatic change in the mix of sales since the onset of the credit/liquidity crunch. A year ago, the under $500,000 price range accounted for 46 percent of sales, the middle segment ($500,000 to $1 million) made up 40 percent, and the greater than $1 million segment captured 14 percent of the market. As of September 2008, the mix had shifted to 76 percent, 18 percent, and 6 percent, respectively.

MORTGAGE RATES

· Interest rates continue to remain near their historic lows. Thirty-year, fixed-mortgage interest rates averaged 6.04 percent during September 2008, compared with 6.38 percent in September 2007, according to Freddie Mac.

· Adjustable-mortgage interest rates averaged 5.14 percent in September 2008, compared with 5.66 percent in September 2007.

**Note: Mortgage rates are predicted to fall below 5% very soon.

Saturday, December 06, 2008

Excellent Buying Opportunity

Here is an New York Times article which highlights why buying a home now will be a very smart decision.

Here is the link: http://www.nytimes.com/2008/12/06/business/yourmoney/06money.html?8dpc

Richard's Note: I'm predicting the bottom end of the real estate market, homes priced between $250,000 and $400,000, has bottomed-out. Rates continue to decrease making it even more affordable for first-time home-buyers to purchase a home.

I'm predicting 30-year fixed conforming loans to fall below 5% in January 2009 if not by the end of the Month.

Homes priced between $400,000 to $600,000 could very well bottom-out within the next few months here in the San Fernando Valley.

Homes priced between $600,000 to $1,000,000 should decline another 10%-15% and should bottom out by the end of the first quarter or beginning of second quarter 2009.

Homes priced from $1,000,000 to $1,700,000 should continue to fall throughout 2009. I'm predicting another 15%-30% price drop from current prices. I'd suggest a safe time to purchase a home in this price range to be the summer of 2009.


Written by: Richard Johnston, Rodeo Realty
818-730-4128

Thursday, December 04, 2008

Foreclosure Timeline - San Fernando Valley

September 8, 2008, California has a special foreclosure timeline for loans originated between 2003 and 2007, inclusive, which are secured by owner-occupied residences.
Indeed, loans involved in short sales are likely to be owner-occupied loans from the years 2003 to 2007, which was the heyday for subprime lending. The special foreclosure timeline does not apply if the borrower has filed for bankruptcy, surrendered the property, or contracted with a person or entity whose primary business is advising people, who have decided to leave their homes, on how to extend the foreclosure process and avoid their contractual obligations. The special foreclosure timeline will remain in effect until January 1, 2013. (Cal. Civ. Code § 2923.5.)

FORECLOSURE TIMELINE FOR OWNER-OCCUPIED REAL PROPERTY LOANS (made from 2003 to 2007)

The approximate minimum time frames for the non-judicial foreclosure of owner‑occupied real property loans made from 2003 to 2007 are as set forth below. In California, most lenders elect to foreclose non-judicially by conducting trustees' sales, not by judicial foreclosure.

Pre-Foreclosure Period (Short Sale Homes)
A lender may initiate the foreclosure process when a borrower defaults on a loan, such as by missing a mortgage payment. However, a slight delay may not justify acceleration and foreclosure by the lender. Hence, in practice, lenders generally wait a few months after a missed payment before starting the foreclosure process.

Day 1: Lender Contacts Borrower

For owner-occupied loans from 2003 to 2007, a lender initiating the foreclosure process must generally contact the borrower by phone or in person to assess the borrower’s financial situation and explore options for avoiding foreclosure. During the conversation, the lender must inform the borrower of the right to meet with the lender within 14 days. The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency.

Day 31: Filing of Notice of Default

For owner-occupied loans from 2003 to 2007, the lender may file a notice of default 30 days after contacting the borrower to explore options for avoiding foreclosure. The notice of default must be filed in the county where the property is located and a copy must be mailed within 10 business days after recordation to the borrower and all other persons who have requested such notice. The notice of default informs the borrower of the default. It must also include the lender's declaration that it has contacted the borrower to explore options for avoiding foreclosure, tried with due diligence to contact the borrower, or the borrower has surrendered the property.

Day 121: Filing of Notice of Trustee’s Sale

Three months after the filing of the notice of default, the lender may record a notice of trustee’s sale setting forth the date, time, and place of the upcoming trustee’s sale. Because of the gravity of a notice of trustee’s sale, it must be widely disseminated. The notice of trustee’s sale must be recorded, posted, mailed to the borrower and others, as well as published once a week for three consecutive weeks in a newspaper of general circulation.

Day 145: Deadline to Cure Default

Up to five business days before the trustee’s sale, the borrower may reinstate the loan by curing the default or paying the missed payments plus allowable costs. After the reinstatement period expires, the borrower still has the right to redeem the property by paying the entire debt, plus interest and costs (not just the arrearage), before the bidding begins at the trustee’s sale.

Day 152: Trustee’s Sale

Although California law allows a trustee’s sale to take place 20 days after the posting of the notice of trustee’s sale, lenders customarily wait at least 31 days instead to help protect against federal tax liens. At the trustee’s sale, the property is sold through a public auction to the highest bidder. Title is transferred to the successful bidder by trustee’s deed.

Richard's Notes: If you are unable to afford your home and your payment continues to increase or you have fallen behind on your mortgage payments here in the San Fernando Valley, please do not panic. You have many options to think about. Please contact me for professional advice.

Richard Johnston, Rodeo Realty 818-730-4128

Article Written By CAR.

Wednesday, November 19, 2008

Mortgage Interest Rate Update

As of November 19, 2008 the conforming interest rates has fallen to 5.875%. This is the 30 year fixed rate for loan up to $417,000.

Conforming Jumbo loans from $417,001 to $729,751 is at 6.25%.

Jumbo loans LOAN AMOUNTS $729,751-$2,000,000
5/1 Year Fixed 5.875 %
7/1 Year Fixed 6.125%
Interest only available

Information provided by Jeff Fink at LA Mortgage.

Inventory of homes continue to slide. We are currently at a 6-7 month supply of homes which is signaling that homes are selling. If you are ready to purchase a home, please call me.

Richard Johnston, Rodeo Realty
818-730-4128

Friday, November 14, 2008

Current Interest Rates Los Angeles

CONFORMING, CONFORMING JUMBO, FHA, SUPER JUMBO LOANS
November 14, 2008
Conforming Limits: $100,000 to $417,000
Rates 6.00% 30-Year Fixed

CONFORMING TEMPORARY JUMBO
Conforming Jumbo: $417,001-$729,751
Rate: 6.5% 30 Year Fixed


JUMBO LOANS
LOAN AMOUNTS $729,751-$2,000,000
5/1 Year Fixed 5.875 %
7/1 Year Fixed 6.125%Interest only available

FHA LOANS LOAN AMOUNTS TO 97.5% LOAN TO VALUE
30 Year Fixed $100,000-$ 362,790 6.375%
30 Year Fixed $362,791-$729,750 6.75%

Information provided by:
Jeff Fink
LA MORTGAGE INC. a Rodeo Realty company

Wednesday, November 12, 2008

San Fernando Valley Market Update

Hi Everyone! So what is going on in the real estate market here in the San Fernando Valley?

The bottom end of the market, homes priced between $250,000 and $400,000 are selling very quickly. It's not uncommon to see multiple offers on short sale homes and bank owned homes. Expect to see bank owned homes selling within a few days.

I'm predicting that single family homes priced between $250,000 and $400,000 to bottom out by first quarter or mid 2009. What this means is that if you wait any longer, you will start to see even more home-buyers entering the marketplace and home prices rising.

I do predict home prices between $800,000 and $1.5 million to drop another 10-15% and should bottom out by 2010. What this means that waiting to purchase in mid-2009 should be a good bet.

To search for available bank owned homes visit: http://www.bankowned.la

To all the homes for sale in an area, visit: http://www.properties.la

Monday, November 10, 2008

REMAX Sherman Oaks

Sherman oaks RE/MAX
http://www.homes.la/

Tuesday, October 21, 2008

Home Sales Skyrocket in Southern California

Home sales in southern California rose 65 percent in September compared to the same month a year ago.

A total of 20,497 new and existing houses and condominiums sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino, and Orange counties. It was the largest increase MDA DataQuick has recorded in the 20 years it has been keeping records, the company said Monday.

The increase was fueled by foreclosures, which drove down prices, MDA DataQuick said, pushing the median price down 33 percent from a year earlier to $308,500.
Sales so far this month appear to have been slowed by bad financial news, says Andrew LePage, an analyst with MDA DataQuick.

Source: Bloomberg, Daniel (10/20/08)

Richard's notes: Bank owned homes are selling very quickly here in the San Fernando Valley. This wasn't the case early in the year or last year as banks were not as eager to unload the properties. I believe the government's financial bailout and the banks eagerness to unload properties as huge discounts is causing home prices to plummet.

Monday, October 20, 2008

Encino Real Estate Market Update

Real-time market research for Encino

FREE RESEARCH REPORT - Encino Real Estate

Tuesday, October 14, 2008

Government Takes $250 Billion Stake in Banks

The U.S. Treasury announced plans today to purchase up to $250 billion in preferred stock from the nation's top banks. The move is part of a plan that President Bush says will help prevent recession and preserve the free market.

"Government owning a stake in any private U.S. company is objectionable to most Americans – me included," Treasury Secretary Henry Paulson said in a statement. "Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable. When financing isn't available, consumers and businesses shrink their spending, which leads to businesses cutting jobs and even closing up shop."

Nine major financial institutions have already agreed to the voluntary plan. Combined, these institutions will receive $125 billion in capital from the government. The banks are:
Goldman Sachs Group Inc.
Morgan Stanley
J.P. Morgan Chase & Co.
Bank of America Corp.
Citigroup Inc.
Wells Fargo & Co.
Bank of New York Mellon
State Street Corp.

As part of the voluntary program, the government will buy stock "on attractive terms that protect the taxpayer," according to a joint statement by the Treasury, Federal Reserve, and FDIC.

The shares be non-voting, unless the matter directly affects the government's rights as a shareholder. Banks that agree to be part of the program will accept restrictions on executive compensation while the government is holding the stock.

Paulson said taxpayers should expect a "reasonable return" from the stock and said the government will also receive warrants to buy additional stock from institutions participating in the program.

"The actions today are aimed at restoring confidence in our institutions and markets and repairing their capacity to meet the credit needs of American households and businesses," Federal Reserve Chairman Ben Bernanke said in a statement.

Source: U.S. Treasury, Wall Street Journal

Monday, October 13, 2008

Sen. John McCain is Right About Reducing Principal Balances on Home Loans

McCain Mortgage Buyout Proposal Rouses Critics

Presidential contender Sen. John McCain stepped into a political hornet’s nest Tuesday night when he proposed that the U.S. Treasury department "buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes at the diminished value of those homes."

In subsequent explanations, McCain’s economic adviser Douglas Holtz-Eakin said McCain is proposing that the government would buy mortgages from banks and investors at the original value of loan, no matter how inflated that it now appears to be, and then give the home owner a new mortgage at current value at a more affordable interest rate. “Obviously, the taxpayer is on the hook for the difference,” Holtz-Eakin said.

Barack Obama’s top economic advisor Austan Goolsbee was among those highly critical of the idea. "This proposal, if enacted, would be a massive government subsidy from taxpayers to the most irresponsible banks, including the ones that committed fraud," Goolsbee said, adding, "This proposal would give the taxpayer all the risk, with no gain."

Source: BusinessWeek.com, Jane Sasseen (10/09/2008)

Thursday, October 09, 2008

Sherman Oaks Real Estate Market Update

Real-time market research for Sherman Oaks

The chart above represents the most up-to-date market statistics for the Sherman Oaks area. This chart is updated every week so please bookmark this link. If you own a home in Sherman Oaks, be sure to sign-up for our market snapshot report.

Sherman Oaks is one of the most popular area of the San Fernando Valley. Other popular areas are Burbank, Studio City, Toluca Lake, and Encino. If you are relocating to the San Fernando Valley, please Richard Johnston, Rodeo Realty, Inc. 818-730-4128.

Wednesday, October 08, 2008

Rodeo Realty, Inc.


I am pleased to announce that I have joined Rodeo Realty, Inc. in Sherman Oaks, CA.
How will this move benefit my sellers?
1. All homes will be advertised in the Los Angeles times every weekend (except short sales)
2. 500 Postcards will be mailed to nearby home-owners.
3. The home will be featured on Realtor.com until sold.
4. You'll be working with a prominent real estate broker here in the San Fernando Valley.
5. We have 11 offices to serve you. What this means you don't have to go far to get great service.
6. Free market snapshot report is available to homeowners.

How will this move benefit my buyers?
1. In-house mortgage brokers are available to get you pre-approved.
2. You can search for properties in the San Fernando Valley with no sign-up required.
3. Market research reports available every week.

Saturday, October 04, 2008

San Fernando Valley Market Update

Home Sales Surge 21% in the San Fernando Valley During August

Sales of existing single-family homes surged 20.7 percent during August throughout the San Fernando Valley, the Southland Regional Association of Realtors reported Thursday, Sept. 25.
Realtors closed escrow on 666 homes, up 114 transactions from a year ago August.

“The increase in sales activity occurred before news of the financial meltdown on Wall Street, but even though we won’t know for some time how that crisis will be resolved, there still are many buyers out there sorting through a solid selection of homes for sale at the best prices in years,” said Mary Funk, president of the Southland Regional Association of Realtors, which serves the San Fernando and Santa Clarita Valleys.

“Interestingly, the inventory is not all that high,” she said, “but soft resale prices, especially on the Valley’s relatively limited selection of bank-owned properties, continue to lure more and more buyers into the market.”

With the purchase of a single-family home now within reach of more buyers, condominium resale activity has not picked up as much momentum. A total of 172 condos changed owners, down 8.5 percent compared to 188 condo sales in August of 2007.

The median price of homes sold last month fell 34.1 percent to this August’s median of $425,000 – down $220,000 from the figure reported in 2007, a steep drop from last year, although from month-to-month the rate of decline appears to be flattening out.

The August median was in a range not seen since 2004 when prices were increasing at a 26.3 percent annual pace.

The condo median price of $275,000 was off 29.3 percent from August 2007.
“Assuming current rescue efforts in Washington stabilize the economy and replenish the supply of mortgage funds for new loans, Realtors expect prices will stabilize in 2009 and sales activity will post further gains,” said Jim Link, chief executive officer of the Southland Regional Association of Realtors.

“Uncertainty breeds opportunity for astute buyers,” Link said. “The best homes will be purchased before the herd gets back into the market. Come Spring, prices may still be favorable, but the selection may be smaller and interest rates higher, perhaps negating any price discounts.”

There were 6,447 active listings throughout the San Fernando Valley at the end of August. That was down 16.3 percent from a year ago and off 7.2 percent from July of this year.
At the current pace of sales, the inventory represents a 7.7-month supply, just above the 5- to 6-month supply indicative of a balanced market.

Pending escrows – a measure of future resale activity – increased 82.6 percent from a year ago, supporting the conclusion that more people are taking advantage of the best buyers’ market in decades.

The Southland Regional Association of Realtors®

Friday, October 03, 2008

President Signs $700 Billion Rescue Bill


President George W. Bush signed a historic economic rescue bill on Friday, which sets out to revive the U.S. financial system by allowing the federal government to buy up to $700 billion in failed mortgaged from banks and other financial institutions.

The president signed the bill shortly after the U.S. House of Representatives voted 263-171 today to pass the far-reaching legislation.

"This legislation is critical to stopping the economic turmoil that millions of Americans are facing," NAR President Dick Gaylord said in a statement. "Today's action will go a long way toward ending the current economic crisis crippling the housing and financial markets."
The legislation will help restore liquidity to the mortgage market, which will stabilize the housing market and protect home owners, Gaylord said.

President George Bush, along with congressional members, had lobbied throughout the week for the support of spending billions of dollars to buy bad mortgage-related securities from troubled financial institutions, as a way to ease the credit crisis.

The bill was tossed a setback earlier in the week after the House voted it down, which sent stocks plunging 777 points, the biggest single-day drop in U.S. history.

The Senate revived the bill on Wednesday by making changes to the $700 billion measure, which was aimed at garnering more bipartisan support. The revised bill extended bank deposit insurance and expired tax breaks. The Senate passed its version of the bill in a 74-25 vote on Oct. 1. (see NAR Applauds Senate Stabilization Action).

Earlier in the week, NAR had called on its members to contact Congress to support the bill. NAR also teamed up with eight other business organizations to run an ad in major newspapers across the country that urged Congress to pass the recovery plan.


Source: REALTOR Magazine Online (10/3/08)


Thursday, October 02, 2008

House Could Pass New Stabilization Bill

Daily Real Estate News October 2, 2008House Could Pass New Stabilization Bill
The Senate on Wednesday night approved a plan to support the U.S. financial system and the House is expected to take a second vote on the measure today.

The bill that passed the Senate calls for spending up to $700 billion to buy bad assets from faltering financial institutions. But also it would extend an array of tax breaks worth $108 billion to businesses and families and temporarily increase the limit on federal insurance for bank deposits to $250,000 from $100,000.

Other sweeteners include: energy-related provisions, business tax breaks, a one-year fix of the alternative minimum tax and tax relief for victims of recent disasters. Supporters hope these changes will curry favor in the House, and for some, it appears to be working.

Rep. John Shadegg (R-Ariz.), an influential conservative, said the new bill was "materially better" than the one that failed in the House.

"Much as I would like to see much more dramatic changes, there comes a point in time where we've got to send the signal to the U.S. markets, U.S. consumers and world markets that we're dealing with this," Shadegg said. "I'm inclined to hold my nose and vote yes."

Source: The Washington Post, Lori Montgomery and Shailagh Murray (10/02/2008)

Tuesday, September 30, 2008

Reseda home - Investor & Contractor Special

** Major Price Reduction **

Address: 19610 Strathern St., Reseda, CA

Price: Only $275K

Terms: House is being sold AS-IS and we need an all cash buyer. We can close asap with no contingencies.

Benefits: Huge lots size 11,400 and the potential to flip this home quickly.


CALL 818-730-4128
- Serious All-Cash Buyers Only -

Studio City Real Estate Market Update

Real-time market research for Studio City

This Studio City real estate graph displays Median price in black and Average Days on Market in orange. The graph is automatically updated weekly so be sure to bookmark this link to keep on top of the real estate market here in Studio City.

Additional useful links:
Studio City Bank Owned homes
Studio City Short Sale homes
Studio City Condos and Townhouses

Sunday, September 28, 2008

Three Things You Can Control When Selling Your Home

1. Price - The right price can be determined well researched computerized market evaluation. This includes active homes, pending, and homes sold within the past 6 months. If you own a home, you can view your neighborhoods activity by visiting: http://www.marketsnapshot.la/

2. Condition of the Property - Your home's condition is important if you want to sell fast and for top dollar. A clean well maintained home enjoys a competitive advantage over other active homes on the market.

3. The Realtor You Select - Many homeowner don't realize that a real estate agent has to sell the home twice. One to other real estate professionals, and the second to the general public. It's important you choose a Realtor who communicates with you on a weekly basis and also provides constructive feedback from other real estate professionals and the general public.

Thursday, September 25, 2008

Van Nuys Real Estate Market Update

Here is the most up to date real estate market update for Van Nuys, CA. You can bookmark this post to view the changes in the marketplace in the next coming months. You can view available homes in Van Nuys now.


Real-time market research for Van Nuys

FREE RESEARCH REPORT - Van Nuys Real Estate

Monday, September 22, 2008

Mortgage Market Watch

Mortgage Market Watch by Mark Arnold

The government's plan to stabilize the financial sector appears to have drawn some renewed confidence around the globe, as Japan's Mitsubishi UFJ Financial Bank is now going to step in and purchase a 10 to 20% stake in Morgan Stanley - this occurs just days after rumors swirled that Morgan Stanley might be another Wall Street casualty. Stocks have strengthened on the news and this is pressuring Mortgage Bonds lower so far today.

It will take some time for the financial sector to work through the liquidity issues and there will be some more ugly stories, so the Trading environment for both Mortgage Bonds and Stocks will remain volatile. One thing to consider, the Fed's moves to make capital easier to acquire can be viewed as inflationary - this may be why we are seeing commodity prices soar this morning, while the US Dollar is under selling pressure.

Oil, at $107 per barrel, has quietly climbed $15 per barrel in the last four days, ever since the Fed stepped in to help the financial sector. This climb in Oil could weigh on Stocks at some point. The 200-day Moving Average for Oil lies at $111.93 per barrel, so it will be interesting to see how prices behave as they approach this ceiling.

Mortgage Bonds are trading right near support at the $100.00 level. Should prices close below this floor, it is likely that the Bond will drop down to test a strong floor of support at the 200-day Moving Average, presently at $99.51. As we have been saying recently, we still view the Fannie and Freddie news as being beneficial to rates in the longer-term - but with so much volatility and uncertainty in the financial markets, there will be bumps along the way.

Saturday, September 20, 2008

Burbank Real Estate Market Update

The market has been on a downward trend recently and this week, while essentially flat, doesn’t break us out of that cycle.

Real-time market research for Burbank

The properties have been on the market for an average of 120 days. Half of the listings have come newly on the market in the past 91 or so days.

Real-time market research for Burbank

Friday, September 19, 2008

Top Stories for Today by Realtor.com

Massive Rescue Effort for Financial Markets
A proposed plan reportedly includes using hundreds of billions of dollars in government funding to buy bad loans, leaving banks with more money and fewer problems and allowing them to again lend money. Read more...

30-Year Mortgage Rates Reach 7-Month Low
After inching past the 6 percent mark last week, mortgage rates continued to drop lower this week. Read more...


Banks: No Exceptions for Short Sales
Lenders are agreeing to let some short sales go through, but they want the home owners to sign a note promising to pay some or all of the balance due. Read more...

Monday, September 15, 2008

Economic Update Video - Los Angeles

Financial Giants Fall Victim to Mortgage Crisis

Financial Giants Fall Victim to Mortgage Crisis

Weighed down by losses in the U.S. mortgage crisis, the stability of major financial institutions continues to be shaky. On Monday, U.S. investment bank Lehman Brothers Holding Inc. filed for bankruptcy and Bank of America announced that it would be buying struggling Merrill Lynch.
Lehman's is the largest casualty, so far, in the past year in the ongoning credit crisis. Lehman filed for bankruptcy on Monday following a failed attempt over the weekend to find a buyer.

Concerns over the stability of other firms also looms, particularly after the U.S. government's decision not to provide any bailout for Lehman. In March the government provided financial backing for JPMorgan's takeover of Bear Stearns, the first big bank to fold under the mortgage crisis.

Also on Monday, No.2 U.S. bank giant, Bank of America announced it would be buying Merrill Lynch in a $50 billion deal.

"Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders," Bank of America Chairman and Chief Executive Officer Ken Lewis said in a statement. "Together, our companies are more valuable because of the synergies in our businesses."

The buyout is expected to close in the first quarter of 2009. Source: Reuter News, Ellis Mnyandu (9/15/08) and Associated Press, Madlen Read and Tim Paradis(9/15/08)

Richard Note: It's very important you get pre-approved for a home loan before looking to purchase a home. Please call me so we can schedule a time at my office in Sherman Oaks to discuss your real estate needs. 818-730-4128.

Sunday, September 07, 2008

Government Takes Over Freddie Mac & Fannie Mae

On Sunday, the Federal Government seized control of Freddie Mac & Fannie Mae. I'm hopping the governments actions will allow more people to borrow money to purchase a home here in the San Fernando Valley. The reason our real estate market has been declining is because getting a home loan has been virtually impossible for ordinary home-buyers.

To read more, click here.

Saturday, September 06, 2008

September 2008 E-Newsletter

Here is a link to our September e-Newsletter
Don't miss this month's cover story: "How To Avoid Foreclosure By Selling Fast For Less"

Here are the articles for this months newsletter:

SHORT SALES
How To Avoid Foreclosure By Selling Fast For Less... read more.

LOAN LINGO
Here's a glossary to help... read more.

SELLING SMART
Require Enough Deposit To Secure Contract... read more.

WAITING TO SELL
Time No Cure For Overpriced Homes In Today's Market... read more.

CREATIVE BUYING
Multiple Purchase Offers Can Work To Buyer's Advantage... read more.

PLANNING PAYS
Mortgage Pre-Approval Still Important For Today's Buyers... read more.

Tuesday, September 02, 2008

San Fernando Valley Homes Sales Up - Market Update

San Fernando Valley Single-Family Homes and Condominium Resale Statistics

San Fernando Valley home sales surged 16% during July as buyers raced to grab bargains; median price down 31%Buyers jumped into the resale housing market during July, pushing sales of existing single-family homes in the San Fernando Valley up 16.2 percent from a year ago and 6.9 percent higher than the June tally, the Southland Regional Association of Realtors reported on Thursday, Aug. 29.

While still at historically low levels, sales have increased every month this year since January.
“The numbers indicate that the market has definitely bottomed out with sales now on the upswing,” said Mary Funk, president of the Association. “Demand is increasing because people realize that what they could not afford before they probably can afford now. Come next year, people who are waiting will find that they will be paying more.”

Realtors across the San Fernando Valley report a resurgence of multiple offers on properties as buyers compete with each other over the most favorably priced homes. Many of those offers present ridiculously low prices which have virtually no chance of being accepted, especially by banks that have little negotiating latitude as they try to recoup investments on foreclosed properties.

“Lenders are taking their time and letting offers accumulate,” Funk said. “It’s taking a lot more work and more time for a sale to close as lenders make borrowers jump through more hoops.”
Nonetheless, sales activity in the under-$500,000 price range is “solid,” Funk said, while above $700,000 activity remains sluggish, primarily because of tighter requirements on home loans.
As lenders adjust to new rules, Funk and Jim Link, the Association’s chief executive officer, expect lenders to start writing loans in the higher price ranges, thus fueling a resurgence in that segment of the market, too.

Because buyers are striving to take advantage of a rare opportunity to buy a single-family home at a favorable price, condominium sales lagged during July. A total of 205 condos sold, down 25.7 percent from a year ago and off 10.9 percent from this June. Condo sales had been moving up every month since January with July being the first decline this year in month-to-month condo activity.

“We’re optimistic that the light we see at the end of this tunnel is not the train,” Link said. “This recession, as bad as it was for homeowners and lenders, does not appear likely to last as long as the national recession of the 1990s. We should start to see a strengthening of the market in 2009.”

Link and Funk agreed that prices will not solidify until foreclosures and “short sales” – which Link characterized as the ‘elephant in the room’ – work their way out of the system.
They also agreed that the real numbers of foreclosures and short sales are likely to wane in the coming months, especially as lenders implement new procedures and the recently-approved economic stimulus package plus other moves by federal authorities begin to take effect.
“While bank-owned properties and short sales remain a major factor,’ Link said, “the San Fernando Valley is not in the same position as, for example, the Inland Empire, where foreclosures represent a much higher percentage of their inventory.”

The single-family median price of $435,000 was down 31.0 percent compared to a year ago. However, it did post a modest gain compared to June, up 1.0 percent. The median has been falling since the record high of $655,000 was set in June 2007.

The condo median of $280,000 was off $127,500 or 31.3 percent compared to July 2007. The condo record high of $415,000 was set in February 2006.

Link said he expects the market to remain busy and perhaps pick up added momentum in the coming months. Pending escrows – a measure of future resale activity – support that view.
There were 1,141 open escrows at the end of July, 39.2 percent higher than a year ago and up 1.2 percent from this June. It marked the third consecutive month that the pending sale total has topped the 1,100 benchmark.Funk said that many prospective buyers are surprised to learn from their Realtor that the inventory of homes for sale while higher than just a few years ago is not excessive.

There were 6,950 active listings throughout the San Fernando Valley at the end of July, down 3.4 percent from a year ago. Of that total, single-family homes accounted for 75 percent of the active listings.

At the current pace of sales, the active inventory represents a 7.5-month supply – slightly higher than the 5- to 6-month supply deemed to represent a balanced market.
By comparison, the inventory during the recession of the 1990s hit a record high of 14,976 in July 1992 and the inventory compared to pace of sales was three-times higher at a 23-month supply.

Contrary to an inaccurate public perception, the active inventory in the San Fernando Valley has been trending lower since November 2007 when it stood at 7,505.
Written by the Southland Regional Association of Realtors.

Friday, August 29, 2008

** New Listing ** 19610 Strathern St., Reseda, CA 91335

19610 Strathern St. Reseda, CA 91335
$325,000 or best offer

** Major Fixer **

Click here to view the details of this home.

Investor or Contractor special. Huge lot size 11,400 - perfect to build a new home or expand the current one. Property to be sold 'AS-IS'. Property has been divided into two separate living. All offers considered!

Serious buyers only. Call Richard Johnston, RE/MAX 818-730-4128

Sunday, August 17, 2008

Multiple Offers Reapearing

Multiple Offers Reappearing
By Mary Funk, President
Southland Regional Association of Realtors.

While many prospective home buyers are still waiting in hopes of catching the bottom, others are jumping into the residential real estate market feet first and, in an growing number of instances, they wind up competing with a swelling legion eager to capture a bargain.

At a recent meeting involving dozens of members of the Southland Regional Association of Realtors, all of the Realtors said they had recently encountered home purchases where a handful of buyers presented competing purchase offers.

It's happening in all price ranges in all communities," one participant said.

Many of the properties have list prices that had been discounted from year ago levels, including a number of bank-owned houses that had been involved in foreclosure proceedings.

The activity level is no where near the frenzy of the sellers' boom, the participants said, but offers are coming in, near and, in some instances, above the already discounted list price.

The report represent a significant shift in a market that had been paralyzed by buyers who had been glued to the proverbial procrastinator's fence. Buyers' hesitancy created endless work but no sales for Realtors, who typically are not compensated until an escrow closes.

That lack of urgency now appears to be fading as more buyers enter the market at a time when government-sponsored programs appear to be settling the finance industry, thus making home loans more available and affordable - albeit at stricter qualifying guidelines which require proof of income and down payments.

Buyers who are entering the market believe they have a secure source of income, faith in the local economy and realize that waiting to catch the top or bottom of any real estate cycle is risky business, with success hinging on a large dose of luck.

The recent increases in government-insured mortgage limits are expected to provide much-needed liquidity and stability to housing markets across the country.

That is especially true in California - a region with particularly expensive homes - where tens of thousands of families could be eligible this yer to purchase or refinance their homes thanks to the recently approved Economic Stimulus Act.

The higher loan limit expands the pool of eligible borrowers, enabling more families to qualify for safe, affordable FHA-insured mortgage loans which can be as high as $729,750.

By focusing on 30-year, fixed rate mortgages, FHA helps home owners avoid and escape the risks associated with exotic subprime mortgage products, which have resulted in rising default and foreclosure rates.

While still at historically low levels, rising sales suggest that the worst may be past and that more buyers believe that the time to buy is now.

Wednesday, August 06, 2008

Property Tax Reassessment Scams

Apparently, some people love paying for a service they do not need.

One letter that came in the mail charged a flat rate of $75 while a recent bulk mailing wanted nothing up front, instead going after a larger pay day down the road - an amount that could total thousands of dollars or $1875, using the most recent solicitations own example.

Yet the Los Angeles County Assessor has flatly stated: "There is no reason to pay for a review that has already been completed by the Assessor's office."

This page has warned homeowners in prior weeks to beware, but the latest example is so egregious that another warning is warranted.

Home prices in the San Fernando Valley and most of Los Angeles are holding relatively steady, but some properties have seen a decline in value. Homes purchased at the peak of the recent sellers' market may have seen enough of a drop in value to qualify for reduction of their property taxes.

In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a decline-in-value. Reducing the assessed value brings with it a reduction in the annual property tax bill.

The assessor has already reviewed properties purchased between July 1, 2004, and June 30, 2007, and has sent letters notifying a property owner if they qualify for the reduction.

If a letter has not been received, chances are the property did not qualify for a reduction in assesses value as of the cut-off date of January 1. Any reduction also would be reflected in the annual property tax bill, however, homeowners can contact the assessor to check or file an application or an appeal. It's an easy process with a simple one-page form available on-line that must be filled by Dec. 31.

"Solicitations of this type many not be illegal," said Assessor Rick Auerbach, "But property owners should be aware that their property may have already been reviewed and the value reduced. There is no reason to pay for a review that has already been completed by the Assessor's office."

For details on the program, an application form, and contact information, go online to:
http://assessor.lacounty.gov/extranet/guides/prop8.aspx

Written by: Southland Regional Assocation of Realtors

Thursday, July 31, 2008

Legislative News & Updates - Buy a Home & Get $7500 Tax Credit

After, the House and Senate passed H.R. 3221, the "Housing and Economic Recovery Act of 2008", President Bush signed the legislation into law on Wednesday, July 30. This legislation contains a number of victories for REALTORS® and American homeowners including GSE reform, FHA reform, permanent loan limit increases, and a $7500 homeowner tax credit which went into effect immediately upon the President's signature. This bill will help homeowners facing foreclosure find ways to refinance, and will help strengthen mortgage markets Click here to Read more...

To view available homes for sale visit: http://www.homes.la

Thursday, July 24, 2008

Loss Leader Homes - Why Listings Don't Sell

Loss leader refers to a listing which never sells and only benefits the listing agent. These homes sit on the market for months and even hundreds of days without selling. The agent benefits because home owners in the neighborhood think the agent does big business when in fact most of their listings never sell. You can find an agent like this who make outrageous claims about buying your home after X number of days or selling your home for free when buying one of their other listings.

The agent takes ANY listing and usually at a price the seller thinks they can get for the home or hopes to get - usually unrealistic. The agent benefits from having buyers call about the home which then the agent tries to sell a more realistically priced home in the neighborhood.

You can probably find a loss leader within a few minutes by search the MLS. They are the ones with no or poor quality pictures and a description with just a few words. We all know the biggest factors which cause a home not to sell is price, location, condition of home, and accessibility. Marketing a home correctly with quality pictures is important because 90% of home-buyers start looking online.

I really don't understand why a home-owner would hire an agent who doesn't have any intention of selling their home professionally and quickly. The entire purpose of listing a home is to sell it for top dollar and only this can be achieved if the home is priced right, accessible, and market correctly to the general public and to other Realtors.

More articles you should read:
Selling Your Home? A Realtors Perspective
No Picture? Blame the Listing Agent

If you're thinking of selling your home or haven't received the results you were promised, call an agent who's intention is to sell your home.

Written By: Richard Johnston, RE/MAX OTB
818-730-4128

Sunday, July 20, 2008

Celebrities in Sherman Oaks - Paris Hilton & Joel Madden



I was driving on Ventura Blvd in Sherman Oaks when I spotted Paris Hilton and Joel Madden having lunch at Fatburger. Here is the image ;-). It's funny how many celebrities I see every day in Sherman Oaks.

Thursday, July 17, 2008

The Bottom is Near

Are you looking for the real estate bottom? Guess what? The bottom is near and approaching quickly. If you are timing the market here in the San Fernando Valley, your wait is over.

Currently, we are in a VERY STRONG BUYERS MARKET.

The only people buying now are the cash investors, buyers who have 15-30% down, and home-buyers who can qualify for an FHA loan (3% down).

Unfortunately, it's getting harder for the average home-buyer to get a home loan. Most people cannot qualify for an FHA loan because either they don't make enough money or make enough but in a form which is not documented. Also, asking a stated income and asset buyer to invest 30% in a home just to secure a home-loan is difficult. Most people don't have that kind of money.

It's obvious that some areas of the valley and in certain price ranges have bottomed-out already. The banks are getting more eager to unload their properties quickly. This is leading to discounted bank owned homes selling within a few days.

For example, within the past month, I've noticed bank owned homes in Sherman Oaks selling in the high 400's. This was unheard of just a few years ago when the same house was selling in the mid 600's.

Plus, not all areas of the San Fernando Valley have experienced price decline equally. In less affluent neighborhoods, home-priced have plummeted up to 60% off it's market high just a few short years ago. In wealthy areas like Studio City & Sherman Oaks, home-prices have fallen an average of 25%. So it always pays to buy a home in a wealthy neighborhood - less market volatility.

If you are ready to purchase a home now, the first step is to get pre-approved for a home loan. Getting pre-approved for a home loan is required if you are considering purchasing a bank owned home. Simply having good credit and cash in the bank doesn't make you a candidate for a home loan.

Written by:
Richard Johnston, RE/MAX OTB
Burbank real estate home specialist

Wednesday, July 09, 2008

Luxury Homes in the San Fernando Valley

Below is a link to luxury homes and the number of luxury homes priced above $1.25 million. This list is update daily so be sure to bookmark the link.

Studio City Luxury Homes - 54 homes
Encino Luxury Homes - 71 homes
Sherman Oaks Luxury Homes - 92 homes
Tarzana Luxury Homes - 64 homes
Toluca lake Luxury Homes - 20 homes
Burbank Luxury Homes - 14 homes
Valencia Luxury Homes - 17 homes
Woodland Hills Luxury Homes - 56 homes
Calabasas Luxury Homes - 123 homes

Saturday, July 05, 2008

5 Reasons to BUY Real Estate NOW!

It’s time to start considering a re-entry into the real estate market. After all, simple supply and demand dictates it is a buyer’s — and investor’s — market.

Many savvy real estate investors have made excellent returns by moving against the trend with careful market timing. The thought process is simple: When everybody is buying, it’s time to sell. And, when everyone is selling, it’s time to consider buying.

Here are five market conditions that have investors thinking today just might be the perfect time to buy real estate.

No. 1 – Low prices

Prices are down in most real estate markets across the country. In fact, the national median existing home price for all housing types was down 7.7 percent from a year ago, to $200,700 in March from $217,400 during the same month last year, according to the National Association of Realtors® (NAR). In many markets, the drop is even more substantial, especially when you compare with 2006 prices.

Greed is one of the biggest culprits keeping buyers on the sidelines. They are hesitant to buy now because prices may continue to drop. No one wants to buy a $210,000 home and see its value drop to $190,000 in six to 12 months.

Though this is a valid concern, it can be minimized with careful research of a specific market. You can further ensure your investment will hold value by making an offer that is 10 percent to 15 percent below the current market value.

The days of bidding wars and escalation clauses are gone. Homes are no longer selling for more than market value, and sellers are lucky to get the list price. Now is the time to invest in a real bargain.

No. 2 – Great selection

The housing inventory is on the rise, meaning there are more homes available for sale. According to NAR, it will take more than nine months to sell the national inventory of homes at the current sales pace. In some markets, such as South Florida, there is more than a 16-month supply of homes.

In addition to lower prices, this large inventory means a greater selection for buyers. As an investor, you can look for a home with the features, amenities, and favorable location you desire. By getting in the market now, you can afford to be particular and take your time finding exactly what you want.

No. 3 – Motivated sellers

When faced with the possibility that their house could sit on the market for a year or more, sellers become motivated to work with prospective buyers. Not to mention the fact that the already sodden market is being further deluged with an increase in foreclosures, short sales, and bank-owned properties, providing sellers even more motivation to be flexible so they can sell their properties.

Seller motivation extends far beyond accepting a lower offer. Sellers today will consider owner financing, where the buyer makes payments to the seller over time for all or a portion of the purchase price. Sellers are also more likely to agree to repairs or improvements requested by a buyer or recommended by a property inspector.

No longer in the driver’s seat, sellers are now agreeable to covering a portion of closing costs, buying down the rate, accepting a trade for the down payment, or throwing in new appliances and even furniture in the sale. In short, sellers will now negotiate.

No. 4 – Favorable interest rates

Interest rates are down, making housing more affordable. With the national average rate for a 30-year conventional fixed-rate mortgage at around 6 percent, a buyer can save thousands over time. For example, a $200,000 loan amortized over 30 years at 5.9 percent interest will carry a monthly principal and interest payment of $1,186.27.

Let’s say you’re waiting for the price to drop, however, and you buy the property for $190,000. Sure, you’ve saved $10,000 initially, but in the meantime the interest rate climbs to 7 percent, and your monthly payment increases to $1,264.07. By missing out on the lower interest rate today, you pay an extra $28,008 over the 30-year life of the loan.

In case it bears repeating, now is the time to obtain a fixed-rate amortized loan. There is no reason to take on the risk of an adjustable rate mortgage when interest rates are at historical lows. Also keep in mind that lenders are going back to more traditional underwriting requirements in light of increased delinquencies. This means tougher restrictions on the amount of the down payment, proof of income, and credit scores will make obtaining a loan more difficult. Federal Housing Administration (FHA) loans, seller financing, and lease options are on the increase as alternative financing options to conventional loans.

No. 5 – Rental opportunities

As overblown real estate prices begin to deflate, investors will find they can begin collecting rents that cover all their monthly expenses. It was difficult to find and purchase a rental property that would cash flow at the previously over-inflated prices, but today’s bargains can make a cash-flowing rental realistic once again.

Further, tenant demand for rental properties is on the rise. And with foreclosure filings up 57 percent and bank repossessions up 129 percent over last year, according to RealtyTrac, the rental demand is likely to increase further as people who have lost their homes to foreclosure look for alternative places to live.

And most people who find themselves in this situation will be forced to rent for five to seven years before they can qualify for bank financing to purchase their own home again.

Making the decision

Although there are compelling reasons to consider buying real estate now, it is always important to weigh the pros against the cons.

To help alleviate indecision, follow these rules:

1. Look at values in the local area to see if they’ve stabilized or if they still appear to be in a downward spiral. Only buy in stable areas.

2. If you’re buying a personal home, be sure to plan on living in the house for at least the next three to five years.

3. When buying real estate as an investment, be certain the property cash flows, with rental income exceeding expenses such as the mortgage, taxes, insurance, and other costs.

4. Finally, analyze your economic stability and only buy what you can comfortably afford. Keep at least three months of living expenses in reserve in preparation for that fabled rainy day.

With a little common sense and thorough homework, you’ll likely find that now is a great time to consider buying real estate. Markets are cyclical, and the current combination of low prices, high inventory, low rates, motivated sellers, and increasing rental demand make it a buyer’s market for bargain shoppers.

Source: Growing Wealth

1,100 Bank Owned Homes For Sale


If you are searching for a bank owned home in the San Fernando Valley and surrounding areas, http://www.bankowned.la/ has a list of over 1,100 bank owned homes. The site is update daily so be sure to bookmark the cities and return daily for an updated list.

No other site in the San Fernando Valley provides a free list of available bank owned homes. This site is dedicated to investors, first-time home buyers, and those people looking to purchase homes up to 50% of what they were selling for just over a year ago.

If you're serious about buying a bank owned home in the San Fernando Valley, visit: http://www.bankowned.la/ to view the free list.

Written by:
Richard Johnston, RE/MAX
818-730-4128

Tuesday, July 01, 2008

July 2008 San Fernando Valley Real Estate Newsletter

July 2008 San Fernando Valley Real Estate Newsletter

1. MARKET BOTTOM? Why Smart Home Buyers Are No Longer Waiting To Buy In today's new real estate market the time for hesitation is past. Now is the time for action. To take advantage of the new market, the reality is clear—don't wait... read more.

2. 5 Questions Every Savvy Home Buyer Should Be Asking Now... read more.

3. How To Sell Short Fast - When homeowners find themselves on the short-track to foreclosure, many will choose to sell their homes in a “short-sale” transaction—selling for less than the mortgage amount still owed to the lender. A short sale prevents the owner from going through the trauma of foreclosure and eviction... read more.

4. How To Minimize Interest Rate On Investment Property - With low interest rates and many attractive loan programs available today on residential real estate, now may be the perfect time to buy an investment property or second home. Be aware, though, that lenders charge somewhat higher... read more.

5. Good Credit Behavior Now Rewarded In New FICO Formula - Even as lenders take a closer look at loan applications, the company that developed the model for credit scoring—Fair Isaac Corporation—has decided to modify its formula in a way that will reward responsible borrowers... read more.
If you want to recieve our monthly newsletter, click here.
Read last months newsletter. Click here.

Monday, June 30, 2008

Buy a House Only If You Are Ready

Here is a recent article I read in the Los Angeles times by Liz Pulliam Weston. Liz hits in on the mark with her answer to a question asked by a reader.

Buy a house only if you are ready

Dear Liz: As a first-time buyer, I'm wondering: Is this the right time to buy a new home? Based on current economic indicators, house prices may go down further. When do you think is the best time to buy?

Answer: The best time to buy a home is when:
  • You have a strong desire to be a homeowner.
  • You are financially prepared and can afford the costs of a home.
  • You are ready to stay put for several years.

Liz also states, "The best time to buy a home is when you are ready, regardless of the market. That said, if you buy now, you must be psychologically prepared for your home to lose value. You could wait until prices start to rebound - but you may lose out on low interest rates or some great deals."

I've been recently reading that interests rates will start to rise as the bottom of the market nears. I'm also noticing that single family homes in Reseda, Van Nuys, Lake Balboa, and North Hollywood priced between $300,000 and $500,000 have hit the bottom and are now selling with multiple offers.

It's important to note that not all areas decline the same. For example, single family homes in Sherman Oaks have declined and average of 25-30% while in Reseda, home prices have fallen between 45-65% since the height of the real estate market.

It appears the areas which are holding ground are Studio City, Toluca Lake, Sherman Oaks, and Encino. I believe most of the wealth in the valley in concentrated in these areas which in turn is why we don't see big price declines.

Homes prices above $500,000 are still declining but with the lower priced homes starting to sell, it will probably be a matter of months until they find their footing and bottom-out. This should probably take place by the end of the third quarter or worst case scenario, at the end of the year 2008.

Now is the time to buy and hold. This is exactly what the investors are doing. Interest rates are still low but will probably rise later in the year and into 2009.

Written by: Richard Johnston, RE/MAX
818-730-4128

San Fernando Valley Market Update for June

Here is the latest update for the real estate market in the San Fernando Valley by our Association or Realtors.

http://sanfernandovalleymarketupdate.blogspot.com/

Saturday, June 28, 2008

Buying & Bailing in the San Fernando Valley

The term 'Buying & Bailing' means when a home-owner purchases a similar home while their credit is good, then walking away from their current home leaving the lender holding the bag (losses).

Though I do not advocate this kind of behavior, I can imagine more and more homeowners will want to make the switch. Just imagine owing $600,000 on your current home, then finding out a similar home down the street is listed at $350,000. The difference in mortgage payment can be substantial.

Though I do not personally know anybody who has done this, I'm sure this will become more prevalent as home-prices continue their decline in the San Fernando Valley. Lenders should work with home-owners who have fallen behind or who are unable to make the current mortgage payment(s) by possibly reducing their mortgage balance.

Written by: Richard Johnston, RE/MAX OTB Estates
I am a Short sale & Foreclosure specialist for the San Fernando Valley including the areas of Burbank, Studio City, Tarzana, Sherman Oaks, and Van Nuys. You can visit my San Fernando Valley real estate site for more information.

Wednesday, June 25, 2008

Lenders Prefer to Foreclose on Short Sales

The title of this post might sound crazy to you, but the more I get involved with short sales and bank owned homes, the more I realize that lenders go out of their way to make sure the short sale gets foreclosed upon.

Lets take a step back and look at all the reasons why a Realtor and a buyer would rather not deal with a short sale:
1. Really low price - it's obvious the sellers is desperate and once the bank does an appraisal of the home, their going to reject the deal.
2. Risks involved:
A. You pay for home inspection and appraisal not knowing if the home is yours.
B. Your initial deposit can be at risk if the seller disappears or won't release your money.
C. The lender forecloses on the home while you are still in negotiation.
D. The seller files for bankruptcy.
3. It can take an average of 2-5 months to find out if your offer has been accepted by all lenders.
4. You might miss out on new bank owned homes because your initial deposit it tied up on a short sale.

Because lenders know bank owned homes are in high demand and are selling for top dollar, Realtors and buyers prefer to work with a bank who can make decisions within a few days. Another words, buy a short sale not knowing whats going to happen with risk, or buying a bank owned home knowing the outcome within a few days.

It's obvious why lenders prefer to foreclose on a home than sell it short. Agents prefer it and so do buyers. The only reason anybody should think about buying a short sale is if they have time to waste and some money to risk. Also, be sure you are working with a short sale specialist.

Written by:
Richard Johnston, RE/MAX
818-730-4128

Sunday, June 22, 2008

La Crescenta or Tujunga? I'd Rather...

Lately I've been finding myself showing homes in La Crescenta and Tujunga. A two bedroom one bath home starts around $350,000 to $450,000 and a three bedroom two bath home starts in the mid $400's.

If I was to choose between La Crescenta and Tujunga, I would rather live in La Crascenta. I find the neighborhoods more developed and the homes well kept. You can find great neighborhoods on either site of Foothill Blvd in La Crescenta.


If you find the high cost of living in Glendale too much to handle, La Crescenta is an excellent alternative. It's only minutes away from Glendale. To get to Glendale from La Crescenta, take the 210 to the 2 freeway. Also, on the way down the 2, you'll enjoy the Downtown Los Angeles skyline.
To view available homes for sale in La Crescenta visit: http://www.homes.la/

Written by: Richard Johnston, RE/MAX
818-730-4128

Thursday, June 19, 2008

Selling Your Home? A Realtor's Perspective

What most home-sellers never see is the exchange of information from real estate agent to real estate agent. Below I'm going to outline what some agents do to the detriment of their seller's which cost the seller time and money.

Making your property available is important especially in today's market. I'm going to highlight what usually will cause the buyer's agent NOT to show your home.

1. Tenant! Need 24 Hours Notice
Problem: 24 hour advance notice required. Tenants rarely take care of the place. Smelly.
Answer: Get the tenant out asap or offer a credit to allow agents access to the property with a courtesy call. Maybe offer to tenant free maid service to keep the place clean and smelling good.

2. Call for Combo Lock Box Numbers
Problem: Listing agent doesn't put the combo code in the MLS and doesn't answer the phone when a buyer's agent calls. The agent will then skip over this home.
Answer: Listing agent puts the combo code in the agent private remarks section. It may sound simple but you'd be surprised.

3. We Update the MLS Daily/Hourly Don't Call for Availability
Problem: The buyer's agent will hesitate to call for fear of being rejected and will usually skip this listing.
Answer: Listing agent welcomes all calls for an update. If the listing agent can't handle the call volume, hire an agent to answer the phone.

4. No Pictures in the MLS
Problem: Buyers will skip over this home and so will agents.
Answer: Get a camera and take some pictures. Rule of thumb: If your home doesn't have pictures online within a few days, I suggest you find another agent asap!

5. Listing Agent Never Picks Up the Phone
Problem: The listing agent never picks up the phone when you call, it goes direct to voicemail.
Answer: The listing agent hires a receptionist to answer the phone so buyer's agent can get info quickly.

6. Make Appointment with the Owner
Problem: The buyer's agent has to call the owner and make an appointment. With so many properties on the market, guess what's going to happen?
Answer: Make your property available and place a lock box on the door.

The bottom line is, if agents can't communicate with the listing agent quickly or show the home quickly, then your home is going to continue to sit on the market while other homes sell quickly. Also, be sure you are working with a Realtor who knows what their doing.
Written by: Richard Johnston, RE/MAX
818-730-4128

Monday, June 16, 2008

Waiting for the Bottom?

Are you still waiting for the bottom? What do you consider the bottom? Is the bottom when others say so? Who do you trust? Do you listen to your real estate agent's advice?

If I can predict the bottom, I would be the richest man in the world. The fact is NOBODY can predict when the bottom will occur. Months will pass and only then will the bottom be truly called. Plus, the bottom for lower priced homes won't be the same for more expensive homes. The bottom for Valencia won't be the same for Sherman Oaks. The bottom for Reseda won't be the same for Van Nuys.

Do you run with the crowd? It's time you stand-out from the crowd and make things happen. This is a VERY strong buyers market. Take advantage of the situation and buy yourself a home in the San Fernando Valley and think long term. It's easy to buy a home, it's keeping it that's a challenge. Are you up for the challenge?

Sincerely,

Richard M. Johnston
RE/MAX 818-730-4128

Short Sale Trouble: How to Avoid It!

A recent post by Alan Butler on the BloodhoundBlog highlights potential issues when working with a listing agent who really doesn't understand the pitfalls of handling offers in a short sale.

Alan's response to agents who take all offers presented on a short sale and submits them to the bank to choose the best one as, "...A coward’s way to handle contracts."

In my opinion, the best way to handle a multiple offer situation on a short sale is to have the owner accept an offer and have another in back-up. Both offers should be submitted to the lender(s). Also, when an offer is accepted, the listing should be displayed as a 'Pending' listing so agents don't show a home which is already under contract. This also prevent numerous other offers to pour in which can complicate the situation with the bank.

When an offer has been accepted on a short sale and another agent wants to write an offer, Alan suggest saying, "I have an offer on the property at this time. You are more than welcome to submit your offer for consideration in a back-up position."

Alan also states that, "If you send multiple offers to the lender, you’ll simply confuse them. They’re confused enough already. Don’t help them.

Second, by sending multiple offers, you might unwittingly be creating the impression that you have got a hot little property on your hands that might be worth more money. This is going to make the lender cocky. Their demands for money are going to go up, and worse yet, they may get the impression that it’s a better idea to take the property away from your client and sell it themselves for more money!"

I agree with Alan completely.

On a recent showing with my clients, we came across an open house in a desirable neighborhood. The first 'Red Flag' I noticed was that the property was a short sale and the owner had already abandoned the property.

The listing agent turned maid was doing some clean-up work because it seemed the owner had just left leaving a trail of dust and trash behind for the agent to clean. Another big 'Red Flag'.

I use the term 'Red Flag' to indicate a serious problem with the property or a problem which can put a buyer at risk.

Nonetheless, I approached the agent and started to ask some questions. Listed below are the questions I asked:

Q. Why has the owner left?
A. Why are you asking? He left because he wanted to put his problems behind him.

Q. Do you have any offers on the house?
A. Yes, I'm going to collect them all and send them to the bank for approval.

Q. Has a notice of default filed on title?
A. Don't know but it's not important.

Q. Do you know how many months the owner is behind on payment?
A. Does that really matter?

Just by asking a few basic question, I already knew that this agent didn't know what she was doing and she was also putting her client at risk of foreclosure. Nonetheless, I advised my clients to skip over this home because the risk far outweighed the benefit.

The correct way to handle a short sale is the same way you would handle a seller who has equity. Welcome all offers, counter, then accept one and place the next best offers a back-up offer. Then sending the accepted including the back-up offer and have the lender choose which one they will accept if any.

Imagine what would happen if the listing agent sends 10 different offers to the lender(s) for approval. Now lets also imagine if the lender accepts an offer and the seller refuses to sign. If that doesn't draw up some lawsuits, I would be surprised.

If your thinking of buying a short sale home, their are some limited financial risks involved and expect to be patient as it can take several months for a response. MAKE SURE YOU ARE WORKING WITH A PROFESSIONAL. The best alternative to a short sale is a bank owned home or buying direct from a seller who has equity.

Written By:
Richard Johnston, RE/MAX
Short Sale Homes in the San Fernando Valley
818-730-4128

Wednesday, June 04, 2008

Documents Requested by Lenders in a Short Sale

If your home is considered a short sale or short pay, when an offer is made on your home, the lender will most likely ask for the following documents.

1. Income Statement showing how much money you make and your total expenses. The lender wants to know how much money is left over after your expenses. It's usually negative for a homeowner who can't afford their home.

2. Bank Statements for the last two months. Keep in mind that if there is a lot of money in your bank account, the lender will wonder why you are not using it to pay your monthly payment.

3. Two most recent pay stubs. Lenders want to know how much you're making at the time. This is so they can determine if they'll let you off the hook.

4. W2 Statement. The lenders want to know how much money you made the prior year.

5. Letter of Authorization. The lenders want you to authorize your real estate agent or another third party to have authorization to discuss your account.

6. Hardship letter. This is a letter by you to your lender on why you can't afford the payment anymore. Loss of job, death, health, etc... There are several resources online which will supply you with a sample hardship letter.

7. Listing agreement. This is the agreement you signed with your Realtor when the agreement was made to sell your house.

8. Signed Purchase Contract. This is the offer the buyer wrote also signed by you.

9. Estimated Hud 1. The escrow company will put this together.

10. Pre-approval letter. This will usually be included with the offer from the buyer. The lender wants to know that the buyer can get a home-loan.

Every lenders requirement might be different but the items requested above will usually be what they ask for. Keep in mind that the only time lenders really want to talk to the listing agent is when you have accepted an offer. So the first step is to give your agent authorization to have an open communication with your lenders.

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Short Sale homes in the San Fernando Valley including Sherman Oaks, Encino, Studio City, Toluca Lake, Van Nuys, and Santa Clarita Valley.

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