Friday, February 22, 2008

Traffic Pattern for Realtor.com

The graph above demonstrates the traffic pattern for the past 3 years on Realtor.com. Graph is courtesy of Alexa.com. This graph demonstrates why it's a great time to buy a home now rather than waiting like most unsophisticated buyers. You don't have to be an investor to purchase a home, just don't do what everybody else is doing. Buy Low and Sell High!

Looking back, the most opportune time to sell your home for top dollar was the 1st quarter of 2006. Now, it's a great time to purchase a home. Buyers have dried up and sellers are desperate. If you've got money (at least 5% down) have great credit (over 700), you're in complete control. Keep in mind you need 10% down if your going to state your income.
To view a free list of bank owned homes in the San Fernando Valley, click here.

Thursday, February 21, 2008

Locked Out 2008: The Housing Boom and Beyond

You can download the Housing Boom and Beyong report in PDF by clicking the following link:


Here are a few excerpts below:

  • How did Californians manage to buy homes during the
    housing boom?
    Increased homeownership was aided
    by the fact that lenders allowed borrowers to put little or
    no money down and to provide few or no details about
    their income and assets. Lenders also promoted a variety
    of loans that allowed homebuyers to borrow larger sums
    than they could have with a conventional fixed-rate loan
    as well as to qualify for financing despite having credit
    problems. These loans include ARMs with short-term teaser
    rates; interest-only loans; and “subprime” loans, which are
    generally provided to borrowers with weak credit histories
    and those who choose not to specify their income and
    assets when they apply for a loan. Subprime loans were
    often structured as ARMs with low promotional interest
    rates. Other factors that helped Californians purchase
    homes during the housing boom include the decline of
    mortgage interest rates after 2000, the migration of many
    Californians to less expensive areas of the state, and the
    substantial income gains of the state’s wealthiest residents
    during the past decade.
  • Tens of thousands of California homeowners face
    foreclosure. As introductory mortgage interest rates
    expire, payments are increasing to unaffordable levels for
    many homeowners with ARMs, including homeowners
    with subprime loans. Many homeowners who bought
    their homes or refinanced their mortgages in 2005 find
    themselves “locked in” to loans they cannot afford: they are
    unable to refinance their loans or sell their homes because
    the amount they owe exceeds the current market value of
    their home.....The state and federal governments have promoted
    initiatives to help stem the increase in foreclosures among
    homeowners with subprime ARMs. However, unless such
    relief efforts are expanded, the number of foreclosures is
    likely to increase as California’s homeowners face higher
    mortgage payments at the same time that credit standards
    tighten and home prices soften, making it harder to sell a
    home or refinance to a more affordable loan.

Some Lenders Used Predatory Practices to Lure Borrowers into Loans with Risky Features

Some homebuyers were lured into loans with risky features by unscrupulous lenders who used aggressive and deceptive practices, particularly in the subprime market. In 2006, for example, Ameriquest Mortgage Co. – once the nation’s largest subprime lender

– agreed to pay $325 million to consumers and states after investigations revealed predatory practices, including inadequately disclosing prepayment penalties and improperly influencing appraisals to inflate home values. Some observers suggest that predatory lending practices have been widespread, rather than limited to a few “bad apples.”

• The Center for Responsible Lending contends that subprime lenders have knowingly made “reckless loans to families who have no prospect of repaying those loans.”

• The National Association of Realtors suggests that “abusive lending occurs much too often in subprime markets,” including “charging extremely high interest rates and loan fees unrelated to risk [and] using aggressive sales tactics to steer consumers into unnecessarily expensive or inappropriate loan products.”

• The US Government Accountability Office has found that advertising tends to emphasize the benefits of risky loans “without effectively explaining the associated risks” and that federally required disclosures given to borrowers generally were “too complex,” “used small, hard-to-read typeface,” and “buried key information."

• Furthermore, The Wall Street Journal reports that many borrowers “whose credit scores might have qualified them for more conventional loans say they were pushed into risky subprime loans. They say lenders or brokers aggressively marketed the loans, offering easier and faster approvals – and playing down or hiding the onerous price paid over the long haul in higher interest rates or stricter repayment terms."

To download this free report, click here.

Richard's notes... If you're unable to afford your home, have no equity, unable to refinance or sell at a profit, please call me ASAP 818-730-4128. We can list your house on the market and I'll negotiate with the banks to sell your home quickly. If you have received a "Notice of Default" letter in the mail, you are possibly 3-4 months past due on your mortgage payment. Please do not panic but it's also important you do not wait any further.

If you're an investor, it's an excellent time to purchase a home. Rates are still low and bank owned homes are selling up to 50% off market value. It's also an excellent time for home-buyers to get a great deal on a home. Stand out from the crowd! The first step is to get pre-approved with a loan officer.

Sincerely,

Richard M. Johnston
818-730-4128

P.S. As home prices continue to decline here in the San Fernando Valley, it's getting harder for home-buyers to buy a home because lenders are tightening their loan standards. To help protect you from future price depreciation and being locked out of obtaining a home loan, I'll help you negotiate an extra 10-15% off already reduced market value and pre-approve you with a proven loan officer ensuring the best rate and terms. Call me now.

Tuesday, February 19, 2008

Markets Down - Who's to Blame

I believe the real estate market here in the San Fernando Valley will get worse before it gets any better. Lenders are tightening their standards making it virtually impossible for first-time home-buyers to purchase a home. If you’re stating your income, figure you need 10% down and let’s not forget have another 2% of the purchase price for closing costs. Recently, I've heard some lenders are moving to 20% down.

Looking back over the past four years I've been selling homes, 90% of my first-time home-buyers had no money and most even requested the seller to pay their closing costs.

So without a doubt, I can predict this slowdown will cause a chain reaction which will affect home prices from the $700-$1.2 million range within the next 2-5 months. If home-owners can't sell to buy bigger homes, then the more expensive homes will continue to sit on the market causing even more price reductions.

I'm even predicting the number of bank owned homes to double or triple in the next 2-4 months. With all those short-sales sitting on the market and potential buyers being squeezed out of the market, things are not looking good at this moment.

I'm hoping the government moves quickly to raise the FHA loan limits and conventional loan limits quickly. This will help home-buyers secure a loan which will hopefully help rebound the housing market. I'm also hoping the government will step-in and protect those home-owners whose payments are rising.

The only people I can blame are the lenders and the government for this real estate slump. The lenders for being greedy and lending money to people who couldn't afford the rising payments, and the government for not having more of an oversight into what was going on.

It seemed that the government was asleep at the wheel and let big business do whatever they wanted. Maybe it's a little to late to save all those people who only wanted to own the American dream of home-ownership and are now losing their home.

If the government does not intervene, I'm predicting a 10-15% price decline in home value over the next 6 months followed by a 1-2 year plateau and then a steady increase in home prices starting in 2010-2011. I wish I can tell you when the bottom of the market will hit, but with all the changes happening so quickly in the marketplace, it's anybody's guess. I can only predict at this point and it can change anytime. Hopefully, the government will wake-up and help ease the real estate market out of this real estate slump.

To search for bank owned homes, visit: http://www.bankowned.la/
To view all available homes for sale, visit: http://www.properties.la/

Wednesday, February 13, 2008

Los Angeles Investors - Excellent Time to Buy a Home


Are you a Real Estate Investor here in the San Fernando Valley? If so, then this is the best time to buy a home. Let's face it, it's not getting any easier for people to buy a home. In fact, the going down payment for a stated income / stated asset home-buyer was 5%. Now, it's 10%. What that means is if you were able to buy a home a few weeks ago, it's possible you can't buy one now.

That might be tough news for the average home-buyer, but excellent news for a real estate investor. I'm predicting most of those short sales which are lingering in the marketplace to become bank owned homes. I'm also predicting the number of bank owned homes to double or triple in the next 60-90 days.

A common response I receive from wannabe buyers is, "I'm going to buy when the market hits bottom." That's funny. I'm in this business full time and I don't know when the bottom will hit. I do think home prices will decline further, but how much and when the market will bottom-out is anybody's guess. Maybe a few months or possibly up to two years from today.

What I do know, it's an excellent time to purchase a home. Why? Because nobody is buying. Home seller's selling their homes short will accept any offer the bank accepts. Lenders are discounting their inventory up to 50% off market value to move them now. If you want to be like every wannabe home-buyer out there, then wait and see what happens. If you're serious about buying homes when sellers and the bank are desperate to sell, then buy now.

Before you go, it's funny all the excuses people come up with to not buy a home. I guess people love living in apartment buildings. Just the though of hearing my neighbors conversation and their toilet being flushed is enough to make me work harder to pay my home mortgage. Rents are going up, and it's common for the landlords to have you sign another year lease at a discount to tie you up for another year.

If you want to make a difference in your life and buy when others are running for cover, then this is the time. In fact, why not further negotiate the price of the home 20-30% off to build in a safety cushion in-case prices fall further.



Richard Johnston, RE/MAX OTB
818-730-4128

Call me for a free list of bank owned homes or visit: http://www.bankowned.la/

Monday, February 11, 2008

The Dreaded Short Sale - What You Should Know

It's funny what some agents will do to circumvent the dreaded "Short Sale" labeling on their listings. It's like the kiss of death for the homeowner because most agents know to avoid them like the plague. In fact, I'm predicting most of those short sales will eventually become bank owned homes.

But why? Why do most agents prefer not to show their clients Short Sales? I guess it's because not only do you need to have an accepted offer with the owner, every leinholder on title needs to approve the deal too. Just imagine having 4 different people agreeing to allow the home to be sold. The chance of that happening is slim to none.

Some agents think their smart and price the home so low buyers think it's a steal. But what buyers don't realize, is that the owner might accept (owner will accept anything), but the lenders will definitely reject the deal. C'mon, how dumb do you think the lenders are? If it looks too good to be true, then it is.

Another tactic being used my some agents is to price the home a few dollars above the total amount owed to not label the home a "Short Sale." I guess with most agents avoided short sales, agents are doing everything possible to get as many people interested in the home as possible.

Monday, February 04, 2008

Team OTB Alliance - Bank Owned Specialists - San Fernando Valley

Jesse Perez, Richard Johnston, Tom Cortesi
Bank Owned REO Specialists

San Fernando Valley & Santa Clarita Valley
818-730-4128

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