The OCRealtress Blog

Home Buyer Takes a Chance and Wins

Mama Realtress always tells her First Time Home Buyers:  "Be prepared to place 10+ offers before you get one accepted.  Put your emotions in the back seat because there are potentially hundreds of people fighting for the same properties.  Blah, blah, blah."  Well, Mama Realtress needs to revise her monologue because she has been proven wrong. 

A couple of months ago a client of mine who had been dabbling in home seeking for two years made their first offer on a Bank Owned Home in Orange.  I recited my usual lines trying to ease the rejection, but was shocked to find an acceptance, rather than a rejection, of their offer.  It was listed for 475K, but they offered considerably less, and much lower than the comparable sales in the area.  Why was their offer accepted? 

First of all, the home had been listed for close to two months with no price reductions.  Clearly, the list price was not what buyers were willing to pay, and after two months the bank was finally ready get get it off their books. Second, the listing agent incorrectly entered it into the MLS as a Short-Sale, which many agents and buyers avoid at all costs. Third, and most importantly, it was the perfect home for MY client!

Of course Mama Realtress has a moral to her story:  Work all the angles!  Sometimes the homes that don't sell are the sleeping beauties. Be open to opportunity.  Share the word.

OC Home Sellers...This Tax Credit is For YOU!

Like it or not, the Federal Government has extended and expanded the Home Buying Tax Credit.  Considering the frenzy of home buying we have experienced in Orange County for the past few months it is clear that demand will remain high through the traditionally slow season.  Homes often receive multiple offers even in the $600K to $800K range.  Expanding the Tax Credit will bring more higher income Buyers into the market, thus increasing demand for higher priced homes. 

Since a large portion of the inventory listed for sale are Bank Owned, or Short-Sales that may not even result in a close, Buyers have few choices.  Seller's should be taking advantage of the low inventory and high demand for the expanded price points while Uncle Sam is pointing his finger at YOU!

 
The Tax Credit details are as follows:  http://www.irs.gov/newsroom/article/0,,id=204671,00.html

• First Time Home Buyers (not owned a home in the past three years) get up to $8000 tax CREDIT, or 10% of home price.
• Move-up Buyers (owned a home in 5 of the past 8 years) get up to $6500, or 10% of home price
• Qualifying maximum incomes for both CREDITS are Adjusted Gross Income of $125,000 Single and AGI $225,000 Married
• The home must be in contract by April 30, 2010 and close by June 30, 2010.
• Credits-NOT deductions.  If Buyer owes IRS $1000 they get a check back for up to $7000

Sellers and Buyers of ALL shapes and sizes Uncle Sam wants YOU.  Share the word.

 

Investing in Orange County Real Estate is Not for Everyone.

Lately I have had several people mention they are considering investing in real estate here in Orange County, CA.  People want to live in Orange County, that is an undeniable fact, however investing in our Wild Wild West housing market is not for the feint of heart. 

Getting a "deal" has increasingly become a challenge due to huge demand for homes/condos priced under 600,000.  Cash is king, so if you can swing an all cash offer, you are golden.  Banks will often take a low cash offer that can close quickly for their REO over a financed market value offer.  There are a lot of people in OC purchasing all cash, so your offer may still be one of many.  Condos in good areas can be had in the low to mid 100K's  and single family homes start in the mid 300K's. 

If you will be financing your investment purchase there are three different types of homes you can purchase.  

• Bank-Owned homes: The trouble with these listings is that from my experience there can be 5-50 offers on them, so you have to put together a complete and "attractive" offer package. What I mean by "attractive" is that your offer price needs to be market value and the offer must include FICO summary, proof of down payment funds, a pre-approval from a direct lender, and any other addendum's the bank requires. If it is not all together in one package they won't even consider your offer.
• Short-Sales:  Since you are not looking for a primary residence you have the time to wait out short-sale approval from the bank. From my experience this process may take 2-9 months. You never know if the banks who hold the mortgages will approve taking less than what is owed so don't hold your breath for "the one" to come through and keep looking for other options.
• Normal sale, or equity sale: These are the best, and hardest, homes to find. A normal sale should have less mystery components since they have to disclose everything they know about the home and have likely cared for the home more than a distressed property.

Bryan Shoup, Mortgage Consultant from Home Security Financial, says an investor needs to have a debt to income level of 45% or less, at LEAST 25% down payment (unless you are purchasing with a family member who will live in the home, then as little as 3.5% will work).  No stated income loans and an individual can own up to ten properties (previously it was only 4).

If you intend to rent out your investment have your REALTOR run a search on closed leases for the size and type of home your intend to buy.  This will be a good indicator of how much you could ask for.  Rental prices have remained quite high even in this economic downturn so it is possible to be cash flow positive if you are financing 60% or less. 

Do your homework, select a reliable REALTOR who will be a strong partner for your business success, and be patient with all the wackiness you will see in the market.  Hold on for a bumpy ride in the Wild Wild West of OC Real Estate!

Share the word.

The REAL Tweeps of Orange County!

Despite our undeserved reputation induced by staged "reality" shows, Orange County is chock full of REAL people who freely give of their time, money, and knowledge.  In the last few weeks I have had the privilege of getting to know some awesome Orange County Social Media Rock-stars.  They may not be gifted musicians, but they are gifted with words and community. 

Just Spotted, an Orange County website, hosted the OC Blog Awards at Wowzville in August.  Much to my surprise, I was privileged to be nominated for a Micro-Blogging award (Twitter).  The place was packed with OC locals blogging about everything from crafting (@thisiscarrie), fashion (@boutiquing), food (@fastfoodmaven) and everything in between.  There were wonderful goodies donated by Dippen'Dots Fountain Valley, Daddy Cakes (pancakes extraordinaire), and BabyCakes cupcakes.  Colleen and Kelly of Just Spotted organized this event to celebrate our powerful online community:  http://www.just-spotted.com/2009/08/youve-just-been-spotted-oc-blog-award_20.html

A week later in Irvine another phenomenal event was hosted by Social Media Club of Orange County, Tweet Up Orange County, Style Week OC and sisters Rochelle, Haley and Chelsey Veturisa. The Irvine Peppino's bar was bursting at the seams as online personalities forged new offline relationships with fellow business owners, students, hobbyists, and plain old social media addicts.  There were close to 90 Twitter "Tweeps" elbow to elbow with camera's flashing and video interviews being shot.  http://www.ocregister.com/articles/twitter-networking-social-2541296-orange-county

The first OC Twestival will be held at Orange Hill Restaurant September 15th and will be raising money for Orangewood Children's Foundation.  Entertainment is being donated by musicians and comics to benefit this very worthy cause.  Hundreds of OC Social Media users will be there to support our local children.  http://orangecounty.twestival.com/2009/09/02/move-over-america-twestival-ocs-got-talent/

Orange County has a rich pool of people who genuinely care about their community.  If you need to know how to start a wordpress blog, or, simply, who has the best tacos in OC, there is a local online community anxious to share their knowledge. 

I am proud to be a part of the REAL OC Tweeps!

Adieu, My Sweet $8000 Tax Credit!

Ah, my dear Federal Tax Credit, parting will be such painful sorrow.  You have seduced my First Time Home Buyers with your irresistible offer of $8,000.  They have been lined up waiting to catch a glimpse of your promising reward, but now they may not make it past the front door before you say goodbye on December 1. 

Before seeking you out they made sure their maximum AGI of $95,000 single and $170,000 jointly met your requirements.   For their patience and bravado you offered them up to 10% of their new homes purchase price not to exceed $8,000.  They swore allegiance that they would maintain primary residence and keep it for three years. 

First Time Home Buyers have showed up at your venues and tried to get your attention along with many other competitors, but your promise has eluded them. Hopes cannot be dashed so easily.  They have until mid October to secure their escrow and until December 1 to close the sale. 

In the end we must bid you adieu, but hopefully my First Time Home Buyers will wave goodbye with your treasures awaiting them at tax time!

Share the word.

What Is Real Estate Truth?

On Facebook awhile back I asked for suggestions about what people want to know regarding Real Estate.  The most emphatic reply was:  "THE TRUTH!" 

Well, here it is:  "I DON'T KNOW!"

·         I don't know when the banks are going to release all the foreclosed homes they are holding.

·         I don't know when the market is going to bottom out.

·         I don't know what interest rates are going to be.

·         I don't know how many offers there will be on the Bank Owned home you really want, or if they will select yours.

·         I don't know if the short-sale will ever be approved by the bank.

·         I don't know if you will ever win the lottery!

Whew, now that we got that out of the way, let's talk about what I DO know:

·         I know I submitted 22 offers this year for clients and every one of the homes had multiple offers (clearly, a lot of people think it's a great time to buy).

·         I know people want to buy homes in Orange County: OC Register article Sales up in 51 O.C. ZIPs in mid-June  http://lansner.freedomblogging.com/2009/07/10/sales-up-in-51-oc-zips-in-mid-june/29555/

·         I know interest rates are at historic lows.

·         I know every neighborhood is its own microcosm of supply and demand, which is reflected in varying home sale volume/price.  Irvine's stability is a great example.

·         I know You have to understand that Federal, state, and local laws, customs, and practice are evolving at lightening speed.

·         I know You have to trust ALL the professionals representing your interests. 

There you have it, the truth, in a nutshell.  The bottom line is that home buying and selling in OrangeCounty in 2009 must be a reflection of what is best for you and your family/investment group/portfolio.  The choice is yours.

Share the word.

 

 

Can You Sell Your Home on Twitter and Facebook?

The explosion of Social Media has changed the face of marketing, information decimation, and socialization.  The medium's incredible power begs the question:  Will the buying and selling of Real Estate change?

Since the internet has made home buying and selling a transparent process, information is a short click away.  Likewise, advertising and marketing of real estate has changed drastically.  Very few people use print media for home buying because online searching is targeted and current. 

We know the internet is where people are, but, what sites?  Facebook, Twitter, Friendfeed, Flickr, YouTube, and similar social media sites are growing exponentially.  Why?  Because we are social creatures and static sites don't provide the interaction humans crave.  Instead of marketing a new home listing on on a print/internet page I can now share it with hundreds/thousands of my "friends" and "followers."

• First, let's look at the power of Facebook and selling your home.  Mark Zuckerberg announced in April that their site has over 200 million users and 100 million people login in every day.  Check out the company's video-blog:  http://www.facebook.com/video/video.php?v=71196792074If I can post your listing on my page and/or profile where 150 "friends" will receive the information on their wall.  Most of my friends have 100+ friends who also have 100+ friends and if any one of my friends comment on your home it will be seen by all their friends.  In addition, all viewers can pass the link to anyone they think may be interested. 
• Twitter has been getting a huge amount of press for it's viral effect on information spreading.  After tweeting about your new listing hundreds (soon to be thousands), of my followers will receive the tweet. If they retweet my tweet all their thousands of followers will receive the tweet and so on.  For example, if I have 500 followers and 5 of my followers, who have 500 followers, retweet the listing your home will now have been seen by at least 3,000 people all in a matter of minutes.  And that is just my FIRST tweet about your home. 

My guess is that Social Media will become our"newspaper" for receiving and sharing information.  There is no guarantee that Twitter, Facebook, and their kind can acutally sell your home, however, using them can guarantee that your home will be seen by thousands that would otherwise not have been exposed to your listing.

Share the word.

East Orange, CA: A Place to Call Home

When visitors discover my lovely neighborhood in the hills of Orange I almost always hear:  "Wow, I never knew!"   Flanked by prestigious Lemon Heights, Cowan Hills, Tustin Ranch, and Orange Park Acres, East Orange is a surprising gem and an excellent value. It was built from 1986 and 1992 and looks much like bordering Tustin Ranch, but with a more spacious and park like atmosphere. 

Climbing up the hill headed East on Chapman Blvd., Orange Hill Restaurant stands guard over East Orange.  Just below the crest is Orange Park Acres with its abundant flora and fauna, dirt horse trails, and winding trails connecting nearby Santiago Hills.   

The community is rich in education and recreation.  Santiago Canyon College is located directly across Chapman Avenue from Santiago Hills, and is expanding using Measure E Funding. Chapman Hills, the local Elementary school, can be accessed by walking paths that connect all the subdivisions to the school and adjacent park.  The whole community centers around the Santiago Hills Community Park, which is adjacent to the school.  Peter's Canyon Wilderness Park, Irvine Regional Park, Irvine Lake, and Silvarado Canyon provide a variety of outdoor recreational options.  More adventurous sports lovers can take the Mountain to the Sea Trail all the way to the Newport Beach, which makes an excellent 26 mile run/ride.

Single family 3 bedroom homes sell from the low $500,000's.  Larger 2100+ square foot homes start in the $600,000's.  Recently a 3000 square foot paired home sold in Broadmoor, Orange Park Acres, in the very low $500,000's.  With condos from $150,000, single family homes from $500,000, view homes from $600,000, and expansive estates from the low 1,000,000's, East Orange is a superb value in pricey Orange County.

Take advantage of our anonymity and snatch up your own slice of peaceful living.

You CAN Buy Your First Home With VERY LITTLE Money Down.

Hot Off the Presses:  US Housing and Urban Development Secretary, Shaun Donavan, Announces That Home Buyers with FHA Insured Home Purchases Can Apply $8,000 Tax Credit Toward Down Payment and/or Closing Costs!

All those first time home buyers who are having trouble coming up with the 3.5% required down payment + closing costs for a Federal Housing Administration insured loan have been offered a hand.  They can now use their American Recovery and Reinvestment Act of 2009 tax credit of up to $8,000 for the purchase of their first home if they meet the income/price/residency requirements.  Check out http://www.hud.gov/news/release.cfm?content=pr09-072.cfm for more details.

Prior to today's announcement the credit was applied only after filing 2008 or 2009 tax returns with the IRS.  The new development allows state Housing Finance Agencies and some non-profits to "monetize" the tax credit, depending on the mortgage amount, providing the buyers with down payment and/or closing costs.  If they qualify, borrowers can use the credit now, or they can wait until filing tax returns later. 

There will likely be several bumps in the road while this plan is being implemented.  However, the reward for first time home buyers (anyone who has not owned a home in three years) will outweigh the obstacles.  This ruling is very controversial and could be reversed so watch for details of when/how it will be implemented.  As of now, the tax credit expires at the end of November 2009. 

The clock is ticking:  Share the word.

Los Angeles Times Prints the Truth About Real Estate: Finally!

Shh, quiet:  do you hear the orchestra?  I am actually singing the praises of the LA Times.  Columnist Chip Jacobs article in the Business section was titled:  "Not that cheap."  He goes on to give the account of several buyers' experiences with trying to buy a home in LA.  Trying is the operative word.  With all the pent up demand for homes under 600K, buyers face stiff competition and even with offering over list price they are competing with often 20+ other offers.  Whew!  The truth is finally revealed.

This scenario is happening over and over again for one reason:  Affordability Index.  With the reduction in home values and the historically low interest rates (not to mention the state and federal tax credits) thousands of people that could not afford a home two years ago are desperate to buy a home.  They are so desperate that they will offer well over list price.  Market value has become an arbitrary number that has made home buying like gambling. 

Some lovely clients of mine submitted an offer for 4% over list price on an Anaheim, CA home just recently.  Their FICO score is fantastic and their financing is a 20% down conventional loan.  The bank did not select their offer, the winning offer was 6% over list.  We gambled 4% but that was not enough.  In this fast paced climate it is imperative that you work closely with your Realtor and come up with a multi-faceted game plan.

The truth has been set free! It is a Seller's market, not a buyer's market, in the under 600K price point.  We need houses to sell to our clients.  Share the word.