Moms are the greatest. Although many moms are working today, they are still run the roost at home and have the best advise when it comes to home ownership. In honor of Mothers Day, Century 21 Hometown Realty celebrates the wisdom of mothers. Here is advice that we were able to locate from Moms.
How much can you afford?
Lenders like PrimeLending, our mortgage partner play a significant role in home ownership. They will pre-qualify you for a home loan so you know how much the bank believes that you can afford. If you are pre-approved for a $300,000 loan, mom’s advise is to look at homes for $250,000. This leaves a cushion for the unknown.
Another mom suggests buying a home as if you only have one income. Being house poor is never a great situation, especially in today’s sluggish job market. Most job seekers are in the market for 6 months today, so make sure you have some savings to manage the possibility of employment challenges.
Buy Smart!
Century 21 Hometown Realty is one of the few companies that offer consumers the ability to do deep level of research on your home purchase. Take a close look at the neighborhoods where you want to live. Give consideration to the market conditions in that neighborhood. If possible, avoid neighborhoods that have a lot of foreclosures or a lot of homes for sale – this signals a fragile marketplace where your home purchase could include a lot of downside risk.
Pick the right real estate agent and spend time with them to understand the real estate market. This is true for buyers and sellers. Take the time to look at lots of homes that are priced in your price range to understand what other buyers and sellers are looking at. Century 21 Hometown Realty agents have access to a market analytics tool called REALTORS Property Resource. Ask your agnet for an RPR report before you buy or sell a home.
It really does not matter if you are buying a new home or a used home, the home inspection is really important. Ask questions about the cost of irrigation, the cost of landscaping. Find out how old the heating and ventilation is and who the service provider is. Take a close look at the roof. When was the home last painted?
Here in California, rodents and termites can do a lot of damage. Moms say that they would have delayed listing their home for sale if they had done an inspection before listing their home. Sometimes the price you list your home for does not account for repairs that are needed before the transaction closes.
We’ve all heard that many things in life are not fair. But the process of qualifying for a mortgage shouldn’t be one of them. That doesn’t mean you necessarily get the loan you apply for. It does mean that you have the right to be judged on your financial stability and credit history rather than on biases. Two federal laws, theEqual Credit Opportunity Act and the Fair Housing Act, prohibit lenders from considering irrelevant information, such as race or gender. And, these laws provide recourse if you suspect lenders have run afoul of the law in rejecting your application. If the Department of Justice suspects housing discrimination, an investigation may be filed under either or both of these laws. The Equal Credit Opportunity Act (ECOA) was originally signed into law in 1974. It prohibits discrimination in any credit transaction, including mortgages, based on:
race or color
religion
national origin
sex
marital status
age (provided the applicant is legally able to form a contract)
income from public assistance programs
the applicant’s good faith exercise of any right granted under the Consumer Credit Protection Act, which is the umbrella statute that includes the ECOA.
The Fair Housing Act (FHA) was initially passed in 1968. It is also called Title VIII of the Civil Rights Act, and makes it unlawful to discriminate in residential real estate transactions, including buying, selling, improving, or renting a housing unit. This law prohibits discrimination on bases similar to the ECOA. When the FHA was first signed into law it was specifically to prevent unfair practices based on race or skin color. Although the law also covers other bases for discrimination, nearly four decades after its passage, the majority of FHA violations reported to the Department of Fair Housing still involve race and color.
Municipalities have also been charged with violating the FHA by rejecting building permits or by passing zoning regulations, which result in physical separation of residents by race, color. The FHA also bars direct discrimination based on religion, as well as indirect discrimination such as zoning ordinances designed to prevent the use of private homes as places of worship. In today’s housing market, a rising number of single women are homeowners. Not too many years ago, it was hard for women to get mortgages alone because lenders saw them as financially risky. But the Fair Housing Act makes it unlawful to base a decision not to sell housing because of an applicant’s gender.
Discrimination based on an individual’s country of birth, or the country of birth of his ancestors, is also prohibited by the FHA. The Justice Department has taken action against some municipalities which have set up more stringent standards for certain groups to buy or build houses, as a covert way to limit the growth of those populations.
Having children under the age of 18 is not a lawful premise for refusing to approve a mortgage, according to the FHA. However, certain housing facilities may be designated as restricted to those ages 55 and over, under the Housing for Older Persons Act, an amendment to the FHA.
Discrimination based on disability is illegal in all types of housing transactions. This includes physical and mental disabilities, as well as a growing list of specific conditions. For example, according to the U.S. Department of Justice, disability may include conditions such as blindness, hearing impairment, mobility impairment, HIV infection, mental retardation, alcoholism, drug addiction, chronic fatigue, learning disability, head injury, and mental illness. However, the Justice Department adds that “current users of illegal controlled substances, persons convicted for illegal manufacture or distribution of a controlled substance, sex offenders, and juvenile offenders are not considered disabled under the Fair Housing Act, by virtue of that status.” The FHA prevents the use of zoning laws to hinder the residential choices of the disabled. It also demands that new multi-family construction meet the accessibility requirements within the law.
If your income includes public Social Security, pensions, annuities, child support, payments under a separate maintenance agreement, reliable alimony, or public assistance, a lender cannot refuse to include those items in your income calculations. In the case of alimony, lenders do have the right to ask you to prove that the payments are consistent. Lenders can’t require that a co-signor be your spouse. They also cannot require a co-signor if you otherwise meet the standards.
Lenders cannot discourage you from applying for a mortgage or reject your application on any of the bases prohibited by the Equal Credit Opportunity Act. They can however, determine your immigration status and your right to remain in the country long enough to repay the debt.
Lenders also cannot refuse a mortgage because of the racial makeup of the neighborhood an applicant wishes to live in. It is unlawful to ask about plans to have children or expand a family. However, lenders do have the right to ask about expenses relating to current dependents.
Your Century 21 Hometown Realty agent can answer any questions that you may have about your fair rights in applying for a mortgage. Additionally, loan officers at Prime Lending are available to help you with your application.
Americans’ Expectations Align to Encourage Home Buying
More consumers may be looking to purchase homes with a shift in several key housing market indicators, according to Fannie Mae’s March 2012 consumer attitudinal National Housing Survey. More Americans now expect both home rental and home purchase prices to increase over the next year.
Nearly half of consumers expect higher rental prices, the highest number recorded since monthly tracking began in June 2010.
Thirty-three percent expect home prices to increase, up 5 percentage points since last month, and the highest percentage recorded in over a year.
In addition, confidence in consumers’ views of their own finances is stabilizing—for three straight months—44 percent believe their personal finances will get better over the next year. These trends may be providing Americans with an increased sense of urgency to buy a home as 73 percent of Americans now believe it is a good time to buy a home, up from seventy percent in February.
“Conditions are coming together to encourage people to want to buy homes,” says Doug Duncan, vice president and chief economist of Fannie Mae. “Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice.” Homeownership and Renting
Thirty-three percent of respondents expect home prices to increase over the next 12 months, a five percentage point increase from last month, the highest level over the past 12 months.
The survey shows that on average, Americans expect home prices to increase by 0.9 percent over the next 12 months (up slightly since last month).
Additionally, 39 percent of Americans say that mortgage rates will go up in the next 12 months, a five percentage point increase from last month.
The percentage of respondents who say it is a good time to buy rose by three points to 73 percent, the highest level in over a year, while the percentage of respondents who say it is a good time to sell rose one point to 14 percent this month.
On average, respondents expect home rental prices to increase by 4.1 percent over the next 12 months, a significant increase since February, and the highest number recorded to date.
Forty-eight percent of respondents think that home rental prices will go up, a three percentage point increase from last month and the highest number recorded to date.
Sixty-six percent of respondents say they would buy their next home if they were going to move, up one point since last month, while thirty percent say they would rent, up one point versus last month.
The Economy and Household Finances
The rise in confidence in the economy’s direction leveled this month, with 35 percent responding that they think the economy is on the right track, consistent with February’s total. The percentage who say the economy is on the wrong track rose slightly from 57 percent to 58 percent.
Only 12 percent think that their personal financial situation will worsen in the next 12 months, consistent with February as the lowest value in over a year, and tied with January 2011 for the lowest to date.
Twenty-one percent of respondents say their income is significantly higher than it was 12 months ago, up 1 point versus February, while 63 percent say it has stayed the same – consistent with February’s values
Thirty-four percent say their expenses have increased significantly over the past 12 months (a slight increase of one percentage point).
When a tree is planted between property lines, disputes may arise, and an otherwise neighborly relationship may be strained. Or perhaps a tree fell, and now no one knows who should cover the cost. From dangerous tree removal to the just plain annoying tree debris landing in the yard, there are ways to work out tree problems and maintain good neighborly relations.
Most shared tree problems fall into three main categories:
1. Hazardous Tree Removal: The neighbor’s tree is dead, split or leaning. The homeowner next door wants the tree removed before it falls in the yard and perhaps hits the house or other property.
2. Property Damage: The neighbor’s tree has fallen and damaged property. Payment for tree removal service and damage repair is required.
3. Poor Maintenance: The tree is growing over the next door neighbor’s roof. Debris keeps falling in the yard, pool or patio. The tree needs professional maintenance to resolve the problem.
“Don’t touch a neighbor’s tree,” advises Lou Giroud, ISA Certified Arborist and President, Giroud Tree and Lawn. “By law provided there is no trespassing, a homeowner has the right to take care of the portion of the tree on their property. However, to avoid conflict and potential legal issues, get the neighbor’s permission before taking any action.”
Here’s how to proceed. “Start with an evaluation by an ISA Certified Arborist,” suggests Mr. Giroud. “Ask the Arborist to assess the situation and provide a recommendation in writing. Share the professional evaluation with your neighbor, especially if the tree is deemed a hazard and removal by a tree removal service is required.
The next step is to reach out to the neighbor. “In working with thousands of tree issues between neighbors,” explains Mr. Giroud, “I’ve found that the best results are gained through friendly communication.”
1. If the neighbor is approachable, call or visit. Schedule a time to talk about the tree problem. Calmly present the issue and share the recommendation from the tree service company. If the neighbor can’t pay for the work, offer to pay for it or share in the cost.
2. If the neighbor is never home, write a friendly letter explaining the concern and attach the Arborist’s recommendation.
3. If the neighbor doesn’t respond, send a certified letter. As a last resort, hire an attorney specializing in tree law.
Disputes with a neighbor can cause a lot of stress. An ISA Certified Arborist can evaluate the situation and help make the job of negotiating with a neighbor a little easier.
If you are in the process of buying or selling a home, your Century 21 Hometown Realty agent can help you.
Seven bills reforming some foreclosure rules passed committees in the California state legislature this week.
The bills were introduced in February. One set of bills extends protections to tenants, giving them 90 days before eviction after the foreclosure sale of the property. Another increases penalties to banks that fail to maintain blighted homes.
Servicers would be required to provide documentation to the borrower establishing its right to foreclose before the filing first step in the process, under other passed bills. Evidence of ownership and chain of title must also be shown to the borrower.
Two other bills charge servicers a $25 fee for every notice of default recording. The money will fund investigations for California AG Kamala Harris. Another piece of legislation passed by committee allows Harris to convene a grand jury to investigate financial crimes in different jurisdictions.
“All Californians have been impacted by the toll the mortgage and foreclosure process has taken on our neighborhoods,” Harris said. “Our California Homeowner Bill of Rights will provide relief for homeowners, tenants and communities. I thank the authors and supporters of these important bills.”
The BIlls
The Foreclosure Reduction Act
This bill was introduced by Assemblymen Mike Eng and Mike Feuer; Sens. Mark Leno, Fran Pavley and Senate President Pro Tem Darrell Steinberg.
Under this bill, servicers would be required to provide documentation to the borrower establishing its right to foreclose before the filing first step in the process — the default notice. Evidence of ownership and chain of title must also be shown to the borrower.
The bill prohibits servicers from dual-track foreclosures, or completing the process if the borrower is being considered for a modification. Notices of foreclosure sales must also be personally served.
Enhancement of AG Enforcement
The bill from Assemblyman Mike Davis imposes a $25 fee to a servicer when a default notice is recorded. The fees would fund investigations from the California AG and the national task force led by New York Attorney General Eric Schneiderman.
Servicers filed more than 67,000 default notices in the fourth quarter, according to RealtyTrac.
Attorney General Special Grand Jury
Another bill from Davis and Sen. Lori Hancock would authorize the AG to form a special grand jury to investigate and indict financial crimes against the state in different jurisdictions.
Due Process Reform Legislation
Assemblywoman Holly Mitchell and Sens. Mark DeSaulnier and Fran Pavley introduced the bill, which would increase fines to owners of dilapidated property to $5,000 per day from $1,000.
Enforcement actions would not be taken for the first 60 days against someone who acquired the distressed property. The investor or purchaser must show he or she is making repairs to the property.
The bill also requires banks to inform local code enforcement agencies when liens are released on foreclosures. This would clear the way for demolition to proceed.
Tenant Protection
The bill, written by Assemblywoman Nancy Skinner and Sen. Loni Hancock, would require buyers of foreclosed homes to honor the terms of existing leases for any tenants and give at least 90 days notice before eviction.
Bakersfield’s real estate bust was certainly one of the worst in the country, and because of that, many homeowners have faced real challenges when evaluating the mortgage on their home. To a lesser extent, there was also plenty of pain felt by homeowners along the Central Coast too. Underwater homeowners wistfully listen to radio ads boasting refinances with ‘record low interest rates’, knowing that taking advantage of those rates in a refinance is simply out of the question.
Compounding an already impossible problem, some homeowners also have an Option ARM that has reset, or is about to.
The Federal HARP (Home Affordable Refinance Program) was announced in early 2009, but few were able to take advantage of the program and one of the primary challenges were the limitations around loan-to-value requirements.
Simply stated, if your mortgage was more than 125% of your home’s current value, you were simply out of luck. And, in many places in Bakersfield’s housing market, we’ve seen as much as 50% of property values simply disappear.
Who Is Eligible for HARP 2.0 Refinance
Reach out to your lender for specific questions or contact our mortgage partner, Prime Lending. Here are some of the things you’ll want consider to determine whether or not you might be eligible for a HARP Refinance are the following:
You cannot have made more than one late payment in the last 12 months, and none in the last 6 months
The loan amount cannot exceed current conforming loan limits. California’s upper conforming loan limit is $625,000.
Your existing loan closed prior to May 31, 2009.
You’ve not done a HARP refinance. If you took advantage of HARP 1.0, you are not eligible for HARP again.
Second mortgages are allowed, but the second must approve.
Second homes and investment properties ARE eligible.
You may not use HARP if you have an FHA loan. For those homeowners, try the FHA Streamline Refinance Program.
There is 105% loan-to-value limit if HARP is used to refinance an adjustable rate mortgage or an Option ARM. If you need help with understanding what your valuation is, do not rely on Zillow – it is very inaccurate. Contact a Century 21 Hometown Realty Agent.
Loan is guaranteed by Fannie Mae or Freddie Mac. This is has nothing to do with who you make your mortgage payments to. To find out if your is guaranteed, check Fannie Mae and check Freddie Mac.
I know this is some downright gripping reading, but I suspect if you are one of the homeowners that can benefit from a HARP refinance, you may very well be on the edge of your seat. If you have questions, if you are curious about your eligibility, don’t hesitate to reach out to us. If we don’t know, we’ll point you in the direction of the lenders we trust to help you get to the bottom of it.
Here is another great sign of economic stability and home ownership stability in San Luis Obispo County. According to CoreLogic, The Foreclosure 12 – Month Percentage shows the percentage change in home foreclosures in San Luis Obispo County. CoreLogic records this data from banks and public record sources.
Data from CoreLogic
Century 21 Hometown Realty has been working with consumers on short sales and with banks to liquidate foreclosed properties for the past 5 years. It is with a deep sigh of relief that we see stability returning to the marketplace. With every foreclosure is a family that is being asked to move – something that breaks our hearts and the hearts of our community.
There are many economists that are theorizing what caused the turn around in housing, but in reality – it is likely a combination of many factors: low interest rates; changes in lending standards; population expansion, government policy, and so on. For us here on the central coast, we see inventory as the driving factor. As you can see from this next graph, there have been fewer sales.
Century 21 Hometown Realty is actively seeking listings to fulfill our buyer requests. If you are thinking of listing your home for sale, please contact one of our agents immediately. To learn more about our programs for sellers, please check out this information.
Here is a quick snapshot of real estate trends in a town like Arroyo Grande. If you would like these trends for your area, contact any of our offices or agents today.
Arroyo Grande Public Record data from CoreLogic ePropertyWatch
Here in California, buying a home or other property is a factor of loan affordability. Today, we see a lot of “cash buyers” in the market – but that simply means that they have already arranged financing. In this borrowing home ownership economy, the interest rates play a very significant role in the value of homes. The national economic recovery in America has reached every part of the economy except for jobs and housing. The good news for Californians is that home prices in Bakersfield and on the Central Coast have stabilized or began to rise again. Every listing on C21home.com has a handy mortgage calculator which will allow you to estimate how much you can afford. Be sure to take advantage of low home loan interest rates while they last. It is a great time to lock in a low rate for a 30 year mortgage. There is a chart below that shows you why.
Century 21 Hometown Realty CEO Jack Hardy shared a story yesterday. Jack and Shelia Hardy were at a listing presentation in Grover Beach where the homeowner felt like their home was valued in the low $600’s. It is common for homeowners to think that their homes are worth more than buyers are willing to pay today. Each homeowner has recent memory of an even higher home value 5 or 6 years ago. But the fact remains that we have seen 20% to 40% drops in some home values over the past few years. It is a heartfelt loss. But things are looking up. Homes that were selling in the low $500,000 range in Berry Gardens are now fetching prices in the mid to upper $5s. “We are seeing a lift in home prices in many areas of the Central Coast and Bakersfield,” says Hardy.
Grover Beach Home Values, look at neighborhood details on any listing for market stats
The housing market is an uncertain place unless you take a long term view. In the long run, buying a home is not like buying a car. If you own your home long enough, population growth and housing demand will increase its value. If you are both buying and selling a home, you always have a balanced transaction. The buying and selling power are equal. If you sell high, you buy high. If you sell low, you buy low.
Here are a few tips that can help you prepare to buy or sell your home.
1. Look into financing options first. Century 21 Hometown Realty offers mortgage support through Prime Lending. They have local loan officers who will be happy to walk you through the financing process. If you choose Prime Lending or other mortgage company, there should be no application or consulting fees to see where you stand.
2. Keep a close watch on interest rates. The risk associated with your loan is what determines your interest rate. There are many factors including the bank’s cost of funds (Federal Bank Interest Rates), your credit rating, and the loan to value ratio on the property you purchase. Even a small difference in interest rate can make the difference in thousands of dollars in purchasing power. Here is a chart to help you understand this.
Here are the current interest rate trends as published by the National Associaton of REALTORS
When selling a home in an unfavorable market, it can be hard to face some facts. Most likely, your home will not command the price you want. It might be hard to cut your losses and move on. And you may find you have more emotional ties to selling your home than logical ones.
Such feelings are not a surprise, says retirement expert Jan Cullinane, author of “The New Retirement: The Ultimate Guide to the Rest of Your Life.” Business decisions often are more emotional than we realize. But understanding some basic theories of behavioral economics—how psychology affects economic decision-making—can help us all make better financial decisions.
“Leaving a home can be very emotional,” Cullinane says. Yet, she adds, when we need to sell a home in a down market, we need to understand the obstacles and the behavioral economic factors so we can cut the emotional ties.
“We’re much more emotional, like Homer Simpson in our thinking, rather than logical like Spock from ‘Star Trek,’” Cullinane says. “When it comes time to sell our home, it helps if we are aware of these factors and how we think.”
Being aware of the following behavioral economic concepts help with this difficult decision-making:
Status quo bias. “It’s easier to do nothing than to do something,” Cullinane explains. People don’t want to change things unless there are compelling reasons.
Loss aversion. In this market, you may have to sell your home for less than you thought. On the flipside, when you buy your next property, you’re likely to buy it at a discount. But that doesn’t always make us happy. “We feel worse about a loss than we feel happy about a gain,” Cullinane says. Recognizing our loss aversion can help us come to terms with the loss and appreciate the gain.
Endowment effect. “We put a higher value on something we own than on something we don’t own,” Cullinane says. The endowment effect can create a roadblock when putting a home on the market. It also means that others won’t value our home the same way we do.
Anchor. We all have an “anchor”—a fixed price for which we think our home should sell—and we don’t want to sell it for less than that amount. Often, our anchor is based on what we paid for the house and what we feel it should be worth now, even if market conditions have changed dramatically. We need to get past that emotional anchor. “Let’s face it, your home is worth what someone is willing to pay for it,” Cullinane says.
Sunk costs. When we have put money into something that we can’t get back, we have a tough time cutting our costs and moving on. For instance, if you remodeled your deck, you may not be able to recoup that money when you sell. You need to realize that money is a sunk cost—it already has been spent and you won’t get it back—and move on.
If you’re retiring, or moving for other reasons, it helps to realize that your home is not worth now what it once was. Those high sales prices aren’t coming back any time soon, but you can get a good deal on a new purchase.
“Knowing that you feel worse about a loss than you feel happy about a gain—and recognizing that intellectually—goes a long way to getting over that emotional hurdle,” Cullinane says. “Knowledge is power.”
Century 21 real estate agents have recently been on adventures to expand their personal courage and promote local charities. It is partially personal mission and partially component of the Century 21 mission of “Smarter, Bolder, Faster.” Recently, the Arroyo Grande Relay For Life, a chapter of the American Cancer Society has been the benefactor.
Anne McCracken, veteran Century 21 Hometown real estate agent is also a cancer survivor. She and fellow Century 21 agent Crystal Cowart are co-chairs for Relay for Life. Over the past few weeks, they have been jumping out of planes to raise money for cancer research. Other Century 21 Hometown agents joining the effort include Nancy Tucker, David Hubbel, Michelle Adney, and Hubbel team assistant, Andrianna Burbank.
“It was bucket list stuff because I lived through cancer” says McCracken. “As a survivor, I personally understand that the support for the American Cancer Society in fighting such a terrible disease is the greatest gift that I can give back to humanity.”
Anne has sold real estate for 8 years. Before that she was the Manager of Silverado Tours for 14 years. McCracken was also employed with the Lucia Mar school district for 11 years. Real Estate became a natural evolution in McCraken’s career. “My mom was an agent so I grew up as the child of a REALTOR.” Her brother is also a real estate broker and REALTOR. “I love the people I work with and have purchased and sold many homes for myself,” says McCraken.
For McCraken, Century 21 Hometown Realty has the size, training, support, and collaborative environment that allows her to specialize in residential real estate. McCraken is an agent on the Hubbel Team with 3 other agents. The Hubbel team is ranked #8 team in the Nation for Century 21.
To raise money for Relay for life, McCraken and others flew out of Oceano Airport and parachuted into a landing area at sea venture beach. The flight took them up to 10,000 feet and had everyone the opportunity to take in the majestic view. The skydiving company managing the event was Skydive Pismo Beach.
Each Century 21 agent did a Tandem dive with a certified instructor. Skydive Pismo beach has master instructors on staff with more than 2500 jumps. Giving that kind of control to another person was akin to giving control and faith to your doctors. Buyers and Sellers are in some way putting that level of control in their agent.
Safe landing, weather it is in real state, skydiving, or in cancer survival is the greatest possible outcome that keeps McCraken coming back for more.
Moms are the greatest. Although many moms are working today, they are still run the roost at home and have the best advise when it comes to home ownership. In honor of Mothers Day, Century 21 Hometown Realty celebrates the wisdom of mothers. Here is advice that we were able to locate from Moms.
