Tuesday, October 29, 2013

Property Taxes ~ Informational or Need to Pay?

Every time I work with buyers I remind them about their property taxes. Quite frequently during the disclosure process, escrow paperwork, and of course the initial contract writing.

So far, so good. I'm pretty sure everyone is taking care of their property taxes on time. Pretty sure.

First half is due in November, late in December. Second half is due in February, late in April.

Escrow pays the taxes due from the seller and the buyer at close. Sometimes there are supplemental property taxes due. And sometimes, it takes forever to get that bill to you.

This quickie blog post is just a timely reminder that the tax assessor may take a while to reassess your home after a sale, but they add hefty penalties if they have to wait for your payment. Hefty I tell you!

So, when you get your bill, pay it in a timely manner. I also suggest to new home owners that when they get one that says 'Informational' on it, give a shout to your mortgage lender...just to be on the safe side. Make sure there's enough money being impounded in there the first time round and that the bank is truly paying the taxes.

Remember, the assessor does not like to wait and charges tons if you are late!

Friday, October 25, 2013

Since Some Are Still Wondering....

Don't be too skeptical about the housing market rebounding. It really is!

The number of US Mortgages Going Unpaid = 4,594,000! Seems like a lot? Nah, it's only just under 6.5 % of all outstanding mortgages!

Unfortunately the east coast, again I say - The Judicial Foreclosure States -, are where the highest numbers of foreclosures still remain.

Pretty & perfect weather California, with some of the highest values in Real Estate, is non-judicial and the numbers are reducing.

Home loan rates are still very low. 

Housing prices have gone up but I sure don't expect them to go down in the near future!

There are plenty of loan programs out there ~ get on board the home buying train I tell ya!

Tuesday, October 22, 2013

What Are Solar Panels Worth In Real Estate?

I'm always trying to find some good tidbit of info to share with my blog readers. I want to thank our broker at Realty Executives Valencia for forwarding to us a couple answers from appraisers when determining value for a home with solar panels.

Cut and pasting so I make no excuses for typos, spelling, nor grammar errors:

Appraiser #1:

So the question is...can/does a Solar Panel System add real value.
As an active/licensed Appraiser I have come across many sales/refi's with solar panels. And have found its market value effect is primarily influenced by the Lender. In the case of a home with Leased/Rented panels, there is no way for an appraiser to specifically add value for this feature..like we would for a Pool or extra Bathroom, even though "permanently attached" to the structure and then considered Real Estate, not Personal Property, the unit ownership still belongs to the solar company and Could be removed, and possible resulting damage to roof. If however the Solar panels, were purchased and owned, the property could/should easily sell for more and typically the appraiser could/should appraise the property at our highest end of comparable range, really without any drama. In a perfect world, we would find another similar home (paired sale) that also sold a bit higher due to solar panels. A buyer would love this feature, and an appraiser wants to give it value, within the guidelines of the Lender making the loan. When asking this question, just imagine being in the Lenders shoes, if the borrower defaulted, and lender takes the property back, if rented, they would lose that security, but if owned outright it would stay attached add could add value to the next buyer.
Now, the next question would be...so what's a professional Solar System worth ? Good question...its really not set in stone yet. It appears every system is different and some are more like 100% effective, and some less useful. And there does Not appear to be any industry standard Rating system developed yet. There are more accepted price/value criteria for say a pool or extra bath but solar systems are newer and no accepted norm has really been established yet. I can say I did a Refi in Westridge area home in the $800's and the owner spent $60,000 on a purchased solar system and I bumped up final value by $50,000 - as it fell within my comp range on these larger homes. There is No accepted formula, derived from their cost savings. The newer appraisal format and reporting specifically asks the appraiser to comment on energy efficient items but does not have an accepted way for the appraiser to specifically add a value, I would expect this will eventually change but for now we recognize a buyer is paying more but without another paired sale comp with same feature selling higher the best we can do is appraise it at the top of the Sale comp range.

Appraiser #2:  

This question is coming more often, So my answer may start changing,
But currently, paired sales analysis is not showing any contributory value ( Yet) for solar,
 In fact, due to the contract that must be acquired in most solar home and the continuing power bill most home receive due to limited panels buyers are currently not paying more for a solar home, and may even have an adverse effect as most monthly payments are around $150- $200.
In Santa Clarita we are seeing a large influx of Solar new construction and existing dwellings so we may start to see some market driven value for solar soon.
 Hope that helps.
FYI: If you can find two homes alike in same tract, one with solar and it sold for more then that would be the contributory value for solar. But can never say for every neighborhood, that is like views and pools, different value's for different areas.

Friday, October 18, 2013

Wanna Be a Dare-Devil House Flipper?

We all know there have been a lot of flips in the market over the last few years. Homes bought for really dirt cheap, rehabbed, then sold for profit. Most of those seemed to be the below 300k range homes. Bought for a little over 200k, kitchen, baths, painting done (hardly ever the landscape though), then resold for just a smidgen under 300k. Yep saw quite a few of those.

Now, it appears, the higher end market has been a little more primed for house flipping. Think Million Dollar Listing Los Angeles. And, for the last couple of months, out here in the bedroom community of Santa Clarita, the market over 700-ish was pretty stale. I do, however, see it picking up a bit again.

So, let's say you want to make more than 25k. You want to make 500k, well how about just 150-200k? You will need to find the higher priced flippable (is that a word?) home.

And, yes, they are out there. They are being aggressively approached as well. The house flippers are sending letters, making calls, popping e-mails to the owners and agents for those stale 700-ish homes to see if they want to sell for cash.....for significantly less than market value.

Surely they have been able to convince a few, more than a few likely, home owners to take the bait.

Look for some to come back on the market. Expecting them in the Spring of 2014.

But if you want to be that Dare-Devil as well be prepared to cough up some major cash, have a huge investment....and be financially able to hold for the next few months.

Are ya that kinda person?

Tuesday, October 15, 2013

Are Home Equity Loans Going To Be The New Wave Of Home Lending?

Now that the equity of many home owners has risen since the lowest levels of 2009 will we start to see HELOC's (Home Equity Line Of Credit) coming back?

Refi's were rampant with the equity increase and the low rates. That has slowed down significantly with the rise in mortgage interest rates.

Yet, the thought of a 10 year interest only HELOC is probably pretty tempting to a homeowner that has seen a nice jump in their homes' value since purchased in the last few years.

Needless to say, 'Proceed With Caution!

Many will be happy that they have the new found equity. I can only hope that we don't get into the cheap money, spending spree, take it out of your house 'bank' like we did in the years preceding the housing bubble bursting!

Be careful homeowners, thing long and hard before you use your house bank yet again.

Friday, October 11, 2013

Sellers ~ What Are You Going To Do As Inventory Climbs?

Inventory is climbing. We expect it to continue to do so, yes? Of course.

This is just a quickie reminder to sellers that the days of overpricing a nasty home are going, going, gone!

The market is settling down. So what does that mean to a seller when they decide to sell their home?

It means you better be ready to get real. Best be ready to do some staging, hire an agent that can tell you where to put what piece of furniture in which room. What rooms to focus on. How to get the most bang for your buck. You know, the stuff we've hardly had to do much of for a while.

Well, quite honestly, I've always suggested to my sellers how to prep their home for sale. My favorite line? "You gotta pack it anyways." That seems to help.

When the inventory becomes higher, there will of course be more competition. You can prep your house all you want to look it's absolute best.

Will that make it sell for more than it's worth? Should you list high and bring it down? Well, from almost 12 years experience.....I say a big NO NO NO!!!

When we settle down into a more normal market....and we all know we're getting there....the most important thing you can do to sell your home is list it for the right price immediately upon deciding to sell.

Don't let your neighbors or family sway your good judgement. Don't let a greedy agent tell you your house is worth more than it is just so they get your listing then beat you up week after week to get price reductions.

I've had about 1/2 dozen stale listings in my dozen years of selling Real Estate. Stale listings...I'm unloading one now. First one in many years of course. Thought the sellers had some sense but listed too high. Then it's been a fight to get them back to reality.

It's not worth the fight. 
It's just like a stale piece of bread when you list too high from the get-go.
Nobody really ever wants it....
unless you drop the price so ridiculously that someone will find a use for it!

Tuesday, October 8, 2013

Seller Completed Disclosures

When selling a home, the seller is required to complete a bounty of disclosures regarding the property.

In reality they are to indicate what items have been completed recently, what problems they have had. Items repaired by insurance. Lawsuits. All kinds of good stuff. It's important as a buyer to know as much as possible about the home they are buying. Who better to tell than the seller, right?

When I list a home for sale I usually wait until we get an offer in and then sit with the sellers while they complete the disclosures. If they have a question, I'm right there to make sure they complete the legal documents in their entirety. The longest I sat with a seller on this was 4 hours! He had a lot to write down.

I wait as things may have changed from list date to contract date and these disclosures should be as accurate as possible.

I always tell them 'Disclose, disclose, disclose'. Never hide anything as it may bite you in the butt later on.....when you least expect it!

Now, the hardest part is when I'm representing a buyer. We get a whole different type of disclosure packet from every different type of seller working with all kinds of agents.

You can definitely tell if the seller read them, asked questions about how to complete them, cared if they were accurate or not.....and if the agent just highlighted the spots for initials and signatures and dumped them at the sellers door. Oh, yeah, you can tell.

But what do you do in that instance? You can go back and forth and continue to ask questions of seller. Yes you can. That's your right as a buyer. Any questions you have, you can ask.

Keep that in mind when selling or buying a house. Disclosure correctly and eliminate future problems. Ask questions to avoid future lack of knowledge.

Friday, October 4, 2013

Friday MLS Stats for 10/4/13

Santa Clarita Valley ~ Awesometown to some....just home to others.

How many homes are moving in the last 30 days? What shows up on the MLS I can share. New homes don't usually hit the MLS, and trust me, there are some new homes moving.

Active ~ 568 total
Only 40 are Short-Sale
And, only 17 are Bank Owned
Just about exactly 10% of the market is distressed sales.

The deals were a year ago....those are gone,
 unless you're in a judicial state waiting to pounce like a vulture!

Pending/Back-Up ~ 619 total
265 are Short-Sale
Again, the number 17 is what hits for Bank Owned

Sold in the last 30 days? ~ 299
SS = 49
REO = 12

So, we are at a two month supply. We are seeing  price reductions. I am seeing a lot of my networking groups sharing staler listings. You know, the ones that haven't sold in the first 2 weeks? Yep, I've got one of those too!

At any rate, that's the latest numbers for our SCV. I believe the number of homes sold in last 30 days is a little less due to the hike in rates scare we had a couple months ago.

Questions, comments? Have at it!

Tuesday, October 1, 2013

More Big Moolah To Be Paid to Freddie Mac

Citigroup is coughing up 395 million to Freddie Mac to settle potential future repurchase claims on millions of loans sold to the GSE in the last 10 years. Citi has that 395M in their existing reserves for just such an expenditure.

This agreement handles claims for misrepresentation on 3.7 million loans sold by Citi to Freddie.

Any loans not covered by this pay-out Citi says they still have enough in reserves to handle them.

Apparently Citi is one of the few banks that have reached an agreement with the FHFA over allegations of misrepresented loans sold to both GSE's.

I suppose if more would cough up the cash for crappy loans, the GSE's wouldn't be asking for that 1.7 bailout from the rest of us.