Real Estate Information

When working with your buyers, they may be shy of meeting all the financial requirements to purchase a home. Here are sources and strategies that may help.

First off, consider seller financing. The use of seller financing-in which the seller agrees to take a promissory note from the buyers for the purchase of the seller’s home. This has dropped because fewer sellers can finance the sale of their current home and buy another. However, if buyers are creditworthy, it doesn’t hurt to ask whether sellers have the means to swing a seller financed transaction.

Next, tap family members. Many loan programs allow buyers to use gifts from family members for a down payment or closing costs.

You can also turn to IRAs. Remind buyers to investigate whether borrowing from their individual Retirement Accounts can help generate cash for a down payment. IRA rules also permit you to withdrawal up to $10,000 penalty free once in a lifetime to purchase a home. However, you must be either a first-time buyer or someone who has not purchased a home in at least two years.

Keep an eye on credit unions! Credit unions are often a well kept secret, but they can be an economical source of financing. Most credit unions service their own loans and occasionally even run "specials" on loans.

And last but not least, suggest leasing with an option to buy. A lease option agreement allows buyers to rent a home with the promise of a sale at a certain price while they gather a down payment. Often, the sellers agree to apply a portion of the monthly rent toward the down payment. If a seller's home is languishing on the market, this might be a good way to secure an eventual sale and help buyer.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

Lenders may be getting more responsive to short sales. The view of real estate professionals is mixed, with some saying yes and others saying no, depending on the lenders they work with and where they are. But one aspect of short sales that has proved troublesome across the board is compensation.

Some MLSs have a rule requiring listing agents to let there colleagues know if a listing is, or is potentially, a short sale, and thus subject to a possible last minute change in commission by the lender. To encourage the adoption of such a rule by MLSs that don't have one, the NAR Board of Directors in May approved model language for a rule specifying that if you know there might be a short sale, you must say that, and put the selling agent on alert that a lender might want a change in commission.

The goal of this new language is to make at least this one aspect of short sales less painful. Colleen Badagliacco, chair of NAR's Multiple Listings Issues and Policies Committee says, “The amount of time it takes lenders just to get back to you on your loan application is the real problem with short sales, and we can't control that. But this rule at least helps eliminate the conflict that arises when lenders come back and want to give us a haircut on our commissions."

It's not uncommon for lenders to want a cut in real estate broker commissions as a condition of approving a short sale, and the buyer's representative finds out only at the last minute.

Conflicts like this typically end up in arbitration. Although the rule passed by NAR is voluntary, Badagliacco thinks many MLSs will adopt it for their members. Far less certain is the direction of lenders in speeding their processing of short sale applications.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

According to The Orange County Register, for the 22 buisness days ending June 15 2008, Orange County home sales decreased 0.6 percent. The median sales price fell 26.3 percent. The median is where half the homes sold for more and half for less. The types of homes that are selling along with the home value changes, cause the median to change.

Aliso Viejo's median sale price the previous 4 weeks was $434,000. That is a 18.4% decrease from what it was in 2007. Aliso's sale volume the previous 4 weeks reached 86, a 13.2% increase from what it was in 2007.

Dana Point's median sale price the previous 4 weeks was $725,000. That is a 11% decrease from what it was in 2007. Dana Point's sale volume the previous 4 weeks reached 32, a 10.3% increase from what it was last year.

Mission Viejo's median sale price the previous 4 weeks was $537,000. That is a 14.1% decrease from what it was in 2007. Mission's sale volume the previous 4 weeks reached 46, a 33.3% decrease from what it was in 2007.

San Juan Capistrano's median sale price the previous 4 weeks was $400,000. That is a 43% decrease from what it was last year. San Juan's sale volume the previous 4 weeks reached 33, a 13.8% increase from what it was in 2007.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

Fannie Mac is making bold cutbacks that will send shock waves through the mortgage market, after posting a quaretly loss Friday that was three times larger than Wall Street had expected. The mortgage finance giant lost $821 million or $1.63 a share for the quarter that ended in June 30 2008.

In order to slow its financial decline, the mortgage finance giant slashed its dividend to 5 cents a share from 35 cents a share and said it will eliminate loans for borrowers with solid credit scores but little proof of income or small or no down payments.

Fannie Mac is also raising its mortgage fees, which will be passed on to borrowers as higher interest rates or closing costs.

With Freddie and Fannie Mac becoming more risk-averse, fears are building that mortgage rates will keep climbing, making it harder for people to afford a mortgage or refinance their home, and spur even more foreclosures.

Disappointed stockholders send Fannie Mae's shares down 8.9%, or 89 cents, to $9.06 in late trading Friday. Investors continue to worry that Fannie and Freddie will be overwhelmed by losses and require government aid. They are the biggest buyers of U.S. home loans from banks and other lenders. Together, they own nearly half of the outstanding U.S. mortgage debt.

The company said it's boosting efforts to recover money from lenders who committed fraud in loans the company bought. To speed up the sale of foreclosed properties, Fannie Mac is opening offices in California and Florida

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

Inflation is bad for investors on multiple levels. It erodes your savings, makes stock market returns less valuable and if you're not getting cost-of-living adjustments in your salary, inflation simply makes you feel broke. This year through June, the government's widely watched consumer price index rose 5%, the biggest one year rise since 1991.

Oil prices have recently made a brisk retreat for record highs, which could decrease inflationary pressures going forward, but prices for a barrel are still p 61% from a year ago.

These figures have prompted renewed concern at the Federal Reserve about inflation. And with inflation likely to remain a worry, what's an investor to do? Things that worked in the past may not work so well now. For instance, during the inflationary 1970s, real estate investing proved a shrewd strategy. Today real estate prices continue to fall in many markets and analyst expect home woes to continue for some time.

Real estate aside, there are smart, basic strategies that investors should consider when trying to inflation-proof their portfolios:

Investing in Commodities is one of them. With oil plunging 21% from its record high, this might seem counterintuitive. But grains, metals, and lumber are also commodities. Buying tips is another strategy. When inflation is quiescent, this isn't always the best strategy. But with consumer prices on the rise, moving a portion of your fixed income portfolio into TIPS or a TIPS focused fund can make a lot of sense. Another way is to invest in sectors with pricing power. Traditionally, pharmaceutical and Health companies are the best bet for companies with pricing power and steady earnings. And lastly, be careful when hunting for yield. With inflation rising, there's great temptation to hunt for higher yields among corporate bonds or dividend-paying companies. But higher yields can signal danger ahead.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

Housing Bill has passed and the most noticable changes are with FHA. October 1st 2008, the down payment increases from 3% to 3.5%. FHA will no long allow the down payment assistance programs like Nehemia, as predicted. Any and all loan process must have full credit approval by FHA on September 30th. The last big change is the mortgage insurance will no longer be "one rate fits all". It will now be driven by loan to value and credit scores. Overall, the rate will go down making less payment to the borrower.

On December 31st 2008, the second biggest change goes into affect. The temporary high balance of $729,000 will end. It will be reduced to $625,500 under the new housing bill for both FHA, FNMA, and FHLMC. If not for this bill, it would have become $417,000. These balances apply to Orange County.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

The risk of housing foreclosure severely impacts your family and contributes to declining property value in your neighborhood.  As a result of widespread foreclosure, San Bernardino County has the nation's highest risk for declining property values over the next two years, as reported by leading mortgage insurance provider The PMI Group (www.homesafepmi.com).  To see PMI Group's detailed housing price report and risk index, please see our latest study at the following link: (Report: http://www.pmi-us.com/media/pdf/products_services/eret/pmi_eret08v3s.pdf).

 Many homeowners think foreclosure is a bank's first decision if you default on or miss your mortgage payment.  However, lenders actually want to keep you and your family in your home - banks save more money on auction and closing costs by adjusting your mortgage to meet your current income and financial situation.  This is why the PMI Group is actively working to help all Inland Empire residents at risk of foreclosure with a free Homeownership Preservation Workshop, co-sponsored by Congressman Jerry Lewis and The City of San Bernardino, on Saturday, August 16, 2008.  The event details are as follows:

What: The workshop is aimed at helping area residents cope with the housing downturn and avoid foreclosure. Expert consultants will be on hand, along with Rep. Jerry Lewis, R-Redlands, and representatives from major mortgage banks.

When:  Saturday, August 16, 2008

Registration:  8:30 a.m. - 9:00 a.m.

Workshop:  9:00 a.m. - 3:00 p.m.

Parking: Show up early!

Location: National Orange Show, Valencia Room, 689 S. E Street, San Bernardino, CA 92408

Cost: FREE!

Phone: (909) 862-6030

Lunch: Lunch is provided!

Among those Los Angeles County regions ranked at highest risk factor for declining property values include

• Los Angeles - Long Beach - Glendale:     85.7% risk factor
• Santa Ana - Anaheim - Irvine:               85.8% risk factor
• Riverside - San Bernardino - Ontario:       95.5% risk factor

According to a recent study published by Freddie Mac (http://www.freddiemac.com/service/msp/pdf/foreclosure_avoidance_dec2005.pdf), fewer than half of homeowners contact their lender before entering foreclosure.  Contrary to popular belief, banks and lenders substantially prefer mortgage workout plans and debt solutions to foreclosing on defaulted mortgage property - foreclosure can be far more costly and worsens America's credit situation in an already weakening economy.  

Join us next weekend for a chance to speak with your lender face-to-face and work out a payment plan that meets your individual requirements.  Of course, we can not guarantee an effective mortgage workout program specific to your needs - some families' credit situations make more sense for considering options such as downsizing or an entirely new personal budget.  In any case, we can connect you to the debt counselors, lenders and financial experts who can share their advice with you, cost-free, to find a new solution for your financial challenges.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

There are "two distinctly different paths" for housing in America right now, says Mortgage insurer PMI Group's latest report on the risk of falling home prices . Most of the nation's housing markets are showing signs of improvement, but the inflated markets in California and Florida are showing signs of further deterioration amid rising foreclosures.

"Risk continued to intensify in many of the metropolitan areas where home price growth had significantly exceeded historical norms, but continued to decline in many other areas across the country," reports PMI addressing the risk of falling prices over the next two years.

35 of the 50 largest metropolitan areas in America risk of future price declines decreased in the first quarter. However, in California, the risk of price declines increased in 25 of the state's 28 metropolitan areas.

According to PMI, the main shadow over the state's real estate markets:foreclosures, which tend to drive down prices. PMI did find one sign indicating that California's market may be normalizing: excess housing supply is declining in many markets -- the supply of unsold inventory in Orange County, for example, dropped from 29.0 months' worth in late 2007 to 20.3 months in early 2008. In Los Angeles, inventory declined from 18.7 months to 17.9 months, PMI reports.

PMI uses economic, housing and mortgage market factors, including home price appreciation, employment affordability, excess housing supply, interest rates and foreclosure activit to calculate "risk index".

Here's PMI Group's list of the cities with the highest "risk factors" in the first quarter of 2008 (A "risk factor" of 85% means PMI believes there is an 85% chance of declining property values in the next two years):

 National Rank              City                          Risk index

1)   Riverside-San Bernardino-Ontario       95.5%
2)   Fort Lauderdale-Pompano Beach         92.2%
3)   W. Palm Beach-Boca Raton                   91.9%
4)   Orlando-Kissimmee                                91.1%
5)   Las Vegas                                                  88.1%
6)   Tampa-St. Petersburg                              86.6%
7)   Santa Ana-Anaheim-Irvine                       85.8%
8)   Los Angeles-Long Beach-Glendale      85.7%
9)   Miami-Miami Beach                                   84.8%
10) Sacramento                                                 82.2%

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

Orange County has 2.4 million square feet of new office space being marketed, according to real estate services firm Stanley Inc. The firm blames the flood of space coming on line from "mistimed construction" and sublet from companies that have closed.

25.1 percent of the office space in Orange County's most prized buildings were available for rent during the second quarter of 2002 in the last recession, reports Studley Inc. The county has 2.4 million square feet of new space being marketed. Today you drive through OC and see buildings without people in them.

In the second quarter, a forth of the county's Class A office space, the newest and most desirable buildings, was available for rent, by Studley's count. Second quarter availability was up 0.6 percent from the first three months and 7.1 percent for the second quarter of 2007.

Countywide availability was 18.6 percent, which is up 0.6 percent from the first quarter, but only a 3.8 percent increase from a year ago. Sublet space poured into the airport area, which accounted for fully half the sublet space in the county.

South County also has it problems. Studley says the availability rate hit 32.9 percent in the second quarter with 1.2 million square feet newly built or under construction. Aliso Viejo is particularly hurting. Homebuilder, Lennar, reportedly has reduced its local staff by 30 percent. It also announced it is putting 30,000 square feet of its 137,352 square feet at 25 Enterprise up for sublease. Safeco, the insurance and financial firm, put 75,000 square of sublet space on the market at 120 Vantis.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search

Since 2005, housing prices have dropped about 15 percent. Resulting in a loss of about $3 trillion dollars in the U.S. household wealth.

The Federal Reserve's tug of war with itself- monetary stimulus to fight a recession versus monetary tightening to fight inflation will most likely be decided by the future direction of housing prices.

Further housing price decreases at double digit levels would lead to more asset write downs that, in turn, would lead to more credit tightening, along with sharp declines in consumer spending, and eventually a deep prolonged recession. In this case, the Fed would barley be in a position to fight inflation and buttress the value of the U.S. dollar.

It's appropriate to look more closely at the forces at work that shed light on the future course of home prices because so much of our economic future is tied to the housing market.

Keeping you informed about the Orange County real estate market, economy and life in the OC is what I'm committed to doing.    

For more great Orange County market insight and industry news visit Laguna Niguel Real Estate or view the Orange County Market Trends at Orange County Real Estate.  

Listen to Zen's Laguna Niguel Real Estate Podcast available 24/7.

SEARCH ORANGE COUNTY'S BEST HOMES at Orange County MLS Home Search