Category Archives: Real Estate

Real Estate

10 Reasons to Buy a Home Now

Enough with the doom and gloom about home ownership. Brett Arends explains why owning a home is a good thing.

With newspaper headlines declaring that foreclosures are on the rise, short sales are difficult to navigate, and the rate of home ownership is on the decline, some home buyers may no longer see the value of purchasing a home.  However, there are several reasons why home ownership makes economic, financial, and personal sense.

MAKING SENSE OF THE STORY FOR CONSUMERS

  • Home prices have declined approximately 30 percent from their peak, according to Standard & Poor’s Case-Shiller Index, which is good news for home buyers hoping to purchase a house at an affordable price.  As a result, statewide affordability reached 64 percent in the second quarter of this year, meaning 64 percent of California households could afford to purchase an entry-level
    home in the state.
  • Although home buyers should not view a home strictly as an investment, generally speaking, homeownership does offer risk capital.  The median home price in California has risen year-over-year for nine consecutive months, which implies home equity will increase over the next few years.
  • Owning a home also can be beneficial because it acts as “forced savings.”  While the monthly mortgage payment may be slightly higher than renting an apartment, most renters do not put the difference into a savings account.  The portion of a monthly mortgage payment that’s allocated toward the principal of a mortgage shouldn’t be viewed as a cost, but rather as a forced monthly saving, because in the long run it’s building equity in the home.

Read the full story in the Wall Street Journal

Real Estate

Beware the Credit Repair Scam

Recession-hammered homeowners’ credit scores are on the decline across the country, say scoring industry experts, and that makes more consumers vulnerable to scams that purport to erase delinquencies, judgments, foreclosures and other problems from files at the three national credit bureaus — Equifax, Experian and TransUnion.

What sort of scams? A Federal Trade Commission settlement in early September with a Florida “credit repair” company provides a fresh example. The FTC’s complaint against Clean Credit Report Services Inc. of North Miami alleged that the firm promised clients it could boost their credit scores dramatically and quickly — even if the derogatory information in their files was accurate and current.

In national radio advertisements, plus Internet and TV pitches, Clean Credit said it could make records of “late payments, collection accounts, charge-offs, repossessions and bankruptcies” simply disappear from credit files, according to the FTC’s complaint.

Lower scores, in turn, are preventing many homeowners from qualifying for new or refinanced mortgages under toughened underwriting standards imposed by lenders and investors such as Fannie Mae and Freddie Mac.

The takeaway here for anyone with depressed credit scores who nonetheless is seeking a mortgage: Don’t believe claims of credit-repair operators who say they can perform miracles on your credit files, boosting your scores overnight and keeping them that way permanently. They can’t. If the delinquencies and other derogatory information in your files are accurate and current, the only way to boost your scores is to reverse your previous credit behavior and make responsible use of your credit accounts over time.

Finally, never pay money upfront. Not only are demands for advance fees for credit-repair red flags for scam operations, they’re also blatant violations of federal law.

Read the full story at: Washington Post

Real Estate

Cal HFA Offers New 30 Year Mortage


The California Housing Finance Agency (CalHFA) announced this week the launch of a new fixed-rate, 30-year, FHA-insured mortgage program for low- and moderate-income home buyers.

MAKING SENSE OF THE STORY FOR CONSUMERS

  • CalHFA provides financing and programs for low- and moderate-income Californians.  The program announced this week enables qualified, first-time home buyers in California to receive a 30-year mortgage with a fixed interest of approximately 4 percent.
  • The CalHFA program includes upfront mortgage insurance, which is required for most FHA- insured home loans.  Borrowers are eligible to use the California Home buyer’s Down payment Assistance Program, which can provide up to 3 percent of the purchase price of the home for down payment or closing costs.
  • In addition to being a first-time home buyer – defined under federal law as not having owned and occupied a home for the past three years – borrowers also must meet income limits, which vary by county and family size.  Income limits can be found on the CalHFA Web site at http://www.calhfa.ca.gov/homeownership/limits/income/income-main.pdf.
  • Borrowers also must purchase homes within FHA’s loan limit and CalHFA’s sales price limits.  Mortgage loans are limited to $417,000 under FHA guidelines, while CalHFA’s sales price limits vary by county.
  • Additionally, borrowers must meet the minimum credit score requirements and maximum debt-to-income ratios and complete a HUD-approved home buyer education program.  More information about the CalHFA program can be found at CalHFA Home Page.

Read the full story.

Real Estate

Real Housewives of New Jersey” Star Teresa Giudice Accused of Bankrupty “Falsehoods”

Teresa Giudice
Teresa Giudice

I guess it doesn’t make a difference how much money you make. If you spend beyond your means, you can get in Trouble. So it is with the Real Housewife of New Jersey Teresa Giudice and her husband Giseppe “Joe” Giudice. Among other things, apparently they left out a rental that they owned.

Back in October, Giudice and her husband, Joe, filed for Chapter 7 with the U.S. Bankruptcy Court in Newark, N.J., People reports.

According to the documents, the two owe nearly $11 million to creditors against their annual household income of $79,000, due to unpaid mortgages, hefty credit card bills and renovation obligations.

Giudice told the magazine in a statement. “What is true is that due to the economy, most of my husband’s real estate ventures failed despite his hard work and effort. As a result, we looked to the Bankruptcy Court for a ‘fresh start.'”

U.S. Trustee Roberta A. DeAngelis filed a Complaint Objecting to Discharge Sept. 2, which indicated her opposition to the couple’s bankruptcy petition – suggesting that it be denied because the two failed to disclose pertinent financial information and reported various “falsehoods,” reports RadarOnline.com.

READ: US Bankruptcy Court’s Complaint Against Giudices

According to DeAngelis, Teresa received a “$250,000 initial advance, a $30,000 additional advance, and royalties based on sales of her cookbook Skinny Italian.”

TGFabulicious.com also had over $100,000 deposited into its bank account over the course of six months following their October 2009 filing.

The complaint also pointed the finger at husband Joe, who admitted he presented falsified federal income tax returns to DeAngelis, and that the tax returns were never actually filed with the Internal Revenue Service.

Joe also did not disclose he owned the property at 1601 Maple Avenue in Hillside, New Jersey and that he was collecting rent from the location.

DeAngelis stated “the defendants have concealed, destroyed, mutilated, falsified, or failed to keep or preserve recorded information from which their financial condition or business transactions might be ascertained.”

Real Estate

Five Mistakes Home Buyers Make

Affordable home prices and historically low interest rates have created an ideal situation for many qualified first-time home buyers to purchase a house.  Despite this opportunity, some buyers may be overconfident and make mistakes during the home-buying process.

MAKING SENSE OF THE STORY FOR CONSUMERS

  • Some first-time buyers are unaware of the vast amount of paperwork and negotiations that go into purchasing a home.  As a result, buyers may think they can save money by forgoing the use of a REALTOR®.  However, managing the nuances of offers, inspections, financing, and other pivotal steps when buying a home often causes confusion and anxiety for buyers.  Working with a REALTOR®–who is obligated to put the buyer’s best interests first–will help to alleviate buyer concerns during this process.
  • Online mortgage calculators can help buyers estimate the amount of house they can afford, but calculators should not be the sole source for mortgage-approval information.  Buyers are advised to meet with a mortgage broker or banker prior to beginning the home search to help determine the loan amount for which they are most likely to be approved.
  • Although there is a large selection of homes available for sale, home buyers should not assume they can make low offers or unreasonable demands.  Even in hard-hit housing markets, homes in desirable neighborhoods are receiving multiple offers.

To read the full story, please click here.

John J. O’Del
Licensed Real Estate Broker
Call 530-263-1091

Real Estate

Frank Lloyd Wright House May Relocate to Japan

Frank Lloyd Wright house may relocate to Japan An experimental textile block house designed by architect Frank Lloyd Wright could be moved from California to Japan.

La Miniatura in Pasadena was built in the 1920s and is one of four similar houses in South California, reports the Los Angeles Times.

However, it has remained on the market unsold for two years and its asking price has now dropped from $7.7 million to less than $5 million.

Real estate agent Crosby Doe believes that he may now have found a potential buyer via an art dealer based in Japan.

“With my position in the preservation community, I will probably be crucified for saying this,” explained Mr Doe to the newspaper.

He added: “But we have to consider all options. We moved the London Bridge to the Colorado River. Why couldn’t we move this house to Japan?”

The Financial Times recently reported that there has been a surge in the number of Chinese investors purchasing property in Japan as real estate prices continue to fall across the country.

Written by Graham McPherson.

Real Estate

Home Prices Increase and Sales Stabilize

National home prices jumped a substantial 3.6% in the past year, according to the S&P/Case-Shiller Home Price Index released on Tuesday. Prices also climbed 4.4% in the second quarter compared with a 2.8% plunge in the first quarter.

Home prices rose in August for the third straight month, a rapid pace of recovery that surprised economists and raised questions about how long the trend can last.

U.S. home prices rose for the fourth straight month in August and shoppers spent more last week, providing evidence consumer demand could be stabilizing.

After a steep three-year descent, home prices rebounded this summer at an annualized pace of almost 7 percent, the Standard & Poor’s/Case-Shiller home price index showed Tuesday. Against a backdrop of rising unemployment and falling consumer confidence, the speed of the recovery stumped Robert Shiller, economist and co-creator of the index.

“It’s a time of exceptional uncertainty,” Shiller said. “It doesn’t seem like a time to see home prices booming, but that’s what’s happening.”

He expects prices will continue to rise for the next few months, but can’t forecast beyond that, explaining, “There’s no way to be a statistician about this.”

John O’Dell is a licensed real estate broker
Call him at 530-263-1091

Real Estate

Missed Mortgage Payments Rate Falling

The number of U.S. households that missed consecutive mortgage payments or were in foreclosure fell more in the second quarter than any time since the mortgage crisis began four years ago, a survey found.

But the data, released Thursday by the Mortgage Bankers Association, showed the crisis is far from ending. One worrisome sign: The number of newly distressed borrowers increased, raising the prospect that foreclosures and delinquencies could resume their rise.

Overall, some 14.4% of borrowers had missed at least one payment or were in foreclosure at the end of June. That was down from 14.7% at the end of March, but up from 13.5% a year ago. The improvement came because fewer borrowers fell 60 days or more delinquent on their mortgages. The number of households that had missed just one payment increased.

Read more Wall Street Journal

Real Estate

New Online Help From Fannie Mae


Since the start of the housing downturn, the number of Web sites and foreclosure-prevention companies claiming to offer help to struggling borrowers has greatly increased.  While some of the businesses are legitimate, others are fraudulent and offer services that consumers may be eligible to receive free of charge.

  • This month, Fannie Mae – the government-sponsored entity that helps set lending standards for most mortgages—started a Web site, KnowYourOptions.com. The site contains elements distinguishing it from those aiming to prevent foreclosure.  All of the information on the site is available in Spanish or English.
  • KnowYourOptions.com provides video explanations of what users might accomplish in each of the tabbed section of the site.  In the “Take Action” section, for example,” struggling homeowners are advised that the first step to take in seeking help with their mortgage is to contact their mortgage company.
  • Other features of the site include contact information for mortgage companies and loan counselors, calculators to determine if the borrower is eligible for assistance, and information on commencing short sales or deeds-in-lieu of foreclosure.
  • Another helpful Web site for consumers is Hope LoanPort, which allows struggling homeowners and housing counselors to submit financial documents to mortgage companies and track the status of their efforts to avoid foreclosure. Hope LoanPort was created by Hope Now, a consortium of 12 mortgage companies and 250 counseling agencies.

To read the full story, please click here.

Real Estate

Buying Land, be Careful

By John J. O’Dell

I recently met a couple at one of my favorite coffee shops, the Flour Garden. We started talking and they were looking for some cheap land to buy, figuring that there was a lot of good deals out there because of the economy.

Since I always carry my laptop with me, I did a search for land under $50,000.  I found a parcel that was a little over an acre in a great part of Nevada County.  The parcel was listed at around $30,000.  I thought to myself this seems too good to be true because of the price and location.

The clients and I drove out to look at the parcel.  The first thing I noticed was that there was evidence of at least three attempts to drill for water. Talking to the neighbors, they stated that there had been at least six attempts to drill for water! So here was a great parcel of land, no treated water nearby to tap into, and no apparent possibility of finding water by drilling a well. In other words, right now, you can’t build a house on the parcel.

I hate to tell you what the owners paid for that property, but it was well over $150,000, now listed at around $30,000.

The moral of the story is, never buy land that does not have either water available or if it doesn’t,  without drilling a well prior to closing.   Make sure you have an agreement with the seller as to how much money you are going to spend in case you don’t find water. That way, when you reach your budget you can cancel the purchase contract. Determine if the seller will work with you and share some of the expense of drilling a well.

John J.  O’Dell
Is a licensed real estate broker
You can reach him at 530-263-1091