Tim 4 OC Real Estate

Perhaps you would like to buy a home, but you just haven’t been able to save enough for a down payment.  Recently you may have heard about a first time buyer’s tax credit, and that it may be possible for you to buy a home with very little down.  It might sound like a dream come true, but it could be your worst nightmare. 

With the advent of easier FHA guaranteed loans, requiring only 3.5 % down payment, the possibility of home ownership may seem to be in your grasp.  Then you hear that the down payment can be gift money, and the loan can contain additional funds to help cover your closing costs.  Thus, if you have no savings, but can get relatives to help out, what would be so wrong ?

If you have not been able to save any money, it is probably because your expenses pretty much match your income.  You have a balance.  If you have good credit, you’ve earned it by being careful with your spending.  Most financial advisors will tell you that this economy puts you in a position where you should have at least 6 months of income saved in case a crisis, like a job loss or illness, strikes. 

The cost of your mortgage is only the beginning of the expense you must consider when buying a house.  There is also property tax, insurance, maintenance, repairs, and utilities.  These are all significant expenditures.  You also need to build an emergency fund.  If you add all of these up, and it comes out to less then your current rent, you can maintain your financial balance, and the purchase may be fine.

Many people sincerely believe they can work a little harder, tighten their belts, and make that higher payment.  The rate of defaults and foreclosures on mortgages show that is not a realistic expectation. 

So what happens if you move ahead, guess wrong, and can’t cover the expenses ?  Is it really that bad ?  Remember the good credit you built up before you bought the house ?  It vaporized.  Remember the peaceful evenings in your rental ?  They now get interrupted all evening with calls from the bill collectors.  Then the bank says enough, you lose the house to foreclosure, and find it is really hard to even find someone willing to rent to you because of your “poor credit risk”.

This may sound like doom and gloom, but its not really.  As a real estate agent, I would love to help you find a house to buy.  That’s how I earn a living.  However, I also want you to be a client for life, and that doesn’t happen if the purchase ends up as a disaster.  I encourage my clients to buy within their means, and we always evaluate all the costs that come with the house they are considering.  I want them to start out right, without any regrets, or future frustrations. 

So, check out those properties, set your goals, and if you’re ready to make a move, do it with a peace about the transaction.  Never let others convince you it will be OK, and you can do it.  In the end, you are the one with the financial obligation, not your friends or advisors/agents. 

Please feel free to email me, or call, if you’d like to discuss your situation in depth. 

I’m not in the loan business, so I will admit I don’t have “expertise” on this topic.  However, as a real estate agent, and homeowner for over 30 years, some advice that is being given today just doesn’t make sense to me, and it might really hurt you if you buy into it.

It works like this.  A homeowner discovers their property is no longer worth what they paid for it based on resale information they receive for similar homes.  They get frustrated, and feel they are wasting their money.  Maybe they had a rate adjustment, and a higher payment, and they are frustrated.  So what should they do ?

They start following up on some of the emails and ads they see for loan modifications.  They are told to stop making their payments, and the lender will be forced to lower the interest rate and the loan balance.  So, they do this, and happily spend the money on luxuries they just don’t need.

This advice just doesn’t make sense to me.  First, it would appear that the person giving the advice gets paid up front, so they have no reward for helping you to succeed with a better financing plan.  Secondly, I don’t see why this is an incentive for a lender to suddenly cut you a deal.  In fact, you risk a rather quick foreclosure, and possibly a default judgement for the difference between what you owe and what the bank receives when selling the property.  In addition, you risk a destroyed credit rating for 10 years.  You could be out of the market for purchasing a new home, and have difficulty with renting.  You will pay higher interest for any loans you might get to pay for cars and other large purchases, and if you are job seeking, you may have problems with a bad credit rating.

Certainly having a loan modified is important.  Banks may well adjust interest rates, especially if you have an adjustable mortgage.  It is less likely they can adjust how much you owe on a loan because they actually paid that money to someone else when you signed the contract.  It is not as likely they can make you a gift of their investor’s funds.

If you need to make changes on your loan, your best results will come when you work with the bank.  Making your payments shows your good faith.  Emails, and even phone calls, just don’t get a timely response.  If you have a local branch of the bank that handled the loan, pay them a visit.  Ask for help from the manager or loan officer.  Be open about your difficulty, and present a cooperative, but passionate, plea for help.  Be sure to follow up quickly to get a progress report. 

If you just don’t get anywhere, stick with it.  The federal government has a new program, and more will be coming.  Also, talk to the person who originated the loan.  Remember, if they are now “selling” loan modifications, be very, very cautious.

For more information, here are some helpful links:

   Orange County Home Ownership Preservation Collaborative

   CA Consumer Home Mortgage Information

   CA Department of Real Estate Consumer Alert

This article will hopefully get you to think about your options.  More information will be coming in future posts.  Share what you think below.

We’ve got to admit, when summer vacation arrives, Rancho Santa Margarita has a lot of fun activities.  Be sure to check out some of these in the upcoming weeks:

Taste of Rancho - June 6, 4 - 9 PM Held in Central Park, behind City Hall, local restaurants will provide samples of there menus at reasonable prices.  You may also visit the beer and wine tasting garden.

Summer Concerts  In Central Park 6-8 PM

July 12  Rock to the tribute band for Bruce Springsteen. 

July 19  Hello Cleveland: A rock and dance band with a wide range of music offerings

July 26  Stone Soul: performing classic 60’s soul and Motown music

August 2  Hot August Night - a tribute to Neil Diamond with his classics

August 9  Swing Shift - performing great dance and romance tunes

August 16 Neon Nation - focused on the 80’s experience

Starr Ranch Summer Junior Biologists

Multiple sessions are offered in June and July will acquaint kids with the scientific study of wild animals and their habitats.  For information call 949 858-0309.

Summer Camps at the Community Center

There is no need for your kids to sit home in front of the TV.  Let them stretch their experiences with summer camps in town center.  Camps include Engineering with Legos, Dnace and Cheer, Sewing, Claymation Magic, Survivor, Mad Scientists Workshop, Shakespear,

and a lot more.  Stop by Town Hall to get more information or call 949 216-9700. 

Church Programs

Looking for a faith based experience for your kids this summer ?  Most houses of worship in the Rancho offer summer programs for kids on a weekly, full week, or evening basis.  Call your preferred house of worship and ask for details on programs they may be offering.

We’ve got to admit, when summer vacation arrives, Rancho Santa Margarita has a lot of fun activities.  Be sure to check out some of these in the upcoming weeks:

Taste of Rancho - June 6, 4 - 9 PM Held in Central Park, behind City Hall, local restaurants will provide samples of there menus at reasonable prices.  You may also visit the beer and wine tasting garden.

Summer Concerts  In Central Park 6-8 PM

July 12  Rock to the tribute band for Bruce Springsteen. 

July 19  Hello Cleveland: A rock and dance band with a wide range of music offerings

July 26  Stone Soul: performing classic 60’s soul and Motown music

August 2  Hot August Night - a tribute to Neil Diamond with his classics

August 9  Swing Shift - performing great dance and romance tunes

August 16 Neon Nation - focused on the 80’s experience

Starr Ranch Summer Junior Biologists

Multiple sessions are offered in June and July will acquaint kids with the scientific study of wild animals and their habitats.  For information call 949 858-0309.

Summer Camps at the Community Center

There is no need for your kids to sit home in front of the TV.  Let them stretch their experiences with summer camps in town center.  Camps include Engineering with Legos, Dnace and Cheer, Sewing, Claymation Magic, Survivor, Mad Scientists Workshop, Shakespear,

and a lot more.  Stop by Town Hall to get more information or call 949 216-9700. 

Church Programs

Looking for a faith based experience for your kids this summer ?  Most houses of worship in the Rancho offer summer programs for kids on a weekly, full week, or evening basis.  Call your preferred house of worship and ask for details on programs they may be offering.

When I first came to the Saddleback Valley in 1973, I heard about this rustic restaurant hidden in Trabuco Canyon.  It was several years before I tried it, but in several return visits I’ve never been disappointed.

The Trabuco Oaks Steakhouse was started in 1968 by the Sherod family.  It was originally a snack bar serving the campers at O’Neill Regional Park.  Soon they decided to serve dinner, so they stayed with a traditional steak and potatoes offering.

Now this place is rustic.  You may share your table with a tree, and I wouldn’t be surprised to see some of the natural residents hanging out in the parking lot sometimes.  Your memory will be of the mesquite grilled steaks, which are always carefully selected, and cooked to perfection over natural coals. 

Don’t dress up for this dinner unless you plan to donate your tie ( which will be cut off at the entrance ) to the hundreds hanging from the ceiling.  You’ll also be able to do plenty of networking without your smartphone, twitter, or facebook accounts.  The walls are papered with thousands of business cards of visitors from all over the world.

For a great treat, you should pay the Trabuco Oaks Steakhouse a visit.  It is a unique experience.  Check ahead, though.  Call them at 949 586-0722 for reservations.  They may be out of the way, tucked behind the general store and across from Trabuco Canyon Elementary School, but they are definitely popular.  You can also check out more at their website, www.trabucooakssteakhouse.com.

How is your garden looking these days ?  It really may have a significant effect on your emotions.  It can have you smiling, or depressed.  Unlike so many things we face today, this is something you can actually control with a little effort and a few dollars carefully spent.

Many of us have lawns, and they can get to be looking rather dead and brown.  Their biggest need may be some good fertilizer, but before you add it, make sure you take a rake and pull out all the thatch that has built up. This also breaks the soil.  Cut your grass, rake it firmly, and then spread the fertilizer.  Finally, use a shower nozzle and soak it by hand so the water doesn’t run off, carrying away that new nutrient.   Water again by hand a day later, then water every couple of days and watch it spring back to life.

Our plants may have grown a lot, but if they look leggy, its time to prune them back and clean out the dead material.  I love to prune the inside of bushes so they can breath.  Many gardeners just cut off the tops of the branches, but I like to get inside and get rid of the ones that criss cross each other and just get in the way.  The library has some good illustrated books on the way to best prune plants to stimulate new growth.

Sometimes plants overgrow others and you get a nice mess.  Your yard will look a lot better if you thin it out so what is growing can stretch out, breath, and have room to develop.  While delving into your bushes, make sure to pull out those pesky weeds, and use a hand cultivator to break up the soil.  Then give those plants some food.

Finally, your flower beds are filled with dirt, but if you add some colored bark, they will stand out and be quite attractive.  Most bark also acts as a mulch which improves the soil quality.

Seasonal ( annual ) color flowers are a great trim and bring a lot of cheer to your yard.  You can get flats of them on sale most times at your local nursery.  Seeds are also readily available, inexpensive, and will grow into beautiful flowers.

You may be tired after a weekend cleaning up your yard, but you’ll enjoy the results for months.  Wouldn’t it be great to come home after a tiring day in the “world” and be greeted by a cheerful, colorful, bright yard ?  Not only can it soothe your soul, but it may thrill your neighbors.

I’m often asked by visitors to Open Houses if they should move, or expand their current home.  Of course, as a real estate agent, getting a commission for helping them find a new home, and one for selling their current residence, helps me support the economy.  However, that is not always the best piece of advice.

When someone asks if they should consider an addition, it is pretty clear they are attached to their home, and probably the neighborhood.  My first questions are about their current house, and their relationship with the neighbors.  If there is a strong bond, then expanding the house, within reason, is probably a more pleasing option.

Of course, you can overbuild for a neighborhood.  If you have homes that do not exceed 2000 square feet in size, and suddenly you expand to 4500 square feet, you may never recoup the expense.  Usually people only need one or two more rooms, or larger rooms, or an additional bathroom, and these are not excessive. 

Cost can be a big factor.  It is not just the price of the house that is important. Check the taxes.  In California, value is based on the purchase price of the property, and you may move into a newer area that has Mello Roos assessments.  So, you could have a current tax bill of $ 1500 / year and move to a slightly larger home and face a tax bill of $ 10,000 / year.  ( Always have your agent check the projected tax bill based on the sale price, not the current tax rate of the owner ).  You may also have association fees.  Your new purchase may have higher payments, plus there are the costs of getting the loan, the sale of your home, and fees associated with moving.

Your current home may be your castle, and it has been molded to your way of living.  A new home will require changes to accomodate your family.  Do you have the energy for the work ?

Of course, you may have postponed moving for a long time, and now you simply need a new home.  In that case, this is a good time to make that purchase.  Interest rates remain relatively low, prices are down, and deals are awaiting you. 

Finally, if you are concerned about the fact your home will net less now than two years ago, keep in mind your new home will cost less than two years ago.  The relative value should remain the same, but the lower prices do mean lower tax assessments.

If you have questions, please call me direct, toll free, at 800 504-6787.  I’d love to speak with you about your opportunities.

Welcome to Tim’s home tour of your house.  If you have decided to sell it, then you want it to appeal to everyone who drops in, even if it is beyond their price range.  Visitors have friends who might also be in the market, and you want them to remember your home.  Here is a quick tour guide for what you need to do so your home is ready to show.

Curb Appeal  The first thing a potential buyer will see is the front of your property.  They might also look through the gates, because the yard means a lot.  If you have a lawn, cut it and trim the edges.  Flower beds ?  Clear out the weeds, prune the bushes, and scrape the soil.  Put some fertilizer down, water it in, and then put down mulch or colored bark.  If there is dirt on the house, or trim, wash it off.  Pressure washers do a much better job then a jet nozzle on your hose.  If the paint is peeling, sand and touch up.  If the first impression is bad, the potential buyer may never look inside.

Prepare a bright outlook  Dirty windows give the impression of a dirty house.  Make sure the windows are all washed, and the views are stunning.  This means you need to cut back any tree limbs or bushes blocking the windows.  Your backyard should have great appeal.  Use the same principles as the front yard.

Clean your countertops  It is so easy to wash down your sinks and counter tops.  If the grout is badly stained, try a special clear to make it shine.  Even if the counters are outdated, clean they look much better.  Also, put away the clutter.  Don’t leave out the dirty or drying dishes.  Wash them and get them back where they belong.  Put food away in the pantry.

Clean your cabinets  If you have a buildup of grundge, people may wrongly assume your cabinets need to be replaced.  For natural wood cabinets, clean them with products designed for the task, and then use an orange or lemon oil to make them shine.  For white cabinets, clean them with a very mild soapy solution.  Your cabinets make a very important impression.

Make the Beds  Your bedrooms will look great with the beds made.  If people see covers on the floor, they wonder what other maintenance has been left undone.

Less is more  Its your home, and you have all your memories and collectibles on display.  However visitors see all your stuff and visually it shrinks the room size.  Look at some magazines on home makeovers, or visit some model homes, and see just how simple they keep the presentation.  Go home and do the same.

Use gentle air freshners  Having a pleasant, natural, smell in your house is great.  However, if the deodorizer is too powerful, people will wonder what bad smells you are trying to cover up.

Don’t hide the defects  You want to fix the errors.  An inspector will find any problems and the buyer will want the repairs made before they take possession.  If you have a defect, get in a qualified person to repair it.  If you are waiting for repairs, put a little sign on the area saying “Our booboo will be fixed next Tuesday by a professional”.  People will appreciate full disclosure.  So will you when there are no surprises after the sale.

Do something to get them to stay a few extra minutes  Put out some cookies and lemonade, or have a special event on the TV.  Anything you do that attracts a buyer’s attention will make them more likely to take a second look.

Light up the dark spaces  You can’t like what you can’t see.  Make sure your curtains are pulled back to allow ample natural lighting.  If that is not available, turn on the lights.  People often keep laundry rooms dark, but they are very important to buyers.  Don’t make them seek the switch … leave it on.

If you would like a personal analysis of your home, and how it can best be displayed for appeal, give Tim a call.  Its toll free, and there is no obligation … but of course he would love to be your agent when you are ready to sell your home.  Call toll free 800 504-6787

Housing prices have fallen and sales are up.  Yes, there are loans available for those with good credit, there are affordable homes, and buyers are not only looking, but they are making committments.

The first step in the process is to secure a loan commitment.  In the past, people called a "finance person" who said "no problem, you’re qualified."  Don’t waste your time with a quick approval because you might find the house you love, and then hear the frustrating words "Oh, we can’t actually finance that deal."  Sit down with a loan agent who will take the time to review your full profile, and then show you what is available.  Once you know what you can actually afford, its time to go shopping.

In the foothill communities of Ladera Ranch, Rancho Santa Margarita, Trabuco Canyon, Coto de Caza, Mission Viejo, and Lake Forest, there are many great opportunities. Currently, there are 124 properties owned by the bank, 24 more in the foreclosure process, 83 more that have received a notice of default, and 583 listed as short sales.  All of these properties are selling for prices significantly below their peak value just two short years ago.

Often people hear about "distressed properties" ( those in financial difficulty ) and think they are run down, with lots of needed costly repairs.  Sure that occurs with some homes, but the vast majority of homes in this community are relatively new, often with beautiful upgrades, lush landscaping, in fantastic neighborhoods.  The only problem is that the owner had a change in their financial circumstances and could no longer afford the house.  Often these are properties that were dearly loved, and reflect a true pride of ownership.

Would you like to know more specifics ?  Give me a call and lets check it out to see if there is a property available that is the right fit for you.  There is no charge, no obligation, but I’d love to be your agent of choice as you move forward in your home search.  Call me toll free at 800 504-6787.

Tim

You may have been surprised by the headlines announcing  home sales are on the rise.  Most of the economic news is really bad, and the warnings are out that credit will be hard to find.  However,  there are lenders with money available … if you have a good credit history and can meet the standard rules of finance ( a stable job, down payment funds in the bank, low debt ).

The price of homes has dropped generally about 25% from their peak value.  The exception are the multi-million dollar homes that just keep growing in value.   A large percentage of the homes are bank owned or available for short sale ( priced below the current debt ), and this has set the lower prices.

Short Sales require patience.  It takes time for the bank to go through the paperwork and agree to a price.  Sometimes this can take many months, but the patient buyer could get a good deal as a result.  Bank owned properties, taken through foreclosure, can be sold faster because the banks already know the price they are seeking.

Competing with these price levels are owners who have no financial difficulties, and have room to negotiate a lower price.  Often they are priced to compete with the bank pricing, but they can close deals in days instead of months.

There are a lot of great opportunities on the market today.  Many beautiful homes are available at great prices.  If you are interested in finding out more, lets sit down and talk .. call me toll free at 800 504-6787 and we can get together right away.

Tim