Real Estate Information

Congress recently extended the home buyer tax credit closing date to September 30. The measure would give more time to thousands of qualified home purchasers, who through no fault of their own are unable to meet the current closing deadline of June 30; however the measure would not extend the deadline for home buyers to qualify for the tax credit. The deadline extension applies only to homebuyers who have ratified contracts in place as of April 30, 2010, but could not close before June 30.

The April 30 deadline created a surge of home sales in April. Let’s take a look at the Los Angeles real estate market for June.

Caution: In all of these Los Angeles neighborhoods, housing quality and size, as well as lot size, vary greatly. Therefore, the highest and lowest sold prices often reflect which particular houses sold and are not generally indicative of an increase or decrease in overall value. So I caution against reading too much into the following statistics:

Beverly Hills Real Estate Sales Statistics - Single Family Homes

Beverly Hills Post Office Real Estate Sales Statistics - Single Family Homes

Bel Air Real Estate Sales Statistics - Single Family Homes

Hollywood Hills East Real Estate Sales Statistics - Single Family Homes

Hollywood Hills West Real Estate Sales Statistics - Single Family Homes

West Hollywood Real Estate Sales Statistics - Single Family Homes

Learn more about Los Angeles real estate by visiting EileenWalshRealtor.com.

Because of the current historic low interest rates, many mortgage experts are advising Los Angeles home owners to consider refinancing their existing mortgages as a way to

• decrease the amount of their monthly mortgage payments

• reduce the duration of their current loan, or

• provide money for home improvements or other expenses. Interested? Read on…

Know Your Numbers

Before you rush into refinancing your Los Angeles real estate, be aware of two key strategies that will benefit you. The first is KNOWLEDGE. Carefully investigate the pros and cons of different refinancing features such as interest rate, closing costs and fees, and the term of the loan. Determine the purpose of your refinancing and the amount of savings and/or money you hope to gain from it. Examine your personal financial situation--now and in the future--to identify the best option for you.

Since refinancing is all about numbers, you will want to see figures in black and white before beginning the refinancing process. Online sources allow you to input your information re: the amount of the mortgage, the interest rate, the term of the loan, and fees to calculate your monthly expenditures and savings.

Research the advantages and disadvantages of a fixed rate and an adjustable rate mortgage (ARM).  A fixed rate is usually for a term of 15 or 30 years, and the interest rate remains the same for the term of the loan. An ARM means that after 3 or 5 years your interest rate can change (usually going higher). If you are planning to stay in your Los Angeles real estate for only a short time, an ARM may be beneficial for you.

If you currently have an ARM which has a relatively low rate of interest, but you are concerned about future increases, you might consider converting your current loan into a 15 or 30 year fixed rate mortgage. Or, since the difference between a fixed 15 year and a fixed 30 year interest rate is significant, you could save thousands of dollars by shortening the life of your present loan, often with only a slight increase in the amount of your monthly payment.

Compare Options

The second most important strategy is COMPARISON SHOPPING. It is imperative that you compare the rates and terms of several mortgage lenders. Again, online sources such as can provide you with multiple loan quotes. Beware of high refinancing fees or borrowing more than you need. Ideally, you should thoroughly investigate the rates, terms, and features of at least three lenders.

The key to finding the best refinancing situation for you is to obtain and understand your current mortgage information, assess your present and future financial status and needs, and comparison shop. You will most likely find that marketing conditions have made this a perfect time to refinance your Los Angeles real estate, thus allowing you to escape high mortgage payments and/or make financially sound decisions for the future.

In addition to the demands of current Los Angeles home buyers for environmentally-friendly, or green real estate, there is also a growing segment of consumers who are looking for houses which incorporate the principles of feng shui. An ancient Chinese practice, feng shui is believed to improve one’s life through the use of color, location and positioning, and specific materials and objects, all of which combine to produce a positive energy, or chi, in your home.

The primary focus of feng shui is the positive flow of energy, which contributes to the creation of harmony in life. Integral components of the philosophy are the five elements of fire, earth, water, metal, and wood, and each of these is enhanced by color selection and use in your Los Angeles home as follows:

• FIRE - Passion and high energy. These strong colors include red, orange, purple, pink, and bright yellow.

• EARTH - Nourishment and Stability. Beige and various earthy sand colors.

• WATER - Ease, freshness, and abundance. Blue and Black

• METAL - Clarity and preciseness. Grey and white.

• WOOD - Health and Vitality. Brown and Green

Other feng shui principles to follow include:

1. The clearing of unnecessary furnishings and objects:

In feng shui, less is more. Believing that clutter impedes the flow of energy, feng shui proponents suggest avoiding big pieces of furniture and removing most plants, photographs, and personalize items. Most homes will benefit from the absence of about 1/3 of their current furnishings.

2. Abundance of light:

Ample lighting is conducive to good energy and should be generously provided in your Los Angeles home to provide a sense of spaciousness. Natural light is best, but warm, soft artificial lighting is acceptable. A dimmer switch is strongly suggested for your lights.

3. Outside appearance:

A solid, strong front door is essential, as is an attractive and clutter-free entranceway. Your landscaping should be well-maintained, and your house numbers clean and easily visible. A well-lit entrance is also a must! 

4. The feng shui “trinity”:

The bathroom, kitchen, and bedroom are of vital importance since there is a powerful connection among the three areas which promote health and well-being.

• In the bathroom you should try to create a spa-like, relaxing atmosphere through the use of lighting and mirrors, which give the room a sense of space/

• In the kitchen unadorned countertops in colors harmonious with the cabinets and walls are a necessity. Use fire and wood tones, and avoid those associated with water. Lighting under the cabinets invites a good chi, as does a basket of fresh fruit or flowers.

• In the bedroom, the bed should have a solid headboard, be approachable from both sides, and be flanked by two end tables. It is best if the bed does not face the door to the room. The walls should be in earth colors, and televisions, computers, and exercise equipment should not be present.

Good feng shui means positive energy, sure to help with the sale of your Los Angeles home. Who doesn’t want the hope of good health, happiness, and prosperity?

As every Los Angeles homeowner knows, property insurance is a necessity. The cost of adequate insurance may seem daunting initially, but there are certain steps you can take to reduce your costs to a reasonable level.

        1. Shop around for the best value. Check online for quotes from at least three reputable agencies. Be aware that some companies offer a discount of 30% to 40% if you buy online. Other possible discounts can result from insuring both the home and the contents or by insuring your home and your car with the same firm.

        Also know the replacement value of your home, taking into consideration any unique features that will be expensive to replace. Keep in mind probable inflation increases at renewal time. Does your insurer automatically adjust your coverage or do you have to request the change?

        2. Make periodic updates to your Los Angeles home or property. Ways to reduce insurance costs include the following:

A) replacing the existing heating system to one which is safer and more cost-efficient.

B) keep plumbing in good working order and protect it from freezing

C) replace fuses. Inspectors are looking for circuit breakers and a safe wiring system

D) install fire detectors or even a central alarm system. Be sure to keep a record of all repairs/replacements and inform your insurance company of each one.

        3. Maintain the building and grounds. Regular repainting or installing siding is essential to protecting your Los Angeles home from moisture damage. Hire professionals to clean any chimneys and check for termites. Repair unsafe sidewalks and remove dangerous tree roots. Again, keep your insurance company current on your efforts to eliminate hazards.

        4. Consider tenant-based liabilities. The type of dog you allow on your property influences your insurance rate, as does permitting smoking on the premises. You may also want to specify acceptable locations for outdoor grill use and make renters aware of their responsibility to cover damages caused by them and the need for renters’ insurance.

By following these tips and consulting with your insurance representative, you should be able to lower your premium, avoid cancellation, and stay off the industry’s “bad list.” Also think about raising your deductible amount and avoid making too many small claims to keep your premium costs down.

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To a Los Angeles home loan shopper, there may seem to be an endless--and confusing--array of mortgage types. Of course you want to choose the option that is best suited to your current and future financial situation, but understanding the terminology, types, and monetary ramifications is not always easy. Mortgages generally fall into four categories (fixed rate, adjustable rate, step, and balloon) according to the interest rate and duration of the loan.

Basic terminology;

•     Fixed rate--The interest rates do not change during the life of the loan, thus allowing you to know the amount of your payments.

•     Adjustable rate (ARM)--the interest rate is tied to certain indexes plus a margin and can fluctuate up or down, thus affecting each payment,

•     Step--the interest rate and monthly payment remain the same for a specified period of time. After that the interest will change to the prevailing rate and will remain there for the duration of the loan.

•     Balloon--a loan payment that expands after a certain amount of time. Basically it functions similarly to a fixed rate mortgage in the earlier months/years with a delayed steep increase at the end,

The following information, courtesy of Mortgages.Interest.com, outlines the type of mortgage, the loan characteristics, and the situations most appropriate for each one. If, for instance, you plan to live in your Los Angeles home more than 10 years and desire stability in payment amounts, then a fixed rate mortgage is for you. If, however, your finances are currently strained, but you know that in 5 to 10 years your monetary situation will improve or that you will most likely move within 10 years, then an ARM or balloon mortgage may be better for you. Being familiar with these options allows you to discuss them intelligently with your real estate agent and/or lender and then select the type which best fits your circumstances.

 Fixed rate mortgage (30, 20, 15, 10 years)

• Interest rate & monthly payment remain the same for the entire term of the loan
• plan to live in property more than 10 years
• like total payment stability

0/1 year adjustable rate mortgage

• Interest rate & monthly payment remain the same for 10 year
• Starting the 11th year, interest rate adjusted every year, so payment is subject to change every year for remainder of loan
• plan to live in property more than 10 years
• like initial payment stability, can accept later changes OR
• plan to move within 10 years
• want loan to remain in force in case plans change

7/23 (2-Step) or '30 due in 7' mortgage

Interest rate & monthly payment remain the same for 7 years

• Conversion option: On the 8th year, interest rate adjusted to reflect prevailing interest rates, resulting payment will remain the same for remainder of loan
• plan to live in property more than 10 years
• can tolerate one payment adjustment OR
• plan to move within 7 years
• want to remain in force in case plans change

7/1 year adjustable rate mortgage

• Interest rate & monthly payment remain the same for 7 years
• Starting the 8th year, interest rate adjusted every year, so payment is subject to change every year for remainder of the loan
• plan to live in property more than 7 years
• like initial payment stability, can accept later changes OR
• plan to move within 7 years
• want loan to remain in force in case plans change

7 year balloon mortgage

• Interest rate & monthly payment remain the same for 7 years
• At the end of 7 years, loan is due in full. Borrower must refinance into new loan at prevailing interest rates
• plan to live in property more than 7 years
• are willing to refinance at prevailing market rates OR
• plan to move within 7 years
• like payment stability

In addition, there are variations of the ARM, step, and balloon mortgages which differ primarily in the duration of the loan and of the planned residency.

FHA Loans

Another good source of information for first-time Los Angeles home buyers is the Department of Housing and Urban Development (HUD), an agency which oversees FHA loans. This type of loan is particularly useful if you have little money for a down payment, less than great credit, or large monthly bills. An FHA loan requires as little as 3% down (and it can be a gift from a relative or friend). In terms of your credit rating, the FHA is primarily concerned that for the past two years you have paid bills in a timely manner and have been steadily employed. With FHA you have to wait only two years after declaring bankruptcy, and your debit-to-credit ratio can be higher than for a conventional loan. You can qualify for an FHA loan if your monthly payments are no more than 43% of your income, and, as with conventional loans, you can choose from many types.

Of course, there are some negatives to consider before taking on an FHA loan. Interest rates generally run about 1/8 of a percentage point higher than conventional rates, but the real disadvantage of an FHA loan is that the borrower must pay an up-front insurance premium of 1.75% of the mortgage if the down payment is less than 20%. This cost can, however, be added to your total loan amount.

So there you have it--an easy-to-understand guide to mortgage types. As always, you should feel free to contact me anytime with questions. I am glad to recommend a number of outstanding mortgage lenders if you are interested in talking with one.

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The prospect of relocating to a new place can be somewhat unsettling as you face emptying your present house and filling up your Los Angeles home. Not only must you deal with the onus of packing and the logistics of your physical move, you also find yourself a bit anxious--and possible sad-- about leaving a place where you’ve grown comfortable. No wonder so many people dread making a move!

There is, however, a painless way to lessen the angst and allow you to cope well (maybe even enjoy) the relocation process--and that is organization. While you may be proficient at researching and hiring a moving company and finding a reliable Realtor to sell your current residence and help you find the perfect Los Angeles home, there are numerous “small” steps you can take to eliminate unpleasant surprises later on and to make the process go more smoothly.

FINANCES: To alleviate any concerns you may have about the financial ramifications of living in a new city, you can compare the cost of living in two places by visiting HomeFair.com. This site will help you calculate how far your salary will go in your new location.

SCHOOLS: HomeFair.com also provides pertinent information about school systems throughout the U.S. Here you can discover student/teacher ratio, instructional costs per pupil, special programs, number of students going on to higher education, etc. You can also Google the board of education in your new city for information.

AMENITIES: The Chamber of Commerce can help you learn about religious facilities, cultural opportunities, parks and outdoor activities, hospitals and health care availability, and a myriad of other questions you may have--perhaps adult education

LOCAL REGULATIONS: You should investigate in advance property taxes and/or local assessments. Learn about average utility charges, trash/recycling rules and facilities, and parking restrictions in the area of your Los Angeles home.

TRANSPORTATION: Do you require public transportation? Does the new location offer mass transit? Is traffic congestion a problem? Best to be forewarned in this area. Go online to contact the municipal/governmental offices or the Department of Transportation in the new location.

MISCELLANEOUS: Make arrangements in advance to get legal documents and school and medical records before you leave your present location. Also, if your current bank does not have a branch in the new city, look into setting up a new bank account before you actually move. Begin now to fill out change of address cards to send to magazines, credit card companies, etc. It’s so much easier to do this before moving!

While your move to your new Los Angeles home may necessarily be an exciting adventure, by eliminating worries of the unknown and becoming familiar with your new surroundings in advance, you can anticipate and actually look forward to beginning a new phase of your life.

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A simplified guide for painless purchasing of your Los Angeles home. PART4

Be patient. You’re getting close to the finish line and will soon be the owner of your first Los Angeles home. Just a few more steps to go…

1. Homeowner’s insurance policy

Adequate homeowner’s insurance is a requirement of all lenders, and it is certainly in your best interests to protect the investment you’ll be making in your Los Angeles home. To find the policy that is right for you, you should shop around for the best value. Eileen can refer you to some insurers. You can also check online for quotes from reputable agencies. Be aware that some companies offer a discount of 30%-40% if you buy online. Other possible discounts can result from insuring both your home and the contents or by insuring your home and your car with the same company. Your insurer can also advise you if you need additional coverage, such as flood or fire coverage, as many properties in Los Angeles do. Know the replacement value of your home, taking into consideration any unique features. Think about probable inflation increases at renewal time. Will your insurance agency automatically adjust your coverage, or will you have to request a change?

2. Preparations before closing

As the closing date approaches, Eileen will check with your lender to make certain all necessary documents are in order and are being prepared. You will want to contact utility services such as gas, electric, water, cable, and telephone to set up services in your name for after the date of the close. 

3. The walk-through

You are entitled to a walk-through inspection of the property in the final three days before the close. This is your final chance to make sure that all conveyed items are present, there is no new damage, agreed-to repairs have been completed, and the home is in good working order. Items to be checked out are numerous and include the exterior of the home (grading, roof and gutters, garage, siding, paint, concrete, brickwork, doorbell, e.g.) as well as the interior (lighting and fans, appliances, toilets, heating and cooling systems, faucets, electrical outlets, thermostat, fireplace, etc.). The house should be empty, except for conveyed items, and “broom swept“ clean. If any problems are discovered, Eileen Walsh will notify the seller and request repairs or monetary compensation for these items. Eileen will be present at the walk through and you are entitled to be there as well. The seller's agent will also be present.

4. And finally…the closing!

You should have recently received a settlement statement listing all the costs you’ll be required to pay at the close, such as an escrow deposit for taxes and insurance. In most cases you’ll be required to bring a certified check and a photo ID with you to the escrow office. The escrow officer will walk you through all the paperwork you'll need to sign. After all the paperwork is signed, you wait a day or two for the funds to transfer and your ownership to record at the county registrar's office. Once the recording is completed, escrow will call Eileen to announce the recordation. Eileen will then deliver to you the keys to your NEW HOME!

 Congratulations! You are now a first time home owner!

At last, a little more help from Congress on the home-buyer tax credit, as reported by LATimes.com...

"Congress late Wednesday night extended the deadline by three months for a popular home-buyer tax credit that has helped fuel the real estate market in recent months.

The extension is only for those buyers who signed a purchase contract by April 30 and need extra time to close their deals. The deadline to close was Wednesday and the extension will push that deadline to Sept. 30. The incentive offers up to $8,000 for certain buyers.

Real estate brokerage offices and mortgage lenders have been backlogged with the number of people trying to close their deals by the Wednesday deadline, according to the National Association of Realtors, a group that lobbied heavily for the extension. The group estimated that the extra time would assist some 180,000 people nationally and 17,700 Californians who qualify for the credit but did not appear as if they would meet the Wednesday deadline to close their deals.

Syd Leibovitch, president of Rodeo Realty in Bel-Air, said the extension would help people in Southern California who qualify for the incentive but whose deals have been delayed from closing through no fault of their own.

“It’s fair, because you have people in short-sales transaction where the escrows take a lot longer than you would think,” he said. “Most of the delays are because of lenders taking a little longer to get loans, or getting approval from short sales.”

The federal tax credit was created in 2008 by the Bush administration as a $7,500 incentive for first-time purchasers, who were required to repay the money in a series of installments. Congress increased the amount to $8,000 in February 2009 when it passed the economic stimulus package and waived the repayment requirement. As an initial deadline for the credit loomed last November, Congress extended and expanded it to include as much as $6,500 for some current homeowners.

The Realtors group in Washington estimates that a total of 4.4 million people have received the credit since it was made nonrefundable last year. That includes 2.9 million first-time buyers and 1.5 million repeat buyers, the group said."

A simplified guide for painless purchasing of your Los Angeles home

PART III

Okay, you’ve made your lists of "must have” and “would be nice” features, and you’ve identified desirable neighborhoods with the schools and amenities that meet your needs. Now it’s time to seriously shop for your first-time Los Angeles home.

Before you even step outside to begin the search, Eileen Walsh will e mail you listings which meet your criteria, and you can “visit” many of them online via a virtual tour. You can also go to the local MLS via this website so you can identify homes on your own. Once you have narrowed down your choices, Eileen Walsh will arrange for you to look at--in person-- your selected properties. A few bits of advice here:

1. Take notes on each home you tour. Too often individual details blur after you’ve seen four or more houses in a day.
2. Look past the owner’s furnishings and décor. Concentrate on the features you have identified as important and try to picture yourself actually living in the space.
3. If you have decided that you don’t need a “move-in ready” residence, look at the potential of the property. Would simple cosmetic changes make a considerable difference?
4. Listen to both your head and your heart. Sometimes a property really does “speak” to you, and you know you have found your new home.

Making An Offer

Now it’s time to make an offer! Eileen will provide you with comparable prices (comps) of similar homes which have recently sold in the neighborhood to help you decide how much you are willing to offer. She will prepare a contract which will include price; amount of down payment and deposit (earnest money); your financing arrangements; inspection rights; conveyance of any appliances, window treatments, furnishings, etc.; the close of escrow date; and any contingencies you might want to add.

Once Eileen presents your offer to the seller, negotiations may begin. The seller may accept your offer or may counter your offered price or any other part of the contract, and you may, in turn, counter such requests. The goal is to reach an agreement that makes both you and the seller happy. No one wants to feel that they "gave in" more than the other party. Keep in mind that every time you counter instead of accepting, the deal is now out of your hands and in the hands of the seller alone, because when you counter you are now "making an offer" that the seller can simply walk away from. So take your counters very seriously.

Home Inspection

More often than not, however, an agreement is concluded and you will quickly proceed to having a home inspection. Eileen can arrange for the inspection and can advise you as to any other inspections which are standard in your area. She will also advise you on how to handle any negative issues which arise as a result of the inspection process, like finding a faulty roof or plumbing. You'll have to decide if you will ask the seller to fix any problems or issue you a credit with respect to the problem. This is a very touchy part of the negotiation process and Eileen will help you with this.

What‘s next? Preparation for your closing, a walk-through of the property, and then the close of escrow! Watch this blog for the final installment of this series.