Real Estate Information

In our present economic situation, many people are currently facing the loss of their homes. However, because foreclosure is expensive for lenders, mortgage insurers, and investors, the FHA, HUD, Freddie Mac, Fannie Mae, and private companies are being required to work with borrowers who are experiencing money problems. As a result, lenders do have workout options to help you keep your Los Angeles home. Warning: Do not mistakenly assume that your mortgage situation will correct itself; you must take the steps suggested below to avoid, or at least forestall, foreclosure.

1. ACT NOW! Time is of the essence. Do not ignore letters or calls from your lender. If you do, chances are that action to foreclose will begin quickly.

2. CONTACT YOUR LENDER:  When you reach the lender, you should be prepared to provide him/her with your account number; a brief explanation of your circumstances; income documents or evidence of unemployment, public assistance, or business losses; and a list of your household expenses. Ask about a reduced interest rate, refinancing, lengthening the term of the loan, and a repayment plan for missed payments. In all probability, the lender will mail you a loan workout package. It is important that you complete and return these forms quickly.

3. DO RESEARCH; Reread your loan documents to determine what is said about unpaid mortgage payments. Learn about specific foreclosure laws in your state Get in touch with the government housing office where you live.

4. CONSIDER SELLING: Lenders will most likely suspend foreclosure proceedings while your Los Angeles home is on the market and possibly even eliminate mortgage payments during this time. Explore a short sale.  If the market value of your house is less than you owe, your lender may consider taking the sale proceeds and forgiving the rest of the debt. Or you might give your deed to the lender in return for the loan balance being cancelled. Check with an attorney or housing counselor before taking these actions.

5. BEWARE OF SCAMS! Avoid “foreclosure prevention” companies who offer to negotiate with your lender, will cost you thousands of dollars, and may even “rescue” your home away from you. Do not sign anything from these firms!

6. SET PRIORITIES: Pay the mortgage on your Los Angeles home before paying credit card debts, doctor bills, or the like. Can you sell a second car or other assets? Could you take a second job to ease the situation? Your lender needs to know that you are serious about trying to find a solution to your financial problems and are willing to make sacrifices to do so.

7. EXPLORE ALL OPTIONS:

        a. Get legitimate help. Contact a HUD approved housing counselor (1-800-569-3287) or 1-888-995-HOPE) for free or low-cost guidance. Help is also available from the National Foundation of Credit Counselors (1-866-557-2227). Also, check with your local bar association or a neighborhood legal services program for pro bono legal representation.

        b. Look into government benefits such as fuel assistance, food stamps, or property tax abatements to help you through this difficult period.

It is important that you be both aware and proactive in your fight to keep your Los Angeles home!

Nearly everyone has heard of someone who has bought a fixer-upper or near-foreclosure house, renovated it, and then sold it at a hefty profit. Sound fairly simple and lucrative? Perhaps, but a word of caution: Don’t quit your day job just yet!

Those who earn an income, either part-time or full-time, by flipping Los Angeles real estate, caution would-be flippers to understand the basics before beginning such a venture, they definitely need to:

• Assess their financial situation

• Have time available to renovate the property

• Possess good negotiation skills

• Have knowledge of what renovation entails and of building codes

• Have a practiced eye for evaluating potential value

• Do a great deal of research to learn about the industry

• Have a good sense of timing

• Find trustworthy advisors, such as an agent, a loan officer, and a reliable subcontractor

Of primary importance is that you have adequate cash available for escrow and loan fees, renovation supplies, subcontractor fees, monthly mortgage payments, insurance, and utility bills. Richard Davis, owner of Trademark Properties and creator of the reality show “Flip This House”, states that he has never seen anyone actually buy a house for no money down. It is also important to note that the FHA requires flippers to hold on to their Los Angeles real estate for at least three months in order to qualify for FHA mortgage insurance. Remember that every day you own the property it costs you money.

Those owners of Los Angeles real estate who wish to flip, far too often have no idea of the actual physical labor and time involved in replacing floors and roofs, installing plumbing, extensive painting, remodeling a kitchen or bathroom, or making major improvements to landscaping. While an owner can hire a subcontractor to do some of the work, that costs money and reduces the amount of the final profit.

Finding the right property is no easy task, either. Just because it is being foreclosed does not make it a steal, and even with a home inspection, problems may not show up until renovation has begun. A potential investor must also beware of being too optimistic about renovation costs or profits.

Time, too, is often of the essence. Once the investor finds a suitable piece of Los Angeles real estate, he must move quickly to obtain a loan, order supplies, hire contractors, complete the renovation, advertise, and sell the house.

So, should someone give up the dream of flipping real estate? Not necessarily, say many experts. They do, however, advise investment property buyers to keep their steady job, with a guaranteed income and health insurance, while they experiment with flipping two or three houses a year. With adequate preparation and a little luck, full-time flipping may just be a possibility for the future!

There may come a time when, after exploring all your real estate options for the future, you decide that you really don’t want to sell your Los Angeles home and that you’d rather “age in place.” In that case, you should investigate applying for a reverse mortgage, also known as home equity conversion mortgage (HECM). As with any program or plan that is financially based, there are many pros and cons to be considered before you make a final decision.

Eligibility: you must be at least 62 years of age, own your own home (or have a very low balance that can be paid off), and be living in it as your primary residence. Your Los Angeles home must meet FHA property standards, and you must provide on-going maintenance and pay property taxes, association dues, and insurance. In addition, you must also agree to attend an information counseling session

 Amount: Factors used to determine the amount of your eligibility include your age, interest rates, and the value of your home. Most reverse mortgages provide you with a monthly payment. The are online websites that allow you to calculate/estimate the amount. Go to www.AARP.com, www.USAReverseMortgageAdvisor.com, or www.ReverseMortgageGuides.org for assistance.

Advantages: As stated in Gilbert’s Guide, a reverse mortgage includes these advantages:

• Reverse mortgages for seniors can be set up as a monthly payment, line of credit or a lump sum—whatever works best.
• No matter how the reverse mortgage is set up, the home owner does not make any monthly payments.
• No monthly payment is due from the home owner unless he or she dies, moves or sells the home. At that time, the loan is due in full, plus interest and fees.
• The home owner can receive monthly income from a reverse mortgage as long as he or she lives in the home as a primary residence. A home owner could potentially continue to receive monthly payments even after the loan balance is higher than the amount that the house is worth.
• Neither the home owner nor his or her heirs will ever owe more than the home is worth, no matter how many payments are received or how high the interest rates become.
• It’s fairly easy to qualify for this loan since credit scores and income are not part of the qualification process.

Thus, you may convert home equity into available money to meet escalating medical costs, supplement Social Security payments, and make necessary repairs to your Los Angeles home. Best of all, you can stay in your home and not have to move.

Disadvantages: Gilbert’s Guide also cautions that there are cons involved with reverse mortgages. Some of these include:

• Reverse mortgages for seniors have high closing costs. The senior must pay origination fees that are about double what they are for conventional mortgages and mortgage insurance. The interest rates are adjustable. So, because the set-up costs are expensive, you certainly don’t want a reverse mortgage if you’re going to move in three to five years.
• For seniors who depend on Medicaid or other state or federal programs, it’s important to consider if reverse mortgage payments will affect their eligibility.

The senior is required to attend counseling by an independent HUD counselor prior to receiving a reverse mortgage. These are complex loans and this is a measure of consumer protection, and this point should be high on your reverse mortgage pros and cons checklist.

As with any financial undertaking, you should meet with your real estate agent, your tax advisor, and your attorney during the decision-making process. Discuss the matter with your family members who may be affected by your participation in this program. Talk with other seniors who have a reverse mortgage, and use, either in person or online, knowledgeable sources such as AARP, Fannie Mae, HUD, the Federal Housing Administration and your bank to your advantage.

The federal governments’ Section 203 (k) program is designed for the rehabilitation and improvement of single family properties and is viewed as a tool for neighborhood revitalization and expanding home ownership. In the past, when a Los Angeles real estate buyer wanted to purchase a home in need of repair or modernization, he/she had to first obtain financing to finance the dwelling and then find additional financing to do the rehabilitation work. With the 203 (k) plan, however, the buyer can get just one mortgage--at a long-term fixed or adjustable rate--to finance both the purchase and the repair of the property.

USES AND APPLICATIONS:  This program can be used in various ways:

        1. To purchase a home and its land for rehabilitation

        2. To purchase a dwelling at one site and move it to another mortgaged property for rehabilitation

        3. To refinance existing secured loans on a home for rehabilitation

        4. To convert a one-family dwelling to a two, three, or four family residence OR

        5. To convert a multi-family dwelling to a one-family home.

ELIGIBILITY:

        Property:

        1..Must be a one-to-four family dwelling that is at least one year old

        2. If the dwelling has been demolished, some of the foundation must remain

IMPROVEMENTS:

        1. All construction must comply with HUD Minimum Property Standards

        2. All rehabilitation dealing with thermal or heating/AC systems must be energy efficient

        3. Cash-paying homebuyers can refinance their Los Angeles real estate within six (6) months of purchase in order to make improvements

As with any government funded programs, the property to be purchased is subject to appraisals to determine the “as-is” and “after rehab” values of the real estate. In addition, the homeowner will be expected to provide HUD with the following:

        1. A plot plan of the site

        2. Proposed interior plan of the dwelling

        3. Work write-up and cost estimate

HUD also offers an FHA Streamlined 203 (k) program that allows buyers or owners of­­­ Los Angeles real estate to purchase or refinance a home that needs up to $35,000 of rehab/repair work. Eligible owners may borrow the money even if they don’t have the equity usually required. In addition, the streamlined program requires much less paperwork than does the regular 203 (k) and thus simplifies the process for obtaining funding for improvements/repairs. Typical improvements approved for this program include such things as :

• Roof, gutter, downspout repair/replacement
• HVAC systems
• Plumbing and electrical work
• Basement completion/waterproofing
• Purchase of appliances
• Minor remodeling of kitchens and bathrooms
• Flooring
• Windows and doors
• Decks, patios, porches

A complete list of acceptable uses of the 203 (k) funds can be found here.

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For many reasons this is a good time for potential home buyers to purchase Los Angeles real estate, and the large number of foreclosed homes available holds the promise of bargain prices.

Too good to be true? Perhaps. Buyers of foreclosed property, especially if it has been unoccupied and not maintained for some time, must be acutely aware of possible problems and trouble spots involved in such a sale and may have to realistically face some unpleasant facts. As Vince Mastronardi, president of On-Site Specialty Cleaning and Restoration, observes, “Buyers need to educate themselves about the potential pitfalls of purchasing distressed property. It’s not so much what damage occurred, but the sources of that damage and how long before the problem was addressed.”

A cautious buyer should look for signs which indicate that all is not well with a piece of Los Angeles real estate.

        1. The presence of mold. Once mold takes hold, it is almost impossible to get rid of. Look for places which have been excessively painted in an attempt to cover up mold.

        2. Lack of heat for months in a home not properly winterized. Result? Burst pipes and water damage.

        3. Hints of water damage. Peeling, bubbling, or discolored paint may occur as a result of moisture. Other evidence of water damage includes swelling in walls/ceilings, stains, and a musty odor.

        4. Blocked drains or pipes may lead to sewage problems.

        5. Evidence of vandalism or break-ins. Signs of such activity include holes punched in walls and broken windows. Theft of appliances, fixtures, air conditioning/heating units, pipes, and electrical wiring is also of concern.  Were the stolen items properly removed or carelessly ripped from their location?

        6. Indications of furnace malfunction or soot damage. Telltale signs include black cobwebs, greasy grey residue on walls, or an oily odor.

        7. Renovations in an older home. You would be wise to check to see if permits were issued. Was the work performed by a professional? Does it conform to required ­­­­­­­­­­­­­­­­­­Los Angeles real estate building codes? Was asbestos disturbed during construction?

        8. Debris dumped in the yard. You will be required to remove such refuse in a timely (and possibly expensive) manner.

        9. Occupation by uninvited critters. Wild animals often live in abandoned structures. Look for snakes, rodent infestation, and unexpected “nests.”

Obviously, you must insist on a thorough inspection of your Los Angeles real estate to avoid buying a badly flawed foreclosure filled with unpleasant and costly surprises. Be sure to request air quality and surface testing; it is well worth the little extra it costs. You should also inquire about any corrections that have been made to address damages and talk to the company who performed the repairs.

By diligently doing your homework and actively anticipating problems, you may just find the foreclosure which fits your needs and is indeed a bargain!

As every homeowner knows, insurance for your Los Angeles home 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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The tax credit may be over for first-time Los Angeles home buyers, but interest rates continue to drop making this an ideal time to buy. Read what the LATimes reports:

Record low mortgage rates are still declining, according to Freddie Mac, which said lenders were offering 30-year fixed loans at less than 4.5% this week and 15-year loans at less than 4%.

Freddie's chief economist, Frank Nothaft, noted that the rate of growth in the gross domestic product had been revised downward, reducing fears about inflation and as a result decreasing pressures on long-term interest rates.

Reporting a seventh straight week of declines, Freddie Mac said the 30-year rate averaged 4.49% for the week ending Thursday, down from 4.54% last week and 5.22% a year earlier.

On home loans with rates fixed for 15 years, the interest rate averaged 3.95%, down from an even 4% a week earlier and 4.63% a year earlier.

The interest rate for the five-year Treasury-indexed hybrid adjustable-rate mortgage -- that's the one that turns variable after five years at a fixed rate -- averaged 3.63% this week, down from 3.76% a week earlier and 4.73% a year ago.

Freddie Mac, the giant government-sponsored buyer of home loans, asks lenders about the rates they are offering on mortgages up to $417,000 to borrowers who are good credit risks. The borrowers would have paid 0.7% of the loan balance to the lenders in upfront fees and points, Freddie said.

Solid borrowers who shop around often find slightly better rates than those published in the survey.

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The home improvement trend appears to have gained momentum in recent months, be it in simple upgrades or major remodeling. Owners of Los Angeles real estate are rapidly joining the ranks of do-it-yourselfers, hirers of handymen and specialists, or clients of architects and general contractors. Which of these categories best describes you depends on your time, ability, and motivation; the complexity of the job; approval/certification required by local authorities; financial considerations; and the availability of reputable help.

After you have identified the improvement desired and the level of expertise required to do the job, your next step is to find the appropriate worker. If that person is you, there are many sources to assist you. Businesses such as Home Depot, Lowes, and carpet/tile retailers often give free “how to” clinics in the evenings or on weekends and have helpful handouts to guide you. There are also innumerable web sites for the novice to advanced do-it-yourselfer which provide, articles, diagrams, videos, advice from professionals, and step=by=step instructions for a myriad of fix=ups or upgrades ranging from hooking up an icemaker tore facing kitchen cabinets to laying floors and constructing a patio. Some helpful sites are DYInetwork.com, DYIAdvice.com, HomeandGardenAdvice.com, and HomeImprovements-and-Financing.com.

You may have determined that you want the services of a professional, but do you want a handyman or a specialist? The latter, the more expensive of the two, has a depth of experience in his/her field but is limited to work in that field. A handyman, while not as experienced, offers a breadth of skills--he/she can hang your ceiling fan as well as paint your ceiling. Check out websites which help in locating dependable handymen and reputable specialists. www.AngiesList.com will not only assist you in finding the right match for your needs, it will also warn you about individuals/companies who have garnered complaints from customers. You may also want to check out franchise businesses such as www.MrHandyman.com--more expensive but more likely to be insured and bonded.

Your reason for upgrading your Los Angeles real estate may be to increase your quality of life or reflect a changing lifestyle (addition of a home office or a screened- in patio), decrease utility bills by becoming more energy efficient (installation of upscale siding or quality windows), or adding value to your property (kitchen island, renovated bathroom). Whatever the purpose, be sure to take advantage of the internet and local businesses--and do enjoy the fruits of your labor.

Get the current value of your Los Angeles real estate.

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.