Laguna Niguel – It’s Getting Better and Better

Posted on May 16, 2012 by jonron

Did anyone happen to check out the Grand Opening of the new Whole Foods Market in Laguna Niguel today? The parking lot was absolutely jammed. I couldn’t find a spot anywhere, even over by Ted’s!

This is good news for our community, and by extension, good news for the price of your home. Things are looking up, and going up! Inventory on homes is low, and listings are often getting multiple offers at above asking price ON THE FIRST DAY.

Adding to the good news is that all five of the area’s high schools were ranked in the top 5% of high schools in the nation. Now, we who have had kids who have attended one of these schools already know this – you don’t have to convince us – but this kind of news is great PR for our city.

I went to The Druggist to mail a letter after unsuccessfully trying to find a parking spot near Whole Foods, and the postmistress told me that she’s going to wait “a couple of weeks” to check out the market. That says a lot about the crowds, doesn’t it?

I don’t know if you agree with me, but full parking lots make me feel good, and I’m glad to see them! I hope you are, too.

Posted in Fannie Mae, Home Prices, Homes, Laguna Niguel, Real Estate, Real Estate Contracts, Realtor, Ron Biuck, Summer | Tagged , , , , , | Leave a comment

Supply and Demand

Posted on May 10, 2012 by jonron

Free markets are about supply and demand. Jim Rohn the motivational speaker and coach use to say if you are not paid enough then improve your skills. If you acquire skills that are in demand you will be paid more. Learn a second or third language and double your income, Rohn says. Real estate in south Orange County is also about supply and demand too.

When prices are falling and inventory is high, buyers are afraid to buy. The inventory grows and people who need to sell drop their prices. Some of these same buyers now are saying, “I refuse to get in a bidding war.” Again a product of supply and demand, buyers must realize that the majority of people believe we are at or past the bottom of the market.

Even the national media is on board with this. Some new government and bank programs are keeping people in their homes and in some states the former owners are turned into renters with a deed in liew. In our area some banks are facilitating “preapproved” short sales. While getting a loan modification is difficult, some homeowners have been successful if they can show ability to pay. The result is fewer homes are coming on the market.
Another factor is the low interest rate environment. Buyers realize these rates may never be seen again. Therefore more buyers are moving forward. Would you rather buy something that many people feel is valuable or wait till the prices fall again. South OC rarely has a “normal” market – whatever that is. Here is a little piece of wisdom for you.

My son and I sold REO properties for a local bank until that bank was purchased by an eastern bank. Our asset manager at the time lived in Laguna Beach. He told us one day, “there are only five Mediterranean climates in the world and we are lucky enough to live in one of them. That is why I am never worried about owning property in south Orange County.” Can there be a more beautiful place to live than in Laguna Niguel and surrounds?
Ron Buck Laguna Niguel San Joachin Hills Aliso Viejo Realtor

Posted in Bank Owned Real Estate, Foreclosures, Home Prices, Homes, Laguna Niguel, Real Estate, Real Estate Contracts, Realtor, Ron Biuck, Short Sales, Summer | Tagged , , , , , , , , , | 2 Comments

The Pulse of Laguna Niguel, CA Real Estate

Posted on May 3, 2012 by jonron
Laguna Niguel real estate Ron Buck Realtor San Joachin Realtor Aliso Viejo Realtor

Another beautiful home sold by Ron Buck, Realtor.

It is a good time to sell a home! Yes inventory is low in all price ranges. Currently there are only 22 active listings in Laguna Niguel between one and two million dollars. There are 13 active listing over two million. Lenders have eased up on larger loans now and there are cash buyers about as well. By the way, if you have an upper end home it pays to stage your home.

Today there are 99 detached homes under one million. Only 18% are short sales. There are 243 homes of all types in back-up or pending status and of those 62% are short sales. Of course, there would be more short sales in backup status because it takes three or four months typically to get them approved and closed.

Just to put all this in perspective, let me compare where we are today with January this year. In mid-January there were 257 active listings on the market in Laguna Niguel of all types and prices and today we have 205. In mid-January there were also 191 in pending positions compared to 243 today.

This tells us two things. Buyers are buying to take advantage of the record low interest rates. Second, fewer sellers are listing. Our typical hot listing months are March through June so we Realtors® are holding our collective breaths. Buyers looking for a first-time detached home or an investor looking under $500K in Laguna Niguel have only thirteen to look at. One can see the entire inventory in one Saturday. Needless to say this is putting upward-price pressure on affordable homes.

For a buyer still waiting for the proverbial “shadow inventory”, a term that refers to real estate properties that are either in foreclosure and have not yet been sold, or homes that owners are delaying putting on the market until prices improve, don’t hold your breath.

Posted in Bank Owned Real Estate, Foreclosures, Home Prices, Homes, Laguna Niguel, Real Estate, Real Estate Contracts, Realtor, Renters, Ron Biuck, Short Sales, Summer | Tagged , , , , , , , , , | 3 Comments

Real Estate Contract Essentials

Posted on April 26, 2012 by jonron

Ron Buck Real Estate Broker Laguna Niguel Realtor San Joachin Realtor Aliso Viejo Realtor California Real Estate

Last week I spoke about buyer protections in the DRE (Department of Real Estate) residential purchase contract. The DRE wants consumers to be protected and wants buyers to have time to properly check out a house as well as make sure they can get financed.

 

 

What about sellers? What protections do they have? First, they don’t have to list their home and they don’t have to accept an offer. If the offer comes in at full list price with a qualified buyer and the seller rejects the offer then commissions could be owed to the listing agent.

If a seller signs a contract to purchase and the buyer performs then the seller is obligated to sell the home. If the sellers change their minds after accepting an offer their only recourse is to negotiate their way out, if the buyer is willing. What if the seller accepts an offer, the contract is delivered back to the buyer, and a few hours later a higher offer comes in? Tough luck. The sellers may possibly negotiate a first backup with the second buyer and hope the first buyer goes away. The seller may refuse to make any requested repairs and hope the buyer leaves as well, but if the buyer performs under the terms of the contract then the first buyer gets the house.

What if the buyers do not remove their contingencies in 17 days? If the buyers do not remove contingencies on the 17th day the sellers may give them an extension. By doing nothing, the contingency period (due diligence) automatically extends. If the sellers deliver a notice to perform (usually 48 hours) then the buyers must remove all contingencies or cancel the contract and get their earnest money back.

What if the buyers’ contingencies are removed but they fail to close on time? Again, the sellers have the option to extend the closing formally, just wait, or they may give the buyers a demand to close escrow. If the buyers do not close escrow they could lose their earnest money and/or be subject to legal action.

Posted in Bank Owned Real Estate, Fannie Mae, Foreclosures, Home Prices, Homes, Laguna Niguel, Real Estate, Real Estate Contracts, Realtor, Ron Biuck, Short Sales, Summer | Tagged , , , , , , , , , | Leave a comment

California Real Estate Contracts Favor Buyers

Posted on April 20, 2012 by jonron

Last week I spoke about the shortage of inventory in the Laguna Niguel housing market.

This week I spoke with Realtor® friends in both Las Vegas and Phoenix. Both of these individuals expressed that the inventory was a fourth of what is was last year at this time and buyers are offering over asking price in many if not most cases. Orange County is not as bad but just the same buyers need to be familiar with buyer protections since they will be moving quickly.

The DRE (Dept of Real Estate) wants buyers of 1-4 unit properties to be protected. They must first be aware of how agency works and then the standardized contract has built in protections for the buyer. This only changes when a Realtor or a bank asset manager amends the contract. (Email me for a blank contract, contract@jonronrealestate.com).

In a hot market your first goal is to get the property. After losing several bids you will understand what I mean. The contract also has several “contingencies”. This means the completion of the sale is contingent upon clearing these hurdles.

The first is financing. If you are buying from a new builder this might be your only contingency. Typically the buyer has 17 days to complete the appraisal and get loan approval – or at least feel comfortable there will be no problem getting the loan.

The second is the physical inspection of the property. This should be done quickly so the buyer does not waste money on the appraisal and then discovers that the condition of the property is unacceptable. In the case of a standard equity sale the buyer may negotiate with the seller for repairs. This is not true on short sales and REO properties.

HOA rules and financials, taxes, schools, geology and many more subjects can be contingencies as well. Just remember that all investigations should be done in 17 days. At that point the buyer will be asked to remove, in writing, all contingencies. Up until this time the buyer may cancel and receive most or all of the earnest money back.

Some escrow companies charge cancellation fees and any money spent on HOA documents may not be refundable.

After removing contingencies the earnest money is at risk. Typically sellers ask for one to three percent of the purchase price for earnest or good faith money. If the deal goes through, all of the earnest money is credited toward the buyer.

Don't be confused by real estate contracts. Let Ron Buck, Realtor, explain them to you.

Posted in Home Prices, Laguna Niguel, Real Estate, Real Estate Contracts, Realtor, Ron Biuck, Short Sales, Summer | Tagged , , , , , , , , , | Leave a comment

Are Online Home Values Misleading?

Posted on April 12, 2012 by jonron

Didn’t your mother tell you not to believe everything you read? Well this applies to some of the most popular algorithm home valuation websites. How so you say?

Many of the popular sites like “Zillow” can be very misleading. Even according to their own publications they can be off by 20% a third of the time. Log on to Zillow and read their blog and you will see it is full of examples of valuations that are way off for many reasons. These sites often pull in “comps” from different but adjacent tracts of homes which grossly misrepresent a value either to the high or low side.

Let me put in a plug for the “Local Realtor”. We know in many cases what the real story is behind many closed listings. In many cases the neighbors know the real story as well. For example, why does a 2100 sq. ft. home sell for more money than a home 400 sq. ft. larger on the same street. The valuation algorithm will not know that the larger home had multiple slab leaks and was a property that was uninhabitable. In other words it had to sell to a cash buyer at a substantial discount because no lender would loan on the property.

Some short sales for instance sell at market value even though they are sold “as is” with no warranty. However some short sales sell at substantial discounts because the bank wants to unload it from inventory.

While it is great to have so much free information on line, it can be confusing and lead to a buyer rejecting a well-priced property for a faulty reason. Team up with a local, knowledgeable Realtor and you will get the home that is right for you a great deal. Besides as a home buyer it costs you nothing to use the professional.

Ron Buck, Realtor-Broker

Posted in Bank Owned Real Estate, Foreclosures, Home Prices, Homes, Laguna Niguel, Real Estate, Realtor, Ron Biuck, Short Sales | Tagged , , , , , , , , , | 2 Comments

Why I Will Encourage My Buyers to Buy THIS Year: Factor of 13

Posted on April 6, 2012 by jonron

What is the Factor of Thirteen? Simply put, it is the home price which makes financial sense for real estate investors, and is arrived at by figuring what a home’s yearly rent will be and multiply by thirteen. In many communities of Laguna Niguel and South OC we have hit that price point. This is the reason prices will bottom out.

Take into account the record-breaking low interest rates, and 2012 looks even rosier. Remember, a one percent rise in interest rates means you now qualify for a home whose price is 10% less. Buying while rates are unbelievably low means you can afford a nicer home. How can you resist?

If you are a first-time home buyer right now, or even a standard 20% down buyer making offers, you have probably been beaten out more than once by cash buyers. Take heart, because cash buyers tend to get overconfident and think they will get a 10% to 50% discount. That is usually not true. Cash will beat out financing when all else is equal, however. Some Fannie Mae foreclosures have a fifteen-day moratorium against investors to give owner-occupied buyers an edge.

Remember to count backward. What? Yes, if you want to buy this summer remember that the normal escrow is 30 to 45 days and the normal short sale is around 90 days, but can be two or three times that long. To buy in June you should be looking now.

Even with the power of the internet you need a knowledgeable Realtor more than ever. Rich Dad Poor Dad says “use a broker”.

Posted in Fannie Mae, Foreclosures, Home Prices, Homes, Laguna Niguel, Real Estate, Realtor, Renters, Ron Biuck, Short Sales, Summer | Tagged , , , , , , , , , | 2 Comments

The Real Estate Times, They Are A-Changin’

Posted on March 31, 2012 by jonron

Realtors® and active buyers are always 30 to 60 days ahead of the media when it comes to real estate street smarts and the pulse of the market. So, I’m giving you  advance notice: Things are a-changin’. What is happening in Laguna Niguel and south Orange County?

In Laguna Niguel, inventory is down and sales are up. In the second week of January 2011 there were 320 active homes on the market of all prices. In the second week of January 2012 there were 257 active homes on the market. As of March 30, 2012 there are 219 active listings. That is a 15% drop in inventory in two and a half months this year. It is also a 31% drop in inventory from Jan 2011. Our normal listing months are March, April, May and June

Sales are up. There are roughly 20% more sales first quarter this year as compared to the first quarter of 2011. The number of homes in backup and pending status is also up over last year. If you are a buyer looking in any price range you know the inventory is down. If you are an entry-level buyer you are probably very frustrated right now. I hope we see inventory increase in the second quarter.

Short sales may be on the way out as well. There are several things happening. First the HARP2 program is allowing some underwater homeowners to refinance at lower interest rates. As a result of the “Robo-Signing” scandal, the banks and the government have come to a complicated settlement that is going to result in some underwater homeowners being able to realize a principle reduction of $100,000. This obviously means that some underwater homeowners will be able to stay in their homes, which is a good thing.

Home buyers are still savvy and will not frivolously spend their hard-earned money – BUT – homes that are in good condition and well priced in Laguna Niguel will receive offers. and in lower price ranges they may receive multiple offers. Even high-end properties are moving. If this pressure continues at the low end we will see prices begin to move up. I believe we are there.

Let’s see when the media catches on.

Posted in Bank Owned Real Estate, Foreclosures, Homes, Laguna Niguel, Real Estate, Realtor, Short Sales | Tagged , , , , , , , , , , , , , | Leave a comment

What Should Home Buyers Watch For?

Posted on March 24, 2012 by jonron

Probably the most emotional factors for buyers are beautiful upgrades and staging. While these are very nice, please keep in mind that the staging goes away when you buy and the upgrades while nice can be reproduced on another home.

DRE real estate contracts give buyers a time period to inspect and fulfill their due diligence. This is true of a short sale that you have waited four months for, and it is even true of a bank-owned property. Almost all banks will have a generic addendum that the buyer MUST sign before opening escrow. This addendum will most likely change some of the time frames but there will almost always be an inspection clause and an appraisal contingency clause.

Buyers, especially low-down-payment buyers, should be aware of excessive HOA fees, private community transfer fees, Mello-Roos bonds and base tax rates. All of these items will raise the monthly payment.

Of course it goes without saying that location is most important because you can’t change that. If you are attracted to beautiful views, which are abundant in Laguna Niguel, remember trees can grow up and block views and new structures can sometimes be built in the way of your view.

Third party inspectors, worth their weight in gold, charge in the range of $300 to $600 for the average home. This is a chunk of change but a pittance compared to buying an existing major problem. Geological conditions are beyond the scope of inspectors generally so if you are concerned, a basic geo report is in the neighborhood of $1200. Mold inspectors are sometimes a good idea if there is undo moisture in an area of the home or if the buyer is super-sensitive to mold and mildew.

Most Realtors® have a list of reliable handymen, electricians and plumbers to help you out with all the small stuff after purchase. Remember – Short Sales and bank-owned properties are always “as is” sales.

Happy Spring – the market is heating up.

 

Posted in HOA, Homes, Laguna Niguel, Real Estate, Realtor | Tagged , , , , , , , , | 1 Comment

2012: The Year to Short Sale Your Home

Posted on March 17, 2012 by jonron

FORGIVENESS OF DEBT

Traditionally if a person had a debt forgiven by a creditor then that forgiven debt was considered as income by the IRS. That forgiven debt would be taxed at your normal short-term tax rate. Currently there is a special dispensation by the IRS forgiving or waiving any tax on the debt the bank is shorted and the customer is forgiven. This expires at the end of 2012. While the National Association of Realtors is working hard to lobby congress to extend this policy – there is no guarantee of an extension.

HAFA PROGRAM

Under the national Housing Affordable program, you may qualify for $3000 cash to move out of your home when you complete your sale. You will usually qualify if you are living in your home or have only recently moved out.

BANK FULL SATISFACTION

Those in past years who sold their homes as short sales had to worry about a possible deficiency judgment by the banks being shorted unless they were “insolvent” at the time of sale. In early 2011 the California legislature passed a law which said that a first mortgagor who allowed a short sale had to accept it as “full satisfaction” for the debt. Then in July of 2011 the legislature passed another law which applied to second mortgage companies. It is very typical for a second mortgagor to accept around 6% of their debt as satisfaction. As of now, if approved, neither lender can come after the former homeowner for a deficiency. (If the second has been charged off to a debt collector, negotiations are more difficult but the same law applies.)

BETTER THAN FORECLOSURE

Generally speaking the seller may purchase a new home with a conventional loan within three years after the short sale. It is much longer after foreclosure.

For those moving to a different city FHA loans can be made immediately if the borrower was never late on his payment during the short sale.

 As always, be sure to consult with a tax and/or mortgage specialist.

Posted in Laguna Niguel, Real Estate | Tagged , , , , , , , , , , | 5 Comments