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“Theresa is phenomenal! Before putting my house on the market I interviewed Theresa and three other agents. Theresa believed the value of my house was $45,000 higher than the next highest agent estimate, and I could tell from our first meeting that she brought much integrity to her work. From beginning to end she executed a flawless sale. We closed the deal within two months of that first interview. Theresa even negotiated a sale price that exceeded our asking price, which was already much higher than the value other agents told me I could get. She has great skill and many resources and I would highly recommend her to my friends and family.”

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Insurance- Some…

Insurance- Something to think about.

The truth is, most homeowners pay little attention to their property insurance until disaster strikes. And then, it’s too late.

Purchasing the right type and amount of insurance coverage for your home or rental is not difficult. Do some research, call a reputable agent and get it done. These basics will arm you with the knowledge you need to start:

Take a close look at your Insurance Coverage Binder Agreement. This thick packet of documents is a binder of terms and coverage limits. Flip through the pages until you get to one labeled “maximum coverage limits”  While all the categories are important, pay special attention to your dwelling and liability coverages.

Determine dwelling coverage needs

Dwelling/building covers the building structure if it is damaged by a covered peril (fire, windstorm, flood due to broken pipe, etc.) Find the dwelling/building coverage amount listed on your policy and divide it by your home’s square footage. Talk to your insurance agent and, perhaps, a contractor to determine whether the coverage your policy allows per square foot is enough. In California, for example, $200 to $400 per square foot is a good range, depending on the quality of construction materials and characteristics of your lot (condominiums are a little different, and we will cover that below).

According to a …

According to a recent on-line post a “Georgetown law professor is proposing a Resolution Trust Corporation like entity might be the key to getting the housing market back on track.   In Clearing the Mortgage Market through Principal Reduction:  A Bad Bank for Housing (RTC 2.0) Adam J. Levitin considers ways in which negative equity problems might be addressed and assesses the feasibility of using a “bad bank” entity for pooling and standardized restructuring and resecuritization of underwater mortgages.  This is the first of two MND articles summarizing the paper which Levitin wrote for The Big Picture, a Wall Street oriented blog.

Levitin says that the housing market is not clearing and has not since at least 2008 and possibly 2006.  He defines “clearing” as a climate in which willing buyers and willing sellers are able to meet on a price.  One reason for this failure is negative equity which currently affects 27.1 percent of all residential mortgages.  The average negative equity is $65,000, considerably greater than the average household disposable income of $49,777.  “The depth of negative equity,” Levitin says, “is likely to increase as housing prices drop” due to foreclosures and lack of upkeep on properties where homeowners see no upside to further spending.  Negative equity impedes clearing because even where buyer and seller are able to meet on a price they often cannot close the deal because the seller cannot pay the additional $65,000.

At the heart of the problem then is  mortgages, unlike houses, are not marked to market but are carried at book value.  If they were marked to market they would track home values but a change in accounting is unlikely and ill-advised so we must look to other ways of clearing the market.  To date there has been only one – foreclosure, a method that is slow, inefficient and rife with negative externalities on neighbors, communities, and local governments.  Foreclosures can also result in over-clearing.  For various reasons the market for distressed properties is thin, bids are heavily discounted, and market prices are driven even lower.”

For more information contact Theresa @858 869 5656

Housing Affordability Index is on the rise!!!

According to the lenders The Housing Affordability Index rose to a record high of 205.9 in the first quarter of 2012, breaking the 200 mark for the first time since recordkeeping began in 1970.

From the National Assocaiation of Realtors a household earning the median family income of just under $61,000 could afford a home costing $325,500 in the first quarter. That’s remarkable purchasing power when you consider that the median cost of an existing home nationwide is $158,100!!

All of this makes it a great time to buy!

Currently, the median monthly mortgage principal and interest payment for a median-priced home would take only 13.5% of gross income.
Commenting on the report, NAR’s president Moe Veissi said, “We’ve never seen better housing affordability conditions or market opportunities than we see at present.”
Housing affordability is based on a combination of factors, including the median home price, median family income and the average mortgage interest rate. A composite Housing Affordability Index of 100 is defined as the point where a median-income family household has exactly enough income to qualify for the purchase of a median-priced existing single-family home, assuming a down payment of 20% and 25% of gross income devoted to mortgage principal and interest payments.
Also, conditions for first-time homebuyers have never been better. A companion index measuring the ability of first-time homebuyers to purchase a home rose to a record high of 135.8 in the first quarter. The index is configured differently for first-time homebuyers: an income of 65% median ($39,632), a starter home of 85% median ($134,400), and a down payment of 10%.
According to NAR, first-time homebuyers could afford a home costing $182,500, an amount well above the overall median-price home.
For the year, the Housing Affordability Index is projected to set a record high average of 191. Share this good news with any potential buyers you have. For more information about the favorable home-buying environment as well as record low interest rates, call me today.

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The house where…

The house where Michael Jackson died has finally found a buyer, three years after the owner put it up for sale.  According to sources a Los Angeles businessman has made an offer of $17 million for the $23.9 million listing but buyer and seller are still negotiating. Since the singer’s death, the house has been overrun with Jackson fans and tourists wanting a glimpse of the last place Jackson was alive. Other fans snapped up a piece of the pop star when his items went up for auction last December, netting nearly $1 million.

Real Estate Flips!

The Problems of “Flips”..and Why they Don’t often Close !!!!!
Hello Agents!!!!!!!
 
As an agent, you haven’t lived until you’ve tried to keep a “flipped” transaction” together.
 
This is a long posting… just like the transaction you may get involved in.
 
Neither you nor I, need “practice” closing escrows. (i.e. working on transactions that don’t close).
 
What’s particularly galling is we WILL have to dip into our own pockets before COE with no guarantee of a commission.
 
For ease of understanding…..I’ll list the timelines with a red header…and highlight “issues” in italicized red print.
 
I’ve only listed the major issues…there are other minor technical issues which are aggravating… but are usually not deal killers” (just time killers).
 
Less than
30 Days since Seller Acquisition
 
·       Not allowed unless seller meets one of the following exemption criteria:
 
·       State and Federally chartered financial institutions and government sponsored enterprises (Fannie and Freddie).
 
·       Local and State government agencies.
 
·       Non-profits approved to purchase HUD REO properties.
 
·       Both lenders and property disposition firms they hire or w ith whom they are affiliated are temporarily exempt from the 30-day
lock out period. 
 
·       Profit and non-profit entities that purchase abandoned or foreclosed properties using “Neighborhood Community Stabilization Program” funds are exempt from the 30-day lock-out period.
 
Problems:
 
(Since the typical buyer is locked out for the first 30 days…many of the best properties have already been snapped up).
 
1 to 90 Days since Seller Acquisition
 
If the property is being sold within one and 90 days of the seller’s acquisition date and the new sales price is 20% or more than
the seller’s purchase price, all of the following are required.
 
(Professional “flippers” rarely flip a property that can’t be marked up AT LEAST20(+) %).
 
A second appraisal is required. Both appraisals must support the sales price and provide evidence that repairs and/or renovations were completed in a professional manner.
 
(Appraisal problems in our industry are well known and are is just one person’s opinion…now we have to have TWO possible potential problems).
 
(Another issue…the second appraisal CAN NOT be paid for by the buyer…which means either you, I or the seller have to come out of OUR pocket ..Approx. $500 IN ADVANCE OF CLOSING).
 
(If the second appraisal comes in below the sales price, the LOWER of the two values will be used, leading to you having to renegotiate sales price).
(In other words your deal is probably dead and someone is out $500).
 
“It gets better….keep reading”.
 
A property inspection (cost $300) completed by an inspector who has “no interest in the property”.
 
(This is not the typical inspection you walk the buyer thru…it’s an ADDITIONAL “in house” inspection done by the wholesale lender which {of course} occurs long after your “inspection contingency” expires).
 
The inspector must be paid by the LOAN OFFICER/ BROKER.
 
The borrower MAYreimburse the lender at loan closing.
 
(Speaking just for myself…I’m not investing $800 in a deal that MAY or MAY not close…and you shouldn’t either).
 
Then seller has to provide evidence verifying sufficient legitimate renovation, repair, and rehabilitation work on the subject property.
 
(Record keeping is not a strong point of most flippers).
 
Herein lies several more problems:
 
1)   Often repairs and renovations are shoddy and completed hurriedly.
 
2)   There’s a lack of disclosure of those hidden defects.
 
3)   Sellers don’t want to fix anything in a standard transaction, so this issue is PARTICULARY “acute” with flippers.
 
4)   Most flippers are borrowing short term money (i.e. “hard $$$”) so they want the shortest escrow possible. Given that we need 2 appraisals AND an a “in house “ lender inspection YOU’RE LOOKING AT 45 -60 DAYS TO COE.
 
5)   Even though these delays are not anyone fault…all of which will aggravate the borrowers and may lead them to find another property with OR without YOU AND/OR I.
 
91 to 180 Days since Seller Acquisition
 
If property is being sold between 91 and 180 days of the seller’s acquisition and the sales price increases by more than 20%…only 1 appraisal and 1 property inspection is required.
 
The buyer cannot pay for this inspection either.
 
In Closing
 
At this point you are probably wondering why all the additional hoops.
 
Simply stated: Buyers who purchase substandard properties are more likely to walk away!
 
Lenders and PMI companies (and the government agencies who guarantee the loan.) don’t want need any more foreclosures on their hands crashing local values.
 
So they put everyone thru more hoops than a Barnum and Bailey circus to insure the value/workmanship of the property.
 
Professional flippers provide a real service to the community by rehabbing dilapidated properties and maintaining the values of neighborhood.
 
Our job as real estate professionals are protecting our clients.And all these rules are not supporting us in doing that.
 
So…if you do get involved with this type of transaction at least now you can go in with eyes wide open!!!!!!!!

Downtown San Diego Condo For sale!

Gorfeous place with views and open floor plan!!
Call Theresa Steinwehe for more information 858 869 5656

Spain Update!

NEW YORK (CNNMoney) — Spain’s borrowing costs continued to rise Tuesday, with the yield on the 10-year bond hitting another record high above 7%.

Worries that Spain may need a bailout of its own is fueling investor anxiety.

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The yield on the 10-year bond spiked to 7.27% early Tuesday — its highest level since the euro debuted in 1999 — according to Tradeweb, before easing slightly to 7.11%.

The 7% mark is the first warning sign that a country may be headed toward needing financial rescue.

“It looks inevitable that Spain is going to mirror the experience of Italy, Portugal [and] Greece and is going to need a bailout sooner than later,” said Nick Stamenkovic, fixed income strategist at RIA Capital Markets in Edinburgh, Scotland.

The rising borrowing costs come as Spain sold €2.4 billion worth of one-year bills at 5.2% and €639 million of 18-month bills at 5.35%. While the demand was strong, the yields were nearly twice as high as last month’s auction.

Spain cannot afford to borrow at 7% for long and analysts say the nation is effectively shut out of the market at these levels.

Gianni Versace’s house is for sale…anyone?? anyone??

What will it cost you to buy a piece of fashion history?

The Miami mansion once owned by the late fashion designer Gianni Versace went on the market earlier this month for $125 million. That makes it one of the two most expensive homes for sale in the United States.

Versace bought the 19,000-square-foot beachfront home on Ocean Drive, known as Casa Casuarina, for $10 million in 1992 and invested heavily in the property.

The designer was shot to death on the doorstep of the mansion in 1997, and Casa Casuarina sat empty until entrepreneur Peter Loftin bought it from the Versace family for a relative bargain at $19.7 million in 2000.

“This is an iconic oasis for the rich-and-famous that sits in the middle of South Beach,” Loftin said in a statement. “It’s a one-of-a-kind property, created by a genius; that is a piece of art, and a piece of history.”

Building permits up..

NEW YORK (CNNMoney) — Builders appear to be getting more bullish on residential real estate: in May, they applied for permits to build new homes at the highest rate since September 2008, according to a government report issued Tuesday.

The increase in permits to an annual rate of 780,000 in the Census Bureau report mirrors a recent survey of builder confidence, which rose to its highest level since 2007, according to the National Association of Home Builders.

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Actual housing starts, however, dropped 4.8% compared with April, although they did gain 28.5% compared with a year earlier.

The housing market has been sending out mixed messages, with home prices still very weak and foreclosures showing signs of picking up after months of decline.

A drop to multi-family housing starts to an annual rate of 179,000 from 217,000 in April accounted for the loss in new construction. Starts of single family homes rose 3.2% month-over-month to a 708,000 annual rate.