Any Ghosts in the Closets? The Neighbors Will Talk

”Do you think I will get top dollar for my home,” my seller paused before adding, “ even after what happened here?”
From the tone of her voice, my instinct told me that this wasn’t good. “What happened here?”

My seller shared the story of how after they had moved into their beautiful home that the neighborhood children began to tease their children “that they lived in a haunted house”. There was much more to a last minute disclosure of a “death” in the house than had been told. Unfortunately, they had not met the neighbors before the close of escrow to share the tale of the house. While they bought the house at a reduced price, moved in and lived there happily for many years without any problems, knowing the history may have affected their decision to buy the house and should have been disclosed more thoroughly since it will live on with the house.

I have had numerous encounters with neighbors before helping buyers purchase a home and while some neighbors may have a vendetta again the seller, most often the information is helpful.

For example, while looking at a piece of land with a buyer, the neighbor stepped over to share that she wondered why anyone would buy a piece of land you couldn’t build on, because it was in a flood plain. While this wouldn’t necessarily stop me, if I loved the land, just because a neighbor says something doesn’t make it fact. However, I would definitely heed the warning and check it out with the government agency that issues building permits.

In this day of foreclosures, neighbors can be a great source of information since the banks are exempt from certain disclosures, since they have no knowledge of the house. Recently, I approached a neighbor with a potential buyer for the house next door. With a friendly introduction, we asked the neighbor about the sewer that was noted “available” in the listing information. The kind neighbor shared with us about the home being on septic, as well as, the questionable addition had been there since the house was built. While again, I would still recommend checking out the building plans at the government agency, the neighbor’s information gave my buyers the information they needed to feel comfortable enough to proceed with an offer.

So the moral of the story is, it is a good idea to meet your new neighbors before you make an offer or as soon after, while doing your inspections…to find out if there are any ghosts in the closets.

--Virginia Hall

Grab That Golden Housing Ring!

The NEWS is out! While the Economic Stimulus Package waits for President Obama to sign the bill, the Senate has passed the Economic Stimulus Bill, which included some good news for Home Buyers.

The President of the National Association of Realtors announced this morning, "So here's what we have achieved: 1) the loan limits will be raised to $727,000 in high cost areas, 2) the tax credit will be raised to $8,000 with NO payback [a true credit], 3) interest rates have come down 125-150 basis points, and 4) the bill has over $50 billion in it for foreclosure mitigation, with Geitners Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES's thereby freeing them up to do the same with new mortgages, and Fannie has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10."

While most people have ambivalent feelings about the costly Economic Stimulus Bill, it is almost here and you or someone you know might as well take advantage of it. There are certain qualifications first time homebuyers need to meet, but what an opportunity for new as well as move up buyers. Grasp that golden housing ring and run with it!

--Virginia Hall

Unleashing the Economic Stimulus Package on the Housing Market

Last week, Buyers asked me excited about the $15,000 Home Buyers' tax credit. Wouldn't that give the housing market a shot in the arm?

However in regards to the Economic Stimulus Package and the Home Buyer Tax Credit, the New York Times reported vaguely, "In driving down the total cost — from $838 billion for the Senate stimulus bill and $820 billion for the House-passed measure — lawmakers also reduced the Senate’s proposed tax incentives for buyers of homes and cars, which hold big public appeal." So it appears it will be a bit before we find out the rest of the story, the exact amount of the credit.

So while we wait for the details on how much Buyers will get, the government has already previously passed a nice incentive for qualified first time home buyers--at least $7500 in tax credits if you buy before July 1st. So while Interest rates are down, what are you waiting for? If you plan to stay in San Diego, now is the time. Time to get a hold of a qualified Realtor®, such as myself, to start a search.

Homes in good condition are already getting multiple offers in San Diego County. Once they unleash the full details of the Economic Stimulus Bill and expose the exact amount of the credit, the smart people who have been sitting on their money waiting for the housing market to bottom out will act, investing their money and getting back a tax credit, to boot. Don't get left behind. Why not join them?

--Virginia Hall

4 Basic Tips Guaranteed to Sell Your Home Faster

What do I need to do to get my home ready to sell? I am asked this all the time when owners are preparing to sell their homes. Selling a home is not an easy task. You may need to start preparing months in advance. Visit a model home in a new development, or even other homes that are selling to see what works and what doesn't. Notice how the model homes makes you feel. The sparse, non-personal decoration generally appeals to everyone and is easy on the eye. Keep in mind, you are preparing the house to sell not to live in.

1. Remodeling. While remodeling definitely adds value and helps a home sell quicker, exactly how much money do you get back in return? According to Realtor Magazine, while the Kitchen and Bathrooms are the rooms most recommended to remodel, you can expect 94.1% of the money you spent on an average kitchen remodel and 87.5% on a bathroom remodel back in the sales price. So if you plan to do any remodeling it is important that you use a budget, and stick to it, in order for the remodel make sense. This is not the time to use the top of the line accents or features unless you plan to enjoy the remodel for a year or two before selling. Be practical.

2. Paint. At the same time, some very low cost affordable things can be done to help sell your home more quickly. Touch up the paint or if it beyond this, then paint the home a nice neutral color. "Realtor®" Beige is good. Right now there are multiple offers going out on homes that may be dated, but are clean and well maintained.

3. Clean…Clean…Clean… The most important cost effective task to make your home more sellable is to deep clean and de-clutter the home. While one person's clean is another person's dirty, is important to ask for feedback from friends and your Realtor®. An objective by-stander can see when your love-worn chair has to go. If you refuse to put it out of its misery, then at least put it into storage. Look at your furniture, see if you can remove any of it and then rearrange to open up the room. Nothing yells out "small room" quicker than too much furniture. Pack up all those personal photos and other knick knacks. Oil scent diffusers or other types of light air freshers add a nice touch, filling the room with a safe, pleasant fragrance.

4. Landscaping. Another important item is the yard. Curb appeal is what will often get someone in the door. Even though we have heard "don't judge a book by its cover" a million times, it is our nature. Landscaping accounts for 15%of the price. A ragged, weed ridden yard with junk thrown about warns the buyer of what’s to come inside. Clean up the yard, keep the weeds mowed, edge the lawn, trim those over-grown bushes, and plant a few bright color flowers in the entrance to lure them in. If your grass is brown, sprinkle some ammonia sulfate and water well for a quick green. Also the yard should be free of old cars, engine blocks, empty plant pots, and trash.

With a glut of ghastly foreclosures on the market, these simple, yet vital steps, are guaranteed to help you sell your house quickly and at a higher price.

--Virginia Hall

Safe Neighborhood…or Not?

When people on the news say in surprise, "This kind of thing never happens in our neighborhood" it may be true....Or is it?

One of the number one concerns of buyers is moving into a safe neighborhood. San Diego has many wonderful neighborhoods and others that aren't so great. While there are no guarantees in any community, with a little bit of research, you may be able to decrease your chances of moving into a troubled neighborhood.

The internet is a great source of information! On my website www.VirginiaHall.com under "About San Diego", I have set up links to some of the most useful websites with local information including "Local Government". Under this tab, you will find many local agency links.

Under “Local Government”, you will find a "Sheriff’s Dept” website link, where you can find lots of law enforcement information. At the top of the Sheriff’s website home page, you will find a link to "Resources". This will lead you to a link "Crime Analysis and Statistics" where you can search by address the crime in the area.

If you have children, you may want to click on Megan's Law. This website shows where sex offenders might be in your neighborhood.

A little bit of research can save a lot of headaches down the road.

--Virginia Hall  

San Diego Home Prices Turn the Corner or Just a Blip?

According to the San Diego Business Journal, the San Diego Association of Realtors reports the Medium housing prices may have actually turned the corner. Data gathered from Sandicor, the multiple listing services, show housing sales up 60 percent from a year ago, along with a rise in prices from November to December 2008. Resale house prices rose 2.6 percent to $349,450 and a 2.6 percent in condos to $200,000. This does not take away from the fact that housing prices overall dropped 30% from year to year and condos dropped 36%. So we still have a long ways to go.

However, Sellers with homes in good conditions are getting multiple offers starting to drive prices upwards. So I am hopeful, yet wary, the housing prices has hit the bottom. While I think that the housing market is stabilizing, the unemployment rate is still affecting the economy. According to San Diego Metropolitan UpTown Examiner and Daily Business Report the unemployment rate has risen from 4.9 percent in October 2007 to 6.9 percent in November 2008. With the economy still trying to recover, we may still have another year before our home prices actually begin to rise again due to short sales and foreclosures.

So if you missed the opportunity to buy a house in the last few years because the housing prices were too high, now is your chance. The housing prices have rolled back to 2003 prices. How long will this last? Or will the prices drop further? Only those who can foretell the future will know. Why risk missing the boat again? It is time to buy. There are signs that the economy may improve this coming year and you may miss the boat.

--Virginia Hall



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2009 Brings New Hope!

While no one can predict the future, as President Obama sets up new legislation to turn around the economy, there is a new attitude emerging. One of hope.

Many attribute the recession to cycles and some see it as a self fulfilling prophecy. A year ago when the experts predicted a bad year, we all tightened our belts and trimmed the fat from our budgets. When you multiply this by the millions, you naturally have a recession.

But now a different climate is developing. Many see the Bailout money coming. We are ready to recover. “The economy, including the real estate market, may have finally arrived at, or is just before or just past the bottom,” according to Gary London in the San Diego Business Journal.

The recession has brought hope to many renters. The Housing prices have now rolled back to an affordable level, where renting costs as much as to own.

While First Time Home Buyers must have more money to put down than two years ago, there are still great benefits to buying a home. You have to have a place to live and in the long run, home prices continue to climb. Even with the recession, home prices are still triple what they were twenty years ago. Why pay someone else’s mortgage? The average home owner saves approximately $8000 a year in taxes. Not to mention the $7500 tax First-Time Home Buyer Credit incentive if you buy before July1st 2009. See http://www.federalhousingtaxcredit.com/ for more detail.

When I look back at when I was in my mid-twenties, at that time you couldn’t buy a house without having 20 percent down and the interest rates were in the teens. Unlike today when you can get into a home with as little as 3% down and the interest rates still continue to be in the 5 and 6’s.

While price reductions may continue during 2009, until the majority of foreclosures and short sales have been bought up, I agree with London “While it is very unlikely to be a banner year, 2009 will be a new beginning." Looking forward to a Better New Year.

--Virginia Hall

Assume a Delinquent Home Loan--Genius or Mistake?

"I only want to look at foreclosures," buyers have requested. "I also want to take over someone else's loan." Buyers looking for the ultimate deal.

Sounds like a win win situation. Take over someone else's delinquent home loan, relieving them of their financial burden. At the same time, the buyer would put down a small amount to pick up the property at a low price with a low monthly payment

Years ago, people stayed in their homes paying down their mortgages, when suddenly tragedy would strike--a job loss, divorce or a death occurred. The bank would start the foreclose process. The banks would foreclose and the sellers would lose all the money they had invested into their home. That is when the opportunistic buyer would offer to take over the loan and keep the house from going into foreclosure. While there are laws that highly regulate this now, it was possible to assume a loan and come out ahead.

However, in today's market, most sellers have over-extended themselves by leveraging all the equity they have in their properties. For example, they may have bought the property back in 1997 for $174,000 and, for one reason or another, have borrowed up to $475,000 in 2006. With the housing market depreciation, that home may now only be worth $240,000. So if you were to take over their loan of $475,000, you would be paying more than the house was worth. Not a good deal.

Watch out for those Websites that advertise foreclosure properties for $15,000. It was brought to my attention awhile back, when several of my clients said that I was linked (without my knowledge) to such a site. Many of these websites are quoting what you need to pay in order to get the home loan back on track and out of foreclosure. Then you can assume the loan for a home that isn’t worth what is still owed on it. Not a good deal.

On the other hand, there are a lot of foreclosures and short sales still actively listed that are good deals on the market. With the help of an experienced agent, invest your money wisely. Start out the New Year right---Buy Low and Sell High!

--Virginia Hall

Take Off Those Rose Colored Glasses When Buying a Foreclosure--A Good Deal or Not?

According to the San Diego Business Journal 12/16/08, DataQuick reports that Foreclosures now make up the majority of home sales, 52.1 percent of transactions last month. A great opportunity for Buyers...or is it?

When you buy a Foreclosure or what they call a "REO", you will want to take off your rose-colored glasses and get ready to do some research. While buying a foreclosure property can be a great deal, the Buyer needs to BEWARE! The history of the house is unknown because the Bank Seller has not lived in it and thefore is not obligated, by law, to provide Buyers with any information that is normally disclosed by the usual selling homeowner. They do not know the neighborhood or the fact that the neighbor's dog may bark many nights. They do not know that there was a water leak and a recent insurance claim. They may not know that there is a crack in the foundation. This is why it is so important to have a Realtor® guide you through the process of inspections and check out any issues you have concerns on.

However, by law, the Bank Seller is required to provide you with any Material facts that they know of, including Meth labs, Lead Paint, and Megan's Law website information. However, quite often, understandablely they don't know anything about the property. They may not even be located in the state. They are also required to have smoke detectors and water heater bracing. No excuses there.

When buying a foreclosure you need vision. While you can get the home at a price below market value, you can expect that many of the homes will typically have deferred maintenence that could be very expensive. Most home owners losing their homes, are not putting money into a sinking boat. With vision, you can see the home fixed up. But remember that comes with a price.

In most transactions, the Bank Seller also expects the Buyer to pay for the termite inspections and any costs required to repair termite damaged wood and fumigation, if needed. The Bank Seller focuses on giving you a sales price that you will take the home "as is" understanding that you will have some work ahead. So you want to have a Realtor® that has a good grasp of the value of the comparable homes in the area and is able to provide them to you. Because ultimately, the Buyer makes the decision on the price.

While waiting for an accepted offer, it is not typically as long as a Short Sale (an oxymoron for a short pay sale). However, it is usually longer than the standard 72 hours Purchase Agreement period given to most sellers, but rather one to three weeks. None of the time frames for inspections or loan contingencies begin until after both Buyer and Seller have agreed upon terms and price in writing, an accepted offer.

While you are waiting for the acceptance you should begin gathering a list of referred licensed contractors (plumbing, electrical, roofer, etc.) that you may need to look at any major repairs for estimates. Down the road after you have gone through remodeling or major repairs, you don't to look back and say, "if only I had known."

Once you do finally get an answer, you may want to seek out legal advice. The Bank Seller normally has their own contracts written up by their lawyers. These contracts are definitely written with their best interest at heart. By law Realtors® , not being lawyers, are not able to interpret these contracts for you. Real Estate Agents typically use the standard Residential Purchase Agreements written by Lawyers who represent the California Association of Realtors®.

Once you feel comfortable with the contract and sign on the dotted line, then it is hurry up time. The Bank Seller will typically shorten the time periods alotted for the Buyer to do inspections, get their loans, and to close escrow. Usually the Bank Seller will stipulate a heafty fine if you close late. However, the knowledgeable Realtor® will keep the time frames on track and if at no fault to the Buyer, the agent may be able to get a time extension and delay late fines.

The one process that usually takes the longest is the loan process and can be addressed up front is the Buyer's loan. People are waiting in line to get loans, while lenders have cut back staff. You will definitely want to be preapproved and have provided your lender everything they need to get your loan approved in a timely manner.

The Foreclosure is a great opportunity for the Buyer who takes off the rose colored glasses and approaches cautiously.

--Virginia Hall

Take the Bull By the Horns: Selling Short Sale vs. Foreclosure

Many bury their heads in the ground in denial and allow their homes to go into foreclosure. This is not the way to go. While life throws you a curve ball: a death, a divorce, rising interest rates; and you may not be able to avoid foreclosure, home owners need to stand up to the hard times and need to take the bull by the horns. Even though a short sale and foreclosures impact your credit scores. In reality, the short sale shows creditors that the seller took responsibility for the problem and it will impact your credit for 2 years versus foreclosures impacting your credit for 5 years. Those facing Short Sales and Foreclosures should always consult their lawyers and accountants before listing their homes because there could be tax consequences.

While it says "Short Sale", it is the furthest thing from a short process. You need to be ready for the long haul 6 weeks to 6 months after an accepted offer. A short sale should be called a Short Pay. The seller is selling the home for less than they owe to the bank. At this time, Banks are inundated with short sales and foreclosures. In the end the banks are losing the difference. So they have appraisals to verify the value. The market has driven prices down and the bank's may have to agree to accept the loss. This is not an easy process, pulling thousands of dollars away from a bank.

The last thing people in financial crisis want to do is spend more money on a sinking ship. However, when selling a short sale you can actually get multiple offers when the home is clean and free of clutter. When there is trash thrown about and the weeds are growing out of control, buyers have a hard time seeing the potential. So take the bull by the horn. Hire a qualified agent who has handled short sales before and who you can trust to guide you through the process.

--Virginia Hall

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