Bailout - A Good Idea or A Bad Idea?

May 21, 2008

There have been numerous news articles chronicling the House and Senate passage of "bailout" legislation for lenders, and homeowners. President Bush announces that he will veto any of these proposals. There are editorials being written both pro and con. On my part, I read as much as I can and listen to the TV and radio interviews. Thus far I am unable to discern exactly what is proposed and why any legislation will be good or bad in either the short term or the long term.

Having exposed my ignorance, I recognize that the foreclosures being processed do seem scary.

For the past year and a half I have been tracking, through Dataquick, the number of Notice of Default, the number of Notices of Trustee's Sale (This is what is published in the newspapers.) and the R.E.O.s (Those properties that have actually foreclosed and are now owned by the lender.) I have only been following this data for the City of Redlands, CA as that is my primary real estate market area.

Certainly the numbers have increased. One has only to glance at the local newspapers to view the columns and columns of Notices of Trustee's Sale. I do not know how many of the Notices of Default actually arrive at this place in the foreclosure process, but many never do. Also, some portion of those published for trustee's sale also never actually foreclose. Hopefully, those homeowners who really want to retain their ownership will be able to do so.

Some of the methods being pursued by real estate professionals, both lenders and sales agents are renegotiating, a freeze on rate adjustments, a refinancing with a different loan, and other individually worked out methods. Interest rates have not risen dramatically; only the rates on the adjustable that had a "teaser" start rate.

This is not the first downturn in which borrowers owe more than the present value of their home. The key to staying out of the foreclosure process is wanting to keep your property. While the Senate bill suggests that it will keep 500,000 folks in their homes, it remains to see the actual steps that are authorized to do so. For those under a threat of foreclosure, there are resources that are being put in place now. Stay tuned for more info.

Chasing the Critters

May 20, 2008

They are around all year, but it seems that as spring arrives, the rodents do too. I refer to the gophers and rabbits that love to attack my garden. Since I am not a big supporter of poisons, I am delighted to have discovered some products that seem to be effective in chasing the critters away.

For mare than five years I have used "Sonic Spikes". If not available in your local nurseries, they can be purchased on-line. They come in at least two varieties: a spike that you fill with "D" batteries just as you would a flashlight and a spike that has a solar panel on the top. The benefit of the latter, even though it costs almost twice as much, is that once stuck in the ground, you do not have batteries that need replacing. These spikes emit some sort of beep that the gophers find unpleasant and they move on.

It seems that the rabbit population in my area increases and decreases for reasons unknown to me. However, when they are super abundant they can be vociferous plant eaters. I have not tried this product, but am sure that I will. (Supposedly, it may also discourage ground squirrels.)

It is a granular spread that you scatter around your plants and is made of blood meal and other ingredients that make rabbits afeard for their lives. Formulated to remain present in damp weather, it can probably continue its repellent qualities even if dampened by your sprinklers

Another organic deterrent product is called "Worm Gold". It is made from worm casings and when used under hibiscus and citrus trees that are infected with whitefly, the flies will move on. It can be used throughout your garden and, according to the manufacturer, nearly every plant in your garden will become increasingly pest-free.

It is nice to know that eco-friendly products are being developed and that they do work.

Your Credit Worthiness

May 19, 2008

A pristine credit record is a tremendous asset in today's lending market place. Not only will a lender for a housing loan require a FICO score above a certain level, so too will lenders of student financing and other major loans. The FICO (Fair Isaac Company) score has become the standard for determining consumer credit worthiness. You can now order your own credit report and check it to be certain that it is correct. Errors can occur and you are the person who can recognize them.

Here are a few suggestions for establishing a good credit history.

Pay your bills on time. The record of your payment history accounts for 30% of your score.

Maintain a mix of credit; car loan, credit cards, etc. A blend of credit boosts the score.

Establish your own credit history by obtaining credit cards in your own name.

Don't max out your credit balances.

Confine loan shopping to a few weeks and don't shop too much. Each inquiry to your credit can affect your rating.

Don't keep opening new accounts.

Lastly, closing accounts does not usually improve your credit score. Keep them open even if you are not using them.

Of these suggestions, the most important two are not to overextend your credit and PAY ON TIME. Even if you can only make the minimum payment - make it on time.

Big Events in Redlands

May 16, 2008


This Saturday and Sunday will be a great time to visit Redlands, California. A number of cultural organizations will be sponsoring events. Some are free to all, others will require and admittance fee.


The Redlands Art Association will be holding the "Art in the Park" festival on Saturday and Sunday from 9 a.m. to 4 p.m. There will be wonderful arts and crafts on display and for sale. It will be at Smiley Park on Vine street and Fourth St.


The Citrus Belt Quilters will be displaying their quilts in the Smiley Park as well.


For a tour of historical homes on Saturday from 9 a.m. to 4 p.m. you can pay $10 or for 2 folks the charge will be $16. It is a wonderful chance to enjoy the loving restoration of these homes.


Also The Redlands Historical Museum will be hosting a showing of classic 19th century apparel. This exhibit will be at the Lincoln Shrine and there is a charge for admittance.


The weather, though hot, will be wonderful to stroll the central area of Redlands.

The Value of Renovations

May 15, 2008
In this morning's Wall Street Journal a headline asked the question "Will Upgrading Your Home Help You Sell It? As a real estate agent, I frequently am asked by potential sellers, and also by homeowners contemplating a remodel, if the upgrade they are considering will improve the value of their property. I was interested in the opinion of the writer of this article.
The writer, , M.P.McQueen, concluded that big-ticket renovations no longer bring the resale return that they did a few years back. Depending on the region of the country in which you live, different improvements are more appealing. However, investing in the curb appeal of your property can be done for a relatively small investment and will create the potential buyer's desire to live in such a well maintained home.
Here is the McQueen summary of projects that are still returning much of the original cost.
Curb appeal projects such as new windows, stucco, paint, and plants.
Projects that lower your insurance or utility bills such as electrical and plumbing upgrades and central station burglar and fire alarms.
Making all the repairs that might seem insignificant, but which again lower your maintenance costs. (That new furnace, new xerographic landscaping, waterless hot water heaters, etc.)
When investing in upgrades and renovation projects, the best criteria in my opinion is the enjoyment they will bring to me and my family, not just will I get my money back when I sell.

Time to Check up on Your Heating and Cooling Systems

May 14, 2008

It looks like Southern California is about to be hot. I mean the weather, but maybe the real estate sales. This is a good time for property owners to check out their heating and air conditioning systems. So many of us wait until we have a problem and that is usually when the heating contractors are super busy and their answer is "Sorry, but we can't come to look at your system for a week to ten days." Ouch! Ten days with out cooling in hundred degree weather!

Many contractors have annual check up schedules for their customers. If you are not on such a service program, you might consider it. Preventative maintenance is always a good thing.

You might also consider getting bids to upgrade your system to a more energy efficient one. In the past five or more years, manufacturers have redesigned their products and you could save on your monthly utility costs by purchasing and installing a new heating and air conditioning system. Do recognize that generally the more expensive the unit, the higher the efficiency rating. Do the math to see how long it might take to recover the costs.

A new heating and air system is a good upgrade and it maybe something that a buyer will consider when purchasing a property. In the meantime, you will have the comfort of knowing you are helping reduce your energy usage.

"Recycling That Helps the Planet and You"

May 13, 2008

I have just received a book of great ideas. It comes from Yankee Magazine and is entitled Panty Hose, Hot Peppers, Tea Bags, and more - for the Garden. The sub title is 1001 Ingenious Ways to Use Common Household Items...

As a person who has never had a green thumb, I am reading the suggestions with hope of being able to successfully grow to maturity and beauty those plants I buy.

The ideas are short and uncomplicated. From time to time as I read further, I will share some.

"Pasta-billities"

The next time you boil some pasta or potatoes, let the water cool and then use it to feed your favorite plants. It contains small amounts of starch, organic matter and other nutrients that plants like. (Also you are not throwing away that precious commodity, WATER.)

"Go Bananas"

After digging a planting hole, make it a rule of thumb to check your fridge or fruit bowl for overripe bananas, badly bruised apples, shriveled grapes, bagged lettuce that has gone slimy or other inedible fruits or vegetables. Toss them all into the hole and say good riddance - and good luck. (I don't know about most folks, but I do seems to accumulate all of this stuff.)

Enough for now, but more another time.

Median Prices Now (2008) and Then (2003)

May 12, 2008

I've been reading editorials that suggest that the prices of residential properties have fallen dramatically. I suppose "dramatically" is a relative term. If you are a seller, and you thought your home was worth a million dollars a few years ago and now eight hundred dollars is what the appraiser says it is worth today, the decline is dramatic (20%). If you are a buyer of the eight hundred dollar listing, your offer will still be another 10% less than the list price. As has always been the case, the fair market value of a piece of real estate is the price a willing and qualified buyer will pay to a willing seller. Negotiation is usually necessary.

Just out of curiosity, I researched the IMRMLS to see what the median selling price was in April 2003 versus the median selling price in April 2008. Sometime in 2002 to 2003, the Inland Empire real estate market changed and since 2007 it has backed off the peak. What I discovered is that 2008 median prices are 25% to 30% greater than the 2003 median prices. I suspect that in future months, the comparison of median prices will show the rising market of 2003 and the stabilizing market of 2008.