What's the Good Word?

February 28, 2007

It just seems timely to address the stock market news since every media has the drop in the DOW as their lead story. I read Inman News and Blog everyday and I liked their comment so I am quoting it for you.
"Balance
Ten reasons why a stock market correction (any market correction including housing) is a good thing.
1. It curbs hubris.
2. It scares off speculators.
3.The rich get richer (less).
4. We second guess how brilliant we are.
5. It sheds light on what we may be ignoring.
6. Where there is smoke, there may be fire.
7. It gives us a moment to pause.
8. We reassess where we are.
9. It returns us to fundamentals.
10. It brings balance to life."

In future blogs, I will comment on why these 10 items may be good for the market.
#1 What is hubris? excessive pride or sel-confidence; arrogance.

Seller Property Questionnaire

February 27, 2007

In January 2005, the Board of Directors of the California Association of Realors ratified a new form to aid a seller in making a full disclosure about a property's condition and some other factors that might affect a buyer's decision to buy.

Since the early 1980s, the old rule of "caveat emptor" (buyer beware) has been replaced with "Disclose, disclose, disclose". The California State Legislature enacted a law requqiring the seller to provide the buyer with a Seller's Transfer Disclosure form. This form is required in every residential 1-4 unit sale in the state of Califronia. There is also another disclosure form used to document seller's responses to other disclosures required by law (i.e. Did someone die on the property in the past 3 years?) This form is called the Supplemental Statutory Disclosure.

The 2005 Sellers Property Disclosure is not required by statute but was designed more as a check list to aid the seller in addressing issues that might cause a buyer concern if they were undisclosed.

The rule for disclosure is if you know anything at all about the property, disclose it! When in doubt, disclose. It may seem trival to disclose leaky pipes that have been fixed, but in the end, it may save you from a lawsuit. Sellers amy ask "I have had to fix the yard sprinklers many times, do I need to disclose that?" The correct answer is "Probably". Buyers may want to know that an underground sprinkler system does require maintenance.

If you know, DISCLOSE.

Choosing a Countertop

February 26, 2007

One of the choices homeowners who are remodeling a kitchen or building a new home will have to make is the material to use for the kitchen countertops. Back in the old days (30 years ago) the choices were pretty much limited to ceramic tile or formica. But in the 1980s along came Corian and similar brands of resin made stone-like tops. Then came the rage to use natural granite slabs buffed to a mirror-like shine. Of late, a new product has come on line just to make your choice more complex.

Engineered quartz offers the natural beauty of granite without all the drawbacks of natural stone. It is made from approximately 93-95 % natural quartz with the remaining 5-7% consisting of resin and pigments, Natural quartz is first ground to small particles of varying sizes, then mixed to specific color and blends and combined with the resins. The resulting mixture is then molded into slabs, and the slabs are then vibrated and compressed while a vacuum removes all air, all of which is designed to eliminate air pockets and create a hard and dense material. The slabs are then heat-cured, rolled to specific thicknesses and polished to a beautiful sheen.

All of the above processing results in quartz counters that are very hard and very dense, are resistant to knife cuts, and do not require ongoing application of sealers to prevent the staining common to porous natural stone. These counters do not have fissures and cracks, and are also more heat resistant than natural stone .

Engineered quartz is worth investigating if you are looking for a countertop that has the natural beauty of real stone.

California Super Speedway

February 23, 2007

This weekend is the big NASCAR event at the California Speedway in Fontana. If it is not necessary, it will be best the avoid the I-10 Freeway and the Cherry Avenue and Milliken Avenue off and on ramps.

Tonight will be the 2007 San Bernardino County 200 - Opportunity California. These are the truck races which usually precede a major NASCAR race.

Tomorrow will be the 2007 Stater Bros. 300 which starts at 4:30 P.M.

Sunday is the main event, the Auto Club 500.

Today the gates open to the public at 8:00 A.M. Tomorrow the gates open at 9:00 A.M. and Sunday the gates open at 7:00 A.M. It will be a great event.

Since Nascar has become one of, if not the largest spectator sport, you need to plan your weekend to avoid the roads in and around the speedway. If you want details, you can go to CaliforniaSpeedawy.com.

Making Your Home Sparkle

February 22, 2007

(Pause a moment to remember the "Father of Our Country", George Washington. Today is his birthday.)

Its just about Spring and time for the traditional "Spring Cleaning". Where do you start? If you are interested in hiring a professional service, the yellow pages in your phone book are a good starting place. There are some house cleaning franchises listed as well as local services. I personally have used both "Merry Maids" and "Maids 2000". The quality probably varies depending on the franchise owner and its employees. So your next step is to ask for references. The service should be willing to provide them for you. (I always take references with a grain of salt since someone is unlikely to provide a dissatisfifed customer as a reference.) Asking friends if they have used a cleaning service is an excellent idea.

We, in the real estate profession are also good resources. If you bought your home through a realtor, call him or her and ask if they have services which they have used. The agents gennerally will have names or can check with their associates and provide you with some
names.

Of course, you can always do your own "Spring Cleaning". Outline your schedule and start with one room. It will be a wonderful feeling and when you do it yourself, you will know that the finished product meets your standards.

Crisp and Clean - First Step to Selling

February 21, 2007

The real clue to homes that sell in any real estate market is "Crisp and Clean". Most people know and understand "Clean". Are the windows spotless? Are the carpets spotless? Are the closets organized? Are the floors vacuumed and mopped? Can you open a cupboard or closet and see space? Is the garage free of trash? Has the house been power washed on the exterior? A yes answer to these questions indicates a clean house.

But what makes a property "Crisp"? Is the lawn mowed and edged? Are the plants trimmed and the garden beds weeded? Are there blooming flowers in the beds or in strategically placed
pots? Has the somewhat worn carpet been replaced? Are all the kitchen counters free from clutter? Are there bright towels hanging in the bathroom? Are all those family photos packed away? A good way to judge your home for "crispness" is to take digital pictures. I found that I needed to pack away stuffed animals, to rearrange furniture and make my home less "me-friendly". When I made these changes, it began to be "crisper".

If you are planning to put yoour home on the market, take the "Crisp and Clean" inventory!

Cleaning Stainless Steel Appliances

February 20, 2007

With the popularity of stainless steel appliances, homeowners can get frustrated in their efforts to keep the stainless steel shiny. Real Simple Magazine published the regimen used by Sue Bailey, lead product manager of major appliances for Viking. Sue perfofrms this regimen every four months on her own own stainless steel.

Wash surfaces with hot, soapy water (dishwashing liquid is fine) and a non abrasive sponge, work both with and against the grain (yes, stainless steel has a grain) to lift buildup. Dry with a towel. Don't be alarmed if appliances look duller than usual; you have just removed kitchen grease and residual cleaning products.

Apply a layer of stainless steel polish according to the package directions, wiping off excess immediately. Bailey reccomends Sheila Shine, which works as well as cream polish but requires much less elbow grease (www.sheilashine.com or 800-836-0362 for store locations).

With a clean, dry towel, buff the polish into the surface, going with the grain, until it shines and the towel comes away dry.

If you try this, let me know your results.

What's Missing?

February 19, 2007

I subscribe to the Los Angeles Times, The San Bernardino Sun, The Riverside Press and the Wall Street Journal. What I noticed this weekend was that they have ceased to headline "The Real Estate Bubble". It was there during the past week, but it seems to be replaced with the dreaded "Foreclosure".

I guess the news media has decided that the frenzied markets of 2003, 2004 and 2005 gradually turned into the slow down of 2006. Prices did not implode, but eased as buyers became wary and as inventories of listed properties increased. Condition and marketing are playing a much bigger role in real estate sales. With appreciation flat or minimal, Sellers can no longer look to flip a house for great profit but houses are still selling.

It is this flat appreciation (I didn't say negative appreciation) that now is the focus of the media.
Will all that interest only and 100% financing cause Sellers to default? It remains to be seen although as long as the job market is strong, and owners can make their payments, they will probably do so.

Something else that was missing in the news media I read....mention of George Washington. I know his real birthday is the 22 of February, not the 19th, but it would have been nice to see one op ed piece that praised the man "who couldn't not tell a lie" and who is "the father of our country". Please don't tell me that these are myths foisted upon me by the spin doctors of the mid 20th century.

Helping to Sell Your House Quickly

February 16, 2007

Here are some strategies a homeseller should follow to help to sell a house quickly in a slower real estate marketplace.

1. Do your best to see the house as a product to be market - not as your home.

2. Consider getting a professional inspection to know what might need to be repaired and to
show that you are prepared to disclose the condition of the house to any prospective buyers.

3. Stand back and look at the house. Ask yourself as objectively as possible :"Would you buy
this house?"

4. Make certain that your house is fresher, cleaner and better maintained than your
competition.

5. Pack away all your "cherished collections" including family pictures. Buyers need to look at
the features of the house, not your memories.

If you start with these 5 steps, you will be setting the stage for a quick sale at the highest possible price.

Historical Interest Rates

February 15, 2007

In sorting thru my 31 years of archival materials that I have saved, I came across a print out of VA interest rates since the VA loan began in June of 1935. This history was prepared in July of 1992. When the program began, the interest rate for a VA loan was 5%. My information does not state whether this was a 30 year fixed rate or only a 20 Year loan. (I will have to do some research to determine the term of loans being offerred in 1935.)

The highest interest rate cited for a VA loan was 17% in September of 1981. Some of you may remember those days when not only was the interest rate 17%, the sellers had to pay 6 points (6%) for the veteran to obtain the loan. Even with such rates, buyers and sellers were still transferring home ownership.

I checked with our mortgage company, Financial 200, this morning and currently the VA interest rate is 6.25%. The last time the interest rate was in this range was October of 1966.
You can still obtain conventional 30 year financing for a rate of 6%.

Financial 2000 (909-748-7110) has a wide variety of loans. If you need new financing or refinancing, check it out. Also, they are offering a $100 gift to any borrower who closes a loan that is a better deal than they can offer.

California Ranch - an American Gem

February 14, 2007

What is America's most important contribution to residential architecture? The correct answer is the ranch house. Ever since the post World War II period this type of home became a fixture on the suburban landscape. During the 1920s and 1930s California and Southwest architects first designed these houses. At first they were for the wealthy and were sprawling imitations of the ranch houses of the Old West. In the mid 1940s, builders looking for a way to meet the huge demand for housing that followed World War II, found this simple style perfectly suited for mass construction.

The defining characteristics of the ranch house are the single story and the living area in the rear of the house opening with lots of glass to the outside. Bedrooms were typically located in the front part of the house. In the living area, few walls divided the space. There would be an eat-in kitchen/family room and a combination living/dining area. Most of the living areas opened to covered patios or veranda areas.

Originally these ranch houses were designed by architects for wealthy owners, but in the 1940s, builders hired the architects and determined specifications and construction details. From the late 1930s until the end of the 1970s, the ranch was the predominant house form in the United States.

The light filled spaces and the open style floor plans were influential in the development of the informal lifestyle that defines Californians.

"Popcorn" Ceilings

February 13, 2007

The blown-on, cottage cheese look ceilings became very popular with builders in California in the 1950s, 60s and 70s. In the 1980s the popularity faded and homebuyers would often turn away from a home with what they now called "popcorn" ceilings or they would know that removing the "popcorn" would be a redecorating priority.

A homeowner might often be tempted to scrap the ceiling and remove the layer of blown -on plaster as a do-it-yourself project. While it is legal for a homeowner to remove the ceiling which might contain asbestos, asbestos is a banned and dangerous substance if not properly handled.
To remove it correctly is a cumbersone project and truly it will end up to be more cost effective to hire a professional.

The professional you hire must have a valid contractor's license and certificate for asbestos abatement work. You can check qualifications at the contractors' state licensing board. at www.calb.ca.gov.

An alternative to scraping and removing the "popcorn" is to encapsulate it. This involves puting on a coating that seals and binds any asbestos fibers. Often a new layer of drywall is installed over the existing ceiling.

Before anyone starts removal of asbestos, the following state agencies must be notified - the Air Quality Management District and Cal/OSHA. For more information, you can go to www.dir.ca/dosh/asbestos.html.

Before you start the process, it would be wise to have the ceiling material tested. It is always possible that it contains no asbestos, which greatly reduces the steps necessary for removal.
A list of asbestos consultants who have been certified by the California Department of Industrial Relations, Division of Accupational Safety and Health (Cal/OSHA) may be obtained on the Internet at www.dir.ca.gov or by calling 916-574-2993.

Lincoln Tribute

February 12, 2007

Today is the anniversary of the birth day of Abraham Lincoln, the 16th president of the United States. For many years, in remembrance of his life, the 12th of February was a national holiday.
However, in the move to not have 2 presidential holidays in February, the celebration of Washington's and Lincoln's birthdays was combined and now occurs on the Monday between the 12th and the 22nd.

Redlands still has a substantial celebration of Lincoln; perhaps largely due to the fact that the only Lincoln museum west of the Missippi River is located in Redlands.

The Lincoln Shrine was a gift to the citizens of Redlands from Robert Watchorn and 2007 is the 75th anniversary of the Shrine. A new exhibit is being premiered which highlights the lives of both Lincoln and Watchorn and is entitled "We Cannot Escape History." I urge everyone who can to take advantage of this opportunity to view memorabilia from Lincoln's era. There are some awesome pieces in this collection. Admission is free.

Price and Value

February 9, 2007

The fair market value of a property has long been defined as the price a willing seller will accept and a willing and qualified buyer will pay. The definition naturally implies that there may be some negotiating to arrive at a price acceptable to both parties.

A question often asked during such negotiations by both the seller and the buyer is: "What is the property really worth?"

Real Estate agents attempting to answer this question will turn to past closed sales, sales in escrow and current listings, the traditional "market analysis."

It seems that valuation sites are cropping up everywhere on the internet. We have this burning desire to know what our property is worth or what the one we want is worth. Fortunately or unfortunately, depending on your perspective, value is not absolute and selling price will be determined by market conditions. How large a pool of similar properties are on the market? What is the motivation of a particular seller? Just consider, an umbrella sells for $20 when there is a storm anticipated, and $5 in the summer season. If you watch the Antiques Roadshow you will note that appraiser will give a value "at auction", an insurance value or a retail store value. These may all be different and are reflective of the purpose for which a value is given.

Presently in our real estate market, selling price becomes a measure of value, motivation (demand) and supply and it will be the result of all of these factors.

Home Sale Tax Break

February 7, 2007

In an e mail today from the Inman News Newsletter, Robert J. Bruss clarifys one of the questions homesellers often have in regards to the IRS regulation that permits a $250,000 or $500,000 gain to be excluded from the capital gain tax on the sale of a primary residence.

The question comes when one spouse holds title to the property, sometime during that spouse's ownership, he/she got married but did not put the new spouse on title. Which exclusion will apply, $250,000 or $500,000?

Providing both spouses meet the primary residence and 2 year occupation tests, and neither spouse has sold a primary residence within the past 2 years, the $500,000 exclusion will apply.

IRC 121 does not require the name of both spouses to be on the pricipal residence title. For full details, please connsult your tax advisor.

Some January Stats

February 6, 2007

The first month of 2007 is over and I checked to see what the residential real estate closings were in 2007 compared with 2006. As predicted, the number of sales is down, however, the number of closing reflect a more normalized market.

Area 2006 2007

Redlands 41 39
Yucaipa 47 30
Highland 42 33
San Bernardino 189 106
Banning/Beaumont 59 47
Riverside 238 156
Moreno Valley 198 79
Fontana 154 109


These numbers are the closed sales reported though the IMRMLS. They reflect the transactions in which a Realtor was involved and not all transactions that may have occurred.
I plan to check sales each month to see if any trends are developing. The closings in January typically reflect sales activity in November and December. It will be interesting to watch the statistics as the year 2007 progresses.

Questions and Comments

February 5, 2007

Perhaps some of you who are reading my blogs are reluctant to make comments or register your questions. I would really appreciate any comments and would be most happy to answer real estate questions you might ask.

Every daily blog has the word "comment" at the bottom of the blog for the day. Just click on "comment" and a screen will pop up. You do not have to register. There is a box on the right hand side of the page where you can type your comments or questions.

Then you have 3 choices to identify yourself. One choice requires you to put in your name and contact information. If you want personal contact this would be the appropriate box. However, if you just want to make your comments anonomously, click on the"anonomous" box. Then click publish.

The system will e mail me with your comments or questions and I then click "publish" to record them on the blog site. Obviously, I will not publish comments that are in bad taste.

I look forward to hearing from you.

House Hunting Tip

February 2, 2007

Before you even begin your search for the house of your dreams, or maybe just your residence for the present time, it is important to carefully evaluate your financing options.

One hundred percent financing and interest only mortgages became popular in the last several years. Not just with first time home buyers or buyers with no savings, but with many savvy buyers who wanted to purchase a home with the most leverage possible. On the surface, with both of these types of financing, you don't build equity in your home when prices are flat. Of course, making improvements in the home or making principal payments, can create equity.
However, just making the required monthly payment will keep the principal balance the same as the day you purchased your home.

This type of financing is not necessarily bad, but make sure that you have an understanding of the pros and cons. While you are educating yourself about financing, get yourself preapproved for the mortgage you will need to complete the purchase of your new home. You have much better negotiating power if sellers know that you are financially capable of closing the sale.

Another tip about financing; use a lender that has a solid reputation for making real estate loans. A by product of the booming real estate market of the past few years was the tremendous increase in the number of mortgage brokers. Listen to your real estate agent as they should have some insight into which lenders actually do the best job of processing loans.

Century 21 Lois Lauer Realty has a fully owned subsidiary called Financial 2000. We believe that we aid our clients by providing a mortgage service that we know and can count on to get the job done.

What is a Notice of Default?

February 1, 2007

The media has been headlining foreclosure data. "Foreclosures are up 50%!" Is this Chicken Little announcing that the sky is falling? As economists, real estate agents and perhaps potential buyers and sellers try to understand what is happening in the real estate market place, foreclosure data becomes of interest. Just a clarification as to what is contained in the foreclosure data being cited.

In California, most loans are "Deeds of Trust". In a Deed of Trust, there are 3 parties involved: the borrower (Trustor), The lender (Beneficiary), and the Trustee. When the borrower fails to make payments on the loan, the lender notifies the Trustee who then records a Notice of Default. The borrower then has 90 days to bring the payments up to date. Should the 90 days pass and no payments from the borrower have been received by the lender, the lender then has the Trustee record a Notice of Sale. The borrower then must bring all the payments current and/or pay off the entire amount of the loan plus accrued interest and penalties. The Notice of Sale must be published in a local newspaper 3 times in 21 days. If no payments have been made, on the date specified on the Notice of Sale, the property will be auctioned on the court house steps or at such public venue as is specified in the publication.

If the media are picking up the number of Notices of Default that have been recorded, this number is usually higher than the number of actual foreclosures. The process, as outlined above, actually gives the borrower slightly over 4 months to cure the default and stop the foreclosure.

If you receive a Notice of Default from your lender, contact us at Century 21 Lois Lauer Realty and we will go over the process and suggest possible solutions for you.