Qualifying for HAFA

August 31, 2010
HAFA, the second part of the government's "Making Home Affordable" initiative is the Home Affordable Foreclosure Alternatives (HAFA).
To qualify for HAFA, the borrower and the lender must first have made an attempt to modify the borrower's loan. If a modification is denied, then a borrower may be eligible for HAFA.
To be eligible for HAFA the loan must be
1. for the principal residence of the borrower
2. a first lien mortgage originated before January 1, 2009
3. delinquent or will be in default in the reasonably foreseeable future
4. a monthly payment, including PITI, condo association fees, homeowners association fees and any other escrow payment shortage amounts, is more than 31% of the gross income of the borrower.
5. a current unpaid principal balance equal to or less than $729,750.
While these are the criteria stated in the HAFA program literature, borrowers are finding that some lenders have added additional criteria which they use to deny a HAFA short sale.
If you are denied and you feel you meet these basic criteria, you could contact http://www.makinghomeaffordable.gov/

Speeding Up the Lender's Responses

August 30, 2010

California legislators recently passed Senate Bill 306 which creates some new rules for lender and escrow procedures.

The new law adds a short payoff amount request into the existing payoff demand law. Generally a lender must respond to a payoff demand within 21 days from when it is request by escrow.

After a short sale has been approved by the lender, the lender is required to respond to a short pay demand statement within the 21 day period. This lender response can be a short-pay demand statement or w written statement electing not to proceed with the proposed transaction.

The review and approval of a short sale request does not fall within this 21 day requirement.

Another provision of SB 306 deals with the time a lender has to approve a closing statement. Typically a lender may approve a short sale subject to the lender's approval of a closing statement prepared by escrow. Lenders have not always conducted this review promptly.. Under SB 306, if a lender fails to approve a closing statement within 4 days, the closing statement will be deemed approved, but only if is not clearly contrary to the terms of the short pay agreement or the short-pay demand statement provided to the escrow holder.

The law also includes some technical changes to existing real estate related laws.

The full text of SB 306 is available at: http://www.leginfo.ca.gov/

A Diversity of Interest

August 27, 2010

On Fridays I have been posting information on various activities that are occurring in The Inland Empire. My underlying agenda is to publicize how varied and interesting the events taking place in our region really are.

From the Ozzfest last week to the "flute social" this Sunday at 4:30 and the Jazz Kids performance at Uncle Howies'sPizza, you can find fans.

The Inland Empire Valley Flute Society, will be treated to a performance by the Silver Sounds Flute Ensemble and there will be a sight reading session. Everyone attending is invited to bring their flute and participate. It will be held at a member's home in Redlands and is open to flutists who want to join the flute choir. For more information e mail imailto:ievflutesociety@gmail.com

From 6 to 8 p.m. on Saturday evening, the Redlands Jazz Kinds All Star Big Band will perform. All tips received that evening will go to Citrus Valley High School instrumental music program.

And for all the car buffs or folks thinking of purchasing a new car or folks who just want to know what is being created in the automobile industry, the Inland Empire Auto Show is being held at the Ontario Convention Center, 2000 E convention Center Way in Ontario. It opens at noon today and continues through 5 p.m. on Sunday. Admission is $7 for adults on;line, $10 at the door. 12 and younger are free. http://www.ieautoshow.com/

I'm certain that some of you readers know of other events. You can click the comment button to post them.

"Making Home Affordable"

August 26, 2010

In early 2009, the Obama Administration and Treasury Department launched the Nationwide "Making Home Affordable" program for distressed homeowners. This program focused on stabilizing the housing market and helping home owners facing hardship avoid foreclosure.

As of June 2010 these are the numbers that have been published from several sources including the June "Making Home Affordable" scorecard.

6.3 million U.S. homeowners are not current on their mortgage;

There are 1.1. million REO (Bank-owned) properties

3.2 million Home Affordable Modification Program (HAMP) eligible 60 day+ delinquent loans

Of that 3.2 million, 11.7 million borrowers are likely to be eligible for HAMP modifications

As of June 2010, there are 389,000 active permanent modifications

Any borrower who either fails or is denied a loan modification is someone who could consider foreclosure alternative options.

"Home Affordable Foreclosure Alternatives" is a government sponsored program designed to offer incentives to the investor, the servicer and the borrower to do a short sale of the borrower's property and to prevent a foreclosure.

For the borrower who is eligible to participate, the borrower's debt is eliminated as the HAFA program mandates forgiveness of all liability for repayment of both first and second lien holders.

The borrower may also receive up to $3000 for assistance in relocating. The program works with servicers and investors and is subject to investor constraints and must be implemented within the investor guidelines.

The California Association of Realtors is offering classes for agents because agents need to understand the program in order to assist the consumer who could be eligible to participate.

HAMP and HAFA will become important acronyms as the government attempts to stabilize the housing market. Thus far the programs have not had the desired effect of speeding up the length of time it takes to receive short sale approval, but as investors and servicers become familiar with the processes, it is everyone's hope that it will provide the benefit that the government intended.

Recovery on the Upper End?

August 25, 2010


I researched some numbers for the closed sales in the $400,000+ price range. This was a price range that hit its peak volume in 2006. Since then sellers with properties listed over $400,000 have had to be super competitive if they wanted to attract buyers. Here are the number of closed transactions reported through the IMRMLS from January 1, 2010 to July 31, 2010.


Banning/Beaumont.......3


Bloomington...................0


Colton..............................6


Fontana..........................15


Grand Terrace..............0


Highland........................11


Loma Linda...................5


Mentone........................1


Moreno Valley..............0


Redlands.......................49


Rialto.............................0


Riverside......................170


San Bernardino............3


Yucaipa/Calimesa.......24


When we see these numbers increase, we will have seen the bottom

Not "Double Dip" But "Doubling Down"

August 24, 2010

I saved an article that was published in the July 24, 2010 Wall Street Journal that was headlined "Doubling Down on Housing". The title caught my attention since it referred to a gambling term with which I have become familiar since the popularity of 'World Championship Poker".

The article actually mentions a strategy that some underwater homeowners are using. They sell there house at a loss and write a check to the lender for the difference between the selling price and the mortgage owed in order to purchase twice as much house for not much more money. The ability to use this strategy is made possible by the extremely low prices of houses plus the extremely low mortgage rates. This putting of cash into a closing is a change from the short sale mentality. This strategy has allowed these sellers to trade up to more desirable housing - something short sellers cannot do. These sellers are making a bet on the future of real estate values.

Obviously, these sellers have to have the cash available to make this doubling down bet. They have to believe in the future value of housing and they have to be unconcerned about all the hype for the "double dip".

Yeah, for these optimists, may they win the bet!

How Do Buyers Choose a House?

August 23, 2010

I sat an open house yesterday and, as always, it is enlightening to chat with the visitors. If they are coming from reading my ad in the newspaper, I assume that the open house has some amenities that are important to the visitor. Some of the visitors now-a-days have come after seeing it on the Internet Interestingly, I have found that most of these visitors cannot or are reluctant to share what it is they are wanting in a home beyond the number of bedrooms and the location.

So, how do buyers choose the home that they want to purchase?

I have learned that most buyers purchase because the property hits some emotional trigger that sets off a desire to live in that house. If they have articulated the features that they need or want, it is amazing how often the home on which they make an offer will lack some of these qualities.

Bottom line: Buyers choose because they can picture themselves living in that choice and their lender has assured them that they will qualify for the purchase price.

An exercise that buyers might use would be the old "needs" versus "wants". You may need at least 3 bedrooms, but you want 4. Figure out what you need to live your lifestyle or the lifestyle you want and you may more easily sort out the hundred of properties that you can look at on the Internet. You will also assist your agent in her search to find your "dream" or "almost dream" home.

Escape the Heat This Weekend

August 20, 2010

It is August and we are finally experiencing our hot summer weather. Fortunately we can always escape it and take a drive up into our beautiful mountains. This Saturday and Sunday you can visit Moonridge Animal Park and enjoy the sixth annual Native American Arts Festival.

Moonridge Animal Park is a wildlife animal sanctuary and rehabilitation center. It is celebrating its 50th anniversary and is worth a visit in itself.

However, this weekend you can sample dishes from a variety of food vendors. There will also be demonstrations of Native American arts and crafts. There will also be music, dancing and story telling. Children can also create arts and crafts.

There will be an Aztec group that will tell stories from Mexico, a contemporary flute player named Screaming Eagle.

Moonridge Animal Park; 43285 Goldmine Drive, Big Bear

Hours of the festival are 10 a.m. to 5 p.m. Saturday and Sunday.

There is a general admission charge of $9 @6 for children ages 3-10 and seniors 60 and older and children under 3 are free.

For information call 909-878-4200 04 on the Internet, http://www.bigbearzoo.com/

Transparent and Transparency - The New Buzz Words

August 19, 2010

As I listen to news commentary, I am struck by the frequency with which the words transparent and transparency are used. I am familiar with the concept of transparent which refers to something through which things can be seen, like a window glass or a gauzy piece of fabric. But I was unsure of the exact meaning when "transparent" was used in a phrase "The loan process must be more transparent." Does the speaker mean that the loan process must be "seen through" such as when one "sees though" another's motives? Or does the speaker just mean that the process should be "clearer" so that loan applicants can better understand how a loan processing works?

Nowadays, "transparent" and "transparency" are used in almost every public discussion, so I looked up the meaning in my very old Webster Dictionary. First, I was amused to know that "transparency" is the quality or state of being transparent. I needed to look up "transparent" and did find its third, fourth and fifth meanings to be right on with current usage.

#3. easily understood

#4. easily recognized or detected

#5. open, frank, candid

Thus transparency is what we are all looking for in our business and governmental dealings.

It is fun to see how often this type of new buzz word is used. Let's hope we are all for the qualities of #3,#4,#5.

Being Prepared For the Changes in Lender's Requirements

August 18, 2010

If you are planning on purchasing a property this year, be prepared for the large amount of your financial (and to some degree) history. If you own other property, the lender will want to know why you are purchasing the subject property. This is particularly true if you are not selling your present home.

Knowing the basic requirements can aid you in getting your finances in order. It is not that you will be denied a loan if these basic requirements are not met but it is highly unlikely unless you have additional proof of financial worthiness.

1. FICO score (credit score) of 720+

2. Verifiable and sustainable employment or self employment for the last two years.

3. One year plus of mortgage payments in an immediately liquid account.

4. No late payments or foreclosures on real estate debt.

5. Evidence of down payment funds.

6. Usually past two years of 1040 income tax returns.

A professional loan officer will assist you with guidelines for the documentation you will need. However, your prior preparation will make the process smoother.

Rent Versus Own

August 17, 2010


The debate concerning the benefits of renting versus owning or owning versus renting has been going on as long as I can remember. When the cost of purchasing a home rose so dramatically in the early years of this decade, many potential home buyers became renters out of financial necessity.
When housing supply becomes limited, rents rise. When we are in inflationary times, rents rise.


During the past several years rent have declined slightly due to more rental units becoming available. These units were not necessarily in typical apartment complexes, but were single family homes that either the owner could not sell and decided to rent or were properties purchase by investors taking advantage of the low prices of residential properties.


So, the question of whether to buy or rent continues to be asked. The best answer may still be "It depends".


It depends on how long you plan to stay in one location. It depends on how much you wish to have control of your living environment. It depends on whether you can afford a home in the area in which you wish to live. All of these "it depends" are for you to decide the value of ownership and the responsibilities ownership entails versus having someone else be responsible for the upkeep, but also being able to dictate rules for lessees.


Certainly n today's real estate environment with low interest rates and attractive home pricing, the rent versus own debate is skewed toward home ownership.

2010 - Bouncing along the Bottom?

August 16, 2010

Here is a posting of the median prices of residential properties in the fourteen communities that I track. These are the monthly median prices from January through July 2010. This is not a scientific evaluation. The numbers are derived from a division in half of the number of reported closed transactions in the IMRMLS and then taking the reported sales price of the property at that halfway point.

Banning/Beaumnont.........Jan/169,000.....Feb/165,000.....Mar/185,000.....Apr/165,000

.............................................May/185,000.....June/171,000....July/170,000

Bloomington.......................Jan/135,000......Feb/110,000.....Mar/150,000.....Apr/150,000

.............................................May/155,000.....June/121,500....July/129,000

Colton..................................Jan/97,500.........Feb/125,000.....Mar/100,000.....Apr/128,000

.............................................May/130,000.....June/150,000.....July/105,000

Fontana..............................Jan/190,000......Feb/200,000......Mar/200,000.....Apr/215,000

............................................May/200,000.....June/213,000.....July/200,000

Grand Terrace..................Jan/236,000......Feb/199,900.......Mar/249,900.....Apr/200,000

............................................May/187,000.....June/182,500.....July/190,000

Highland............................Jan/163,500.......Feb/150,000......Mar/160,000......Apr/162,000

............................................May/173,500.....June/185,000.....July/170,000

Loma Linda.......................Jan/275,000.....Feb/240,000.......Mar/175,000......Apr/240,000

............................................May/203,000.....June/250,000.....July/190,000

Mentone............................Jan/200,000.....Feb/225,000.....Mar/200,000......Apr/190,000

............................................May/220,000.....June/78,000.....July/195,000

Moreno Valley..................Jan/150,000.....Feb/149,000.....Mar/150,000......Apr/157,000

............................................May/163,000.....June/160,000.....July/150,000

Redlands...........................Jan/210,000.....Feb/207,000.....Mar/210,000......Apr/227,000.

...........................................May/217,000.....June/221,000.....Ju;y/199,900

Rialto.................................Jan/145,000.....Feb.144,000.....Mar/155,000.......Apr/155,000

...........................................May/164,901.....June/165,000.....July/150,000

Riverside..........................Jan/185,000.....Feb/200,000.....Mar/190,000.....Apr/190,000

...........................................May/215,000.....June/200,000.....July/190,000

San Bernardino...............Jan/95,000.......Feb/92,000........Mar/90,000.....Apr/110,000

..........................................May/107,000.....June/113,000.....July/107,000

Yucaipa/Calimesa..........Jan/160,000.....Feb/195,000......Mar/199,000.....Apr/179,000

..........................................May/209,750.....June/189,500.....July/170,000

Perhaps the reason that I describe the market as "bouncing along the bottom" is because there does not seem to be a consistent trend. The median prices seems to be in a trading range of about $10,000 to $15,000. Up one month, down the next. Always remember that the median will reflect the range in which properties are selling.

Ozzfest Returns to its Roots

August 13, 2010

This Saturday, August 14, Ozzy Osbourne revives his Ozzfest in its Devore birthplace. Beginning at noon, Ozzy Osbourne, Motley Crue and Rob Halford will each perform full sets on the main stage. Zakk Wylde and Black Label Society will headline the second stage. The San Manuel Amphitheatre is located at 2575 Glen Helen Drive in Devore.

This festival was launched in 1996 and was last in the Inland Empire in 2007. For fans of heavy metal rock, this will be an exciting event.Tickets are $19.50 -$155 through Ticketmaster. http://www.ticketmaster.com/

For additional information http://www.ozzfest.com/

Our understanding is that this is Ozzy Osbourne's first festival appearance since 2008 when he did a Texas show.

Trace the Rise and Fall of Median Prices

August 12, 2010

It is interesting to trace the history of median prices in the fourteen communities that I have been tracking. These numbers are not scientifically derived. They are derived from the very simple process of taking the number of closed transaction reported through the IMRMLS, dividing by two and then using the price of the property at that halfway mark. These prices are for the month of July, 2010-2003.

Banning/Beaumont.......2010/170,000......2009/172,000......2008/235,000......2007/320,000

.........................................2006/324,990......2005/325,000......2004/235,000......2003/148,500

Bloomington...................2010/129,000......2009/119,900......2008/185,000.......2007/437,999

.........................................2006/370,000.....2005/309,000......2004/265,000......2003/170,000

Colton..............................2010/105,000.....2009/96,155.........2008/194,000.......2007/260,000

.........................................2006/336,000.....2005/314,000......2004/225,000.......2003/170,000

Fontana...........................2010/200,000.....2009/180,000.....2008/274,000.......2007/414,000

.........................................2006/420,000.....2005/399,500......2004/315,000.......2003/212,000

Grand Terrace...............2010/190,000.....2009/203,000......2008/275,000.......2007/348,000

.........................................2006/365,000.....2005/342,000......2004/292,000.......2003/249,900

Highland.........................2010/170,000......2009/130,000......2008/280,000.......2007/336,000

.........................................2006/392,000.....2005/346,000......2004/272,000.......2003/217,500

Loma Linda....................2010/190,000.....2009/230,000......2008/308,000.......2007/429,500

.........................................2006/495,000.....2005/397,000......2004/315,000........2003/225,000

Mentone.........................2010/195,000......2009/169,900......2008/189,000........2007/170/344

........................................2006/385,000......2005/245,000......2004/298,000.......2003/238,000

Moreno Valley..............2010/150,000......2009/140,000......2008/198,000........2007/354,990

........................................2006/390,000......2005/340,000.....2004/275,000........2003/190,000

Redlands........................2010/199,900.......2009/219,900.....2008/284,000........2007/420,000

........................................2006/425,000......2005/362,000.....2004/329,900........2003/270,000

Rialto..............................2010/150,000......2009/130,000.....2008/190,000........2007/360,000

........................................2006/391,000......2005/340,000.....2004/279,000........2003/190,000

Riverside.......................2010/190,000......2009/175,000......2008/255,000........2007/400.000

........................................2006/430,000......2005/400,000....2004/330,000.......2003/230,000

San Bernardino.............2010/107,000......2009/75,000.......2008/150,000........2007/299,000

........................................2006/311,000......2005/275,000.....2004/212,000........2003/142,500

Yucaipa/Calimesa........2010/170,000......2009/199,000.....2008/260,000........2007/355,000

........................................2006/390,000.....2005/360,000.....2004/314,000........2003/205,000

There are the numbers. It is obvious that there has been a very deep decline in the value of single family homes. For home owners who has appraisals in 2006, the reality may be that an appraisal today could be 50% less. If you wondered why so many folks owe more than their home is worth, these numbers tell the story. If you had put 20% down and the value drops 50%, you are upside down. The good news is that if the future resembles the past, prices will recover, but not in the near future.

Unpermitted Additions

August 11, 2010

You would think that by now the issue of unpermitted additions would be a thing of the past. Since the mid 1980s (and maybe even prior), in the State of California we have had disclosure regulations that require disclosure of additions made without permits. (Actually we now need to disclose almost any work done on a property that was done without the required permits.) With the knowledge that unpermitted work would have to be disclosed when a property was being sold, you might believe that homeowners would be conscientious about obtaining the necessary permits. However, unpermitted additions are still being done. Perhaps a homeowner wants to save the expense of taking out required permits. Perhaps the homeowner does not realize that a permit is required. Perhaps the homeowner is aware that additions of square feet of living area can trigger a reassessment of the property and results in higher property taxes. Whatever motivated the homeowner to by pass the permit process, when a property is sold, it becomes necessary to disclose the unpermitted work.

There are other possible steps a potential seller might take. One would be to apply for an "after-built" permit. There may be penalties, but if the work was done to current codes, an "after-built" permit may be issued. Disclosing the lack of a permit to a potential buyer is a common way of dealing with the unpermitted situation. If a buyer is willing to accept the property "as-is", it can be sold without the permits being obtained. The catch-22 in this acceptance by a buyer is that a lender may require that the work be permitted in order for the buyer to obtain financing.

If a homeowner is contemplating an addition to the property, checking with the city about permits and doing the work with permits is always the best way to avoid future problems.

Changes in FHA Loan Requirements

August 10, 2010

In the past several years the FHA insured loan has become a loan of choice. In the initial years of this 21st century, lenders developed alternate financing options with low down payments and no monthly insurance premiums were required with the 80% first trust deed and the 10 or 20% equity second. (This is probably one of the reasons we do not see many HUD foreclosed properties for sale.) However, we the financial crisis and the demise of the exotic loan products, FHA loans are once more the loan of choice for many home buyers.

This year has seen the Department of Housing and Urban Development raise the upfront premiums for mortgage insurance from 1.75% to 2.25% in April. This percentage is calculated on the amount of the loan being insured. This change in the upfront premium had a dampening effect of the number of loans being processed.

IN February HUD had promise that it would roll back the up front premiums if Congress would give it authority to raise the annual premiums instead. Legislation to do just this was passed by the House on July 30 and approved by the Senate on August 4. The legislation raised the cap on annual premiums from .55% to 1.55%. Last week, FHA commissioner, David Stevens announced that upfront premiums would be reduced to 1.25%.

If all this number manipulation has your head spinning, be sure when you speak with your loan agent that you obtain clarification of these mortgage insurance premium costs. They are scheduled to go into effect on September 7, 2010.

The FHA has a website that is helpful in explaining the FHA requirements. it is http://www.fha.com/

July Closings - 2010-2003

August 9, 2010

The following are the numbers for the closed transactions for the month of July as reported through the IMRMLS.

Banning/Beaumont......2010/111......2009/142......2008/115.......2007/56......2006/84

........................................2005/105.....2004/100.....2003/67

Bloomington..................2010/27........2009/44.......2008/23........2007/13........2006/20

........................................2005/23.......2004/37........2003/26

Colton.............................2010/57.......2009/76........2008/38........2007/15........2006/64

........................................2005/51.......2004/44........2003/36

Fontana.........................2010/259.....2009/413......2008/273......2007/94.......2006/221

.......................................2005/245.....2004/235......2003/244

Grand Terrace.............2010/6.........2009/12.........2008/12........2007/2..........2006/7

.......................................2005/14.......2004/8...........2003/9

Highland.......................2010/57........2009/87........2008/68........2007/30........2006/46

.......................................2005/70.......2004/59........2003/53

Loma Linda..................2010/20.......2009/23........2008/13........2007/16.........2006/20

.......................................2005/11........2004/16........2003/11

Memtone......................2010/4..........2009/15........2008/7..........2007/4..........2006/5

.......................................2005/2..........2004/6..........2003/7

Moreno Valley.............2010/272......2009/436......2008/386.....2007/84.......2006/105

......................................2005/289......2004/301......2003/261

Redlands......................2010/56........2009/63.........2008/55.......2007/45.......2006/69

......................................2005/72........2004/95.........2003/89

Rialto............................2010/105......2009/172.......2008/116.....2007/38.......2006/84

......................................2005/122......2004/119.......2003/117

Riverside.....................2010/434......2009/532.......2008/427.....2007/179.....2006/267

......................................2005/458......2004/426.......2003/414

San Bernardino...........2010/241......2009/382.......2008/241......2007/96......2006/203

......................................2005/218......2004/220.......2003/259

Yucaipa/Calimesa......2010/59........2009/58..........2008/40.......2007/36......2006/61

......................................2005/71........2004/66..........2003/73

Note the huge drop in numbers from 2006 to 2007. I wish I had been tracking the market at that time. In the trenches we knew that the market had come to a screeching halt. The numbers would have told us that there was a big change. The rising market was over. It is also interesting to note that the numbers bounced back in 2008 and more so in 2009. Perhaps due to investors and buyers recognizing what a value market it had become. The numbers for 2010 seem to show that the volume of sales has returned to a fairly standard amount.

Still Time to Attend

August 6, 2010

Redlands Theatre Festival is presenting five plays in repertory in the Avice Sewell Theatre in Prospect Park. This long standing tradition of repertory theatre is a real treat. The season runs through August 21. Tonight, Friday, "All the King's Women" is being performed and Saturday, the feel-good musical "Pump Boys and the Dinettes" is scheduled.

Performances begin at 8:30 p.m.. Single tickets are $18 or season tickets for all 5 plays are $72. More information is available at http://www.rtfseason.org/ or 909-792-0652

Bring a picnic and enjoy the park setting prior to the performance.



The Treasure Hunters Roadshow will be in Ontario today and tomorrow. This is your chance to find out if that item you have treasured all these years is worth something or nothing. Treasure Hunters is a roadshow that travels throughout the U.s., Canada and the United Kingdom. The organization started in 1996. The event is free and there will be several experts present to evaluate items. It is being held at the Quality Inn, Airport, 515 Vineyard Avenue in Ontario. Information may be obtained at http://www.treausrehuntersroadshow.tv/

One Idea for Reducing Your Energy Costs

August 5, 2010

August is the month most of us cringe when we open our electric bills. Running an air conditioner or increasing the time your pool motor is running, can have a huge effect on your electric bill.

However, according to a recent flyer from Southern California Edison, 70% of the energy used in your home is for appliances. SCE is offering a Refrigerator and Freezer Recycling Program to encourage folks to recycle these two major appliances.

If you have a spare refrigerator in the garage, it may well be old and inefficient. You can recycle it for free through the SCE program. They will pick it up and give you $50 to get rid of it. If you also have an older refrigerator in use in your kitchen, now is a good time to purchase a new ENERGY STAR - qualified refrigerator or freezer. SCE will give you a $50 rebate and haul away your old fridge for free.

You can contact SCE on the Internet: www.se.com/pickup or call 1800-234-9722 Monday through Friday between 2 a.m. and 6 p.m.

Southern California Edison also has a program that can help reduce your costs by allowing them to place a monitoring device on your compressor unit. This device gives them the power to shut down your air conditioner if there is a huge demand for electricity during the hot weather. This program is really not invasive and does reduce your electric costs.

Transfer Taxes in Real Estate Transactions

August 4, 2010

Recently there have been some news articles about "private transfer fees". These fees have been in existence for some time, but have recently become the focus of a number of real estate organizations including the National Association of Realtors and the California Association of Realtors. The real estate organizations would like the federal government to ban these private transfer fees while the building industry organizations defend them as a way to spread the cost of public improvements that are necessary for any new tract development. These fees are usually 1% of the purchase price and are in effect for 99 years and "run with the land" meaning every time the property sells, these fees are a charge upon the home seller.

Counties in California have charge a "documentary transfer tax" for generations. Through out California this tax is $1.10 per thousand of sales price. Cities are also permitted to charge a transfer tax. The city of Los Angeles charges $4.50 per thousand in addition to the county tax of $1.10. The highest city transfer tax is charged in several of the Bay area cities; Berkeley, for instance charges $15.00 be thousand in addition to the county $1.10. I found no cities in San Bernardino county charging a transfer tax and only the city of Riverside in Riverside county. In recent months, however, a number of city councils have considered levying this transfer tax as a way to help balance their budgets.

While the city and county transfer taxes go to pay for the services provided to the citizens by their governments, the private transfer taxes go directly to the developer. Developers claim that the use of this tax to pay for the public improvements help lower the initial cost of the home since the developer did not include these costs. A question that might be asked is "Does the developer continue to collect the transfer fee even after the total cost of the public improvements have been recouped?"

Transfer taxes may become an interesting issue for debate.

The Opinions of Experts

August 3, 2010

There are exonomic experts. There are financial experts. There are real estate experts. Perhaps everyone is an expert in one field or another.
As I follow the "experts" in the various news media, it is amazing that experts can differ widely in their opinions of the same subject. Needless to say, the subject that I follow the most is the experts' opinion of the state of the economy and ,in particular, the state of the real estate market. On expert says it is recovering. Another expert says it is in for a "double dip". Another says the "shadow inventory" of foreclosed properties is huge. Another says that this inventory is being absorbed without a glut of homes on the market.

Then there are the experts in the arena of home sellers and home buyers. Home sellers know that the value of their home is much greater than the value of the home that just sold around the corner. The home buyer knows that the value of the homes on the market is still too high. It seems that every one has an opinion and that everyone's opinion is grounded in some sort of expertise.

Real estate professionals also have opinions. Economists in both the National Association of Realtors and in the California Association of Realtors have opinions about the recovery of the real estate market.

Hopefully the real estate agent who is working directly with buyers and sellers basis his or her opinion on the actual data from transactions that have taken place in the past several months. it is a real challenge to an agent to give a prospective seller or buyer an "opinion of value" for a particular property. Considering that in some market places, there is a limited number of transactions and that each property has its unique quirks, agents knowledge of the properties is critical. They may not be experts in knowing the future direction of prices, but they must be expert at knowing what has recently sold and for how much. Their expertise is local and is an opinion that can prove valuable to those potential sellers and buyers.

Listings and Pendings - August 1, 2010

August 2, 2010

Here are the numbers for the active listings and fro those with accepted offers as reported through the IMRMLS on August 1, 2010.

Banning/Beaumont........Active/575........Pending/220.........Back-up/85........Ratio/.530

Blommington...................Active/73..........Pending/60...........Back-up/23........Ratio/1.137

Colton...............................Active/130........Pending/100........Back-up/51.........Ratio/1.162

Fontana............................Active/712........Pending/635........Back-up/200......Ratio/1.173

Grand Terrace................Active/25..........Pending/16...........Back-up/7...........Ratio/.92

Highland..........................Active/195........Pending/122.........Back-up/50.........Ratio/.882

Loma Linda.....................Active/64..........Pending/32...........Back-up/26.........Ratio/.906

Mentone..........................Active/38..........Pending/16...........Back-up/8............Ratio/.632

Moreno Valley................Active/641........Pending/654.........Back-up/221.......Ratio/1.365

Redlands.........................Active/304........Pending 110..........Back-up/57..........Ratio/.549

Rialto...............................Active/269........Pending/294.........Back-up/75..........Ratio/1.372

Riverside........................Active/1215.......Pending/843.........Back-up/343.......Ratio/.976

San Bernardino..............Active/720........Pending/536.........Back-up/136........Ratio/.933

Yucaipa/Calimesa..........Active/278........Pending/97...........Back-up/57...........Ratio/.554

Just a reminder. The "Back-up" category is used to report accepted purchase agreements that have significant contingencies such as contingent upon bank approval.

Thus far our numbers do not indicate a glut of properties being offered for sale. Nor do the numbers indicate a significant slow down in the number of properties that have accepted offers.

Next Monday, I will post the numbers for the closed transactions.