An article in the Wall Street Journal took issue with a recent TimeMagazine cover story calling into question most Americans cherished beliefs about home ownership. Much of what the Journal stated isn’t new. In fact, it recites benefits of home ownership that you already know better than anyone. But in pulling them together in the way it does, it makes you realize just how compelling home ownership is from just about every standpoint. If you haven’t seen the piece, by Brett Arends, here’s a thumbnail sketch of its 10 points:

Why is now a great time to buy?

1. You can get a good deal. Prices are down 30 percent on average depending on which part of the country you are looking . They’re at a level that makes sense for people’s income.

2. Mortgages are cheap. At 4.3 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.

3. You can save on taxes. When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.

4. It’ll be yours. The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?

5. You can get a better home. In some markets, it’s simply the case that the nicest places are for-sale homes and condos.

6. It offers some inflation protection. Historically, appreciation over time outpaces inflation.

7. It’s risk capital. If the economy picks up, you stand to benefit from that, even if you’re goal is just to have a nice place to live.

8. It’s forced savings. A part of your payment each month goes to equity.

9. There is a lot to choose from. There are some 4 million homes available today, about a year’s supply. Now’s the time to find something you like and get it.

10. Sooner or later the market will clear. The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.

What is a Short sale?

Basically, it is when the mortgage holder allows the homeowner to sell their property for less or “short of” what is owed on the mortgage. As part of the deal, the lender forgives some or all of the debt.

Why would the lender do that?

Good Question, typically its to avoid foreclosure which is a more time consuming and costly process for both the bank and the homeowner. The losses the bank incurs on a foreclosure are 10% to 12% higher on average than that of short sales, notes Corelogic.

Why would a homeowner agree to a short sale?

To get out of a loan they can no longer afford. Also, shorts sales don’t inflict as much damage on a persons credit history as foreclosures do.

What Buyers need to Know.

There is nothing short about a short sale! If you are looking for a quick escrow or closing, forget it. It can take anywhere from two to ten months to close a short sale. Depending on the lender , there can be lots of hurdles and lots of paperwork to get the bank to approve a deal.

You can get a good deal.

The appeal of a short sale of course is that you can get a a price break of anywhere between 3 to 5 percent but you have to be realistic, if you see an eye popping deal chances are it will not fly with the bank. They will have it appraised and if its worth more than your offer the smoking hot deal will disappear.

Do Your Homework.

You can avoid some of the hassles if you pick properties that have been through the process previously , meaning buyer fell out of escrow. This typically means a lot of the issues with approval have been resolved. You also want to avoid deals where the bank has not approved the short sales process yet.

What Sellers need to know:

Talk to experienced short sale agent. Choose a licensed agent that is well versed in the procedure of working with the banks and closing short sale deals. Its not a process for a rookie realtor. Also before you jump into a short sale talk to both an attorney and a certified public accountant to avoid potential pitfalls.

Understand the Consequences:

The reason you consult with experts, short sales have some drawbacks. First, there is always the chance the lender can sue for the debt that it had supposedly given. Also, the loan amount you didn’t payback has the possibility of being taxed by the the IRS. Finally, if you have a 2nd and 3rd loan, the holders of those notes may try to get their money back in civil court.

Home sales during the fall are traditionally a bit slower than the spring and summer months. But fall can be a good time to sell because there are (usually) fewer houses on the market which means less competition and buyers typically want to buy quickly before winter and the holidays set in. 

      If you plan on selling this fall, you’ll want to do everything in your power to attract  homebuyers. One of the first things you should do is examine, and, if needed, repair any major structural systems. If you’re unaware of any, you may want to hire a professional home inspector. Chances are a potential buyer will hire an inspector to examine the house, so you might as well save yourself any surprises down the road. 
      The American Society of Home Inspectors says a typical home inspection includes drainage conditions exterior surfaces, decks, chimney, the roof, windows, doors, plumbing fixtures, furnace, air conditioner, insulation, ventilation, electrical, heating, and plumbing systems.

Once that’s done, you should make sure you don’t have any loose shingles. Repair and paint your gutters, if needed. Once the structural systems are repaired or given the thumbs-up, then you should turn to appearance. And when it comes to looks, if you’re selling in the fall, there are many things to consider, including:

Curb appeal. In other words, the way your house looks from the street – the roof’s condition, how the paint is holding up, whether the windows are sparkling, the lawn is mowed, the landscape is attractive and not buried beneath a peppering of fall leaves, and the driveway and walkways are free from toys and clutter.Entering the house. Your front door should be in good condition. Usually when the real estate professional is busy retrieving the key from the lock box, the potential buyers are standing by with nothing else to look at but the front door. Does it need painting or staining? Also, new hardware will make it stand out, and why not adorn it with a seasonal fall wreath?  

Once inside your house, the two things that immediately turn off prospective buyers are dingy walls and dirty, ill-colored, outdated, or shabby carpet. Sometimes it’s hard to be objective about the condition of your own house because you see it every day, so ask a friend, neighbor, or your real estate agent to give it a look and give you their honest opinion. Fresh paint can do wonders. Keep the colors neutral. And while you can offer buyers a carpet allowance to compensate for bad carpet, replacing it before selling really boosts that first impression and makes the house more appealing and worth more in the buyer’s mind. Clear the clutter. If you have too much furniture, put some of it in storage. Fewer pieces of furniture will make the room seem larger and more open. Also, clear counters in the kitchen and bathrooms. Make sure closets are clean. Pack up some of your clothes now. Fewer hanging clothes in the closet will make the closet appear bigger.

Talk to the professionals. Now’s also a good time to interview real estate professionals. Ask about their experience, find out how well they know the area you’re eyeing, and talk to references. Once you have someone lined up you can follow his or her additional recommendations and begin the final phases of preparation before your house goes on the market.

Finally, you should be mindful of setting a competitive price. Your REALTOR® will begin by conducting a competitive market analysis of your house and give you an estimate of the fair market value of your home, which is a range that will fluctuate depending on the housing market in your area and how much similar homes in your neighborhood are selling for.Don’t insist on setting the price too high, especially if you’re on a timeline. A house priced appropriately will be taken more seriously and will ultimately sell more quickly than one that’s overpriced.

Ever wonder what it would be like to live within minutes of the beach?  To live in a place where people come for vacation?

Oceanside California offers both and is still affordable. Located between San Diego to the south and Los Angeles to the north, Oceanside is a beach community in southern California featuring an excellent climate and a very laid-back atmosphere. 

It is bordered by Camp Pendleton military base to the north, Vista to the east, and Carlsbad to the south.  The primary freeways/highways serving Oceanside are the 5, 76, and 78 freeways.  The closest major airport in San Diego’s Lindbergh Field. 

If you are interested in making this town your home,  purchasing an investment property, or a summer home destination, contact me today.

Here are a few facts about Oceanside that you may not know:

Demographics

Oceanside’s climate in the news!

• On June 13th 2005, the Wall Street Journal rated Oceanside as the number one vacation home market in the country.
• Oceanside’s climate was recently rated the fifth most desirable in the world; second most desirable in the nation.

   

Attraction & Amenities

If you are considering the purchase of a home or just wondering how the market is here in North County take a look at the stats below.

AUGUST 2010 statistics for both Detached and
Attached homes.

The countywide median SFD price of homes sold fell from $392,000
in July 2010 to $385,000 in August 2010, but increased 2.67
percent from August 2009 for 12 months of year-over price increases
countywide.

NORTH COUNTY
============
The median price for all North County home sales – attached and
detached – decreased 3.89 percent in August 2010 from July 2010,
to $385,000

DETACHED HOMES
===============
Detached homes in North County decreased 3.16 percent from
$475,000 in July 2010 to $460,000 in August 2010. Year-over
median single-familydetached homes in North County decreased
one percent, from $465,000 in August 2009.

ATTACHED
=========
Attached home prices in North County decreased 5.55 percent to
$232,500 in August 2010, for two consecutive months of price
decreases. North County attached homes decreased 11.93% from
$264,000 a year ago; countering 12 straight months of year-over
price increases, following 24 months of year-over declines.

DAYS ON MARKET AND UNITS SOLD
=============================
Median days-on-market for single-family detached homes in North
County increased to 48 days in August 2010 from 42 days in July
2010. The number of North County single-family homes sold rose
0.14 percent from July 2010 to August 2010. Sold units remained
constant year-over compared to August 2009, following a July
2010 year-over decrease that countered a trend from January 2010
of year-over sales increases.

Statistics are per Homedex

Love at first sight: Buy a home that fits your budget and your lifestyle. Be sure the home is in a community and neighborhood you desire. Visit neighborhoods several times before you buy to check out schools, noise and traffic patterns. 

For other tips and guidlines for purchasing or selling your home please contact me through my blog, via phone or through my email.

What is a short sale?

A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.

Why is the number of short sales rising?

Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.

A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.

The rapid increase in the number of short sales, and the short sales process itself present a number of challenges for REALTORS®. Most Realtors are not experienced in the short sale process, the banks do not have a well defined process or the manpower to handle the numerous transactions, and some properties have multiple loans and mulltiple lenders.

There are programs out there to help a distressed homeowner sell thier property as a short sale. The HAFA (Home Affordable Foreclosure Alternative) program is designed to assist distressed homeowners to sell thier homes and avoid foreclosure.

Keep in mind that the California Legislature  passed  a measure providing tax relief on mortgage debt forgiven in a short sale. 

Previously, California homeowners were exempt from owing federal taxes on the forgiven mortgage debt, but still were required to pay California taxes. This bill now aligns the state’s tax code with that of the federal government, and, if the governor signs it, will become law in time for people to take advantage of it by the April 15 deadline for filing tax returns.

Please contact me for further information about this program or to help you sell your distressed home.

To Buy or not to buy, that is the question.

Consumers trying to time the market and purchase their home at precisely the right time when prices are at thier lowest are advised to take a different approach.  While home prices have leveled off  in the Oceanside area as well as most of North county San Diego coastal, and have even  risen in some markets, mortgage rates may rise, offsetting any potential savings.

Early last year, the Federal Reserve  purchased mortgage-backed securities, which kept interest rates low for consumers.  However, the Fed’s purchase program ended in March, and some analysts predict that interest rates will  increase throughout the rest of the year.  Some predictions have the rates rising to 5.5 percent by mid-2010 and close the year at 5.75 percent to 6 percent.  The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) projects rates on 30-year fixed-rate mortgages to average 5.6 percent this year.

The high end Real Estate market is also facing challenges with buyers qualifying for financing.  During the height of the market, many high-end home purchases were fueled by exotic mortgage products.  Those mortgages are no longer readily available and many lenders are requiring borrowers to provide proof of income, such as W-2s and recent paystubs, as well as demonstrate their ability to meet the monthly mortgage obligation.

The answer to the question above is “Buy now”, the market has leveled off and predictions are that the interest rates will probably rise. If there is an increase in interest rates the savings off the overall purchase price of the home will be cancelled out.

$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010.  Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied.  The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)).  California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)).  Other terms and restrictions apply to both tax credits.

If you are interested in this information and have questions, please contact me at your earliest convienience.