The real deal about Los Angeles real estate.....really!

Cleaned out my closets and gave my old clothes away to someone who can use them - Pay It Forward

It didn't make too much sense to me to have clothes in my closet that just sit there that I hardly every wear.

After I thought about it, I'm sure there are plenty of people that could be wearing these clothes, so I went through my entire closet and now have a huge load of clothes to give away.

I'm going to donate them to a worthy cause.

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My buyers are renting a home that is in a short sale with a Trustee Sale posted: Here's my discussion with them.........

I have a really nice couple with 2 kids.  They live in the San Fernando Valley area of Los Angeles.  The husband's mother is going to be purchasing a home for them, with a conventional loan.

We already have a pre-approval with direct underwriting and are ready to go.

Here's the dilemma:

1. The home they are renting is in a short sale, with a trustee sale scheduled for mid-February
2. The landlord initially told them in December to forget about the rent, and they agreed to use the security deposit on hand as applied rent.
3. The landlord afterwards, in January, gave them a 30 day notice to vacate (they have been living in the house for 2 years)
4. The landlord, as of 2 days ago, has now given them a 3-day notice to quit.
5. The landlord, at some point, informed them that the short sale of his home was an all-cash transaction, approximately $100k below list price.

Here was my advice to them:

First of all, I immediately forwarded them contact information for 2 Eviction Attorneys that I know of.

They clearly need to know what their rights are in this situation.  In the state of California, if a tenant has been living in the home for 2 years, they are due a 60 day notice to vacate, not 30.

Secondly, in the state of California, the landlord can no longer use the security deposit as a form of rent towards the last month.

So it kind of seems that the landlord is flying by the seat of their pants on this one.

Also, something smells a little fishy here.  I know the city they live in very well, and the market value of homes there.  I don't really see where the bank, after doing an appraisal, are going to accept a purchase price that is $100k below market value, which currently would be in the mid $400k range, even if it is an all-cash offer.

Secondly, if it was an all-cash offer, why are they doing inspections and what appears to be retro-fitting standards to the property?  An all-cash offer wouldn't have any of these lender-required type activities going on.

So of course, the properties I am now showing them are standard sales and REO's only.  We do not have any time, unfortunately, to be making offers on short sales and be subject to any unknown waiting periods.

I also advised them to re-prioritize their wish list because we no longer have the luxury of time to make sure everything is on the list, especially in the price range that we can qualify for, which is mid $300k and below.  They need a minimum of 3 bedrooms for their kids, so we are going to be really pressed to find something that will work in that range, in an area they feel comfortable in.

I am pounding the pavement every day to preview and check out any new listings and/or price changes that fall into our range to get them into contract ASAP.   And my clients have really opened themselves up to different areas and have shifted their priorities around that have opened up more inventory for us.

In the meantime, I offered to have some dialogue with the listing agent on the property they are renting now.  I figured if we all work together and communicate, we can make this all happen.

I did so, and told him that I am a certified short sale mitigator, and that I have an excellent track record with the particular bank that holds the mortgage on the property, and offered to help possibly get an extension on the closing date.

We had a few friendly email exchanges, but towards the end, he was a little more abrupt saying he cannot wait for my clients to close escrow on a purchase.  Suffice it to say that was the last email I received before my clients received the 3-day notice to quit.

We'll see how this all rolls out.  I'll keep everyone posted.

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Think Twitter is the Bomb? Well think again...............Introducing.....Twitelleh!!

Watch for these up and coming sites also:

1. Twiterri'a

2. Twittinheimer

3. Twitteaux'

4. Twittenuki

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Some insight as to how the drop in home values roll out, and why.................

The more I process short sales for sellers, and also assist buyers with new home purchases, the more data I accumulate.

EVERY DAY I am running comps these days for buyers and also running Comparative Market Analysis (CMA's) for sellers.

What I've discovered is that the gain, and drop, for that matter, in home values is kind of like a "bullseye" when you plot it out.

The center of the bullseye is usually a major metropolitan area.  This is typically where the highest demand for housing is, and thus by the laws of supply and demand, creates the highest value and prices for homes on average.

Well, for those who can afford to buy in the "bullseye", they usually do so.

For those who cannot afford to buy in the "bullseye", they buy as close to it as possible by how much they can afford.  This is somewhere in the pink outercircles if you look at my diagram.

For those who cannot afford to buy in those areas, they typically will look in the outer, white areas.

But it is interesting to see how this affects those areas if there is a decline in the market as we have seen over the past 5 years.

Those outer areas in the white zones get hit hardest because the demand sort of "implodes"

Let's use my area of the San Fernando Valley as an example.

In our area, in addition to Hollywood we have the entertainment industry comprised of television studios, film studios, and radio stations in such cities as Burbank and Studio City and a few others.  And of course we have the downtown Los Angeles area about 20 minutes away.

Well, in 2004/2005, at the peak of the market, $100,000 wouldn't really by you anything in the "bullseye" area.  You never really saw anything at all with a "1" in front of it.  It simply didn't exist.

So in order to purchase a home in that range, you had to go out to the furthest "white" areas.  Areas such as these are about 1 1/2 to 2 hours away from the metropolitan LA and San Fernando Valley areas.

Well, now in 2011, on the average between homes and condominiums, properties with a "1" in front of it you can find in about 15% of the overall market!!  That's a dramatic increase in availability of homes in that price range.

And that follows suit for buyers in other ranges.  Those buyers in all the different ranges can now afford to buy MUCH closer to the bullseye area, and are doing so in droves!!

But what that does to the outer "white" areas is devastating because the availability of homes in lower ranges that are closer to the bullseye creates a reverse affect in those "white" areas.

I'm seeing homes that sold for $350,000-$400,00 in some of those areas now being listed for $95,000!!

Home values will increase.  They always do. 

And people are ALWAYS moving into Southern California every day because of the weather and job market.

I can testify to that first hand!   There is plenty of new construction still going on as I speak!  It's quite amazing.

And I have buyers coming out of the woodwork now who want to take advantage of the current home prices and interest rates.

Can all of us afford to buy at first in the bullseye?  Of course not.

But the important thing to remember is:  Know when to take advantage of the market when it presents a window of opportunity for you to move closer to the target. 

You can go online as much as you want, but there is no replacement for an experienced agent who knows the region and has been around a while to be able to guide you, at your particular stage of aim, towards that bullseye.

First time buyers:  Get in while the gettins' good!

Existing homeowners:  If you're in an equity position to do so, take advantage of your opportunity to upgrade.

So the next time you're deciding about where to purchase, especially from an investment standpoint, you may want to stay on "Target" with an outstanding real estate agent who knows the red and white, so you don't have to be blue........

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So you need to get away from the hustle and bustle of everyday life! Why not spend the day at the Topanga State Park in Los Angeles, California.

This beautiful park is considered the world’s largest wildlife park within city limits.

The Topanga State Park is perfect for hiking, riding horses, picnics and just enjoying the scenery!

The park is also a great place to go exploring for marine fossils, numerous sedimentary formations and volcanic intrusions.

For more information regarding the Topanga State Park please visit the link below: http://www.parks.ca.gov/?page_id=629

What a great place to spend the day exploring and just have some fun!

HAFA eligibility now includes vacant properties..............here's the facts...........

Some recent changes to the HAFA program in regards to vacant properties have made the eligibile pool of borrowers who qualify just a bit larger.

Prior to the changes, a property that was not owner-occupied for 90 days for reasons other than a required job relocation of more than 100 miles for were not eligible for HAFA.

With the new changes, previously owner-occupied properties which have been vacant or rented for up to 12 months may be eligible as long as the seller has not purchased another property during that time period.

The new guidelines are effective Feb. 1, 2011, and are not eligible on loans owned or guaranteed by government owned or sponsored entities including Fannie Mae, Freddie Mac, FHA and VA.

Keep this in mind for your clients who may be eligible for HAFA which includes up to $3000 in relocation expenses from the proceeds of the sale, AND the elimination of any pursuance of deficiency by the bank once the short sale closes.

Melissa Zavala and I have started a new series for short sales that you may find valuable called "Short Sale Heaven for 2011"

You can subscribe to our posts by joining the group here:

http://activerain.com/groups/shortsaleheaven

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The historic Millard House also known as the La Miniatura is located in Pasadena, California.

The Millard House was built in 1923 and is a Frank Lloyd Wright home.

This amazing home is in the textile block style that Mr. Wright was well known for in his designs.

In fact, the Millard house was the very first textile block home that Mr. Wright designed.

The house was owned by Alice Millard a rare book dealer for whom Mr. Wright built a home for in Highland Park, Illinois in 1906.

The Millard House was listed on the National Register of Historic Places in 1976.

For more information regarding the Millard House please visit the link below: http://en.wikipedia.org/wiki/Millard_House

Another great piece of history right in our own backyard!

Spend a relaxing and enjoyable weekend at the Cadillac Hotel in Venice, California!

The Cadillac Hotel is located near Venice Beach and the Santa Monica Pier.

There you can enjoy all the wonderful amenities the hotel has to offer and more!

The Cadillac Hotel was built in 1914 and is popular to this day, among the royals of Hollywood.

This historical hotel was also the home away from home for Charlie Chaplin!

This amazing Art Deco hotel can be enjoyed by anyone who loves the beach and the sun.

For more information regarding the Cadillac Hotel please visit the link below: http://www.thecadillachotel.com/history.html

What a great way to escape the hustle and bustle!

Enjoy the day wine tasting at the Cornell Winery in Agoura, California!

Cornell Winery is located in the center of the “Three Magical Miles” off of Mulholland Highway.

There you can enjoy the most delicious wines that are created locally! In fact, the wineries motto is “Drink Local Wine.”

The Cornell Winery is a wonderful place that brings the past to life, while maintaining a new and exciting future in the California wine culture!

For more information regarding the Cornell Winery please visit the link below: http://www.cornellwinery.com/

The Cornell Winery has such a rich history much like its wines, what more do you need for a perfect day of relaxation and wine tasting! 

Interest Rate Update - 01/23/011

Home mortgage rates changed only just a bit this week. 

The 30-year fixed rate mortgage rose a little, while the 15-year rates fell slightly.

Hey, if you can pay off your mortgage in 15 years, now's the time to do it!!

I have quite a few clients who paid off their 30-year mortgages early, some by even a decade merely by adding to their principal payment each month or even once or twice a year!

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