Live Lake Forest

These are the latest REO properties in South Orange County that look like the best values today:

$659,900 – Rancho Santa Margarita (Las Flores) -  4 bedroom, 3 bath, 3 car garage, about 2400 square feet.  Last sale was 9/06 @ $960,000.  Update: in escrow as of 11/30

$699,900 – San Clemente (Talega) – 4 bedroom, 3 bath, 2300 square feet.  Last sale 4/2006 @ $950,000.  [12/13 - Still available, also 2 others @ same price, similar size and features!]

$476,500 – Rancho Santa Margarita Single Family REO – 3  bedroom, 2.5 bath, not quite 1500 square feet.  Prior sale 9/06 @ $640,000  [Still available 12/12! - It must not be very nice inside!  By now, I expect they will accept less!]

If any of these look good to you, or you have questions or would like to receive the new listings as soon as they come on the market, please call or email me!  (My contact info is in the upper right corner of the page.)

Or leave a comment!

I’ve had a couple of buyers ask me recently about using a lease option, or “lease-to-own” agreement to buy a house.  Since I have had some experience with this, decided to post about it.
If you wanted to consider lease-to-own, also known as lease-option, of a property, the most likely candidates are vacant homes that are listed for sale, but have been on the market for a while. If a seller hasn’t been able to attract a buyer, and they are getting tired of supporting an empty house, they may consider doing a lease-option.  

All terms are negotiable, but a typical scenario might be something like this:
List price : $600,000, vacant property, on the market 60+ days
Offer : $10,000 option money, lease of $3000/month, $500 of lease to apply to down payment, purchase price $585,000 to close at end of 12 month lease period.

Advantages to seller :

• Immediate cash from option money and pre-paid rent.
• Income to help pay the mortgage during the lease period. 

Risk to seller:

• Buyer/Tenant may change their mind after living in the house.
• Buyer may damage the property and it will require rehab before re-marketing.
• If values decline, the buyer may walk away at the end of the option period.

Advantages to buyer:

• Can tie up a house today for purchase at a future date, so if value increases would have built-in equity buildup.
• Less cash required to move in.
• Part of rent may be applied to purchase (although rent is often market-rate, or more.)
• Can be good for a buyer who needs to improve credit, complete more time in new job, or save for down payment before buying.

Risks for buyer:

• If the buyer doesn’t buy at the end of the option period, seller gets to keep option money.
• If better house comes up, may not be able to jump on it while tied up in the lease

I bought my first house using a lease option, and it worked well for me.  My husband and I were newly-weds with less than 2 years at our jobs, and we didn’t have the required 20% down payment (this was 1978, when 80% loans were the only mortgages available and I don’t think FICO scores were even invented yet.)  We gave the seller $2,000 option money, and agreed to buy the house in one year for $100,000 (market value at that time was closer to $95,000) and we agreed to pay $600/month rent.  At the end of the year, we came up with the other $18,000 of our down payment and bought the house, which appraised for $125,000 at that time.  The interest rates at that time were terrible so we had to take an adjustable at 12.5% because fixed rate loans were 16%.  But that allowed us to become “proud homeowners”!  

Lease options can be a good solution for both buyers or sellers, but they are not without risks. There are many ways to actually structure the transaction to protect both parties, such as recording the option, or opening a long escrow and using an interim occupancy agreement during the lease period. Please call or email me if you are considering doing this and I will help you figure out the right way to go.

 If you have some general questions or comments about this article, please post your comment.
Vicki
Phone direct : (949) 457-0281
mailto:Vicki@VickiLloyd.com)

Here’s a new one that I just tried out.  You enter the purchase date and price, and it will calculate the current value using historic averages and the Case-Shiller studies and reports. 

Try it yourself!

Let me know what you thought by leaving a comment here.

Lake Forest sellers are having a tough time adjusting to the realities of today’s market.  There are currently 421 active properties in the MLS, and 95 of those (22%) are either foreclosed or short sales.  The short sales, in many cases are not really available because it is unknown in if the mortgage holder will agree to discount the loan to avoid foreclosure.   

The pricing now starts at $194,900 for a single story, one-bedroom condo that is bank-owned.  There is now a 2-bedroom, 2 bath condo available for $224,900, that is also a bank-owned property.  A 2-bedroom townhome, with almost 1200 square feet and a single car garage is available as an “approved short sale” for $289,000.  The best condo on a price-per-square foot basis is another bank-owned 4 bedroom, 2.5 bath, with 1550 square feet for $369,900.

The lowest priced single family home is now available for $438,900 and it appears to be in attractive condition.  (It is not a short sale, or bank-owned!)  There are currently 7 other single family homes priced under $500,000 available today.

With interest rates at the lowest level in over 6 months, and competitively priced homes becoming available, I am predicting the activity level to pick up significantly in the near future.  I don’t believe the prices will drop enough to attract many investors, but for owner occupants, the outlook is the best I have seen for a long time!

I specialize in Lake Forest, but work the entire Orange County area, and know of many competitively priced properties in other Orange County cities.  If you have been waiting for some good buying opportunities, please contact me (Vicki@VickiLloyd.com) as soon as possible to help you find the right one!

This house just had the price reduced yesterday, now qualifying for my “hot buy” stamp of approval.  With 4 bedrooms, 2.5 baths, over 2100 square feet, and 3 car garage at end-of-cul-d-sac location, it’s one of the best on the market today!  It is located in Foothill Ranch, which has a very highly rated elementary school!  $614,900

I just spoke with the bank’s agent, and he told me that several agents say they will be bringing in offers, but none in hand yet!  Call me, if you like this too!