While I feel sorry for those who lost their homes, I believe that the biggest problem was that they didn’t take it seriously enough when they bought. Home ownership was considered a short term strategy, and there was little thought given to the long term benefits, commitments, or risks!

How is buying a home like getting married?

It’s not for everybody! There are alternatives – you can date, go steady, live together, and even have children without getting married. You can live in a rental house, apartment, or with your parents or friends and not ever buy your own home.

It takes a lot of research to find the right one. Maybe the right mate is not available when you are looking for him or her, or not located where you happen to be looking. It can take time and effort to connect. When you want to buy a home, the one for you may not yet have been built, or someone else may already own what you want so you may have to wait and hope it becomes available when the current owner is ready to move.

The basics need to be right. There are some things that you just can’t change about a spouse no matter how hard you try, or how long you wait. Basic values such as religion, attitudes about relationships with friends and family, whether or not to have children can be deal breakers. Throwing money at the problem won’t solve it if the core values aren’t compatible. With a house, while you can customize, decorate or add on, you can’t move it across the street, into another school district, away from the road noise, or add a panoramic view. There are some things that just can’t be changed! (This is the basis for the famous saying “location, location, location”)

You need to think about and plan for the longer term. Things change over time – some things are predictable, others are surprises. When buying a house, look ahead to the next phase of your life and try to anticipate your space and layout needs. If you are planning to have 5 children in the next 3 years, don’t buy a 2 bedroom house! If you are getting older and your back or knees are hurting, buy a single story house.

Emotions can cloud your better judgment. Being “in love” with a person or a home can keep you from recognizing some of the imperfections. Try to be realistic about your expectations.

If you choose the wrong spouse, or house, you may be miserable. After the novelty wears off, you need to live your life every day. If there are issues with your spouse or your house that you just can’t stand, you will not be happy!

It’s expensive to get in. The cost of a wedding can range from minimal to “sky high” and the cost of buying a house will include many one-time charges beyond the down payment.

It’s expensive to get out of it. Just ask one of your divorced friends how much that costs! When you sell your house, there will be selling expenses including title insurance, escrow fees, transfer taxes, and sales commissions.

The “free love” movement of the 1960′s didn’t bring an end to marriage. The free mortgages and rapid appreciation of the early 2000s followed by the foreclosures of today do not signal the end of home ownership. You just have to remember the basic reasons to go forward with either – that is to make your life more enjoyable in a home, or with a person you want to be with in the long run!

I like to work with serious buyers who are seeking a nice home & neighborhood where they will enjoy their lifestyle. If you are looking for an agent to help guide you through the many questions and considerations about this important decision, please call me and we can work together!

Call me for real estate help or advice!

(949) 457-0281

This photo has nothing to do with this post - I just liked it!

If you are planning to buy a condo, or a house in Lake Forest, Mission Viejo, Rancho Santa Margarita, or other South Orange County area, there is a good chance that you will be buying in to a home owners’ association (HOA).  If that is the case, make sure you read over all the HOA documents soon after you receive them.  These are usually provided to you during the escrow process, and you will normally have 5 days after receiving these to either approve them, or cancel the purchase and get your money back.

What should you look at, or what should you look for?

Start with the budget. This will show you the items that are expected to be paid each month by your dues.  Some budget items can be expected to go up almost every year – like costs for electricity, water, utilities, gasoline, insurance, and most labor.  Also, look at the year-to-date actual financial statements to see how they compare to the budget.  Have there been unexpected or substantially over-budget expenses?  Is the income (from dues) under the budgeted amount?  If there have been a lot of foreclosures in the association, the unpaid dues from those homes will have to be written off, and the shortfall will have to be made up by an increase to the next year’s dues budget.  By law, in California, the HOA dues may be increased by the board of directors by up to 20% without a vote of the homeowners.  If a 20% increase is not enough to cover any shortfall, a “special assessment” of up to 5% of the annual budget may be declared by a vote of the board of directors.  Most associations publish their new budgets in November for the following calendar year, and the new dues assessments go into effect in January.

Review the Rules. Most HOAs have rules that address many areas of your life.  Putting a basketball hoop on your garage, or a portable one in the driveway, may be restricted.  Do you have a boat or RV?  Many HOAs require that they not be visible from any other property or from the street, or that you may only park your RV in front of your house for the time it takes to load or unload it after a trip.  Also, if you drive a commercial vehicle, know that there may be restrictions on keeping that in your driveway.  Do you work from home?  Some associations will not allow any kind of manufacturing or retail types of businesses, or will restrict the hours that you can operate.  What kind of pets do you have?  Chickens, ducks and pot-bellied pigs are often outlawed, and some associations put a weight limit on the size of dogs that are allowed.  Read over the rules and make sure there aren’t any that you can’t live with!

Architectural Guidelines. Before you plan that room addition, front porch, patio cover, or major remodel to your new home, find out what is likely to be approved by the architectural committee.  If you want to add a 2nd story, or change the exterior look of the home, find out before you buy that it will be allowed!

Meeting Minutes.  The minutes from the Board of Directors’ meetings will tell you what is going on in the Association.  Much of the time, the minutes are quite routine and boring, but check to see what issues are coming up at board meetings.  Are neighbors fighting about something?  Is the association failing to enforce the rules?  Are they anticipating discontinuing any services, or upgrading any of the commonly owned facilities?  Are there any lawsuits threatening the Association?

Buying a home that is part of an association means that you are buying ownership in that association.  Do your homework – You need to know what you are buying!

]]> http://livelakeforest.com/2008/10/before-buy-hoa/feed/ 2 http://livelakeforest.com/2008/06/sellers-when-get-offer-respond-quickly/ http://livelakeforest.com/2008/06/sellers-when-get-offer-respond-quickly/#comments Fri, 20 Jun 2008 21:50:02 +0000 Vicki Lloyd http://vickilloyd.wordpress.com/?p=157 In the current market, when a buyer makes an offer on a property, it is in the seller’s best interest to respond quickly.  The buyers today are not impulsive, frenzied, or in a panic to “buy now or be priced out forever.”  If any urgency is felt by a buyer, it is more likely based on interest rates rising.

The standard contract in California provides an expiration date of 3 days after an offer is signed.  That doesn’t mean that the seller should take their sweet time to make a decision.  I have seen buyers go through a careful thought process to first decide to make an offer at all, and then to come up with the terms and price that would make them happy with the results.  At the time an offer is signed, most buyers are looking forward to coming to a conclusion of their home search, and moving forward with their plans to move in, arrange furniture, get settled in, and basically get on with their life.

During the wait time, between offer and response, the buyer’s emotions may swing substantially while imagining the offer being accepted, rejected or countered.  Since nobody likes rejection, a defensive ”I don’t really care that much” attitude often develops.  At the same time, the buyer may also be mentally justifying their original offer and while it originally may have been a strategy to negotiate to a “middle ground,”  it can evolve into a “they can take it or leave it” decision.

While dragging out a decision by the seller, there is also the chance that another home will become available that will be more attractive to that buyer.

Sometimes, it is difficult to respond immediately because one or more of the sellers may be unavailable to review and consider the offer, but with email and fax machines available from almost any corner of the globe, availability should not be an excuse for long.  Unless the home is brand new on the market, the listing agent should keep the seller well-informed and prepared by having regular discussions about what to expect and how to respond.   Providing information to the seller about agent feedback, recent sales (the ones that buyers bought, instead of yours), new listings, local foreclosures, buyer activity level and interest rates should be an important part of a listing agent’s job. 

Several years ago, I worked with some buyers who submitted an offer on a newly-listed , but substantially over-priced property.  (We justified the offer price with recent comps, many of which my buyers had visited.)  The listing agent was in no hurry to help the sellers make a timely decision, but they eventually countered 3 days later.  By then, my buyers were mad that their offer was treated so casually.  They decided to keep looking, ended up buying a different house, and 6 months later the original house sold for $15,000 less than my buyer had offered! 

Sellers – You have had your home on the market because you said you want to move.  When an offer comes in, it should not be a surprise – that’s why you’ve let all these strangers come through your house.  When you get an offer, thank the buyer (no matter what, it’s still better than not getting an offer) and tell them whether or not you want to sell at the price they offered.  Dragging it out will only hurt you in the end! 

A seasoned agent told me years ago to make sure I always knew how to find my lender “just in case!”  She was only half joking when she advised me to keep them within “choking distance” and make sure they understood the consequences of failing to take good care of my clients.  I have always considered that to be a good rule regarding the lenders that I recommend to my buyers, but really hadn’t thought about it for the lenders that other agents used for the buyers of my listings. 

I recently had a listing sell to a buyer who insisted on using a lender from outside our area -in New York, even though the property and the buyers are right here in California .  The buyers had a previous successful experience through that lender, and wanted to use him again.  They had a substantial down payment, which was verified with a copy of a recent bank statement that they showed to us. 

The out-of-area lender consistently failed to return phone calls or emails, and I had a nagging feeling that something wasn’t quite right.  We got some vague messages about some kind of bank error that was being corrected, and the loan docs would “probably be coming tomorrow.”  The escrow was scheduled to close in 30 days, but on the 24th day, the out-of-area lender finally admitted that he was unable to do the loan.  The buyers still wanted the house, and finally agreed to work with a local reputable lender, who had to start the process all over again. 

The escrow ended up closing 12 days later than originally agreed to.  The sellers were inconvenienced by the delay after knocking themselves out to complete all the disclosures, escrow documents, and repairs required for closing quickly.  The buyers did not get the lower interest rate that had been promised by the original lender, but they realize now that it may have been fictitious along with the “banking error” that they never knew they had.

Lessons to remember :

• Always try to work with local reputable lenders!
• Local lenders have a reputation to live up to.
• Local lenders need to earn the respect of buyers’ agents and to do a good job in order to stay in business.
• Local lenders want to make a good impression on listing agents, in hopes of possible future business with them.
• If you work with a local lender who lets you down, you can go to their office and choke them!

I hope you laughed as much as I did.  This was my easy lazy way to add something to my blog without thinking too much.  I just returned from a vacation, so I will catch up on the market conditions reports tomorrow! : ) 

If you have a minute, please take my simple little survey by answering the 6 multiple choice questions.   Thanks!

What homes are on the market?  Search for homes, or get a Free Market Analysis Here.

You may also add your comments here.

The first quarter of the year has now ended and the preliminary numbers aren’t pretty! A large number of foreclosures and short sales currently in the MLS have been dragging the values down, so homeowners who don’t have to move, are not putting their homes on the market. 

Overall, the average price for January through March is $433,236, about 21% below the $550,502 average sale price for the same period in 2007.  The price per square foot, $284 in 2008, is 25% below the $370/square foot sold in 2007. For single family homes, the average sales price of $634,850 is only 7.5% lower than last year, but the price per square foot ($309) is off about 20% from last year’s $386.  For condos, the average sales price of $283,115 is 28% lower than last year’s $397,500, while the price per square foot of $265 is 24% below last year’s $351. 

Buyers – There will be good houses that fit your needs, but they just may not be available today.  You still need to do your homework – get pre-approved with a reputable lender, become familiar with the market values, get to know the neighborhoods, and generally become educated so when the right property comes on, you will be ready to jump in with your best offer. 

Sellers – You need to be realistic with your price range, keep the house picked up and ready to show, and make it easily available for agents to make appointments to bring their clients through. If it is properly priced and presented, you should be able to sell quickly!

What other homes are on the market?  Search for homes, or get a Free Market Analysis Here.

The good news is that there are real buyers around, and they are purchasing the homes that are priced and presented well. Of the 111 properties that have come on the market since the first of the year, 12 have already sold and closed escrow.  There are 2 homes that I personally saw come on the market in the last month, that were clean, staged, available to show, and priced competitively, and they both sold with multiple offers in the first few days!

Single family home prices now start at $409,900 for a 3 bedroom, 2 bath bank-owned home.  There are 33 now listed at $500,000 or less.  The highest priced home is on the lake front, priced at $1,595,000.  Condo prices now start at $164,900  $153,640 (as of 2/24/08) for a 1 bedroom foreclosed property.  There are 13 available today at less than $200,000.

For details about any neighborhood in Lake Forest, please call me or send me an email.   If you would like to search for homes without having to register, click here.

I really believe that the volume of 2004 is understated because homes were selling so fast that many never made it in to the MLS at all! 

What kind of volume will we see in 2008?  Leave your guess in the comment section and I’ll buy the winner a cup of coffee (or a beer – your choice) next January when we know the answer!

If you would like to see what is currently for sale, go to my search page!

The condo prices start at $189,900 for a one-bedroom bank-owned home.  A two-bedroom is also available from a bank for $209,900 and the least expensive three-bedroom is priced at $289,900.  There are a total of 152 condos and townhomes available today. 

Single family homes now total 192, with prices ranging from $449,900 up to $1.8 million.  There are currently 14 houses priced under $500,000 and 15 homes priced over $900,000.  Ten of the properties at the high end are on the Lake Forest II lake front, and the others are in either the Montbury Estates neighborhood or Normandale Heights. 

The current available inventory is a little lower today than over the most recent few months, due mostly to lots of listings that expired or were withdrawn the last few days of the year.  Many of these will probably come back on the market as “new listings” within a few weeks – many with a new listing agent and a new price.  Out of the 350 actives, the distressed segment of the market makes up about 40%, with 39 homes that have been foreclosed, and 101 that are offered as “short sales” and require bank approval to sell for less than the current owners owe on their mortgage.

If you are considering selling your Lake Forest home, or any other home in Southern California, you need to make sure it is priced at today’s value and forget about what your neighbor sold for in 2005!  The mortgage market has tightened up, and the rare buyers who can qualify for a loan are pickier than ever!

Note : I will be adding my year end review of the 2007 Lake Forest real estate market in about a week to allow time for all the end-of-the-year closings to be reported to the MLS. 

To search Lake Forest, or any other area in Orange County, please check my search page.