Downtown Again

Hi People.


All of us know that Downtown San Diego has taken a beating as far as the sale of homes has gone. Very typical.

In the extra cool places (Downtown SD is one of THE coolest place) homes were flying off the shelves quicker than they could get built, up until late '05. That's when the slow down came fast in 92101 (Downtown zip. Are you new?).

The big problem was that developers were already half way done with their new condo project. No going back at that point. So, they had to finish the building and that left a ton of un-bought condos. This screwed up the prices, increased foreclosures & short sales (That & the general economy) and made all of the developers go bankrupt & bye-bye after they finished their projects.

Currently the Downtown area has 1400 units for sale. Approx 500 units are resale, 200 units are brand-spanking new & 700 are in a B St high rise named Vantage Pointe (Now has a NOD filed on them), according to the the San Diego Tribune.

That's a ton of condos for sale. The problem is, there's nothing being built to take their place. All of that inventory will be gone in a couple of years. The CCDC's (Centre City Development Corp., the Downtown planning commission) wants to double the population in 92101 within the next 20 years from 30,000 to 60,000. In order to do that the Downtown area is going to need some serious building.

One little problem, who's going to finance it? Banks are not digging the idea of giving construction loans (See any media source re our recession). The developers could swing smaller projects, but that doesn't fit the CCDC's plan. What will give?

The prices of downtown will go up. Straight supply & demand. Also, if the Charger stadium goes in down there, good night nurse.

Get with me for any info on the Downtown market, 619-507-7449.

God Bless.

Dumb Vs Smart

Hi People.

Just saw a CNN Money article about Trulia's new rent vs. buy index. They do some type of fancy calculations for major cities and can decide if you should rent or buy a home. Nice of them.

In San Diego, according to Trulia, you should rent.

Now, I am a little biased (It is my lively hood), so me thinking the exact opposite of Trulia & CNN Money is no surprise. But, here's my argument.

The article does not talk about tax incentives for a home owner. All of your closing costs and mortgage interest, as well as maintenance is tax deductible. Now, it's not a good idea to spend money in order to get a tax incentive. Talk to your accountant and weigh it out.

It does talk a little about fixed rates vs. rental increases. Here in San Diego the vacancy rate is under 5% and going down (Means 95% + of all rentals are rented). You can not honestly tell me that the rents are not going to go through the roof. Not only a good time to buy your home, but a great time to buy a rental property. The fixed interest rate (Below 5%) you get now and your monthly mortgage will be way below market rents within 5 to 10 years (Crystal ball says so).

The cost of buying vs. renting is what the article is based on. They are going off of conventional loan standards. 10% to 20% down payment. Most entry level buyers in San Diego are going FHA, 3.5% down. In san Diego buyers are also getting sellers to pay for their closing costs, approx 2.5% of the purchase amount (On a purchase of $300,000 that would be $7,500). That sways things towards buying.

Pride of ownership, a sense of community and other good stuff also. Put that in your rental pipe and smoke it.

Remember, even if you do rent, you are still paying a mortgage. It will be your landlord's mortgage.

Anyway, don't let Trulia, and definitely don't let me tell you whether to buy a home, rent a home or live on the moon. Do your home work, check the #s and your financing and make a grown up decision.

Contact me for anything, 619-507-7449.

God Bless

Turn That Noise Off!

Hi People.

Here's the first hour of my last radio show. Click on The San Diego Money Makers to make fun of me.

It was fun, but I gots to work.

Let me know if I can do anything for you.

God Bless.

Memorial day

Hi People.

This is just a quicky to remind us all what is really important. To seperate luxury from need.

Our homes, our investments, our cars, our jobs would not mean a thing without freedom.

Freedom has to be earned. Period.

So, thank you to all of the brave men and women who gave their lives so we can be free.

God bless the servicemen & women & God bless America.

Lucy, Don't Get Too 'Cited....

Hola, People.

Lot's of news out there re home prices across the nation. Most area's prices have been going down, but a few have been going up. San Diego is 2nd in the nation (San Francisco is 1st at 16.2%) in year over end home appreciation at 10.8%, according to S&P/ Case-Schiller Home Price Index.

Before us San Diegans get all arrogant and start calling our friends and relatives in other cities, telling them to choke on that, we should look at the "why".

I would like to think that it's because God loves us more than other folks. I checked with my Pastor and he assured me that is not the case. The weather? The Padres are in 1st? More job growth than most areas? The best Mexican food on the planet (Chew on that, Texas!)? All good stuff, and it helps, but not the major reason.

1st reason is the big boys finally came out to play. Michael Lea, director of the Corky McMillin Center for Real Estate at San Diego State University, said "prices are rising because more higher-priced homes are selling than a year ago". Higher priced homes sell, the overall value goes up. Easy math.

Don't get me wrong, since people in the higher wampum bracket are selling is good news. “That’s a positive for the market overall,” Lea said. “We’ve been talking about a shadow inventory that existed, part of which is people who just held off selling because they thought prices were going to continue to go down. If more of those people come into the market, it’s healthy for the market to establish a nondistressed clearing mechanism.”

The next reason is the amount of inventory. Homes under $500,000 are getting gobbled up quicker than cheese cake on my plate. There's just more buyers than homes out there in the lower priced categories. This is keeping prices pretty stable. Sometimes it even drives the prices up,especially when all cash offers are competing against each other.

Note. Appraisers are not letting the prices get too out of hand. Just because there is 20 offers on a property does not mean the highest price will still get a favorable appraisal. Supply and demand means nothing when it comes down to appraisal. They can only go off of current comps.

So, these are good #s in San Diego. Things are looking up. But, the #s do not tell the whole story.

Let me know if you want comps ran on your home or on an area you are digging. 619-507-7449.

God Bless

Hi People

Hi. Test. Just bought a new droid and was seeing how the blog thingy worked.

Fannie & Freddie Sitting In A Tree.......

People, cheers (Said in an English accent. A bad one).

It's Friday. I'm hungry and tired. I ain't doing it! I'm giving the keys to my good friend Sam Gardner at Gardner Mortgage.

Hit me up for anything, 619-507-7449.

Greetings from scenic Mission Valley,


First off, I want to say that I do not intend to write my updates on a weekly basis (although, some might say, regardless of frequency, they are done weakly). The information below warranted this latest missive and will hopefully benefit many stranded on the sidelines who have been unable to refinance.

Freddie Mac has announced a new program designed to help those without sufficient equity to refinance their mortgages. Fannie Mae has a similar program but it is limited to loans they service (roughly 10 -15% of the people I checked on). Freddie Mac's new 'Open Access' program was designed to help families unable to refinance due to low appraised values. This program will allow homeowners to borrow up to 105% of their homes value with very competitive rates (below 5.0% as of this morning!)

To qualify for either program, the current loan must be serviced by either of the two above entities. You can't pay-off an equity line or second mortgage (loans can be subordinated) or pull cash-out but this program works with primary residences, rental properties and vacation/2nd homes!

Again, not everyone will qualify for these programs but it's quick and easy to check to see if you take advantage of historically low rates and a rebound in the housing market. You can check to see if you qualify by clicking on these links FreddieMac or Fanniemae. It's super simple to do or email me and I'll check it out and let you know if either program works for you.

In closing I really want to thank everyone once again for all of your referrals. As I've said before, referrals are the life-blood of my business and I truly appreciate your telling friends, neighbors and co workers about Gardner Mortgage. Thanks.

Sincerely,

Sam Gardner

Please pass this information along to anyone who might benefit from either of these programs.

Gardner Mortgage Inc.
2667 Camino Del Rio South #106
San Diego, Ca. 92108
Office (619) 497-6125
Cell (619) 804-2417

The best compliment I can receive is a referral to your friends and family!

Bad Condo Board Member, Bad

People, People, People.

There are folks out there with too much time on their hands and not enough sense. Proof?

I recently wrote you to tell you the ups and downs of condo ownership. Some of the downs were that you had to abide by rules (Covenants, Conditions & Restrictions or CC&Rs) and that you didn't know who you would be sharing the condo community with. A good friend of mine just sent me an article of the perfect example.

Apparently, there is a condominium in Baltimore that has a K9 ca-ca problem. It would seem that Maryland dogs can not control themselves and poop all over the place. “We pay all this money, and we’re walking around stepping in dog poop,” complains a cranky old man (Who else?).

So, naturally, they put up signs (I assume) saying "cork your dog". If that didn't work they would put heavy fines on the criminal's masters (I assume) and make them watch the sad part of "Marley & Me". If that didn't work they would do something drastic (This last is not an assumption). DNA testing? Que?

That's right. There is a proposal on the books at the Scarlett Place Condominium that "all dogs in the building would be swabbed for DNA testing to create a database. Dog owners would pay $50 each to cover the costs of tests, and an additional $10 per month for the cost of having building staff pick up wayward piles of poop" says the Baltimore Sun.

Instead of this proposal being thrown out, the board is actually going to vote on it. Double que?

Now, getting this passed is a long shot (I hope). It sure does not feel legal to submit people to this new ruling after they bought their condo. But, that's what amendments are for. I hear someone screaming "Unconstitutional" in a weak, old person's voice.

I just wonder why they went to that instead of some more obvious solutions. Security cameras, catch them in the act of #2. This would also serve to fill the emptiness in the person who gets to watch the monitors and wear the Duky Police badge.

Even simpler, how about a grounds keeper who can clean up the waste. Maybe he can sweep, mop, do windows.... see where I'm going with this?

So, if you are buying a condo you could end up with some crazy ass people (I assume).

Let me know if you need help reading the CC&Rs of you condo. The nutty neighbors are on you.

God Bless.

Cancelled Like A bad Sit-Com

People (Imagine that I just gave you a high 5)!

Cancelled escrows are running a muck. Eleven already for me this year (At least that's the ones I remember). Last year was my all time record (At the time) at ten, and that was for all of '09. At this rate I'll hit 25. What is happening?

There are several evil factors at work. I will share.

Appraisals blow! This new HVCC (Home Valuation Code of Conduct) thing that NY Attorney General Andrew Cuomo gave birth to has really screwed things up.

Homes are having a much harder time appraising due to the new rules that state that brokers can not pick their own appraiser anymore, the lenders do. The lenders go to big appraisal companies (Some owned by the lender, see B of A). A pretty good idea, in theory. The problem is that these companies are sending appraisers out to jobs out of their area of competence. If you live in Riverside, you might not know that neighborhoods change drastically South of El Cajon Blvd as opposed to North of El Cajon Blvd. Huge.

Loans are tricky & delicate. The banks want more financial documentation and they want to be updated all of the way through the escrow. This always wanting updates slows things down. This slowing things down pisses off the seller and sometimes the buyer gets kicked out of escrow. I've had to do some serious butt kissing, threatening & crying to keep my people in escrow.

Bad advice. People now a days are getting way too much info/ advice from the media (Remember, they don't really report the news. They report the olds. They get their info from interviewing Realtors), from stupid Realtors (Not all) and from their friends/ family. The media & Uncle Joe's advice are usually the worst. Again, the media is not up to date. By the time they report it it's already dead. And, Uncle Joe rents and has not had a steady job in 15 years. Why would you listen to him?

There will always be cancellations, and most of time they are for good reasons. Do not be afraid to cancel. If you REALLY don't want to go through with the purchase, you shouldn't. Just don't listen to Uncle Joe, he's stupid.

Let me know if I can help with anything, 619-507-7449.

God Bless.

Con-Dos & Don'ts (Stupider)

Hi People.

Just a quick note of some of the good things and the pit falls that could come about when buying/ selling a condo.

Firstliest, a condominium is a shared ownership. The advantage is the sharing of expenses to keep things economical. The disadvantage is that you don't get to pick who you share with. In-breads? Nazis? Dodger fans?

2nd, since it is shared, there are rules that everyone has to abide by. The good thing is you don't have people painting their condo weird colors or parking their Pinto on the grass. The bad thing is you have rules. You are not the King, just a Congessman.

3, there are monthly (Usually) fees to support the community. The good thing is the shared expense thingy. The bad thing is that these funds are sometimes mis-managed. If you do not have enough money for a new roof you have to raise the fees, make an assessment of some kind or neglect the roof.

Quatro, Condos are less expensive. Good thing, less money to buy. Bad thing, you get less when you sell (Condos do appreciate but not usually at the rate a house does. Plus, you have little power to change a complex in order to get that sweat equity).

Some other things to consider before you buy:

Can the condo be purchased with a FHA or VA loan? Even if you are not using one of those loans it will effect your value when you go to sell.

What is the owner occupancy? The more home owners the better. "Pride of ownership" keeps places nicer and keeps the value up. Also, it is hard to get a loan on a condo if the owner occupancy is lower than 51%. That will really effect your value.

Have you looked at the condo's financial records? Their plans on maintenance? You want to make sure they have enough funds for future work and emergencies, and that they have a proper plan for on going maintenance.

Let me know if you have any condo questions, 619-507-7449.

Go Bless

Disclose Or Get Smacked

Greetings, People.

It is not enough to simply tell the truth. You have to tell the hypothetical truth. That is, if there is a Lotto chance of something happening to someone, and you happen to own the thing that it could happen on, you better preach it.

It's called disclosure. You've seen it used on "Law & Order" when the one legal side has some info and they have to disclose that info to the other side. It's like that in real estate, except mas. You have to disclose things you don't even know.

Like a "Lead Based Paint Disclosure". A seller or a landlord has to give this to a buyer or tenant (Unless the structure was built after 1978, when the evil lead was exiled from home paint) to tell them there is a possibility that there is lead based paint and that if ingested it could be harmful to you (Unlike regular paint that is yummy).

Now, 99% of the people out there have absolutely no idea if their home has lead based paint (the people who do know have way too much time on their hands). Doesn't matter. You have an obligation to the buyer/ tenant to disclose the possibility of it being around.

Just today the Department of Housing and Urban Development (HUD) announced settlements with 2 San Antonio landlords who did not give this disclosure to their tenants. What did the landlords agree to do? $84,000 in lead paint hazard remediation work, the landlords have agreed to pay $6,000 in civil penalties and $20,000 in Child Health Improvement Projects (CHIPs). That is a swift kick in the ouch!

So, whether you are a seller or a landlord, disclose. Disclose important things. Disclose stupid things. If you did some upgrades, disclose. If something needs attention, disclose.  Do it in writing and get signatures from ALL parties.

If you'd like a list of disclosures that will keep you safe (Hopefully), contact me at 619-507-7449.

God Bless

Bustin' Caps

People, yawnnnnnnnn.

There's nothing in the real estate news to get me mad. Nothing to argue about. Nothing to confess. When has "nothing" ever been good? No news is good news, except for people reporting the news (How dare he call himself a reporter).

So, just a quick lesson on the Cap Rate (Capitalization Rate) and what it means to your real estate investment.

The Cap Rate is the ratio between the yearly net operating income produced by an asset and its capital cost.

Let's say you buy a duplex at $300,000 and it produces $2600 worth of rent (Very doable now here in San Diego. There are even better deals than that). Let's calculate the Cap Rate.

$2600 times 12 months comes to $31,200. That's your gross income. Now you have to take out your expenses NOT including your mortgage (Not considered an expense. I do not make the rules).

Expenses will typically be: Property taxes (Your income taxes are your problem), vacancies & maintenance (Maintenance can cover a very broad spectrum. We will keep it simple).

Property taxes on our deal will be approx $3000. The vacancy rate in San Diego is approx 5% (One of the best in the country) which comes to $1,560 from our $31,200 gross, & maintenance is a variable type # (Anything can happen. Also, the dollar amount will change drastically if you do it yourself or pimp it out). What I like to do is take the taxes plus the vacancy and have that be my maintenance amount, $4,560.

So, our expenses come to $9,120. Subtract that from our net and we have a projected net of $22,080. Note: This is a projection. You must do your due diligence and inspect the property you buy thoroughly so you know what you have.

Now, take that $22,080 and divide it by the purchase price of $300,000. That comes to a Cap Rate of 7.36%. Pretty darn good. This doesn't even count for appreciation, which will come eventually, or tax incentives.

People, this is not the only tool to use when buying investment property. Your loan is important (Most important?). The area is important (What's that saying about location?). Your spouse's opinion (Brother, I promise this is important). Tons of other things too. But the Cap Rate is a good starting point.

Let me know if you have any questions re any real estate junk, 619-507-7449.

God Bless.

Who's Driving This Thing?

People. What does it look like?

I'm a little busy, a little tired & a little lazy (Watch your mouth) so I gave the steering wheel to my good friend Sam Gardner of Gardner Mortgage. Not to worry, he's an excellent driver (Yea, an excellent driver).
 Jack

Almost Friday Greetings to All,


Hope all is well with everyone. It's been a busy week and I wanted to to check in and bring you up to speed with an interest rate update.

Due to the economic uncertainties in both Europe and the U.S., concerns with the tragic oil spill in the Gulf and the incident in Times Square, rates have again improved. Interest rates are near their record lows (and the lowest rates we have seen in 40 years).

On another positive note, it appears that lenders once again are looking at ways to approve and fund files. This is a tremendously good sign and I look forward to a return to a more common sense approach to lending.

RATES:

30 year fixed rates for loan amount to $417,000 are as low as 4.625% with 15 year money in the very low 4.00% range. Shorter term loans are as low as 3.25% (not a typo) for 5 and 7 year fixed rates, including interest only. Not the right loans for everyone but certainly have their place in the sun.

Loan amounts over $417,000 are in the upper 4.00% range with shorter term rates in the low 3.00% range.

FHA 30 year rates are below 5.00% and you can buy with as little as 3.5% down, less than perfect credit and use a gift as your down payment. This is a great program for 1st time buyers as well as for those with less than 10% down.

In short, we may never see rates like this again in our lifetimes. The economy is recovering, inflation while dormant for now will return and eventually the deficit will force rates higher. If you are in position to take advantage of this market, I strongly advise you do so.

Hope you have a great weekend and please remember, I'm always available to answer questions or run scenarios based on your goals and needs.

Sincerely,

Sam Gardner

P.S. Please let any friends, neighbors or co-workers know that I would be more
than happy to answer any of their questions as well. Thanks

Gardner Mortgage Inc.

2667 Camino Del Rio South #106

San Diego, Ca. 92108

Office (619) 497-6125

Cell (619) 804-2417



The best compliment I can receive is a referral

Vacation Time

It's been a long time, People.

I want to grab your ear a bit on an investment that won't be for everyone, but some will dig it. Vacation rentals.

I was introduced to vacation rental possibilities back in '05 when my sister bought a nice little cabin in Idylwild, Ca. Cute 1 bed, 1 bath log cabin that was decked out with all the modern amenities.

It was cheap, so she bought it with cash (Part of an inheritance that her & I split). I told her (In the most condescending voice that I could muster) that she had lost her mind. "You won't get any appreciation out here" is what I told her.

Like siblings are supposed to, she ignored my advice and bought the cabin. I bought a Miami condo that I couldn't rent out (HOA rules) for a year.

We all no that I lost a ton of loot in Miami. Her property value did go down, but she rented her cabin out by the weekend & the week, getting up to $300 a night. When it's not being rented she goes up there with her family, occasionally inviting me so I can see my mistake up close. I sold my condo and lost money and self respect. My sister still makes money on her cabin and still uses it. Who's dumber than me?

Some goodies about vacation rentals:

Can be bought as a 2nd home (Better % rates).

Renters give credit cards instead of deposits. If any damage happens, you have them by their froot of the looms.

No eviction notices. When their done, their done. It's a temporary rental so their are different occupancy rules.

You get to use it too!

You can change rates any time you want. Christmas time, rates go up. Valentines, up. & so on...

You can actually end up getting a better return. It will be rented less days out of the year, but at a much higher rate.

Get with me if you want to hear more about this type of investment. 619-507-7449.

God Bless

2nd Hour Of Talking Smack

Hi People.

Here's the 2nd half of my radio show from last Saturday. We talked about the current San Diego home market, soup, George Washington & loan mods (The Unicorn of real estate).

Try not to make fun of me.

God Bless

Inspection? My Dad's A T.V. Repair Man.....

What's kickin' People?

I've been doing this real estate thing for awhile and it never ceases to amaze me how cheap people get at the wrong times.

My wife accuses me of this. "You've been wearing that shirt since I met you" or "Why are you only putting $5 in the gas tank"? I need money for my .99 cent tacos....

The point is, when you're buying a $250K, a $300K, a $400K (Low prices for San Diego) home do NOT worry about a $350 home inspection.

The inspection is there to protect you and is good for you (Like .99 cent tacos). It is the smallest of most of your expenses when buying a home and probably the most important. On a $300K home purchase using a FHA loan you will come out of your pocket approx $18K. Are you really worried about that $350?

People, certain things are not o.k. to skimp on. Your health, your child's education, your wife's birthday present (Trust me), your plastic surgeon (Trust me), your accountant (Ask Nicolas Cage), your teeth (Ask Dave Letterman or English people), your hair stylist (That's put in for the ladies and the metros), your car (Toyota? Cheap shot), and for crying out loud, anything to do with the home you buy!

It's o.k. to be cheap (I are one), but be cheap in a good way.

God Bless

3.8% Of Your Booty

Hello People.
Lots of scaredy cat talk out there re the new healthcare program and how it's going to be funded. One of the stories floating around is a new 3.8% tax on American's income. Fractionally true.
The tax is for "unearned" (I hate that verbiage. Even if I win $$ in Lotto I earned it. Who bought the scratcher & who actually scratched it?) income of people who's yearly income is considered high ($200K for singles & $250K for married folk. Guess married folk will be doing the heavy lifting...). N.A.R. (National Association of Realtors)  says "Unearned is the income that an individual derives from investing his/her capital. It includes capital gains, rents, dividends and interest income. It also comes from some investments in active businesses if the investor is not an active participant in the business". So, passive investments. You give your money to someone else to invest & manage it, like a stockbroker or drug dealer.
Landlords get a little bit of a break because it is the net rents that get taxed.
Other good news is:
Appreciation is not taxed until sold.
Home owners still get the exclusion of taxes on the gain of there house ($250K for singles & $500K for married types)
If your job is real estate investing than that is considered "Earned" as opposed to "Unearned" and the tax will not apply to you.
This is NOT a real estate sales tax.
So, click on the title or the highlighted "N.A.R." to find out more about how much you're getting screwed. It might be less than you think.
God Bless.
Jack Rowell

Radio Junk

Hi People.
Here's the first hour of last Saturday's show. Argued about loans, real estate, investments and ethnic food. A little bit of a clash of opinions.
God Bless

Gots To Hustle

Hey People.
I just wrote 12 offers for a client who is desperately trying to buy a San Diego home. Obviously, he's not that picky. He just wants a home to retire in. Too much to ask? Even for a Veteran? Hopefully not, but this is what he's fighting.
Not enough homes for sale under $400K. Anything out there on the market (Unless it's falling down, haunted or was owned by Al Davis. We San Diegans really hate Al Davis) that is properly priced will have several offers on it within a week, often as much as twenty offers. But, the unemployment? The multitude of foreclosures? The overall recession/ depression (Depending who you ask)? How can there be that many people buying? 3 main reasons. The tax credit for 1st time home buyers (Usually the full $8,000 for us San Diegans) is about to expire (Have to be in escrow by 4/30 & close by 6/30). Next is the prices are really low. There are a lot of people thinking we are at the bottom of prices & they want to get in while the gettin's good. Last, the interest rates are at a all time low and they are starting to creep up. Folks are trying to luck the good thing down.
The other thing working against my client is he is a Veteran who is going to use his V.A. loan. They're great loans for the Veterans because they are 100% financing, the only type of loan that still does it. The problem with loan is that they tend to take a little longer than most loans and the V.A. appraiser (BOO) is usually a little tight on the appraisal (Tight like my grip on a candy bar). Both of these factors make this loan less attractive to the seller. So, in a multi offer situation my client would get beat like Al Davis at a Charger tailgate party (We really do hate him).
The good news, my client is a hustler and that's why we wrote 12 offers at once. Sooner or later he will have his house.
God Bless the Veterans.

Used To Be A Dirty Word

Hi People.
Feeling lazy today (That feeling is not exactly exclusive to today) so my friend Sam Gardner of Gardner Mortgage said he'd pick up the slack. Off to do some San Diego fun.
Enjoy & God Bless.

Monday morning greetings,


It continues to be a Planet of the Apes out there in the mortgage world as the industry continues to struggle with changing guidelines. The good news is there does appear to be light at the end of the tunnel.

Positive changes we have seen recently are the re-appearance of mortgage insurance companies (PMI) and the willingness to insure loans with as little as 5% down payments. I never thought that I would welcome mortgage insurance but my arms are open and I'm ready for a hug! The only options for borrowers with small down payments (or minimal equity for those seeking to refinance) over the past couple of years has been FHA or VA loans. Another positive move is that B of A recently announced that they will be working with some borrowers who are under water on their loans by reducing principal balances and not just modifying loan terms. This I believe will do more to stabilize the housing market than any of the other well intentioned but poorly executed government plans. You can lower someone's house payment with a loan modification but history has shown this has not worked well for lenders who offered this option or to the few homeowners who qualified. The best way to keep people in their homes is to reduce their principal balance. This gives people a reason to stay in their house, maintain pride of ownership and helps keep neighborhoods intact. This action would eliminate many foreclosures, help stabilize prices and allow more families to take advantage of historically low rates. Families, who are able to save money by refinancing, pump this money back into the economy, helping to create jobs and stimulate growth.

Rates:

Rates continue to hover in the 4.75% - 5.00% range for 30 year loans and 4.25 - 4.50% range for 15 year mortgages. The government has continued to keep rates low for fear of slowing the economic recovery which continues to show light in some areas. Trust me, this too shall pass and both rates and inflation (low rates arch nemesis) will rear their ugly heads again. It is still a great time to reduce your rate, lower your monthly payment and consolidate debt. Home prices in most areas continue to be at or near their most affordable levels in years and there is still time to take advantage of the government’s 1st time buyer’s credit.

As always, please let me know if I can answer any questions or help with anything. Have a great week.

Sincerely,

Sam Gardner

Gardner Mortgage Inc.

2667 Camino Del Rio South #106

San Diego, Ca. 92108

Office (619) 497-6125

Cell (619) 804-2417

The best compliment I can receive is a referral to your friends and family!

Don't Get Cute

Buenos Dias, People?
Beware of situations and opportunities that are served with phrases like "They won't find out", or "I never got caught", or "I just learned this new form of torture. Let me show you, it won't hurt". These, and others, are red flags and should be avoided like water boarding.
Like this deal my client was considering. A nice duplex that was well remodeled. The rents were a little low, but the renter was willing to come up a little on his rent. The best part of the deal was the loan that the seller had that could be assumed (Meaning the buyer would take over the existing loan from the seller. Has nothing to do with the "makes an ASS out of U and Me). Assuming the loan would be less expensive for my buyer because no new loan fees or appraisal. The existing loan was also a 4.25% interest rate, super sweet for an investment property (Usual rate for a non-owner occupied or investor loan is currently around 6%, give or take). Gots to do it, right?
Well, after looking at the loan it turned out that it was a variable loan that adjusted every 6 months. Not great, but still workable. Then we found out it was an interest only loan, not exactly what my client wanted. Then we found out the loan was to mature (Bank wanted it's money back) in another 8 years. None of these things were on my client's wish list, but they were not ugly enough to scare her away. Then the ugly came.
We found out that this "assumable" loan was not sanctioned/ O.K.ed/ allowed by the bank. The seller's sweet deal turned into my client giving him a big chunk of money, him signing over the deed and my client would simply start making the payments. Was (It's German, meaning what. You're supposed to say it with a "V" sound and kind of Gestapo, coy like)? We asked him what would happen if the bank found out? He said "The bank could make you pay up all at once, or raise the interest rate or a # of other things. I don't really know, it's never happened to me". We asked how would she get the payment (Just out of curiosity, it's dead by this time). "I'd send it to you. And don't worry, I'll make arrangements to have the payment mailed to you if I die (He was very old)". We shook his shaky hand and said no thanks.
So, watch out for super great deals that you have to get overly creative with. Sometimes the word creative is code for fraud.
Let me know about your tricky deals, or escapes from them.
619-507-7449.
God Bless

Bull Ca-Ca

Hi People.
I said it before and I will croak saying it. You can not take the word of a journalist who is blindly looking (Oxy-moronic?) at info and adds it up wrong. Always remember, evidence does NOT equal proof. Throwing #s and stats at a scenario and hoping they stick is not building a case, it's building an out house.
For instance, a new article out by Forbes Magazine says we San Diegans are in the top 10 in the "America's Worst-Selling Housing Markets". Hooray, we finally made a list. Not the list we wanted to be on, but at least they know we're here.
The article goes on to say that we are in the top 10 with other Ca cities like L.A. (Boo!), Sacramento (Take it or leave it. To be honest I never even think of them) or San Francisco (Good eats). Saying further that we all over built at the wrong time (We did) and that we were the kings of the sub-prime mortgage (No one did it like us). All of that is true.
The thing that gets me is the writer saying that we are "saddled with 1000s of unsold homes". Que stupid? Tell that to my clients who have to write an approx 20 different offers (On average) in order to buy one home. Tell that to my seller who has to pick between a single mom who just wants a place to raise her kids and the investor who came in all cash (Sorry mom). I can not tell you how many times I've submitted a full price offer for a client, in the first day the house was on the market, just to be told by the listing agent that they have a total of 23 offers and 5 of them are well over asking price. It's been like this in San Diego real estate for the last 2 years.
So, when reading articles from people out of town, or people who do not work in that particular industry, be careful. Those articles will make you repeat dumb things.
Click on the title to read this fools nonsense.
God Bless.

Appraisers Suck

People, how do?
The title is a little harsh. Appraisers are in a bad situation. Their pay has been cut by the banks. They can not use their old contacts to get them jobs due to new Federal regulations. Instead, they are all pooled together like cattle in a sardine can until the lucky appraiser is picked (Yippee, I get to work for less money). Then they are so scared of over appraising a home that they naturally are over conservative. Very understandable. Some might even be glad that they are over conservative. Part of the reason we're in this economic mess is due to over inflated property values that went up like a high fly and then came screaming down on the kid without a mitt (That kid now has no teeth). Appraisers have it bad.
But, come on. They ruin more dreams than Freddy Kruger (Couldn't think of another bad dream persona. Sorry). 2 examples:
1. Nice lemon grove listing that I had listed for $350,000 and got an offer at $338,000 (It was a little over priced, so we liked the offer). The appraiser (An appraiser from Temecula) came up with a value of $315,000. For the math-can't-do-its that comes to a $23,000 discrepancy. My clients were counting on the extra loot to buy something worth $22,500. We ended up at a price of $330,000 and the buyer had to come up with another $15,000 cash to make the deal go. Why would the buyer do that? Because it was a great deal. The seller gets screwed out of some money and the seller doesn't get to finance the amount they should have.
2. Nice condo in Eastlake. I'm representing the buyer now and we're in escrow at $224,000. Mr Appraiser-Man gave us a slap in the face value of $200,000 (Again, lives in Riverside County). There is no way to bridge that amount on that low end of a deal. We are trying to work it out, but I have no faith that 10%+ of the purchase price can be settled (So pessimistic). My client will get his deposit back but not the $500 he spent on appraisal and not the $250 he spent on the property inspection. Ouch!!!
Both of these properties were under valued by someone who did not know the area.
So, I do feel bad for the appraisers and what they have been drug through, but not enough to not be really angry with them.
God Bless.

#s Don't Lie

Hola, People.
The Wall Street Journal just reported on an organization (The Center for Economic and Policy Research in Washington DC, or CFEAPRIWDC. Not the catchiest acronym) that came out with a crazy formula that can determine if you should buy a home or rent. It's called the "price-to-rent-ratio" (Again, not too catchy).
"Take two houses of similar size and quality—one for sale and one for rent—in the same neighborhood, or comparable neighborhoods. Take the price of the home for sale and divide it by the total cost of renting the other house for a year. If the resulting number is higher than 20, it's likely the price of the home for sale could fall further. Thus, renting might be a better option, says Mr. Baker. However, the price is most likely near its low if the figure is 15 or below; 15 is the general average price-to-rent ratio over time, Mr. Baker says, and the number at which rental and ownership costs are close to even". That's what he says. I like that he put a formula to it, I just do not understand his reasoning. The strange thing is, I agree with the out come.
Here's where he said San Diego is:
"Median home price: $387,816 (Closer to $350,000)
Average monthly home payment: $2,525 (Could be, with taxes & ins)
Average rent: $1,249 (Is he kidding? probably closer to $1800)
Price of appliance repair: $46.79 (23% below average) (I have no idea).
The article further states:
"San Diego presents an attractive buying opportunity. Prices have stabilized and in many cases are going up, says Mr. Yun.
Services are also below the national average, which puts another check in the buy column."
So, I do not know how he came up with his #s or his formula, but I do agree with this Nutty Professor's hypothesis for San Diego. I have no idea what the rest of the country think of his findings.
Click on the title for the rest of the article.
God Bless.

Real Estate Investments & The Flip Is Dead

Hey, People.
If you've watched all of the reality shows on how to invest & fix up properties to "flip" we have some re-educating to do. The "flip" is dead (At least in San Diego) unless you buy the property at an auction for all cash (Someone will find that one in a million example to prove me wrong. That house that was bought for $100K, had it's light bulbs replaced and was flipped for $200K. On a whole, flips are dead).
Properties on the market are priced correctly (Again, somebody will find that lotto house that only needed the drive way swept before he flipped it for a quick $20K).. Do not think you can buy something, slap on some paint, throw in a Ficus tree and think you can sell it for a profit. The seller knows (At least his listing agent knows) how much to deduct for paint and other cosmetic fixes. Plus you have closing costs (On the buy and the sell), mortgage payments to make while you own it & realtor commissions (96+% of all houses sold are done through a Realtor. You don't have to use one but it will usually take you longer). It ain't 2004.
The good news? Since it's not '04 and since prices have come down mucho faster than rents, it's a great time to invest in rentals. I have a client who's in escrow on a duplex that she's paying $315,000 for. The rents come to $2550 a month, gross profit. Her mortgage payment, taxes & insurance will come to under $1750 a month. A potential of $800 a month in her pocket. That's just potential. To be safe, you should multiply your gross rent ($2550) by .8. That comes to $2040 net before mortgage, $300 a month of approx net.
That's about a 7.5% capitalization rate (Take the net rents, before mortgage, and divide it by the sales price. The higher the rate the better). Back before '06 you'd be lucky to get a 4 or 5% cap rate.
These are pretty conservative #s, you should do better on your investment.
Check out the old article I found by clicking on the title.
Call me with any questions on investments, 619-507-7449 or email me at jack@rowellrealestate.com
God Bless.

Blogger Buzz: Blogger integrates with Amazon Associates

Blogger Buzz: Blogger integrates with Amazon Associates

KRAZEE

People.
If you own, rent, buy, sell, invest, look at, build on, tear down, or do something else revolving around real estate then you are a target for coo-coo people. Case in point.
I was putting a lockbox on a listing of mine in P.B. when someone asks me "can I help you?". Anytime I'm asked that I feel like just saying "no" and going on about my business. But, I decided not be rude and I introduced myself and told the guy I was the listing agent for this particular dwelling. I shook the guy's dead fish hand and listened to his story of how he was interested in renting the place from my seller (My seller had moved out of state) but he couldn't get a hold of her. He mentioned that my seller did not call him back a couple of times before he asked me for her phone #. "I'm sorry. I can't give it to you. If you want I can relay a message for you" was my uncomfortable reply. I gave him my card and prayed that he would not call.
Within an hour he called me. He started telling me of this great plan he had when I interrupted him and asked him to call me back in 20 minutes. I then tried to get a hold of my seller to ask her if this is a friend of hers so I would know how short with this guy I could be. He called me approx 10 times inside of an hour (Hell no I didn't answer) leaving me one message telling me that I really should answer the phone.
The next day I finally got in touch with my seller and told her of the evil plot going on and that I was against it. She told me that the guy gives her the creeps too (Thank goodness) and that she did NOT want to rent to him. Now I was armed.
I was just about to call my stalker when he called me. I let him state his case. He wanted to rent her place for $2000 a month and give me a $1000 (For que?). He told me "If you're smart (No one ever accused me of that), you'll take this deal. Places sell much faster and for more money when people are living there". I explained to him that wasn't true (In fact, the opposite is true) and that I told my client that it wouldn't help her to rent the place out while she was selling it. He told me I was wrong. I said I wasn't. "You are". "I'm not". This went back and forth until I gained my senses and told him "I understand your opinion but we are not going to rent to you. That is final".
There was an odd silence before he said "Well, you are wrong and I work for a news paper and I am going to write an article and tell the world what you are doing". I started laughing. "This article will shine an unfavorable light on you". I was laughing very loud now. I told him (Through my laughter) that we really couldn't rent to him now, due to his character issues. "Character issues? Would you like a letter from a Congressman to vouch for my character?". I could barley get it out when I said "I'll need a letter from a Congressman, a Priest, a Rabbi & a pharmacist". A full minute of me laughing went by before he said "I think you're wrong". I finally hung up, sat down and laughed my butt off.
I called my seller to tell her about the comedy I was just in. She said the guy told her he was with the FBI.
So, watch out. There are loonies out there that will entertain you.
Tell me your funny story in the comment or call me 619-507-7449.
God Bless.

I Are Angry

Hello People.
Ever thought "Boy, if I had $400,000 (More or less) I would find a good house priced around......Oh... $430,000, and I would offer them $400,000 and watch their mouths water"? Sounds like a good plan, right? The seller would be nuts to not take your offer. No, appraisal. No loan hassle (There are tons of them). No brainer.
That's what my client and I thought too. After making that offer we we're countered at $425,000. We were also told if we did not close in 14 days (That was the amount of time we offered) the price would jump to $427,000. We countered their counter at $405,000, still feeling like the cash was good. They emailed back (Very coldly I might add) saying they had another offer that they were going to deal with.
I talked to my client and she wanted that home. I emailed the agent back and asked him if $415,000 would work. "That will not work" is what Mr. Sunshine emailed back. We sent him a counter that countered our counter that countered the seller's counter saying $420,000, all cash and any other terms and time lines the seller would like. They took the other offer.
I was (Am) so pissed. My client is heart broken. I am thinking bad thoughts towards the seller and listing agent.  The moral of the story is real estate is nuts. No science involved, just people and very often those people are bananas.
Let me know what pisses you off.
God Bless.

They Hate Us

People. Hi.
CNN Money just came out with a list of the top 25 cities in the U.S. to have the best home price forecasts. San Diego did not (They hate us for being beautiful) make the list. Matter of fact, they said we were going to Depreciate. They said we were going to loose .3% (That's .oo3. I know you know math, just clarifying) and places like Kennewick & Yakima, Wa, Modesto, Ca (Have you been to Modesto?) and Anchorage, Ak are going to appreciate. The top 25 are projected to appreciate from 6% to 1.6% in 2010.
It breaks down like this: Washington had a whopping 8 cities in the top 25. State growth seems to be the reason (Or some sort of witch craft). Oregon and California came in 2nd with 4 cities. Let's just say California was 2 & Oregon was 3. Alaska, Wyoming & Montana all had 2. Colorado, New York & South Carolina all had a a big 1.
So, us San Diegans are projected to lose .3% of home value in 2010. On a $300,000 home that is $900. Probably not going down much more. If you're waiting on the bottom, you should be pretty darn close.
Click on the title to see the article that shows all of the cities that crushed us.
God Bless.

Stupider And Stupider

Hi People.
Here's a story of how dumb the banks are.
Back in '08 I was doing a short sale for a friend who fell on hard times (He's doing much better now, thanks for asking). After months of being on the market we finally got an offer for $975,000 (we were on the market for $1.1M). A little low, but not bad.
We (When I say "we" I mean Brian Calvin who does all of my negotiating with banks on short sales. He has the right kind of temperament for it. I get my feelings hurt way too much when people are too stupid to listen to reason) negotiate back and forth with the banks (There was 2 loans) until we had an agreement with the 1st loan for $980,000 and they give the 2nd loan $3000. The 2nd loan said "jump in a lake, we want $30,000". The 1st loan told them to "go to that same lake and take a long walk on a short pier" (Walking into a lake and jumping into a lake will get the same result) you're only getting $3000.
So, we (You know who I'm talking about) go back and forth with the banks and they both will not budge. That kills the deal. No short sale. The property gets foreclosed on 10/09, about a year after the deal would have been done. The kicker?
Both the 1st and 2nd loans were with National City Mortgage, different departments but the same bank. The real kicker?
The house just went back on the market for $787,500. They lost nearly $200,000 because they could not play nice with themselves. Is it any wonder the banks are in the kind of shape they are in?
Let me know how stupid I am.
God Bless.

Psych!!!

What's up, People?
There's a cruel trick going around. It's kind of like going to the zoo and holding a banana just out of reach of the ape cage. Like taking a kid to the Disneyland parking lot and then going home before entering said amusement park. It is just as mean as a Baskin Robbins commercial on t.v. telling me the most delicious ice cream ever is now free and my wife telling me I can not have any because of some lie my doctor said about me having high cholesterol (I hate my doctor).
This trick going around is perpetrated by Realtors all over the greater San Diego area (Maybe the whole country). Here's how it's laid out. The Realtor takes a listing and puts it on the market under market value. Have you ever heard of anything so horrible? You have heard of things that horrible? You've heard of much worse things? Well, I agree that it's not as bad as my ice cream story. Here's why it does suck.
When a listing comes on the market under value it gives buyers false hope that they could actually end up with the house. Well, why couldn't they? The house is priced in the buyer's price range, right? Yes (Is me talking to myself confusing?), but it will get bid up to actual market price or, if there is enough of a shark frenzy, it could get bid over asking price. It should be easy to spot, right?
Yes, it is easy to spot. The unfortunate thing is you have to pursue it anyway, just in case. Just like that 16 year old kid who has to ask the super model out when he comes in contact with her. You can not let those types of opportunities go by without at least trying.
So, to all of my home buyers (And all of the buyers across the land), keep asking that super model out, no matter how much it hurts. You'll get lucky one day.
Let me know your super model story.
God Bless.

Dumb

Aloha, People.
This is going to sound biased, self serving and kind of mean. But I think some people are dumb. I'm not saying they're bad people. I'm not saying they do not love their families. I'm not even saying they're unintelligent. I'm saying there are some dumb folks out there (Unintelligent would be the inability to learn or reason. Dumb people are just not looking at all of the facts before they open their mouths).
Take, for instance, Chris Farrell of Bloomberg's Business Week magazine. He wrote an article with the point of view that the government should "pull the plug on government support" from the housing industry. That is his opinion, and not a horrible one. There are a ton of people who think the government shouldn't be involved. That's fine. What I think is dumb (It is kind of harsh sounding. What if I just said his idea is dumb and not him?) is his reason for the government to back out.
His reason is he feels that with the government giving tax credits and buying mortgaged back securities (Keeps the interest rates down) is "Artificially holding prices at above-market levels" (Prices are not above market levels. Prices are always at market level. That's why they call it the "market". People buy stuff and the price is set. If people are only willing to pay $1 for a loaf of bread then that's the market). I don't know where he's buying real estate, but there's nothing artificial going on. Home prices are way low. Yes, the tax credit is helping send buyers to the market. But, how many people are buying a $300,000 home to get $8000 tax credit? Yes, interest rates are low.....that is actually helping a bunch. But, the interest rates nor the tax credit are driving prices up. There is a gang of home buying action going on, but prices are not reflective of the demand. Wanna know why?
When a home is up for sale and someone wants to buy it using a loan then the home still has to appraise. It doesn't matter what someone is willing to pay, the appraiser is going to set a price at MARKET value based on comparable home sales. Appraisers and banks are not going to be making the same mistakes they made prior to '05. You remember those days when an appraiser would drive by the home for sale and then ask you how much you wanted it to appraise for. That's part of what got us into this mess.
So, I really am surprised that this article was written and published. The article even mentions that "sales of existing homes plunged 7.2% in January". How is that artificially holding prices up?
Any way, click on the title and read the stupid article yourself. This is what I'm battling, People.
God Bless

Contract Tips #1 Or Contingent This

Hi People.
Buyers. This will start off an infrequent series on things to remember when writing a "Residential Purchase Agreement" offer for a home. Sellers. This is what to look out for. The ying and yang, push and pull of negotiating will end up somewhere in the middle called "fair", if both parties are on the ball. One party is often not on his game (Or has a Realtor who was the banjo player in Deliverance) and that party ends up being taken advantage of.
Buyer contingencies. They are there to protect the buyer. Inspection, Loan & Appraisal are the main ones. Inspection is the buyer's right to inspect/ investigate the home, taxes, school district, noise pollution, pollution pollution, area crime and all around niceness. The buyer can hold a seance to check for evil spirits, check the area's demographics or see if the house is Feng whatever. If all of these (But not limited to these) things do not meet the buyer's approval the buyer can back out and get the full refund of the deposit, as long as they are within their contingency period.
Loan and Appraisal Contingencies are tied together and pretty self explanatory. If you can't get the loan or if the home does not appraise you can cancel escrow and get your full deposit back. The longer the buyer's contingency the better for the buyer. Also, you have very little (If any) control over these 2 contingencies. Keep them as long as you can and extend (Before they expire) if the bank/ appraiser need more time.
Obviously, the seller will want as short a buyer's contingency period as possible. When an offer is accepted the seller has to take the property off of the market. Knowing that the buyer can back out legally for something as frivolous as "I don't like the paint at sunset" or "This house makes me look fat" will keep the seller up late at night.
So, what's fair. It depends (Sissy answer). Feel out the situation. If you really want to buy the house and there are several offers on the table maybe you should consider a 10 day inspection period (Plenty of time to get an inspection done if you don't dilly-dally) as opposed to 17 days. This will make you more attractive to the seller. If he doesn't have any other offers and you don't feel like being rushed maybe ask for a 20 day inspection period. He should take it because he's starting to get nervous of never getting an offer or ever being loved. Sad.
People outside of California should consult a local Realtor. Laws, customs and practices can vary state to state.
Either way, call me at 619-507-7449 with any questions on any real estate topic.
God Bless

Housing Market & Corn Farmers

People (You can't see me but I'm tipping my hat to you as if we were greeting each other).
Forbes came out with a pretty bold statement today "Here's a new sign that the housing market is in recovery mode: The number of homes for sale across the U.S. with discounted asking prices dipped to fewer than 20% on March 1". This is great news. But, once again, I think we need to dig a little deeper.
One reason there could be (Has not been verified) less discounts is that builders have caught up to the market prices. The new stuff on the market now has been built with the current market in mind. The builder who started building in '05 and finished in '07 was stuck with a $500,000 home that was only worth $350,000. He had to discount it in order to sell it. The builder who started building in '07 & '08 are building for $300,000 homes and do not have to discount them to get rid of them. Catch my drift?
The other reason they don't have to discount their homes is Uncle Sam is giving money (8000 big ones) to first time home buyers (Biggest portion of buyers out there). That's a built in discount. Kind of like subsidizing the corn farmers. Just grow it and the government will help you out (If I have offended any corn farmers out there I apologize. I didn't think you could read).
Again, this is good news. But let's not strike up the band just yet. There's a lot of corn to grow.
Tell me I'm full of it after you read the attached article (Click on the title).
God Bless.

Always Have Protection

People. How do?
The California Board of Realtors are coming out with a new revision for the "Residential Purchase Agreement And Escrow Instructions" or Form RPA-CA. What does this mean to you? Not a whole lot. It does clarify the wording a tad better on some parts re loan and appraisal contingencies. It does explain that if you change financing in the middle of the escrow period than the seller has the right to "VETO" or accept. It illuminates what does, and what doesn't stay with the house (Ceiling fan with one blade), unless there is added verbiage to the contract to correct that (You can have the ceiling fan, but I keep the fuzzy toilet seat). It clarifies some other things to, but all of these things were in the old contract (My clients and I knew they were clear).
The big things that the new contract changes are there to protect the realtor, not the buyer/ seller Buyers and sellers don't pay dues to the board of Realtors. If CAR keeps more Realtors in business then they can make more money. A little cynical.). It moved some wording up front telling the buyer that the realtor is allowed to write offers with other buyers on the same house. Now, the realtor is not allowed to share how much you offered or anything about you. He's just allowed to write offers for "Potentially competing buyers". Nice for him, not for you.
They re-worded how the deposit (Earnest money) is to be handled. This has been a long time coming. Now it states that the buyer will take the deposit directly to escrow 3 days after the offer is accepted. This is to protect the realtor from him (Sexist) self. The #1 way Realtors/ brokers get in trouble is co-mingling funds. Taking deposits and mixing it in with whatever fund (Gambling, drugs, figurines, etc...). I used to write it in that way so I wouldn't have to hold someone else's money.  My wife won't even let me have money, how am I supposed to take care of someone else's money.
The point of all of this is is that you better employ professionals who have your back when you are dealing with real estate, money, health and whatever else is valuable to you.
Let me know if you want a copy of the new contract. 619-507-7449.
God Bless.

Should I Stay Or Should I Go?

Cheers, People.
Interest rates dropped a whopping .08 percent from 5.05 to 4.97. They dropped like my jaw when my 2 year old spit out the "F" word. This comes 4 weeks before ugliness could come, or not.
"The central bank's $1.25 trillion program to buy up mortgage securities is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens" says MSNBC.
The Fed, and a couple of economists (Namely Sven Jari Stehn of Goldman Sachs. Are we supposed to trust them? I honestly can't remember.) thinks that the end of this program won't disturb the interest rate waters too much. Other economists say interest rates will shoot up like my cholesterol at a fried chicken eating contest.
The fact is that we wont know until we know. Still, if the Fed does extend the program than rates will stay low, probably.
Click on the link for the full article.
God Bless.

Show Me The Money

People, greetings.
Poway just made a list of the top 10 cities "Where Home Prices Are Rising", says the well renowned Forbes Magazine. It also claims that the year over year price change has went up 27%. It has, but what do they mean by price? Do they mean how much homes sold for? Nope.
They are basing this 27% jump on median home ASKING price (Why the yelling?). That has nothing to do with sells. Who wants to buy my '78 Pinto with a missing hub cap and duct tape pin stripes? I'm ASKING (Again with the yelling) $20,000. If you don't want that my neighbor has a primer gray Ford Escort with 200,000 miles on it and a missing door. He can be talked down to $18,000.
The median home asking price (No need to yell) in Poway is a little over $864,000. That is what's active right now. If so inclined, you may buy one of these homes. The total # of single family detached homes actively on the market is 144. 96 of them are over $700,000 (Close enough to the median price). But, only 11 homes over $700,000 sold in the last 3 months. Those homes took an average of 100 days to sell (That does not count the handful of those that tried to sell earlier and re-listed). Do you see what I'm getting at? That 27% increase in asking price does not matter.
Now, in all defense of Forbes, it does go on to say that a big part of the increase in homes for sale is that all of the less expensive homes get sold quick. But, it still sees these price increases as a turn around in the housing market. It could be, but those homes have to sell at those prices. Other wise, who wants to buy my Pinto (real cherry!)?
By the way, Poway is a great area. Great public schools (Score the best in the county), nice neighborhoods, usually bigger lots. I have put a bunch of my clients in Poway and they all love it (So why am i being a jerk?).
Click on the link to read the Forbes' article.
God Bless.

No One Wants $6500

Que Pasa People?
The $6500 tax credit is very lonely. Just like an ugly high schooler at the dance or the kid with no skills at the playground, the tax credit is abandoned. Deserted and isolated, the poor tax credit is kicked to the curb.
The Fed added a tax credit last year (Trying to "piggy back" on the tax credit for first time buyers) to try to entice current homeowners to sell their home and buy a new one. This tax credit was put into place to try to bolster the housing market. It did not. Like the fugly 11th grader or the uncoordinated kid, the tax credit begins a life of on line Dungeons and Dragons (Or whatever nerds are playing now).
The reason no one wants the $6500 tax credit is that it has too much baggage (Just like your ex who blames you for something in their past but he/ she couldn't talk about. Or how he/ she threw loud fits in public. Or how they ...fill in the blank, aren't you glad you escaped?).
1/3 of the homes with loans in the U.S. of A. are upside down on their mortgage. They can not step up, only out (Clever?). A big slice of those people will be future foreclosures or short sales. If you remove 1/3 out of anything it will come down, except my cholesterol. Apparently, I have have an endless supply.
There is 10% unemployment in this great country of ours. Some of them will be in the same bunch as the upside down group, but some of them won't (So there). It ain't '05. You can't get a loan without a job (Even a gangster loan shark will need proof you can pay him back. Breaking your legs is fun, but he won't get his money).
$6500 isn't enough to make an American jump through the housing hoop. Don't get me wrong, I like $6500, but I wouldn't spend $40,000+ to get it. Say your house would sell at $325,000. Your closing costs (remember you pay the realtor commission as the seller) would be approx $26,000. Now lets say you bought a house for $325,000 (Why not just stay in the house you had?). You get an FHA loan with a 3.5% down payment, or $11,375. You're already at $37,375 and you haven't paid for appraisal or an inspection or you closing costs. also, your loan amount is higher than if you would have just stayed put. That's a kick in your Louisiana!
The Fed seems like it is trying to come up with programs to help the economy. They're just not that well thought out.
Click on the title and tell me how stupid I am.
God Bless.

And That's How It's Done

Hi People.
Finally. A good story. A story of how good things happen to good people who work hard and strike when the iron's hot. This story is for everyone who put in an offer to purchase a home after offer after offer with no success. This should be an inspiration to those folks.
Yesterday I was out with some clients ("Clients" sounds kind of sterile. These are friends of mine. I do have friends you know) looking at some property in Poway. We've been trying for several months and have wrote multiple offers on a gang of houses and just have been beaten like the Padres (Sorry), so we finally broke down and decided to start writing offers on the dreaded "short sale" (Short sales are dreaded for several reasons: 1. The ugly short sale can take up to a year to close. The tax credit of $8000 is up in April (You have to be in escrow by April 30th and close escrow by June 30th)Who can wait a year? 2. Since they take so long there is no guarantee that the bank will not foreclose on the property while you're in escrow. Kind of like a 5 year engagement and then you find out your fiance' wants to be a nun. 3. You have no idea what the seller is going to do to the house before you buy it. People selling their house as a short sale are not getting any money back. They are just trying to salvage some credit. Plenty of sellers in this predicament trash the house and take anything that's valuable out of the home and sell it on Craig's List. Bottom line, in a short sale you do not know what you'll get or if you'll get it). But, I digest (big breakfast). so we're looking at these places that my clients really do not want but they realize that in their price range they get what they get. So, we're trying to have a good attitude about the short sales in their price range when my clients got an email.
Right when we were about to leave my clients were notified , via email on their phone, that there was a new home on the market in there price range in that very neighborhood that was a regualr sale(I set them up on an automatic notification of anything within their parameters). We thought we should at least drive by.
We showed up and I knocked on the door. "That was fast, I just put it one the market. Come on in" said the friendliest lady ever. We went in and my clients loved it. Through some conversation I realized that the owner was the listing agent too. I pulled my clients aside and whispered "Do you like it"? They eagerly nodded their heads. I asked them if they wanted to pull the trigger right now. Again with the eager head nodding (Kind of like human bobble heads). I then asked the seller/ listing agent if she wouldn't mind if I used her computer to write up a full priced offer right then and there. She was a human bobble head too. Sold in less than an hour of being on the market.
So, People, keep trying. Don't give up. Your house is waiting for you out there.
God Bless.

But, I Thought You Said....

Hello People.
Here it comes. Interest rates are starting to creep up. We do not know if this is a trend or a blip.
Last week the fed raised the discount rate from .5% to .75% and claimed it would have no effect on interest rates. Wellllllllll, it looks like that was a little misleading, or at least naive. We will see.
Click on the title to see what the Wall Street Journal has to say.
God Bless

Got My A** Whooped

Hey People.
Well, I got whooped again. I put in a strong (Like military coffee) offer to purchase a home for some clients (Nice young couple. Not their name, just a description) just 1 day after it came on the market. The asking price was $265,000. My clients really wanted it. We observed all of the realtor cards in the home (Looked like 52 card pick up). We put 2 & 2 together (Comes out to be 4) and figured there would be multiple offers on that bad-boy. We went in at $285,000. And, we were right.
There were 5 other offers. The listing agent said we were in the top 3 (?) and countered our offer with a "Submit your best and final offer". Let me tell you, those are dreaded words to people trying to buy a home. That means you blindly pick a number out of the sky and out bid yourself, and hopefully the other buyers you are competing with. My buyers went up to $300,000. You would've expected that we won. We did not.
Some Jackass (Not really fair. I don't know the person who won the property. I guess I'm just bitter/ jealous/ frustrated/ pissed) bid over or equal to our offer (The listing agent wouldn't tell us) and offered all cash. The seller had to take his offer.
So, if you're out there trying to buy a home you better come strong (And quick). There are a ton of sharks out there with cash trying to steal your dreams. Don't let them. You can always put in offers on more than one home at a time (It's just an offer to purchase, not a purchase). Then you'll have some options, even if they do steal from you (Bastards).
Let me know what you think.
God Bless.

Come And Get It

Hi People/ Investors.
An article came out by The Wall Street Journal and it says now is a good time to invest in rental property. I disagree. It is a great time to invest in rental property.
Prices have fallen faster than rents, leaving a delicious capitalization rate (Take the net income, not including mortgage payments, and divide it by the purchase price. The higher the number the better.). Back in '07 you would be lucky to get a San Diego cap rate of 5%. Now, even a lowly duplex will get you at least 7%. Plus the interest rates are nutritious (Couldn't let the "food" analogy drop). That's good eatin'. But, if everything else sucks (Everything does not suck. We live in San Diego) what are the down falls?
Glad you asked. Now a days you will need at least a 25% down payment. That ain't chicken gizzards. Add in the closing costs and you're out of pocket for some heavy change.
Unemployment is a kick in the wrong spot (Imagine your 2nd most painful spot. Now imagine that it's painted like a soccer ball. Now imagine you're in a country that cares about soccer...). If people don't make money they can't pay rent.
Those are scary issues, but with any investment their are risks. People will live in Southern California and people will pay to stay somewhere.
Also, remember that when you buy rental property you have bought a job (Unless you hire a property manager. He'll charge you approx 10% of gross rents. Not a bad idea if it doesn't cut into your pocket). 1st, make sure you do your homework before you buy. What are rents? Projected rents? How are the schools? Are there jobs in the area? Public transportation? Does it pencil? Are you being honest with the #s? 2nd, how much will it cost to get the property in top rental market shape? You want to be the cat's meow. if people are looking to rent you want them in your place, not your neighbor's.
Again, if you have the cash, the credit, the time, the ambition and the stomach to jump in, then jump in. People make a lot of money renting out real estate, if they know what their doing. Also, flips are dead. I don't care what HGTV, A&E or ESPN say (Unless you're buying all cash at an auction. Another time).
Check out the article by clicking on the title.
God Bless.

Radio, Suckas Never Play Me

Hi People.
From the good words of Chuck "D".
Check out my last radio show by clicking on the title.
On the show we talked about short sales and how they ain't for everyone, loan modifications and how they practically do not exist, V.A. benefits and how all government programs run like a paraplegic and how to commit 1031 (capital gains deferred program).
God Bless

Loan Stuff

Hi People.
I am so proud to introduce to you my very first guest writer, Eddie Messina. Eddie's a good friend of mine and we have done some transactions together. You might want to listen to him, he'll save you some loot & heart ache. I'm going to take a nap.
Here's Eddie.....

Bank of America was in the news again (back on the 10th) this time being charged with fraud. This really got me thinking this morning about these crazy banks. I’m not sure they are always looking out for your best “interest” … thank you I will be here all night- yuk yuk yuk. The pun, the lowest form of comedic humor but my best friend. Let’s talk about interest for a moment. Many homeowners choose their bank when taking out a mortgage loan. Why not? It is convenient and grandma Moses did it that way. Does this convenience come at a price? Of course! You could wash your car for free but most of the time we take our vehicles to the car wash to have somebody else do it and we are perfectly cool with paying the extra money to rid ourselves of this responsibility The difference between these two conveniences is one has an obvious price to pay (car wash) and the other has a hidden convenience charge (banks) that could cost you’re a few thousand over the years.




The truth is most lenders have access to about the same rates as anybody else on the block and when they price out a loan for a client most of the time they have to reveal what profit they are making on the loan (points/rebates) on the closing statement ( HUD-1) but Banks are exempt from the Real Estate Settlement Procedure act (RESPA). RESPA laws protect borrowers by requiring lenders to disclose information about their mortgage profit margins. Because of this exemption, the banks have a great way of slipping in a hidden fee called the Service Release Premium. This is where they boost your rate and sell to the secondary market for profit. If you were like me before I entered the world of mortgages, I had no idea what the daily wholesale rate was on a given day. If a lender or bank told me 6% I was like cool what is the payment?? Right everyone is worried about the payment but it is important to know with a little probing I could have got a %5.5 saving thousands of dollars over the life of the loan. I could put some carrots in my baby girl’s ears with that kind of savings!



To avoid this always make sure you know what the yield is on the Fannie Mae website versus the Banks rate sheet. Have your bank rep try to explain the difference between the Fannie Mae rate and their rate… that will be good for a laugh or two. Now you are not going to get the Fannie Mae rate (unless you’re bed with Fannie Mae but I don’t want to get into your personal life right now) because everyone has to make a profit in business. Even the street hustlers know that and believe me these hustlers with the ties they really know this game. People should be paid for their services and banks and mortgage brokers are no different. At least you can negotiate a lesser rate than you would have received being the wounded deer or perhaps take the higher rate, but have your closing cost paid! Now that is a novel idea. . . save some of that hard earned money for your savings account versus buying a rate! Well, I will get into that topic next time. I’m not sure you are ready for that yet! I can only unplug you from the Matrix one blog at a time; however, I will leave you with one last tip because I know your are so hungry for this information. When dealing with a bank you are basically stuck using their rate sheet and agenda but if you use a broker they can search multiple lending institutions for programs/rates. Again, I will tell you how to navigate with a broker on my next post! I can only feed you so much this time. Catch a (wo)man a fish and feed him/her for dinner. . teach him/her how to fish, feed him/her for a lifetime… or at least until they get a well paying job.

For more info visit http://emessina.spectra-funding.com



Edward Messina

Spectra Funding

cell: 619-933-3462

Fax: 619-303-7485

emessina@spectra-funding.com

I'm Going Back To Cali

Hi People.
Even though home prices are better than wedding cake and interest rates are lower than a demon's anklet, we San Diegans have been named the "13th Most Unaffordable County In The U.S.". How can that be?
Well, we don't earn that much income. The last quarter told us that the median household earned only $74,900. That's Mom, Dad, dead-beat brother-in-law, Grandma (Grandpa's not with us any more) and the kids (paper route ain't what it's cracked up to be). Only 48.1% of San Diegan's can afford a median priced home at $319K.
The good news. 11 out of the top 20 most unaffordable counties were in California. Why is that good news. That's good news because we are where everyone wants to be. That's why we're unaffordable. Places like Enid, Ok. will not be (or ever be) on the most unaffordable list. LL Cool J did not (or ever will) do a song named "I'm going back to Enid, Enid, Enid".
Click on the link to see the article.
God Bless.

Dollar-Dollar Bill Y'all!

Hey there, People.
Ever sit back and think "what's the perfect money making biz"? What would be something that you could buy cheap and squeeze some yen out? What is the thing that is just hanging around and begging someone to come and scoop up?
Flipping houses? No, in my opinion it's not the time for that unless you're buying the house at an auction. You have to buy low, fix it up and then sell high. In this market you'll buy low and sell low.
Hard money loans? Maybe, but make sure you want whatever is tied to the loan if the borrower can not make his payment. Otherwise you can just go buy something you don't want or need (something my wife accuses me of).
Crack? There's legal issues to be aware of but, I hear it sells like.... crack.
How about buying the deficiency balances on foreclosed and short sales homes? That's the ticket. You go to the bank or investor and offer to buy the debt that he lost for pennies on the dollar. Then (this is where it gets good) you go after the people who have been chewed up and spit out by the economy in the first place. All you have to do is get some of the debt back and you should make a killing (the borrower's spirit, health, marriage & children's future).
Mark my words, there will be some late night infomercials (starring some 80s T.V. personality, like Alf) telling us how to make tons of loot from the comfort of our home.
Click on the title and see the depressing news from MSN.
God Bless.

Tic-Toc

Hello-hello, People.
Just some advice when you're out with your realtor (are you seeing someone else?) and you find a house you like. Write an offer. I know, it goes against everything we've been taught. Patience, self-control, "fools rush in", look both ways before you cross the street. All sound advice in every other situation, but not when buying a home (at least homes under $500,000) in Southern California right now. Why?
The housing inventory in So-Cal is ridiculously low. If a home is priced at market value (again, this usually applies to homes under $500K but I've see it happen on more expensive homes) then it will gather several offers to purchase within a week of being on the market. There's just not that many houses on the market for sale. But the economy?
Economy, schemonomy. There are tons of 1st time buyers and investors who are out there going toe to toe over low priced houses that they can buy with low interest rates. The 1st time buyers get the $8k tax credit and the investor gets a nice rental to house all of the people who lost their home. Pandemonium.
So, to reiterate, if you're digging on a house, pull the trigger and write the offer. It's not a car. You have contingency periods that can get you out of the contract with an untampered with deposit.
Let me know if I can help.
God Bless.

Loan Mods Ain't Gonna Help

Hi People.
It looks like we're in for another record year of foreclosures, short sales & deeds in lieu. Looks like the only thing we will most likely not see is the ever elusive loan modification.
The Loan Mod. One of the country's hope in slowing down the depreciative home values. Seen prominently in it's early "trial" stages but rarely seen after that. Now, everyone knows someone who knows some one's friend who just did a loan mod and that person's mortgage is now $10 a month plus a Bologna sandwich. A little bit of an exaggeration (not much), there are a few people who have completed their Mods.
The problem is that, according to The Wall Street Journal, " Some borrowers are catching up on payments after having their loan terms modified, but S&P says current trends suggest that 70% of such borrowers eventually will redefault". At that rate it doesn't matter who's getting a loan mod done. That's just a stay of execution.
How will we keep afloat? There is a ton of action out there from 1st time home buyers and investors (thank goodness) that are bailing water in the sinking boat. How long can they keep it up? For a good while if the economy continues to recover and interest rates don't fly through the roof. If not.....?
Click on the title for The Wall Street Journal article and tell me I'm full of it.
God Bless.

Realtor Pa-Lease!

People, you are excused. This is a message for Realtors.
Realtor, pa-lease! When you put a house on the market there are certain things that should be put in place in order for us to all have a good and efficient home selling/ home buying time. Certain etiquette to be adhered to. There are plenty of right ways to do things and not too manys ways to mess them up. You kind of have to try to screw someone over in order to do it. Most of the time.
Case in point. A client of mine wanted to see a particular condo at 7:30 just last night. I, a realtor who has some learnin', looked it up on the MLS to see what the proper showing instructions were. "Temporary Resident. Show with 2 hour notice. Thank you for Showing! Lockbox Y (meaning it has a lockbox)" is what the realtor wrote. That's all it said. It did not say I needed an appointment (it is customary that if an appointment is needed it is stated plainly). I called the # given around 2pm and left a message that I would bring my client at 7:30 that evening. No one called me back to say "NO", so I (as anyone else would) felt is was good to go. Easy, right?
We get to the 7:30 appointment at 7:28, I figure it's not too early and so I ring the door bell. Nothing. I ring it again and again. Still nothing. I knock on it. I see a light go on. No one comes to the door. I knock like a cop. Nothing, but I hear movement inside. I figure I've done my part and now it's time to use the lockbox key. I go to the lockbox and get the key.
I decided to knock one more time like a Gestapo agent in 40s Germany. Nothing. I take the key and open the door and immediately see an elderly lady in a room right off of the entry on a laptop. "Hi, I'm sorry..." is what I said to the ignoring lady. "Mam? Excuse me. Mam? Hello. Mam?" is what I was blathering for a full minute before I notice some sign language charts on the wall. "She's deaf" is what my investigative intuition told me. So, being as smart as I am, I decided to yell louder "Mam"? Mam? Hello. Excuse me.". Nothing.
I decided I needed to get her attention by waving my hand and bending down to her eye level so she could see me. I put my business card in my hand so I would look extra official, bent over at the waist, screaming at the top of my lungs and waving my official card around. All of this was a solid, unexaggerated 2+ minutes of brilliance.
I finally catch her eye and she screams at the top of her lungs. I scream "I'm a realtor". She screams (in a very muted tone) "Phone?". I scream "I called". She screamed "Liar!". I tried to calm the situation by showing her the # that I called (that should be proof). She screamed "I'm deaf". I said "What was I supposed to do?". She screamed "I'm sorry" and pointed to the door.
I looked at the door and my client was already outside and laughing at me (can't blame her).
So, Realtors, the moral of all of this is a little EXTRA info when the circumstances are EXTRAordinary is proper etiquette.
God Bless