McMILLIN REALTY | TRENDS blog

Interesting Buyer Trends in Chula Vista

2011-03-29T12:06:00.000-07:00

Residential house prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch the Market Action Index for sustained changes: if the index falls into the Buyer’s Market zone for a long period, prices are likely in for a downward correction. This is the state we have been in for some time now.

The Market Action Index (MAI) illustrates the balance between supply and demand using a
statistical function of the current rate of sale versus current inventory.

An MAI value greater than 30 typically indicates a “Seller's Market” (a.k.a. "Hot Market")
because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer's Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.
Until very recently, we have been charting a drop in our MAI. We are now seeing an increase in buyer activity which is pushing those numbers up over 20 in some areas. Now remember, a HOT market is when the MAI indicator hits over 30.

The CHULA VISTA market is currently quite strongly in the Buyer's Market zone (below 30). The 90-day Market Action Index stands at 19. With several months of inventory available at the
current sales rate, buyers should find ample choice. Home sales have been exceeding new inventory for several weeks. Since this is a Buyer's market prices are not yet moving higher as excess inventory is consumed. However, as the supply and demand trends continue, the market
moves into the Seller's zone, and we are likely to see upward pressure on pricing.

McMillin Realty's Weekly Market Update for Chula Vista

2011-03-04T08:35:00.000-08:00

Why follow a Real Estate company's blog? Because of the great recipes and tips on how to clean your gutters?... NO! Because they are the area experts. Because when it comes to the market and real estate, they have the answers to all your questions. Because when it is time to BUY or SELL your home you should know who is the areas BEST. Demand it, expect it!

At McMillin Realty we have many tools available to our customers that can assist them with all their real estate needs. How do we know what your needs are? Well, we've been helping people just like you find and sell homes in San Diego and especially South County for 50 years now. It's a family tradition.

Attached to this blog is our weekly Market Update. It gives you current prices for homes on the market in Chula Vista combined and by individual zip. It also gives trends in pricing, current levels of supply and demand and a value metrics.

Just some quick observations... Eastlake, 91915, looks to be stable in median list price with week with no trend up or down. The same holds true for 91914, Rolling Hills Ranch, San Miguel Ranch, The Wood, The Gates, with an average list price of $527,311. However, buyer activity is up in that zip and days on market has stabilized. 91913, Otay Ranch, is seeing a slight downward pricing trend, however, days on market are also down - selling faster, and the buyer market has stabilized, although it is still a buyers market. In 91911, Sunbow, and areas west of 5, and 91910, Rancho Del Rey, the pricing trends are up.

What is the bottom line?... Looks like we are starting to see some healthy activity in our city. If you are asking yourself, "Is now a good time to buy?" I only have one answer for you.

NOW IS THE BEST TIME!!!

Below is the full Chula Vista Market Update Report - by Altos Research

Open publication - Free publishing - More otay ranch

Quicker Recovery for New Homes Expected in 2011

2011-02-10T10:53:00.000-08:00

In a community full of new homes, does this mean things are looking up for South County? Lets just say we are very optimistic.

In its latest real estate and economic forecast, the National Association of Realtors anticipates that sales of existing homes, after falling 4.8 percent in 2010, will rise 7.9 percent this year, to 5.3 million, and another 4.5 percent in 2012, to 5.53 million.

The median price of existing homes, meanwhile, rose 0.3 percent in 2010 after a 12.9 percent drop in 2009, and is expected to rise 0.5 percent this year, to $173,800, and another 2.4 percent in 2012, to $177,900.

Sales of new single-family homes are expected to rebound faster, rising 17.7 percent this year, to 374,000 sales, after a 15.5 percent drop in 2010, and then rising 51.1 percent in 2012, to 565,000 sales. In an earlier forecast, released last month, NAR anticipated that sales of new single-family homes would climb 20.8 percent in 2011 and 30.9 percent in 2012.

The new-home median price rose 2.2 percent in 2010 and is expected to climb 1.8 percent this year, to $224,700, and 1.9 percent in 2012, to $229,000.

NAR expects that 30-year-fixed mortgage rates will average 5.1 percent this year, up from 4.7 percent in 2010, and rise to 5.9 percent in 2012.

The group also forecasts the U.S. unemployment rate to fall from 9.7 percent in 2010 to 9.4 percent this year and 8.7 percent in 2012, while U.S. real gross domestic product is expected to dip from 2.8 percent in 2010 to 2.6 percent this year, rising to 3.2 percent in 2012.

See link below for the rest of this story...

Sharing Stream, Real-time Sharing, Trending Shares - ShareThis Stream

Market Conditions for South County - Chula Vista Real Estate

2011-02-04T11:45:00.000-08:00

Market conditions as we enter into February seem to be warming up a bit for our fortuitous buyers. This is really their market. Inventory is high, prices are at an all time low, and interest rates are historically low. For inventory under $400K we are even seeing multiple offers again (especially on our Short Sale and Bank owned properties).

The upper end market is still softening a bit. There are many factors that hamper the market in those areas. Stiffer mortgage restrictions on jumbo loans, state of the economy, and when the bulk of your move up market has lost their equity and/or their home to Short Sale or Foreclosure, the buyer pool is greatly diminished. We do, however, expect to see a healthy recovery in this market, it will just take more time.

Positive indicators is that activity is picking up in our area dramatically. Buyers are out there. First time homebuyers are increasing and will be a major contributor to our market in 2011. The South County can still boast fantastic amenities, outstanding schools, and great growth opportunities. That coupled with the inventory of fantastic homes and affordable prices, this is the destination of choice for many families, individuals and couples to settle down and call home.

Visit www.mcmillinrealty.com to find a home that suits your needs today. Anyone of their outstanding agents can help you!

Chula Vista Market Statistics for the Week of Jan 24, 2011

2011-01-25T11:47:00.000-08:00

In an ongoing effort to keep our market current with what is happening in our area, McMillin Realty has subscribed to Altos Research.

Altos is a powerful online tool that tracks the market conditions of individual areas. It will show current prices for homes on the market, trends in pricing, current levels of supply and demand, and value metrics.

What does that mean for you? Well, if you are a home owner, it means you have your finger on the pulse of the market, you know exactly where you stand with your investment, your home, your future. If you are a buyer, it means you are more educated in the area you wish to purchase. Is that an area that is trending up or down, are homes selling quickly, what type of offer should I make. Knowledge is power. At McMillin Realty we believe the more knowledge we give to our consumer the better decisions he or she will make and ultimately the happier the customer will be.

Here is the latest charts for the entire City of Chula Vista. For individual zip codes you can subscribe to our market summary reports right from this page.

The median single family home price in CHULA VISTA this week is $350,000. The 830 homes have been on the market for an average of 137 days.

Inventory has been tightening but days-on-market and the Market Action Index have been basically unchanged, not providing strong indication for market conditions.

PRICE
The market seems to have paused around this plateau. The Market Action Index is a good leading indicator for the durability of this trend.

QUARTILE PRICES
Often, we find insights by watching pricing trends within the quartile segments. Prices have settled at a price plateau across the board. Prices in all four quartiles are basically mixed. Look for a persistent shift (up or down) in the Market Action Index before prices move from these current levels.

PRICE AND VALUE
The market plateau is seen across the price and value. The price per square foot and median list price have both been reasonably stagnant. Watch the Market Action Index for persistent changes as a leading indicator before the market moves from these levels.

INVENTORY
Inventory has been falling in recent weeks. Note that declining inventory alone does not signal a strengthening market. Look to the Market Action Index and Days on Market trends to gauge whether buyer interest is changing with the available supply.

MARKET ACTION INDEX
Residential house prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained changes: if the index falls into the Buyer’s Market zone for a long period, prices are likely in for a downward correction.

The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory.

An MAI value greater than 30 typically indicates a “Seller's Market” (a.k.a. "Hot Market") because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer's Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.

The CHULA VISTA market is currently quite strongly in the Buyer's Market zone (below 30). The 90-day Market Action Index stands at 18. With several months of inventory available at the current sales rate, buyers should find ample choice.

The market has shown some evidence of slowing recently. Both prices and inventory levels are relatively unchanged in recent weeks. Watch the Market Action Index for changes as it can be a leading indicator for price changes.

McMillin Realty Still Going Strong in South County

2011-01-24T11:16:00.000-08:00

As the first month of the year comes to an end McMillin Realty can report that all remains strong on the home front.

The company has been on a recruiting and hiring bonanza since early last year, and that trend has not diminished. They have also continued their South County image assault in Dream Homes Magazine for the second straight year, and now with an added piece in the Dream Villager, a publication that is distributed only to residence of La Jolla, Rancho Santa Fe, Del Mar and Coronado. It is McMillin Realty's mission to change the perception of our beautiful city into one of abundance, luxury, fine homes, great schools, and extraordinary lifestyles.

McMillin has also started their movie commercials back up in the AMC's at Otay Ranch and Plaza Bonita, only this time it's a :60 sec loud trophy truck, Andy, Jessica and Scott talking racing, realty and growing up McMillin. I'd get there a little early to save a seat, grab some popcorn and check it out.

But what I think I will remember most about this year and McMillin Realty is....

NEW YARD SIGNS!!!

Very rarely does a company change their yard signs. It is costly to do, and once you have a look, you don't want to change it. Well, it was time, and with all the new agents joining the company this was as good a time as any. Have you seen the any new signs up yet? New to the sign, hummm, they are BLACK, REFLECTIVE, AND HAVE THE VIRAL LOGOS WHERE YOU CAN FIND MCMILLIN REALTY ON THE WEB! Too cool, welcome to the new millennium McMillin. JK We like them a lot.

This is going to be a GREAT year. I can tell already!!!

30 Year Fixed Rate Still Under 5 - 23 Weeks in A Row

2010-10-15T14:30:00.000-07:00

Today Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), which found that the 30-year fixed-rate mortgage rate fell again to break the survey’s all-time low; the 30-year FRM has been under 5 percent for 23 weeks in a row. The last time our market saw rates this low Harry S Truman was President of the United States, a first-class stamp cost $0.03 and unemployment was 5.3%. If some of you must ask, the year was 1951. Times are much different from those days, but one thing is the same, THE INTEREST RATE!

Frank Nothaft, vice president and chief economist of Freddie Mac, notes, "September’s employment report held no big surprises to financial markets, allowing long-term bond yields and fix mortgage rates to continue to ease. As a result, both the 30-year and 15-year fixed mortgage rates hit all-time record lows for the third consecutive week."

30-year fixed-rate mortgage (FRM) averaged 4.19 percent with an average 0.8 point for the week ending October 14, 2010, down from last week when it averaged 4.27 percent. Last year at this time, the 30-year FRM averaged 4.92 percent.

15-year FRM this week averaged a record low of 3.62 percent with an average 0.7 point, down from last week when it averaged 3.72 percent. A year ago at this time, the 15-year FRM averaged 4.37 percent.

Have I lost you yet? Basically we are at record lows for interest rates, and when we mean low, we really mean LOW! Like history making low. How has this affected our market? Experts believe the low interest rates are a good part of the increase in pending sales over the last couple of months. Our inventory is up, prices are down, recovery may be slow but it is here, and interest rates are LOW.

"Historically low rates have spurred yet another refinancing wave. Conventional mortgage applications for refinance jumped 24 percent over the week of October 8th to the strongest pace since mid-April 2009, according to the Mortgage Bankers Association. By refinancing into this week’s 30-year fixed-rate mortgage, the average homeowner could save over $230 a month in principal and interest payments on a $200,000 loan balance."

So in a nutshell, buying a home, or just holding on to the one you have, now is a great time.

excerpts from RealtyTimes.com

McMillin Realty has a flair for the trendy....

2010-08-27T12:20:00.000-07:00

With their contemporary, urban flats in the heart of Hillcrest, McMillin Realty finds a way to "JAZZ" up their new properties.

DREAM HOMES South County July / August 2010 Hits Newsstands TODAY!

2010-07-16T14:43:00.001-07:00

But you can be the first to see it here! The cover property is amazing, but so are the rest of the homes. Chula Vista has so much to offer, and the prices make these homes ripe for the buying! Come on down to the real "JEWEL" of San Diego.

Open publication - Free publishing - More the woods

JESSICA MCMILLIN - Antoher Bullet in the McMillin Arsenal

2010-07-16T10:04:00.000-07:00

Her youthful looks or bubbly persona fool you for one second. Jessica McMillin wants to kick your ass on the race track. And given the winning tradition her last name carries, she can likely get that done if she hasn't already. - This is the opening sentence in the article by Marty Fiolka in Dirt Sports Magazine on Jessica McMillin.

Jessica, 25, is the older sister to Andy McMillin and the daughter of Scott and Susan McMillin. "I've been going prerunning since I was just four years old," she proudly states. "My father actually had two kid seats in his prerunner, and we would ride around the dunes chasing my grandpa (off-road racing legend Corky McMillin) and my uncle (five-time Baja 1000 winner Mark McMillin).

Jessica works in the family business for McMillin Realty in the Marketing Department, it also happens to be in the same office as the race shop.

Her first official race was in 2008 at a Mexican CODE event, where she and fellow female racer Chelsea Magness raced the Mango Racing Protruck to a second-place finish. The annual MORE Powder Puff event was next, but then she took a huge next step at the start of 2009 by entering the family's ex-Robby Gordon Trophy Truck at the BITD Parker 425 in the Sportsman class. "That didn't go so well," she admitted shyly. Together with co-driver Todd Tenbroek, she hit a bump and rolled a mile into the race. They got the truck fixed, and had a "great time rolling around in the pouring rain and mud" before a broken radiator ended her day.

The team then bought friend Tim Noe's six-time championship-winning Jimco-VW Class 12 car, in which she promptly won an MDR race teamed with Corky's longtime co-driver Hector Cuadras. It was a good start, but Jessica realized after running the 2010 SCORE Laughlin race that it was finally time to have corrective surgery on both shoulders injured by years of water skiing. She is now healing, but plans a rigorous physical therapy program to prepare for another attack later this year at the MORE Powder Puff race and the SCORE Baja 1000.

Marty Fiolka ends his interview with Jessica by asking her about her future goals. She did say that one was to someday beat her brother Andy. She also said she is happy learning from everyone at McMillin Racing. And the one thing that sticks with her the most is her grandfathers motto "You never, ever quit!"

Everyone at McMillin is so proud of what Jessica has accomplished. Now, GO KICK BUTT!!!

Tax Credit Closing Date Extension/Flood Insurance Extension

2010-07-01T08:59:00.000-07:00

After a close brush with the deadline, Congress has passed an extension of the Homebuyer Tax Credit closing deadline, the Homebuyer Assistance and Improvement Act (H.R. 5623) . The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet
closed. The legislation is designed to create a seamless extension the new closing deadline for eligible transactions is now September 30, 2010. There is will be no gap between June 30 and the date the President signs the bill into law.

NAR worked closely with Congressional leaders on both sides of the aisle to enact this important legislation. Extending the Tax Credit Closing deadline will help provide additional stability to real estate markets across the nation.

For additional information on the extension visit www.realtor.org/government_affairs

Additionally, the United States Senate has passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569) an extension of the National Flood Insurance Program until September 30, 2010. This will allow transactions to move forward. The bill is retroactive and covers the lapse period
from June 1, 2010 to the date of enactment of the extension.

For more information on the flood insurance program visit www.realtor.org/government_affairs

House OKs extension of tax credit closing deadline

2010-06-29T15:09:00.000-07:00

Senate could vote Wednesday

By Inman News, Tuesday, June 29, 2010.

Inman News

In a 409-5 vote, House lawmakers have passed a standalone bill that would extend for three months Wednesday's deadline for closing on a home purchase in order to claim the federal homebuyer tax credit.

The Senate could vote on the bill, HR 5623, as soon as tomorrow, although the death of Sen. Robert Byrd, D-W.Va., has slowed the pace of work in that chamber.

Without an extension, the National Association of Realtors estimates as many as 180,000 homebuyers who were under contract by April 30 may miss the June 30 closing deadline, including 17,700 in California, 15,340 in Texas, 14,830 in Florida and 9,130 in New York.

"Keep your fingers crossed," said Lucien Salvant, an NAR spokesman, who said prospects for quick passage of the bill are mixed.

While some observers think HR 5623, "The Homebuyer Assistance and Improvement Act," could sail through without further delay, there's no guarantee it will come to a vote, Salvant said.

The Senate is already on record supporting an extension, having amended a bill on June 16 to push the deadline back to Sept. 30. But other provisions of that bill, the "American Jobs and Closing Tax Loopholes Act of 2010," have proved controversial, prompting House lawmakers to introduce a standalone bill.

Not So Neighborly Associations Foreclosing On Homes

2010-06-29T14:27:00.000-07:00

June 29, 2010

Capt. Mike Clauer was serving in Iraq when he learned that his home was sold because of missed HOA dues. In many states, it is relatively easy for HOAs to foreclose on members' homes for missed payments as little as a few hundred dollars.

Capt. Mike Clauer was serving in Iraq last year as company commander of an Army National Guard unit assigned to escort convoys. It was exceedingly dangerous work — explosive devices buried in the road were a constant threat to the lives of Clauer and his men.

He was halfway through his deployment when he got a bolt from the blue — a frantic phone call from his wife, May, back in Texas.

"She was bawling on the phone and was telling me that the HOA [homeowners association] had foreclosed on our house, and it was sold," he says. "And I couldn't believe that could even happen."

Clauer had a hard time understanding what his wife was saying. His $300,000 house was already completely paid for. Could it be possible that their home was foreclosed on and sold because his wife had missed two payments of their HOA dues?

In many states it is not difficult for an HOA to foreclose on a member's home for past dues even if the amount owed is just a few hundred dollars.

"I was really in a hurry trying to get home before my family was living on the streets," Clauer says.

Sold For A Steal

But by the time he got back to Texas, it was too late. The Clauers' four-bedroom, 3,500-square-foot home had been sold on the courthouse steps for just $3,500 — enough to cover outstanding HOA dues and legal costs.

The new owner quickly sold it for $135,000 and netted a tidy profit.

"Basically it's everything to us," Clauer says. "Having a house like this paid for was huge for us, for our retirement plans. We thought we were so far ahead, and now it's like we're starting from the beginning."

Clauer's $300,000 home was completely paid for when his HOA foreclosed on it because his wife had missed two association payments. The 3,500-square-foot home was sold for $3,500 on the courthouse steps.

Lawyers for the HOA say that while Clauer's case is regrettable, it was his and his wife's fault for not paying their dues in a timely manner.

"The fact of the matter is, the laws of the state of Texas allow the homeowners association to file assessment liens on properties who haven't paid their assessments, and they also allow foreclosure on those liens," says Patrick Whitaker, who represents the HOA. "And the homeowners association followed the letter of the law."

Beg For Mercy

And in 33 states, an HOA does not need to go before a judge to collect on the liens.

It's called nonjudicial foreclosure, and in practice it means a house can be sold on the courthouse steps with no judge or arbitrator involved. In Texas the process period is a mere 27 days — the shortest of any state.

David Kahne, a Houston lawyer who advises homeowners, says that in Texas, the law is so weighted in favor of HOAs, he advises people that instead of hiring him, they should call their association and beg for mercy.

"I suggest you call the association and cry," he says.

Web Resources

Housten-Area HOA Foreclosure Filings

If a homeowner misses a couple of association dues payments, the $250 or $500 they owe often becomes $3,000 after the association's lawyers add their legal fees, Kahne says.

It's not the HOA that has to pay the lawyer's bill but the delinquent homeowner. If the homeowner wishes to contest and loses, the owner is on the hook for legal fees that could run deep into the tens of thousands of dollars.

Kahne says that as the economy has gone under, HOA management companies and lawyers have been making millions off homeowners through this foreclosure process.

"We're having literally thousands of lawsuits filed over very small amounts of money," Kahne says. "And those very small amounts of money rapidly become large amounts of money when the association attorneys add their bills."

Suddenly faced with a demand that they pay $3,000 immediately or lose their home, many disbelieving homeowners don't know where to turn.

With the recession, foreclosure filings for delinquent HOA assessments in Texas have increased from about 1 percent of all home foreclosures to more than 10 percent currently, according to the industry.

'Won't You Be My Neighbor'

Over the past 20 years, HOAs have exploded across Texas. While there are 1,100 municipalities, there are now 30,000 HOAs. And these associations have far more power to take away a citizen's home than any city or county in Texas.

The perception that the balance of power has swung too far toward HOAs has begun to permeate the Texas Legislature. Reform legislation has passed the Texas House of Representatives, but no bill has been able to make it through the state Senate.

Basically it's everything to us. Having a house like this paid for was huge for us, for our retirement plans. We thought we were so far ahead, and now it's like we're starting from the beginning.

- Capt. Mike Clauer, whose house was foreclosed on after two missed HOA payments

"Associations are a collection of neighbors," says Republican state Sen. John Carona, who represents Dallas. "The goal has to be to work well together — have a harmonious community — and to create a lifestyle that people enjoy and want to be a part of."

In addition to representing Dallas, Carona owns the largest HOA management company in the country — Associa, which has more than 100 offices, 6,000 employees and 7,000 HOA clients in 30 states and Mexico.

Carona defends the rights of HOAs to foreclose for delinquent dues, even for small amounts.

"If an association did not have a means, a forceful means, to collect that money from any homeowner who, for whatever reason, couldn't pay, it places an unfair burden on every other owner in that association," Carona says. "And a burden, quite candidly, that those other members didn't bargain for."

There have been complaints that some members of HOA boards have bought HOA-foreclosed properties for a pittance, and then sold them for a hefty profit.

In Texas, there are no laws to prevent this. Carona says the best way to address this apparent conflict of interest is not by passing new state laws but by letting the HOAs handle it internally through modification of the association's constitution.

"I think that an association can avoid that type of thing by adopting conflict-of-interest rules," he says.

Closing Loopholes

Republican state Rep. Burt Solomons from North Texas has been trying in vain to pass HOA reform legislation. He says during state legislative hearings there was no shortage of outraged homeowners, but he acknowledges that the HOAs, their property management companies and their lawyers fought back effectively.

Pending a legal case, Clauer, his wife, May, and his daughters, Kirsten and Kamryn, are still living in the home that was foreclosed on.

Solomons says HOA board members and advocates testify and say, "'We need the power to access and fine and foreclose, and we need the money. And we look for people in violation of the rules and restrictions that we put in place.'"

"And they drive around in golf carts looking for them," Solomons says.

In theory, HOAs are only supposed to foreclose for nonpayment of dues. But Solomons says that through a loophole in Texas law, in practice, HOAs can foreclose for nonpayment of HOA fines, too. Solomons watched with frustration last year as his reform bill died in the Senate.

Legal Recourse

As for Clauer, he's gone from fighting in Iraq to fighting his HOA in Texas. And if he weren't in the military, Clauer would have no legal recourse at this point.

But in a spasm of gratitude in 2003, Congress passed the Servicemembers Civil Relief Act, which was supposed to prevent nonjudicial foreclosures against military personnel fighting oversees.

"Hopefully we're going to get the house back," Clauer says. "That's what we're fighting for — that the judge will understand that this was illegal. That the HOA can't do what they've done."

If a federal court decides in favor of the Clauers, the foreclosure and subsequent sales of their home would have to be unwound and the deed returned to them. If they lose, the captain's nice, paid-for, suburban home would be lost to his family forever. The case goes to court early next year.

2010-06-21T11:48:00.001-07:00

Market Statistics for Chula Vista | For the week of June 13, 2010

2010-06-14T15:20:00.000-07:00

The median single family home price in CHULA VISTA this week is $379,887. The 790 homes have been on the market for an average of 108 days. Inventory is up and the Market Action (buyers) is trending down recently. While days on market appears to be trending lower, the overall conditions are weakening a bit.

WHAT ARE THE LOCAL CONDITIONS IN YOUR AREA?

91915

The median single family home list price in this market of 91915 this week is $385,000. Inventory is up and Market Action is trending down. While days on market appear to be trending lower, the over all conditions are weakening a bit.

Recently prices in the zip have settled at a plateau even though they dipped this week. Look for a persistent up-shift in the Market Action Index before we see prices significantly move from these levels.

Inventory has been climbing lately with 168 properties available this week. Note that rising inventory alone does not signal a weakening market. Look to the Market Action Index to gauge whether buyer interest is keeping up with available supply.

The Chula Vista 91915 market is currently in the "Buyer's Market" zone (below 30), though not strongly so. The 90-day Market Action Index stands this week at 24 so buyers should expect to find reasonable levels of selection.

91914

The median single family home list price in this market of 91914 this week is $507,500. Inventory is up and Market Action is trending down recently. While days on market appear to be trending lower, the over all conditions are weakening a bit.

This week prices in this zip code bumped up a bit but the trend of recent weeks is generally downward. A pickup in demand will be reflected in the Market Action Index, so watch that chart to try to identify a trough in the market.

Inventory has been climbing lately with 106 properties available this week. Note that rising inventory alone does not signal a weakening market. Look to the Market Action Index to gauge whether buyer interest is keeping up with available supply.

The Chula Vista 91914 market is currently in the "Buyer's Market" zone (below 30), though not strongly so. The 90-day Market Action Index stands this week at 27 so buyers should expect to find reasonable levels of selection.

91913

The median single family home list price in this market of 91913 this week is $389,900. With inventory and days on market basically unchanged and the Market Action Index decreasing, the market isn't sending strong directional signals for the near-term outlook.

We continue to see prices in the zip code bouncing around this plateau. Look for a persistent up-shift in the Market Action Index before we see prices move from these levels.

Inventory has been falling in recent weeks with 207 properties available this week. Note that declining inventory alone does not signal a strengthening market. Look to the Market Action Index to gauge whether buyer interest is falling with the available supply.

The Chula Vista 91913 market is currently in the "Buyer's Market" zone (below 30), though not strongly so. The 90-day Market Action Index stands this week at 22 so buyers should expect to find reasonable levels of selection.

This information and more in depth information on your local real estate market can be obtained by contacting one of McMillin Realty's neighborhood experts. www.mcmillinrealty.com

Mortgage Rates Touched New Low Friday

2010-06-09T11:07:00.000-07:00

Conventional fixed mortgage rates touched a new all time record low Friday. The 30-year fixed mortgage rate available to well-qualified consumers at 1 point origination dropped to 4.375%, from 4.5%. The 15-year fixed-rate also declined, from 4% to 3.875%. Mortgage rates have never been this low.

The decline in mortgage rates stemmed from a big increase in mortgage-backed securities prices Friday. MBS prices, which drive mortgage rates in the opposite direction, gained +21/32 (FNMA 30-yr 4.5 at 102.23) on less than spectacular jobs numbers and more European debt concerns, this time in Hungary. Typically when we see significant declines in stocks as we have lately, mortgage rates improve.

FHA mortgage rates continue to mirror those of conventional mortgages.

Jumbo mortgage rates are also down. Today's 30-year fixed jumbo loan rate for true jumbo loans exceeding conforming "high balance" county loan limits is 5.375%.

These rates are available to well-qualified consumers paying a standard .07 to 1 point origination as verified by FreeRateUpdate.com research of wholesale lenders' rate sheets.

Wells Fargo, the number one originator of residential mortgages in the US, is advertising a 30-year fixed-rate of 4.875% with an APR of 5.065% (source: Wells Fargo website).

Today's Mortgage Rates - available to well-qualified consumers paying a standard .07 to 1 point origination.

30-yr fixed-rate - 4.375%

15-yr fixed-rate - 4.000%

/1 ARM rate - 3.500%

FHA 30-yr fixed-rate - 4.375%

FHA 15-yr fixed-rate - 3.875%

FHA 5/1 ARM rate - 3.500%

VA 30-yr fixed-rate - 4.625%

Jumbo 30-yr fixed-rate - 5.375%

Jumbo Conforming 30-yr fixed-rate - 4.625%

FreeRateUpdate.com researches over 2 dozen wholesale lenders' rate sheets for brokers daily to determine the most accurate rates available to well-qualified borrowers at a standard origination fee of about 1 point. These rates are commonly referred to as "par rates" by loan officers.

Real Estate Outlook: Positive Trends

2010-06-09T11:01:00.000-07:00

Positive news on housing and real estate keep rolling in -- thanks in large part to federal home purchase tax credits and continuing near-record low mortgage rates.

Last week's pending home sales report from the National Association of Realtors illustrates the trend: Pending contracts jumped for the third straight month -- up by six percent in April -- and now stand 22 percent higher than the year before.

Every region but one -- the South -- racked up sizable gains in transactions heading for settlement. Contracts in the Northeast were up by nearly 30 percent for the month. In the West, they rose nearly eight percent, and in the Midwest the gain was about four percent.

The South's pending sales were less than one percent off from the previous month, but are still an impressive 31 percent above where they were 12 months before.

Home prices also appear to be moving on an upward curve, according to the latest Clear Capital Home Data Index -- which tracks price movements in thousands of local markets and Zip codes.

Clear Capital's national report for the month of May found prices up by 6.8 percent year over year.

Consumer confidence is definitely powering some of these sales and price numbers, economists say. The Conference Board's index for consumer confidence in May rose by five points -- a good sign for consumers' willingness to spend money.

Lynn Franco, who directs the Conference Board's survey research center, noted that the "expectations" component of the index was particularly strong -- and is now at its highest point in nearly three years.

According to Franco, consumers' previous fears about the job market, incomes and the overall economy have been on the decline for a couple of months now.

Meanwhile, mortgage giant Fannie Mae released its latest economic projections for the rest of the year. Chief economist Doug Duncan says he sees a "self-sustaining economic recovery" gradually taking shape -- again good news for housing.

Of course, not all the latest numbers on real estate are upbeat. They never are. Now a closely watched index tied to likely new home purchase offers two to three months down the road has gone negative. The Mortgage Bankers Association's index of new loan applications declined again for the third straight week, and now is at its lowest point in 14 years.

What's going on here? Most likely its the tax credits. The April 30 deadline for signed contracts for the two tax credit programs -- and the phaseout of the entire credit program June 30 -- are definitely pushing loan applications down.

As we said last week, the credits -- which are part of the federal stimulus efforts -- pushed many purchasers to move up their transactions to the first half of the year. Lawrence Yun, chief economist for the National Association of Realtors, says the underlying strength of the economic recovery should allow sales and loan applications to recover in the second half, without any need for additional federal help.

by Kenneth R. Harney

Is Now A Good Time To Buy?

2010-05-25T09:52:00.000-07:00

You may be asking yourself, "Is now a good time to buy?" It's a very important question. As a buyer, you're concerned with getting the best deal possible. Will you be buying at the top of the market? Or will you purchase when the market is in favor of you, the buyer?

According to the National Association of Home Builders (NAHB) and their Home Builders/Wells Fargo Housing Opportunity Index (HOI), affordability is high for the 5th consecutive quarter.

How is affordability calculated? In general terms, if housing costs don't exceed 30 percent of the monthly household income, then it meets the standards. Anything more than 35 percent is too high.

"Today’s report is very encouraging because it indicates that homeownership continues its more than year-long trend of remaining within reach of more households than it has for almost two decades," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "With interest rates still hovering at low levels, companies starting to hire new employees and the economy beginning to rebound, this should encourage more home buyers to enter the market and help further stabilize housing and the economy."

The HOI indicates that 72.2 percent of all new and existing homes sold in the first quarter of this year were affordable to families earning the national median income of $63,800.

Some of the best markets for affordability is:

Syracuse, New York
Dayton, Ohio
Grand Rapids-Wyoming, Michigan
Indianapolis, Indiana
Youngstown, Ohio, and
Bay City, Michigan

Of course, affordability, like most aspects of the housing market, is a local issue. The local economy has a direct effect on home prices, market favor (buyers or sellers), and the like.

Take for example, New York-White Plains-Wayne, New York-New Jersey. The NAHB says this region continued to lead the nation in poor affordability. Less than 21 percent of all homes sold in the 1st quarter 2010 were affordable.

Other markets where affordability is low:

San Francisco, California
Honolulu, Hawaii
Santa Ana-Anaheim-Irvine, California, and
Los Angeles-Long Beach-Redwood City, California

Be sure to talk to your local real estate agent about where your local market fits into the affordability equation.

Mortgage Rates at an All Time LOW

2010-05-25T09:46:00.000-07:00

Wary of a volatile stock market and concerned about by European debt woes investors moved to bonds last week pushing bond prices up and mortgage rates down. Mortgage rates, which move the opposite direction of mortgage-backed securities prices, had wavered just below 5% for much of the year until last weeks big decline. Mortgage rates today are even lower than levels December of last year, what's now the previous all time low.

Today's official FreeRateUpdate.com conventional 30 year fixed mortgage rate, available to well-qualified borrowers paying about a point origination, is 4.5%. Today's conventional 15 year fixed rate is 4%, with some lenders reported "squeezing" out 3.875%.

Today's FHA 30 year fixed rate is 4.375%. APR (closing cost) on an FHA loan is typically much higher than that of a conventional mortgage because of MI and other FHA fees.

Today's jumbo 30 year fixed rate, for jumbo mortgages exceeding jumbo conforming loan limits, is 5.5%. It's reported 5.375% is available to borrowers with an extremely low loan to value ratio.

Wells Fargo, the nations largest volume mortgage originator, is currently offering a conventional 30 year fixed rate of 4.875%, with an APR of 5.065. Wells Fargo mortgage rates are available on their website.

FreeRateUpdate.com researches over 2 dozen wholesale lenders' rate sheets for brokers on a daily basis to determine the most accurate mortgage rates for well-qualified borrowers paying a standard origination fee of about 1 point.

Today's Mortgage Rates - currently available to well-qualified consumers at a standard .07 to 1 point origination.

30-yr fixed-rate - 4.500%
15-yr fixed-rate - 4.000%
5/1 ARM rate - 3.500%
FHA 30-yr fixed-rate - 4.375%
FHA 15-yr fixed-rate - 4.00%
FHA 5/1 ARM rate - 3.500%
VA 30-yr fixed-rate - 4.625%
Jumbo 30-yr fixed-rate - 5.500%
Jumbo Conforming 30-yr fixed-rate - 4.750%

Real-Time Real Estate Market Data from Altos Research LLC

2010-05-14T14:48:00.000-07:00

Real-Time Real Estate Market Data from Altos Research LLC: "

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McMillin Realty continues to spotlight South County in Dream Homes Magazine

2010-05-14T13:35:00.001-07:00

BE THE FIRST!!! HOT ON THE NEWSSTANDS (or should I say "Blogstands") the latest and greatest has just been released!!! Dream Homes South County! See what's HOT in the South...

Open publication - Free publishing - More homes for sale

How to Profit by Buying and Selling Homes

2010-05-11T09:52:00.000-07:00

Some people choose to do it as a profession, others do it as a hobby, but one thing they all have in common is the desire to profit from it. `It` being the buying and selling of houses, or as some term it - house flipping. In other words - speculating.

So, with the current downturn in property prices, and the upturn in foreclosures, is it a good time to invest in property? What factors should you bear in mind if you are thinking about buying and selling houses?

Consideration of the following, though not an exhaustive list, should give you some guiding principles to help you before jumping in to real estate.

From what source will you find the funds to purchase the property? If it is going to be a bank loan, consider the rate of interest you will be paying the lender until the loan is repaid, usually at the point of the sale of the property. If it is your own money you are using, how much interest will you lose on it being in a bank? Might you need that money in an emergency?

How much are you prepared to buy the house for? The higher the value, potentially the greater the profit. Set yourself a ceiling, particularly when first starting out. Where will you look to locate the ideal property you wish to buy? From an auction, through a Realtor, or even privately, are some of the more obvious options.

Once you see a house you think you could do things with, check how much similar properties go for in that neighborhood. Pay too much and if you can`t make sufficient profit you are wasting your time, and you could even lose money on the deal.

Will you be carrying out repairs, or remodeling, yourself, or, will you have to bring in contractors to do the work for you? If you do the work yourself, do you have the necessary expertise to carry out the work safely, and do a proper job? What about family commitments, will you have the support of those closest to you? If you can do the work yourself, or at least the majority of it, you can save yourself a lot of expense. But, you need to consider whether you can afford to take the time off work with the possibility of losing wages. You need the commitment to see the job through, and set a realistic time scale for completion.

It is absolutely essential to calculate how much profit you will receive after taking into account the initial cost of the property, interest on any loan needed to fund the purchase, selling costs (Realtor fees, legal costs etc.), your own wages for the time spent on the house, and costs of materials and possibly employing a contractor to do any work needed to add value to the property.

If you have ticked all the boxes and feel confident that buying and selling houses is for you, then you could be on the road to making money in the property market.

So let's begin...

Step 1

Study real estate publications to determine where the housing market is low but rising. To make the most money, you want to buy at a low and sell at a high. If you want to make money quickly, you want to purchase houses in areas that the market is rising. If you are looking for a long-term investment, you can make money over time by buying in depressed areas with no signs of the market going up; it will most likely go up eventually.
Step 2

Place an ad in the newspapers in the areas that look promising. In the ad, state that you are willing to pay cash for houses. Leave your phone number, and leave a message on your answering machine that confirms they have found the correct person, in case they call when you are not available.
Step 3

Call a real estate agent in the area and ask for a list of their short sale properties. With a short sale, the seller's bank must approve the price that you are willing to pay, but it is usually much lower than what you could buy otherwise.
Step 4

When you have found a home or homes to purchase, have a professional inspection done. Be sure that the money you will spend on repairs will be able to be made up for when you sell the house later. Make sure the house is structurally sound. You will spend far less money on repairs if they are not major.
Step 5

Make an offer on the house. The offer should be below what they are asking, but enough so that they will accept the offer. Study comparative market analysis for the area to help you decide on a fair amount to offer.
Step 6

Make necessary repairs and upgrades to the house. The house must be safe to live in and in good working condition. Some upgrades may be purely cosmetic, but don't spend too much money on surface work. Stage the house for sale. You don't want the ugly dog on the block either. Curb appeal is very important. Keep up on the yard work at this time.
Step 7

After all work is done, place the house for sale. Price the house in accordance with other houses on the market. This will get you a better selling price.

The 7 biggest mortgage mistakes

2010-05-11T09:24:00.000-07:00

A home loan is the biggest debt, and most costly monthly bill, most of us ever have.

That's why the seven biggest mistakes borrowers make when shopping for a mortgage can cost so much money and aggravation. Avoid them, and you're a much happier and smarter home buyer.

Mistake 1. Not shopping around for the best deal.

Getting the right loan, with the lowest possible interest rate and reasonable fees, can save hundreds of dollars a month and tens of thousands of dollars over the life of the mortgage. But you'll never know whether you got a great rate if you only get one quote from the bank down the street or the mortgage broker that arranged your last loan.

Our extensive database of mortgage rates can give you a good sense of what loans cost right now. Follow our step-by-step advice on how to find the best interest rate and home loan.

Mistake 2. Applying for a loan without checking your credit history for mistakes.

Errors can drive down your credit score and make it more difficult to qualify for a loan and require you to pay a higher interest rate. To get a free credit report from the three major credit reporting bureaus, go to www.annualcreditreport.com

Each credit report shows how to correct mistakes or submit an explanation for legitimate black marks that appear on the report.

Mistake 3. Saddling yourself with payments you can't afford.

Avoid that by looking at all of your bills and deciding how much you can comfortably spend. Include a realistic estimate for taxes, insurance and condo or association fees. From that, calculate the amount that could be borrowed at prevailing mortgage interest rates. Add the size of the down payment and that should be your limit.

Don't let real estate agents repeatedly show you homes outside this price range. Don't work with mortgage brokers who push you to borrow more than you can afford. Here's more help on deciding how much to spend on a home.

Mistake 4. Failing to understand how costly home maintenance can be.

Just because you can keep up with the mortgage payments doesn't mean you can afford a house. You don't want to find out how expensive home repairs can be when your central air conditioning conks out, the dishwasher spews four inches of hot, soapy water on your kitchen floor or the roof starts to leak.

This is especially important if you're buying your first home. You can't call the landlord. You have to call repairmen, and they don't come cheap.

The Federal Housing Administration says you should plan on spending the equivalent of one mortgage payment a year on repairs. You'll also have to buy lawn mowers, snow blowers (if you live far enough north), ladders, tools and other stuff you don't need as a renter.

Mistake 5. Not getting preapproved for a loan. This is an important reality check -- and it's free. A lender will look at your credit history, income, savings and debts, and decide on a loan cap, though you don't have to borrow the entire amount. If you can't get preapproved, or can't get preapproved for as much as you want to borrow, that's a big red flag. Our report will help you learn all about getting preapproved.

Mistake 6. Signing a mortgage that you don't understand.

A recent study revealed that two out of every five homeowners didn't know whether their mortgage had a fixed or adjustable rate. And if it had an adjustable rate, they didn't know when it would adjust or what their payments would be after the adjustment.

The best place to find most of a loan's key terms is the "Good Faith Estimate" lenders must provide within three days of receiving your application. Knowing the answers to the 10 questions your GFE should answer will greatly reduce the odds for a nasty, costly surprise.

Mistake 7. Not considering a five-year, adjustable-rate mortgage.

Costly subprime mortgages have given all ARMs a bad name. Lenders have shied away from making them. Borrowers have been scared to even consider them. That's why more than nine out of every 10 mortgages written this year have been fixed-rate loans. But there's nothing wrong with the consumer-friendly ARMs usually given to borrowers with good credit. They're a particularly smart idea for borrowers who know they'll be moving before their loan adjusts in five, seven or even 10 years.

At today's rates, those ARMs cost about $30 to $40 a month less than a 30-year, fixed-rate mortgage for every $100,000 you borrow.

What to Know About Your Mortgage to Avoid Foreclosure

2010-05-03T11:54:00.000-07:00

Ask homeowners who have lost their homes to foreclosure and a surprisingly large number complain that they were unaware of important mortgage features when they signed on the dotted line. Whether you are buying, refinancing or already own your home, a clear understanding of your mortgage is key to avoiding the foreclosure process. Smart owners should determine the answers to the following questions for every mortgage or home equity line of credit (HELOC) they have.

Who is your lender and is your mortgage a government loan?
Sometimes the lender you get the loan from continues to be your lender until you refinance. Other times, your lender may "sell" your loan to another lender or loan servicer sometime after you buy your home. To find out who your mortgage holder is at any given time, look at your mortgage statements. They will list the name, address, Web address and contact telephone number for your lender. If you get in a bind where you can't make a payment on time, give them a call ASAP; many lenders are now offering temporary modifications to help keep responsible homeowners from falling too far behind. Know whether your loan is a governmentally insured loan. If you aren't sure if your loan is an FHA, Fannie Mae, Freddie Mac or VA loan, this should be evident from your original loan documents. If you start having problems with your loan and your loan is governmentally insured, your lender is required to offer you ways to help you avoid losing your home. Keep a copy of the loan documents on hand. If you can't find them, call your escrow holder or mortgage or real estate broker, and ask them to get you a copy ASAP.
What type of mortgage do you have?
Is your mortgage a fixed-rate loan or adjustable? If you have a fixed-rate mortgage, is the term 15 or 30 years? If your loan is an adjustable rate mortgage (ARM), you'll need to know what the term is; do you have 30 years to pay it off, or do you have a balloon payment in 10 years?
Do you have a prepayment penalty?
When does it expire and how is it calculated? Will you incur it if you refinance or only if you sell your home?
If your mortgage is adjustable, what type of adjustable rate mortgage (ARM) is it?
Fully adjustable, hybrid ARM or Option ARM? Fully adjustable loans adjust every single month of the loan. Hybrid ARMs have fixed interest rates and payments for the first years of the loan, after which the rates and payments adjust.
If your mortgage is an Option ARM, how much interest do you defer when you make the minimum payment?
Take the difference of the interest-only payment and the minimum payment listed on your mortgage statement to determine how much interest you are deferring or adding to your mortgage balance every month.
If your mortgage is adjustable, what are the adjustment details?
When will it begin to adjust? How often will it adjust? When your mortgage adjusts, will it become amortized (meaning, you have to start paying the principal in addition to the interest)? What is the basis for your mortgage's adjustment? ARMs adjust in accordance with a particular financial index listed in your loan documents. Some common indexes for ARMs are Prime and the London Interbank Offered Rate (LIBOR). On any given day, these indexes each have a particular rate. Your mortgage documents will state that your interest rate will adjust based on your specific index plus a specific margin, like 1 percent or 2 percent, that you add to the index at any particular time to determine the "fully indexed" rate. So, if your index is LIBOR, and your margin is 2 percent, then you can calculate what your adjusted mortgage interest rate will be at any given time by looking up LIBOR on a site like Bankrate.com and doing the math. For example, if LIBOR is at 4.5 percent, and your margin is 2 percent, then your adjusted interest rate will be: 4.5 percent + 2 percent = 6.5 percent. Every ARM has at least two adjustment caps, limits on how much your payment and/or rate can go up. ARMs usually have a cap for how much your payment can go up per year and over the life of the entire loan. Smart owners with ARMs should know their adjustment caps.
What is your household's financial continuity plan for "the three D's"?
You need to ask about how the mortgage payments will get made in the event of a "natural disaster" in your household. Divorce, disability and death are the three most common threats. Make a plan, including life and disability insurance, to cover your mortgage if any of these disasters strikes.

Tara's Action Tip: Right this moment, set aside an hour this week to go through your loan documents and find the answers to these questions. If you get stumped, ring up your mortgage broker, real estate agent or escrow officer/attorney for help.

Advantages and Disadvantages of Buying a Foreclosure

2010-05-03T11:53:00.000-07:00

Many buyers associate buying a foreclosure with getting a steal of a deal. This can be true, but there are also potential pitfalls. The pros and cons of buying a home involved in foreclosure vary with the phase of foreclosure the property is in when purchased. Use this handy guide to figure out what sort of property is best for you!

Missed Payments/Motivated Seller

Advantages:

Seller will be motivated to achieve a fast sale, may create opportunity for below market purchase price.
Seller may be more likely to do repairs.
Seller might be amenable to providing major closing cost credits and other concessions.
Buyer can use regular mortgage financing.
Buyer can obtain desired inspections within standard due diligence/contingency period.
Seller must legally provide complete history of property's condition, problems, repairs, etc.

Disadvantages:

Seller may not be able to negotiate price below outstanding balance of seller's mortgage(s).
Sellers still have to move out.

Pre-Foreclosure/Notice of Default (NOD) or Lis Pendens Filed by Lender/Short Sale

Advantages:

Seller will be motivated for fast sale, increasing buyer's bargaining power.
Buyer can do all standard inspections, including researching title during due diligence/contingency period.

Disadvantages:

Unless purchase price will pay mortgage(s) and closing costs in full, lender's approval of price and terms of sale will be required (i.e. short sale).
Lender may not approve price, seller concessions or closing cost credits.
Short sale may take 45-90 days to close.
Sellers still have to move out.

Foreclosure Auction

Advantages:

Property will be sold for outstanding mortgage balance owed to foreclosing mortgage holder -- this can be a low price for the property.
Cash payment requirements reduce competition.

Disadvantages:

Auction purchase price must be paid in cash on the same day as the auction -- no mortgage is usually allowed.
No inspections allowed; as-is sale.
Buyer may take property and owe other liens, back taxes and mortgages. Buyer must research state of title prior to auction.
Bank cannot provide disclosures as to property history/condition issues.
If bank believes auction will not recover a good price, bank may buy the property at auction.
Property condition might be suspect due to damage done by upset homeowners.
No commissions or attorney's fees will be paid; buyer must pay for their own representation.

Post-Foreclosure Bank-Owned Property REO (Real Estate Owned by Lender)

Advantages:

Bank is motivated to get property sold and will negotiate price, down payment, closing costs, escrow length, etc.
Title will be clear; buyer will not take on any liens, mortgage or back taxes of prior owners.
Inspections and mortgage financing are allowed within normal due diligence/contingency period.
House will be vacant.
Property will usually be listed on MLS; bank will pay real estate agent's commission.
REO sales close within a normal escrow period of time.

Disadvantages:

Bank will not agree to do any repairs; as-is sale.
Bank will usually require additional paperwork.
Bank cannot provide disclosures as to property history/condition issues.

How Foreclosure Affects Your Future

2010-05-03T11:49:00.000-07:00

Foreclosure is far from the worst thing that could ever happen to you. If your home ends up in foreclosure, chances are there are lots of things you should thank your lucky stars for: your family, your health and your good looks. Foreclosure doesn't mean you are irresponsible or not deserving of prosperity. It can be the result of an unwise decision, bad timing or unfortunate life events. Nevertheless, foreclosure and its first cousins, missed mortgage payments and short sales, do have credit, legal and tax consequences. Here are the consequences of each:

Missed Payments

Other than your lender's late fee, there are no credit or other consequences of a mortgage payment being late until it is 30 days late.
One 30-day late mortgage payment can drop your FICO credit score from 50 to 100 points.
If you resume paying mortgage payments after missing one payment (without making a catch-up arrangement with your lender) that one late payment will become a "rolling late," reported as first 30 days late, then 60 days late, and so on.
Most mortgage lenders will not make a mortgage or refinance to a borrower with more than one 30-day late mortgage payment on their credit report within the 12 months preceding the application for credit. All lenders will charge you a higher interest rate and impose tougher terms if you have any "mortgage lates" on your credit report.
Late mortgage payments will be reflected on your credit report for seven years, but the negative impact on your FICO score will decrease as the late payment recedes into the past.

Short Sale

When you sell your home for less than you owe on it, and your lender writes off the debt, your FICO score will drop between 80 to 100 points.
It will take approximately 18 months of consistent, on-time credit payments to restore your credit score to a level where you will be able to get a new mortgage with good interest rates and terms.
Legally, mortgage and lien-holders must agree to extinguish their debts for the short sale to proceed; they cannot sue the homeowner to recover the shortfall.
Until December 2007, homeowners of properties sold through short sale were charged with taxable income for every dollar of debt forgiven through the short sale. Under the Mortgage Forgiveness Debt Relief Act of 2007, though, mortgage lenders will not charge owners of foreclosed homes with taxable debt relief/income through the end of 2009.
If you bought your home less than two years ago or purchased your property using tax-deferred capital gains in the course of a 1031 exchange, there might be capital gains tax implications of your short sale. Consult with your CPA in either of these situations.

Foreclosure and Deed in Lieu of Foreclosure

If your home is lost to foreclosure or you give it back to the lender via a deed in lieu of foreclosure, your credit score will go down by 250 to 280 points.
It will take about three years of consistent, on-time credit payments to restore your credit score to a level where you will be able to get a new mortgage with good interest rates and terms.
Even if your lender is entitled to come after you for the difference between the market value of your home at the time of foreclosure and what you owe on the home, they almost never do.
Tax-wise, mortgage debt relieved through foreclosure used to be potentially taxable as income, depending on the mortgage. Under the Mortgage Forgiveness Debt Relief Act of 2007, mortgage lenders will not charge owners of foreclosed homes with taxable debt relief/income through the end of 2009.
If you bought your home less than two years ago or purchased your property using tax-deferred capital gains in the course of a 1031 exchange, there might be capital gains tax implications of your short sale. Consult with a CPA if you are considering a short sale in either of these situations.

The Skinny on the Short Sale

2010-05-03T11:44:00.000-07:00

There are many flavors of compromise you can strike with your lender if you are facing foreclosure. One of the toughest to execute is the short sale.

What Is a "Short Sale"?

The title "short sale" is somewhat misleading; many assume that "short" means quick, implying a transaction that has a short escrow period. Au contraire. A short sale refers to a homeowner's sale of their home for a net sales price (after commissions, closing costs, etc.) that is less than what the homeowner owes their mortgage lender(s).

Why Is a Short Sale Desirable?

A short sale is an alternative to foreclosure. A short sale prevents you from having to go through the foreclosure and eviction. A short sale does make a smudge on your credit report but is much less traumatic to your credit than foreclosure.

What Makes a Short Sale Hard to Complete?

Because a short sale results in the lender losing (a) funds they are owed and (b) the property which secured the mortgage loan, these transactions must be done with the full participation and agreement of the homeowner's lender(s).

Lenders are institutions, not people. They often move at a snail's pace when evaluating a request for a short sale. Short sales are more frequent in a declining market -- many lenders are simply not equipped to handle the deluge of short sale requests they receive.

Realtors who work on short sale transactions all have stories of trying for weeks to get the short sale "package" to the correct person in the loss mitigation department! Once the package is in the hands of the right person, the bank may have some reason they disagree with the deal between the buyer and seller, and may insist on inserting the bank's price increase, reduction in closing cost credits, or other major alteration of the terms of the deal.

During a short sale, the buyer, seller and even the real estate agents are somewhat subject to the whims of the bank -- the deal cannot be done without the bank's agreement.

How to Get Your Lender to Agree to a Short Sale

With all that said, short sale transactions are completed every day! Because the lender is likely to take so much time processing your short sale request -- and because time is of the essence -- you must ensure that your short sale request itself is as articulate, thorough and persuasive as possible. Here are some concrete actions you can take to maximize your chances for success.

Approach your lender as soon as you think you might need to request a short sale.
If you are struggling to make your mortgage payments, list your home with a reputable real estate agent as soon as possible. If they advise you that your home is likely to sell for less than you owe on it, immediately contact your lender's "workout" department to request a short sale package. If you can get your lender to indicate how much of your mortgage they are willing to forgive up front, you boost your chances of working with a buyer to create a deal that is a bargain for them, but likely to be accepted by the bank, too.
Authorize your real estate agent -- in writing -- to work and to negotiate directly with the lender.
But make sure to stay on top of the communications between your agent and your lender. Delegate; don't abdicate!
Make sure an offer is presented in its best light.
Make sure your real estate agent includes a cover letter that explains the buyer's qualifications to buy your home, how much down payment money they propose to put in -- anything that might boost the lender's confidence. If the buyer is requesting any closing cost credits, be sure to tell the lender if the buyer is a first-time homebuyer; lenders are more likely to agree to concessions for first-time buyers than for investors.
Your lender will request a hardship letter from you.
Make sure you handwrite it, and present your finances in the worst light. If you lost a job, had an illness or death in the family, are a senior citizen or have any other circumstances then let the lender know! Let them know that you are considering filing bankruptcy, and that this short sale would prevent you from doing that; because bankruptcy stops the foreclosure process cold, the lender would much rather approve your short sale than have you file bankruptcy. Also explain any facts that might make it harder for the bank to resell your house -- anything that makes the bank grateful that someone has made an offer!
Make sure your short sale package is impeccably thorough.
At a minimum, the lender will want to see:

The offer to purchase your home, including the buyer's preapproval letter;
Your hardship letter;
A balance sheet listing your monthly income and expenses;
Statements from your checking, savings and other asset accounts;
A net sheet from your real estate agent listing all of the closing costs that must be paid for your short sale to close;
Supporting documentation, including two months' worth of paycheck stubs and all your bills;
Your last two federal income tax returns.

Don't make them have to come back and ask you for any of these items. Make sure the package is complete the first time your real estate agent sends it!

5 Ways to Stop the Foreclosure Process

2010-05-03T11:42:00.000-07:00

If you have missed more than three mortgage payments, or your lender has filed a Notice of Default (NOD), you might think the loss of your home is inevitable. Even at this stage, there are five strategies you can use to stop the foreclosure process.

Foreclosure Workout. Up until the time your home is scheduled for auction, most lenders would rather work out a compromise that would allow you to get back on track with your mortgage than take your home in a foreclosure.
Short Sale. After your lender files an NOD but before they schedule an auction, if you get an offer from a buyer, you lender must consider it. If they foreclose on your home, the lender is going to simply turn around and try to resell it; if you present them with a reasonable short sale offer, they may see it as saving them the time, effort and trouble of finding a qualified buyer in a soft market. So, if your home is on the market, continue to aggressively seek a buyer for it, even after your lender initiates the foreclosure process. Read our guide on How to Sell Your Home Fast When Foreclosure Looms for action steps you can take to unload your home fast, then make your best pitch as to why your lender should agree to the short sale.
Bankruptcy. Bankruptcy stops foreclosure dead in its tracks. Once you file a bankruptcy petition, federal law prohibits any debt collectors, including your mortgage lender, from continuing collection activities. Foreclosure is considered a collection activity, and so the day your lender becomes aware that you have filed for bankruptcy, the foreclosure process will effectively be frozen. But here's the rub; once you get to court, the bankruptcy trustee's role is simply to play referee or mediator between you and your creditors. Bankruptcy really just buys you more time to replace your lost job or recover financially from a temporary disability; it doesn't let you off the hook for your debts. The law requires your mortgage company and other creditors to work in good faith with you to formulate a reasonable repayment plan so you can get back on track. Consult with a bankruptcy attorney regarding whether filing for bankruptcy is a good strategy for you.
Deed in Lieu. A deed in lieu of foreclosure is exactly what it sounds like. The homeowner facing foreclosure signs the deed to the home back over to the bank -- voluntarily. This sounds like it would be a great option, but actually has the same impact on a homeowner's credit that foreclosure does. Lenders are very reluctant to agree to take a home back through a deed in lieu of foreclosure for a number of reasons: They fear the homeowner will sue later alleging they didn't understand what was happening, the lender must pay any second or third mortgages or home equity lines of credit (HELOCs) off before executing a deed in lieu, and the lender wants to be certain that the borrower's financial distress is real. Allowing the foreclosure process to proceed is one way the lender can be sure the borrower is not faking poverty.
As such, a deed in lieu of foreclosure is virtually never granted unless: foreclosure is imminent; the owner has had their home on the market for several months and been unable to sell it; there are few or no junior loans or liens the lender will have to pay off; the seller can document their financial hardship; and the seller initiates the process and documents the voluntary nature of their request for a deed in lieu. Even when all these factors are present, many lenders will not agree to a deed in lieu, but it is worth a try!
Assumption/Lease-Option. Most loans these days are no longer assumable. The average mortgage now contains a "due on sale" clause by which the borrower agrees to pay the loan off entirely if and when they transfer the property. However, if you are facing foreclosure, you might be able to persuade your lender to modify your loan, delete this clause and allow another buyer to assume your loan. The lender may want to assess the new buyer's qualifications, but it can be a win-win-win option for all. You might be able to negotiate a down payment from the buyer which you can use to pay off your outstanding past due mortgage balance.
In a lease-option scenario, the buyer becomes your tenant, and you continue owning the property until the buyer has saved enough down payment money, improved their credit sufficiently or sold their other home. In some situations, the buyer will make a one-time, lump option payment upfront, paying you to obtain the option to purchase your home. You can apply the option payment to bringing your mortgage current. Then, the buyer will make lease payments monthly which you, the seller, then apply to your mortgage. To successfully use a lease-option to stop the foreclosure process, you must negotiate lease payments that cover most or all of your mortgage payment, property tax and insurance obligations -- enough that you can make up any difference and still pay to live somewhere else.

How to Deal With Your Lender When Facing Foreclosure

2010-05-03T11:39:00.000-07:00

Why would an impersonal institution -- a mortgage bank -- want to compromise with a homeowner who is behind on his payments? Well, some banks have more of a "compassionate personality" than others, but the bottom line is that it costs a bank up to $80,000 to foreclose on a home!

What Is a Workout?

A workout is a compromise between a lender and a homeowner who is in default on her loan or anticipates that she will soon default. A workout may involve temporarily or permanently modifying the terms of the loan to make the mortgage more affordable or the default more "fixable" to the borrower.

What Workout Alternatives Are Available to a Homeowner?

Lenders are amenable to all sorts of workout arrangements that can help a homeowner get back on track. Mortgage lenders can agree to:

"Fix" or keep constant an interest rate or payment that is about to start adjusting.
Lengthen an introductory "teaser" interest rate or payment.
Grant a temporary forbearance that allows the borrower to stop making payments for up to six months.
Defer some payments to the end of the loan, adding several months to the loan term.
Add a large lump sum of back mortgage payments owed by a buyer into the total loan balance, so it can be paid in small installments over the entire life of the loan.
Modify the length or interest rate of the mortgage loan, reducing the monthly payment amount. Read more about loan modifications.
Waive legal fees and penalties that a buyer has incurred.
Allow the owner to sell the home for less than is owed on it, effectively forgiving part of the mortgage balance.
Allow the owner to transfer the home to a buyer who assumes the mortgage, even if the mortgage was nonassumable.
Agree to take a deed in lieu of foreclosure, which lets the owner voluntarily give the property back to the lender, rather than going through the entire foreclosure process.

How Can You Max Out Your Chances of Working It Out?

Explain your financial hardship and why it is/was temporary.
If you lost a job, explain why and give details as to why you believe you will be re-employed soon. If your mortgage rate and payment are adjusting, explain that and show that you made your payments on time consistently before the adjustment.
Demonstrate that you have tried to improve your situation.
Provide proof that you have been job hunting, have reduced your monthly expenses or have taken on a second job or a roommate to boost your monthly income.
Make a specific proposal or specific alternative proposals.
Ask for what you want in verbal and written requests. Call your lender and speak to a representative in the workout or loss mitigation department. Have a discussion with him of what you are considering requesting, then get his name and fax number and issue your request(s) in writing. For example, if you currently have a 15-year fully adjustable mortgage with a current 7.25 percent interest rate for a monthly payment of $2,500, you might request that the lender extend the term of your loan to 30 years, change the interest rate from adjustable to fixed, and drop the rate to 6.75 percent for a monthly payment of $1,900. Consider providing several alternatives which would work for you if the lender cannot or will not agree to your first proposal.
Demonstrate that you are financially able to keep your end of the bargain.
In the former example, show that you now have or soon will have the income required to make the payment you are requesting.
Make your request ASAP.
As soon as you believe you might be in financial trouble and unable to make your payments, call your lender! While it's true that some lenders will want to see you deplete your savings before they buy your hardship story, many prefer to do workouts with people who haven't yet fallen behind; they believe responsible borrowers are more likely to live up to their end of the workout bargain.
Make a show of good faith.
If you are significantly behind on your mortgage, you might need to beg, borrow or steal (well, don't really steal!) to come up with some lump sum as a show of your good faith and commitment to keeping your home. Try to negotiate some payment greater than a month's mortgage payment, but less than the total amount you are behind as your "down payment" on your workout arrangement. Then, pay it -- exactly when you say you will. If you are late making this payment, your lender will lose all confidence that you will comply with the terms of the workout.

While a mortgage workout is less physical than your gym workout, it can be equally advantageous to your lifestyle. So stack the decks in your favor before you make that call, and good luck!

Tara's Tip: When negotiating a workout with your lender and before you agree to any compromise, ask the representative: "How will this appear on my credit report?" Understand the credit implications of your compromise before you agree to it. If the compromise will be reported as a derogatory item, try to negotiate the manner in which your lender will report the arrangement to the credit bureaus. Your goal is to have it reported as "Pays as Agreed," but if you don't get the lender's agreement to do that before you agree to the compromise, you never will.

7 Steps to Avoid Foreclosure

2010-05-03T11:37:00.000-07:00

If you have missed fewer than three mortgage payments or are anticipating that you might have to miss them in a month or so because of life circumstances, put your smarts in action and implement this simple plan to avoid foreclosure. Don't confuse simple with easy; avoiding foreclosure can take time, patience, money and effort, but if you save your home, it could be worth it!

If you have missed more than three mortgage payments and/or your lender has instituted formal foreclosure proceedings, all is not lost.

Step One: Cultivate Clarity

Before you make the massive commitment of time, money and energy it might take to avoid foreclosure, make sure that saving your home is going to be worth it. If, for instance, you have extra mortgages and home equity lines of credit (HELOCs) on your home, it may not make sense for you to restructure that debt so that you still have a $500,000 mortgage on a home that is worth $300,000.

Step Two: Conquer the Fear

For many people, the prospect of being unable to make their mortgage payment paralyzes them with fear and anxiety. They stop opening the mail, start avoiding phone calls and procrastinate on paying the bills. The fastest way to feel relief if you are falling behind on your mortgage is to do something about it. Whether you gather your bill statements, apply for a new job or call your lender to explain your situation, moving into action will prevent you from waking up to find a Notice of Trustee Sale posted on your front door. By the time that happens, there is not much you can do to save your home.

Step Three: Increase Your Cash Flow

This may seem like a no-brainer, but it is sound advice. Consider doing some freelance work, getting a second job or taking in a roommate. Evaluate what you don't use and don't need; you wouldn't believe the numbers of people who have spare automobiles, computers and other valuables they can sell. Slash unnecessary expenses; cable TV, massages and dining out must go. Cutting expenses will show your lender you are willing to make sacrifices, boosting the chances they will work out a compromise with you.

Step Four: Call Your Lender to Try to Work It Out

If you make a thorough, persuasive and specific request for a temporary or permanent loan modification, your lender might agree to help you.

Step Five: Try to Refinance

If your mortgage balance is near or less than what your home is worth on today's market, you might be able to refinance your home, get a lower interest rate, lower your monthly payment, skip a payment or two, or even receive some cash at the time you close the refinance transaction. Work with a reputable mortgage broker and try contacting a mortgage representative at your current lender; some lenders will do more to get you into a new loan with them than they will to modify your current loan.

Some nonprofit, alternative and governmental lenders now offer to refinance mortgages of homeowners in distress. For example, the Neighborhood Assistance Corporation of America offers a Home Save refinance mortgage with interest rates far below market averages. The Federal Housing Administration (FHA) has also set aside billions for the purpose of refinancing the loans of borrowers who have fallen behind on their mortgages.

Step Six: Put Your Home on the Market Immediately

If it looks like you will not be able to work out a solution with your lender or refinance your home, you should put it up for sale -- immediately. Find a real estate agent who has successfully represented other homeowners you know and who has a track record of getting homes sold quickly. The faster you get your home sold, the less damage will be done to your credit and your psyche!

Step Seven: Bonus Step for Seniors

If you are over 62, you might have additional options. Consider reverse mortgages and advances on your future appreciation, which unlock the equity in your home. These programs all have serious implications, so consult your children, your financial adviser, your CPA and your estate planner before you agree to anything.

The Stages and Phases of the Foreclosure Process

2010-05-03T11:33:00.000-07:00

Foreclosure is the sequence of legal proceedings by which a lender sells or repossesses a home when the homeowner has stopped making payments on the mortgage. As a homeowner, understanding the individual steps of the sequence is critical to understanding your rights and responsibilities along the way.

These days, very few states require the lender to take the homeowner to court to foreclose on the home. The process in most states is known as nonjudicial foreclosure.

Stage One: Missed Payments

In most states, a homeowner must fall 90 days behind on their mortgage before the mortgage lender can legally initiate the foreclosure process. So if you have missed fewer than three payments, you're not actually in foreclosure. However, this phase is very important, because (a) you have to go through it before the foreclosure process can start, and (b) this is the phase in which you as a homeowner have the most options at your disposal.

If you are in the missed payment stage, this is the best time to rework your finances, to call your lender to work out a compromise, and to put your home on the market for a fast sale.

Stage Two: Pre-Foreclosure

Once a homeowner's mortgage payments have not been made for at least 90 days, the lender records a public notice that the owner has defaulted on their mortgage, and then mails the notice to the homeowner. In some states this notice is called a Notice of Default (NOD); in others, it is a Lis Pendens. Depending on the law in your state, the lender might be required to post the notice on your front door.

This pre-foreclosure stage is really a grace period; it gives a homeowner three calendar months to "cure" your default. What's the cure? You can either work out an arrangement with the lender, sell the place or come up with the cash you owe.

Stage Three: Auction

If the default is not cured within three months after the Notice of Default is issued, the lender or their representative (the foreclosure trustee) sets a date for the home to be sold at an auction called a Trustee Sale. The Notice of Trustee Sale is recorded with the County Recorder's Office, delivered to the homeowner, posted on the door of the property and published in a local newspaper -- to make sure everyone knows when and where the auction will be.

This auction is either held on the steps of the county courthouse or in the trustee's office. In many states, the homeowner has the "right to redemption" (he can come up with the outstanding cash and stop the foreclosure process) up to the moment the home is sold at the auction.

At the auction, the home is sold to the highest bidder. The big catch is that these auctions require cash payment in most states; few third-party buyers can afford to bring enough cash to the courthouse to pay in full. As a result, many lenders either simply ink an agreement with the homeowner to take the property back (called a deed-in-lieu of foreclosure) or buy it back themselves at the auction.

Stage Four: Post-Foreclosure

If a third party has not purchased the property at the foreclosure auction, the lender takes ownership of it. Then, the property becomes what is called a bank-owned property, also known as REO, short for Real Estate Owned (by lender).

REOs are sold in one of two ways. Most often, they are listed with a local real estate agent for sale on the open market; they are usually put on the multiple listing service (MLS) so that local buyers' agents can show and sell the property to a qualified buyer for a commission. Some lenders prefer to sell their REO properties at an REO liquidation auction, often held in auction houses, at convention centers or at the property.

Top 10 Things You Need to Know About Foreclosure

2010-05-03T11:32:00.000-07:00

No one wants to hear the F word, but in today's market, everyone is talking about it. What exactly is foreclosure and how does it affect you? We break down what you need to know about the process.

Foreclosure is a process, not a thing.
People often misuse the term "foreclosure." Foreclosure is a series of events, not a state of being. Lenders don't foreclose on homeowners; they foreclosure on property.
Foreclosure defined
The foreclosure process has four phases. The terms and length of each phase vary by state.
Homeowners: Your rights and options vary depending on the stage your home is in and the state you live in. Know what laws apply to you. Buyers: The stage and state will determine the strategy you use.
Stages of foreclosure process
A difficult financial situation doesn't have to lead to foreclosure.
There are several steps you can take to avoid foreclosure if your loan is about to adjust, you lose your job, or otherwise anticipate that you might miss mortgage payments.
7 Steps to avoid foreclosure
The mortgage lender is not eager to take your house away.
Lenders are not in the business of managing real estate, so they would rather work with homeowners to keep them in the house. And with the growing number of defaults across the country, your lender may be more open to cutting a deal.
How to deal with your lender when facing foreclosure
You can sell your home immediately when foreclosure is looming.
Even if you live in a tough market, being aggressive and keeping your home in good condition can help you get a speedy sale.
Selling your house fast when foreclosure looms
All is not lost once you get a notice of default.
If you've missed more than three mortgage payments, you still have some alternatives for stopping the foreclosure process.
5 Ways to stop foreclosure process
A short sale is better than going through foreclosure.
Lenders don't typically forgive mortgages, but in a market with lots of inventory, they would rather see the house sold for less than the mortgage, than deal with trying to sell it themselves.
Understanding short sales
Foreclosure has major legal, tax and credit consequences.
Foreclosure will heavily impact your ability to borrow money in the future, so make sure you've exhausted all other options first.
How foreclosure affects your future
Buying a foreclosure property doesn't always mean you'll get a bargain.
Finding a turnkey property in the foreclosure market is rare. Oftentimes, the home will need some renovation. Crunch the numbers first to make sure you really are getting a deal.
Advantages and disadvantages of buying a foreclosure
Understanding your mortgage can help you avoid foreclosure.
Many homeowners who end up in foreclosure say they were unaware of some crucial pieces of information about their mortgage. Read all the loan documents, ask questions, and consult with an attorney if you can.
What to know about your mortgage to avoid foreclosure

Foreclosure Defined

2010-05-03T11:30:00.000-07:00

Foreclosure is not the most cheerful thing to think about, but it is an element of reality every homeowner should be aware of and comprehend fully.

We fear what we don't understand. The concept of "foreclosure" is frequently misunderstood and frequently feared. Understanding the concept of foreclosure with precision maximizes your ability to take action to improve your situation!

What Is Foreclosure?

A legal proceeding which culminates in a mortgage lender selling or repossessing the home of a borrower who stopped making mortgage payments.
A series of events that begins when a homeowner defaults -- or stops making mortgage payments -- usually because of a life crisis which impacted their income (examples: death, disability, divorce, etc.) or because their loan payments increased beyond their ability to pay them (example: when an adjustable rate mortgage begins to adjust). The series of events ends when the mortgage holder sells the home at auction, or takes the home back from the owner.
HOMEOWNERS: Foreclosure starts when you are at least 90 days behind on your mortgage payment. Then, the foreclosure process is represented by a series of notices you get in the mail and even posted on your front door over a 4-6 month period of time telling you that you have two options: (1) either bring your past due mortgage current or come to some compromise with the lender, or (2) your home will be sold and you will have to move out. At the end of these notices is usually an auction, where the lender sells your home on the steps of the county courthouse or simply takes ownership of it, and you move out.
Your options, rights and responsibilities change depending on what phase or stage of the foreclosure proceeding your home is in at any given moment.
HOMEBUYERS: Foreclosure is a series of phases of "distressed" property ownership. During your house hunt, you might run into properties whose current ownership status is all over this continuum. Each place on the spectrum presents a different set of considerations -- legally, logistically and from a bargaining perspective -- impacting how desirable (or not) a property might be to you, as a buyer.

Bottom Line: When you buy a home using mortgage money, your promise to repay the mortgage loan is secured by the home itself. If you stop paying your mortgage for more than a 90-day period of time, the mortgage lender will set the legal wheels in motion to take the home back. Those legal wheels are, collectively, called "foreclosure."

How to Sell Your House Fast When Foreclosure Looms

2010-05-03T11:24:00.000-07:00

When foreclosure looms, many homeowners try to sell their homes. For them, the goal is not just to get the home sold, but to do it quickly. Foreclosure rates are the highest in buyer's markets, when homes take a longer than average time to sell. What's a homeowner to do? Get aggressive, and get your home sold fast!As a seller, you control the only three factors that influence whether your home sells quickly: pricing, marketing and condition. Here are some easy steps and insider secrets to make your home fly off the market in record time!

Pricing Your House

Don't try to salvage equity that does not exist. The fact that you bought your home for thousands more than homes are currently selling for in your neighborhood is irrelevant to the current fair market value of your home. You have to get clear on your goal: Are you trying to eke dollars out of your home by holding out for the highest price, or are you trying to avoid the seven-year black mark that a foreclosure will leave on your credit report?
Don't overprice your home. Get clear about what you want. If you'd like to get your home sold, make sure you price it aggressively and that means low. If your home is overpriced, some buyers won't even see it because it will appear to be out of their price range. Other buyers will focus on seeing properties whose sellers seem more realistic about pricing. Your house will sit on the market longer than it should and then the lowballers will crawl out of the woodwork.
Get real about what your home is worth. Have your real estate agent prepare a Comparative Market Analysis (CMA) that shows recently sold, similar homes in your neighborhood. If you're serious about getting it sold fast, take the sales prices (not the list prices) from the most recently sold homes in your area, and then go down 10 percent or so from there to get your list price. When a home is slightly underpriced, it seems like a bargain. More buyers will come out to see it, and chances of getting a qualified offer skyrocket.
Make sure you have an accurate understanding of how low you can go. A buyer is not going to pay a premium price for your home just because that's what you owe. If you owe more than your home is worth, give your lender a ring, complete a short sale application and ask your lender to give you some indication of how low a sale price they will accept. Conform your list price to that (don't forget to take closing costs into account); a short sale blemishes your credit but not as badly as a foreclosure does!

Marketing Your House

Make sure your home is well-marketed on the Internet. This is your real estate agent's responsibility, but you should make sure that it gets done. More than 80 percent of house hunters start their home search on the Web. So your listing should be on all of the top real estate listing sites like FrontDoor.com, Yahoo, Craigslist and Realtor.com. Internet marketing is virtually free; if your real estate agent posts your home on five sites, it costs you nothing but time to post it on 10 more. Some sites will actually syndicate your virtual flier to dozens of other sites.
There is no such thing as too many pictures. Property listings that have no pictures are skipped over by the majority of buyers. The more photos of your home are associated with the listing, the longer time buyers will spend looking, and they will be more likely to come see your home.
Condition, condition, condition. Clean it up, spruce it up, fix it up, but don't spend too much. If you are facing foreclosure you probably can't afford the time or the money it would take to do major work. Focus on the things that are inexpensive, but make a major cosmetic difference, like paint and carpet. Have your real estate agent refer you to a handyman who can caulk cracks in the tile, fix minor leaks, and patch scrapes and holes in the walls. These things are cheap to fix and make a negative impression if you don't fix them. Make sure your place is immaculate every time a buyer steps inside. Piles, messes and odors are extremely distracting to buyers and can even cost you a sale.
Offer creative concessions and/or financing perks. Some house hunters who want to buy your house might have a hard time doing so. Help them out! Offer such concessions as assuming your mortgage (with the lender's consent), a lease with option to buy, or closing cost credits that will help the buyer defray closing costs or buy down the interest rate.

Window of Opportunity

2010-04-29T14:40:00.000-07:00

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

Homebuyers in California have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010 and close escrow between May 1, 2010 and June 30, 2010 inclusive.

Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted and under federal law, and they purchase properties that have never been previously occupied as provided under California law. The

Federal tax credits, slated to expire soon, first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010.

Please note: There are different restriction for each of the credits and not all buyers will qualify. Please review links provided below for more details:

	Federal Tax Credit	California Tax Credit
First Time Buyer	up to $8,000	up to $10,000
Long-Time Resident	up to $6,500	up to $10,000 (must be home never occupied)
Purchase Agreement Signed	Before May 1,2010	Before December 31, 2010
Close of Escrow	Before June 30th, 2010	On or after May 1, 2010 - December 31, 2010
Reserve Tax Credit	N/A	On or after May 1, 2010
Limited Funds	N/A	$ 100 Million for 1st time buyers $ 100 Million for New Home buyers
More Details:	http://www.federalhousingtaxcredit.com/	http://www.ftb.ca.gov/individuals/new_home_credit.shtml

San Diego Housing Marketing Strengthening

2010-04-15T14:33:00.000-07:00

SAN DIEGO — San Diego County’s housing market shook off its winter doldrums and turned in a March median that suggests prices have firmed up and may be heading upward, MDA DataQuick figures showed Monday.

The local firm that tracks the real estate market reported the March median at $330,000, equal to December’s level. It was $45,000, or 15.8 percent, higher than in March 2009 — the biggest percentage increase in five years — and up $8,000, or 2.5 percent, from February.

DataQuick analyst Andrew LePage said the rise is mainly because of more higher-cost homes selling instead of a general rise in appreciation. Homes selling for more than $400,000 comprised 37.4 percent of the March market, up from 34.1 percent in February and 26.9 percent in March 2008. At the same time, homes selling for less than $300,000 accounted for 42.3 percent of the market, down from 43.6 percent in February and 52.6 percent a year ago.

“It’s price softness in the high-end that is driving sales and bringing up the high-end total contribution to countywide sales,” LePage said.

He and other analysts said the future of the housing market, still emerging from a five-year slide, will turn on interest rates and low-cost distress sales. Foreclosure sales dropped in March after rising the previous three months, normally a sign of less distress.

But LePage said lenders likely switched their attention to short sales — homes sold for less than the mortgage balance — instead of facing higher losses by sending properties through the foreclosure process. The market share of foreclosure resales was 32.8 percent, down from 38.7 percent in February.

Still, University of San Diego economist Alan Gin said he is optimistic about the housing market because the economy looks more promising.

“The economy is starting to rebound,” Gin said, “so the question is, can the economy rebound fast enough to save people from these foreclosures? Can enough new jobs be generated so people who are stressed out can find work and meet their mortgages? I think that’s going to be the conflict through much of 2010. Some people might be saved; others will not.”

Rick Hoffman, president of Coldwell Banker Residential Mortgage in San Diego, said his agents have seen more activity in the last few weeks from buyers and sellers, and not just because spring is always more active than winter.

“We can’t keep inventory in our Carmel Valley office,” Hoffman said.

But he characterized consumer confidence as weak.

“When you start looking statistically at prices that reached a floor and have come up a bit, consumer confidence always lags the actual statistics,” he said. “I don’t think the message has gotten to consumers that, hopefully, we’re off the bottom and maybe we’ve changed to a slight increase.”

DataQuick said sales totaled 3,227 in March, up 30.9 percent in the usual upturn from February but 18 percent below the March average going back to 1988. Real estate agents say sales are down from normal levels because inventories are relatively low, as many would-be sellers wait for prices to rise.

At the neighborhood level, DataQuick reported declining median prices for resale houses in high-priced neighborhoods, while prices in the lowest-priced ZIP codes rose.

Among neighborhoods with at least 20 resales in the first quarter, the median price in Rancho Santa Fe was down 72.2 percent from $6.5 million in the first quarter of 2009 to $1.8 million this past quarter. La Jolla, Del Mar, Solana Beach and Coronado quarterly medians also were down year-over-year.

Logan Heights rose 4.4 percent to $135,750, as did other low-cost places such as Golden Hill, National City and City Heights.

Rich Toscano, a real estate market watcher at Pacific Capital Associates, said another measurement of price changes, cost per square foot, rose about 5 percent from February to March, double the median increase of 2.5 percent. He said that indicates a rise in value.

“I have a feeling that we are in a recovery of sorts,” Toscano said. But, he cautioned, “I definitely have concerns about the sustainability of the recovery.”

Most worrisome to Toscano and others is the outlook for interest rates. Last week, the Mortgage Bankers Association reported an average rate for 30-year fixed-rate mortgages of 5.31 percent, up from 5.04 percent the week before. Some economists believe that rate could reach 6 percent by the year’s end.

Would-be homebuyers have to decide whether it’s worth hoping for lower prices, when higher rates could eliminate any savings on the monthly payment.

Dave McDonald, a mortgage broker at American Dream Real Estate Group, said for every 1 percentage point increase in mortgage rates, the purchase price would have to drop roughly 10 percent to yield the same monthly payment. For example, a loan of $330,000 at 43⁄8 percent, available two weeks ago, would have to drop to $295,000 to produce the same monthly payment of about $1,750 at 53⁄8 percent.

“If you could find something you like and could qualify, I’d say buy it,” McDonald said.

By Roger Showley, UNION-TRIBUNE STAFF WRITER

Originally published April 12, 2010 at 12:55 p.m., updated April 12, 2010 at 10:42 p.m.

What is a Market Action Index (MAI)?

2010-03-31T10:19:00.000-07:00

Residential house prices are a function of supply and demand, and market conditions can be characterized by analyzing those factors. Watch this index for sustained changes: if the index falls into the Buyer’s Market zone for a long period, prices are likely in for a downward correction.

The Market Action Index (MAI) illustrates the balance between supply and demand using a statistical function of the current rate of sale versus current inventory.

An MAI value greater than 30 typically indicates a “Seller's Market” (a.k.a. "Hot Market") because demand is high enough to quickly gobble up available supply. A hot market will typically cause prices to rise. MAI values below 30 indicate a "Buyer's Market" (a.k.a. "Cold Market") where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A cold market will typically cause prices to fall.

The CHULA VISTA market is currently in the Buyer's Market zone (below 30), though not strongly so. The 90-day Market Action Index stands this week at 25 so buyers should expect find reasonable levels of selection.

The market has shown some evidence of slowing recently. Both prices and inventory levels are relatively unchanged in recent weeks. Watch the Market Action Index for changes as it can be a leading indicator for price changes.

Not surprisingly given the overall Market Action Index, all quartiles are in the Buyer's Market zone with several months of inventory given the current rate of demand for homes in the quartile. Watch the quartile for changes before the overall market shifts. Often one end of the market (e.g. the low end) will improve and signal a strengthening market before the whole group changes.

Don't foreclose! Do a short sale

2010-03-30T12:06:00.000-07:00

By Les Christie, staff writerMarch 29, 2010: 2:30 PM ET

NEW YORK (CNNMoney.com) -- Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks, when the government starts handing out cash to encourage lenders to close these deals.

"Banks have ramped up short sale approvals," said Duane Legate of House Buyer Network, which connects short sellers with buyers. "They're hiring a lot of the people who once worked in the mortgage-lending industry and moved them over to short sales."

These transactions, where lenders allow homeowners to sell their houses for less than they owe, accounted for 17% of all residential real estate sales in February, up from nearly 13% in November, according to a monthly real estate market survey by Campbell/Inside Mortgage Finance.

And Bank of America (BAC, Fortune 500), the country's largest mortgage servicer, has more than doubled the number of short sales it processed in recent months.

Elizabeth Weintraub, a Sacramento, Calif.-area real estate agent who handles many short sales, was amazed at how quickly a recent deal went through. "Bank of America approved it in 24 days," she said. "That flipped me out."

This is a huge change from even just six months ago when the short-sale market was stalled and most people would describe the process has real estate hell. Because lenders stand to lose so much on these transactions, they have been reluctant to make short sales happen, often waiting months before getting back to potential buyers.

Beware: You lost your house but still have to pay

"In the past, many short sales would never come to fruition and the ones that did averaged over half a year to complete," said Chris Saitta, CEO of Equator, which produces short sale software.

"Things would just fall into a black hole and not come out again," added Weintraub.

And even when banks did agree to the sale, the process could be further complicated if the original owner had a second mortgage.

In most cases, the first lender is repaid in full before any money flows to a second-lein holder. And because most distressed borrowers are severely underwater, there's usually nothing left to send on. As a result, second-lein holders are left holding the bag and have been killing many deals.

But that has been changing. For one thing, banks realize that they make out far better financially with a short sale than a foreclosure. "The lenders lose 50% on a foreclosure and only 30% on a short sale," said Glenn Kelman, founder of the real estate Web site Redfin. "And short sales offer a way to get distressed properties off their books quickly."

And on April 5, lenders and mortgage investors will have even more incentives to offer troubled borrowers short sales instead of foreclosing.

Under the new Home Affordable Foreclosure Alternatives program, borrowers will earn a $3,000 "relocation incentive" and servicers will get $1,500 for handling a short sale.

The investors who actually own the mortgage notes will get $2,000 in exchange for sharing proceeds of the short sales with any second-lien holders. And, finally, those second lien holders will receive up to $6,000 for releasing their claims.

Lenders participating in the program must also determine the market values of properties early on and inform the owners of just what price they're willing to accept. Then, if owners come back to the lenders with bonafide offers, they have to be accepted within 10 days.

Equator's Saiita anticipates a short sale explosion in response to the new program. "The challenge will be handling all the volume," he said.

The company has already tweaked its software, which 58 servicers use, to handle the new HAFA rules. And that should help reduce the time it takes to execute a sale, which currently averages 88 days.

The boom in short sales may accelerate the end to the foreclosure crisis by cleaning out the overhang of borrowers in distress and replacing them with more stable homeowners.

Plus, these sales are better for distressed borrowers because their credit scores suffer less. Going through a foreclosure can knock 200 points off a FICO score, twice as much as the penalty for a short sale.

California expands $10K buyer tax credit

2010-03-30T11:32:00.000-07:00

State doubles credit to $200M, opens it up to resales
By Inman News, Thursday, March 25, 2010.

Inman News

The state of California has re-established and extended a $10,000 homebuyer tax credit.

The new law, AB 183, signed today by Gov. Arnold Schwarzenegger, allocates $200 million to the credit for homes purchased between May 1 and Dec. 31, and between Dec. 31 and August 1, 2011. That's twice the amount allocated to a similar credit passed for purchasers of new homes last year. Those funds were quickly depleted and builders have been asking for the credit's return ever since.

The state has extended the new credit to first-time buyers of existing homes as well as buyers of new homes. The funds will be split evenly between the two groups, and buyers will have to occupy the home for at least two years.

The legislation had the backing of the California Building Industry Association and the California Association of Realtors.

"The tax credit will help push prospective buyers off the fence, clear out inventory, and jump-start the homebuilding industry, which will help create jobs and reinvigorate the state's economy," said Liz Snow, the building association's CEO and president, in a statement.

"AB 183 also will significantly contribute to efforts to stimulate jobs creation within California's housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon, and returned to the lender; or have been sitting on the market for extended periods of time," said Steve Goddard, the real estate association president, in a statement.

"It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities," Goddard added.

Snow said the credit would be paid out over several years and therefore lessen the blow to the cash-strapped state's budget.

"Additionally, recent studies show that building a new home generates roughly $16,000 in state tax revenues alone, which supports the notion that the credit will more than pay for itself," Snow said.

The Franchise Tax Board concluded that losses to the state's General Fund will equal $200 million: $6 million in 2009-10; $69 million in 2010-11; $67 million in 2011-12; $54 million in 2012-13; and, $4 million in 2013-14.

"The bill appears to represent a blending of policy goals, including: increasing demand for housing by lowering the effective purchase price; decreasing the existing market inventory of homes; and, encouraging construction of new homes. Supporters claim this bill will result in the generation of additional jobs in California. No formal jobs analysis has been conducted," according to a legislative report.

REOs and Short Sales Account for 50% of California Home Sales

2010-03-19T09:31:00.000-07:00

Foreclosed homes taken back by lenders and distressed short sales accounted for nearly half of all residential home sales in California in 2009, according to a market report released this week by the California Association of Realtors (C.A.R.). In 2008, such sales made up 38 percent of annual transactions.

As one of the hardest-hit states by the housing downturn, the Golden State is littered with bank-owned properties and homes facing foreclosure, but the lower prices and increasing buyer appetite for these deals are helping to reduce some of California’s distressed inventory.

The median price of distressed properties declined nearly one quarter to $250,000 in 2009, compared with $330,000 in 2008, C.A.R. reported. Meanwhile, the median price of non-distressed properties decreased only 10.4 percent to $485,000 compared with $541,000 in 2008.

Although one-third of sellers sold their homes for a loss last year – the highest level on record since C.A.R. started tracking net cash losses in 1989 – the lower home prices lured investors. According to the state Realtors association, more than 70 percent of properties purchased by investors were either short sales or REO/foreclosures. The typical investment property had a median price of $232,750.

Lower home prices and a large supply of distressed properties, coupled with federal tax breaks, also encouraged first-time buyers to take the plunge into

homeownership. The percent of first-time buyers increased dramatically to 47 percent in 2009, up from 35.9 percent in 2008, according to the report.

“It is clear that the federal tax credit for homebuyers worked well in 2009 and is continuing to drive home sales,” said C.A.R. President Steve Goddard. “The homebuyers’ tax credit is arguably the most successful strategy employed by the government’s efforts to stimulate the economy.”

According to a survey conducted by C.A.R. on the effectiveness of the federal tax credit, nearly 40 percent of homebuyers in the state said they would not have purchased a home if the tax credit was not offered.

C.A.R. also noted that the large number of distressed properties led to more than half of all first-time buyers purchasing an REO/foreclosure or short sale property.

According to C.A.R.’s analysis, California’s median home price hit bottom in February 2009 at $245,170. Since then, the median home price has increased steadily in month-to-month comparisons, but remained below 2008 levels throughout 2009. The annual median price is projected to increase to $280,000 in 2010 from $271,000 in 2009, the association said.

Homes priced $500,000 or less dominated the sales mix throughout 2008 and 2009, but C.A.R. says sales of high-end homes started picking up in late 2009, with the number of closings for homes priced $500,000 or higher rising 3 percent, and sales of homes priced $1 million or more experiencing their first year-to-year increase since July 2007.

A separate study by a local newspaper shows that a growing number of Californians are turning to the courts to fight the foreclosure process and prevent their homes from becoming REOs. According to numbers complied by the San Jose Mercury News, the number of foreclosure lawsuits filed in federal court in California has ballooned from just 29 cases statewide in 2005 to nearly 1,400 in 2009.

Politics Has California Short Sellers Facing Big Bills

2010-03-19T09:26:00.000-07:00

What should have been a legislative afterthought is threatening to become a financial purgatory for thousands of California taxpayers hit by the housing crisis.

With less than a month until tax filings are due, struggling Californians who received mortgage modifications or lost their homes in short sales or foreclosures last year face the prospect of huge state tax bills. That's because legislation that would prevent their canceled debt from being treated as taxable income is caught in the latest budget spat between Gov. Arnold Schwarzenegger and state lawmakers.

Schwarzenegger, a Republican, said this week that he would veto a tax bill passed by majority Democrats. Among other things, the legislation would have mirrored federal tax relief given to those who had mortgage debt forgiven in 2009. In previous years, the state conformed with federal law.

Business groups have objected to an unrelated provision in the bill dealing with penalties for tax fraud, and that prompted Schwarzenegger's veto threat.

The governor has asked the Legislature to pass a separate bill dealing solely with the mortgage issue so he can sign it before April 15. Democrats, the majority in both houses of the Legislature, appear to be in no hurry.

If no bill is signed in the next month, San Diego resident Kate Dalcour said she and her husband could be on the hook for nearly $16,000 in additional state taxes.

Dalcour's husband bought a condo for $300,000 in 2007. Because of a pay cut, he was forced to sell it in December for $175,000 less than what he owed on it.

"It's awful and kind of scary," said Dalcour, a 29-year-old behavioral therapist. "This is money that California would not expect to get under normal circumstances, and it's not very fair."

The political standoff is unfolding in one of the states hardest hit by the real estate crisis.

California had the nation's fourth highest foreclosure rate last month, when one in every 195 housing units there received a foreclosure filing, according to RealtyTrac Inc. The Irvine, Calif.-based foreclosure listings company listed Nevada, Arizona and Florida as the top three states.

According to the National Association of Realtors, 24 percent of home sales nationwide in January were foreclosures, and 14 percent were short sales.

In a foreclosure, a bank typically ends up taking the property after the homeowners fail to make payments on their mortgage. A short sale happens when sellers owe more than the house is worth, and the lender is willing to accept less than the mortgage balance to get out of the investment.

Banks may opt for short sales as an alternative to going through the longer foreclosure process and risk having the property sit empty for months.

Depending on the type of loan, the government can consider the forgiven debt as income and tax it. In California, most first mortgages to buy a home aren't affected, but homeowners can face big tax bills if they default on some types of refinance loans and second mortgages that let them cash out equity.

Congress responded to the growing problem by passing the Mortgage Forgiveness Debt Relief Act of 2007, which prevented homeowners from being liable for their canceled debt. The act prohibits such federal taxes through 2012.

California matched its state tax laws to the federal act in 2007 and 2008. It has not passed an extension for 2009, which has left many short sellers in limbo.

Conforming California to the federal standard would help an estimated 16,000 people who have mortgage debt forgiven between 2009 and 2012, according to the California Franchise Tax Board.

Real estate agents said California's political leaders need to act because the tax liability will hurt families trying to reassemble their lives.

"These are people who lost homes, and you expect them to pay $20,000 in taxes?" said Elizabeth Velasco, a real estate agent with Warren Realty who specializes in short sales in Sacramento and the San Francisco Bay area. "They can't even put food on the table."

Dalcour, the former condo owner from San Diego, is hoping the Legislature will separate the tax relief provision from the rest of the bill so thousands of Californians won't get tangled up with huge tax liabilities while the state's economy is doing so poorly. California's unemployment rate has been above 12 percent for months.

In a letter to state legislative leaders, Schwarzenegger said he asked for legislation that would protect homeowners, only to receive a bill that "uses these homeowners as leverage to increase tax penalties for businesses."

"They put in a bad element to an otherwise good bill," said the governor's spokesman, Aaron McLear.

Senate President Pro Tem Darrell Steinberg blamed the governor. He said Schwarzenegger has fallen into the hands of big business by objecting to a provision in the bill that would penalize companies for underreporting their taxes or overclaiming tax credits. The provision conforms with federal tax rules signed by former President George W. Bush.

Steinberg, a Democrat from Sacramento, said he will continue to push for tax penalties on individuals and businesses that commit fraud, but he would consider sending the governor a separate bill.

"We are not going to sacrifice people who have worked very hard and are unfortunately on the verge of losing their homes," he said. "We're going to do right by them."

San Diego County housing prices rebound in February

2010-03-19T09:15:00.000-07:00

San Diego County housing prices bounced back in February to reach a median $322,000 that was in the range of prices for much of last year, MDA DataQuick reported Monday.

The median, the midpoint of all prices, was up 5.6 percent from January’s $305,000 and up 13 percent from February 2009. The January median price had fallen 7.5 percent from December’s $330,000, reflecting an active market in low-cost homes and little activity in move up properties.

February’s numbers represented the highest year-over-year increase since March 2005, a few months before the median peaked at $517,500 and then fell to a low of $280,000 in January 2009.

But housing experts caution that January and February do not usually set the pace for sales and price trends for the year because of their traditionally low volume of activity.

Single-family resale homes had a median price of $358,500, up 3.9 percent from January’s $345,000 and just about the same as the December median; the figure was 12 percent ahead of year-ago levels. Condo resales stood at $219,500, up 8.9 percent from January’s $201,500 and nearly equal to the median price in December; it was 12.6 percent ahead of February 2009’s $195,000. The new-home median, including condo conversions, was $460,000, up 13.3 percent from January’s $406,000 and the highest since last May; it was 1.8 percent higher than in February 2009.

Sales in February stood at 2,465, up 6.2 percent from January but 8 sales lower than in February 2009. Single-family resales were below year-ago levels, down 4.2 percent, a reflection of the low inventory of homes for sale, especially low-cost distressed properties, as lenders try to modify loans rather than initiate foreclosure proceedings. Many analysts expect foreclosures to increase this year and thus lead to more sales but perhaps lower prices overall.

South County Appeals to Upper End Market

2010-03-15T09:08:00.000-07:00

BE THE FIRST TO VIEW THE SOUTH COUNTY EDITION OF DREAM HOMES MAGAZINE TODAY!

McMillin Realty is dedicated to changing the perception of Chula Vista and the South County their main vision is that South County is the premiere living destination in San Diego County. Let's get the word out!

It's Tax Season, Do You Know Where You Stand With Your Property Gain/Loss?

2010-03-10T08:44:00.000-08:00

Sale of Residence - Real Estate Tax Tips

You may qualify to exclude from your income all or part of any gain from the sale of your main home. Your main home is the one in which you live most of the time.

Ownership and Use Tests

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least two years (the ownership test)
Lived in the home as your main home for at least two years (the use test)

Gain

If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

If you can exclude all of the gain, you do not need to report the sale on your tax return
If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040)

Loss

You cannot deduct a loss from the sale of your main home.

Worksheets

Worksheets are included in Publication 523, Selling Your Home, to help you figure the:

Adjusted basis of the home you sold
Gain (or loss) on the sale
Gain that you can exclude

Reporting the Sale

Do not report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable. Report any taxable gain on Schedule D (Form 1040).

More Than One Home

If you have more than one home, you can exclude gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

Example One:

You own and live in a house in the city. You also own a beach house, which you use during the summer months. The house in the city is your main home; the beach house is not.

Example Two:

You own a house, but you live in another house that you rent. The rented house is your main home.

Business Use or Rental of Home

You may be able to exclude your gain from the sale of a home that you have used for business or to produce rental income. But you must meet the ownership and use tests.

Example:

On May 30, 1997, Amy bought a house. She moved in on that date and lived in it until May 31, 1999, when she moved out of the house and put it up for rent. The house was rented from June 1, 1999, to March 31, 2001. Amy moved back into the house on April 1, 2001, and lived there until she sold it on January 31, 2003. During the 5-year period ending on the date of the sale (February 1, 1998 - January 31, 2003), Amy owned and lived in the house for more than 2 years as shown in the table below.

Five Year Period	Used as Home	Used as Rental
2/1/98-5/31/99	16 months
6/1/99-3/31/01		22 months
4/1/01-1/31/03	22 months
	38 months	22 months

Amy can exclude gain up to $250,000. However, she cannot exclude the part of the gain equal to the depreciation she claimed for renting the house.

This hard hit market is an opportunity for many first-time buyers

2010-03-05T15:03:00.000-08:00

The housing market decline that has triggered a wave of foreclosures and deeply eroded recent home equity gains is also opening the door to ownership for renters who can meet tightening lending standards.

With the departure of the easy credit terms that triggered the mortgage market meltdown, lenders have raised the bar on who can qualify for a home loan. But those with high credit scores and money for down payments are finding that many homes are priced to sell, particularly in entry-level neighborhoods hit hard by mortgage defaults.

To compete with bank-owned homes, other sellers have been forced to cut their prices. For renters who watched the median price of a home rise from $185,000 a decade ago to $517,500 at the height of the recent housing boom, June's countywide median of $370,000 seems like a bargain, said Gary Kent, a real estate agent who began selling foreclosures when the housing boom ended.

So far landlords have reported no large outflow of tenants. But Kent said one sign that some previous renters are entering the market is that few of his recent bank-owned sales have been contingent on the buyer selling another home.

While sales volumes remain relatively low, an influx of renters into the foreclosure market "is definitely happening," Kent said. "I am selling a lot of foreclosure properties. Most of these buyers are renters."

In Spring Valley, one of the communities where foreclosures are common, "a condo that may have sold for $300,000 in late 2005 might now go for $150,000 or even less," he said.

While beneficial to some, some analysts say the recent dip in prices hasn't returned true affordability to the marketplace. A recent study by Homes for Working Families and Moody's Economy.com found that reduced home prices haven't come close to erasing "the negative effects of the housing market bubble" in metropolitan areas like San Diego County.

Tighter credit and higher unemployment are "largely offsetting any declines in the monthly debt service burden of being a homeowner," said Kathryn Murray St. John, a spokeswoman for Homes for Working Families, a nonprofit group dedicated to improving home affordability.

For many renters, the combination of a lagging economy and tighter credit means their prospects for home ownership are actually worse than before home prices began dropping, said Delores Conway, director of the Casden Real Estate Economics Forecast at the University of Southern California.

"What will ultimately restore affordability is if the credit crisis ends so we have loan availability," she said. "Right now the consumer is very stressed about high energy prices, high housing costs, whether they are renting or paying a mortgage."

Among renters who have benefited from the market downturn are Roy and Julie Blackman of Clairemont. The couple recently went into escrow on a single-family home.

Julie, 32, is a civil engineer. Roy, 39, is an irrigation technician. The couple moved to San Diego in 2002, when home prices were soaring. Since then they've been biding their time, waiting for prices to drop within their reach.

"We've been married 11 years," said Julie. "We've been renting the whole time. I wanted to stay in Clairemont where I grew up. We decided to hold out. When we saw things start to go down, we kept an eye out and waited for stuff to get below $400,000."

They recently found a 1,450-square-foot home near Clairemont Square that they purchased for $385,000. They paid 3 percent down with a loan insured by the Federal Housing Administration and another $10,000 in closing costs. Their monthly payments will be about $3,000. With two incomes and no children, it's within their means.

Although they had been looking at foreclosure homes, the home they chose wasn't a distressed sale. Built in 1957, it was in move-in condition, unlike many bank-owned properties they had visited.

"When we saw good paint on the walls and flooring it was like, `Wow, we can actually move into this house without re-doing it,'" Julie said.

While landlords have seen no great decline in renters because of lower home prices, there has been a small rise in vacancies. In a spring survey released last month, the San Diego County Apartment Association found that the average rent was $1,201, an increase of nearly 3 percent over the association's fall 2007 survey. At the same time, vacancies were up.

The study found a 4.8 percent vacancy rate countywide, an increase from the 3.4 percent reported in the fall poll.

Real Estate Overview by Popular Community

2010-03-05T14:26:00.000-08:00

Normally I give a general snapshot of the market by zip code. It is useful information and helps us see the big picture, however, sometimes it is interesting to see how the market is reacting in our own community.

So here are a few statistics in some of the more popular areas of East Chula Vista.

RANCHO DEL REY
The median sales price for homes in Rancho Del Rey, Chula Vista for Nov 09 to Jan 10 was $360,000 based on 59 sales. Compared to the same period one year ago, the median sales price increased 6.7%, or $22,500, and the number of sales increased 1.7%. Average price per square foot for Rancho Del Rey was $198, a decrease of 1.5% compared to the same period last year.

There are currently 40 resale and new homes in Chula Vista including 93 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Rancho Del Rey was $721,257 for the week ending Feb 24, which represents an increase of 4.2%, or $28,802, compared to the prior week.

EASTLAKE
The median sales price for homes in Eastlake, Chula Vista for Nov 09 to Jan 10 was $217,500 based on 58 sales. Compared to the same period one year ago, the median sales price increased 13.7%, or $26,250, and the number of sales decreased 33.3%. Average price per square foot for Eastlake was $184, an increase of 4.5% compared to the same period last year.

There are currently 16 resale and new homes in Chula Vista, including 80 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Eastlake was $318,735 for the week ending Feb 24, which represents an increase of 2.7%, or $8,485, compared to the prior week.

EASTLAKE GREENS
The median sales price for homes in Eastlake Greens, Chula Vista for Nov 09 to Jan 10 was $330,000 based on 70 sales. Compared to the same period one year ago, the median sales price increased 8.6%, or $26,250, and the number of sales decreased 4.1%. Average price per square foot for Eastlake Greens was $189, an increase of 3.8% compared to the same period last year.

There are currently 20 resale and new homes in Chula Vista, including 89 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Eastlake Greens was $397,968 for the week ending Feb 24, which represents an increase of 8.1%, or $29,665, compared to the prior week.

OTAY RANCH VILLAGES
The median sales price for homes in Otay Ranch Village, Chula Vista for Nov 09 to Jan 10 was $339,250 based on 106 sales. Compared to the same period one year ago, the median sales price increased 7.2%, or $22,750, and the number of sales decreased 26.4%. Average price per square foot for Otay Ranch Village was $178, an increase of 1.1% compared to the same period last year.

There are currently 51 resale and new homes in Chula Vista, including 154 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Otay Ranch Village was $317,656 for the week ending Feb 24, which represents a decrease of 0.1%, or $462, compared to the prior week.

THE WOODS
The median sales price for homes in Eastlake Woods, Chula Vista for Nov 09 to Jan 10 was $619,000 based on 16 sales. Compared to the same period one year ago, the median sales price decreased 3.7%, or $23,500, and the number of sales decreased 27.3%. Average price per square foot for Eastlake Woods was $179, an increase of 4.1% compared to the same period last year.

There are currently 13 resale and new homes in Chula Vista, including 22 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Eastlake Woods was $991,560 for the week ending Feb 24, which represents an increase of 3.3%, or $31,283, compared to the prior week.

SAN MIGUEL RANCH
The median sales price for homes in San Miguel Ranch, Chula Vista for Nov 09 to Jan 10 was $449,000 based on 53 sales. Compared to the same period one year ago, the median sales price increased 21.4%, or $79,007, and the number of sales increased 1.9%. Average price per square foot for San Miguel Ranch was $183, an increase of 7% compared to the same period last year.

There are currently 19 resale and new homes in Chula Vista, including 50 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in San Miguel Ranch was $401,723 for the week ending Feb 24, which represents a decrease of 4.3%, or $17,863, compared to the prior week.

McMillin Unveils "Millenia" and Introduces New Vision for the Future

2010-03-05T09:55:00.000-08:00

03.05.2010 – More than 200 elected officials, civic and business leaders from both sides of the U.S./Mexico border packed into Frida’s restaurant in eastern Chula Vista Wednesday night to learn of the plans for The Corky McMillin Companies' new town, designed to be the epicenter of the sprawling Otay Ranch community.

Chula Vista Mayor Cox, along with Scott McMillin, chairman of The Corky McMillin Companies, took turns addressing the enthusiastic crowd before dramatically unveiling the name Millenia to a warm round of applause.

The mayor began her remarks by putting the long planning process in context.

“For the last 20 years, McMillin and the city of Chula Vista have had an extraordinary partnership,” she explained.

Reflecting the clearly forward-looking spirit of the project, she continued, “McMillin has always built for the future, including creating jobs for our kids and our community.”

Scott McMillin elaborated on the ambitious goals Millenia embodies.

“This project is going to be the heart of eastern Chula Vista. We wanted to develop a project where you could do it all: live, work and play.”

Millenia is a 210-acre mixed-use community – roughly the same size as three Qualcomm Stadium footprints. McMillin describes it as a “smart, energy-efficient, pedestrian-oriented, well-planned community that fundamentally changes how neighborhoods are created and thrive.”

A hybrid of suburban and urban neighborhoods, Millenia will be the urban center of the award-winning 23,000-acre Otay Ranch community. It will include more than 3.4 million square feet of commercial space (office, civic and retail) and about 3,000 homes. The San Diego Association of Governments designated Millenia a Smart Growth Urban Center. Attention to practical, livable details throughout Millenia is unmistakable.

“We envisioned a dynamic and energetic community, that is safe and secure, accessible and optimistic,” explained Todd Galarneau, McMillin’s project manager. “Millenia will have a strong employment and civic component, and a variety of housing types in a series of compact, walkable districts.”

“What’s great,” exclaims Galarneau, “is that the entire community is woven together with parks, plazas, town squares, biking and walking paths that offer recreation, relaxation and socializing.”

Not only is foot travel enjoyable and convenient, but transit is too, by virtue of Millenia’s central location. Adjacent to the state Route 125 and on a planned express transit route, Millenia will link downtown San Diego with the international border.

“Millenia is a regional center as much as it is a neighborhood. It’s a new way of building community,” Galarneau added.

Millenia is pioneering the integration of LEED (Leadership in Energy and Environmental Design) standards and goals at a neighborhood design level, one that is less dependent on cars and more people friendly. One simple example: making walking easy and fun will get people out of their cars for community trips. Fewer drivers mean less air and water pollution. It’s so innovative, in fact, that the design is part of a national research project by the National Energy Research Center’s Center for Sustainable Communities, the U.S. Department of Energy and the California Energy Commission.

“Tonight is the story that the partnership between business organizations, the city and the community can create opportunity and a place that everyone has been dreaming about for the last twenty years,” McMillan said. “Because of the great community and the civic support, this project was possible.”

Founded in 1960 by Corky McMillin and now celebrating it’s 50th year, The Corky McMillin Companies has built more than 30,000 homes, 16 mixed-use master-planned communities, more than 20 community parks, college dormitories and 2,000 military residences on seven bases. The company is building in San Diego, Imperial Valley, Visalia and Bakersfield, California, as well as in San Antonio, Texas. The Corky McMillin Companies is also the company behind the redevelopment of Liberty Station, which was voted Base Redevelopment Community of the Year by the Association of Defense Communities. For additional information on the company, go to mcmillin.com or visit www.milleniasd.com for information on the project.

EXTRA EXTRA Read All About It!!!

2010-02-24T19:16:00.000-08:00

The McMillin Realty South County edition of DREAM HOMES Magazine March issue will be hitting newsstands soon.

Our feature home is a gorgeous, upgraded gem in Eastlake, but that's for you to check out yourself. It won't disappoint.

Our Chula Vista "highlights" this month are, the South Bay YMCA - Celebrating 50 Years this year; the Chula Vista Elementary School District; the Chula Vista Marina; and our gorgeous Otay Ranch Town Center.

It is McMillin Realty's mission to help educate all of San Diego County the tremendous benefits and amenities our city has to offer. We are no longer the sleepy little border town we once had the reputation of being. We have shopping, dining, schools, parks, golf, hospitals, marinas, country clubs, and it is all new and state of the art.

We are passionate about our community, it's people, and it's future.

At McMillin Realty, we don't just sell homes, we sell lifestlyes. South County Lifestyles - The very best San Diego has to offer!

- Posted using BlogPress from my iPhone

Dream Homes Cover Home - Sneak Preview!

2010-02-24T15:47:00.001-08:00

Realtors® Strive to Reduce Stress in Short Sale Transactions

2010-02-24T15:20:00.000-08:00

According to the most recent Realtors® Confidence Index, buyers continue to be discouraged with the extended short sale process, resulting in foreclosures that could have been prevented. New resources from the National Association of Realtors® aim to help Realtors® and consumers successfully navigate the short sale process to help more homeowners avoid foreclosure.

“Our members report that short sales are often riddled with delays and red tape,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “As the first, best source for real estate information, Realtors® are dedicated to help streamline and improve the short sale process for both buyers and sellers. NAR has worked tirelessly to provide Realtors® with the resources they need to navigate short sale transactions, as well as provide guidance on helpful government programs designed for homeowners facing the process.”

On April 5, 2010, the U.S. government will implement the Home Affordable Foreclosure Alternatives Program. Part of the Home Affordable Modification Program, HAFA helps homeowners who are unable to retain their home under HAMP by simplifying and streamlining the use of short sales and deeds-in-lieu of foreclosures. Homeowners must meet certain requirements to participate and incentive payments are provided to homeowners and servicers.

What's Happening in the Eastlake Real Estate Market

2010-02-22T12:38:00.000-08:00

February 19, 2010 Report

This week in Eastlake

The median single family home price in CHULA VISTA 91915 this week is $399,000.

The Market Action Index has been trending down lately, while inventory and days-on-market are climbing. The trends imply a weakening market.

PRICE
We continue to see prices in this zip code bouncing around this plateau. Look for a persistent up-shift in the Market Action Index before we see prices move from these levels.

INVENTORY
Inventory has been climbing lately with 121 properties available this week. Note that rising inventory alone does not signal a weakening market. Look to the Market Action Index to gauge whether buyer interest is keeping up with available supply.

MARKET ACTION INDEX
The CHULA VISTA 91915 market is currently in the 'Buyer's Market' zone (below 30), though not strongly so. The 90-day Market Action Index stands this week at 25 so buyers should expect find reasonable levels of selection.

DAYS ON MARKET
The properties have been on the market for an average of 125 days. Half of the listings have come newly on the market in the past 91 or so days. Watch the 90- day DOM trend for signals of a changing market.

McMillin Realty Earns Website Quality Certification

2010-02-16T09:54:00.000-08:00

- Designation signifies excellence in corporate website. -

CHULA VISTA, CA – February 16, 2010 – McMillin Realty has earned the Website Quality Certification (WQC), presented by Leading Real Estate Companies of the World® to member companies that have demonstrated excellence in website design, functionality and execution.

Every aspect of the site, www.mcmillinrealty.com, was reviewed to ensure exacting standards were met in eight key areas, ranging from design and content to human interactivity to search engine optimization. The WQC was introduced in 2009 to recognize and encourage superior websites among Leading Real Estate Companies of the World’s 600 member firms. McMillin Realty is one of 64 initial applicants to earn the designation.

“A real estate company’s website plays an increasingly significant role with today’s consumers, who often go there first when considering buying or selling a home. It is thus critical to use this Internet medium to attract and engage consumers in a meaningful way,” said Pam O’Connor, president/CEO of Leading Real Estate Companies of the World®.

For more information about McMillin Realty, please visit www.mcmillinrealty.com.

# # #

About McMillin Realty
McMillin Realty was started over 40 years ago by Corky McMillin with one mission in mind; to be the best real estate company in San Diego. We were built on principles that Corky stood behind; integrity, reputation, respect, knowledge of the industry and a desire to give his clients the best service possible. That mission stands just as strong today as it did 40 years ago. We take pride in our employees, sales people and work ethic. We value our clients and their families, just as we value our own.

McMillin Realty has 3 locations in South County to serve you. Visit our website to find an office, agent, a home, our real estate blog, community blog, updated market statistics or just see what else we have in store for you today.

About Leading Real Estate Companies of the World®
Leading Real Estate Companies of the World® (www.LeadingRE.com) is a global real estate network comprised of over 600 of the best-known local and regional real estate firms. With nearly 5,000 offices and 150,000 sales associates in the United States and 35 countries abroad, LeadingRE affiliates sell almost $300 billion in home sales, representing nearly one million transactions annually. The network has #1 marketshare in more of the top 88 U.S. markets than any national brand, representing a powerful force in American real estate.

December Existing-Home Sales Down but Prices Rise; 2009 Sales Up

2010-02-08T14:20:00.000-08:00

After a rising surge from September through November, existing-home sales fell as expected in December after first-time buyers rushed to complete sales before the original November deadline for the tax credit. However, prices rose from December 2008 and annual sales improved in 2009, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million units in December from 6.54 million in November, but remain 15.0 percent above the 4.74 million-unit level in December 2008.

For all of 2009 there were 5,156,000 existing-home sales, which was 4.9 percent higher than the 4,913,000 transactions recorded in 2008; it was the first annual sales gain since 2005.

Lawrence Yun, NAR chief economist, said there were no surprises in the data. “It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit,” he said. “We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit. By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010. However, the job market remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year.”

An NAR practitioner survey shows first-time buyers purchased 43 percent of homes in December, down from 51 percent in November. Repeat buyers rose to 42 percent of transactions in December from 37 percent in November; the remaining sales were to investors.

The national median existing-home price for all housing types was $178,300 in December, which is 1.5 percent higher than December 2008. “The median price rose because of an increased number of mid- to upper-priced homes in the sales mix,” Yun said. It was the first year-over-year gain in median price since August 2007.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said market conditions are challenging in some areas. “There’s a shortage of lower priced homes for sale in much of the country, resulting in multiple bids in some areas,” she said.

“Raw unsold inventory has been trending down. As the market heats up again this spring, buyers may need to be prepared to move quickly on a particular home – the best advice is to begin working with a Realtor® now to be able to use the tax credit and benefit from the increased buying power in the current market,” Golder said.

Total housing inventory at the end of December fell 6.6 percent to 3.29 million existing homes available for sale, which represents a 7.2-month supply at the current sales pace, up from a 6.5-month supply in November. Raw unsold inventory is 11.1 percent below a year ago, is at the lowest level since March 2006, and is 28.2 percent below the record of 4.58 million in July 2008.

Distressed homes, which accounted for 32 percent of sales last month, continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes in the same area. For all of 2009, the median price was $173,500, down 12.4 percent from $198,100 in 2008; distressed homes accounted for 36 percent of total sales last year.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.93 percent in December from 4.88 percent in November; the rate was 5.29 percent in December 2008.

Single-family home sales fell 16.8 percent to a seasonally adjusted annual rate of 4.79 million in December from a pace of 5.76 million in November, but are 12.7 percent above the 4.25 million level in December 2008. For all of 2009, single-family sales rose 5.0 percent to 4,566,000.

The median existing single-family home price was $177,500 in December, which is 1.4 percent above a year ago. For all last year, the single-family median was $173,200, down 11.9 percent from 2008.

Existing condominium and co-op sales fell 15.4 percent to a seasonally adjusted annual rate of 660,000 in December from 780,000 in November, but are 34.7 percent higher than the 490,000-unit pace a year ago. For all of 2009, condo sales rose 4.8 percent to 590,000 units.

The median existing condo price was $183,700 in December, up 1.0 percent from December 2008. For all of last year, the median condo price was $176,100, which is 16.1 percent below 2008.

Regionally, existing-home sales in the Northeast dropped 19.5 percent to an annual level of 910,000 in December but are 21.3 percent above a year ago. The median price in the Northeast was $241,700, up 3.2 percent from December 2008.

Existing-home sales in the Midwest fell 25.8 percent in December to a level of 1.15 million but are 8.5 percent higher than December 2008. The median price in the Midwest was $143,200, which is 1.8 percent above a year ago.

In the South, existing-home sales dropped 16.3 percent to an annual pace of 2.01 million in December but are 15.5 percent above December 2008. The median price in the South was $152,000, down 1.0 percent from a year ago.

Existing-home sales in the West declined 4.8 percent to an annual rate of 1.38 million in December but are 15.0 percent higher than a year ago. The median price in the West was $236,000, up 2.7 percent from December 2008.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

Chula Vista Market Trends

2010-02-03T15:25:00.000-08:00

The market is a moving target. So what is happening in your area? Here is a quick snap shot of the overall Chula Vista market.

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For more a market report in your neighborhood simply fill out the form below and you will be email a detailed market summary of your area.

You can also request detailed market summaries on any part of San Diego county from McMillin Realty's website at www.mcmillinrealty.com, or bookmark this blog, you can always find it on our side blog.

Real Estate in 2010 - The Short Sale

2010-01-26T12:17:00.000-08:00

This year in the real estate market we may find a different trend then the one we have grown so accustom to, an increase in short sales over foreclosures. Banks are less interested in owning property and more willing to work with owners. Lenders and sellers have been negotiating short sales, an extremely hot topic in today's real estate world.

What is a Short Sale?

A short sale occurs when a borrower can no longer afford to keep paying a mortgage and the amount owed on the property is more than the house is worth.

Why are Short Sales becoming easier now?

Traditionally short sales have been tedious and complicated. Short sales were lender specific, home value assessments were unrealistic, and both lenders and buyers frustrated with the process often walked away.

In May 2009, the Foreclosure Alternatives Program was announced by the Obama administration. This program is designed to streamline the short sale process and establish financial incentives for loan servicers, home sellers and second lien holders.

Previously, the short sale process was difficult to negotiate. Home sellers would often not hear back from lenders and there were no timelines in place to protect the rights of both parties involved in the sale. They were complicated to negotiate, navigate and close, and most agents avoided short sales completely. Many buyers pulled out of escrows due to lengthy escrows that never approved or closed. There was no continuity or process across the board. It was up to each individual bank and the negotiator handling the file.

Standardized documents such as short sale agreements and offer acceptance letters have helped streamline the short sale process. With standardized documentation, Realtors are more equipped with the knowledge of what paperwork a lender requires in order to approve a short sale.

According to realtor.org, a professional site for the education of Realtors, the HAFA (Home Affordable Foreclosure Alternatives) program will be in place by April 15 2010 to simplify the short sale process. Loan providers can begin following the guidelines early.

The HAFA program requires that all lenders have 30 days to contact the borrower requesting a short sale. Borrowers must respond to the lender within 14 days. All foreclosure proceedings are suspended during this time frame and the lender is unable to reduce commissions as written in the listing agreement.

Short sales are beneficial to the home seller because when a short sale is approved, the home seller will avoid foreclosure. Short sales are less detrimental to credit ratings and in the long run cost both the lender and borrower less money than foreclosure proceedings.

Prior to the HAFA program inception, no guidelines were in place to establish short sale negotiations, making the process complicated and time consuming. With HAFA in place, realtors are better equipped to deal with short sales and the process should begin to streamline in the near future.

Who can you call for help with your Short Sale?

McMillin Realty has trained and certified their agents through the National Association of Realtors Short Sale and Foreclosure training program and holds the designation of SFRs. McMillin's agents have a short sale guide book that has articles related to short sales: Short Sale Taxation issues, Credit Rating after a short sale, Deficiency Judgments, Deeds in Lieu of Foreclosure, a chart that compares loan modifications, short sales and foreclosure options. It is a great source of information for the seller. The company also employees a full-time short sale negotiator who works with the agents to get the short sales closed in a timely manner.

With East Chula Vista being one of the most impacted markets in short sales and foreclosures, McMillin Realty understand and has made it the company's mission to inform and educate the public of their rights and choices before losing their homes to foreclosure.

For more information of their services you can go to www.callscottforhelp.com or call 888-710-0500

Market Summary for Otay Ranch This Week

2010-01-20T13:08:00.000-08:00

The median sales price for homes in ZIP code 91913 in Chula Vista from Sep 09 to Nov 09 was $330,000 based on 388 sales. Compared to the same period one year ago, the median sales price increased 0.8%, or $2,500, and the number of sales decreased 4.9%. Average price per square foot for homes in 91913 was $175, a decrease of 2.2% compared to the same period last year.

There are currently 172 resale and new homes in ZIP code 91913 on Trulia, including 524 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in 91913 was $342,381 for the week ending Jan 13, which represents an increase of 4.2%, or $13,741, compared to the prior week. Popular ZIP codes in Chula Vista include 91913 and 91915, with average listing prices of $342,381 and $367,377.

91913,

The median sales price for homes in ZIP code 91913 for Sep 09 to Nov 09 was $330,000. This represents an increase of 3.4%, or $10,800, compared to the prior quarter and an increase of 0.8% compared to the prior year. Sales prices have depreciated 36.6% over the last 5 years in 91913, Chula Vista.

The median sales price of $330,000 for 91913 is 8.02% higher than the median sales price for Chula Vista CA. Average listing price for homes on Trulia in ZIP code 91913 was $342,381 for the week ending Jan 13, which represents an increase of 4.2%, or $13,741 compared to the prior week and an increase of 6.6%, or $21,279, compared to the week ending Dec 23. Average price per square foot for homes in 91913 was $175 in the most recent quarter, which is 0.57% higher than the average price per square foot for homes in Chula Vista.

91913,

DREAM Homes & McMillin Realty Bring South County to the World

2010-01-12T08:37:00.000-08:00

Yesterday the first edition of McMillin Realty's San Diego South County Edition of Dream Homes Magazine was published in the San Diego Edition of Dream Homes and in it's International Magazine, giving Chula Vista and it's surrounding communities worldwide exposure.

McMillin is proud of the city it has helped develop and support, and when the opportunity came to showcase our fine city in one of our industries top magazines, well, we jumped at the chance. We want the world to know what we already know. Chula Vista is the best place on earth to live!

Here is a copy of our first edition. We hope you enjoy it!

10 Hard-Hit Housing Markets That Are Ready to Rebound - US News and World Report

2010-01-11T08:04:00.001-08:00

10 Hard-Hit Housing Markets That Are Ready to Rebound - US News and World Report
After slumping, home prices in these 10 cities are expected to rise over the next three to five years

As the historic housing crash continues to hammer real estate prices from coast to coast, many homeowners probably can't remember the last time their property's value actually increased. But even with home prices still falling at the national level, a number of hard-hit housing markets are gearing up for a rebound. To pinpoint the cities most likely to go from slump to bump, we turned to Moody's Economy.com. Using S&P/Case-Shiller home price data, Moody's identified a handful of cities that took it on the chin during the crash—with property values dropping by more than 25 percent from peak to projected trough—but are expected to see strong home price appreciation in the relatively near future. Celia Chen, the senior director of housing economics at Moody's Economy.com, says home prices in many of these slump-to-bump cities became overvalued during the first half of the decade but have since fallen, or are in the process of falling, to extremely affordable levels. "That will encourage buyers back into the market and lift prices up," she says. Here is a look at 10 hard-hit housing markets that are ready for a rebound:

1. Tacoma, Wash.: With about 200,000 residents, Tacoma is the second-largest city in Washington's lovely Puget Sound region. The city's abundance of government jobs, bountiful outdoor activities, and proximity to Seattle—just 32 miles away—helped drive home prices higher during the first half of the decade. But as the national housing crash picked up steam, Tacoma saw its real estate market decline sharply. Home prices in Tacoma dropped 24 percent from their peaks through the first quarter of 2009. Still, Moody's Economy.com expects the market to bounce back strongly, with home prices increasing 22 percent by the first quarter of 2012 and 41 percent by the first quarter of 2014. David Graybill, president and chief executive of the Tacoma-Pierce County Chamber of Commerce, says the area's large military presence and diversified economy will help to support rising home prices going forward. "We also have one of the nation's busiest ports, the Port of Tacoma, which is an international deep-water port," Graybill says. "And although most international trade is down currently, the long-term outlook is good."

2. San Diego: Sunny San Diego was on the leading edge of the housing market's dramatic boom and bust. Residential real estate "prices started running up in San Diego faster than many other places in the nation," Chen says. But the market has since crashed, with home prices plummeting nearly 42 percent from their peaks through the first quarter of 2009. Still, San Diego's high-tech and hospitality industries will spark economic strength and rekindle home price appreciation in the coming years, Chen says. Moody's Economy.com projects home prices in San Diego will rise about 13 percent by the first quarter of 2012, and 25 percent by the first quarter of 2014. "Technology is really what will drive the economy once the recession is over," Chen says. "There are a lot of high value-added jobs that are in the metro area."

3. San Francisco: Home prices in this city are expected to bounce back solidly as well. Real estate values in San Francisco had fallen 29 percent from their peaks through the first quarter of 2009. Chen says that San Francisco will pull out of the recession sooner than most other parts of the nation, and she expects future job and population growth to support rising home values. "The types of jobs [in San Francisco] generally tend to be higher paid, and personal income growth is going to accelerate [there] quicker," Chen says. "Personal income growth really does drive home prices." Moody's Economy.com projects that home prices in San Francisco will rise about 12 percent by the first quarter of 2012 and 26 percent by the first quarter of 2014.

4. Memphis: Home prices in Memphis fell 23 percent from their peaks through the first quarter of 2009. John Moore, the president and chief executive of the Greater Memphis Chamber, says that the area's exposure to subprime loans—although limited to several specific areas—played a key role in this decline. More recently, however, foreclosures linked to subprime mortgages

have dropped, and investors have scooped up distressed properties at steep discounts, he says. In addition to its pleasant quality of life, Memphis's position as an important transportation hub will keep its economy humming and housing demand strong, Moore says. "We have the largest cargo airport in the world," he says. "We are the third-largest trucking corridor, fourth-largest inland port, and on top of that we are one of only three cities in the [United States] that is served by the five class-one railroads." In addition, Moore says that Memphis's low cost of living and strong healthcare system have made it a popular destination for retirees. Moody's Economy.com projects that home prices in Memphis will rise about 9 percent by the first quarter of 2012 and 24 percent by the first quarter of 2014.

5. Worcester, Mass.: Worcester, which has about 180,000 residents, saw its home prices fall by roughly 23 percent from their peaks through the first quarter of 2009. But Timothy Warren, CEO of the Warren Group, a New England real estate information and data provider, points to two key industries that can help drive home price appreciation. With a number of colleges and universities located there—such as the College of the Holy Cross and Clark University—higher education is an important component of Worcester's local economy. And its university-linked healthcare sector is another key provider of jobs. "Because of the medical schools, there are teaching hospitals out there as well and a lot of research that gets done," Warren says. Moody's Economy.com projects that home prices in Worcester will rise about 6 percent by the first quarter of 2012 and 21 percent by the first quarter of 2014.

6. Warren, Mich.: Like nearby Detroit, Warren's economy has been hammered by the auto industry's woes, Chen says. Home prices in Warren fell 37 percent from their peaks through the first quarter of 2009. But going forward, Moody's Economy.com projects that home prices in Warren will rise about 5 percent by the first quarter of 2012 and 21 percent by the first quarter of 2014. These rates of appreciation may look encouraging, but they aren't exactly what they seem, says Chen. Warren, like the rest of the country, will indeed see some job growth as the economy pulls out of the recession, she says. And home prices will eventually fall far enough to attract buyers. But Moody's projection for healthy home price appreciation says more about the depth of Warren's real estate decline than anything else, Chen says. "Because prices are going to pick up off of such a low base, even a small increase in the actual dollar value of homes will look like a very strong growth rate," Chen says. Warren's long-term economic outlook remains unfavorable, she adds.

7. Boston: Home prices in Boston fell 18 percent from their peaks through the first quarter of 2009. But Timothy Warren says the city's robust higher education and healthcare sectors should help support higher home prices in the future. In addition, "the financial services sector has been hit hard recently, but it is still a strength of the Boston area," he says. "They have been hit [harder] than other industries, but I think they will probably come back." Moody's Economy.com projects home prices in Boston will rise about 3 percent by the first quarter of 2012 and 18 percent by the first quarter of 2014.

8. Lansing, Mich.: Like Warren's, Lansing's economy is struggling. Home prices there fell 28 percent from their peaks through the first quarter of 2009. Moody's Economy.com projects that home prices in Lansing will rise about 2 percent by the first quarter of 2012 and 15 percent by the first quarter of 2014. However, these increases are largely attributable to the extremely low base that real estate prices will come off of, Chen says.

9. Chicago: Home prices in Chicago fell 28 percent from their peaks through the first quarter of 2009. But David Hanna, president of the Chicago Association of Realtors, says the city's diverse economy and pleasant quality of life can help drive property values higher in the future. "The city is clean [and] it's functional," Hanna says. "The last two decades of revitalization here has spread out not only through the city but into many of the other surrounding communities." Moody's Economy.com projects that home prices in Chicago will rise about 2 percent by the first quarter of 2012 and 16 percent by the first quarter of 2014.

10. Minneapolis: Home prices in Minneapolis fell 35 percent from their peaks through the first quarter of 2009. Moody's Economy.com projects home prices there will rise about 2 percent by the first quarter of 2012 and 16 percent by the first quarter of 2014.

Here's our list of the 10 hard-hit housing markets that are ready to bounce back:

Tacoma, Wash.: Home prices in Tacoma are projected to increase 22 percent by the first quarter of 2012 and 41 percent by the first quarter of 2014.
San Diego: Home prices in San Diego are projected to increase 13 percent by the first quarter of 2012 and 25 percent by the first quarter of 2014.
San Francisco: Home prices in San Francisco are projected to increase about 12 percent by the first quarter of 2012 and 26 percent by the first quarter of 2014.
Memphis: Home prices in Memphis are projected to increase about 9 percent by the first quarter of 2012 and 24 percent by the first quarter of 2014.
Worcester, Mass.: Home prices in Worcester are projected to increase about 6 percent by the first quarter of 2012 and 21 percent by the first quarter of 2014.
Warren, Mich.: Home prices in Warren are projected to increase about 5 percent by the first quarter of 2012 and 21 percent by the first quarter of 2014.
Boston: Home prices in Boston are projected to increase about 3 percent by the first quarter of 2012, and 18 percent by the first quarter of 2014.
Lansing, Mich.: Home prices in Lansing are projected to increase about 2 percent by the first quarter of 2012 and 15 percent by the first quarter of 2014.
Chicago: Home prices in Chicago are projected to increase about 2 percent by the first quarter of 2012 and 16 percent by the first quarter of 2014.
Minneapolis: Home prices in Minneapolis are projected to increase about 2 percent by the first quarter of 2012 and 16 percent by the first quarter of 2014.

The future is looking Green in Otay Ranch

2010-01-04T08:38:00.000-08:00

More to look forward to in Otay Ranch!

--The Eastern Urban Center is someday expected to be home to 7,500 in 3,000 residential units — 20 percent will be affordable units for seniors and assisted living — and the site of 10,000 jobs and 3.5 million square feet of office, retail and civic services. It will have a main street served by ground-floor retail outlets, an entertainment district, and housing and offices. The center will feature a firehouse and a two-story library taking up the first two floors of a five-story office building. Sprinkled in will be parks within a three-minute walk of residences, plazas, town squares, trails and bus rapid transit stops.-

It will take 20 years to build and its first phase will have to wait for the construction market to return.

And that’s not expected for another year or so, or possibly even three to five years.

But the 210-acre Eastern Urban Center, a planned $4 billion, mixed-use development intended to be the focal point of the Otay Ranch communities, was approved Sept. 15 by the city of Chula Vista.

When built out, it will provide a glimpse of how green urban development can produce a beautiful place to live, work and walk from place to place without having to get into a car.

The Eastern Urban Center is someday expected to be home to 7,500 in 3,000 residential units — 20 percent will be affordable units for seniors and assisted living — and the site of 10,000 jobs and 3.5 million square feet of office, retail and civic services. It will have a main street served by ground-floor retail outlets, an entertainment district, and housing and offices. The center will feature a firehouse and a two-story library taking up the first two floors of a five-story office building. Sprinkled in will be parks within a three-minute walk of residences, plazas, town squares, trails and bus rapid transit stops.

“It will be a regional destination,” said Todd Galarneau, project manager for its developer, The Corky McMillin Cos. “It’s a forward-thinking, sustainable design that brings the urban experience to Otay Ranch for the first time.”

The center’s proximity to Mexico is key, adds Galarneau. “There are a good number of buyers from Mexico,” for both permanent and vacation homes.

Green Features Galore

The project is now assembling applications for LEED Silver certification of environmental efficiency standards. That designation requires a pedestrian-friendly design, transit service and mixed housing/office development to reduce necessary car trips by 38 percent. Other green features of the project are the innovative processing of runoff water. Stormwater flowing off of buildings will be filtered through surrounding landscape and tree wells, says Galarneau. Those systems improve the quality of the runoff water, he said, and reduce the volume of water runoff into storm drains.

Nick Lee, the project’s sustainable development engineer, says the biggest challenge he faces is designing the project’s buildings to be green.

“You try to take a step back and see the economies of scale,” he said. Along with the runoff water systems mentioned by Galarneau, Lee says the project will cut typical water use with a pipe system of reclaimed water from the Otay Water District. That water, which is filtered, but not intended for consumption, will also irrigate street trees and public landscaping.

Electrical service for buildings will be designed to plug into a future “smart grid,” which allows utility customers to have wireless meter reading and a real-time look at electricity usage. The idea, says Lee, is to show customers when they are using high volumes of power and encourage them to turn off appliances to cut usage and costs. Other energy efficiencies planned for buildings include use of windows for lighting, solar energy options and insulation.

Nate Cherry, an architect with the Los Angeles office of RTKL Associates Inc., is the lead building designer for the project. He says the goal of the design is to create a mixed-use project that connects all the neighborhoods around the site as much as possible, since they were built as a series of separate, unconnected developments.

Cherry also placed the commercial hub of the project at the north end. He planned the “very important transit connection” there. For the project’s housing he put in blocks of dense housing clusters. He included design features often seen in Southern California and San Diego architecture.

“There’s use of indigenous styles so it feels like a friendly, familiar place,” said Cherry, noting the use of a lot of plaster and clay tiles for building materials, trellises, indoor and outdoor terracing, and balconies that look down onto public squares and awnings.

Variation Of Similar Theme

Gary Halbert, the city of Chula Vista’s deputy city manager and development services director, says the Eastern Urban Center is often compared to University Towne Center in San Diego.

“Frankly, I don’t think that’s a real good comparison,” said Halbert. “The Eastern Urban Center will be a high-density, mixed-use of office, hotel and residential. It will be a walkable community. Bus rapid transit will literally go right into the heart of the community. To come out of the ground with bus rapid transit feeding it from day one will be a wonderful thing.”

This project is unusual, he says, because it won entitlement approvals first, before any construction drawings were submitted for approval. He figures those will take another year to draw up.

Looking ahead, Halbert sees the tough conditions in the building market to continue for some time.

“Somewhere in the three- to five-year time frame is when I’d expect to see first-phase construction,” he says.

Eastern Urban Center

View more documents from The Corky McMillin Companies.

Mark Larson is a freelance writer for the Business Journal.

Worried About Foreclosure?

2009-12-17T08:29:00.000-08:00

Talk to a McMillin Realty Short Sale Specialist.

Take advantage of our FREE, NO-OBLIGATION consultation.

You don't need to pay for advice on your home needs, we can help. Do you have questions like, "What is a loan modification?, What is a short sale?, What is a deed in lieu of foreclosure?, What is forbearance?, What ARE the credit benefits of doing a short sale vs. foreclosure?"

McMillin Realty can help you. Call us today. 888-710-0050

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McMillin Realty To Spotlight Chula Vista In Dream Homes Magazine

2009-12-11T15:57:00.000-08:00

For those of us that live and work in Chula Vista, we already know the amazing city we are fortunate enough to call home. Our homes are new and beautiful, our schools are state-of-the-art and California distinguished, our dining and shopping are growing and our community has been built with great attention to detail in the master plan. However, for those that do not travel down the South County path, Chula Vista is to them just another sleepy, old, border town, with run down homes, old schools, and abandoned shopping centers. They couldn't be more wrong.

McMillin Realty, with its commitment to community, will embark on an effort to showcase Chula Vista, and all of its gorgeous assets to the county, the state, the country, in collaboration with Dream Homes Magazine. "We want everyone else to know what we already know, South County is a great place to live. We have the same great amenities as Rancho Bernardo or Carlsbad, with two exceptions; our prices are better and we are closer to Downtown San Diego." says Director of Marketing, Liz Klaser. "I think the public will be amazed when they see what we have to offer down here, and what your money actually buys you as compared to other parts of the county."

The first issue is expected to hit newsstands in January.

McMillin Realty has been serving San Diego real estate for over 40 years.

Figuring Out What You Can Afford

2009-12-11T15:09:00.000-08:00

In addition to your monthly mortgage payments, there are many things to factor in when determining how much you can afford, or even if you can afford to buy a home at all. There is a down payment for the loan, closing costs, moving expenses, plus purchases and maintenance for the new home. Generally, your annual gross income multiplied by 2.5 will give you an approximate amount for the price of home you can afford. It could vary depending on how much you have as a down payment, your debts, financial situation, and credit history/rating. Your debts, including alimony and child support, should not be more than 30 to 40% of your gross income.

Monthly Mortgage Payment
Lenders want to make sure you have the ability to pay your loan. As a general rule of thumb, you can figure that your monthly mortgage payment should be equal to or less than 25% of your gross monthly income. This also will vary depending on circumstances.

Amount of Money Needed
You will need money for a down payment and closing costs, plus any move related expenses and maintenance or repair costs for your home.

» Down Payment – Your down payment is a percentage of the property value and is usually from 3 to 20%, or more if you want a lower loan amount. This can vary by the type of mortgage you obtain. Also, if your down payment is less than 20%, you may be required to pay mortgage insurance (PMI or MI).

» Closing Costs – these are settlement costs involved in purchasing your home. They range from 2 to 7% of the property value and include such things as points (a percentage paid for securing a particular interest rate), financing fees, taxes, title insurance, pre-paid and escrow items, and your down payment. You will receive an estimate of these costs prior to closing.

McMillin Realty | We Serve San Diego: San Diego Real Estate|Chula Vista Real Estate|Point Loma Real Estate|Eastlake Real Estate|Otay Ranch Real Estate|Downtown San Diego Real Estate|Carlsbad Real Estate|Rancho Bernardo Real Estate|4S Ranch Real Estate|Bonita Real Estate|La Jolla Real Estate|Imperial Beach Real Estate|Coronado Real Estate|Clairemont Real Estate|Pacific Beach Real Estate

Southland home sales up again, drop in median price smallest in 2 years

2009-12-04T15:57:00.000-08:00

La Jolla, CA---Southern California home sales rose in October as prices showed more signs of firming. The median sale price fell by the smallest amount in two years, the result of a shrinking inventory of homes for sale and government and industry efforts to stoke demand and curtail foreclosures, a real estate information service reported.

Two counties – Orange and San Diego – posted modest year-over-year increases in their overall median sale price last month. It was the second consecutive gain for Orange County and the first in more than three years for San Diego. Both counties also posted small annual gains the past two months in their median price paid for resale single-family detached houses.

Last month 22,132 new and resale houses and condos closed escrow in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. That was up 2.8 percent from 21,539 in September and also up 2.8 percent from 21,532 a year earlier, according to MDA DataQuick of San Diego.

October marked the 16th month in a row with a year-over-year sales gain, although last month’s was the smallest of those increases. The 2.8 percent uptick in October sales from September wasn’t unusual, given sales have increased between those two months in half of the years – including 2007 and 2008 – since 1988, when DataQuick’s statistics begin. The average change between September and October is a decline of just under 1 percent.

Last month’s sales were the highest for an October since 2006, when 23,745 sold, but were still 9.5 percent lower than the historical October average of 24,458 sales. Since 1988, October sales have ranged from a low of 12,913 in October 2007 to a high of 37,642 in October 2003.

Sales increases over the last two months can be partially attributed to the recent increase in short sales, which take longer to close escrow. The result is that some summer deals that might normally have closed earlier instead closed in September and October.

Other factors driving home sales higher of late: A rush by some to take advantage of the federal tax credit for first-time buyers, which was initially set to expire at the end of this month but was recently extended and expanded. Also, mortgage rates remain extremely attractive and, combined with home price declines, have boosted housing affordability.

A critical financing source for first-time buyers purchasing lower-cost homes, especially foreclosures, has been the federally-insured FHA loan. FHA mortgages accounted for 38.3 percent of all Southland purchase loans last month, compared with 32.5 percent a year ago and just 2 percent two years ago. FHA’s share of purchase loans varied last month from 26.2 percent in Orange County to 49.2 percent in Riverside County. They offer down payments as low as 3.5 percent and relatively lenient qualifying standards.

“The government is playing a huge role in stabilizing and, to some extent, reinvigorating the housing market,” said John Walsh, MDA DataQuick president. “Its actions have triggered ultra-low mortgage rates, plentiful low-down-payment (FHA) financing, an extended and expanded tax credit for home buyers, and programs and political pressure aimed at reducing foreclosures.”

“The real question now is how well can the market perform next year as some of the government stimulus disappears,” he continued. “The more upbeat outlooks suggest a strengthening economy and job market will help pick up the slack, and that demand for lower-cost foreclosures will remain robust. The more negative forecasts assume, among other things, a much slower economic recovery, more foreclosures than the market can readily digest, and more turbulence in the credit markets.”

The latter outlook suggests today’s market stability is contrived and will prove short-lived – nothing more than a temporary price plateau – while the former suggests home prices are currently at or near bottom.

In October, the median price paid for a Southland home was $280,000, up 1.8 percent from $275,000 in September but down 6.7 percent from $300,000 in October 2008. It was the median’s smallest annual decline for any month since September 2007, when the median fell 4 percent from a year earlier. September 2007 – one month after the current credit crunch hit – marked the beginning of a 26-month streak of year-over-year declines in the median price.

The region’s overall median sale price has risen or held steady on a month-to-month basis ever since it dropped to a more-than 7-year low of $247,000 in April. Last month the median was 44.6 percent lower than the peak $505,000 median reached during several months in early and mid 2007.

Orange County logged a 3.9 percent annual gain in its overall median last month and a 1.9 percent increase in its resale single-family house median. San Diego County saw a 0.5 percent annual increase in its overall median price and a 2.9 percent gain in its median for resale houses.

Another price gauge analysts watch, the median paid per square foot for resale single-family houses, has risen or held steady for the past six months. In October it was $170 for the six-county area, the same as in September but 9.5 percent lower than a year earlier. The figure hit a low this year of $147 in April.

Recent month-to-month and year-over-year gains in the median sale price reflect, in large part, a shift of late toward foreclosures representing a lower percentage of sales. It’s mainly the result of lenders and loan servicers increasingly steering distressed borrowers into either an attempted short sale or loan modification. This reduction in foreclosures is key because over the past two years foreclosed properties were often the most aggressively priced on the market.

Last month, foreclosure resales – houses and condos sold in October that had been foreclosed on in the prior 12 months – made up 40.6 percent of all Southland resales. That was up insignificantly from 40.4 percent in September and down from a high of 56.7 percent in February this year.

As sales of lower-cost foreclosures began to wane earlier this year, sales in higher-cost neighborhoods picked up. High-end homes began to account for a greater share of all sales and helped reverse the steep slide in the median price. Over the past few months, however, the high-end’s share of total sales has flattened out.

In October, sales of homes priced $500,000 and above fell to 18.5 percent of all sales, up from a low this year in April of 13.4 percent but down from 20.2 percent in September and 19.6 percent a year earlier. In October 2007, $500,000-plus sales were 41.1 percent of all sales.

Availability of financing for pricier homes appeared to improve in recent months, but the “jumbo” loans that many high-end buyers require remain relatively expensive and difficult to obtain.

Mortgages above $417,000 – formerly the definition of a jumbo loan – made up nearly 40 percent of purchases before the August 2007 credit crunch hit. Last month they accounted for 15.1 percent, the same as in September but up from 13.3 percent a year ago and a 2009 low of 9.3 percent in January.

MDA DataQuick is a division of MDA Lending Solutions, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.

The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,196 last month, up from $1,189 for September, and down from $1,470 in October a year ago. Adjusted for inflation, current payments were 46.0 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They were 55.8 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to move in different directions. Foreclosure activity remains high by historical standards, although mortgage default notices have flattened out or trended lower in many areas lately. Financing with multiple mortgages is low, down payment sizes are stable, and non-owner occupied buying is above-average in some markets, MDA DataQuick reported.

Source: DQNews.com Media calls: Andrew LePage (916) 456-7157 or John Karevoll (909) 867-9534

McMillin Relocation can help you move to, from and around California

2009-12-04T15:31:00.000-08:00

Providing services for Corporations and Individuals, we take the stress out of finding the right neighborhood and the right home for your family.

McMillin Relocation is a member of Leading Real Estate Companies of the World^® the country's largest network of leading independent residential real estate firms. This gives our clients relocation services across the United States and nearly 700 firms with 5,500 offices and 170,000 associates in 38 counties.

RELOHomeSearch.com is a community research tool that you can use to find information about cities, neighborhoods, zip code areas, etc. To recieve an instant cost-of-living analysis, be able to research home sale and other community statistics, and find relevant properties for sale listed by our members. Once you click on a member property listing, logo, or company name link, you are taken directly to our members' websites where you can view full-market coverage.If you're moving to a new area, you need a qualified real estate agent in your destination city. Our agents live and work in the neighborhoods they serve, and they're closely involved in their communities. They know about available homes, neighborhood characteristics, schools, shopping, traffic patterns and social activities – all the information a new neighbor would need.

McMillin Realty was started over 40 years ago by Corky McMillin with one mission in mind; to be the best real estate company in San Diego. We were built on principles that Corky stood behind; integrity, reputation, respect, knowledge of the industry and a desire to give his clients the best service possible. That mission stands just as strong today as it did 40 years ago. We take pride in our employees, sales people and work ethic. We value our clients and their families, just as we value our own.

Biggest Losers: 20 Home Design Features That Send Buyers Running

2009-12-03T12:31:00.000-08:00

Design glitches draw attention away from a home’s best features. Don’t let out-of-date fixtures and unappealing decor cost you a sale. While some buyers may actually appreciate “vintage” features, home and design experts say these 20 features almost always serve as a turnoff.

1. Dated and excessively bold or dark paint and tile colors, such as “Pepto Bismol” pink, avocado green, deep plum, or jet black. “Dark can be cool, but it has to be a color that’s popular today,” says sales associate Gloria Holland, of McMillin Realty in Chula Vista.

2. Lacquered or high-gloss painted walls that are expensive to repaint and show all defects. Likewise, faux- and sponge-painted walls can be so passe.

3. Painted trim that’s very dark-and costly to remove.

4. Wallpaper, which is a lot of work (and potentially expensive) to remove. Most disliked: Dated flowered or striped patterns.

5. Kitchens that lack any dining space. Also, outdated, small-scale, and dirty kitchen appliances that look like they won’t perform.

6. Worn, cracked laminate countertops, and backsplashes or plastic cultured marble.

7. Outdated bathrooms with small sinks, short toilets, squatty bathtubs, and tight showers-all of which aren’t conducive to unwinding after a long day’s work, says Ames.

8. Lack of ample closet space in bedrooms, or no closet at all and no place to build one or add an armoire.

9. Dens, libraries, and family rooms without built-in bookcases or a space to include shelves.

10. Stained and worn wall-to-wall carpet in rooms or on stairs. Worst choice: shag. Also, worn linoleum that suggests a house was never updated.

11. Poorly built additions that don’t blend with a home’s architecture, such as a sunroom with tinted glass.

12. Shortage of windows or very small windows, which makes a home feels dark and gloomy.

13. Ceilings with so many recessed lighting spots that they resemble Swiss cheese and are expensive to remove. Worst offenders: big 6-inch diameter lights.

14. Too many rooms outside the kitchen and bathroom that have cold ceramic tiled floors.

15. Children’s bedrooms with a theme that runs through the carpeting, wallpaper, murals, ceilings, light fixtures, curtains, and furnishings.

16. Homes without a foyer or garage.

17. Too many mirrored walls, ceilings, doors, and backsplashes in a single room. The effect is dizzying, Ames says. One mirror magnifies, but many cheapen the look.

18. Skimpy molding and trim, such as 1-inch baseboards.

19. Noisy, grinding fan in a bathroom that’s attached to a light switch so it can’t be turned off.

20. Inexpensive gold-colored light fixtures in any room. Also, Hollywood-style lighting with huge bulbs in a bathroom is also out of date, design experts say.

7 Smart Strategies for Remodeling Your Kitchen

2009-12-02T11:30:00.000-08:00

When planning a kitchen remodeling project, keep the same footprint, add storage, and design adequate lighting to preserve value and keep costs on track.

If you’re contemplating a kitchen remodel, you’re also weighing a considerable investment. But a significant portion of the upfront costs may be recovered by the value the project brings to your home. Kitchen remodels in the $50,000 range recouped 76% of the initial project cost at the home’s resale, according to recent data from Remodeling magazine’s Cost vs. Value Report. To make sure you maximize your return, consider these seven smart kitchen remodeling strategies.

1. Establish your priorities

Simple enough? Not so fast. The National Kitchen and Bath Association (NKBA) recommends spending at least six months planning before beginning the work. That way, you can thoroughly evaluate your priorities and won’t be tempted to change your mind during construction. Contractors often have clauses in their contracts that specify additional costs for amendments to original plans. Planning points to consider include:

Avoid traffic jams. A walkway through the kitchen should be at least 36 inches wide, according to the NKBA. Work aisles for one cook should be a minimum of 42 inches wide and at least 48 inches wide for households with multiple cooks.
Consider children. Avoid sharp, square corners on countertops, and make sure microwave ovens are installed at the heights recommended by the NKBA—3 inches below the shoulder of the principle user but not more than 54 inches from the floor.
Access to the outside. If you want to easily reach entertaining areas, such as a deck or a patio, factor a new exterior door into your plans.

Because planning a kitchen is complex, consider hiring a professional designer. A pro can help make style decisions and foresee potential problems, so you can avoid costly mistakes. In addition, a pro makes sure contractors and installers are sequenced properly so that workflow is cost-effective. Expect fees around $50 to $150 per hour, or 5% to 15% of the total cost of the project.

2. Keep the same footprint

No matter the size and scope of your planned kitchen, you can save major expense by not rearranging walls, and by locating any new plumbing fixtures near existing plumbing pipes. Not only will you save on demolition and reconstruction, you’ll greatly reduce the amount of dust and debris your project generates.

3. Match appliances to your skill level

A six-burner commercial-grade range and luxury-brand refrigerator might make eye-catching centerpieces, but be sure they fit your lifestyle, says Molly Erin McCabe, owner of A Kitchen That Works design firm in Bainbridge Island, Wash. “It’s probably the part of a kitchen project where people tend to overspend the most.”

The high price is only worth the investment if you’re an exceptional cook. Otherwise, save thousands with trusted brands that receive high marks at consumer review websites, like www.ePinions.com and www.amazon.com, and resources such as Consumer Reports.

4. Create a well-designed lighting scheme

Some guidelines:

Install task lighting, such as recessed or track lights, over sinks and food prep areas; assign at least two fixtures per task to eliminate shadows. Under-cabinet lights illuminate clean-up and are great for reading cookbooks. Pendant lights over counters bring the light source close to work surfaces.

Ambient lighting includes flush-mounted ceiling fixtures, wall sconces, and track lights. Consider dimmer switches with ambient lighting to control intensity and mood.

5. Focus on durability

“People are putting more emphasis on functionality and durability in the kitchen,” says McCabe. That may mean resisting bargain prices and focusing on products that combine low-maintenance with long warranty periods. “Solid-surface countertops [Corian, Silestone] are a perfect example,” adds McCabe. “They may cost a little more, but they’re going to look as good in 10 years as they did the day they were installed.”

If you’re not planning to stay in your house that long, products with substantial warranties can become a selling point. “Individual upgrades don’t necessarily give you a 100% return,” says Frank Gregoire, a real estate appraiser in St. Petersburg, Fla. “But they can give you an edge when it comes time to market your home for sale” if other for-sale homes have similar features.

6. Add storage, not space

To add storage without bumping out walls:

Specify upper cabinets that reach the ceiling. They may cost a bit more, but you’ll gain valuable storage space. In addition, you won’t have to worry about dusting the tops.

Hang it up. Install small shelving units on unused wall areas, and add narrow spice racks and shelves on the insides of cabinet doors. Use a ceiling-mounted pot rack to keep bulkier pots and pans from cluttering cabinets. Add hooks to the backs of closet doors for aprons, brooms, and mops.

7. Communicate effectively—and often

Having a good rapport with your project manager or construction team is essential for staying on budget. “Poor communication is a leading cause of kitchen projects going sour,” says McCabe. To keep the sweetness in your project:

Drop by the project during work hours as often as possible. Your presence assures subcontractors and other workers of your commitment to getting good results.
Establish a communication routine. Hang a message board on-site where you and the project manager can leave each other daily communiques. Give your email address and cell phone number to subs and team leaders.
Set house rules. Be clear about smoking, boom box noise levels, which bathroom is available, and where workers should park their vehicles.

Consumers spend more money on kitchen remodeling than any other home improvement project, according to the Home Improvement Research Institute, and with good reason. They’re the hub of home life, and a source of pride. With a little strategizing, you can ensure your new kitchen gives you years of satisfaction.

John Riha has written six books on home improvement and hundreds of articles on home-related topics. He’s been a residential builder, the editorial director of the Black & Decker Home Improvement Library, and the executive editor of Better Homes and Gardens magazine. His standard 1968 suburban house has been an ongoing source of maintenance experience.

Why Use a REALTOR®

2009-12-02T11:20:00.000-08:00

Many consumers consider selling their home directly but eventually turn to REALTORS®. Smart home sellers realize they need the expertise in pricing their home, making connections with REALTORS® working with buyers, arranging and staffing open houses, and coordinating with other professionals in the sales process.

Only about half of all real estate agents are REALTORS® - the top half, in our not-so-humble opinion. REALTORS® work independently, for small agencies, or for large brokerages. They help people buy and sell residential or commercial properties, vacation homes, and land; they conduct appraisals; they operate in the United States and in other countries; some specialize in auctions; and others are buyer's representatives.

REALTORS® Are Experts

Eighty-five percent of sellers were assisted by a real estate agent when selling their home, according to NAR Research, and 79 percent of buyers purchased their home through a real estate agent or broker.

Why Use a REALTOR®?
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Here are 12 ways a REALTOR® will make your home buying or selling experience better.

1. Your REALTOR® can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.

2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.

3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.

6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.

7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.

8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.

10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

11. Your REALTOR® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

FSBO Woes: Why It's So Hard to Sell Your Own Home

2009-11-30T16:06:00.000-08:00

For most people, a for-sale-by-owner transaction simply isn't in the cards

Granted, some people are able to sell their own homes without the services of a real estate agent. Some of these successful do-it-yourselfers are very experienced home sellers. Others are transferring ownership of their home to a child, a coworker or a tenant who's already living in the home. These circumstances are the exception, not the norm, however. For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards. Here are five reasons why.

1. FSBOs can't list their home in the MLS. FSBOs aren't permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. FSBOs are also locked out of many home search engines and Web sites, including the gigantic Realtor.com. Sure, a determined FSBO can put a for-sale sign in his or her front yard and run a tiny advertisement in the local newspaper, but the home won't receive nearly as much exposure as it would through the MLS.

2. Agents won't show FSBO homes. In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there's no guarantee that the buyer's agent will be compensated for his or her services, unless the buyer has signed a buyer's brokerage agreement that specifically provides for such compensation. Even if a FSBO offers to pay the buyer's side of the commission, most agents won't want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects.

3. FSBOs usually overprice their home. Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they're wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home's buyer appeal. Overpricing a for-sale home is a sure way to deter potential buyers.

4. Buyers will feel intimidated. Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they'll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they'll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer.

5. FSBOs are likely to stumble into legal trouble. Real estate transactions are fraught with potential liability for unwary sellers, particularly in states that have extensive disclosure requirements (such as California). A FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes.

McMillin Realty has dedicated, professionals that work and live in South County. They are experts in your market. When thinking about selling your home, contact the neighborhood leader in real estate - www.mcmillinrealty.com

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Existing-Home Sales Record Another Big Gain, Inventories Continue to Shrink

2009-11-25T11:15:00.000-08:00

Now is the time to SELL!!!

Washington, November 23, 2009

Driven by the first-time buyer tax credit, existing-home sales showed another big gain in October with a strong uptrend established over the past seven months, while inventories continue to decline, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – surged 10.1 percent to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5 percent above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

Lawrence Yun, NAR chief economist, was surprised at the size of the gain. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” he said. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.”

Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. “There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13 percent of successful first-time buyers had a previous contract that was cancelled or fell through – there likely are many more buyers who were attempting to purchase but simply ran out of time,” Yun said.

Historically low interest rates also are boosting the market. “Mortgage interest rates last month were the third lowest on record dating back to 1971,” Yun noted. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95 percent in October from 5.06 percent in September; the rate was 6.20 percent in October 2008. Last week, Freddie Mac reporter the 30-year rate dropped to 4.83 percent.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said strong demand by first-time buyers is creating some unusual conditions. “In parts of the country, especially in Southwestern states but also in Florida and suburban Washington, D.C., we’ve been getting many reports of multiple bids in the lower price ranges with foreclosed properties getting absorbed quickly,” she said.

“In fact, low-end inventory has become very tight in many areas and in some cases buyers are becoming more aggressive. In this kind of environment it’s important to work with a Realtor® who can walk you through the process and help you negotiate a satisfactory deal,” Golder said.

Total housing inventory at the end of October fell 3.7 percent to 3.57 million existing homes available for sale, which represents a 7.0-month supply at the current sales pace, down from an 8.0-month supply in September. Unsold inventory totals are 14.9 percent below a year ago.

“The supply of homes on the market is now at the lowest level in over two-and-a half years – we’re getting closer to a general balance between buyers and sellers,” Yun said. The last time the relative housing inventory was this low was in February 2007 when it also was at a 7.0-month supply.

What does this mean to you? If you are on the fence about selling your home, NOW IS THE TIME!!! Buyers are out there, inventory is low, it is a seller's market! Call a McMillin Realty associate today! They are experienced in this type of market and in your community. Know one knows better - www.mcmillinrealty.com McMillin Realty also has a fully staffed Short Sale department to assist you if you are in need. www.CallScottForHelp.com

source of information: Realtor.org (National Association of Realtors)

The Best iPhone Real Estate App

2009-11-25T10:55:00.000-08:00

Everything great about the iPhone comes alive with the Trulia app. Use your iPhone to search all homes for sale near you, find nearby open houses after Sunday brunch, or daydream about your favorite beachfront getaway. Scroll through the color photos or see results on a local map. See full property details and then get directions from Google. It's just that easy and it's free! It works great on the iPhone 3G, the original iPhone and the iPod touch. Your home buying experience will never be the same.

Find homes for sale near you

Automatically find homes for sale near you.

• iPhone knows your location and finds the homes near you
• See the property highlights in the search results
• Edit your search and filter the homes directly from the results screen

Get the details for every property

You get all the important details that you need.

• See a color photo and read the full description
• Get the Open House times and dates
• See the property on a full screen map

Other cool features

Other features include.

• Flip through the properties on an interactive map
• Get driving directions from Google maps
• Save the properties you’re interested in to your iPhone

Demo Video

Buying a Home 101 part 3

2009-11-23T14:05:00.000-08:00

Getting the money right

For most people, buying a house involves a double financial whammy.

First you have to assemble a pile of cash for the down payment and closing costs. Then you must convince a bank to lend you an even more staggering sum - generally 80 percent or more of the purchase price.

So your first step, even before you start the actual hunt for a property, should be to get your financial house in order.

Start with your credit

Credit reports are kept by the three major credit agencies, Experian, Equifax, and TransUnion. Among other things, they show whether you are habitually late with payments and whether you have run into serious credit problems in the past.

A credit score is a number calculated from a formula created by Fair Isaac based on the information in your credit report. You have three different credit scores, one for each of your credit reports.

A low credit score may hurt your chances for getting the best interest rate, or getting financing at all. So get a copy of your reports and know your credit scores. Try Fair Isaac's MyFICO.com, which charges $15.95 each for reports and scores from Equifax and TransUnion. Experian scores and reports can be accessed from experian.com and cost $15.

Errors are not uncommon. If you find any, you must contact the agencies directly to correct them, which can take two or three months to resolve. If the report is accurate but shows past problems, be prepared to explain them to a loan officer.

Know what you can afford

Next, you need to determine how much house you can afford. You can start with one of the Web's many calculators. For a more accurate figure, ask to be pre-approved by a lender, who will look at your income, debt and credit to determine the kind of loan that's in your league.

The rule of thumb here is to aim for a home that costs about two-and-a-half times your gross annual salary. If you have significant credit card debt or other financial obligations like alimony or even an expensive hobby, then you may need to set your sights lower.

Another rule of thumb: All your monthly home payments should not exceed 36 percent of your gross monthly income.

The size of your down payment will also determine how much you can afford.

Line up cash

If you haven't already, you'll need to come up with cash for your down payment and closing costs. Lenders like to see 20 percent of the home's price as a down payment. If you can put down more than that, the lender may be willing to approve a larger loan. If you have less, you'll need to find loans that can accommodate you.

Various private and public agencies - including Fannie Mae, Freddie Mac, the Federal Housing Administration, and the Department of Veterans Affairs - provide low down payment mortgages through banks and mortgage companies. If you qualify, it's possible to pay as little as 3 percent up front. For more, check out their Web sites at Fanniemae.com or Freddiemac.com.

A warning: With a down payment under 20 percent, you will probably wind up having to pay for private mortgage insurance, a safety net protecting the bank in case you fail to make payments. PMI adds about 0.5 percent of the total loan amount to your mortgage payments for the year. So if you finance $200,000, your PMI will cost $1,000 annually.

Once you've considered the down payment, make sure you've got enough to cover fees and closing costs. These may include the appraisal fee, loan fees, attorney's fees, inspection fees, and the cost of a title search. They can easily add up to more than $10,000 - and often run to 5 percent of the mortgage amount.

If your available cash doesn't cover your needs, you have several options. First-time homebuyers can withdraw up to $10,000 without penalty from an Individual Retirement Account, if you have one, though you must pay taxes on the amount. You can also receive a cash gift of up to $13,000 a year (the limit for 2009) from each of your parents without triggering a gift tax.

Gift taxes are paid by the donor, not the recipient. (In fact, if your and your spouse's parents are both well-heeled, they can give you a total of $104,000 in one year - $13,000 from each of the four parents to each of you.)

Check on whether your employer can help; some big companies will chip in on the down payment or help you get a low-interest loan from selected lenders. You can also tap a 401(k) or similar retirement plan for a loan from yourself.

Buying a Home 101 part 2

2009-11-23T13:55:00.000-08:00

Are you ready to own?

Home ownership means you no longer pay monthly rent for the roof over your head. You can do what you want with your house (within reason). When you leave, you can sell it to recoup the purchase price and - with any luck - earn a profit too.

But don't kid yourself. Home ownership comes with a slew of disadvantages, responsibilities, and downright headaches.

So before going any further, consider whether your lifestyle and finances make home buying a smart move.

TIP: High costs mean you should be prepared to stay put. Except in a roaring real estate market, it usually doesn't make sense to buy a home you'll own for less than three or four years. Reason: the high transaction cost of buying and selling property means you could lose money on the deal. If you do make money, you'll pay capital gains taxes if you're in the house less than two years.

When home prices are falling, it just makes the case against buying even stronger. So ask yourself if you can really stay put for that long. Will you need to move because you are transferred by your current employer or a new one? Are you thinking of going back to school?

TIP: It may make more sense to rent On the financial side, one key question is whether it costs more, on average, to rent or own in your area. The rule of thumb is that if you pay 35 percent less in rent than you would for owning - including the monthly mortgage, property taxes, and any homeowner's fees - then it's smarter to continue renting.

Only if all those answers still point towards owning should you proceed to the next step - getting the money right.