For the most part, I like to think of myself as an optimistic and practical kind of guy. I would normally start of writing about Real Estate this and Real Estate that...However, these are some very difficult times we are living in.
My grandpa Doc worked for Good Year Tires for 45 years, and I remember him saying that he had gone up to Azusa Canyon, in Azusa, CA, panning for gold just to make ends-meet. You see - he lived in the great depression and I am begining to get worried that we may not be far behind those times today.
Bob Dylan said it the best - "You had better start swimming or you'll sin like a stone, Oh the times, they are a changing." (Great song from the 60's).
I have had several clients this year who had lost their jobs and homes. I tried to get them a "loan modification" without success due to the fall in property values.
The real estate market has always gone Up & Down...I've been selling through four of these real estate cycles. In the past - there has always been some other industry that usually has pulled the USA out of its economic troubles.
My company has had its share of tough times and cut backs over the last three years...But I am proud to say that "The Shire" is celebrating its 11th year anniversary. To quote my uncle Denny, "calm seas do not make a good sailor."
To navigate throught these waters, I have attended severl advanced training classes to brush up on short sales, foreclosures, and the new lending procedure laws. Additionally, I am hosting similar training classes for my agents.
The loan side of real estate has also gone through some huge changes as well. These changes in te lending disclosure laws and the new appraisal rules and procedures have a dramatic effect on the purchasing and the selling of residential homes. This is effecting all homeowners as well as real estate professionals and the way we do business.
The government has now taken control of the appraisal industry. Basically turning it into a "Union Hall." This new policy has cut the average appraiser's income in half, offering nothing of value in return.
You might ask - "How does this effect me?" - good question! Many of the more qualified and experienced appraisers are leaving he residential side of the market. Meaning...
The fee charged for the average home appraisal is between $410 and $460 taking 3 - 5 hours of work to complete. An appraiser could run his business, pay staff and make a decent living if he worked hard. NOW the ramifications of this new policy has changed things for everyone!
Now the appraiser is paid about half for the same work and the "Union Hall" gets the other half. Lenders may no longer rely upon past relationships with LOCAL AND EXPERIENCED appraisers. The appraiser may even come from out of the area. This last month I had two out-of-the-area appraisers, one from Riverside and the other from Temecula, for a Brea and Lakewood sale! Both were challenged for review appriasals - more money out of pocket to the Buyer or Seller.
Banks have impemented some new strategies. Once such strategy is withholding many of the foreclosed properties from the market, in an effort to reduce inventory, artivicially driving up prices. Hiring Property Management Companies - such as mine0 to renovate and rent-out these houses.
Unfortunatley, this tactic is a couble edged sword. In theory - it will help to stablize the fall of prices. However - all over Southern California I see appraisals coming in lower than the agreed sales price, or the appraisal is challenged by the Buyer's Lender and the Review Appraiser then cuts the priced due to short sale comps.
I believe there is not a master conspiracy - Too many panks have TARP money allowing time to be on their side - hoping to ride out this market and reduce their loss from it.
What's going to happen next? If I knew the anser to this question - I would be as wealty as Donald Trump (with a better hairdo).
I believe the real estate market may dip a little more (3-5%) by the end of 2010. The real estate market should then flatten in 2011 and 2012 - prices won't go Up or Down, allowing the market to right itself - FINALLY! A new real estate cycle should start to increase home prices - at whatever number the cost of living index is - in the spring of 2013.
The changing of the trees is a strong indication that Fall is here. An economic in congress - stop the spending and bail-outs - maybe all we need to change the economic "Fall" of America's economy and the real estate market.
Thursday, November 5, 2009
Tuesday, August 25, 2009
If I Kick Up Enough Dust!
Have you hard "A LOT" of complaining lately? The president's complaining that there is another crisis, Congress has lost touch with the people who put them in office and yes some real estate agents have been doing the "whiny thing" about this tough market. Well, I am sure tired of hearing about it.
I'm not complaining! I am doing whatever it takes to improve my life, my career and my country. I'm assisting those who call for my services with the best positive attitude and expertise. I have always embraced the real estate business as a career.
I have been assisting people buying and selling homes through all types of markets over the last 24 plus years. Up markets, Down markets, Seller's markets, Buyer's markets, Flat and Stagnant markets. You see, Real Estate is a simple business, it is NOT an easy business.
In whatever market we happen to be in, there's one thing that has always made America strong and able to weather any economic Storm thrown at her...
It is America's unstoppable attitude! And, in Real Estate it is the "American Dream" of home ownership that drives the market. Prices go up and prices go down. However, the unstoppable "Dream of Home Ownership" will have people always looking to improve the quality of their life.
If it makes sense for you to sell now, for whatever the reason, then it's time to sell. I think you will want the Broker that says "I am going to get this sold for you."
If you are thinking of buying or investing, for whatever reason, then it's time to purchase. I think you will want the broker that says "I am going to find just the right home for you."
I have been pounding the pavement, kicking up dust, showing properties and holding open houses almost every weekend since January. The year is half over and I have helped 17 people buy and sell their homes so far this year. My agents are busy and doing well also.
"Lead by example" is what my mother told me when I was young.
My thinking is "if i kick up enough dust, I believe I'll get some dust on me." A positive attitude is what is needed in this type of real estate market.
There are so many great real estate opportunities to invest in right now! For example, the $8,000 Tax Credit for First Time Buyer's is a great way to help you or your children get into their first home.
How about those retirement dreams? Laguna Beach, San Clemente, Lake Arrowhead? These areas have dropped to more then reasonable prices!
Thinking of selling? Curious to what's working in this market? Target marketing is doing really well for the executive home. First Time Buyer seminars are doing great for the more modest priced homes.
Interest Rates have been holding steady at just above 5% for conforming loans and 6.75% for Jumbo Loans. Easy Docs and No Income Qualifier Loans do not exist anymore. We are in a full documentation loan market. Good Credit and income provide for fabulous opportunities.
As always feel free to call me with ANY questions, I'm here to help 714.626.8880
Have you hard "A LOT" of complaining lately? The president's complaining that there is another crisis, Congress has lost touch with the people who put them in office and yes some real estate agents have been doing the "whiny thing" about this tough market. Well, I am sure tired of hearing about it.
I'm not complaining! I am doing whatever it takes to improve my life, my career and my country. I'm assisting those who call for my services with the best positive attitude and expertise. I have always embraced the real estate business as a career.
I have been assisting people buying and selling homes through all types of markets over the last 24 plus years. Up markets, Down markets, Seller's markets, Buyer's markets, Flat and Stagnant markets. You see, Real Estate is a simple business, it is NOT an easy business.
In whatever market we happen to be in, there's one thing that has always made America strong and able to weather any economic Storm thrown at her...
It is America's unstoppable attitude! And, in Real Estate it is the "American Dream" of home ownership that drives the market. Prices go up and prices go down. However, the unstoppable "Dream of Home Ownership" will have people always looking to improve the quality of their life.
If it makes sense for you to sell now, for whatever the reason, then it's time to sell. I think you will want the Broker that says "I am going to get this sold for you."
If you are thinking of buying or investing, for whatever reason, then it's time to purchase. I think you will want the broker that says "I am going to find just the right home for you."
I have been pounding the pavement, kicking up dust, showing properties and holding open houses almost every weekend since January. The year is half over and I have helped 17 people buy and sell their homes so far this year. My agents are busy and doing well also.
"Lead by example" is what my mother told me when I was young.
My thinking is "if i kick up enough dust, I believe I'll get some dust on me." A positive attitude is what is needed in this type of real estate market.
There are so many great real estate opportunities to invest in right now! For example, the $8,000 Tax Credit for First Time Buyer's is a great way to help you or your children get into their first home.
How about those retirement dreams? Laguna Beach, San Clemente, Lake Arrowhead? These areas have dropped to more then reasonable prices!
Thinking of selling? Curious to what's working in this market? Target marketing is doing really well for the executive home. First Time Buyer seminars are doing great for the more modest priced homes.
Interest Rates have been holding steady at just above 5% for conforming loans and 6.75% for Jumbo Loans. Easy Docs and No Income Qualifier Loans do not exist anymore. We are in a full documentation loan market. Good Credit and income provide for fabulous opportunities.
As always feel free to call me with ANY questions, I'm here to help 714.626.8880
Thursday, May 21, 2009
What's the Difference?
Just a couple of weeks ago, I had a buyer come into one of my open houses who just loved the house. He and his wife wanted to write an offer on the house right then. The home at the open house was priced over a million dollars. They both had great jobs, good credit and had heard on the radio that loan rates were down below 5%. They assumed that they could get financing without any problems due to their outstanding credit rating and they were planning to put 20% down. Well of course they can get a great loan, a "JUMBO LOAN" at the rate of 6.5%.
Like so many other buyers, they were shocked to learn that the difference between a Conforming Loan and a Jumbo Loan was nearly $1,003 in their payment per month. They asked a lot of questions after I explained what their new payment was going to be. With this new information, they didn't qualify for this home.
So what is the difference between a "Conforming Property" and a "Non-Conforming Property?" What is the difference between a "Conforming Loan" and a "Non-Conforming Loan," or a "Jumbo Loan" and a "Super Jumbo Loan?"
A "Conforming Property" is any residential property of 1 to 4 units. It can be a Condo or Town Home, as well as a Single Family Residence.
A "Non-Conforming Property" would be any property of mixed use, or 5 or more units, etc. An example of this might be "The Lofts" in the redevelopment of downtown areas such as: LA, Fullerton, or Brea, or store front properties with apartments above. Note: these can be good investments, however, it is hard to find a lender to loan on these types of properties...usually a "Commercial Bank."
The "Conforming Loan Rate" is the rate that you will normally read about or hear advertised. The Federal Housing Finance Agency (FHFA) has determined that the "Conforming Loan" loan limit will remain at $417,000 for 2009 in most areas in the U.S., with higher limits in certain cities and counties. (Feel free to call me and inquire about the loan limits in your area 714.626.8880).
A "Jumbo Loan" is any residential loan above $417,000. The "Jumbo Loan" typically carries a higher interest rate than conforming loans. Jumbo Loans have varying limits for different areas of the country as well.
A "Super Jumbo Loan" is a specialty type of loan. Usually an "Adjustable Rate Loan" with a shorter term limit of 5,7,10 years. An example of this type of loan is a $25,000,000 home with 50% down leaving a loan amount of $12,500,000.
You may ask, "What difference does this make to me?"
If you are buying or selling a home, or just thinking about it, it could mean the difference between you or your potential buyer qualifying for a loan or not. Or, in having to put down a larger down payment to get a better interest rate.
EXAMPLE #1: If your original purchase price is $521,000 and you put 20% down ($104,200), your loan amount would be $416,800, a "Conforming Loan."
EXAMPLE #2: If your original purchase price is $750,000 and you put 20% down ($150,000), your loan amount would be $600,000, a "Jumbo Loan."
This is where we separate the proverbial men from the boys, or ladies from the girls. Good Realtors, from the inexperienced.
In this market, of the buyers purchasing property with the maximum conforming loan limit of $417,000, they would have a payment of approximately $2,839 with taxes and insurance included. This means the buyer should have approximately $8,500 in income per month before taxes.
If the purchase price is $750,000 with 20% down ($150,000), a loan amount of $600,000, a "Jumbo Loan," the payment would be approximately $4,982 with taxes and insurance included. This means the buyer should have approximately $15,000 in income per month before taxes.
The above is an EXAMPLE ONLY. When you are thinking of buying or selling, or if you have any questions regarding loans, give me a call. There is a difference in Realtors.
John Chesshire
714.626.8880
Like so many other buyers, they were shocked to learn that the difference between a Conforming Loan and a Jumbo Loan was nearly $1,003 in their payment per month. They asked a lot of questions after I explained what their new payment was going to be. With this new information, they didn't qualify for this home.
So what is the difference between a "Conforming Property" and a "Non-Conforming Property?" What is the difference between a "Conforming Loan" and a "Non-Conforming Loan," or a "Jumbo Loan" and a "Super Jumbo Loan?"
A "Conforming Property" is any residential property of 1 to 4 units. It can be a Condo or Town Home, as well as a Single Family Residence.
A "Non-Conforming Property" would be any property of mixed use, or 5 or more units, etc. An example of this might be "The Lofts" in the redevelopment of downtown areas such as: LA, Fullerton, or Brea, or store front properties with apartments above. Note: these can be good investments, however, it is hard to find a lender to loan on these types of properties...usually a "Commercial Bank."
The "Conforming Loan Rate" is the rate that you will normally read about or hear advertised. The Federal Housing Finance Agency (FHFA) has determined that the "Conforming Loan" loan limit will remain at $417,000 for 2009 in most areas in the U.S., with higher limits in certain cities and counties. (Feel free to call me and inquire about the loan limits in your area 714.626.8880).
A "Jumbo Loan" is any residential loan above $417,000. The "Jumbo Loan" typically carries a higher interest rate than conforming loans. Jumbo Loans have varying limits for different areas of the country as well.
A "Super Jumbo Loan" is a specialty type of loan. Usually an "Adjustable Rate Loan" with a shorter term limit of 5,7,10 years. An example of this type of loan is a $25,000,000 home with 50% down leaving a loan amount of $12,500,000.
You may ask, "What difference does this make to me?"
If you are buying or selling a home, or just thinking about it, it could mean the difference between you or your potential buyer qualifying for a loan or not. Or, in having to put down a larger down payment to get a better interest rate.
EXAMPLE #1: If your original purchase price is $521,000 and you put 20% down ($104,200), your loan amount would be $416,800, a "Conforming Loan."
EXAMPLE #2: If your original purchase price is $750,000 and you put 20% down ($150,000), your loan amount would be $600,000, a "Jumbo Loan."
This is where we separate the proverbial men from the boys, or ladies from the girls. Good Realtors, from the inexperienced.
In this market, of the buyers purchasing property with the maximum conforming loan limit of $417,000, they would have a payment of approximately $2,839 with taxes and insurance included. This means the buyer should have approximately $8,500 in income per month before taxes.
If the purchase price is $750,000 with 20% down ($150,000), a loan amount of $600,000, a "Jumbo Loan," the payment would be approximately $4,982 with taxes and insurance included. This means the buyer should have approximately $15,000 in income per month before taxes.
The above is an EXAMPLE ONLY. When you are thinking of buying or selling, or if you have any questions regarding loans, give me a call. There is a difference in Realtors.
John Chesshire
714.626.8880
Tuesday, March 24, 2009
Times can be rough and times can be hard!
Don't you sometimes wish that someone would come and bail YOU out? I sure do. However, I don't think that is going to happen for my company or me anytime soon!
Like most of you, I'm one of those working guys who believes that this real estate market will too pass. It goes up and it goes down and sometimes you just have to go along for the ride. Keeping a good attitude in the face of troubled waters will always win over the doom and gloom of what's heard on TV, radio, and read in the newspaper.
Remember 1979 - 1982 and 1990 - 1994? Well even if you don't... Like today's market, those were some pretty rough times for real estate. The home loan interest rate was 16 - 19% in the early 80s...and unemployment was over 14% here in California. Chrysler, Ford, GM and Anheuser Busch plus a few other major companies even left California, causing the loss of thousands of jobs! Yes, times can be hard.
One of the most valuable lessons I learned during those tough times was to not buy into the doom and gloom of the day. There are always positives to every situation. Our lives are only so long, and between here (however old you are) and whenever there comes, we must strive to be happy.
Attitude creates energy! If people around you are upbeat you will tend to be upbeat as well. If they are negative and baa-humbug about everything...well you get the idea.
During these trying times we must remember every morning to count our blessings, especially the little ones...good health...good friends...the shared love of your family. Toward the end of the year I will be getting married, and let me tell you...I picked a winner! I thank my lucky stars everyday for her, and I am so thankful to have her in these hard times. And most of all, let's all remember that we do live in the greatest country in the world.
If things are hard here...they are even tougher outside the US. Where in the world is better then here? Russia? Germany? France? Spain, Egypt, Italy? Greece, Africa? Any part of South America? Japan? North or South Korea? China maybe? NO, I think not!
I don't profess to have the answers to the economy, or to Wall Street's issues or even the Real Estate market...in which i am an expert in. I do however, have an answer to changing things that are happening around me during these times.
The answer is a positive ATTITUDE.
I can control my attitude. I'm helping my neighbor take out her trash...I am putting in a little more time with one of my favorite charities, HBIC...and when someone asks me "How's it going in the real estate market?" I say, "When it's tough, the tough get going!" with a BIG SMILE!
I believe the same amount of people are still getting married this year...the same amount of babies are getting born...moving up in size...moving down in size...relocating out of the state and coming into Southern California...We all have to have a place to live and that's where i come in.
Think about it...who would you rather be dealing with when it comes time to utilize a service, be it a doctor..dentist..mechanic..check-out clerk..or in my case a real estate broker...when the times comes you want to deal with a professional with a positive attitude! Next time you see your neighbor give away a big smile and say..."It's just another day in paradise!"
One final positive thought about how tough the real estate market is...Most of the part-timers and the wannabe agents who jumped in for a quick buck...etc. have left the industry That means that cream rises. This has always been a fabulous career for me and I wouldn't give it up for the world.
When it comes time to buy or sell your house, who do you want working for you? a wannabe...or an experienced, professional real estate agent with a positive attitude. I know what my choice would be!
Don't hesitate to call me if you have any questions, or comments, or even just to say "hello" :)
John Chesshire
714.626.8880
Like most of you, I'm one of those working guys who believes that this real estate market will too pass. It goes up and it goes down and sometimes you just have to go along for the ride. Keeping a good attitude in the face of troubled waters will always win over the doom and gloom of what's heard on TV, radio, and read in the newspaper.
Remember 1979 - 1982 and 1990 - 1994? Well even if you don't... Like today's market, those were some pretty rough times for real estate. The home loan interest rate was 16 - 19% in the early 80s...and unemployment was over 14% here in California. Chrysler, Ford, GM and Anheuser Busch plus a few other major companies even left California, causing the loss of thousands of jobs! Yes, times can be hard.
One of the most valuable lessons I learned during those tough times was to not buy into the doom and gloom of the day. There are always positives to every situation. Our lives are only so long, and between here (however old you are) and whenever there comes, we must strive to be happy.
Attitude creates energy! If people around you are upbeat you will tend to be upbeat as well. If they are negative and baa-humbug about everything...well you get the idea.
During these trying times we must remember every morning to count our blessings, especially the little ones...good health...good friends...the shared love of your family. Toward the end of the year I will be getting married, and let me tell you...I picked a winner! I thank my lucky stars everyday for her, and I am so thankful to have her in these hard times. And most of all, let's all remember that we do live in the greatest country in the world.
If things are hard here...they are even tougher outside the US. Where in the world is better then here? Russia? Germany? France? Spain, Egypt, Italy? Greece, Africa? Any part of South America? Japan? North or South Korea? China maybe? NO, I think not!
I don't profess to have the answers to the economy, or to Wall Street's issues or even the Real Estate market...in which i am an expert in. I do however, have an answer to changing things that are happening around me during these times.
The answer is a positive ATTITUDE.
I can control my attitude. I'm helping my neighbor take out her trash...I am putting in a little more time with one of my favorite charities, HBIC...and when someone asks me "How's it going in the real estate market?" I say, "When it's tough, the tough get going!" with a BIG SMILE!
I believe the same amount of people are still getting married this year...the same amount of babies are getting born...moving up in size...moving down in size...relocating out of the state and coming into Southern California...We all have to have a place to live and that's where i come in.
Think about it...who would you rather be dealing with when it comes time to utilize a service, be it a doctor..dentist..mechanic..check-out clerk..or in my case a real estate broker...when the times comes you want to deal with a professional with a positive attitude! Next time you see your neighbor give away a big smile and say..."It's just another day in paradise!"
One final positive thought about how tough the real estate market is...Most of the part-timers and the wannabe agents who jumped in for a quick buck...etc. have left the industry That means that cream rises. This has always been a fabulous career for me and I wouldn't give it up for the world.
When it comes time to buy or sell your house, who do you want working for you? a wannabe...or an experienced, professional real estate agent with a positive attitude. I know what my choice would be!
Don't hesitate to call me if you have any questions, or comments, or even just to say "hello" :)
John Chesshire
714.626.8880
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