Riverside Realtor Blog - Alma Dizon

Moratorium on Mortgage Rates Will Help Some People...

2007-12-05T13:26:00.000-08:00

Word is out that there's the Bush administration has worked out an agreement with lenders to temporarily freeze mortgage rates for some homeowners, so that their mortgage payments won't adjust upward. According to one person familiar with the plan, the moratorium would "apply to borrowers with loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010." This will be of great help to people who have been able to make payments thus far but are facing a sudden increase of as much as 30% per month. The idea is to keep more people from going into foreclosure, so even though it won't help those already in danger of losing their homes, it should ease some of the pressure on real estate by keeping more short sales and repo's off the market.

The good news is that Treasury Sec. Paulson finally admits that the massive number of homeowners falling behind can no longer be dealt with as individual cases but must be recognized as a nationwide trend. Unfortunately, it's too little and too late for a lot of people.

The article ends with a gloomy outlook of impending recession, which has everything to do with consumer sentiment at the moment. A poll last month indicated that 40% believe that a recession is imminent. If that many people feel this way, it's no wonder that few are buying homes right now when so many need to sell.

AP article on Bush admin plan to freeze mortgage rates

Desperate Home Owners Use Plastic...

2007-10-29T10:06:00.000-07:00

Some months ago, I wrote a blog entry on how mortgage companies were thinking of offering credit cards with a very small percentage in rewards going toward paying off the mortgage (kind of like an mileage card for an airline). For homeowners who pay off their credit cards monthly (and don't fly), this might make sense. But now, the word is out that some desperate people have taken to using plastic to avoid foreclosure--and they're not paying the cards off. Uh, oh...

Is this better or worse than the people who pay off their credit cards but lose their houses? A general rule of thumb is, do what you can to keep the house and give up on the cards. But using the unpaid cards to pay the mortgage is definitely scary. I suppose it could work if someone is fairly sure that s/he will get a million dollars in 2 months. But what if the lottery gods are frowning then? If the lender okays a lower monthly payment for now to stave off foreclosure, that unpaid credit card has a nasty interest rate. I suppose that if the house is at least saved, one could then sacrifice the card and then try to negotiate with that company later... Of course, after the late payments on the house, one's credit is already shot, so what's an unpaid card? That is, so long as the roof overhead isn't going to get taken away!

The article goes on to mention the fatal holidays fast approaching (at least, the Mission Inn put up its unlit Christmas decorations in September!). Ooh, think home made gifts! They're ... priceless! (That's what we'll be doing a lot of at my house--mostly from our 5-year-old but also quite a few from me. We're also going to make all our own Christmas cards. And hey, I think my clients will like the personal touch!)

Do I have any wise words for people in such desperate straits? Unfortunately, not really, other than that they need to go to debt counseling (real, non-profit counseling and not another con artist), and they need to get into a situation that they can afford right now. And for those who are starting out and thinking of buying a home, I highly recommend that start with what they can afford, and if it's not available, stay with family or rent, and learn how to save--which means not using those cards very much!

Article on Credit Cards and Mortgages

San Bernardino Tax Relief: Fires and Declining Value

2007-10-25T12:08:00.001-07:00

San Bernardino County will be reassessing residential properties that have lost significant value. This will be a little help to those who've had fire damage in recent days. They're also offering tax relief for items such as boats, planes, and business personal property. There's none for home furnishings as these aren't taxable. IVAR has a page with info and links to county sites at:

http://www.ivaor.com/sbtaxrelief.pdf

Once a home is rebuilt, it will be reassessed at where it was when the damage occurred unless additions are made. Such additions will be assessed at full-market value.

For homeowners who haven't had any damage, they should see if they can have their properties reassessed due to lower home sales in the neighborhood. The form to fill out can be found at:

http://www.sbcounty.gov/assessor/documents/arp068.pdf

Fires are part of the California environment

2007-10-24T12:03:00.000-07:00

As a child, I once read a book about settlers in the west who had to keep a strip of land cleared around their home in case of fires. Of course, what I know now, living in California, is that keeping the brush cleared is only the most basic line of defense and not much help when gale-force Santa Ana winds are carrying sparks far and wide. As people move further out into the desert, both low and high (our higher altitudes are dry here, too), they need to be aware that fires are a fact of life here and be prepared to live accordingly.

After the Northridge quake, southern Californians became very aware of needing earthquake supplies. But we also need plans on how to react to a big fire. The other evening, a couple on the news said that they decided to leave when their dual pane windows got hot to the touch. They were extremely lucky that firefighters managed to bring that section under control just in time. Quite frankly, I would have been gone before then. Yes, I love my house, but my family (2 and 4-legged members) are more important. Also, firefighters are more important than my house. If homes are still occupied, firefighters no longer have the option of getting out and looking for a better spot to hold the line. They have to waste their time rounding up the stragglers.

Some people think it's a good idea to stay behind and water their property. Well, a few people have survived with their homes intact, and some haven't. Since our property has a number of trees, I don't think I'd take the chance. After all, when trees are exploding in flames, I don't think a garden hose is going to do much.

So when you're looking at a home on the side of a hill with a gorgeous view and only wilderness behind, look to see how you'd get out in a hurry if you had to and ask about insurance deductibles. Buy it if you love it, but don't forget the terrain, the drought, and the winds are here to stay.

30% off of WHAT?

2007-10-05T10:46:00.000-07:00

There's a house for sale in Riverside that has extra red lettering on the sign, stating in big letters 30% REBATE. However, when you look more closely, there are smaller letters in-between that explain "off commission." So it's not 30% off the sale price, but rather the agent is promising to put 30% of her commission toward the buyer's closing costs. This means that it's not even 30% of 3% off of the sales price. The sales price is the same, but assuming that the buyer has to get a loan, the agent (not the seller) will help with closing costs. It's an expensive house, so this comes out to about $8700, which is a lot of money to the agent but not actually so much for the seller and definitely nothing for the buyer, who wouldn't have to pay the commission anyway.

Is this a good tactic? Well, it gets attention at first, but then buyers immediately feel put off that it's not a significant amount and doesn't affect the price. Buyers' agents might assume that they'll be asked to throw in 30% of their commission (after all, it's not clear who is supposed to do it, and it may in fact be 30% of each agent's commission...).

In the end, the only way to get serious attention that might result in some offers would be to lower the price in a meaningful way. But for whatever reason, the sellers have chosen to pay the mortgage on a house that has sat empty for about a year. The only way I can make sense of this is to think that the sellers must have tremendous pride of ownership and don't want to sell their house for a penny less than what they think it's worth. Certainly, the listing agent wants to get rid of it if she's willing to give up nearly a third of her commission...

THE MOST AMAZING RESTAURANT IN RIVERSIDE

2007-09-28T10:47:00.001-07:00

When my husband and I moved to Riverside from Santa Monica, what we probably most regretted leaving behind was the fabulous array of flavors to be found in restaurants in the L.A. area. We have found some places we like a lot and visit often, but the truth is, we've gotten into a rut. And we certainly never could find anything on a par with what we've had in the Bay Area or on an incredible food trip we took through Italy (shockingly expensive, but we'll reminisce about it until our dying days). But now we've had an amazing dining experience that I must put in the top 5 of my entire life, and that place is Omakase, where chef Brein Clements creates memorable food.

Omakase is not for the faint of tastebuds. If you really think one clove of garlic is sufficient, you will find this restaurant overwhelming. For me, each mouthful was a stunning revelation of intense flavors that woke up different spots on the tongue. I truly understood for the first time just which tastebuds sense sweet, which ones salt, and which ones savory. It was like seeing a fauve painting after going through a museum of well-varnished masters, the flavors contrasting boldly and with stunning clarity, yet still harmonizing into a complete work. Each mouthful of each course was a stunning discovery with one taste standing out here, another there.

I highly recommend going with the chef's tasting menu (they will ask you for specific food allergies to make necessary adjustments). You can also get a glass of perfectly matched wine with each course, but I'm going to have to forego that option next time because I almost had to be carried home after 5 glasses. The portions are small and exquisite, so 5 courses are just right and won't make you a glutton.

To eat at Omakase is to experience something that you will not be able to find in other cities as the dishes bring together Japanese, French, Italian, Indian, American, and who knows how many other traditions together into a new marvel. Moreover, the food there brings together an individual chef's artwork and also locally grown organic fruits and vegetables, so you will only find this in Riverside and nowhere else.

To read up on the restaurant and to see how what new wonders the season has brought to their current menu, click on the following link:

Omakase

Just how thirsty is your lawn?

2007-09-27T12:35:00.000-07:00

It should come to no surprise that the biggest use of water in the California is to keep our lawns green. But just how much water we're spraying out there might surprise you. It turns out that the average daily use for yards and gardens statewide is 185 gallons. Doubtless, if we had to haul that water from a well, most of us would settle for hard-packed dirt, and only the extremely wealthy would have that lush, green look. But water has been cheap, and so the desert has been settled with scores of tract homes, all vying for that illusion of living in a rainy area.

But you don't have to settle for dust and prickly pear. There are many lovely low-water plants that you can cover the front lawn with. Most people don't actually play football on the green expanses in front of their homes. A wide variety of plants, both native and imported from other dry climates, can provide plenty of coverage and color while attracting hummingbirds and butterflies. I find these plants much easier to maintain than a lawn (ours is mostly in back, where the dogs get to enjoy it, and it looks truly pathetic). Sure, have some grass if someone actually runs around on it, and you can plant trees strategically to provide shade for some lawn. But according to a survey, the biggest reason for lawns is appearance, and that's a sad reason to be using up water during a drought.

According to the Western Municipal Water District, the annual rainfall necessary to sustain various plants is as follows:
Grass: 45.1 inches
Medium water-use plants: 33.8 inches
Low water-use plants: 16.9 inches
California native plants: 11.3 inches

In an average year (which we haven't had for a while), Riverside gets about 10 inches of rain. So even a yard of only native plants would need extra water. From 7/1/05 to 6/30/06, the total rainfall in Jurupa Hills was a little over 7 inches. Think about that versus the 45 or so inches you sprinkled onto that grass.

PE article on watering

County Records News data on rainfall in Western Riverside

On Love and Distrust

2007-09-26T10:54:00.000-07:00

People have always told me that it was a good thing that my daughter was shy and clingy almost from birth. They told me no one would be able to steal her. And yes, she was better than a car alarm, wailing if someone even walked into the room. With my husband and me, she was and continues to be wonderfully affectionate. It was truly gratifying when, as a toddler, she finally learned to kiss me and proceeded to kiss me softly 18 times on the nose. But this doesn't mean that she trusts us absolutely, and it's simply her nature to question our opinions and actions.

Take last night, for example. When we got home, she told me that she hadn't been able to eat her spaghetti at kindergarten because the container slipped out of her hands when she was trying to open it, dumping her lunch on the cafeteria floor. She really likes spaghetti, so she asked me to make more for dinner. While I was making dinner, I cleaned out her lunchbox and, sure enough, found the spaghetti container. It was full and looked untouched. I opened it, examined it for signs of floor and found none. I was puzzled. I'd assumed that she would just have thrown it out. On the other hand, I've worked very hard to train her to bring everything home, so that we can recycle properly instead of just tossing it all into the trash the way they do at school. Plus, I know how much she loves spaghetti and in fact had asked for it again. So I tossed it into the green recycling (it was meatless), and started anew. When we sat at the dinner table, my daughter plunged her fork into her pasta and began to eat voraciously. Then she paused, slowly looked up at me, and asked, "These are the same noodles that fell on the floor?" "No," I told her, "those are in the laundry room, in the green bin." "Really?" she asked. "Go and look," I told her, "It's in there." She thought a moment and then continued to eat without checking the bin.

I had two reactions. One was, "I'm your mother. How could you even think that I would reheat those noodles?" My second was, "Nobody is going to con this child into buying a shoddily built house or a bad refi." Of course, one could say that she knows me well enough to have figured that I would examine her lunch and not just immediately believe that they'd fallen on the floor. She may also have picked up my tendency to question what I'm told, no matter who is talking.

But she's much more distrustful than I was at age 5. I gradually became distrustful in my teen years, after discovering with much horror that my parents weren't always right or logical. And a close relative conned me out of $100 when I was 16. I had always been an unquestioning and fairly obedient child, so learning distrust was rather traumatic. My daughter, on the other hand, seems to have it hardwired into her. Why else would she even think I would try to feed her spaghetti that had fallen on the cafeteria floor?

Then there are the cousins of mine whose mother was infamous for her inability to smell and taste rotting food. She sporadically poisoned the extended family at holiday gatherings, and we all became wary of anything she had to offer. My cousins, from a young age, began throwing their food onto the roof when their mother wasn't looking. Years later, she surprised them by leaving the same house to them all. They were estatic. It was full of rot and had unpermitted additions, but it was in Hawaii and worth a lot of money on paper. Then, these close-knit siblings, who had always supported each other against their mom, began to fight with the one who'd actually stayed home and taken care of their mother. So she took out a huge loan on this unsellable house and split the money with the others, who promptly got hit with taxes on it. Hmm, so maybe they should have continued to be suspicious of their mother despite her last act of love for them...

So beware and ask questions, even if (and especially if) family is involved. Get an appraisal that truly reflects the actual physical condition of a property and the costs to make it sellable. Seek tax information. Have agreements written down and get copies of everything, even receipts. It doesn't mean that you love them less, but it does lessen the amount of pain you'll feel, realizing later that a loved one didn't live up to your expectations.

Of course, my child didn't actually go look at the green bin. But I was ready, and I will be the next time she questions me. I hope she doesn't stop doing so.

Pending Sales Down Most in the West

2007-09-05T10:42:00.000-07:00

The numbers are out for this past July, and they support what we've been seeing here in Riverside. There's been a tremendous decline in houses going into escrow, and then some of these are falling out as buyers fail to get loans. Overall, pending sales of existing homes fell just over 12% from June, while in the West, the decline hit nearly 21%. Furthermore, the figures fell almost 22% in the Western states from a year earlier.

These percentages translate into unsold houses in many places, leaving buyers overwhelmed by choice. In general, shoppers tend to feel paralyzed in the face of too many options (which is why agents shouldn't show too many properties!) to the point where none of them seems like a good buy.

This situation means that people who do buy now have an unsual combination of the following 1) good credit, 2) some savings to put down, and 3) the ability to move against the herd. I keep running into people who wished that they'd bought up property during the 90's. All I can say is, the ones who did then were rare and strong individuals. Of course, prices are much higher now, but it's still workable for those willing to reside in a home (and not just pretend to!) for a couple of years.

An agent I know was telling me that several of his middle range and higher end homes have come down a lot. The 2 middle range ones had dropped about 100k each, coming down to the low 600's, while one for over a million had dropped 200k. And I'm seeing starter houses that have dropped 50k. So for those who are ready and can still think clearly, it's actually a sensible time to fight the mass hysteria and pick up a good place to live.

Article on Drop in Pending Sales

1/5 of CA foreclosures weren't owner-occupied

2007-08-31T22:02:00.000-07:00

What we knew anecdotally finally has a number: 1/5 of CA of the mortgages in CA that are in default aren't occupied by the people on title. This number could include people who have had to move due to job transfer, etc., but apparently, most of these absentee owners never moved in to start with. They were speculators looking to flip houses, and they lied on their paperwork to get lower interest rates and loans up to 100%. Although this plan may have worked for a few investors when the market was climbing quickly and a lack of available houses meant that inventory sold quickly, the situation changed drastically once more people tried it. Like many other investment fads of past years, the people who got on the bandwagon up to the peak could do well while those who started later lost out. But there's a key difference between this type of speculation and others in that it depended on loan fraud.

Sometimes, investors did it without their loan officer's knowledge. At other times, the loan officer and/or realtor suggested it and didn't explain to the investor that the papers that s/he was signing stated that the property would be owner occupied. In the latter case, the loan officer and/or realtor may have been trying to get a series of commissions, using inflated appraisals, and ultimately the difference in value through straw buyers who would ask for 100k or more back at close of escrow. When the scam works, the con artist makes out extremely well. And if it doesn't, the would-be investors are left with the deed, the debt, and often too much shame to report what happened. After all, it was their own greed that got them into trouble...

LA Times Article on Speculators in Foreclosure

Capital One Gets Out

2007-08-30T12:28:00.000-07:00

Capital One has announced that it's getting out of the wholesale mortgage business. They'll lay off some 1900 people over the course of the year as they shut down GreenPoint Mortgage's main office in CA along with 31 other offices. GreenPoint's home page states that the company will honor current rate locks on loans that are "in the pipeline," but no new loans will be made.
There was a note about a related press release on the Capital One website and a link to it. However, when I went there, I was unable to locate the press release, and a search within the site for "GreenPoint" brought up no results. I did find several links to positive articles and press releases, the first one ironically noting that Fortune Magazine had declared Capital One among the top 100 companies to work for. On the other hand, this will probably remain true for those who continue to be employed with them.

The reason for Capital One's decision is that it has become less profitable to sell their loans on the secondary market. There isn't enough money in making loans to keep companies going--they have to be able to package and sell them to someone else. Those investors, however, are nervous after increasing defaults has left them with foreclosed houses and a glut of houses for sale. What this means for real estate, of course, is one less source of loans for anyone who might want to buy and thus fewer able buyers for properties that are sitting on the maket.

For a MarketWatch article, click on the following link:
Article on Capital One

Aggressive Lending Practices and Countrywide's Corporate Culture

2007-08-25T10:11:00.000-07:00

The news is out. The questionable loans that were done for my elderly parents and some friends of ours (see entries from 7/25/07 and 7/26/07) were part of an overall corporate culture at Countrywide. This mortgage company not only targeted the sub-prime borrower, they also aggressively went after A paper clients in a manner that was aimed to them into more costly loans and squeeze every last fee out of them. They would then go on to sell the loans at a higher rate than typical because investors on the secondary market found them more valuable due to their potentially very high interest rates on ARMS. The company offered incentives to their loan reps to get them to push more expensive loans, and carefully worded scripts helped them guide borrowers toward signing up.

To read the article on Countrywide's questionable practices, click on the following link:
Countrywide in NY Times

Bank of America to Countrywide's Rescue?

2007-08-22T17:58:00.000-07:00

So now the story is that B of A has injected 2 billion dollars into Countrywide (that after they admitted having to borrow 11.5 billion to finance home loans). B of A took nonvoting convertible stock in return--so they can eventually sell them for a lot more (with restrictions) if prices go up. For now, Countrywide's stock value has gone up to $26.25 a share. Last week, shares hit a low of $15, then rebounded a bit after the Fed cut rates. They're still at about half of what they were at their height.

What does this all mean for buyers? Anecdotally, some friends of ours were about to sell their home and buy another. However, last week, they found that because they hadn't received the purchase agreement back in a timely manner, they hadn't been locked into their interest rate. As rates suddenly climbed, they saw their buying power drop about $200,000. They were in a panic, looking for a rental as they had to be out of their house by the end of the month. Today, I talked to them, and they're getting a 30-year fixed for the agreed purchase price--from Countrywide. So yes, this is saving transactions for those who are in the middle of buying and selling.

But this situation also has a dampening effect for those who don't have to buy. It cuts further into consumer confidence. Those who would like to buy their own home worry about buying and then seeing the property lose value. Of course, if they wait for prices to come down as far as possible, interest rates will have risen by then since, as you know, it's about how big a monthly payment one can afford to make. On the other hand, there are those who remember what it was like in the early 90's when people had to move for a job or family, and they couldn't get what they owed. Some friends of ours lost their house and then experienced the humilliation of being refused credit to buy a small tv a year later.

And then there's the reverse side of the coin--people who are waiting for things to get worse, so they can pick up houses on the cheap. They're holding out to see how low things ago (and also hoping that interest rates will stay down), and then they'll buy at just the right moment. However, they're going to need the numbers to work out just right to get rent that will cover a loan (or loans!) for 90%.

So will B of A's move help save Countrywide? We'll have to wait and see if people can make their payments.

Here's a link to an article on Bank of American and Countrywide:

BofA saves Countrywide?

Smile at the Red Light!

2007-08-09T20:58:00.000-07:00

Watch out--more cameras are cropping up at Riverside's intersections. They recently put one up on the right-turn lanes from Indiana onto Arlington, heading east. I guess too many people were making the turn from the left-most of them during the red light. Make sure to smile the next time you do that as you'll be videotaped.

Some months ago, a realtor I know was caught on tape running a light. Apparently, the video was clear enough to show her grimace as she realized her mistake too late.

I haven't been able to tell yet if the cameras are having any effect on people's habits. I suppose it's a sign of how much Riverside has grown that I now see drivers running red lights on a regular basis. Lots of our streets have speed limits of 45 and 50 miles an hour, yet we have more and more stoplights popping up to control all the cars. And when traffic gets really thick, it's sometimes necessary to wait through 3 or more light changes to make a left turn, so it seems rather inevitable that several cars at the end will run the red. But I can't come up with any ready explanation for the number of cars that just go through even though they haven't had to wait. Is everyone too distracted by the kids, coffee, and omnipresent cell phone? On the other hand, now that drivers know about the cameras, perhaps they're just looking for a moment of fame...

video on Riverside traffic cameras

Middle Class Refi Victims Don't Get Much Sympathy...

2007-08-04T22:48:00.000-07:00

So our friends who got a couple of bad refi's to fix a botched loan (see 7/26/07) tried talking to several lawyers about their options. Two of the lawyers said flat out that they would never have a chance because no one would believe that educated professionals like them would have signed off on a loan they didn't understand. Ouch.

But that's just the point. If you can rip off people who are supposed to know better, and they can't do anything about it because they went to college, then who's left to fight? The elderly, the infirm, the people who are struggling to get into the middle class? How far can they get in a legal battle on their limited time and resources?

In the meantime, our friends report that their original lender's company has gone under. The office is dark and empty. They've tried calling the loan agent himself and keep getting a recording message that doesn't mention his current company's name. He hasn't called them back.

With taxes and insurance, their current mortgage payment is a whopping $4700 a month, and that's interest only, fixed for 5 years. They wouldn't even be able to rent their house out for $3000 a month. Our friends have good jobs, but they have small children in daycare (their other large monthly bill), and they're unable to save at all for the future. Now, there are some people out there who benefited from their misery--shouldn't these individuals be held accountable, regardless of the fact that these two made the fatal mistake of trusting so-called experts to put together good loans for them?

How does your refi company make money?

2007-07-29T22:10:00.000-07:00

My parents have been looking at new loans for them, and it's been a confusing time for them trying to see all the differences between the choices they have.

At first, they were going to go with the lowest interest rate, and then they realized that the loan would be for about 10k more than they currently owe. As I explained to them, that's because the mortgage broker was charging them almost 10k for the refi, but that rather than charging them upfront (and probably giving them cause to run away), he was spreading it out over the life of the loan. The monthly payment was lower than they'd be with the other company they were considering, but it came at a price.

My parents weren't too happy with the idea of increasing the principal. As it was, their previous lender had fooled them into an option ARM, and their principal had already increased over 11k before they'd fully realized what was happening.

So now they're looking at a mortgage banker who will charge only $450 for the refi but will use a higher interest rate. As I explained to my parents, the higher interest rate is how his company makes money, particularly since they say that they never sell their loans (very unusual). The second company additionally says it will lower the interest rate .25% if my parents open another account with them, such as a credit card or an IRA.

I told my parents that all companies have to turn a profit somehow, so the only way to choose is for them to ask themselves what is their most important goal. After all, as they're now in their 80s, they really need the lowest payment. They don't want to have to refi soon as this is likely the last time when they'll be able to handle it, so the payment needs to stay stable for a while but probably not for more than 10 years. They also need to talk to an estate planner to bring the whole picture together.

On the other hand, they have a real problem at their age with getting into more debt in order to help someone else make a living. And I can't say I blame them.

Don't forget to read your trust deed

2007-07-25T21:19:00.000-07:00

I'd been telling my parents over the last few months some of the fraud I've seen and the terrible loans that people I know have unwittingly signed up for. Then my parents finally told me that some months ago, their monthly payment on their condo had suddenly gone up from about $875 to over $1400 a month, and they had no idea why. This was odd as they've owned a total of 4 homes over some 60 years and have refinanced numerous times. They're hardly beginners. On the other hand, they're elderly now, and they weren't familiar with some of the obscenely intricate loans that have come into existence in recent times.

They told me that they'd called their lender several times, and each time, they talked to someone different who told them to pay a different amount. I finally convinced them to go to Kinko's and scan the entire trust deed and have it emailed to me. These are some of the phrases I found on p. 19:

"The interest rate I will pay may change."
"The interest rate may change monthly..."
"My interest will never be greater than 9.950%."

On p. 20, I found the following statement:
"If the Minimum Payment is not sufficient to cover the amount of the interest due then negative amortization will occur."

Then on p. 21:
"Since my monthly payment amount changes less frequently than the interest rate, and since the monthly payment is subject to the payment limitations described in Section 3(D), my Minimum Payment could be less than or greater than the amount of the interest portion of the monthly payment that would be sufficient to repay the unpaid Principal..."
"For each month that my monthly payment is less than the interest portion, the Note Holder will subtract the amount of my monthly payment from the amount of the interest portion and will add the difference to my unpaid Principal, and interest will accrue on the amount of this difference..."

Then I found the following:
"My unpaid Principal can never exceed the Maximum Limit equal to ONE HUNDRED FIFTEEN percent (115%) of the Principal amount I originally borrowed. My unpaid Principal could exceed that Maximum Limit due to Minimum Payments and interest rate increases. In that event, on the date that my paying my monthly payment would cause me to exceed that limit, I will instead pay a new monthly payment. This means that my monthly payment may change more frequently than annually and such payment changes will not be limited by the 7.5% Payment Cap. The New Minimum Payment will be in an amount that would be sufficient to repay my then unpaid Principal in full on Maturity Date in substantially equal payments at the current interest rate."

I called my parents and told them that they needed to refi ASAP. They had been told about negative amortization or reverse mortgage as an option, and they had chosen not to do it because they believe that it's unethical. Yet that's exactly what they had gotten themselves into. As the interest rate can only go up (and it's now at about 8% for them!), they fail to pay principal and even fail to pay all the interest. They end up owing more, and the debt simply escalates.

In addition, when I first got into real estate, a lender told me that "pick your payment" was a good loan for agents, such as myself, because the borrower can pay more or less each month according to his or her varying income. Now, since when did people in their 80's have a lot of variation in their income? Guess what, my parents' loan also has a "pick your payment" paragraph as it states toward the bottom of p. 21:
"After the first Interest Rate Change Date, Lender may provide me with up to three (3) additional payment options that are *greater* than the Minimum Payment, which are called "Payment Options."
Ooh, boy, that explains why every time they called, they were given a different amount to pay. I told them to get the amounts in writing with an explanation of what each amount represented. They had no idea if a new amount covered any principal at all anymore.

Basically, a loan officer who didn't care that my father is retired and 81 had played bait and switch with him. He lured my parents with an incredibly low introductory interest rate without explaining to them that it was very short-lived and would change dramatically, probably putting them further into debt unless they refinanced quickly. The loan officer didn't plan on being around when my parents found out what had been done to them or perhaps he just figured that they were too elderly to notice or even do anything about it.

This should be criminal. At the very least, it's predatory lending. But my parents probably don't have enough time left to them on this earth to pursue a lengthy lawsuit. At any rate, they signed off on everything. But that's what they do, isn't it? "Sign here, here, and here." People don't get enough time to read it, and they get intimidated, wondering if someone thinks they're idiots for not understanding more quickly. So they sign, and then they're in debt forever.

I have asked my parents not to sign anything again until I've had a chance to read through it first. The borrower is supposed to get enough time to read through the papers and also have some time to change his or her mind after signing. Don't let your parents give up these rights.

Oh, and by the way, the lender was Countrywide...

Lost and Found Skunk

2007-04-26T22:30:00.000-07:00

We had a bad scare last weekend. We were getting ready for bed and let the dogs out for a few moments. Then, when we counted noses, we came up one short. And of course, it was Skunk--the only one who wasn't wearing a radio fence collar or regular collar with tags as he'd heard his neck a while back, and the vet had said to leave him naked for a while.

My husband and I took turns walking up and down the streets and Gage Canal until 12:30 am, calling him (softly, so as not to wake up the neighborhood, but loud enough for a cookie-loving dog to come running). No luck. We stayed up till 2 am making signs and then started posting them at 8 a.m. My little girl and I started knocking on neighbors' doors at 9 am. Some people didn't answer, others came still in their bathrobes, but all were understanding when we showed the photo of our beloved black and white Pomeranian. Several people said that they'd seen him and another one of our dogs (who had come back to us, acting like nothing had happened!) and chased them both but hadn't been able to catch them. Then, at 11 am, a woman called to say that she'd seen one of the flyers. She had been driving home and had seen both our dogs in the middle divider on Arlington! She had gotten out of her car and helped another woman catch Skunk while the other one fled. Then the other woman told her that she would take him home with her to Moreno Valley before dropping him off at the animal shelter the next morning.

I immediately turned the car around, and we headed off to Moreno Valley. As soon as we walked in the door of the animal shelter with Skunk's flyer, the people behind the desk told me that they had him. They'd already given him a bunch of shots, and I had to pay some fees, but it was well worth it to get him home. And it turned out that they had already found his microchip and alerted the call center (there was a message on our home phone when we got back--but they never called our cell phones!).

We brought Skunk home, where he seemed quite relieved and a bit tired after his adventure. My daughter kept saying to him, "Don't you ever do that again, Skunk!" Then we had to go around the neighborhood, taking down the flyers. Whew! We were exhausted.

Ever since then, whenever I take Skunk out for a walk, people in the neighborhood wave to him and even honk their horns occasionally. He's famous now and doesn't mind it a bit.

To find out about getting a microchip for your dog, you can go to:
http://www.homeagain.com/

How many roommates can you have?

2007-04-12T23:46:00.000-07:00

From time to time, I've heard that there's a 4-person limit on roommates in the neighborhoods around UCR. Then I run into houses where there are 6 or 7 kids living. I finally emailed my councilman Art Gage and got an answer: a maximum of 4 unrelated people can live together unless it's a "sober house" (ie., halfway home). (Wow, that's fewer than dogs, my husband commented. As I explained to him, dogs ARE family.) Of course, it's dependent on the neighbors watching, counting, and complaining to the city.

I recommend the following: if one of the students is on title (or his/her parents own the house), that person in particular should meet the neighbors at the start of the year, presenting a friendly and responsible face. Otherwise, have the most personable student do so. Keep the grass in front short (it may be worth it to have everyone chip in for yard care). Smile a lot, wave, give little gifts (like flowers for grannies), and don't kiss the neighbor's babies. If you are going to have any parties, tell the neighbors ahead of time, keep the noise and trash under control, and shut down at a reasonable hour. If they get mad at your for some reason, fix it as fast as you can. Believe it or not, this will help a lot. Of course, there will always be someone too curmudgeonly to win over, but if most everyone else loves you, it will be ok. Truth be told, I'd rather live next door to a dozen well-behaved students than two lonely louts. Who wouldn't?

Driving on Cooking Oil

2007-04-01T22:17:00.000-07:00

While out door hanging near UCR a while back, I ran into a man working on a car in his driveway. It was great--he was rebuilding an old car, so that it would drive on used cooking oil. Now, I've read that a couple of men have actually driven from Alaska to Argentina in a car that runs on used cooking oil. They picked up all kinds of oil along the way, and everything worked. Now, that's what we need. Wouldn't it be great to refuel your car in a fast food drive-thru? Hmm, I wonder if trans fats are also an issue for machinery...

Yahoo news article on Alaska-Argentina drive

Would you like a dog with that house?

2007-03-31T21:39:00.000-07:00

Thinking more on the dog limit issue, I've realized that one logical step to take past the limit would be to require everyone to have one dog. In this way, the dogs would be spaced out evenly, and no one could complain because all would be guilty. If one dog barks at a siren, all the dogs will howl across the entire city in waves, and it will be hard to tell where it begins and ends.

I say this after showing property in Alta Loma and discovering that all the neighbors had one dog, all of whom gathered behind his or her fence to bark at us. No one could say that anyone in particular was guilty of lowering property values (one of the worries expressed by the apparently lone Citizen for Companion Animal Limits), so I can only imagine that having one dog in each yard would force people to concentrate on other issues, such as whether or not the kids at the closest school require a police presence at dismissal time.

In fact, when escrow closes, the pound should show up at the door with a free puppy as a house-warming gift. What parent could say "no" in front of their delighted children? Just so long as animal control finds out ahead of time that the buyers don't already have a dog (which should have had a license application made out long before, along with photo, microchip number, and pawprint checked against a centralized dog bureau of investigation list for a past history of unscooped poop and raucous siren howling.)

Further thoughts on the issue of limiting dogs and cats

2007-03-19T08:59:00.000-07:00

After attending the committee meeting and hearing the bizarre one-woman show that goes by the name of Citizens for Companion Animal Limits, I have more than a few thoughts based on 2 pages of notes.

1) What will be the cost of limiting the number of licensed dogs?
First, there will be a decrease in income as people who would license all of their dogs will have to stop at 4, and those who never licensed theirs before probably won't start up in order to take up the slack. Secondly, there will be an increase in the cost of tracking those dogs that have been licensed to make sure that they haven't been replaced at death by another animal. Moreover, the brilliant suggestion of requiring owners to put a microchip in their licensed animals would entail paying personnel to check that dogs are really who their owners claim to be. Now, would that happen yearly and at the pound (less expensive for the city but a traffic nightmare for owners who would have to get off work to go in at a centrally appointed hour, not to mention the liability involved in gathering a lot of dogs together for a riot) or at homes (wow, that would be quite a gas bill for the city, plus they'd have to get everyone to make appointments)? Anyway, it's not even a question of cost here but of multiple costs that go on and on.

2) If the city is then paying so much attention to dogs who are licensed, will there be any time left to look for abused animals?
Good question. Considering the amount of time that would be needed for doggie roll call, I can't imagine anyone would have time to go after those who don't have licenses, much less those who are mistreating dogs. At any rate, the limit on dog numbers will create a new class of criminals--people who would license their dogs but can't because they've exceeded the limit. And by chasing after them, the real problem of suffering animals will be overlooked.

Dogs and Cats: A question of quality, not quantity

2007-03-18T20:32:00.000-07:00

It's happening again--they're having another meeting to discuss limits on dogs and cats that Riverside pet owners can have. The group who's pushing for this has managed to come up with a mostly positive-sounding name: Citizens for Companion Animal Limits. But they seem to be missing the point: it shouldn't be a question of limiting the number of animals that all residents can have but rather about the quality of care that any person gives his or her animal(s). Let's face it, there are plenty of people who shouldn't have even one dog, cat, turtle, goldfish, let alone a child.

The reason we have so many dogs (all licensed-- except for the newest acquisition, who's getting a license next week--fixed, and current on shots) is because we've had to pick up the pieces after someone else made a mistake. Having managed to find the majority of owners of the dogs who've ended up at our house, we're lucky only to have 6 at the moment whose previous owners never showed up, gave up their animals, or had them taken away from them. It isn't easy having so many different personalities and types. We watch "Dog Whisperer" a lot for tips, brush, feed, bathe, walk, pick up after them, and we plan our schedules around their and our child's care. Also, the vet bills are astronomical. Just keeping their flea meds and heart worm medication up puts a serious hole in our budget. The commission from the 2nd house I ever sold went entirely to pay for doggie boot camp for our Dalmatian rescue (I have a special place in my heart for people who abandon Dalmatians--they need extra forgiveness for their--the humans', that is--rotten behavior). Another commission I earned once went entirely to diagnose a dog's rare blood disease (atypical hemolytic anemia) and finally to have her put down when chemotherapy couldn't save her.

So we're not the kind of people who keep unfixed animals and then end up living in filth and squalor. Our dogs mostly stay indoors (dogs actually prefer to sleep a lot, so this keeps them happy and generally quiet), so they're not barking day and night.

One very special characteristic of the city of Riverside is that there's long been a live-and-let-live attitude here about home owners and their pets. While I can understand the desire to get irresponsible pet owners under control, the way to do so is by observing who takes care of their animals and addressing such cases in an appropriate manner rather than by making a blanket (and blind) judgement that imposes a random number.

So show up tomorrow and be counted. I have a feeling that someone snuck this issue onto the agenda because no one seems to know about it!

PE notice about meeting on dog limits

UCR Area Sellers Stubbornly Keep Prices Up

2007-02-21T09:55:00.000-08:00

All over town, prices are coming down except for right around UCR. A few sellers have come down 10k to 30k, but most are still pricing like it's spring of '06. What are they thinking?

First, most of these houses have an awful lot of debt on them. I looked at one Canyon Crest home's records and discovered that even though the family bought it in the 70's for less than 35k, they recently refinanced it for about 470k. The home is now vacant, so I guess they needed the money for another property...

And then there are the houses that are listed by agents who've never been inside. One such house last fall finally went for about 50k under where it started for a total of 325k. Sounds like a bargain for a 4-bedroom house. However, when I sent inside it and looked up, I saw daylight. Floors and walls were rotted out from old plumbing leaks. The home really needed 100k in repairs to make it safely livable (and not just another case of "let's paint over the dry rot"). The house had been completely paid off for decades, but the old man (now in a nursing home) had been convinced by his agent that it was a gold mine. Whoops.

Another home has been listed at 399k for several months. The out-of-area agent told me that he took the highest and lowest solds, and the sellers picked a price in the middle. This is very aggravating for someone like me who has sold some of the highest priced comps he used. This particular listing has 4 bedrooms on record, but good luck finding all of them. North of UCR, there are a number of houses that were given permits to add a bedroom (without a closet) that had to be entered through another bedroom. While this may have worked in the old days, people no longer consider these bedrooms but rather walk-in closets and (if large enough) studies or sitting rooms. Moreover, this house has numerous illegal additions, including random exterior doors (various heights, no stucco work, rotting wood frames) and a toilet in a closet (that also suddenly has an exterior door). They enclosed the breezeway to the garage (again, allowed in the area) but didn't put in any insulation. The "guest room" is an uninsulated 8 x 10 shed (and yes, there's someone sleeping in there). The backyard is bare dirt and a few pathetic trees, one of which had been attacked with an axe that was still stuck in a branch. The agent told me that even as a fixer, it only needs about 30k in work. So I have to ask, why doesn't he buy it himself? Maybe because no one will! Again, even while the family owes very little on the house (they would have owned it outright except that they refi'ed a couple of years ago), they've been convinced by someone who isn't familiar with either the property or the area that it's worth too much.

What this neighborhood does have going for it is proximity to UCR, an excellent high school, and a mellow "live and let live" community. Due to the rugged hills surrounding it, the area has a natural beauty and a protected feeling. Also, these hills mean that there isn't much more room to build. The limited number of properties is what keeps the value up here. But the small size of the houses by today's standards, plus the poor condition of many of them, make it a hard sell in the current market.

Pitfalls of the Short Sale

2007-02-20T16:55:00.000-08:00

I'm beginning to see short sales pop up in our MLS--not as many as buyers are looking for but enough to attract attention. For a buyer, the home can be a good buy at some tens of thousands of dollars less than what the sellers got it for. The lender has agreed to take less than what is owed (provided that the sellers have real hardship). However, the property generally won't be 100k under market.

There are certain matters to take into consideration first, and this can be problematic if the sellers haven't done all their homework.

1) The lender has to approve the short sale and will have final say on the buyer. I saw a house fall out of escrow several times because the lender wasn't happy with the buyer's contingencies.
2) Buyers should remember that if the lender hasn't already approved of the short sale, the whole process may take up to 6 months.
3) If the sellers admit that their income isn't as high (without a job loss or death) as they said it was when they applied for their loan, they may have committed fraud.
4) While the lender may "forgive" the amount of the loan lost, this amount is then considered taxable. For instance, if the lender accepts 50k less, the sellers will have to pay taxes on this amount.
5) In the case of a VA loan, the seller will have to repay the lost amount before being able to get another VA loan.
6) Buyers' agents should be check to see if the dual commission is marked "yes," meaning that the lender will want them to take a reduced commission.

Short sales can be a good buy for buyers who don't have to sell a house first, aren't picky about condition, and who can be flexible. For sellers, it certainly isn't an easy way out, and they need to make sure they understand all of the ramifications.

recycling taken to a new level--your flooring

2007-02-09T21:18:00.000-08:00

I try to recycle whenever possible. It's not just about getting nickels for soda cans, either (which go into our little girl's piggy bank). It's also about trying to keep our landfills under control (1. they fill up 2. chemicals that don't belong there leach out into the water, etc.). Anyway, we generally put out very little garbage weekly, and most of what we set out goes to the composting and recycling programs. When we have wood, I break it up for kindling in the fireplace. The dog poop goes into our own compost piles, and believe me, the plants like it.

As I've written before (9/4/06), we have some nice areas here in the Inland Empire that smell ... like manure. Cows, in particular, are a great producer of the stuff, and in the age of farming on a massive scale, we're hard put to use it all. Now, there's an idea afoot to take what's left after cleaning it up and making ... particle board with it. What a great idea--those fibers have survived a cow's four stomachs. It could probably make some resilient floors, and it would be a lot cheaper than imported Italian porcelain tile. Of course, the idea is in the early stages, and we'll have to see what designs they come up with. But it's certainly no worse than making vinyl flooring out of ... compressed, liquified dinosaur remains.

To read the Yahoo News article, click on the following link:

manure article

The wind and the barn owl

2006-11-30T12:06:00.000-08:00

The wind was very strong yesterday, about the worst we've had in a couple of years. Whenever this happens, I expect baby owls to start raining from the palm trees.

I have no idea why, but the local barn owls like to build their nests in the Mexican fan palms around us. They must like the view from up there, but these slender, graceful trees bend and bow in the winds, their fronds flying off. Nestlings don't have much of a chance. One year, three baby owls fell. One died immediately, another was so injured that it had to be put down, and the third was in good enough shape for the county to take it in. I couldn't get near the lives ones. They have wicked talons and beaks, and they're too scared to let anyone get near. There's not much their parents can do when the little ones can't fly.

This year, however, instead of a baby, I found a dead adult owl by the lemon tree in the middle of the afternoon. At first, I panicked, thinking that it might have eaten a rat that had been poisoned. I spent some time talking to our pest control and several vets' offices, considered paying for a necropsy, then read up on barn owls online. It turns out that they're quite short-lived in the wild, often dying during the first two years of life. So, in the end, we figured that it was more likely that the owl was asleep in a palm and got knocked out by the wind. He was probably too groggy and fell too fast to save himself. (I was once outside at night when a stray cat knocked a sleeping pigeon out of a tree. I scared the cat off, and the pigeon sat on the ground for a while, too befuddled to get up right away. He eventually managed to get back into the tree. Like us, their reaction time is affected by deep sleep!)

Toward dusk, I heard its mate calling, and I felt sorry for it. I've found a site that has instructions for building barn owl nests, and I'm going to talk to our handyman about trying to set one up. Maybe that way, we can keep them safer, and if they stick around, we'll be able to stop paying for the rat control. Then our owls can be secure, knowing that they're getting only organic rodents in our yard!

Here's the site I found with the owl nest plans:
owl nests
And here's the Press Enterprise article on yesterday's weather:
Press Enterprise article on windy weather

This is actually a terrific time to buy if you don't want to go with the herd

2006-11-28T22:20:00.000-08:00

I keep reading in the paper that the market will be down for a while longer, and I even saw one article that recommended that buyers wait another 6 months. What for? I have to ask, to start a mini sellers' market in the spring?

Actually, this is good time to buy as the sellers who are on the market are more motivated (they're the ones who have hung on through the fall). I'm seeing some nicely priced houses that are fixed up now and look better than they did when they first came on the market last summer.

And there's very little competition right now from other buyers. So while other people are lowering their FICO scores by picking up items that they don't have to pay for until 2007 (which is basically the same as getting another store credit card despite the "no interest until...") or reducing their savings (ie., funds for closing costs and deposit) by splurging on tinsel, this could be a good time to get a home instead. Give everyone handmade gifts (homemade cookies and your children's art projects are priceless) and promise to have them over for lots of backyard barbecues once it gets warmer. And then they can give you housewarming gifts that will more than make up for budgeting during the holidays.

Or you can wait like everyone else and then see what happens when you're in competition.

Sharks with Halos? Investors and Foreclosures

2006-11-27T10:53:00.000-08:00

I got a call last week from a woman who teaches people how to invest. She wanted information about buying foreclosures. It turned out that she didn't have a real estate license and had never bought a foreclosed property before. We talked for a little while, and I told her that there are implications for the realtor who is representing an investor who is buying a property that is in foreclosure. Namely, that there are so many pitfalls, and that if the seller complains that he or she has been defrauded, the agent is the first to fall. As I put it, a few thousand isn't worth losing one's license. There are special laws to protect sellers who are in foreclosure (ie., they have extra rights of rescission) due to a history of investors abusing these people, to put it mildly.

She began to explain to me that when she first thought about the subject, she had been inclined to think that it was about taking advantage of sellers in foreclosure, but she had come to see it as helping these people out. Well, I told her, while it may be true that they're getting out from under a mortgage they can't handle, the investor is generally looking to profit and prefers to pay about 40% less than the market value. Also, the seller is still ruined credit-wise and will have trouble even renting an apartment afterwards.

The way I see it, it's not too different from telling someone who is about to die that you will save their lives if he or she gives you both their kidneys. After all, they can go on dialysis and eventually get a donated kidney (perhaps from one of their own children!). Yes, you have literally saved this person's life. Will he or she love and appreciate you? I don't think so. Do you have enough self-love to make up for this deficit? Well, that depends on you. Some of us go there, others won't.

Replacing CC&Rs with HOAs

2006-11-14T20:45:00.000-08:00

I've been seeing more and more new tracts pop up with very low HOA fees but no common space whatsoever and no shared maintenance of front yards. Where do the fees go? Actually, that's an interesting question, and it's all about controlling your neighbors (and you) to keep property values up.

For decades, CC&Rs (Covenants, Conditions & Restrictions) were the accepted way to control the use of property and are still handed down with the deed. They can have very specific rules, such as no parking on lawns, taking in garbage cans, and fence heights. However, without a governing body to enforce these rules, things can get lax in neighborhoods where people decide to mind their own business.

So builders have implemented another strategy, that of organizing new tracts into home owners' associations that exist primarily to keep everyone in line. Depending on your lifestyle preferences, this can be a good or a bad thing. The good news is, you won't have to look at unsightly messes that your neighbors can't get around to cleaning up. The bad news is, you may not be able to paint your color fuschia, and it's your absolute favorite color. And then HOA's are made up of fallible human beings. For some friends of ours who got cited for parking an 18-wheeler (that wasn't theirs!) near their house for 2 weeks, their HOA can be annoying.

There was a time when a PUD (Planned Urban Development) meant tiny lots, a gate, and a tot lot, sometimes a pool, and very little parking. They tended to have lower fees than condos because the houses didn't share common walls, and thus they didn't have to share earthquake insurance. Now, I'm seeing more and more tracts of large houses with big yards also coming under the title of PUD. Without the common areas and gates, the fees are on the low side, and no one has to get nervous about attempting to reach the parents of the obnoxious teens across the street who dump their fast food little in the gutter.

Think twice before putting that ficus benjamina in the ground

2006-10-27T22:21:00.000-07:00

I was looking at a house the other day and spotted a pretty ficus benjamina planted on the side of the house. The owners told me that it was only about 2-feet high or so when they put it down, and less than a year later, it's already taller than me. Uh, oh, I said.

You see, being from the subtropics, I know how big some house plants get in the wild. I once saw a schefflera that was perhaps 20 feet tall. Ficus benjaminas shouldn't be underestimated just because they look so sweet and helpless in a pot. They're related to banyan trees, and they have thirsty, powerful roots that will go hundreds of feet in search of water. They will also lift and break through cement, so watch out for walks, driveways, patios, and even your foundation.

Here's a link to a site with photos of ficus benjaminas and their roots:
http://mgonline.com/benjamina.html

Selling a House from Kyoto via the Web

2006-10-21T21:38:00.000-07:00

It sounds like a bad joke. I was in Kyoto, the sellers were in San Juan Capistrano, the buyers' agent was in Mission Viejo, the buyers were in Moreno Valley, and the house was in Riverside. So how did we do it? The Web, of course! The buyers' agent first faxed the offer to my office where another agent helped me out by scanning and emailing it to me. I also emailed back and forth with the buyers' agent to find out more about their situation and discuss the condition of the house. From there, my sellers and I went over the offer via email while my buddy at the office talked to the buyers' lender to go over how they were structuring the loan. I wrote the counter using Winforms on line, emailed it to my sellers, who then faxed it to my friend. He scanned and emailed contracts, and we were able to open escrow within 48 hours.

The only real difficulties in all of this was that none of the clients had a scanner, and my husband's laptop isn't a tablet. As I said, we got around the first problem by having an agent at my office act as middleman for the documents. And luckily, a colleague of my husband's at the university in Kyoto was able to scan the 2 pages that needed my signature.

I wouldn't want to work this way all the time, and I strongly recommend that clients go with an agent who is in the area. But it's nice to be able to stay on top of things and get some time with my family!

Blogging from Japan: Lessons in Urban Living

2006-10-05T07:09:00.000-07:00

We've been in Tokyo and then Kyoto this past week while my huband attends some conferences, and it's been an incredible experience overall. From the start, we've had a series of lessons in how people can live together in intensely crowded situations without killing each other. Californians could stand to take a look at some of their approaches.

The first thing that I noticed was that everything is smaller. Even though the Japanese, like the earthquake-wary Californians, tend to extend their cities horizontally rather than vertically, the lack of land has led to tiny buildings that are packed together. Cars are smaller and get better mileage (gas is expensive), there are lots of hybrids, and people park in amazingly tiny spaces. (I don't know if the Japanese don't have fender benders or just get their cars fixed instantly, but I have yet to see anyone with a dent yet.)

Which leads me to something I spotted from the airport train: stacks of cars. It was a tiny lot in front of an apartment building, and the denizens had their cars precariously (to me at least) stacked 4 at a time on lifts. I realized instantly that it meant that the first one home has to be the last one to leave in the morning. Could we possibly live that way without shooting each other?

Here's a photo of a Tokyo car lift.
tokyo car lift photo
carlift photo in original context
Here's a company that's been designing car lifts in the US:
harding steel

In Pursuit of Your Happiness

2006-09-23T00:00:00.000-07:00

I chose the motto "in pursuit of your happiness" because of that lovely and whimsical phrase "life, liberty, and the pursuit of happiness" in the Declaration of Independence. Adam Smith preferred the "pursuit of property," but I rather like Jefferson's choice of words because the American dream isn't merely about chasing after material things, it's about self-determination. The ability to pursue one's own happiness, whether or not one ever succeeds, is something that very few people throughout the world have ever had.

So when I make the promise to work with a client to help them seek their own happiness, I know that we may not find it in the act of buying or selling a house. Sometimes, it means not buying or selling a house.

A couple called me a few months ago to discuss putting their home on the market. They'd been dreaming for years of retiring, selling their house, and buying a large RV to tour the country together. I looked at comps for their area, and we realized that the reason why a similar house in their tract hadn't sold for months was because it was priced over 50k more than the highest sale for its square footage. There was no reason for it to be priced so high as it would never have appraised, and no buyer would have gotten a loan on it. Then I asked my clients to find out just how much they would need to net to buy the RV they wanted. That's when we ran into problems. They had taken out a second mortgage to make some very nice improvements on their home, but consequently, they weren't going to net enough to buy the RV. I crunched the numbers for them with various scenarios, warning them about needing to help buyers with closing costs, etc., the effect that the HOA fees would have on 100% financed buyers, etc. Finally, they told me that they would need to list their house about 40k over what we all knew made sense.

I was cringing as I drove to their house with all the contracts ready for them to sign. While their house would be priced lower than the others around them, I knew it was just going to sit as no one with a lot of cash and very little brains wasn't likely to save the day.

They greeted me at the door with apologetic smiles and told me that just 5 minutes before I got there, the wife had looked at her husband and said, "Why are we looking all over for happiness when maybe it's right here in front of us?" And then they knew they weren't going to sell.

I was incredibly relieved and happy for them. While I want (and need) to make a living, I'd rather help people buy and sell a home when it's right for them. They need to know as much as possible, so that they can figure out if it really would be better for them to make that move ... or not. And it saves me the horrible situation of sellers in escrow who discover that they're not going to make enough money after all or who have to live with the stress of keeping a house clean for 6 months while no one makes an offer. Thus with self-determination comes the pursuit of one's own happiness and the possibility of actually achieving it.

Using someone else's identity to get a home loan isn't a good idea...

2006-09-21T22:36:00.000-07:00

... because you're bound to be caught. Think about it. If you buy a house with someone else's credit history, that address becomes associated with that name. The person is likely to find out at some point, and then you're a sitting duck, right? And also, if you couldn't have gotten that loan on your own, how will you make the payments?

Sounds dumb, and yet people try it. There was a case last year of someone who got a loan, bought a house, and then the listing agent was questioned months later because the person whose credit had been used found out about it and called the authorities. The agent hadn't ever realized that the buyer wasn't who he said he was. After all, he had provided all the necessary documents to his lender, right?

Another agent I know had a listing for some sellers that were about to go into foreclosure. Then she got a call one day from someone who told her that his credit had been used to buy the house. It was very odd because he apparently knew the couple to some extent, and it wasn't clear if he had knowingly given them his social security number. At that point, he was just hoping that they would sell the house in time to save what was left of his credit. Well, they lost the house. They didn't even own it a year and never were able to make the payments.

So don't use someone else's credit to buy a house. If you don't have the credit and salary, then you probably can't make the payments, and someone is bound to notice that they suddenly have a house payment showing up on their credit history. And if someone you know would like to use your credit to buy a house, don't let them. There's a reason why no one will loan them the money.

Nowadays, Yahoo Looks Better than Google for Real Estate Searches...

2006-09-20T10:21:00.000-07:00

I used to hate Yahoo. I would try to search for data and just find misleading links to porn sites. So then I used Google religiously for a few years. When my husband put together my first website, and I began writing content for it, I was elated at how fast we went to the top of Google searches and not surprised at my lack of visibility on Yahoo and other search engines. Whenever I'd get sales calls from people who promised that I could buy my way to the top of Google, I'd tell them that we didn't need them because we're content-driven, and my husband isn't selling his know-how to everybody and their cousin.

Then it all changed. Google changed their algorithms, and our site quickly fell. Regular updates and new content did little to help. Then, to my horror, someone in my office showed me that an agent who is very high in Google was using my site to boost their standing. My husband tried to put up blocks and complained to Google, but to no avail.

Then this afternoon, when looking for my blog in Google, I discovered that references to my blog show up very quickly when searching for "riverside real estate blog". And in fact, the same agent who has been using my website also pops up, and the description comes word for word from my blog! But my blog doesn't actually get onto the first page of the Google search. Funny, huh?

Yahoo, on the other hand, has my blog and our first site showing up immediately under several different search terms. And the annoying site jumper is below us when he shows up at all. So now I'm beginning to use Yahoo for other searches, and I'm finding them much improved from 5 years ago. I've located real sites with information.

Yes, this is merely a personal experience. Let me know what you've noticed!

Personalities that I prefer as buyers rather than as sellers...

2006-09-14T23:22:00.000-07:00

I've been very lucky in that I've liked every client that I've had thus far (knock on wood). A few of them had personality traits that made them the perfect buyer or seller. But sometimes people whom I would have loved to have represented when they were buying come to me when they want to sell and vice versa.

Basically, these are clients who are easy going and can accept flaws. When they bought, they got a good price on an imperfect home, and they managed to live there quite comfortably. They made some improvements, and they accepted some of the home's defects while never becoming aware of a few. Sometimes, they also had agents and home inspectors who weren't extremely observant.

Then the time comes for them to sell, and they discover that the seller's market has ended, and buyers are expecting perfection. This can be harsh as they may not have the money to fix up everything and have more than enough to deal with jobs and family. If anything, that's one reason why we have so many houses staying on the market right now--because a lot of people aren't perfectionists, and these houses are expensive. What an average person could put up with for $900 a month, s/he won't for $3500 a month.

Of course, with these prices and consumer uncertainty, even dream sellers are watching their houses sit on the market. Dream sellers are a wonder to behold. Their houses are immaculate, everything works, and if there's a problem, they fix it before an offer even comes in. Since such personalities have excellent credit and savings, they get the termite inspection done during the first week and might even tent the structure before the first open house if termites are found... When they accept an offer and the home inspection is done, they read the report and start making repairs even before the buyer's agent can send a repair request form. Can you imagine what these people are like as buyers? They see every speck of dirt, loose fleck of paint, burnt out light bulb, and lose water heater strap. They detect the slightest odor of a pet, hear distant trains, and feel faintly sticky spots. If I find new construction that fits their needs and preferences, I'm in luck because then they'll get a house that has never been lived in, and they can go after the builder to fix any problems (and they will).

But us realtors can't be too picky. As long as my clients are honest, intelligent, and have a sense of humor (and like I said, I've been very lucky), I can't only represent them in situations of my choosing. So I keep smiling at them (even though sometimes I go home and cry), and I plug on.

Revenge isn't always sweet in divorce and real estate

2006-09-12T21:36:00.000-07:00

Divorce and real estate can be tricky, especially when the couple decides to get back at each other in ways that end up sinking the boat for both of them.

An agent I know worked for some months a while back with a couple that wanted to buy a house. There were very few houses on the market at the time, and they did go for a period without looking. Then they continued and finally found the right place. However, when the agent put a call in to the loan officer to prepare the contracts, he found out that the couple had had a falling out during that break in the home search. The husband had moved out, they'd prepared to divorce, but then they managed to work things out. During that time, the husband continued to put money into their shared checking account, and the wife was supposed to pay their credit cards and car loans. However, it turned out that the wife decided to get revenge by not making payments. She shopped a lot instead. After he moved back in, the husband got them caught up again, but the damage was done. Their credit was no longer enough for them to get the loan they needed. I never did find out if they stayed together after that discovery.

Another more recent situation that happened to another agent I know occurred with divorcing sellers who had gone on the market after the slowdown. The house was in his name, but his job had him travelling a lot, and she was living at the house. Every time the agent went by the house, something else was missing. One day, all the kitchen cabinets had been pulled out. It turned out that the wife was getting revenge by ripping out everything possible. After many months, they managed to get a low offer and got into escrow. However, only a week into escrow, they had to cancel because the bank repo'ed the house. It turned out that the husband had taken his revenge by not making payments for some months... Now, they have nothing to show for their investment, and they both have ruined credit.

A cousin of mine once told me that the best revenge is to live well. Sometimes, that means not taking revenge, especially when it can and will boomerang on you.

Imperial Irrigation District Encourages Planting Trees in the Desert

2006-09-09T09:21:00.000-07:00

Imperial Irrigation District is now starting a program similar to the one here in Riverside in which homeowners can get reimbursed $25 per tree planted around their homes. This is a great way to lower air conditioning bills as deciduous trees can greatly reduce the amount of sun beating down on roofs and patios during the hottest months.

We've planted a number of trees around our house and have benefited greatly from their shade. Our family room went from impossible to cool enough to being the most pleasant room in the house all summer long. Our only regret is that we seem to have run out of sunny areas on our roof for the number of solar panels we want. So you may want to put up solar panels before you plant, and then just shade the remaining areas of your roof. Of course, if you're out in the desert and have enough land, you could also put panels in your yard. On the other hand, if you're on a budget, trees are much cheaper than solar panels, which are a big investment and, depending on your power company, may not get you much of a rebate.

You can read a Press Enterprise article about the new program by clicking on the link below:

Planting Trees in the Desert

Think Twice About Improvements

2006-09-08T20:17:00.000-07:00

A woman once called me out of the blue to ask if putting in a new pool would increase her new home's resale value. I told her, quite frankly, that she should only get the pool for her family to enjoy but not if she planned on selling the house within a couple of years. I explained to her that the pool, which she said would cost about 40k, might add only 10k in value, so it wasn't the best investment.

Every time I preview homes, I see one or two that I have to put in my "What were they thinking list?" A poorly built (and unpermitted) deck off a master bedroom that had an unfinished and rotting plywood floor; a former closet turned toilet connecting a game room addition to a kitchen; a massive 2-story house where the laundry room had been made into a full bath (without a bedroom) while the washer and dryer were banished to the garage (they'll need to shower after hauling the laundry all that way from the upstairs bedrooms and then running the dryer on 100+ degree days).

An article in Money Magazine examines the pool question and other expensive renovations that don't always pay off when selling down the road. To read the article, click on the link below:
4 Risky Renovations

Eating Well in Riverside: Pho 99

2006-09-07T19:25:00.000-07:00

A great place for lunch or dinner with kids is Pho 99 on La Sierra. Their food is tasty and very comforting. Let's put this way, after my baby was born, I sent my husband there for take out.

There's Pho in abundance, of course. (For those of you who haven't yet had Vietnamese food, it's a wonderful soup with rice noodles and various cuts of meat. You add as much hot sauce and chillies as you want or none if you prefer.) They also have fresh spring rolls with shrimp and fried egg rolls, both of which our little girl loves. Then there are the noodle and rice dishes with wonderful charbroiled pork and pork paste (a kind of sliced sausage), among many other choices. And of course, what sets Vietnamese food apart from most other cuisines (for me, at least) is the salad greens (plus plenty of fresh basil and bean sprouts) that accompany most meals, so the guilt is minimal.

And if you're a coffee drinker, you must try their iced Vietnamese coffee. Forget Starbucks, you haven't had had real coffee (or been really truly awake) until you've had iced Vietnamese coffee.

You can find Pho 99 at:
4557 La Sierra Ave
Riverside, CA 92505
(951) 688-2671

Smells Like Chino

2006-09-04T20:25:00.000-07:00

There are just some things that you need to warn buyers about. Having myself relocated to the Inland Empire some years ago, there were some details that I discovered and feel duty bound to inform my out-of-area buyers about. One of these issues is ... the smell of areas that are transitioning from agriculture to suburbs.

When we first moved out here, I made a little joke to some friends that their neighborhood smelled "like Chino." You see, I've always been in the habit of setting my car's air conditioning to recycled air when passing through Chino, which smells like dairy farms. How was I to know that Chino and the surrounding areas would become incredibly desirable and expensive. Geez, if only I'd known then what I know now.

Even though we bought a home in an established neighborhood, there have been days when I walk out of the house and found that we smell "like Chino," too. The UCR campus often has that odor, depending on the wind and who is fertilizing.

North Corona, aka Eastvale, smells quite strongly of dairy farm. It doesn't matter that the farms are shutting down and moving out of the area--the manure will be in the dirt for many years to come. The upside, as I tell people, is that they will have gorgeous lawns and be able to grow most any vegetable or fruit suitable for our weather.

A couple of articles on how dairy farmers have been selling out to developers in Chino and Eastvale can be read at the following sites:
Chino Dairy Farms

LA Times article on Dairy Farms

Tented House for Sale

2006-09-02T23:42:00.000-07:00

Growing up in Hawaii, I took it for granted that people ought to get their houses tented for termites every ten years or so. The joke about rickety houses was always that the termites were holding hands to keep them from falling. Several times a year, the weather would be ripe for termite love, and clouds of termites would hover around the streetlights. We'd turn off all the lights and set candles by dishes of water to catch those that got into the house.

Here in California, termites don't seem nearly as omnipresent, and so I occasionally run into sellers who seem to think that because their house was better built and/or kept clean, they won't have any termite problems. Not true.

Even brand new houses can have termites deep in the wood--they just won't work their way out to a visible area for about 10 years. And if there's been extra moisture (not just weather, but badly aimed sprinklers, for instance), all the more reason to expect an infestation.

I generally tell sellers to get a termite check done as soon as possible after listing the house. Then when they get into escrow, they can go ahead and have any section one (outright infestation or situations that could soon lead to infestation) repairs made. Depending on the buyer's lender and the severity of the problem, a clean report may be required by funding or even just to get loan docs.

Several times in the past year, I've had sellers who found themselves having to get the house tented during escrow. Yes, it can be embarrassing to have that tent go over your home with the for sale sign in front. The neighbors can't help but notice. But I tell sellers that the good news is that they're definitely selling a termite-free house and that the buyers will have a warranty from the termite company. And this is much better than what happened to my husband and myself when we bought our home. Some termite work was done, but they didn't tent, and by the time we discovered live termites swarming inside our house a couple of years later, the company had gone out of business, leaving us to pay for tenting out of our own pocket.

Every year, we have a company inspect our house to nip any activity in the bud. But you have to be home and make sure the inspector is really looking closely. Ask them about any odd piles of sawdust-type material you may have seen or any dark holes appearing in the ceiling (those turned out to be subterranean termites that had gotten up through the wall and were eating our ceiling!).

There was a great article in Harper's Magazine in Aug. of 2005 about Formosan termites in New Orleans. It also had some very interesting info on the levees there, so that when I first heard about the approaching hurricane, I knew that the city was going to flood. You can read the article online at:

The Swarm

Some of the Pros and Cons of a New House versus Resale

2006-09-01T11:52:00.000-07:00

Buyers often tell me that they think that it'd be better to buy a new house in order to benefit the most from increased value. I tell them that can be true if they're buying in the first phase, plan to finish the backyard, put in upgrades, and sell within a few years. People who bought a few years ago have seen their homes double and more in value even if they did just about nothing to them. However, builders have really increased prices on new homes, and buyers of new homes now are faced with higher prices at the outset. If they plan to sell sooner rather than later, there's lots of competition, so they need to finish the yard, put in patios and patio covers, and upgrade the interior. So I find myself warning people that, after the 30% annual increase in value across the board during two years in a row, they're going to have to put some money into that new house to get some out of it.

The potential for a lot of unearned equity (when sellers benefit from fast-rising prices rather than having to improve the property) led to a virtual torrent of flipped houses in new tracts. But as buyers go from one empty house to another, each one with the same layout, the same flooring, the same everything, and all with barren dustbowls outback, their enthusiasm quickly wilts. They wonder why "everyone" wants to move out of the neighborhood and if they're being had.

So while it can make sense to buy a new house in order to get more equity faster, buyers need to keep in mind that the market has changed. If they choose a house that has been lived in (and landscaped), they can finance the cost of the improvements that the sellers have made. Whereas if they choose to buy from the builder, they'll have to come up with the cash (or perhaps get an equity line of credit if value goes up quickly enough) to make those improvements. And they'll have to live with the dust, noise, and general mayhem while those improvements are made. Of course, they'll get to choose the improvements, so the property will be just to their liking. But then they ought to stay put and enjoy living there after all their hardwork.

There are words that rhyme with orange

2006-08-29T19:04:00.000-07:00

I was at a party once, and someone started to tell me that nothing rhymes with “orange.”
“Stonehenge,” I said, but he kept on talking. “Stonehenge,” I repeated, but he paid no attention. Once again, I insisted, “Stonehenge,” but he was so convinced that there was no answer that he never seemed to notice. I decided that he wasn’t all that interesting and moved on to another conversation.
It can be very hard getting people to see past some ridiculous rule that they picked up along the way and have never questioned. I generally don’t believe forwarded messages from my friends and put them to the www.snopes.com test for urban legends.
Some of the overgeneralizations that I don’t believe are: “buyers are liars” (enough of them seem to tell the truth to keep us in business), and “real estate agents can’t spell” (some of us can). I also don’t think granite counters are a cure-all or that everyone can save money with cut-rate brokerages.
I’ve been told that no words rhyme with “purple” (so much for pull, full, handle, supple, etc.), “silver” (what about sliver, shiver, river, cover, bother?), or “month” (rhymes with millionth, billionth, trillionth).
In fact, I know of another word that rhymes with “orange,” and that’s “lozenge.” There are probably other words—let me know if you think of any!

Ungrammatical Spanish and Other Funny Street Names

2006-08-28T21:38:00.000-07:00

After teaching college Spanish (language, literature, culture, history) for 12 years, I still get driven crazy by ungrammatical Spanish street names in the Inland Empire. Sigh. But I do refrain from whipping out the red pen. At any rate, the good news is, such names are unlikely to repeat between areas!

Moreno Valley has a lot of street names that look like someone looked in a bilingual dictionary and then jammed random words together. "Casa Encantador" should be "Casa Encantadora" and "Palos Grande" should be "Palos Grandes." In Murrieta, "Calle del Oso Oro" ought to be "Calle del Oso Dorado" and "La Alba" would be "El Alba" (yes, it's a feminine noun, but it starts in "a," has 2 syllables, and the first syllable is accentuated, therefore the singular articles would be "el" and "un").

Then there are the random names--did they run out of ideas? "Quebrada" means broken and "espaldar" means the back of a chair. Well, one thing is for sure, you won't find these street names in every city!

Do you need mortgage life insurance?

2006-08-27T11:47:00.000-07:00

The general rule of thumb is that a healthy person doesn't need mortgage life insurance and shouldn't just buy it. However, you need to examine your current financial situation and make adjustments to protect your loved ones.

Recently, a client of mine who was about to list his home died unexpectedly. I discovered then that, not only was his widow not on title (they had married only a few months before), the ex-wife had gotten his life insurance and 401(k) as part of the divorce settlement, and there was no mortgage life insurance. In addition, he had taken out every bit of equity on the house in order to buy out his ex, so the widow was having to make the huge mortgage payments (interest-only!) on a house she couldn't sell in addition to the payments on the house she had just bought with him! The husband had been expecting to sell the first house quickly and was, he believed, in good health, so he took some chances by not getting his new wife on title, not getting mortgage insurance, and not writing a new will. In the end, he was wrong, and now his ex and siblings are suing his estate. Additionally, the amount of time needed to settle the matter in probate is likely to eat up the time allotted to the widow, so that if she does get title and sell, it'll no longer be considered a sale by the couple, so she'll only be allowed 250k in capital gains instead of 500k (which is actually how much the house has increased in value since the husband first bought it years ago). All in all, she has been hit with all of the costs and none of the benefits of marriage.

So please look at your whole financial picture and have your insurance updated to protect your loved ones because you never know.

Here are a couple of articles on mortgage life insurance and life insurance:
cnn money article on mortgage life insurance
cnn money article on life insurance

Places to go in Riverside: the UCR Botanical Garden

2006-08-22T21:15:00.000-07:00

The UCR Botanical Garden is a truly wonderful place with terrific collections of native plants as well as plants from similarly arid places, such as South Africa and Australia. Roses, irises, temperate deciduous trees, and a subtropical fruit trees round out the specimens on hand. You'll get great ideas here for plantings to spruce up your yard as well as your table. After all, this is Riverside, so you should be able to feed yourself out of your yard!

The fall and spring plant sales at the botanical garden are a local tradition. But warning, members get first dibs, so you should join to get a shot at the rarer specimens. Serious plant lovers come with their own garden carts.

UCR Botanical Garden

On Declining Consumer Confidence and Paralysis in the Inland Empire

2006-08-16T10:55:00.000-07:00

The Press Enterprise has an article about people being surprised by the sudden decline in the real estate market in the Inland Empire. Actually, it's not a surprise at all as the 30% annual increase in values 2 years in a row couldn't be maintained. One consultant cited a lack of consumer confidence as key, and I think that's what this is all about. Prices are so high that, even with continued low interest rates, buyers are understandably intimidated by the monthly payments they'd have to take on. That and the number of properties on the market, many of them in far less than pristine condition, is enough to paralyze any shopper.

The ambivalence of the home buyer faced with too many choices is something to behold. I look for the usual hints of the happy shopper (beaming smiles, caressing the spouse, lots of digital photos), and instead, I see frowns, nervous glances, the need to look at all the details but without satisfaction. This scene is followed by the inability to write up an offer, week after week, month after month... (I generally dump these buyers unless they're personal acquaintances or referrals of personal acquaintances, in which case I can't...)

Barry Schwartz' book Paradox of Choice offers a lot of insight into how consumers don't deal well with too many choices. When faced with too many (in one case, 2 were too many) choices between marked down items, people became too undecided. And as we all know, with indecision comes discomfort.

Here's a link to the Press Enterprise article on the decline in the area real estate market:
Press Enterprise article on market decline

Here's a link to an excellent review of Schwartz' book from the New Yorker last year:
New Yorker review of Barry Schwartz book Paradox of Choice

What do the Sellers Usually Pay For?

2006-08-13T13:26:00.000-07:00

Sellers should always get several estimated net sheets from the listing agent. They need to get one when they sign, when they adjust the price and/or the commision, and when get an offer comes in.

The estimated net sheet should list all the different items that the sellers usually pay for, plus any extras that the offer (or counter offer) entails.

For instance, the sellers need to take into account the following: commissions to each side, title and escrow costs, termite inspection (not including any repairs), natural hazard report, city and county transfer taxes, HOA transfer fees, prorated interested on the loan(s), reconveyance fee for the loan(s), grant deed preparation, one-year home warranty for the buyer, and any prepayment penalty. Depending on the buyer's situation, the seller may need to take into account paying closing costs, points, and fees for a VA or FHA loan.

The commission should be based on the net, that is the accepted price minus any closing costs and points. So if the accepted price is, say 700k, and the sellers are paying 2 points or 14k to lower the buyer's interest rate, they should pay a commission based on 686k. When they get the commission instructions from escrow, they should also go over the numbers and make sure that they're based on the net. If escrow makes a mistake, they can call and get another set of instructions drawn up.

August Panic

2006-08-12T17:12:00.000-07:00

It's August and panic is setting in for some sellers as they realize that summer is coming to a close without their properties going into escrow. Prices are starting to drop on a few homes, but it may be a case of "too little, too late." On the other hand, buyers who don't mind moving kids after school starts (and for some school districts that have an early start, that's next week), this could be a good time to get a bargain if their credit is in order and their lenders can move quickly.

Some clients of mine who needed to sell quickly were smart, lowering the price of their house a second time in July and then raising the commission to outside broker. They swiftly got into escrow with a buyer who was just approved to their new list price, and she needed help with closing costs, but the main thing was that her lender could get the loan funded in time for them not to lose the house that they’re buying.

Another couple I know wasn’t so lucky. They made an offer on another house after listing theirs (not with me), but no one bought theirs, and now they’ve fallen out of escrow. They cancelled the listing to rethink things, and we’ve begun discussing strategies to get their house sold. They’ll try to see if they can make another offer on the home they lost out on once they get theirs sold. It won’t be easy, but then the other sellers are also in a bind and need to sell, so we’re going to stay positive and do our best.

Here’s an AOL real estate article about the need to drop prices in order to sell soon. While it mentions other regions that are harder hit than the Inland Empire, sellers would do well to read it.

Is it time to cut your price?

Saving Your House From Incorrigible Little Dogs

2006-08-11T21:18:00.000-07:00

If you or someone you know loves a little dog, keep reading. The rest of you should stop now before you get too horrified.

I never had much patience for little male dogs that mark all over the house. Then I found 2 elderly Pomeranians in the same week. A Pomeranian rescue group cued me into the best way to save my house and furniture: disposable baby diapers. Since my guys (now 3 in total) are huge 15 pounders from backyard breeders, I use a size 2 diaper and a business envelope (the kind you get in those credit card applications that are mailed to your house every other day). I use clear packing tape to stick one end of the diaper to the envelope, then 1.75-in. wide masking tape for the other. That way, during the day, I can rip through the masking tape when I let them out and then just use fresh masking tape when they come back in. (Please note: it's a good idea to feel around and tuck them in just in case the key element of the dog's anatomy is not in the diaper.) They reuse the same diapers until they're too soggy (modern diapers are a wonder--they can absorb a lot of liquid!), and each generally uses one diaper per day. The diapers don't hinder them at all, they still lift their legs and don't seem even to notice that they're not hitting their target.

This won't work with all small dog breeds. Pomeranians are very easy-going. A friend of mine has a toy poodle, and when I took one of my boys (diapered) to her house to visit, her poodle quickly de-diapered my Pom. I could just imagine him thinking, "Let me help you with that!"

I haven't figured out a solution for little female dogs, but then my little girls were never so bad. As long as I let them out often enough, we didn't have many problems.

As for leaving these little dogs outside all day (and all night), I would never do so. They can squeeze out of fences and gates very easily, and they're easy prey for coyotes. Plus, it's amazing how many people I've met who've had a small dog stolen out of their yard or car.

Someone did tell me that the dogs were marking because they felt insecure. I tried holding one of them (the only one who came to us unfixed) and telling him while gazing into his eyes, "Oh, Skunk, you're so virile," but it had no effect whatsoever. So I'm not the dog whisperer. And even while I don't like the idea of overwhelming generations to come with non-biodegradable trash, it does save my house, and my dogs stay clean and happy inside. So before you take that cute little dog to the pound, try a diaper.

Pros and Cons of Porcelain Tiles

2006-08-10T10:23:00.000-07:00

Tile flooring has become quite popular of late, and porcelain tile surpasses ceramic tiles for beauty and durability. With a lot of houses on the market these days, the ones that stand out often have attractive, updated tile floors. With our hot weather in the Inland Empire, tile underfoot helps to create a cool, tranquil oasis. It's also easy to clean and much better than carpets for people who have allergies. However, think it over before you race out and have your entire house tiled.

Porcelain tiles are expensive, which is why most rehabbers prefer to carpet. (You should be tiling for yourself unless the home will truly benefit from increased marketability.) There's plenty of cheap tiles out there, but ugly tiles are a real turn off, and if you plan to sell the home ever, remember that buyers will run at the sight of them. Also, remember that cheap tiles can still be expensive to rip out, so if you offer a flooring allowance to the few remaining buyers, you're probably going to end up losing on both a reduced price and a huge allowance. So tile well and judiciously in the first place.

Keep in mind that porcelain tile is used in airports--meaning that it won't get scratched up or broken during your or your great-grandchildren's lifetimes. We chose it because our many dogs had scratched up our old Pergo flooring (and scratches in Pergo gather dirt that you'll never get out). However, this durability means that anything dropped on the tile floor will break first, and you'll have to be a bit more careful. (A TV remote was the first casualty at our house. My cell phone slipped out of my hand, but the forward momentum kept it skidding, so it didn't shatter, and I was able to put it back together.)

Think of how the flooring will affect both the feel of the house as well as your physical well-being. If you have a small home, it's a good idea to stay with the same flooring as much as possible, so that the house or condo won't feel chopped up into tiny spaces. (Think twice, however, before tiling the entire house. Those hard porcelain tiles can be tough on your joints, and if you already have back trouble, they could aggravate it, forcing you to wear thick rubber soles at home.) A large house can have different flooring materials in different rooms, but avoid wild changes in color that attract too much attention.

Depending on your preferences, you could put porcelain tiles in high-traffic area and /or where there's water (entryway, kitchen, bathrooms, laundry, living/family rooms) while using carpet or hardwood flooring in the bedrooms and hallways leading to them. If you do use hardwood anywhere, however, I'd recommend putting it in the formal living room rather than tile for a more sophisticated look.

Lastly, we did wait until our little girl had learned to walk (and run) quite well before tiling our family room. Carpet and vinyl are more forgiving to little knees.

For FAQs and to read up on the difference between ceramic (or clay, saltillo) and porcelain tiles, go to: Build Direct

Downtown Riverside: Maria's Antiques

2006-08-09T22:26:00.000-07:00

One block north of the Mission Inn is a little antique store where everything is worth looking at. We met Maria at her previous store on Market, literally when we first came to Riverside. We were in escrow and were shopping for furniture (which you generally shouldn't do, but we were coming from a teeny but more expensive condo in Santa Monica, so we had a little money). We'd already gone to a few new furniture stores and had been disappointed by the high prices and poor workmanship (note: if a big dining room table has a lot of pressboard under that veneer, gravity will win, and the table will sag). Then, while wandering around the Mission Inn, we discovered that Riverside is an incredible place for antiquing, and the best store is Maria's. We got a gorgeous bedroom set there and later went back for a dining room set. The prices for many pieces of furniture in Riverside antique stores are about half of what they'd be in West L.A. There are plenty of big places where you can search for hours, but if you're short on time and need a great gift, go straight to Maria's.

You can find Maria's Antiques at:
3541 Main St. (between 5th and 6th)
Riverside, CA 92501
(951) 784-6528

Downtown Riverside: Mrs. Tiggy-Winkle's Gift Shop

2006-08-06T19:54:00.000-07:00

Downtown Riverside has some great places, including Mrs. Tiggy-Winkle's Gift Shop. This eclectic little store is the best place in town to find tasteful gifts. The first items you see when you walk in are sheets of gorgeous gift wrap--too beautiful for me to use. But they are good for lining drawers! Then there are various sections where you're bound to find the right gift for a discerning woman (or her young child). There's a section for soap and teacups, East Asian gifts, horse lovers, faerie magic, dog and cat fanciers, liberated women, extremely classy infant clothes (including Robeez shoes), old-fashioned toys, sophisticated clothes and shoes, decorator items, and an entire backroom devoted to seasonal ware (truly magical at Christmastime).

Mrs. Tiggy-Winkle's Gift Shop is located at:
3675 Main Street (near the Mission Inn)
Riverside, CA 92501
951-683-0221

HOA fees and 100% Financing

2006-08-05T19:26:00.000-07:00

I often get first-time buyers asking me about condos. My husband and I started out in a condo, and it's a wise choice for first-time buyers as well as older people who are downsizing. Condos tend to be in much better physical condition than houses in the lower ranges of the market as the HOA has to maintain it.

However, I do have to warn first-time buyers that the monthly HOA fee will have a real impact on their buying ability, and they shouldn't assume that they can afford a condo with the same price tag as a house. With 100% financing, every $50 of monthly fee will subtract about $9000 from their pre-approval amount for a house. So if an assn. has a monthly fee of $200, that means that a buyer who could afford a house at $350,000 can only go up to about $314,000.

First-time buyers should ask their lender about the effect of HOA fees on their buying ability, and they should ask their realtor to find out how much assn. fees are when looking at condos.

In a Slower Market Sellers Need to Clean Up, Make Repairs, and Update

2006-08-03T15:14:00.000-07:00

Now that we have so many properties on the market, I'm telling sellers that they have to take another look at their homes and make them as cute as possible. The few buyers I've had of late are really picky, and who can blame them? Would you pay 2 to 3 times your current mortgage for your home in its present condition?

If you've already listed your home, look at the photos of it on the MLS (your agent can send you a link to show you what buyers are seeing). If the photos are bad, have them redone. The first photo should be of the exterior. The driveway needs to be empty--no cars, trucks, trash cans, children, or pets. You'll need some interior and yard shots, too: 1 of the kitchen, the living room, family room, each bathroom, each bedroom, and the patio or backyard. If you're missing any of these, someone will ask "Why? Is it that ugly?" Don't bother with multiple shots of the front of the house or the same room--people will wonder if those are the only decent views. And trust me, if you have no photos or few, agents won't even preview because they'll go to a house that has pictures available.

If any of these essential areas don't photograph well, clean them up, so that they will. Get rid of the clutter, make it look like perfect people live there, update flooring, paint in neutral colors, refinish or replace dilapidated cabinets, outdated countertops, beat up sinks. It will be cheaper than lowering the price of the house and could make the difference in months on the market.

Once you have only good photographs on the MLS, be prepared for people to come and visit. Curb appeal is crucial. There’s nothing like waiting at an open house and watching as cars pull up, then drive away after they take one look and decide not to come in. Is your lawn dead? Is it hard to see the house for the jungle of overgrown plants? Is your house paint peeling or of an unfashionable color? Let’s face it, cute sells. (I managed to sell a mint-green house recently after 6 months on the market. The buyers asked for and got 10k in closing costs. The first thing they did after they closed escrow was paint the exterior. It's so much nicer now! Perhaps if the sellers had done it themselves, they may have sold in the first 2 months and saved what they lost on mortgage payments on an empty house.)

Walk in the front door and pretend you're shopping for something new. What do you first see, smell, hear, feel? Cleanliness, light, and temperature are crucial. Can you see or do you need to open blinds and turn on lights? Does it smell like stale cigarettes, leftovers, kitty litter, disinfectant? Is it too hot? If it’s hot out, have the air conditioning running full blast. Smokers should smoke outside until escrow closes and deep clean the interior until a non-smoker says it passes a sniff test. (Note: non-smokers generally want carpets changed and the entire house repainted inside.)

If they make it past the entryway and into the house, kitchens and bathrooms are going to be very important. Put away as much as possible, so that the rooms look bigger. Make the house perfectly clean and touch up grout and paint (correctly, so that it doesn’t crack and peel soon afterward). Check to be sure that all doors open and shut easily, fix torn screens, and clean out the garage, so that there's room to park in there.

It's hard to keep clean, especially if you have children. Try to give each child one or two responsibilities depending on age and ability. A younger child might be able to wipe off fingerprints down low on the sliding door while an older one could handle toilet duty. Will the child get his or her own room in the next home as a reward? Or perhaps a big yard, swingset, something special? Keeping their and your goals in mind will help you sustain your energy and get your house sold.

Moreno Valley Statistics from the Past 60 Days

2006-08-01T16:33:00.000-07:00

Real estate prices in Moreno Valley are proving stable despite a larger inventory and longer days on market. There's been a noticeable increase in the average price of available 2-bedroom homes as only the most affordable are selling. This high average is some 65k over the average price of the pending 2-bedrooms and 50k over the closed sales. 37 of these houses have 2 bathrooms, and 35 are 1000 and more square feet, and these larger 2-bedrooms houses are proving harder to sell as they're priced similarly to smaller 3-bedroom houses. The difference between available and pendings/solds in 3 and 4-bedrooms is about 28k and 20k respectively. Very few condos are currently available, and there's such a gap in value between older and new complexes that the data is mostly anecdotal.

As always, this data comes from the IMRMLS and thus does not include For Sale by Owners and houses that were listed only in other boards. The numbers may be skewed by agents who made errors in their entries. Pending, closed, and expired numbers are as of 6/1/06.

Houses:

2 and less:
Available: 93 Avg. Price: 355,168 Avg. Days On Market: 51
Pending: 19 Avg. Price: 289,763 Avg. DOM: 51
Back-Up: 4 Avg. Price: 326,662 Avg. DOM: 51
Sold: 24 Avg. Price: 305,070 Avg. DOM: 48
Expired: 17 Avg. Val: 317,700 Avg. DOM: Unavailable

3 bedrooms:
Available: 574 Avg. Price: 390,241 Avg. DOM: 54
Pending: 107 Avg. Price: 362,884 Avg. DOM: 54
Back-Up: 22 Avg. Price: 407,582 Avg. DOM: 83
Sold: 185 Avg. Price: 366,113 Avg. DOM: 46
Expired: 154 Avg. Val: 394,659 Avg. DOM: Unavailable

4 bedrooms:
Available: 757 Avg. Price: 467,528 Avg. DOM: 58
Pending: 133 Avg. Price: 448,168 Avg. DOM: 56
Back-Up: 23 Avg. Price: 476,280 Avg. DOM: 74
Sold: 184 Avg. Price: 445,381 Avg. DOM: 51
Expired: 221 Avg. Val: 464,726

Condos:
2 and less
Available: 2 Avg. Price: 212,000 Avg. DOM: 48
Pending: 0
Back-Up: 2 Avg. Price: 309,950 Avg. DOM: 54
Sold: 6 Avg. Price: 261,333 Avg. DOM: 21
Expired: : 1 Avg. Price: 285,000 Avg. DOM: Unavailable

3 bedrooms
Available: 7 Avg. Price: 300,457 Avg. DOM: 48
Pending: 1 Avg. Price: 238,000 Avg. DOM: 20
Back-Up: 0
Sold: 2 Avg. Price: 272,220 Avg. DOM: 32
Expired: 0

Prices are actually up even though sales are down!

2006-07-29T08:44:00.000-07:00

The numbers are out from the California Association of Realtors, and even though sales are down due to a high number of houses on the market, the prices of closed sales are up overall in Southern California. So while talk of a buyer's market is on everyone's lips, I wouldn't expect to find many bargains. I'm seeing a few sellers dropping prices, but only if they're in a real hurry.

You can look at the numbers at the following site:

http://www.car.org/index.php?id=MzY0MzY=

Softening Market Hits Riverside

2006-07-26T15:07:00.000-07:00

In the two months since my last report, there's been a rise in inventory and a general flattening of prices. Buyers have become rather ambivalent now that there are more homes to choose from. Many are hoping that sellers will drop their prices, but how much they can depends on their level of debt and whether or not they can get a lower price on their next home. In addition, the recent rise in interest rates has also had an effect on buying ability, so that motivated buyers simply can't go as high as in the past.

Back in May, there was a noticeable difference between the average value of available properties and the average of closed sales. That difference is still there, especially in the larger houses, thus revealing a top-heavy inventory. In other words, it's a buyer's market primarily in the upper ranges where there are fewer qualified buyers. Among the smaller houses, the average price of available houses has dropped a bit, but the average of pending houses is only slightly less than before, and that of closed sales is actually up. This is because there's a real lack of houses in good condition in the bottom range of the market. Interestingly, the trend among 3-bedroom houses has been very similar.

2 and less bedrooms
Active: 155 Avg. Price: 385,269 Avg. Days on Market: 54
Pending: 51 Avg. Price: 351,995 Avg. DOM: 49
Back-up: 6 Avg. Price: 342,150 Avg. DOM: 51
Sold: Avg. Price: 353589 Avg. DOM: 41
Expired: 24 Avg. Val: 363112 Avg. DOM: Unavailable

3 bedrooms
Active : 941 Avg. Price: 448,905 Avg. DOM: 56
Pending: 224 Avg. Price: 408,203 Avg. DOM: 57
Backup: 51 Avg. Price: 432,240 Avg. DOM: 79
Sold: 243 Avg. Price: 412,975 Avg. DOM: 49
Expired: 262 Avg. Val: 444,649 Avg. DOM: Unavailable

4 or more bedrooms
Active: 1187 Avg. Price: 640,865 Avg. DOM: 60
Pending: 200 Avg. Price: 532,059 Avg. DOM: 51
Back-up: 55 Avg. Price: 546,378 Avg. DOM: 80
Sold: 275 Avg. Price: 564,320 Avg. DOM: 47
Expired: 318 Avg. Val: 645,014 Avg. DOM: Unavailable

As there are fewer condos, the data becomes rather more anecdotal, but there has been a drop-off in the average price of those actually sold. The prices of 2-bedroom condos are up, but it remains to be seen if they will remain thus and if buyers are forced up to be able to get anything at all. Definitely, it's been the lowest priced 2-bedrooms selling most recently, so that the average of the pendings is a little over 30k below that of closed sales.

Condos:
2 and less bedrooms:
Available: 62 Avg. Price: 279,931 Avg. DOM: 46
Pending: 9 Avg. Price: 239,866 Avg. DOM: 31
Back-Up: 1 Avg. Price: 279,900 Avg. DOM: 81
Sold: 15 Avg. Price: 270,120 Avg. DOM: 29
Expired: 5 Avg. Val: 250,580 Avg. DOM: Unavailable

3 bedrooms
Available: 26 Avg. Price: 347,023 Avg. DOM: 47
Pending: 12 Avg. Price: 357,690 Avg. DOM: 46
Back-Up: 1 Avg. Price: 297,000 Avg. DOM: 73
Sold: 10 Avg. Price: 339,940 Avg. DOM: 35
Expired: 3 Avg. Val: 319,266 Avg. DOM: Unavailable

4 or more bedrooms
Available: 8 Avg. Price: 428,325 Avg. DOM: 43
Pending: 0
Back-Up: 0
Sold: 0
Expired: 4 Avg. Val: 439,650 Avg. DOM: Unavailable

As always, these numbers are from the IMRMLS and only include properties listed there. Sold and expired info is as of 5/26/06. Errors by listing agents may skew the numbers.

Do I expect prices to come down? People keep asking me this. I ask them if they expect gas prices to go down. Home prices will drop if interest rates go up significantly. Motivated sellers who have enough equity will sell for less. However, those who can't get enough on their homes to cover their debts and/or get into another home are likely to stay put until prices rise again. We are beginning to see some foreclosures and short sales, but very few are admitting it yet on the MLS, and their lenders will have the final ok on a non-contingent buyer for a short sale.

Here's a link to yesterday's NAR article on the softening market.
Existing Homes Sales Flattening

I'm not supposed to tell, but you can ask...

2006-07-12T16:15:00.000-07:00

As a realtor, I'm not supposed to show or not show property on the basis of the ethnic make-up of the neighborhood. It follows that I shouldn't volunteer information about race, marital status, and sexual orientation either. I can and do talk about the economic conditions of a neighborhood and will tell buyers how to find public schools rankings. People generally understand that this is how it works, but every now and then, I get a surprise.

Some months back, a woman called and asked me if she could talk to my seller directly as she had some questions about the neighborhood. I asked my seller if he minded, and he said he just didn't feel comfortable dealing with potential buyers. So I asked the woman if she wanted to ask me the questions. Finally, she said that what she wanted to know was if any Black or Mexican people lived nearby. She added hastily that she wasn't racist. I paused, and it occurred to me to suggest that she park on the street and watch for a few hours on a weekend. But then I thought better of it as the elderly Black couple next door might call the cops on her. So I told her that the neighborhood was "fully integrated," and that I knew of African American, Spanish-speaking, Asian, and Caucasian families who lived on the street. I said that there might be other groups, but that I didn't know for a fact. This was enough information, and the woman assured me that she would call back if she had any more questions. She never did call again.

The funny thing is, I'm Filipina (several Philippine ethnicities), Chinese (probably Fukien), Anglo, and who knows what else. My extended family has members who are part Hawaiian, Native American, Jewish, Scottish, French, African American, and Japanese among other backgrounds. If this woman had seen my photo, she probably would have been scared off and never called in the first place!

absolute best vacuum cleaner for realtors and anybody

2006-07-10T11:51:00.000-07:00

A seller called my Dyson Animal the "uber vacuum." It's the one I use before holding open house when my sellers have more pet hair than they can handle. As we have four long-haired dogs, a short-haired one that sheds profusely (at least it means she doesn't need bathing as the dirt comes off with the hair), my own long hair, and my husband's receding hair line, we have to vacuum a lot. And not just the floors because the fans kick the hair up the walls and all the way to the ceiling where it clings. I seem to vacuum up enough to make 10 more little dogs each week. I wouldn't be surprised to hear barking from inside the garbage bag as I haul it out to the curb.

James Dyson isn't exactly an inventor--I'd call him a re-inventor. He takes appliances that already exist and makes them work very well. (His vacuum cleaner was designed in response to his wife's complaints about the shortcomings of the one they had.) His story is also the rare one of the underdog who wins out over the famous company (Hoover) that tried to steal his ideas.

My only complaint about my Dyson when I got it was that it didn't have a good attachment for hooking over to vacuum high shelves, the tops of ceiling fan blades, and semi flushmount light fixtures. They seem to have some new attachments out, however, that I'm going to order and try out.

To read up on James Dyson and his inventions, you can go to his company's main website:

http://www.dyson.co.uk/

She wants a house, but he doesn't want to work

2006-07-03T21:13:00.000-07:00

I read an article recently about how divorce forces a lot of people into poverty as it's a lot harder for one person to live on half the couple's assets. In terms of real estate, a couple has better chances of getting a home by pooling their resources to qualify for a loan. However, I've known some women who've been forced to rent for a long time precisely because they ended up being the sole breadwinner, and I've seen one made into a slave of her mortgage. Each one got married with a lot of hope, only to discover that the man she married didn't want to grow up and get a job.

Now, these women and their husbands have nothing in common with each other geographically, ethinically, financially, or education-wise. They were all in their early 20's when they got married, and they and all but one of the husbands were very religious (hence, the reluctance to divorce). One of the husbands had a law degree from a top school, one attended college, another had been in the military and done some community college, and another had gotten his GED. One never worked at all while two quit work within months of marrying. The fourth quit his job while his wife was pregnant with their 2nd child, leading to their eviction from their apartment. They ended up in a government subsidized apartment.

The men refused to get individual therapy, and several couples only got limited marriage counseling after much begging on the part of the wives. One man told their counselor that if his mother could stay home, he could, too, and any money from part-time work was his alone.

Several of the women wanted a house, and 2 actively searched for a while when prices were low, but they couldn't qualify for a loan. One couple was able to buy a condo when the husband's mother gave them the down payment. The fourth lived with his parents the whole time.

Of the three couples without children, two divorced after several years and no assets. After some years, one of these women did finally marry a man she met at work who already owns his own house. The couple with the condo divorced after some 20 years, but she was forced to buy him out for half even though he had never helped with the mortgage payments. As the property has quadrupled in value, she's facing big payments for the next 30 years.

The couple with kids now have 3, and the wife is working full-time and going to school. Her mother has moved in to help take care of the kids because the husband won't. When the wife began working full-time, her paychecks were garnished to pay off the former landlord. She was able to talk the judge into reducing the amount taken out monthly, but he openly recommended that she get a divorce. She's slowly repairing her credit, got a car of her own (her husband drives a stick-shift truck and never taught her), and has a secret checking account and a credit card. Her husband got excited when he saw the cable was finally paid off and wanted to get cable again, but she refused. She has gotten his name off the lease and the utilities (though the electricity was shut off while she was staying with relatives and recovering from surgery, and he chose to buy something else with the money she'd given him for the power bill. The sad thing is, the kids were sitting in the dark with him!).

I have been very frank with the last woman. If she ever wants to have her own property, she ought to divorce first because CA is a community property state. If she manages to finish school, get a decent-paying job, and get her own home before divorcing, she may find him getting half their property and demanding alimony. Yes, she could hold title as separate property, but she would have trouble getting a loan in the first place since she's responsible for his debts unless she can get control of his spending (highly doubtful). As an educated, working single mother, she's more likely to be able to tap into government aid than if she has a continuously unemployed husband.

So while it's more often true that divorce forces women and children into poverty, it isn't always the case. I just can't help but think that some women would really succeed financially on their own and be able to get their own home if they wouldn't hesitate to shrug off the dead weight of a man who won't even look for a job. In fact, 2 such women might be better off putting their salaries together to get a nicer house and helping each other with childcare. And since they wouldn't get married, they wouldn't be responsible for each other's future debts!

Electric bill too high? Plant trees!

2006-07-02T20:39:00.000-07:00

I was talking to an acquaintance last year who wanted to buy an extra large lot. I asked him if he understood that he was going to have to landscape the half acre and that watering it wouldn't be cheap. So he said he'd just pour cement over it. I laughed and warned him that all that cement would really push up his air conditioning bills--not cheap considering that his 4000+-square-foot house was going to have at least 3 air conditioners. I told him that he should plant deciduous trees to shade his house in the summer. As they drop their leaves, the sun would be able to reach his house in the winter.

The City of Riverside has a great program that reimburses people for planting deciduous trees around their houses. We've taken advantage of this program plus put a pergola with wisteria over our patio. These plantings in combination with putting in 2 attic fans have reduced our kilowatt usage from 1850 to about 1350 during the summer months, which is quite remarkable considering that we have an all-electric house.

Our next goal, which we've been considering for the past decade, is to put solar panels up on our roof (the section that doesn't have trees over it). I've always liked the idea of using the sun to provide power that could ultimately cool our house.

Here's the Riverside Utilities site on the tree program:
http://www.riversideca.gov/utilities/resi-treepower.asp

A bathroom in the garage?

2006-07-01T22:05:00.000-07:00

I had a listing that closed recently. It was a little house with only one bathroom. During the final walk-through, the buyer's agent noticed a sink in the garage and turned on the tap just as her companion and I screamed a warning. She jumped out of the way, and the water just missed her feet. You see, there was water coming in, but the drain to take it away was missing. I hadn't even bothered to mention the sink in the MLS as it wasn't a selling point.

She turned excitedly to her buyer and told him in Spanish that there was a bathroom in the garage. I was surprised but didn't say anything, not wanting to interfere. Technically, I suppose, the water was there to bathe with. And she had used the word "baño," which specifically pertains to bathing, and a toilet may not be present.

The home inspection might have cleared up the matter, but their home inspector hadn't gotten inside the garage. That was because she forgot to tell me that they were having the home inspection on the day they went. I was actually at another home inspection (I always go, whether I'm representing the buyer or the seller), and I only got her message later, asking about the keys. When I called her back to explain that I'd taken the keybox down because one of the keys had gone missing (never did find out where it went to as none of the agents who showed the house ever came clean), I offered to meet her at the house. Not to worry, she told me, she was a professional and knew what she was doing. They forced an unlocked window, climbed in, and did the inspection of the house. And she had locked the place up on their way out. They weren't able to get into the garage and so had left it out. I was so surprised, I didn't know what to say. I told my broker about it, and she was amazed, too.

When I went by the house later, I found the back window still wide open and the front door unlocked. Sigh. Nothing was missing, and no vagrants had moved in, which I reported to my out-of-area sellers.

When I told them several weeks later about the bathroom comment, they had to laugh. I guess a bathroom is in the eye of the beholder.

One house to leave

2006-06-30T12:29:00.000-07:00

I've seen this happen several times. An elderly parent dies and leaves the family home to various adult children, some or all of whom haven't gotten along with any of the others. To some degree, the children feel that the parent loved them after all. Then the fighting starts.

One of the siblings has actually physically cared for that parent and perhaps some other elderly relatives, and s/he is angry with the others for not helping out or even visiting. The other siblings feel that this one has managed to live rent-free for years. All have debts that need paying off, and the house is suddenly worth more than anyone dreamed of. The other siblings deliver an ultimatum to the one still at home: either buy them out or sell off and divide the profits.

At the height of the market, I've seen the caregiver forced to take out an insane loan for a house that is falling apart as no one had the wherewithall to keep it up while grandma or grandpa was dying. The other siblings took their share of the money and then promptly had to pay federal and state income taxes on it. The one sibling now has become a slave to a mortgage without any cash to fix up a property that is losing value in a stalling market. The others have perhaps lost perhaps half of what they sought to gain. No one is really happy.

While many parents want to love all of their children equally, it may be a good idea for them to sit down and figure out the greater need and even the greater merit ahead of time. Accusations will fly no matter what, so they might as well see to it now that the one who actually takes care of the sick and elderly doesn't end up homeless or in debt. Another possibility is to sell while the parents are still able and to put the money toward senior care with anything left over going into a trust fund for grandchildren and/or other minors.

Lastly, give your children your love, rather than debt and jealousy. All I want from my parents is memories and perhaps some of their photo albums.

Divorce and Foreclosure

2006-06-29T11:13:00.000-07:00

I keep seeing this happen. Seemingly sane individuals call it quits as a couple and then somebody decides not to pay the mortgage. Don't do this to each other! At least, don't do this to your kids!

1. If you at least sell the place and share the profits (if there are any), you will have half of something (which could be fairly good as you'll have some control over the marketing, the condition of the house, the sale). If you let the bank sell it, you'll be forced out, the house will be in terrible shape, and you'll get half of whatever's left (which won't be much).

2. Yes, the other person's credit is ruined, but so is yours. And it's getting harder to rent with lousy credit, so don't assume that you'll get a decent rental (at perhaps twice what your mortgage was).

3. Your kids just lost their family, now their home, probably their school (unless you can find housing in the same district) and their friends along with it. Do you want them to forgive you any time soon? And they won't just blame the parent who didn't make the payments, believe me. They'll figure out that the other parent played a part.

So please, if you are contemplating divorce, stay calm and don't ruin the family. Keep an eye on the statements from the mortgage co. If it's been your spouse' responsibility to make the payments, and you see that stopping, do something about it before it's too late!

These houses are for the birds

2006-06-28T12:08:00.000-07:00

We were chatting with a retired couple we know and asked them what they've been up to. Well, it turns out that the husband has been making bird houses to sell at an upscale boutique in Orange County that marks them up a lot. I asked him if birds actually live in them, unlike a birdhouse we have, and he said that one time, he left the garage door open slightly overnight, and the next morning, he discovered that several birds had already begun moving in. He designs them using basic measurements that various birds require, and he's been told that birds like his houses in the Southwest and the Midwest as well as in California. So they're not only yard art, they're also great little homes. If only they made houses for people this way.

You can look at their website at:

http://www.creativeayers.com/

Riverside road problems affect Moreno Valley commuters

2006-06-12T18:34:00.000-07:00

The traffic has become really insane in Riverside and Moreno Valley in the last few years. As always, work on freeways and major arteries have been playing catch-up with all the new tracts and influx of commuters. The 60/91/215 interchange has been something of a disaster for several years now, but there are at least possible surface routes to avoid that construction mess. Moreno Valley, however, is getting rather cut-off what with the bottleneck where the 60 and the 215 converge, the endless construction near UCR, and now the planned work on Alessandro, which has been the major connection to Mo Val.

Alessandro has been something of a mini-freeway as it has a speed limit of 55. People coming from the 215 tend to race along it at speeds of 60 to 70. This is highly problematic given that there are stoplights along the way. I've seen some horrific accidents at the Communication Center. They've added a solar-powered speed monitor that starts blinking "SLOW DOWN" for the wanna-be race car drivers. As far as I can tell, it has no affect on their speed, much like the monitor they've added on the dead man's curve on Arlington just above Victoria.

When cars turn left from Alessandro onto Arlington, the speed actually goes down to 45 mph way before the the blinking yellow caution lights. After the Victoria light, the limit is 40, and by Target, it drops to 35. By Victoria Elem, the speed drops down to 25 when children are present. And where Alessandro becomes Central, the speed limit goes down to 40, again dropping to 25 when the kids are getting dropped off and picked up at Alcott. All of these factors combine to turn Alessandro, Arlington, and Central into parking lots at some hours of the day.

So the plan now is to widen Alessandro. This will help make it into a wider but possibly less long parking lot, at least until more people move into the new housing that they're building in eastern Mo Val. And the plan to put a much needed pipeline along Alessandro from Riverside into Mo Val will take care of the back end. Of course, the latter project won't go on forever. When it finally starts, after months of delays, there will at least be light at the end of that tunnel.

I'm recommending to people not to move deep into Mo Val if they have a long, daily commute westward. If they want a spacious, affordable home, they should do their best to get work closeby, so that they can actually spend some time with their families in that terrific house.

Real time traffic map at Press Enterprise site:
http://www.pe.com/traffic/

June 25, 2006 PE article on Alessandro projects.

Press Entrprise story from April on rejection of bill to declare state of emergency on local freeways.

builders don't want people to flip houses

2006-05-30T20:13:00.000-07:00

Lately, I have had a couple of people ask me about selling new houses that they'd just bought recently. In both instances, when I read through copies of their trust deeds, I found where they had promised not to sell the property for at least a year. In one case, where the owners had borrowed about 95%, they had also promised to move into the home within several months of its completion. This type of verbiage is becoming more and more common as builders try to prevent investors from flipping houses in new tracts.

I asked both sets of owners if they were aware of this wording. The first group said they were, and when I asked if they had a strong reason to get out of the agreement, such as a job relocation, they said, "no." They just wanted to flip the house. I advised them to talk to the lender and find out if it was even possible for them to get around the limitation, such as by paying a penalty. But I also told them there'd be substantial tax consequences, and that they should talk to their tax preparer. I suggested that, since they'd put a large deposit on the property, they go ahead and rent it out for a year in the meantime, so that they'll be able to do a 1031 tax exchange later.

As for the other people, they never responded to my questions but just went ahead and listed with someone else. I wish them luck. They'd just gone through a 6-month listing without a single offer, and it probably had to do with their house being priced about 80k over 3rd phase houses that the builder was closing out.

best tacos in Riverside

2006-05-29T18:49:00.000-07:00

Our favorite taco, burrito, and torta stand in Riverside is inside a small market at 6024 Magnolia near Jurupa (between Pep Boys and Tuxie's Drive-in). Up until recently, it was called Cazares, but at the moment, there's no name over the front door (which is actually in the parking lot in back rather than on Magnolia). The new owners' name is Bark, and the business cards on the counter say "Bark's Carniceria." The guys behind the counter told me the new owners are Korean, but they haven't changed much that I can tell. The menu and all the workers seems to be the same.

My husband and little girl always get the carnitas. My husband likes their red salsa so much that he often asks for some extra on the side. (If you're not sure how hot you want it, tell them only to put it on the side, so you can control the amount.) Our 4-year-old is still too young to handle salsa and onions, so she just has the meat in her tacos. I usually get the carne asada with some avocado thrown in.

They have lots of other cuts that you try out and see what you like, plus shrimp, ceviche, and fried fish.

San Bernardino housing statistics from the last 60 days

2006-05-28T16:41:00.000-07:00

Since my last report on San Bernardino (3/20/06), there’s been an increase both in inventory and in the number of single family residences sold as one would expect during the spring. Values are holding fairly steady across categories with the biggest change being a 23k jump in the average sold price of 4+ bedroom houses. Unlike in Riverside, the average list price of available single family residences has only increased slightly.

There has been a noticeable decrease in the average values of 1-2 bedroom condos that have sold. 3-bedroom condos show a marked increase in pending values over that of solds, but there are so few units involved that the information is merely anecdotal and doesn’t offer a real trend.

Note that pending, expired, and sold data are as of 3/28/06. The back-up category would not allow me to limit the time period, so there may be some false figures if any agents haven’t updated their listings. As always, incorrectly input codes and figures may have skewed the numbers.

Houses
2 or fewer bedrooms:
Available: 215 Avg. Price: 298,992 Avg. Days On Market: 55
Pending: 71 Avg. Price: 279,831 Avg. DOM: 32
Back-up: 14 Avg. Price: 265,707 Avg. DOM: 87
Sold: 90 Avg. Price: 263,406 Avg. DOM: 47
Expired: 38 Avg. Price 283,187 Avg. DOM: 36

3 bedrooms:
Available: 518 Avg. Price: 353,602 Avg. DOM: 53
Pending: 156 Avg. Price: 326,929 Avg. DOM: 47
Back-up: 45 Avg. Price: 336,105 Avg. DOM: 80
Sold: 233 Avg. Price: 322,685 Avg. DOM: 48
Expired: 169 Avg. Price: 357,976 Avg. DOM: 35

4+ bedrooms:
Available: 306 Avg. Price: 466,469 Avg. DOM: 57
Pending: 49 Avg. Price: 371,597 Avg. DOM: 53
Back-up: 3 Avg. Price: 389,738 Avg. DOM: 72
Sold: 81 Avg. Price: 419,515 Avg. DOM: 50
Expired: 94 Avg. Price: 436,779 Avg. DOM: 31

Condos:
2 or fewer bedrooms:
Available: 26 Avg. Price: 204,272 Avg. DOM: 65
Pending: 17 Avg. Price: 189,761 Avg. DOM: 43
Back-up: 4 Avg. Price: 219,475 Avg. DOM: 66
Sold: 18 Avg. Price: 213,438 Avg. DOM: 40
Expired: 11 Avg. Price: 209,790 Avg. DOM: 47

3 bedrooms:
Available: 4 Avg. Price: 263,449 Avg. DOM: 60
Pending: 4 Avg. Price: 247,425 Avg. DOM: 20
Back-up: 0
Sold: 7 Avg. Price: 207,714 Avg. DOM: 35
Expired: 2 Avg. Price: 249,000 Avg. DOM: 103

Moreno Valley Statistics from the past 60 days

2006-05-27T16:45:00.000-07:00

Similarly to Riverside, the recent figures for Moreno Valley show stable prices in general since my last report (3/22/06). The average of available prices is higher than that of expireds but are much closer than in, say, Riverside. The much higher number of closed sales are in keeping with the typically more active spring market. Pending, back-up closed, and expired figures are from 3/27/06 through the present.

In the single family residence category, 1-2 and 3-bedroom houses in escrow show an average lower list price than closed sale prices. However, a number of these properties may end up closing higher as there’s room for buyer’s to stack costs.

As always, the data may be thrown off by agents who input codes and prices incorrectly. I had to leave out the average price of 3-bedroom properties taking back-up offers as the figure was too high—one house was listed for about 3.2 million more than it could possibly be worth.

Houses
1-2 bedrooms:
Available: 63 Avg. Price: 315,156 Avg. Days On Market: 49
Pending: 34 Avg. Price: 295,508 Avg. DOM: 48
Back-up: 4 Avg. Price: 304,000 Avg. DOM: 44
Sold: 43 Avg. Price: 299,127 Avg. DOM: 31
Expired: 18 Ave. Price: 301,316 Avg. DOM: 94

3 bedrooms:
Available: 463 Avg. Price: 390,068 Avg. DOM: 48
Pending: 155 Avg. Price: 360,869 Avg. DOM: 44
Back-up: 36 Avg. Price: (data too skewed by incorrect entry)
Sold: 236 Avg. Price: 366,690 Avg. DOM: 45
Expired: 102 Avg. Price: 384,506 Avg. DOM: 47

4+ bedrooms:
Available: 649 Avg. Price: 465,197 Avg. DOM: 55
Pending: 121 Avg. Price: 452,511 Avg. DOM: 58
Back-up: 37 Avg. Price: 451,860 Avg. DOM: 74
Sold: 226 Avg. Price: 424,746 Avg. DOM: 48
Expired: 172 Avg. Price: 458,179 Avg. DOM: 68

Condos:
1-2 bedrooms:
Available: 1 Avg. Price: 210,000 Avg. DOM: 4
Pending: 4 Avg. Price: 254,750 Avg. DOM: 30
Back-up: 0
Sold: 3 Avg. Price: 201,333 Avg. DOM: 37
Expired: 0

3 bedrooms:
Available: 1 Avg. Price: 229,900 Avg. DOM: 4
Pending: 5 Avg. Price: 242,500 Avg. DOM: 48
Sold: 2 Avg. Price: 213,500 Avg. DOM: 3
Expired: 0

4+ bedrooms:
Available: 0
Pending: 0
Back-up: 0
Sold: 0
Expired: 0

Riverside housing statistics from the last 60 days

2006-05-26T23:41:00.000-07:00

Here are today’s numbers for the City of Riverside and the surrounding unincorporated areas. For pending, back-up, sold, and expireds, the data is from 3/26/06 through today.

Overall, the upward trend continues for new listings while homes that are in escrow are noticeably lower in listed value. In fact, the average value of available listings is higher than that of expired listings with the exception of 3-bedroom single family residences. The sold prices are generally lower than the pending and back-up list prices with the exception of 3-bedroom condos.

What I find interesting is that while the average price of sold 2 (or fewer bedrooms) and 3-bedroom single family residences dropped several thousand dollars, that of 4+ bedrooms actually rose since my last report (3/18/06). And the market is definitely more active than it was a couple of months ago with many more properties closing this spring. So despite the very large inventory, the real estate market in Riverside is actually proving rather stable.

As always, the data may be skewed by the occasional listing agent who inputs the wrong code, price, etc, though I must say there’s been a marked improvement since the board has begun fining people.

2 and less bedrooms:
Active: 124 Avg. Price: 392,759 Avg. Days On Market: 44
Pending: 46 Avg. Price: 354,377 Avg. DOM: 36
Back-up: 12 Avg. Price: 338,133 Avg. DOM: 65
Sold: 63 Avg. Price: 328,470 Avg. DOM: 34
Expired: 29 Avg. Val: 336,906 Avg. DOM: 53

3 bedrooms:
Active: 800 Avg. Price: 459,405 Avg. DOM: 52
Pending: 156 Avg. Price: 412,015 Avg. DOM: 47
Back-up: 67 Avg. Price: 416,979 Avg. DOM: 74
Sold: 297 Avg. Price: 411,142 Avg. DOM: 46
Expired: 188 Avg. Val: 460,991 Avg. DOM: 66

4 and more bedrooms:
Active: 1036 Avg. Price: 641,325 Avg. DOM: 53
Pending: 172 Avg. Price: 555,357 Avg. DOM: 52
Back-up: 69 Avg. Price: 600,165 Avg. DOM: 64
Sold: 293 Avg. Price: 550,767 Avg. DOM: 53
Expired: 251 Avg. Val: 627,826 Avg. DOM: 48

Condos:
2 and less:
Available: 36 Avg. Price: 268,028 Avg. DOM: 32
Pending: 8 Avg. Price: 279,587 Avg. DOM: 37
Back-up: 4 Avg. Price: 263,997 Avg. DOM: 66
Sold: 17 Avg. Price: 282,811 Avg. DOM: 39
Expired: 10 Avg. Val: 250,680 Avg. DOM: 38

3 bedrooms
Available: 21 Avg. Price: 372,576 Avg. DOM: 27
Pending: 10 Avg. Price: 316,389 Avg. DOM: 52
Back-up: 1 Avg. Price: 324,900 Avg. DOM: 1
Sold: 17 Avg. Price: 336,811 Avg. DOM: 28
Expired: 5 Avg. Val: 360,578 Avg. DOM: 31

4 and above count:
Available: 7 Avg. Price: 446,714 Avg. DOM: 59
Sold: 3 Avg. Price: 379,000 Avg. DOM: 120
Expired: 0

If they want to pay an extra $100,000...

2006-05-10T10:59:00.000-07:00

My broker recently announced a scam to watch out for. If the buyers want to pay an extra 100k or so, and they ask the sellers to pay them about half of it outside of escrow (or say, take back a 2nd loan without expecting it ever to be paid), they're defrauding the lender. Such amounts are way over lender limits for seller help with closing costs and/or allowances. To accomplish this, the buyers need the help of the appraiser. Of course, the buyers are going to be stuck with a sizable payment for some years (unless the house goes up significantly in value), so they don't get off completely. If prices dip and a life change forces them to sell, they're in real financial trouble. Moreover, these kinds of sales are also bad for the neighbors because they produce comps that then justify bigger debt when other home owners in the area decide to refinance. If these other owners then get into a situation where they need to sell, they won't be able to cover their debts.
So who benefits? The buyers might at first because they get the house and money to fix it up (hopefully to the point where it actually approaches its supposed worth.) The sellers obviously get their price and then some. The appraiser may profit beyond the usual fee. And then the real estate agent who is also the loan officer fares well because s/he is the person who is making the commissions off the overvalued property. If this person also manages to represent both the buyer and the seller, s/he could be getting an extra 10k. But is that enough money to justify putting so many others at risk?
So if one house in your neighborhood suddenly sells for 100k or so over anything else in the neighborhood, don't jump for joy because your house is suddenly worth more. And please don't use it to take out a bigger loan!

The Final Walk-Through Isn't a Contingency

2006-05-08T20:37:00.000-07:00

I had a bizarre experience last week where the buyer's agent told her not to sign the final walk-through form (Verification of Property Condition) because the sellers had left a bit of a mess in the garage and the grass needed to be cut. The agent, who was also the loan officer, actually threatened to hold up funding until the place was cleaned up.

First, the final walk-through isn't a contingency. It's a piece of paper on which the buyer can note down any repairs that haven't been made and any new problems. It has to be done shortly before closing, and the seller also signs it. Basically, it provides a paper trail should the buyer wish to take legal action (usually of the small claims variety).

Second, as I explained to the buyer, delaying funding would only hurt her. My sellers would have been well within their right to dump her at that point. They would have lost time and money, but they could have put their house back on the market. After all, they had something to sell.

As my sellers had already moved, their gardener had disappeared, and their friends had run out of room in the dumpster, I hired some help and participated in the clean-up. The loan funded, title recorded, all before the clean-up could finish. So the buyer never got to sign a final walk-through at all, and now she doesn't have that paperwork.

In the meantime, I'm still trying to get a waiver signed, saying that she had been advised to have a final walk-through. I have a check that the sellers had agreed to give her outside of escrow for some repairs that her lender wouldn't allow them to pay for earlier. Once I get the waiver signed, I'll give her that check.

Keys will be given after title records

2006-05-06T22:15:00.000-07:00

Lately, I've had trouble with buyers trying to get keys before title records. I've even had one buyer's agent give his client the key that was in the lockbox. He sent me an email, but I didn't receive the email until after I went to take the lockbox down and discovered that the key was missing.

The reason why is that the buyer is still not technically the owner (at least, not according to county records) before title records even after the loan has funded. So I can't hand over the keys until then, and the residential purchase agreement allows for possession at close of escrow or within three days after but not before. A separate agreement has to be made to allow the buyer to move into the property ahead of title recording.

On the RPA, the buyer can put down what time of day they wish to get possession, but this is at best an ideal schedule. I've seen agents put down 10 am on close of escrow. That's nice, but confirmation can take hours, and if it's a special afternoon recording on a Friday afternoon or at the end of the month, confirmation may come after 5 pm.

As for the agent who took the key out of the box ahead of time, I chose not to complain because my seller had already moved out months before and it was a special recording on a Fri. afternoon. I had planned on taking the lockbox down the previous weekend but had left it up to accomodate the buyer who had to reschedule the final walk-through at a time that I couldn't make. But from now on, I'm taking the lockbox off after the inspections and will be leaving them at my office, just in case.

Zillow.com: A Quick Review

2006-05-05T10:11:00.000-07:00

A couple of months ago, a friend of ours told us that Zillow.com had told her that her family’s home was worth about 580k. I was surprised as I knew their home and the neighborhood, and I would have ballparked it at 620k. My husband tried running our own home, and he got a value that was about 60k under what I would have thought. That’s when I knew I had to try out the site.

The first of my closed listings that I ran on Zillow.com was so close, it almost scared me. It was within $50 of what my sellers netted after paying for the buyer’s closing costs of 10k. The property appraised easily at the total amount, making the Zillow.com estimate very reasonable.

However, I then ran another of my closed listings, and the Zillow.com estimate was about 60k under what it appraised and sold for. Curious, I checked the comps and discovered that they were mostly from about 6 to 7 months before. Last year, there was an overall increase in residential property values of 30% in the Inland Empire, and the time factor for figuring value was and is vital. The comparables were generally within a couple hundred square feet and located nearby, but none were from within the last 60 days, so the values were really off. An appraiser would prefer to use more recent sales and add or subtract for differences between the subject property and the comparables.

What is amazing about Zillow.com site is how fast it comes up with an aerial view of the area even with an incomplete address. The photo of one my listings was so clear that I could see the play house in the backyard and the sod (which was only put in a few months ago).

I went ahead and doublechecked the MLS for comps for our friend’s home and found that there were 2 closed sales since 3/1/06 at about 557k and 687k. There’s one pending sale just 2 blocks from them at 579k. Her house is just a couple of years older than both of the solds, and while she doesn’t have granite counters or hardwood floors, her property has additional amenities such as a covered patio, a spa, and a pool with a waterfall. The lot is as large as that of the higher-priced house. If I wanted just to use the average of the 2 solds, neither of which has a pool, I’d come up with 622k, which isn’t too far off from my original guesstimate. So if she really wanted to sell, I’d recommend some extra weeding, decluttering, and deep cleaning. Then I’d price it at 630k with a 6-month listing, 6% overall commission, and lots of advertising.

Zillow.com has a lot going for it, and if it satisfies the curious, that’s fine by me because it’ll keep more people from asking me for CMA’s. Not that I mind finding comps for the curious as I’m rather addicted to doing them.

To check out Zillow.com yourself, go to:
http://www.zillow.com/

Don't Sign that Blank Contract!

2006-05-04T15:10:00.000-07:00

It's just not a good idea to sign any forms that haven't had all the dates, dollar amounts, and commission percentages filled in. If your agent says that he or she can do it later, ask, "Why not now? I'm not in a hurry."

A few weeks ago, the front desk at my office buzzed me to come and help translate for a Spanish-speaking woman. Her story was a sad one.

She wanted to list her mobile home, which had previously been listed. However, the carbon copies she had of the contracts were all blank except for her signatures, dates, and initials. She told me that the agent had "cancelled" the listing at her insistence because she'd never received a single offer. However, the "cancellation" consisted of the agent's signature on the back, a date, and a "K" in a circle.

I explained to the woman that a cancellation form does exist, and she should get the agent to sign it since, if she listed again with someone else and the property sold, she might be liable to pay 2 commissions. Unfortunately, she told me that agent had changed companies, and no one seemed able to find her.

I also told her then that her agreement had originally been with the company that the agent had worked for. While many companies (but not Tarbell) allow agents to take their listings with them when they leave, the office should nonetheless have some documentation regarding the listing. Also, I told her, the agent's current company would show up on the Department of Real Estate website, and the former broker should at least help her get that information.

Hopefully, she'll never sign a blank form again. Who knows how the agent might fill in the blanks? A 12-month listing with a 50% commission? And be sure to get a link to see the listing on the public site of the MLS. You won't be able to see the commission, but you'll see if the price changes without your signing a listing amendment.

Fox News segment on gas prices and inland empire real estate

2006-05-02T19:19:00.000-07:00

I finally got to see the segment that aired last week on Fox News about gas prices and inland empire real estate. It was rather embarrassing. The interview with the producer and the cameraman lasted about 10 minutes, and I made what I thought were important observations about debt-to-income ratios and foreclosures. However, my bit was reduced to a laugh, and the reporter who never even came out that day incorporated a lot of the information that I gave them without attributing any of it to me. Oh, well... I understand now that most people who give interviews are probably brighter than they appear in the clips.

This is a really big file and takes 4 minutes to download with our cable modem connection. You're probably best off right clicking on your mouse and selecting "save as".
http://www.riverside-real-estate.us/videos/Alma-FOX.mpg

A Day Without an (Immigrant) Agent

2006-05-01T14:50:00.000-07:00

I had one escrow that I couldn't open and another that I couldn't close today because both buyers' agents/lenders are Latinas, and their companies are completely shut down. Wow. After fielding desperate phone calls from clients and a non-boycotting agent, I gave up and went home.

I actually should have been out marching today. My mother's father was an illegal alien his entire time in the U.S. He was a merchant marine who jumped ship in Seattle in the '20's. My father's mother never became naturalized. Since her husband became a citizen, it wasn't really an issue, and some years after my grandfather's death, we realized that no one had gotten around to registering grandma for a while. Luckily, the INS never came after her.

Anyway, I do hope these agents and their coworkers are out demonstrating today and making a powerful statement, at least for their clients' sakes. A majority of the San Bernardino and Moreno Valley buyers that I've been seeing in the past year, along with their agents and their lenders, is Latino, and it would definitely cripple the U.S. real estate market if these immigrants were to disappear.

Press Enterprise article about immigration protest in Riverside today:
http://www.pe.com/breakingnews/local/stories/PE_News_Local_D_web_boycott2.10020631.html

Gas and Inland Empire Real Estate

2006-05-01T00:36:00.000-07:00

Several days ago, I got a call from a producer at Fox News who was putting together a segment on gas prices and Inland Empire real estate. I connected him with the buyer of a house I had listed a few months ago, and he interviewed both of us that afternoon.

I’d been thinking for a while about gas and how it’s affecting people who are commuting to the coast, and the interview gave me a chance to articulate some of the concerns I’ve had.

1) People who are looking to buy shouldn’t charge their gas as this will affect their debt-to-income ratio.
2) People who have bought high and have big mortgage payments need to cut their gas costs or the increase may push them over the edge into foreclosure.
3) Increased gas prices will eventually affect all segments of new construction.

I’ve begun asking buyers from LA and Orange Counties if they’re figuring gas into their new home budget. The answers are varied. One person told me that his company pays for his car and gas. What a lucky guy! Other people are telling me that they’ll start looking for a local job as soon as they’re out of escrow.

Riverside has a bright future in terms of growth, but fuel prices will have a dampening effect unless individuals and government can come up with a variety of solutions. We’re certainly weak when it comes to mass transit. Trains are expensive, few, and unreliable. Bus rides are interminable.

In addition, car pool lanes on the freeway appear and disappear randomly, and when I was growing up, no one would have thought 2 people sufficient to call a “car pool.” And the complete lack of a car pool lane wherever there are toll lanes is nothing short of bizarre.

I made the decision to get a Honda Civic Hybrid now that their safety standards are approaching the Volvo I’d been driving the last few years. My clients are cramped, but they don’t seem to mind my doing the driving and paying for the gas. However, while the mileage is terrific, I do have a heart attack every time I go to the pump and see the huge leap in price from two weeks before.

Since I bought a hybrid that also has low emissions, I was able to get car pool stickers, so I can use the HOV lane even when I’m alone. I’m also getting a nice tax refund—but nothing compared to the amazing write-off that Hummer owners get.

So all those wonderful lobbies have helped push us to the edge of suicidal consumption. If you’re serious about getting the home of your dreams, you’re going to have to start making some difficult choices. Your beloved SUV may be costing you as much as the tax payment on a house. If 3 of your coworkers could cram into an economy car with you, all of you could cut your commuting costs to 25%, and then you might be where you were a few years ago… Oh, except that, in addition to their delivery to the local store, all that plastic in our shampoo, mouthwash, and water bottles requires fossil fuels.

Here’s a recent article on the history of write-offs for gas-guzzlers:
http://moneycentral.msn.com/content/Taxes/P97282.asp

Here’s a pro-hybrid site:
http://www.hybridcenter.org/hybrid-vs-hummer.html

Credit Rule #1: They Won’t Bend the Rules

2006-04-30T13:35:00.000-07:00

At some point in an intelligent young person’s life, he or she discovers that there are ways of getting around the rules. Some individuals learn to negotiate at a very early age and hone their powers of persuasion. However, they run the risk of running into trouble with their credit scores if they fail to understand that creditors won’t be manipulated.

Recently, a friend of mine bemoaned his daughter’s situation to me. (Please note that names and details have been changed to maintain their privacy.) Aaron and Mona had helped Belinda buy her first condo when the young woman got her first real job. The couple took money out of their savings toward retirement for the down and borrowed the rest. Later, after escrow closed, they put Belinda on title, too, thinking that this would help establish her as a home owner. This was a couple of years ago, so prices were still reasonable for cosmetic fixers. They got a good interest rate, and the payments were manageable—or rather, they should have been.

Belinda went into sales, and some months were better than others. She got a roommate, and that helped, but Aaron found himself supplementing her mortgage payments more often than he would have liked to. A year later, Belinda was doing well, and she promised her parents that she would take over the payments completely.

Within five months, Aaron and Mona got a notice that the condo was in foreclosure, and that they were going to lose it. Aaron immediately called Belinda, who burst into tears. Apparently, she was late on several payments, and then she had gone in to talk to someone at the lender’s office who had assured her that she could take another week to get the money together.

Unfortunately, Belinda hadn’t understood that a low-level person wasn’t going to able to bend the rules for her. And certainly no one in a management position was going to do it either.

Luckily for Belinda, her roommate had a friend in college whose parents wanted to buy him a condo near the university. Aaron and Mona were able to arrange the sale themselves and sold the unit cheap but quickly. There was a prepayment penalty that ate up the profit they would have made, but at least they were in the clear as far as the condo was concerned.

Belinda has moved back in with her parents, who are now looking into refinancing their home to pay off other debts that they accumulated along the way, fixing up and furnishing the condo. Due to the foreclosure, they’re looking at a 3/1 ARM starting at 9%, and their monthly payments on the house that they’ve lived in since Belinda was a toddler will double.

So even if you think your kids understand, please tell them rule #1: the rules of credit won’t be bent. Pay your utilities, rent, mortgage, credit cards, and other bills on time. One late payment on one bill can affect your interest rates for other accounts. And if you can’t afford all those payments, don’t buy on credit. In fact, don’t buy anything at all.

An article that explains how one late payment will affect everything else:
http://moneycentral.msn.com/content/Banking/Yourcreditrating/P56621.asp

San Bernardino North Lake Project

2006-04-29T21:44:00.000-07:00

For some years now, a battle has been going on over the proposed North Lake Project in the City of San Bernardino. Proponents say that it would help to revitalize the area by bringing in revenue and that the lake front area would offer pleasant park sites plus be valuable commercially. At any rate, the lake would be more attractive than the poor neighborhood currently there. And that’s where things get complicated. Opponents argue that the residents, many of whom are Latino and African American, are simply once more victims of racial prejudice.

As for myself, I have some questions.

1) How are they going to make it clean enough? There are mechanic’s shops and other industrial sites in the area. Would you drink the water from there?
2) Houses there have gone up from about 30k to 250k and higher. How are they going to afford to give all the homeowners the current market value for their properties?
3) This is one of the most affordable neighborhoods left within 1.5 hours of Los Angeles. Even if they give the residents fair market value, where will they be able to buy another home without having to leave the region?
4) Is this really an answer to poverty or will it just sweep it under the rug by forcing the poor to move elsewhere?

In the meantime, there are those who continue to buy and sell homes in the area. After all, this has dragged on for a long time, and people have to go on with their lives. The only thing to do is disclose the situation and tell buyers to call the city and the relocation company Overland Pacific & Cutler to see if anyone has a clear schedule for when they’ll start buying homes.

As I told someone who had decided not to accept an offer on his property, he needs for the city to show him the money and a firm date. Otherwise, he could hold his breath until he turns purple.

City sites:
http://www.ci.san-bernardino.ca.us/pdf/DevSvcs/NOC-NOA.pdf
http://www.ci.san-bernardino.ca.us/depts/mayor/downtown_revitalization/joint_public_hearing.asp

Proposed map of affected area:
http://www.ci.san-bernardino.ca.us/civica/filebank/blobdload.asp?BlobID=2589

Recent Press Enterprise article:
http://www.pe.com/localnews/sanbernardino/stories/PE_News_Local_water17.efe8.html

Site by area residents against the lake project:
http://www.sbeminentdomainabuse.com/id34.html

Same Price, Different Cost Year after Year: the Effect of Mello-Roos

2006-04-28T00:41:00.000-07:00

Just because 2 houses have the same price doesn’t mean they’ll cost the buyer the same amount. Mello-Roos is a special tax that comes into play when developing tracts in new areas. Among other items, sewer and gas lines are expensive, and the cost gets handed on down to the buyer (and future buyers) for some thirty years. The amount differs from tract to tract, with the total tax sometimes as high as 1.8%. This situation can raise monthly payments by hundreds of dollars. To further complicate matters, Mello-Roos may occasionally just be a set amount rather than a percentage, which is easier on buyers. So buyers should ask ahead of time if a house has Mello-Roos and figure out if they can handle the extra cost. The lender will also be interested in this information. Thus while many people prefer a newer home because it won’t have the maintenance issues of an older one, they also need to be aware that newness can have a price, too.
Since it can be complicated to have your agent find out the tax rate for every single property that he or she shows you, wait until you have picked out your top two or three choices. Then have your agent check with a title company to get the rate for each property and to find out whether or not there is Mello-Roos, a 1915 bond, and/or any special assessments. The listing agent may not even know these details, and while the taxes will be disclosed during escrow, you might as well know before you get there.

Useful sites on Mello-Roos are below:
http://mello-roos.com/pdf/mrpdf.pdf
http://www.clta.org/Publications/Title%20Consumers/Mello-Roos.htm

The seller got a sex change in escrow

2006-04-27T09:02:00.000-07:00

It’s fantastic what you can get these days all at one place, such as a one-stop market for clothes, groceries, and caskets. A seller of mine recently got a sex change in escrow, and it was so easy. (Please note: names and details have been changed to protect the privacy of the … otherwise greatly embarrassed.)

I first became aware of a problem when I opened up the packet of documents that I was carrying to my sellers and saw that the cover letter began, “Dear Mr. Juana Arias.” I laughed, thinking that it was just a typo, and when I got to my sellers’ house, I told them about it, saying that it was a funny error considering that I’ve only known women at the escrow companies I’ve worked with.

Then we got to the grant deed that would require signatures in front of a notary public, and we got a big of a shock. It read: “Mr. Juana Arias, a married man, who took title as a single man, and Mrs. Guadalupe Arias, a married woman, who took title as a single woman...”

Juana and Lupe were sisters with long wavy hair and physical dimensions that would never lead anyone to think that they were male. Luckily for me, they thought the picture of themselves as man and wife more hilarious than insulting.

It was Sunday, so I couldn’t call escrow to find out what had gone wrong. I did call a notary public friend of mine, and he told me that there was just too much incorrect information to cross out and that no notary public could sign off on it. Escrow would have to redo the vesting.

The next day, I called escrow to ask about it.

“Oops,” said the escrow officer, “it should be Juan.”

“Actually,” I told her, “they’re Ms. Juana and Ms. Guadalupe, and they’re not married to anybody.”

“That’s weird,” she said. “We wouldn’t have made this up. Let me make some calls and find out what’s going on.”

She called me back a few minutes later to tell me that the error had occurred when Juana and Lupe first bought the house. Apparently, the vesting had gotten Juana’s gender wrong, and the notary public must have been blind. She could correct the mistake, but only by giving Juana a sex change.

The corrected version thus read, “Ms. Juana Arias, a single woman, who took title as a single man, and Ms. Guadalupe Arias, a single woman…”

In the future, if the house gets resold and people don’t know the history, someone is going to think that Juana was a transsexual. It’s amazing what escrow can do for people!

Why pet owners love the city of Riverside

2006-04-26T20:33:00.000-07:00

The City of Riverside still allows people to have unlimited numbers of cats and licensed dogs whereas the County limits people to 9 and 4, respectively. I was surprised when I first moved here and found out about this situation because I would have thought that people in the country would have more room for animals. However, I came to realize that a horde of large dogs running loose in the countryside could wreak a lot more havoc than a houseful of Yorkies.

There are people who would like to see limits on cats and dogs in the city, and some think we’ll be inundated with compulsive cat collectors if word gets out. Others argue that limits would only discourage people from licensing their dogs. I wouldn’t say that people are moving to Riverside with their animals in truckloads, but on occasion I do get a call from someone who is looking for a kennel or a cattery. I myself came to Riverside with only 1 dog, but now that so many have found us, we’ll never be able to move away.

For now, the city is encouraging people to limit their animals by making it very expensive to license an unfixed dog. For people who breed expensive show animals, the higher license fee costs a lot less than a even a pet quality puppy while owners of beloved mutts are more likely to get around to having them altered.

Most recently, Riverside County is considering requiring pet owners to have their dogs fixed and microchipped.in the unincorporated areas. This idea sounds nice, but how feasible it is remains to be seen. Will animal control go around checking under every tail and between all shoulder blades? After all, they can’t even get owners to put a tag with their current phone number on their dogs’ collars.

For information on licensing in the city versus the county of Riverside, you can go to the first and second sites listed below. The last is a recent article in the Press Enterprise regarding the proposal to require altering and microchipping in the unincorporated areas.

http://www.riversideshelter.com/faqs1.htm#3
http://www.riversideshelter.com/license.htm
http://www.pe.com/localnews/corona/stories/PE_News_Local_S_animal25.58cffa5.html

Let the Cat out of the Bag

2006-04-25T08:55:00.000-07:00

My brother is so allergic to cats that if he walks into a place where a cat lived 10 years ago, he’ll start having an asthma attack. It shouldn’t come as a surprise that he doesn’t like cats. I myself find most cats likable but occasionally run into the psychotic individual. In that respect, cats are very much like people. At any rate, if cats or any other pets have been in the house, the seller needs to disclose this fact on the form called the Seller Property Questionnaire, or SPQ.

A good place to first give a head’s up about the presence of animals is in the remarks section of the MLS. I like to warn agents about dogs and cats by adding, “Don’t let the cats out” or “Call first, so seller can put muzzle on French Mastiff.” (I hate surprises when showing property, such as the time I opened a garage door and met a growling Rottweiler. I quickly shut the door and went on to discuss the pros and cons of carpeted bathrooms.)

In the case of the “casa de los gatos,” as my little girl referred to a particular listing I had, the four beloved felines were micro-chipped and wore body harnesses with tags. I printed up signs that read “Please don’t let the cats out,” and we posted them on all exterior doors plus the door into the garage.

The signs worked very well. We didn’t lose a single cat, and while I don’t know if anyone had an asthma attack, I can say that everyone was warned long before they saw the SPQ.

At any rate, buyers should tell their agents upfront if they don't want to visit any houses where animals and/or smokers reside just in case. It will save everyone a lot of time and wheezing.

Dirty laundry

2006-04-24T22:03:00.000-07:00

Sometimes it’s not lack of curb appeal that keeps a property from selling. Sometimes, it’s something that won’t be apparent from photographs or a driveby.

I was showing condos in Diamond Bar, and one of them was in a gated complex with multiple swimming pools and a tennis court. There were trees and flowers, and some of the units had a view of the golf course down the hill. One unit in particular was priced low and had been on the market for a while, so I decided to give it a try.

Now, I had managed to preview quite a few properties for my out-of-area buyer, but I had run out of time, and so we were going blind to this complex. I told Henry (not his real name) upfront that we would be “discovering” these particular units together. Luckily, Henry was very positive despite the rain and a bad cold, and so we tramped round and round, trying to figure out where the different units were hidden in the maze of buildings.

At last, we came to the one that was priced lowest. As I opened the door, we were greeted by an extra, extra large screen television that dwarfed the living room. There were various basketball posters and related paraphernalia, and we soon realized that the residents were Lakers fans.

In the kitchen, there was a folding door, behind which we found the washer and dryer. No detergent or softener scent. That should have been a red flag.

As we walked down the narrow hallway, things started to go downhill. The hall bath was dingy but not too mildewy. Still, there was something in the air. Then, we found it. Opening the closet of the second bedroom, we gasped at the sight of a 3-foot-high pile of smelly laundry. He liked sports all right, but he didn’t like to wash.

We pinched our noses and stumbled backwards out of the room. I shut the door, and we went on to the master bedroom and bath. The bed was in disarray, and there were clothes scattered about, less smelly but somehow more desperate looking. There was a photo of a child on the night table, and that’s when it hit me.

“It’s a divorced guy and his roommate,” I told Henry. “And they’re really helpless.”

“No,” he said, “men aren’t that helpless. We use it as a ploy to get women.”

“No woman is going to find this attractive,” I told him.

He had to agree with that one, and we left as quickly as discretion would allow.

I continued to watch that particular unit sit on the MLS for the next 2 months until Henry’s escrow closed and he was able to move into his new place across the street from the golf course. The bachelor pad eventually sold but only when it was about 20k below everything else in the neighborhood.

How (Not) to Write a Counter Offer

2006-04-23T09:51:00.000-07:00

I spend about as much time preparing a counter offer as I do an offer. I like to talk to the buyers’ agent before they even write the offer, so that I can save time and paper. Then when I get the offer, I go over it with a highlighter pen (which won’t show up in faxes and photocopies), marking all the errors and incomplete spots. If possible, I call the agent and get as many pages corrected and refaxed as possible as I hate having to attach an addendum to the counter when I run out of space. I ask for the buyers’ lender letter, FICO scores, and proof of funds upfront, and I tell the agent that the counter will ask for them if they’re not included with the offer. Then I call the lender to ask if the offer is for the most the buyers can afford and to discuss how the loan will be structured. After that, I draft a counter for my sellers and include wording that the buyers will be preapproved by a loan officer I know since I’m not a lender myself and have only done the preliminary footwork. Then, we go over the draft to see if there are any details that I’ve left out. I do all of this because my sellers have enough juggling to do between their daily lives, preparing to move, and trying to keep the house perfect. They usually understand that I’m doing all the homework, but on occasion, I do have sellers who just can’t accept the information I provide. Not surprisingly, they’re the ones who can’t process the data I give them from the start.

I had some clients once who had an older home that they had fixed up nicely, but there were still some items that they hadn't taken care of before the husband got a job relocation out of state, and they ran out of time and energy. Unfortunately, before Joyce and Noah (not their real names) interviewed me, they talked to some other agents who told them that their little 2-bedroom, 1-bathroom house could get 70k more than the only sold comparable I could find from the previous 60 days. They decided to go with me, but they insisted on pricing the house 40k over the one comp. I agreed that the house might have sold for the amount they wanted if there weren't so many houses on the market, but they were sure that the quality of their house would win out over the supply versus demand rule. They promised to reconsider the price if they didn't get any offers, and we left it at that.

The months dragged by, and there were no offers. Joyce and Noah moved and rented an apartment while continuing to make payments on the home in Riverside. Only a handful of agents came by, and only half of them left their cards. I called for their feedback, and the ones who responded said it was cute, but their buyers expected another bathroom at that price. I kept asking Joyce and Noah if they were ready to lower their price, and they hesitated, saying that they didn't want buyers to think they were desperate even though the house had been vacant for quite a while. I finally told them that I didn't think anyone would notice because we had so few agents showing the house. In other words, the price of the house and its lack of a 3rd bedroom (let alone another bathroom!) were keeping it from popping up in agent searches on the MLS. Houses all around theirs were selling, and there were now two comps 20k under them, but interest rates were starting to go up, and I didn't think that the market would reach them before buyers ran out of spending power.

They finally lowered the price 10k, and a couple more agents brought clients to the house. Then nothing. After much discussion, I got the couple's permission to put in the MLS description that they would help with closing costs. At last, we got an offer. After subtracting for the closing costs they wanted, it was for 10k under the only comp I'd given them at the start. I talked to the buyers' agent, and he was frank with me, his buyers were maxed out and couldn't go any higher. So that went into the reject pile. Even I thought we could do better than that.

Several weeks went by, and a second offer came in. I looked over their FICOs and proof of funds, and I spoke to their lender. Their offer was at the maximum that they could get a loan for, and they were extremely borderline with insanely high interest rates due to past credit problems. Their monthly payment was going to be about $3,100/month. The lender was doing them a favor by reducing his own fees and allowing a slightly higher debt-to-income ratio. I reported these facts to Joyce and Noah, yet amazingly, they wanted to counter back higher to 1k short of their current list price.

"But they can't do it," I said. "They’re maxed out.”

“They can get another lender,” Joyce said.

“No one else will do the loan this high because they can’t make any money off these people,” I replied. “So what's the point of asking them for the impossible?"

"They can counter back," Joyce insisted. "They can increase their earnest deposit."

"What difference does that make?" I asked. "They have a higher than average deposit already, and you'll net the same amount either way."

It was getting late, and the couple wouldn't listen, so I finally threw up my hands, redrafted the counter, and called it a night.

Two days later, I called the buyers' agent to find out if they would be countering back. She told me that the buyers had gotten cold feet because of family troubles. If they could get back on track and if interest rates didn’t go up, they told her they might come back in a couple of weeks and resubmit an offer. I sighed, thinking that they were probably going to go look at other houses with another bathroom during that time.

Pride of ownership has its drawbacks

2006-04-22T11:16:00.000-07:00

A realtor in my office told me that he took a seller to look at some of the other houses available around him with the hope that the client would realize that his own house was overpriced. A little bit of background: the house smells (even after replacing the carpet that the dogs had peed on), and the doors over the 3-car garage hide an illegal conversion (think fire trap). After they got back, the seller proudly told him, "See, I told you my house is better than the others!"

Pride of ownership can be a good thing in that it implies a responsible seller who has maintained the property, kept everything up to code, even updated. At the very least, the house ought to be spotless though stuck in the 50's. I had one client who is a perfect example of this--she had the house inspected for termites, tented, and the repaired spots painted before a buyer even came along. Despite the lack of granite counters, her house sold for over asking price. However, I've also seen cases where pride of ownership can also lead to the sellers taking less money rather than let someone they dislike move into their house.

We have some gorgeous window seat cushions that my in-laws gave us. I call them the $10k pillows. My in-laws put their large pool home on the market in the middle of the recession after falling in love with a tiny house on the beach that was priced much higher. Their own home didn't sell, and so my father-in-law got a bridge loan (now rare)in order not to lose out on the new house. They finally got an offer that was a little low, but what really upset them were the details. They knew that Vicky (not her real name) really wanted the house because she kept driving by and gazing at their rose bushes, but they thought Alan (not his real name) was just too obnoxious because he asked for the window seat cushions and the cats among other things. I never met him but thought he was being facetious, which isn't a good idea when writing contracts. Then another offer came in that was lower, and my in-laws took that one instead, countering the first buyers for back-up position. Alan was flabbergasted, which was exactly what my in-laws wanted.

So the cushions, which had been custom made to fit in that spot, stayed in the garage of the next house for some ten years before they came to live with us. Our little girl likes to play house with them, and our dogs lounge on them. The cats proceeded to claw up the new furniture and ruined a carpet because they were too fat to get out the pet door. They lived to a ripe old age, which was only fitting since they were worth so much! As for Vicky, my in-laws did feel sorry for her, and I hope Alan was more careful not to offend any more sellers after that.

The buyer had ADD among other problems

2006-04-11T19:11:00.000-07:00

A couple of days ago, escrow called me to tell me that the buyer's earnest deposit check had bounced. I sighed, called the buyer’s agent, emailed my seller, and started preparing a notice to buyer to perform.

It happens occasionally that a buyer doesn’t understand that the earnest deposit check will be cashed at the start of escrow. It states on p. 1 of the residential purchase agreement that the check will be sent to escrow within 3 days of acceptance, but sometimes the buyer thinks that escrow will just sit on it until the loan funds. To be safe, I tell my buyers when we first start looking at properties that they’ll need about 1% with a minimum of $2000 for properties under 200k in our area as there are so few properties in that price range. I also say that the money should be in the account. Then I repeat this detail when we write the offer. I try to mention it a third time when I receive the check and log it into my office trust log. I also manage to repeat a few times that the date on the check should match the date on the offer. Then I explain that if the offer is rejected, I’ll return the check, and they’ll need to make out a new check should they decide to write another offer at a later date.

Some of my clients must think I’m forgetful because I repeat myself so often, but it has to do with one of my first buyers, a woman who had trouble remembering details that didn’t fit in with her ideas about real estate. I came to realize that she not only had Attention Deficit Disorder, she worked with some kind of a coaching group that taught people how to invest in real estate, and she firmly believed whatever she thought they had taught her…

I first ran across a child with ADD who wasn’t hyperactive when I was doing academic tutoring after college. I was perplexed at her obvious lack of short-term memory, and it took a lot of work just to teach her a short narration in Spanish. Later, when I finished graduate school and taught at a series of community colleges, I got to the point where I could pick out the students with ADD within the first week of class. I would gently tell them that I wasn’t a specialist, but that I suspected that there was a problem that they needed help with. Over and over again, they’d go to the disabled student program, they would take tests, and they would invariably find out that the reason they’d always been mediocre students was because they had ADD. Then, they’d get tutoring, tips on study habits, and would struggle through first semester Spanish. They’d limp on to the second semester, where they’d finally succumb. It was incredibly frustrating for them, and a few told me that they were successful out in the “real world” but had decided to go back to school to get a degree.

Karen (not her real name) appeared to be confident in her own field, which was as a military paramedic, but I had grave doubts about whether or not she would ever make a lot of money in real estate since she was in her forties and had never owned her own place. Later, someone told me that people with ADD can do well in stressful jobs because the adrenaline helps them focus. Well, real estate can be stressful, but not in a way that helps anyone read the contracts more closely.

She told me that she had signed up once to take a real estate course but quit when the instructor told the class that everything was in the books. She still had the books but hadn’t read them yet. This should have been a red flag, but I thought I could explain the major points to her in everyday language.

What Karen was good at was chatting. She would walk right up to people wherever we went and find out about the neighborhood. She had an exotic Asian and Caribbean background, had lived in Europe, and had lots of interesting stories to tell. She also had very unusual ideas about religion and divine retribution, which extended to her gun collection. She would have been inclined to use one now and then during our search for a property for her, but luckily for the annoying people on the freeway, she wasn’t carrying a gun on her.

The last afternoon I spent with Karen was our third outing in about as many weeks. I was driving on the 215 and was in mid-spiel about the local history when she suddenly pulled a hair out of my head and proclaimed, “I rebuke you in the name of the Lord.”

“Ow,” I said, rubbing my scalp. “What was that about?”

“That’s a gray hair,” she said, shaking it at me. “Before sin, we were immortal and didn’t age. So aging is a sin.”

“Aging isn’t a sin,” I told her. “It’s a reward for surviving.”

“I don’t plan on getting old,” she replied.

We were actually rather close to Patton State Hospital in Highland at that moment, and I should have dropped her off right then, but she had been referred to me by someone, and I was trying to do a good job. She was also pre-approved and not just pre-qualified by her lender. So I began talking about the condo complex I was taking her to and how there were several nice units there in her price range.

We visited 4 units in the complex, looked at the pool, and talked to some of the denizens. Then as I was preparing to drive away, she pointed to a unit that had a lockbox and a sign in the window.

“But it’s not showing available in the MLS,” I told her. “I don’t know anything about it. Maybe it’s already in escrow.”

But Karen was very insistent, and the condo was vacant, so even though I couldn’t get through to the agent, I thought it wouldn’t hurt to take a quick look. The condo turned out to be quite nice and a reasonable rehab job with only a few unfinished details. She was very enthusiastic about the place, and my hope began to revive that she would finally buy a place, and I’d be rid of her. Then the agent called me back, told me that it was her own property, and she was putting it on the market that day with a decent price and acceptable commission. She hadn’t even put it in the MLS yet. Things were looking up.

We raced back to my office in Riverside and started writing up the offer. I spoke with her lender, got details, and was about a dozen pages into the contracts when she said that she thought I had the wrong address.

“This is the condo you liked,” I told her.

“No, it’s not. The one I want is on the other street by the freeway.”

“No,” I said, showing her the Thomas Guide. “It’s on the next street over.”

I almost never get lost. I can’t remember people’s names to save my life, but I usually know where I am. But I couldn’t convince her. If you ever had the experience of having to prove to a child with ADD that the answer to 2 plus 2 is 4 just like it was yesterday, you’ll understand my predicament.

Finally, I said, “We can go back and make sure if you want.”

So we drove back to Highland, and I proved to her that I was right. She wasn’t at all apologetic, but I took it in stride. One of my personal rules is not to say, “I told you so” because I figure the other person is already feeling annoyed enough at being wrong.

We went back to my office and continued work on the offer. Then, I asked her for the check, which, as I'd told her before, should be $2000 for her to be considered seriously in the seller's market.

“Change it to $1000,” she said.

“That’s not enough,” I replied. “You know it should be $2000.”

“$1000.” She took out her checkbook and started writing.

Instead of choking her, I changed the figures and then starting printing up the forms.

When I gave her a printout of her estimated costs sheet, she balked at the closing costs.

“Why are they so high?” She asked.

“Well,” I told her, “you’re buying something, and there are costs. There are escrow fees, inspection fees.…” We’d been over this before, but she seemed to have forgotten. She frowned, then finally signed.

A few hours later, after she’d left, and I’d sent the offer, I got a call back from the listing agent. She liked the offer over all and was only going to counter that the deposit be increased to $3000. Excited, I called my buyer and told her that her offer was accepted and she only had to go up to $3000 on the earnest deposit.

“Why?” she asked.

“It’s to show that you’re serious, you know, as in ‘earnest.’”

“But how come people always say you can buy with zero down?”

“Well, you don’t have any down because you have 100% financing.” I sighed. We’d been over this numerous times. “You’d get it back at closing if you brought in all your closing costs. But this way, they’ll just deduct it from your closing costs.”

“So why do I have to have it now?”

I shut my eyes. “To show that you really want the place.”

“But I do want it.”

“Then go up to $3000.”

“I don’t have it.”

“What happened to it? You had your closing costs three weeks ago.”

She didn’t answer.

“Can you get it?”

“I’ll try.”

“So I’ll tell her that you’ll do it?”

“Yeah.”

I called the other agent back and told her that my buyer had agreed verbally to the counter. She faxed it at once and then was nice enough to put the listing in the MLS as pending.

Late that night, my buyer called me back.

“This guy I know says I only need $500 for earnest deposit money.”

“Is he a realtor?”

“Yeah.”

“Where?”

“Up North.”

“Not in the Bay Area.”

“Right.” Then she added, “And he says those closing costs are too high. That there’s a limit of what percent it should be.”

“Was he referring to the cost of the loan only or was he also referring to all the things you’ll need like a home inspection and the appraisal. It’s all on my web site that I told you about. You can show it to him.”

“He just said that there was a limit.”

“Well, he’s not here. I’m here and I’m your agent. These people want $3000, and they won’t settle for less. Can you get it?”

“I can’t get it. My friend was going to lend it to me, but he changed his mind.”

I shut my eyes. I wouldn’t have lent her anything either. “But your lender had verification of your funds.”

“Yeah.”

I rubbed my eyes. “So I’ll tell them that you’re not going to agree to the counter, and I’ll mail your check to you.”

“You can tear it up.”

“I’ll mail it to you.”

I called the agent right away and left a very apologetic message saying that the buyer had somehow spent her earnest deposit money during the last few weeks without telling me about it. I knew a lot of random details about her parents, her daughter, her ex, and flying the wounded out of Afghanistan, but I had no idea where her savings had gone to.

The next morning, I called the realtor who had referred her to me and told her what had happened.

“But she had the money. I saw her bank statement.”

“Well, she doesn’t have it now.”

“I told her not to buy anything.”

“I’m sure you did. I did, too.”

I’ve been fortunate since then and haven’t had any more buyers with ADD. I think they may have trouble slogging through my verbose web site. The only reason I even got Karen was because her first realtor could read quite well and liked my web site. She sent me another referral after that who turned out to be a very sane and intelligent woman. The only problem was, we then ran into … the seller’s agent with the son who had ADD…

To be continued…

The Real Estate Personality

2006-04-10T23:54:00.000-07:00

A couple of months ago, I got an offer on a listing, and the fax cover from the other agent featured a cartoon of people begging on the street. Each one held a sign stating what he was desperate enough to do in order to show how needy he was. The last person's sign read: "Will work in real estate."

A lot of agents I know, including myself, didn't always plan to go into real estate. We set out on different career paths, but, due to changes in the economy and unforeseen life events, we chose to go in to real estate.

A couple of weeks ago, the assistant manager at my office found an interesting web site (similarminds.com) where you can take tests to determine your personality type. The 70-word Jung test is especially interesting. From there, you can read a description of your personality type at www.personalitypage.com, see a list of careers for your type, and also read about what sort of mate would work well with you.

Not too surprisingly, the other agents and I who have taken the test have generally found out that we should go into the career that we used to have! Hmm, I don’t think anyone’s personality type read “real estate agent.” But then maybe that’s because some careers are taboo, like “snake oil salesman.”

Most of my personality description read like one of my father, and the description of my ideal mate was my mother to a T. Very scary. In short, I’m an INFP or “questor,” also referred to as “The Idealist.” “High capacity for caring. Emotional face to the world. High sense of honor derived from internal values. 4.4% of the total population.” Is this what you expected to read about a real estate agent? Some of the career paths for me are “professor” and “writer” (been there, done both, nearly starved). Other careers are: counselor/social worker, psychologist, psychiatrist, musician, clergy/religious worker.

INFPs aren’t obvious candidates for the world of real estate. We’re introverted, thinking types who write rather than talk. I’ve learned to hold a conversation by focusing on the person I’m talking to and listening a lot. The other person almost always has something fascinating to recount, and someday, when I have time, it will all go into a series of novels. So, you’re thinking, how do I get someone to buy or sell a house?

Well, actually, I don’t. If he or she really likes a house we go to, can buy it, and needs to, it will happen. If not, I can usually figure that out without losing a lot of time. If the person wants and needs to sell a property, I find out as much as I can about the current market around that property, show the owner the data, take photos, write a description, and let agents and buyers know about the place via the Web, newspapers, signs, magazines, door hangers, postcards, open house, and so on until the right buyer comes along.

So what do I do that’s so hard? I … agonize. I wake up in the middle of the night, thinking about some detail that needs to be addressed. I call realtors, loan agents, and escrow officers, trying to resolve issues. I piece together the odds and ends of contracts, addendums, disclosures, and waivers to protect clients. When I have to, I dust, vacuum, mop, water plants, weed, and clean toilets (and these houses aren’t always vacant—the sellers just run out of time! And I was representing the buyers when I cleaned the toilets).

Luckily, since most of my clients have come to me via the website that my husband built, they have been very much like us. While my clients are all very different from each other in background and experience, they tend to 1) do research and plan ahead 2) have good credit 3) use email a lot. The last is a lifesaver for me because I can send them lengthy email messages letting them know what’s going on weekly and, if necessary, daily, even hourly. When it’s a really important issue, my clients and I are outgoing enough to call each other (this is extremely difficult for my husband’s personality—I still have to call restaurants to reserve a table because he can’t—he’s an INTP, which makes sense because he’s a physicist).

I’m probably not the right real estate agent for someone who needs to be told what to do and to be pushed into things. My husband and I always balk when someone tells us we need to buy something now. 9 times out of 10, I will walk away at that point, or if I do buy it, I’ll return it the next day. (My husband tends to read as much on the Web as possible on whatever it is that we’re thinking of buying before we go in and look at the item. Then he lets the salesperson talk and show us other makes and models before we buy what we intended to buy in the first place, that is, if it’s cheaper there than on the Web. If my husband is feeling charitable, he’ll correct the salesperson on a detail or two. When we get home, he’ll give me a rundown on all the technical mistakes the person made.)

I would probably have more transactions and make more money if I were pushier, but it wouldn’t feel right. And I guess I’m lucky because I make a reasonable living while being true to myself and working with clients I respect and enjoy emailing and talking to.

A quick look through the extroverted personality types show that these are the ones most likely to be sales representatives, particularly the ESTP type. Some of the traits are: “action oriented,” “live in the present moment,” “excellent people skills,” “attracted to adventure and risk.” This type “may be gamblers and spendthrifts” and “often has trouble in school, especially higher education.” “ESTPs have an uncanny ability to perceive people's attitudes and motivations,” and “use this ability to get what they want out of a situation.” Hmm, this sounds exactly like some of the salespeople I’ve met and have distrusted immediately…

So what is the “typical” real estate personality? Yesterday, I saw a sign nailed on a post that said “Real Estate Investment Asst. 20K/month” and a phone number. I just had to call to hear the scam. The recorded message sounded like a carefully read and somewhat wooden script. Basically, the person said that if I were one of 2 types, someone who is between jobs or already in real estate (ie. between jobs), I could learn how to be an investor! So, what they’re looking for is enough people to pay them 20k a month! It’s a sad estate of affairs, but a lot of people in real estate are those who couldn’t make a decent living doing what they used to do. 90% of them drop out the first year because they can’t make it, and the money they pay in learning the business provides income to their trainers. Many people who go into real estate are desperate to make money, and so they’re aggressive and cut corners. If they’re the types who would cheat on a quiz in school because they could get away with it and it was easier than studying, they’re likely to continue doing so. Some portion of the realtor population is caring and smart, and you can find them, but watch out for the rest!

To find out more about yourself, try the test and rest about your personality. But be warned, the results will be skewed if you're not honest with yourself!

Beyond Double-ending

2006-04-06T15:48:00.000-07:00

California is a state where dual agency is still allowed as long as it’s disclosed. It’s considered dual agency when the seller and the buyer are represented by different agents that belong to the same company. In this case, the broker is considered the same agent.

When the same individual agent actually represents both buyer and seller, this is referred to as “double-ending.” The odds are (or should be) against it happening, so when I see an agent doing a lot of it, I have to wonder what’s going on.

Then there are the realtors who are also loan people, and they’re also getting a commission off of the loan. Now, I’ve seen some people do a competent job as both realtor and lender when they have assistants, but I’ve never seen one do a very good job with the paperwork, and I’ve seen some who are lawsuits waiting to happen. The following was one that, thank goodness, didn’t get away with what amounted to quadruple-ending. (Please note that the names have been changed to protect the … ignorant.)

A while back, I had a listing that was priced a little high, but which we knew would appraise without stacking. A week after the house went on the market, another house 2 blocks over and very similar came on 10k higher. I made a note of it as I was doing weekly comparative market analyses for my sellers and then didn’t think about it again.

A few days went by, and my sellers got an offer that didn’t quite make sense to me. For one thing, it was for 10k over and asked for 10k in closing costs. It was 100% financed, so the buyer was going to be getting her earnest deposit back. None of this made any sense since there was no way the house would appraise.

The agent’s name on the fax cover was Angela H. The lender letter was signed by Elaine Davis who was with a different company. However, when I called the lender’s number, the person who answered gave the name of the real estate company. I was puzzled and asked if there was more than one Angela. They said, “no,” and I was given to Angela who explained that her husband’s last name was so long and foreign that she always put “H.” I asked her about her buyer, and she explained that her buyer was an investor who was also buying the house around the corner. I was perplexed as I’d been told before by another lender that investors need to have at least 10% down or no one would be willing to lend them the money. (As a rule, 100% financed only works for owner-occupied as people have been shown to be more likely to make payments on their own residence than on a house they’re not living in when they run into financial difficulties.) I explained to the agent that I would present the offer but that it was unlikely that the house would appraise at that amount, to which she gave a surprised, “Oh.”

Out of curiosity, I got on the MLS and saw that yes, the other house was in escrow and taking back-up offers. I noticed that the agent I had just spoken to was the listing agent, and then saw in the remarks section that the agent was one of the sellers. Out of curiosity, I double-checked the tax records and saw only one person noted as an owner, a certain Angela Davis…

That’s when I realized that Angela H. was related to Elaine and that the real estate company and mortgage broker were run by the same people albeit with different company names. Angela was the seller, the listing agent, and the buyer’s agent for her own property. She was also attempting to be the same buyer’s agent for my listing. Her female relative was going to get the lender’s commission on both transactions. (Wait, this is even beyond quadruple-ending as there are 5 commissions involved not even counting the seller’s proceeds…)

When I presented the offer to my sellers, I told them about these other details, and they were pretty impressed with the agents’ attempt to make so many commissions. I explained to them that as long as all the proper disclosures were made, there wasn’t anything illegal about the other transaction. Having already gone over a number of comparative market analyses with me, they understood that the offer was utterly meaningless because neither house would appraise and no backer in his or her right mind would finance the undertaking, so they rejected it outright.

I let Angela know about the rejection, and she said her buyer would be disappointed. I told her that my sellers were uncomfortable with the financing and would prefer it if the buyer put some money down. She said she would talk to her buyer about submitting another offer, and that was the last time I spoke to her.

About 2 weeks later, I was doing an updated CMA for my sellers when I saw that the other house had fallen out of escrow and then was changed to “expired” without any attempt to put it back on the market. My guess is that the house didn’t appraise, and hopefully the buyer caught on that something didn’t smell right. I suppose that it’s not impossible that the buyer was also a relative who would somehow benefit, but I’m not sure how…

So the good news in this instance is that the transactions didn’t go through, and no one got hurt (that I know of). My sellers lowered their price a little and got a buyer who stacked some closing costs. The appraisal came in slightly higher, and the escrow closed with only some of the usual, less exotic delays.

The other agent was definitely trying to pull something unethical but not altogether illegal. As she was going beyond some very specific limits (investor guidelines and an appraiser who apparently wasn’t a relative), she couldn’t make it work. In a way, the limitations functioned better than laws because, as you know, laws can be broken.

I do wonder sometimes if there are cases where the transaction does go through. There’s a house across the street from another listing I have that sold some months ago for about 100k more than it was worth. The listing agent double-ended it and it went into escrow after 0 active days on the market. The house was 100% financed. Hmm, was that appraiser a relative?

He found it on Mapquest and bought it on Ebay ...

2006-04-05T12:04:00.000-07:00

I had a funny experience the other evening. I got a call from Australia from someone who had bought a piece of land that he believed to be in the city of San Bernardino. He had already spoken to another realtor who couldn't find the APN but thought that it was worth about 157k, which was amazing considering that it had cost only about $2000 U.S.

When he told me the name of the street, I was puzzled because I'd never heard of such a street in the area even though the zip code was correct. I looked up the street name via title company records and found that it was in Cedar Creek near Lake Arrowhead. The numbers of the APN were slightly different (he hadn't given me the hyphens, and the number of 0's was off), but it was recognizable.

I then told him that he had lucked out. The lot is tiny and in an area where people build small vacation cabins though some residents stay year-round. The air is cleaner and the crime is low unlike the area where he thought he was buying, which is rather rough. (He told me that he thought that as long as it wasn't in L.A., he thought there wouldn't be any bad neighborhoods!) I also told him about the eminent domain problem near the 215 in S.B. where they're planning to put a lake.

He told me that he'd looked up the address on Mapquest, and I had to laugh. When Mapquest doesn't recognize an address (which it wouldn't have in this case as he didn't even have the right city), it says that it has located a "similar" address, and then sticks a star somewhere in the middle of the area it thinks you're looking for. It was Mapquest that had given him a random S.B. zip code.

So no, he didn't get something for a lot less than what it's worth. It was a bargain in that it could go for about 10k to 15k on the market at this time, but it could take a while to sell. Now, he just has to make sure that the other person on title will also sign the grant deed or has gotten herself off title. And then if he ever comes out here, he can build on it or go camping...

Base the Commission on the Net, not the Agreed Price

2006-03-27T22:20:00.000-08:00

I had a ridiculous argument with a buyer's agent today. The accepted offer on the home was over the asking price, but the buyer needs help with closing costs, and so he had partially stacked. The buyer's agent felt that she was entitled to a commission on the accepted amount even though the seller isn't going to get all of it. This was the first time that I had a buyer's agent tell me this, but then there's a first time for everything.

What this means is that while the list price is, let's say, $600,000, and the buyer offers $605,000, he needs $10,000 to help pay for the cost of the loan. So the seller is actually going to net $595,000. When I presented the offer to my seller, I pointed out where they asked for the help with closing costs halfway down p. 6 and so was able to explain that it was really an offer for 595k from the start even though it showed 605k on 2 lines on p. 1.

Now, if you ask me, 3% of 0 is ... 0. How can you give a percentage of something you don't even receive? At any rate, 3% of 605k is $18,150 while 3% of 595k is $17,850. That's a whopping $300, and depending on the agent's split with her company and particular office, she might get anywhere from $150 to $270. She told me that it was a lot of money to her and not very much to the seller, and I responded that there was a principle involved, and it wasn't worth it. After all, if your clients can't trust you over such a small amount, how can they trust you with their life savings? And it shouldn't be a question of deciding which clients need a little extra money and which ones don't. I can't be Robin Hood and keep my license.

Ultimately, the sellers sign the commission instructions during escrow and can quickly figure out if they're paying a percentage of what they're not getting. In that case, they should speak up. Best of all, they should ask ahead of time if the buyer needs any help and tell their agent that they won't pay more than commission on the net. Of course, if the sellers have tax issues and need higher broker fees for the write-off, they might choose to spend more, but they should be able to make that decision.

I finally told the agent that it wasn't worth arguing over because we saw things differently, and she could choose either to sign or not to sign the Cooperating Broker Compensation form showing that she agreed to take 3% of 595k. I had to go to a meeting and turned off my cell phone for the next hour, during which she left a series of phone calls ranging from threats to cancel escrow to urgent requests for me to call her back and not take offense. Finally, she left a message saying that she was signing the form. I think that this was a good idea because it would have been hard for her to explain to the buyer that he couldn't have the house because she wanted to get paid on the money that's going to his lender.

And yes, I learned a lesson, too. I'm going to send a fax to the buyer's agent when I first receive the offer and put in writing that if it's accepted, the commission will be based on the net. No more arguing math.

Moreno Valley Statistics from the past 60 days

2006-03-22T22:14:00.000-08:00

As of this evening there are a total of 975 residential properties with an average price of $433,340 available in Moreno Valley according the IMRMLS. This average is about $100k less than the average in Riverside, which is roughly the usual gap between the two cities over the past couple of years.

As in other cities in the area, the average price of expired listings from the past 60 days is below the average of the available ones. Since 1/21/06, 277 listings have expired with an average value of $423,393. In other words, sellers (and their agents) are not learning from the expired listings but are instead continuing to price listings as if the market were still experiencing the sharp rise of the past 2 springs.

The sluggish market is most easily understood when comparing the high price tags of available properties with the much lower cost of those pending and sold. The overall count for pending sales of houses and condos since 1/21/06 is 355 with an average price of $385,509. (In addition, there are 72 taking back-up offers with an average of $394,560, but I can't limit the time parameter). The sold count from the same time period is 373 at $384,905 after an average of 46 days on market. The average value of the closed sales is very close to that of the pending sales, but the breakdown by bedroom count, shown below, reveals to what extent the market is still being forced upward.

When broken down by bedroom count, the figures for available listings are as follows:
Houses:
2 or fewer bedrooms: 57 available with an average price of $359,833 and an average of 45 days on market. (This average price was pushed up by several that have large lots where the value is in the land.)
3 bedrooms: 383, $389,241, 49 days on market
4 or more bedrooms: 532, $473,866, 54 days on market
Condos:
2 or fewer bedrooms: 3, $273,300, 16 days on market
(The high average price of the condos has to do with 2 of them being in a new complex that is priced about 90k over the typical Mo Val condo built in the early 1980s.)

The sold properties since 1/21/06 tell in very clear terms what buyers have chosen to pay for housing. Broken down by bedroom count, the figures are:
Houses:
2 or fewer bedrooms: 35, $278,825, 33 days on market. (The average price of these homes is a much better reflection of the starter home market than that of the available 2-bedroom homes above.)
3 bedroom: 147, $364,305, 45 days on market
4 or more bedrooms: 186, $425,966, 51 days on market. (The increase in time on the market noticeably mirrors the higher price of each successive category.)
Condos:
2 or fewer bedrooms: 5, $205,600, 18 days on market. (Unlike the available condos, these sold properties are more what buyers expect to find in Mo Val.)

Similar to the sold properties, the homes that are pending since 1/21/06 have much lower prices and demonstrate that buyers are going after the listings that cost less. The breakdown by bedroom is as follows:
Houses:
2 or fewer bedrooms: 31, $290,600, 32 days on market.
3 bedrooms: 170, $367,128, 44 days on market. (Of all the pending categories, this is the one that comes closest to the average of current available properties and has to do with the ratio of pending to available properties. Basically, more of these properties are getting bought up, so buyers are being forced upward in this size range more than in the others.)
4 or more bedrooms: 151, $429,141, 45 days on market
Condos:
2 or fewer bedrooms: 1, $210,000, 19 days on market
3 bedrooms: 2, $212,500, 43 days on market.
As always, we’ll have to wait for these pending sales to close before we know for sure how much higher the accepted offers were than the current closed sales, assuming that these properties appraise.

The data appears better with this search than my recent San Bernardino search, but then I generally find that I get better data for Riverside and Moreno Valley. The numbers can be thrown off by agents who put in the wrong code although this happens less for Moreno Valley, possibly because agents would rather make their desert listings appear like bargains by putting them in more expensive cities, such as Riverside. (Agents tend to put high desert listings under the S.B. code just because many of those towns don’t have their own specific code in the IMRMLS.) I only went back to 1/21/06 for pending sales to rule out any sales that actually have closed but haven’t been marked as such. The breakdown for properties in escrow that are taking back-up offers was left out because the IMRMLS won’t let me combine them with those pending and also because there’s no way to limit the date. The search was limited to the IMRMLS and excludes for sale by owners and properties that were only listed in other boards.

San Bernardino housing statistics from the last 60 days

2006-03-20T17:15:00.000-08:00

The IMRMLS data for today reflect a slowing market in the city of San Bernardino with available properties priced high and taking over 1.5 months to sell. This is especially interesting because buyers who go to S.B. tend to be the ones who are looking for the lowest prices, have little if any savings, and often do not have strong credit. Many of these buyers are 100% financed, so the slightest increase in interest rates immediately decreases their spending power.

As of today, 3/20/06, there are currently 926 residential properties available in the MLS for the city of San Bernardino. The average price is $357,805.
Looking at the breakdown, the houses, by bedroom count are as follows:
2 or fewer bedrooms: 190 available, average price of $295,762, with an average of 49 active days on the market.
3 bedrooms: 445, $350,170, 54 days on market
4 or more bedrooms: 209, $460,928, 57 days on market
Condo figures are as follows:
2 or fewer bedrooms: 33, $204,560, 46 days on market
3 bedrooms: 9, $240,777, 33 days on market.
(You may have noticed that if you total the breakdown, it doesn't come out the same as the total in the first sentence of this section. I haven't been able to figure out why this happens, and as it is, between the time that I start taking down the numbers and when I finish, the status of properties can change, making it is very difficult to doublecheck my figures for accuracy. That's 40 missing properties, and they could really change the average prices.)

As always, the expired numbers are of interest as they show what price the market wouldn’t bear. Since 1/19/06, 297 properties have expired with an average value of $347,118. For some reason unknown to me, I wasn’t able to get a breakdown for houses and condos by bedroom, nor was I able to get days on market. (There are times when I have temporary difficulties with search parameters, ghost houses that come and go, etc.. There’s no understanding it.) While limited, this bit of information is interesting because it’s below the current average price of 3-bedroom houses.

The sold figures going back 60 days to 1/19/06 are quite strong but not nearly as high as the homes currently on the market. The breakdown is as follows for houses:
2 or fewer bedrooms: 34, $264,602, 42 days on market
3 bedrooms: 154, $331,034, 42 days on market
4 or more bedrooms: 73, $386,008, 46 days on market
Condos figures are as follows:
2 or fewer bedrooms: 18, $217,327, 39 days on market
3 bedrooms: 8, $247,362, 18 days on market
It is certainly interesting that the sold condos have higher sold prices that those available, but with so few sales, it’s hard to draw conclusions as buyers may have chosen the higher priced units because they were in better condition, easier to get into, etc.

The pending data shows a marked drop in price with the exception of the 4+ bedroom house, revealing that buyers are unwilling and perhaps unable to buy as high as they could before. Since 1/19/06, the pending sales breakdown for houses is as follows:
2 or fewer bedrooms: 87, $262,309, 38 days on market
3 bedrooms: 165, $320,903, 48 days on market
4 or more bedrooms 57, $390,265, 52 days on market
Condos:
2 or fewer bedrooms: 18, $200,705, 32 days on market
3 bedrooms: 4, $205,975, 19 days on market
The huge change in condos is, again, hard to generalize about since so few units sold. (I actually tried to look up the individual sales, but then got 0 results--again, one of the many mysteries of the IMRMLS.) There’s a very noticeable increase in the number of 2-bedroom houses being sold, and I would assume that this has to do with their lower price rather than with more people wanting the smallest house possible. Older, 2-bedroom homes in San Bernardino are often around 750 square feet and built from the 1920s through the 1940s, so they aren’t selling because they’re physically the most desirable homes but rather because they are what people can afford.

This data is from listings in the IMRMLS and excludes For Sale By Owners and properties that out-of-area agents only listed in other boards. The data may be skewed by agents who input the wrong code and figures. Also, listings that are in escrow but are taking back-up offers were excluded because the MLS report won’t combine them. Lastly, I’ve found that S.B. data is always thrown off by agents who forget to change “pendings” to “solds.” For this reason, I don’t look at “pendings” more than 60 days old.

Living with oranges and critters

2006-03-19T13:40:00.000-08:00

Someone told me a little while ago that he'd heard Riverside (the home of the parent Navel Washington) is the next Orange County. To me, that says 2 things, that we're experiencing tremendous growth and that our orange trees are disappearing.
A few years back, I discovered that the orange groves were moving out to the desert. At that point, I was told it was because it was cheaper to grow them out there. But I understand now that the truth was that the land here was already becoming too valuable for housing.
The signs have been here for a while. First, they stop watering a grove and let the trees die. It's a sad sight. Then they bulldoze and the markers go up. If it's an expensive subdivision, they leave an outer swathe of trees to give the homes privacy. There are some gorgeous and very expensive tracts where the hoa fees are extremely high, in part to pay to maintain their groves. The homeowners have the right to pick the fruit, but they mostly don't, so it falls, and the gardeners clean it up.
There's a grove we've been going to for years on Victoria just north of Jefferson to supplement our own trees. Their big bags of navels in the winter are $6 apiece, and their bags of valencias are $5 in the summer. They also sell other fruits and vegetables as well as potted plants.
I also visit some friends of ours who live in a tract with orange trees and pick some of their fruit. One of them can't take the acidity--what a pity!
The trick is to squeeze about 20 at a time and drink it quickly with a group of people. Forget about soda and alcohol for parties, I'd rather serve orange juice. It's completely the opposite of when I was growing up in Hawaii and oranges were a rare treat and to be savored. My little girl guzzles hers, and I refill her cup immediately. Our compost pile got as big as a starter house, so I've been putting the rinds out with the weekly green pick-up. I found out the hard way that you can't squeeze and then chill navel orange juice--it gets bitter tasting. Hmm, so that's why all that orange juice in the cartons is from valencias.
But for homeowners who are surrounding themselves with fruit trees, I must warn them that the critters that populated the groves are still with us. I was showing property to someone from out-of-state, and she commented on barriers that looked like they were intended to keep critters out. Under my breath, I told her that I would explain after the seller was out of hearing range.
You see, I'm not going to not tell people some of the facts of life of the Inland Empire. I'd rather tell them upfront how to maintain the property that they're going to pay a lot of money for.
For truth be told, we have ... critters. There are the obvious ones, such as coyotes, possums, skunks, owls, rabbits, and so on and so forth, and then there are the rats and the ants.
In addition to the typical Norway rat, we have tree rats, which are smaller. Rat abatement is a daily fact of life along with gopher abatement. You can't get rid of them, so you have to keep their population under control to make up for how well fed they are. We had our house sealed up and trapped the ones who were indoors, and now we pay for monthly refilling of outdoor bait stations that our dogs can't get into. This means that occasionally, I run into a rat carcass, and I carefully use a rake to push it into a bag. I'm not as squeamish as I used to be, but it's still a painful process. Luckily, we don't have a kangaroo rat habitat near us as they're protected.
Another maintenance issue is ants. We get the perimeter of our house sprayed several times a year to keep them at bay with occasional emergency calls when they start trailing indoors.
The oranges may be nearly gone, but there are home maintenance issues that will be with us for a while.
Here's a Press Enterprise article about the parent navel tree:
http://www.pe.com/localnews/riverside/stories/PE_News_Local_B_navel19.58c.html

Riverside Realtor Blog - Alma Dizon

Moratorium on Mortgage Rates Will Help Some People...

Desperate Home Owners Use Plastic...

San Bernardino Tax Relief: Fires and Declining Value

Fires are part of the California environment

30% off of WHAT?

THE MOST AMAZING RESTAURANT IN RIVERSIDE

Just how thirsty is your lawn?

On Love and Distrust

Pending Sales Down Most in the West

1/5 of CA foreclosures weren't owner-occupied

Capital One Gets Out

Aggressive Lending Practices and Countrywide's Corporate Culture

Bank of America to Countrywide's Rescue?

Smile at the Red Light!

Middle Class Refi Victims Don't Get Much Sympathy...

How does your refi company make money?

More refi horror stories

Don't forget to read your trust deed

Lost and Found Skunk

How many roommates can you have?

Driving on Cooking Oil

Would you like a dog with that house?

Further thoughts on the issue of limiting dogs and cats

Dogs and Cats: A question of quality, not quantity

UCR Area Sellers Stubbornly Keep Prices Up

Pitfalls of the Short Sale

recycling taken to a new level--your flooring

The wind and the barn owl

This is actually a terrific time to buy if you don't want to go with the herd

Sharks with Halos? Investors and Foreclosures

Replacing CC&Rs with HOAs

Think twice before putting that ficus benjamina in the ground

Selling a House from Kyoto via the Web

Blogging from Japan: Lessons in Urban Living

In Pursuit of Your Happiness

Using someone else's identity to get a home loan isn't a good idea...

Nowadays, Yahoo Looks Better than Google for Real Estate Searches...

Personalities that I prefer as buyers rather than as sellers...

Revenge isn't always sweet in divorce and real estate

Imperial Irrigation District Encourages Planting Trees in the Desert

Think Twice About Improvements

Eating Well in Riverside: Pho 99

Smells Like Chino

Tented House for Sale

Some of the Pros and Cons of a New House versus Resale

There are words that rhyme with orange

Ungrammatical Spanish and Other Funny Street Names

Do you need mortgage life insurance?

Places to go in Riverside: the UCR Botanical Garden

On Declining Consumer Confidence and Paralysis in the Inland Empire

What do the Sellers Usually Pay For?

August Panic

Saving Your House From Incorrigible Little Dogs

Pros and Cons of Porcelain Tiles

Downtown Riverside: Maria's Antiques

Downtown Riverside: Mrs. Tiggy-Winkle's Gift Shop

HOA fees and 100% Financing

In a Slower Market Sellers Need to Clean Up, Make Repairs, and Update

Moreno Valley Statistics from the Past 60 Days

Prices are actually up even though sales are down!

Softening Market Hits Riverside

I'm not supposed to tell, but you can ask...

absolute best vacuum cleaner for realtors and anybody

She wants a house, but he doesn't want to work

Electric bill too high? Plant trees!

A bathroom in the garage?

One house to leave

Divorce and Foreclosure

These houses are for the birds

Riverside road problems affect Moreno Valley commuters

builders don't want people to flip houses

best tacos in Riverside

San Bernardino housing statistics from the last 60 days

Moreno Valley Statistics from the past 60 days

Riverside housing statistics from the last 60 days

If they want to pay an extra $100,000...

The Final Walk-Through Isn't a Contingency

Keys will be given after title records

Zillow.com: A Quick Review