Frankly Speaking

Good market or bad there is one constantly nagging question that is consistently asked by home sellers (and buyers) and that is “why do we need to use a REALTOR®? I thought that this week would be a great time to truly explore the value proposition that working with a highly skilled professional can bring to the transaction no matter what side of the aisle you are on. The number one argument is that of commission. Be it 4%, 6% or (you pick the number) it is often said that these cost cannot be justified. That the skill sets required to negotiate a purchase or sale do not warrant the cost. So it is this premise that I will first address. It is a fact that a home listed and properly marketed by a licensed real estate professional will in fact sell for 24% more on average than that of a home that is for sale by owner (FISBO). This fact alone would argue the point. It has been proven that the average seller would have a net profit that is at least 18% greater from his sale if he engages t...

First let me say that last week’s article caused a flurry of responses asking for more information. So if you will indulge me, I will expand on the topic. And, add a couple of divergent opinions in an attempt to draw even more of you into the debate. First, on February 11, 2011 in response to the White House’s floating the idea of dissolving Freddie and Fannie over the next few years, the California Association of Realtors (CAR) had the following response. “The elimination of government involvement would raise borrowing cost for home buyers. And, severely restrict a safe and affordable flow of financing, further impeding the still fragile housing market recovery”. “A reduced government presence in the mortgage market will raise the cost of homeownership and make mortgages less available,” according to CAR President Beth Peerce. She goes on to say “Congress needs to understand that during economic downturns, the housing market needs government involvement to ensure capital stability”. C...

Recently the Press Enterprise ran a story about the Obama administration’s planned phase out of industry giants FANNIE MAE and FREDDIE MAC   who combined hold over half of the nations mortgage securities. The stated motivation for this move is to lessen governments role in   the real estate industry. The big question is twofold first what does this mean for us today?   And, what will it mean for us in the future? It should be noted that   the prevailing thought is that in order to avoid a catastrophic collapse of our financial system   the transition will need to   be stretched out over a protracted period (probably five years or more). So for the short term this will hardly cause a ripple. However, in order for   our secondary market to survive (which is in our best interest) the private sector will need to fill the void left by the exit of Fannie and Freddie from the market place. The likelihood of this happening today is very slim. You see not only ...

It never ceases to amaze me the level of creativity that exist out there when it comes to those who would use illegal means to capitalize on a shifted or down market. The internet has spawned a new level of sophistication to the scams of yesterday. And today, the buyers and sellers would be well advised to ask questions and look before they leap. It should come as no surprise that currently the vast majority of fraud occurring is in the short sale and loan modification arena. This niche market (which currently represents over 50% of the transactions in our area) has been inundated by those who would use fraud and deception for their own financial gain to the detriment of those on whom they prey. In November of 2010, the Federal Trade Commission (FTC) implemented the Mortgage Assistance Relief Services (better known as MARS) act in an attempt to protect distressed homeowners from the ever increasing list of foreclosure relief scams. The primary function of this new rule is to make it il...

2010 was a busy year for our state legislators. And as a result there were a number of new laws crafted which affect the homeowners of California. The following is a brief synopsis of the regulations that have the greatest impact on you as a homeowner. First, it never fails to occur that once you purchase your new home, you immediately become inundated with documents offering to provide you with copies of your grant deed (for a fee), or a homestead document (for a fee). These solicitations are well crafted solicitations that cleverly mimic government documents. As a result an unsuspecting homeowner might be paying a premium price for a document he could get for free, or a service he does not need. AB1373 restricts these companies from these practices as of January 1, 2011. Next on the new law hit parade is SB 183. This law mandates a couple of things. First it requires that a Carbon Monoxide detector be installed in every unit or dwelling intended for human occupancy statewide. This ca...

One of the most difficult things to do in the real estate industry is to accurately time the market. Many have tried, many more claim to have the secret, but the truth is that no one can determine when a market has peaked or hit bottom (except by sheer luck). In fact by the time the media gets around to telling you we have hit the top (or bottom) of a real estate cycle, more often than not we are already well on our way in the other direction. And waiting (for the peak or bottom) can often cause more financial hardship then jumping in. If you will indulge me for a moment, I will explain. I have often said that the best time to sell is just before the peak. During that period, you maximize your profits while facing the least amount of competition. Remember 2007? Once the general public realized that the market had peaked, everyone who was inclined to sell listed their home. And in doing so, ran head on into the law of supply and demand. You see, when supply exceeds demand, buyers dictat...

Virtually everywhere I go, I am asked if this is a good time to buy or sell a home here in the greater Corona Norco (and now Eastvale) market. And without hesitation my answer is always the same. Yes it is. Simply stated, I believe that we are in an era where home value, affordability, inventory, and interest rates have created a perfect storm. Rarely in our history have we seen so much home, sell for so little, with interest rates that just a few short years ago could not be obtained by even the most highly qualified buyer.   In fact in many cases, the homes offered for sale today cannot be built for the price for which they are sold. Now, I know that the national media would have you feeling like the sky is still falling. But real estate unlike any other business is transacted on a local level. And, to truly understand the condition of the market we are in, you must study the transactional data of our market. Most, economist would agree that the 4 th quarter of 2007 marked the p...