You've Opened Escrow, Now What?

Congratulations, you are on your way to owning your very own home!

Follow these suggestions (and your realtor's advice) so that escrow and settlement with go as smooth as possible.

• You will be asked for a down payment on the home you are purchasing.  You can choose to put down as much or as little as you want (depending on your mortgage), but remember, the more you put down toward the total price of your home, the less time it will take you to pay off and the less your mortgage payments will be every month.
• During this period of purchasing your home, you are going to need an escrow or settlement company to act as an independent third party so that you know when and who to give your money to get the deed to your new home. The escrow or settlement company will hold your deposit and coordinate much of the activity that goes on during the escrow period.  This deposit check may also be held by an attorney or in the broker's trust account. Make sure that there are sufficient funds in your account to cover this check.
• The deposit check will be cashed. Assuming the sale goes through, this money will be applied to the purchase price of the home. If for any reason the sale is not consummated, you may be entitled to receive all of your deposit back, less standard cancellation fees. In certain instances, the seller may be able to retain this money as liquidated damages. Prior to executing a purchase contract, it would be wise to speak with your counsel regarding whether or not it is your best interest to have a liquidated damages clause as part of the contract.

The period that you are "in escrow" is often 30 days, but may be longer or shorter. During this time, each item specified in the contract must be completed satisfactorily. By the time you have opened escrow, you have come to an agreement with the seller on the closing date and the contingencies. Each contract is different, but most include the following:

1. Inspection contingency: this should be completed as soon as possible after the contract to purchase is signed as unsatisfactory results of the inspection may mean that you will want to cancel the contract.
2. Financing contingency: once the contract is signed, you have a period of time to secure funding. If, for any reason, you are unable to secure funding during the period of time granted to you by the contract (and the seller will not provide a written extension of time), you must decide whether you want to remove the contingency and take your chances on getting a loan. You may choose to cancel the purchase contract.
3. A requirement that the seller must provide marketable title.

With an attorney or title officer, review the title report. The title must be "clear" to ensure that you do not have legal issues regarding your ownership.Check into local and state ordinances regarding property transfer and make sure that you and/or the seller have complied with them.

Secure homeowner's insurance. This will probably be required before you can close the sale. Due to such requirements as special fire and earthquake insurance, obtaining this insurance may require a lengthy period of time. It would be in your best interest to apply for insurance as soon as possible after the contract is signed.

Contact local utility companies to schedule to have service turned on when you close escrow.

Schedule the final walk-through inspection. At this time, you should make sure that the property is exactly as the contract says it should be. What you thought to be a "permanently attached" chandelier that would come with the property might have been removed by the seller and replaced with a different fixture entirely.

You've made it! Once the sale has closed, you're the proud owner of a new home. Congratulations!

Existing Home Sales Improve

The conflicts in Ukraine and the Middle East had little impact on markets this week, while the economic data was slightly stronger than expected overall. As a result, mortgage rates ended the week a little higher. 

The housing data released this week contained mixed news. Fortunately, the good news came from Existing Home Sales, which cover roughly 90% of the housing market. June Existing Home Sales rose 3% from May to the highest level since October 2013, marking the third straight month of increases. Also, the inventory of existing homes for sale rose to the highest level since August 2012.

 Less encouraging, June New Home Sales, accounting for the remaining 10% of the market, declined 8% from May, and the May results were revised sharply lower. These figures are frequently volatile from month to month. New homes inventories increased as well to the highest level since October 2011. To summarize, the bulk of the housing market showed continued improvement, and the tight supply of homes for sale in some markets may be showing signs of easing.

While Fed officials have recently downplayed the risk of higher inflation, many investors are not quite so certain. The inflation data released on Tuesday eased some concerns, but just slightly. The June Consumer Price Index (CPI), one of the most widely watched inflation indicators, increased at a 2.1% annual rate. Core CPI, which excludes the volatile food and energy components, was 1.9% higher than one year ago. With CPI holding steady close to the Fed's stated target level of 2.0%, investors will be keeping an eye out for signs of rising inflation which could pressure the Fed to tighten monetary policy. 

Next week, investors will be watching both geopolitical events around the world and major economic news in the US. The next Fed meeting will take place on Wednesday. The first reading for second quarter GDP, the broadest measure of economic growth, also will come out on Wednesday. 

The important monthlyEmployment report will be released on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Core PCE inflation, ISM Manufacturing, Pending Home Sales, and many other reports will round out a very busy week. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. 

These Are The 10 Richest Small Cities In America

Rancho Palos Verdes made the Movoto list @ #9...

They might be tiny, but these places make up for it with big bank accounts, fast cars, and more luxurious amenities than you can shake a 24 karat gold stick at.

We talk a lot about superheroes, cartoon characters, and even the occasional royal figure here on the Movoto Real Estate Blog, but most of the time we’re telling normal folks like ourselves where the best and safest places are to live.

Every once in a while, though, we wonder what life must be like for the 1 percent—what sort of places they live in, and what sort of things they need. It’s for that reason why we decided to turn our ranking prowess toward finding the enclaves of our country where the truly wealthy reside.

What we found is that, when it comes to small cities and towns, there’s none richer—in terms of actual wealth or things the wealthy enjoy—than Bethesda, MD. In the process, we also determined the top 10 richest small cities in America, which are:

1. Bethesda, MD 2. Palo Alto, CA 3. McLean, VA 4. Redondo Beach, CA 5. Menlo Park, CA 6. Lexington, MA 7. Brentwood, TN 8. Foster City, CA 9. Rancho Palos Verdes, CA 10. Laguna Niguel, CA 10. Hoboken, NJ

How We Made This Ranking

Even if you’ve read one of our Big Deal List rankings before, you’ll want to pay attention, because this one’s a little different.

In order to determine which small cities in the U.S. are actually the richest, we started with a list of 950 places with populations between 30,000 and 80,000 people according to the 2010 U.S. Census. We then ranked these places from 1 to 950 based on two categories: median household income and median home value, using data from the 2010 Census, with one being best.

The average of these two scores was used to determine the top 25 most wealthy small cities in the country. From there, we gathered further data on just these 25 places in nine additional categories we chose to encapsulate a truly rich place:

• Really expensive fine dining establishments per capita
• Really expensive clothing retailers per capita
• Really expensive jewelry stores per capita
• Luxury car dealers per capita
• Country clubs per capita
• Cosmetic surgeons per capita
• Distance to nearest polo field
• Distance to nearest yacht club
• Distance to nearest private airport

For the first six criteria, we used business listings and only considered businesses actually located within city limits. For the last three, we used the distance to the closest field, club, or private airport by actual driving miles.

Each place was given a score from 1 to 25 in the individual criteria, with one being best. We then averaged these rankings together into an overall Big Deal Score, with the lowest score being the richest small city.

Now that you know how we put the ranking together, let’s take a look at the top places and how they fared across all these various criteria. You might want to grab yourself a top hat and monocle to wear while you read for optimal richness simulation.

9. Rancho Palos Verdes, CA

   

Country Clubs Rank	1	Luxury Car Dealers Rank	8	Polo Field Distance Rank	16
Really Expensive Fine Dining Rank	1	Really Expensive Clothing Rank	11	Private Airport Distance Rank	18
Yacht Club Distance Rank	5	Really Expensive Jewelry Stores Rank	11	Plastic Surgeons Rank	22

Six hours south of Foster City, but still located on the water, Rancho Palos Verdes is home to some of the Los Angeles area’s most prime seaside real estate. That explains its median home value of $973,900 in 2010, but its median household income of $119,778 is also sky-high. Residents can spend that money on fine dining like nowhere else, as Rancho Palos Verdes ranked first overall for hyper-expensive cuisine. It was also first for country clubs per capital and, owing to its coastal location, fifth for distance to the closest yacht club.

http://www.movoto.com/blog/top-ten/richest-small-cities/

The Early Years: The Architecture of Rolling Hills

The Architecture of Rolling Hills

The structure of Rancho Elastico was typical of the early California ranch houses. When you drove from San Diego to the Coast highway to Monterey, the country was dotted with attractive ranch homes. It cost $4.00 per square foot to build an average home inRolling Hills in 1937.

I decided that all the buildings built in Rolling Hills would have a white exterior. They would fit in with the emerald green of the new grain in the spring, and would harmonize with the bare earth after the hay was baled in the Fall. If they were white we would not have the problem that some communities with a high architectural standard had come up against – and that was that a fine architect would paint the exterior of the house a very subtle color. Four or five years later, the house would be sold and the new owner would decide to repaint that lovely, very subtle yellow house again. He did not have the expertise of a trained architect and could no show his painter the kind of a light yellow it should be – or he would decide that he would rather have a “motel green” exterior, and the first thing you knew the character of the neighborhood changed, for the worse. But if it was white, it was white. We painted our gatehouse, the first building erected in Rolling Hills white, and we said, “that is the color we approve.”

The roofs were to be of shingle or shake, weathered. We didn't want red tile roofs. They are not harmonious in a neighborhood unless all roofs are red tile.

The homeowner could do anything he wished on the interior. Every ranchito had to be fenced with a three-rail, white fence. We, the developers, installed all the three-rail, white fences on the road frontage. The cost was included in the price of the land. All other exterior fencing had to be matching height and design, and white – but was paid for by the individual landowner. We, the land developers, planted roadside trees and shrubs. Because of the contour of the land, we could not put in uniform street tree planting, nor did we wish to. We did do roadside planting of trees and shrubs, using those trees and shrubs that would give the greatest effect and still be economical to take care of.

It is hard to realize now, when you drive through Rolling Hills, what it was like in 1936. You could stand at the Rolling Hills gatehouse and look toward Crest Road, and the only trees in sight on several thousand acres were those trees planted at Ranch Elastico, or away on the distant skyline, the trees around the Roy McCarrell houses. 

April's Real Estate Market Report

A Look back at Aprils Market...

Mortgage servicer to pay $268 million to Californians

It's part of a $2.1-billion national settlement with Ocwen Financial, which is accused of breaking state law by denying loan modifications and charging unauthorized fees.

http://www.latimes.com/business/la-fi-ocwen-foreclosures-20140318,0,1317760.story#ixzz2wRSnOS7m

By E. Scott Reckard | LA TIMES

 

California victims of alleged foreclosure abuses will get $268 million in relief from a $2.1-billion national settlement with Ocwen Financial Corp., the nation's largest non-bank provider of mortgage customer service.

Ocwen broke state law by improperly denying loan modifications, failing to honor modifications granted by prior servicers and charging unauthorized fees, according to the California Department of Business Oversight.

"Californians should not lose their homes because of deceptive and poorly executed mortgage servicing practices," Commissioner of Business Oversight Jan Lynn Owen said Monday in a news release.

The announcement provided new details on how alleged victims would benefit from the settlement, finalized last month between 49 states, the U.S. Consumer Financial Protection Bureau and Ocwen. It also spotlights a growing controversy as major lenders outsource their mortgage servicing operations to Ocwen and other firms that specialize in collecting payments, pressuring delinquent borrowers and foreclosing on defaulted mortgages.

The banks are seeking to limit the hassle and cost imposed by tougher regulation of loan servicing in the aftermath of the mortgage meltdown. That's bringing a rush of new business to firms including Ocwen and Nationstar Mortgage Holdings Inc., which traditionally have specialized in handling subprime borrowers.

But as they have mushroomed in size, the specialists have become targets for foreclosure abuse complaints similar to those that have plagued the nation's largest banks since the housing crash.

Ocwen, an Atlanta company with a mortgage servicing arm based in Florida, began managing home loans in 1988. Thanks to an acquisition spree, the number of residential loans it services has grown from about 350,000 to 2.9 million over the last four years. The unpaid balance on these loans totaled $464.7 billion as of Dec. 31.

Mark Buchignani is among those accusing Ocwen of improperly threatening to foreclose on his home. He took a second mortgage of $39,500 when he bought a home in Phoenix in 2006. The original servicer, since replaced by Ocwen, was GMAC Mortgage, a spinoff from General Motors Corp. that had been a major player in home loans during the housing boom.

Buchignani said he never missed a payment until July, when automatic transfers from his bank account stopped going through for four months without his knowledge. He said he continued to receive emails saying the payments had been made. Since he discovered the problem, his offers to bring the account current have been met only with penalties, he said, and a recent threat to foreclose on the home.

"No amount of communication, calls or emails or faxes or letters, complaints or explanations has deflected them from piling on fees and interest and penalties and credit damage," said Buchignani, a video-game designer who recently moved to Southern California and is renting out his house in Arizona.

"They continue to forward my communications to 'Research,' who then issues letters saying they will respond within 20 days," Buchignani said. "But, of course, they don't."

Ocwen did not respond to requests for comment Monday.

In its recent annual report, Ocwen described itself as a leader "in foreclosure prevention and loss mitigation that helps families stay in their home and improves financial outcomes for investors."

But advocacy groups and state regulators have questioned whether it and other big independent servicers have been able to handle the influx of mortgages.

Ocwen said last month that it had indefinitely postponed a planned purchase of servicing rights on about 184,000 severely delinquent Wells Fargo home loans with a principal balance of $39 billion. The move came in response to pressure from the New York Department of Financial Services. Ocwen said it would work with the New York regulator "to resolve its concerns about Ocwen's servicing portfolio growth."

Many of the servicing rights Ocwen acquired came from such household names as Bank of America and Chase. The biggest deal of all was with Residential Capital, which owned the GMAC servicing rights, and while in bankruptcy proceedings sold Ocwen the servicing rights to more than 1.7 million loans in February 2013.

ResCap, as it is known, was among five lenders that signed the national settlement requiring them to provide $25 billion in relief to distressed borrowers; the others were BofA, Chase, Wells and Citigroup Inc. As a result, Joseph Smith, the former North Carolina banking commissioner overseeing the lenders' compliance with the settlement, has now been given authority as well over Ocwen.

In an interview Monday, Smith said he hadn't yet had time to test and report on Ocwen's compliance with stricter servicing rules contained in the settlement. "They're still new to the party," he said.

"My colleagues and I are going to be working on these kinds of issues with Ocwen for the next three years," Smith said, a reference to when his authority expires.

Copyright © 2014, Los Angeles Times

http://www.latimes.com/business/la-fi-ocwen-foreclosures-20140318,0,1317760.story#ixzz2wRSsXfpZ

Southern California is a Real Estate Seller's Market this Spring

San Pedro one of our local cities made it into this LA Times Article for Top Buyers Markets...

By Tim Logan | LA TIMES

As the busy spring real estate season gets into gear, sellers appear to have the upper hand across much of Southern California.

http://www.latimes.com/business/money/la-fi-mo-sellers-market-20140318,0,5284349.story?track=rss#axzz2wR5dWmXV

That's the word from Zillow, the real estate data website that tracks housing markets nationwide. It released a report on the top 10 buyer's and seller's markets in the U.S. Wednesday morning, and Los Angeles made the list as the fourth-strongest market for sellers right now. Riverside ranked sixth.

A strong seller's market, says Zillow, doesn’t necessarily mean its prices are soaring — and indeed median prices have been flat here in recent months — but rather quick sales, few price cuts, and homes selling at or above asking price. In buyer's markets, sales are taking longer and price cuts are more common.

MAP: Southern California home prices by ZIP Code

Right now, Zillow said, there are big differences in different parts of the country.

Of the top 10 seller's markets, seven are in the West and two are in Texas. San Jose, San Francisco and San Antonio topped the list. For buyers, nine of the top 10 markets are in the Midwest or Northeast, with Cleveland, Philadelphia and Tampa, the only Florida market on either list, the most buyer-friendly.

“The real estate data in markets on both coasts are telling markedly different stories,” said Zillow chief economist Stan Humphries. “Real estate has always been local, and as the spring market gains momentum, this old adage will only become more pronounced.”

Zillow also crunched data at the local level to see what neighborhoods are good for sellers, and for buyers, around Los Angeles. Red-hot Eagle Rock took the top spot for seller's market, followed by Canyon Country in Santa Clarita, Tujunga, Mar Vista and Valencia. The top buyer's markets included the Hollywood Hills, Beverly Glen, Northwood in Irvine, San Pedro and Venice.

http://www.latimes.com/business/money/la-fi-mo-sellers-market-20140318,0,5284349.story#ixzz2wR5zXOh2

Chinese Real Estate Investors Predicted to Flood U.S.

China and US ‘to top cross-border property investment’

 Asia, Investment, Lifestyle & Leisure Properties, Market Trends, News, News By Region, News By Topic, North America,Shows and events, World News1 Comment

 By Adrian Bishop, Editor, OPP Connect

By 2016, Chinese cross-border real estate funds flowing in to the United States will be the highest in the world, beating the current US$1.3 billion from Singapore to the UK, say private equity experts

Within the next two years, the world’s leading cross-border property market will be between China and the United States, experts predict.

As interest from Chinese investors continues to build, the US property market is set to become the world’s top recipient of cross-border real estate funds from a single country, private equity investors believe.

According to 70% of investors polled on at the annual Private Equity Real Estate conference, PERE Summit: Asia 2014, held in Hong Kong, which ended yesterday (Thursday) the United States will become the world leading recipient of real estate funds from China sometime before 2016, the Wall Steet Journal blog has reported.

In the last two years, the biggest cross-border property investment has been from Singapore, which put US$1.3billion into the UK market. Chinese investment into the US is currently in fifth place, but PERE Summit delegates  say it is set to rise to the top.

Hing Yin Lee, Senior Executive Director of the real estate investment department at Ping An Trust, says, “Liquidity is really abundant in China, there’s a lot of hidden liquidity in institutions that they need to deploy capital. Cap rates have been compressed to very low levels they need to look for yield and opportunity.”

Among leading targets for High Net Worth Investors, commercial investors and developers are the gateway cities of New York, Los Angeles and San Francisco, say sector experts.

Chinese investment in overseas property is set to at least double in 2014, according to the Asia Forecast 2014, published by Colliers International.

“Given that Asia is currently in a very different property cycle than the US and Europe, its investors will become more active in outbound investment, focusing on key gateway cities, such as London, New York and Chicago.

“Chinese investors, in particular, are expected to look for overseas real estate opportunities with better yields and the strategic benefits of portfolio diversification.”

Other countries are also desperate to pick up Chinese foreign property investment and are forming new partnerships.

RE/MAX Australia New Zealand says it wants to make sure its properties are effectively marketed to the Chinese and it has just signed a deal with leading Chinese-language overseas property portal, Juwai.com.

Michael Davoren, managing director of RE/MAX Australia and New Zealand says, “Our agents have asked for this. Our vendors have asked for this. Everyone wants to make sure their properties are marketed in China.”

According to Juwai.com data, Australia and New Zealand are favourite destinations for Chinese homebuyers, thanks to their relative proximity to China, good education opportunities, protected natural environment and stable real estate markets and economy.

While Chinese buyers favour Auckland as the top destination in New Zealand, places like Kerikeri, Dunedin, Taupo and Northland are also popular hot spots.

*OPP has just appointed Sophia Liu, who has extensive business development, sales and marketing experience, as its new Commercial Director in China. She aims to expand the OPP business in the region, including developing OPPLive China and OPP China magazine (see http://www.opp-connect.com/28/02/2014/opp-appoints-new-commercial-director-in-china/).

OPP has also recently opened an office in Singapore, headed by Managing Director, Harlow Russell and Commercial Director, Cedric De Souza.

For the full WSJ blog story, go to: http://on.wsj.com/1jFMcUF

By Adrian Bishop, Editor, OPP Connect

READ MORE HERE:

http://www.opp-connect.com/28/02/2014/china-and-us-to-top-cross-border-property-investment/

How to Make an Offer on a House – Tips & Strategies

Once you've located the perfect house for you and your family, it is time to prepare an offer. The offer is the foundation of real estate transactions, and upon review, the seller will either accept or decline your bid. It includes basic information, such as the location and physical description of the property, the proposed price, down payment information, and stipulations. It goes without saying that preparing a real estate offer is anything but easy. For this matter, it’s best (though not required) to work with a professional real estate agent.

You can’t make a home seller accept your offer. However, following these tips and strategies can put your offer ahead of the competition.

Factors to Consider When Making an Offer

Your bid indicates how serious you are about buying a particular house. This isn’t the time to play games or submit an offer that’s substantially below the asking price, unless your agent believes it to be fair.

When making your offer, take these factors into consideration:

1. How Long Has the House Been On the Market?
A seller is more likely to lower his or her asking price if the house has been on the market for longer than six months. At this point in the game, he or she is probably eager to sell the house and move on. For this matter, an offer that’s $5,000 or $10,000 below the asking price might work in your favor. And if the property has received few showings or prior bids, then this is even better. The fact that someone is finally interested in the property may move the seller to accept your bid.

2. How Motivated Is the Seller?
Real estate agents often talk with one another, and your agent may have a little background information on the seller, including the reasons behind the sell. This information can help you assess the seller’s motivation, thus helping you to make the best offer.

For example, if the seller isn’t in a rush to move, he or she may hold out for offers that are close to the asking price. On the other hand, if the seller is going through a divorce or is relocating for work, chances are that he or she will accept a lower offer to quickly unload the property.

3. What Are the Prices of Recent Comparative Sales?
A comparative market analysis is another tool to help you make the best offer on a house. Your agent can provide this report, or you can check comparative sales on a website such as Zillow. This report includes active, pending, and sold listings for similar homes in the area. With this information, you can learn the asking price of similar homes currently for sale, as well as the actual sale prices of homes that have closed within the past six months.

Based on the comparative analysis, you and your real estate agent can determine the best price for the house. For example, if you’re bidding on a house with an asking price of $200,000, yet a review of comparative sales shows that similar homes in the neighborhood have only sold for $185,000, an offer that’s $10,000 beneath the asking price might be fair.

Understand, however, that a comparative analysis is simply a guideline. If the house that you’re bidding on has several high-end upgrades – such as a room addition, a finished basement, or newly remodeled bathrooms and kitchen – the seller may not entertain a low bid.

Real Estate Contingencies

Understandably, sellers prefer real estate offers with zero contingencies. However, stipulations are routine in these types of transactions. The key to getting your offer accepted is being fair and keeping contingencies to a minimum. While you generally should include some of the following contingencies, you may not want to include all of them:

1. Home Inspection
A home inspection is not required, but recommended. In your offer, include that the home sale is contingent on a satisfactory home inspection – a thorough examination of the house to check for hidden problems. Areas examined by the inspector include the roof, attic, ventilation system, drainage, doors, windows, heating and air system, plumbing, electrical system, and foundation.

After the inspection, you can ask the seller to make needed repairs. If he or she does not comply, you can walk away from the sale.

2. Financing
If your offer states that the sale is contingent on your ability to secure a mortgage loan, the seller might pass on your offer. The seller is undoubtedly eager to sell the house – therefore, he or she may be unwilling to take a chance on someone who may or may not qualify for a home loan. Have your financing in place before you submit an offer, and include your pre-approval letter with your offer.

3. Earnest Money Deposit
This good faith deposit shows that you are a serious buyer. Submit your earnest money deposit with your offer, and if the seller does not accept your offer (or if you withdraw your offer due to reasons permitted in the contract), you will get your money back. If you proceed with the sale, the earnest money is credited to your closing costs. Earnest money deposits vary by region, but range between $500 and $1,000.

4. Expiration Date
Always include an expiration date with your offer. With this contingency, the seller must respond to your offer within a certain number of days or the offer expires. Choose a length that you’re comfortable with – perhaps 7 to 10 days.

This inclusion protects you in the long run. If you don’t hear back from the seller, you may assume that your offer was not accepted, and you may bid on and purchase another house. However, if you fail to include an expiration date with a prior offer, the seller could legally accept your offer months late, at which time you’re obligated to purchase the house or lose your earnest money deposit.

5. Disclosures
The seller is obligated to disclose certain issues with the property, but is not obligated to make repairs. Laws regarding what a seller must disclose vary by state. However, most states require sellers to disclose any major repairs or issues that have occurred within the past five years, such as mold removal, water damage, or electrical or plumbing problems. Additionally, sellers must disclose any existing hidden issues.

Maybe a window or the roof leaks during heavy rain. Or, perhaps a few of the windows may have broken locks, or the electrical outlets in a particular room do not work. To protect yourself, make sure that your offer is contingent on satisfactory disclosures.

Sellers complete a disclosure form during the negotiating process. After reviewing this form, you can ask the seller to fix issues or adjust the sale price to compensate for these issues. If the seller agrees to make the necessary repairs, but doesn’t fulfill his or her end of the contract before closing, you can legally pull out of the sale.

6. Walk-Through
In your offer, state your wish for a walk-through on the day of closing. This way, you can conduct a final inspection of the house. If the walk-through reveals issues not previously disclosed – perhaps a hole in the wall, a broken appliance, or a water leak – you can legally postpone or cancel the home closing.

Competing With Other Buyers

Ideally, you want to be the only one bidding on a house, as this allows you to take your time preparing the offer. But if other buyers are also interested in the property, time is of the essence, and you have to make your offer count.

There are several ways you can successfully outbid other bidders while still paying a fair price:

1. Include an Escalator Clause
If you really want to purchase a particular home, include an escalator clause in your offer. Simply put, the escalator clause increases your proposed offer up to a certain amount should another buyer submit a bid higher than yours.

Let’s say you submit an offer for $200,000 and include an escalator clause up to $220,000, in which you agree to offer $1,000 over a competing bid. If another buyer submits an offer for $205,000, your proposed price for the house will jump to $206,000, putting you ahead of the competition. This method works wells for homes priced under market value.

2. Increase Your Earnest Money Deposit
Perhaps your real estate agent recommends a $1,000 earnest money deposit. If you learn that others are competing for the same property, it doesn’t hurt to up your earnest money deposit by a few thousand dollars, if possible. This move demonstrates your seriousness.

3. Don’t Ask for a Lot of Extras
Most sellers realize that they will need to make reasonable repairs and updates if they are to unload a home. But if you include a bunch of unnecessary extras in your offer, the seller might go with another bidder. For example, don’t ask sellers for new doors and windows when the current ones work fine. And don’t request a complete bathroom remodel simply because you dislike the present design.

4. Pay Your Own Closing Costs
Buying a house is expensive, and to offset costs, some buyers ask for closing costs assistance. If possible, pay your own closing costs. The less a seller has to come out of pocket, the better. If you need closing costs assistance, be reasonable and ask the seller to pay a small percentage – no more than half.

Final Word

The information included in your real estate offer can make or break the deal. This is probably one of the most stressful parts of buying a house, as it only takes one bidder to knock your offer off the table. Be reasonable with your proposed price and follow your agent’s advice. If the seller submits a counteroffer, work with your agent to decide the best way to proceed. And if you don’t win a bidding war, don’t get discouraged – there will be other homes for you and your family.

What do you believe makes a good real estate offer?

http://www.moneycrashers.com/making-offer-house/

New high-rise on Broadway would be one of tallest in Southland

The apartment and retail complex, called Broadway @ 4th, would house 450 units and fill in a key block in gentrifying downtown L.A., developer Izek Shomof said.

By Roger Vincent | LA TIMES

It's been generations since a high-rise building had its debut on Broadway in downtown Los Angeles, but the skyline is finally in for a dramatic change.

A local developer hopes to transform a homely corner of the city's famed commercial corridor early next year by leveling a drab one-story retail center at 4th Street and Broadway. In its place would be a 34-story apartment skyscraper more than twice as tall as most other buildings in the historic core of downtown L.A.

To be built at a cost of nearly $150 million, the apartment and retail complex called Broadway @ 4th would house 450 units and fill in a key block in gentrifying downtown L.A., developer Izek Shomof said.

To market observers who saw the city's former elite streets of Broadway, Spring and Main become run-down and plagued by drugs and crime during the latter decades of the 20th century, it's remarkable that an extravagant upscale apartment tower would even be built in the neighborhood, much less one that would stand taller than City Hall.

"It's a new day for Broadway that large-scale construction is even proposed," said property preservationist Adrian Scott Fine, director of advocacy for the Los Angeles Conservancy. "It wouldn't have even been on anyone's mind 10 years ago."

Most buildings in the historic core date to the early 20th century. The most recent high-rise was an office tower completed at Spring and 6th streets in 1961. Soon after that, Fine said, many businesses began leaving the city's historic downtown blocks for newer office buildings on Bunker Hill and other blocks near the Harbor Freeway.

But developer Shomof has enjoyed success in recent years renovating old office buildings on nearby Spring Street and turning them into apartments served by hip restaurants, bars, nightclubs and shops.

"I have over 2,000 units with no vacancy," he said of his properties around 7th and 8th streets. "Why not go for another 450?"

Shomof recently submitted plans for Broadway @ 4th to city officials and hopes to get the go-ahead to start construction early next year. The developer and his architect face the challenge of coming up with an appropriate design for a new building in an old part of the city.

The site lies in several overlapping city land use zones where development is restricted, property consultant Hamid Behdad said. Among the zones are the Broadway Theater and Entertainment District, the Bringing Back Broadway Corridor and the Historic Preservation Review Area.

Assigned the challenge of designing a new building for a classic old neighborhood was architect Douglas Hanson, president of HansonLA. Among the city requirements: The first 10 stories or so had to be flush with the sidewalk to preserve sight lines along Broadway. The next 14 stories are to be set back 30 feet from the street.

"These are really strict guidelines that we are the first to test," Hanson said. "Nowhere else in L.A. do people have these kinds of restrictions to make something."

The goal for his firm was to design a building that would look appropriate on Broadway but wasn't an imitation of a historic building in the way that some baseball parks, for example, are made to look as if they were built in an earlier era.

"We weren't interested in making it feel historical," Hanson said. Instead, they used some historic architectural traits such as deep-set windows and other indentations intended to create shadows and texture.

Unlike many historic structures, the new building would have parking spaces both underground and set behind apartments on floors two through six...

CONTINUE Article HERE:

http://www.latimes.com/business/realestate/la-fi-property-report-20140227,0,1145329.story#ixzz2uZOP8vAn

California pending home sales jump in January

By Andrew Khouri | LA TIMES

 

More California homes went under contract last month, as buyers showed signs of life heading into the spring season.

Pending home sales across the state rose 22.9% from December, the first increase since October, the California Assn. of Realtors said Wednesday. The January figures boost confidence in a market that cooled after a torrid rebound early last year.

Buyers have struggled with low inventory, higher mortgage rates and sharply higher prices. That has raised questions about just how robust the upcoming spring home-buying season will be. 

Quiz: How much do you know about mortgages?

But the trade group said buyers have begun to adjust. Home prices and interest rates have shown signs of stabilizing and more homes have slowly come on sale, the association said.

“We’re starting to see a turning point in the market as we approach the spring home-buying season,” the association’s president, Kevin Brown, said in a statement. “Home sellers realize that home prices are holding steady and are gearing up for the upcoming season by listing their homes for sale."

Pending sales are a gauge of future activity and reflect contracts signed, but not closed. The data is not seasonally adjusted, so the increase from December reflects, in part, a normal seasonal boost come January.

Compared with January 2013, pending deals are down 17.5%. And signed contracts have now fallen over the year by double-digits for five straight months. Those drops indicate buyers still struggle in a market defined by affordability constraints and very few homes for sale.

If properties sold at their current pace, there was a 4.4-month supply of non-distressed homes for sale in January. That's an increase from three months in December.

Economists generally consider a supply of about six months to be healthy.

http://www.latimes.com/business/money/la-fi-mo-california-pending-sales-20140226,0,5963789.story#ixzz2uZN4M1IL

7 Home Improvement & Remodeling Ideas that Increase Home Value (And What to Avoid)

By Heather Levin | MoneyCrashers

7 Projects That Add Value to Your Home

Many projects do add value to your home, and improve your family’s quality of life. By working on these projects now, you can enjoy the benefits and updates. If you make green upgrades, then you can also start recouping your investment in these green energy technologies once you complete the projects.

1. Remodeling the Kitchen

Most people consider the kitchen to be the heart of the home, and because of this, updates in this room pay off. According to HGTV, you can expect to recoup 60%-120% of your investment on a kitchen remodel, as long as you don’t go overboard. You should never make your kitchen fancier than the rest of the house, or the neighborhood.

Why You Shouldn't Invest in a Deluxe Kitchen
For example, a historic home in my neighborhood has been on the market for more than two years. During the owner’s last open house, I went in to check it out, and immediately saw why the house hasn’t sold. The quaint Arts and Crafts style home was built in 1900 and has a lot of charm. Unfortunately, the homeowners had invested over $60,000 upgrading the kitchen.

The enormous kitchen, easily the size of the living room, features appliances and countertops that might look more at home in a fancy restaurant kitchen. The style, size, and quality of the kitchen don’t fit in with the rest of the house, or the neighborhood. If you plan on selling your home within the next five years, keep potential buyers in mind before you start on any major remodel; many people won’t pay for a fancy, deluxe kitchen.

A Little Paint Goes a Long Way
When it comes to how much you spend on a kitchen remodel, prices can run the gamut, from $5,000 to $75,000, or more. Get the biggest bang for your buck on a kitchen remodel by looking at color. Fresh paint, in modern colors, can go a long way towards updating the look of your kitchen. Plus, paint is relatively cheap.

You might want to consider using low-VOC paint; this makes your kitchen more eco-friendly, and helps your family avoid breathing in dangerous chemicals, like benzene, that off-gas from regular fresh paint.

Energy-Efficient Appliances
Replace old appliances with energy-efficient models. Energy Star-rated appliances are better for the environment, and they also help you save money, because they use less energy. Potential buyers often look for ways to save money when shopping for a new home.

If you’re looking upgrade your appliances to save energy, learn more about the the best time of year to buy large appliances.

2. Bathroom Addition

If your home only has one bathroom, you can recoup a large chunk of your investment by adding another one. HGTV estimates that you can recoup 80%-130% of whatever you spend adding a bathroom.

When it comes to finding room in your house for an extra bathroom, take a look at any extra rooms or underutilized spaces. Consider other spaces, such as closets or areas under the stairs, too. If you want a half-bath you need at least 18 square feet. If you want a full bath, including a stand-up shower, you need at least 30 square feet. If you want a bathtub, make sure you have at least 35 square feet to work with for a bathroom addition. See these bathroom design and remodeling ideas to get you started.

  

Like any project, the cost of adding a bathroom depends largely on the types of additions and accessories you want to use, and the cost of each of these items. You can save money by frequently checking Lowe’s and Home Depot; they often drastically reduce prices on sinks and toilets that have been floor models. You can also find great prices on tubs, doors, toilets, and fixtures if you shop at a Habitat for Humanity ReStore.

3. Reinventing a Room

Adding more square footage to your home with a new room can be an incredibly expensive project. Although you can recoup some of your investment, anywhere from 50%-83%, this project’s costs can quickly spin wildly out of control. Just turn on any of those home remodeling TV shows; projects that start off with a $15,000 budget quickly turn into $30,000 or more when homeowners and contractors run into unexpected problems.

Reinvent the existing space in your home to save money. Finish a basement, or convert the attic to a bedroom. Many homeowners can also add small apartments in, or over, their garages – which they can then rent out as a room.

Before you demolish walls and rafters, try to think about the ways that you, and potential buyers, can use the space:

• Versatile rooms have greater appeal to potential buyers.
• Basements frequently work well as second living rooms, or game rooms. Many people also turn this space into a small apartment for an aging relative or a tenant.
• Attic spaces often work well for craft rooms and game rooms, especially if they have high ceilings. If you have kids, you can add swings to the rafters, and create a cool play room just for them.

According to Remodeling Magazine’s annual Cost vs. Value report, an average basement remodel, with the addition of a wet bar, costs $64,000. You can save a significant portion of this by doing the work yourself, but even then, adding a new room can be expensive.

g Energy-Efficient Windows

These days, buyers shop for homes with energy efficiency in mind. Old, drafty single-pane windows are a major turn off. Energy Star claims that adding Energy Star-rated windows can save you up to $500 a year in heating and cooling costs by making your home more energy efficient.

According to HGTV, you can expect to recoup 60%-90% of your costs when you invest in energy-efficient windows. You can also receive a green energy tax credit of 10% for this upgrade, as long as you install Energy Star-rated windows. You might also qualify for additional credits from your state, or even your utility company.

Learn more about available offers and rebates in your area by visiting the Energy Star Rebate Finder. They have a searchable database that gives you specific information for your state. Just make sure you check “windows” so you get product-specific information. I searched for energy-efficient rebates in my zip code and discovered that my utility company, DTE, offers rebates to customers who install Energy Star windows.

Energy Star estimates that the average cost of window replacement in an average-sized home costs $7,500-$10,000, or more. If the new windows save you several hundred dollars a year, and you recoup a tax credit, you can eventually recoup your investment.

5. Deck Addition

Adding a deck increases the value of your home. Outdoor living spaces have become more desirable, especially since more people stay home for vacation (i.e. referred to as a staycation). If you make your deck and your backyard more appealing, your house will be more appealing to prospective buyers when you decide to sell. HGTV claims that homeowners recoup 65%-90% of their investment by adding a deck.

The cost of adding a deck to your home varies widely. Everything depends on its size, and how many bells and whistles you want added, like built-in seating, multiple stairs, built-in flower pots, and the size of the deck. Decks can cost anywhere from $1,200 to $10,000, or more. Again, it all depends on the design and materials used.

As you might guess, you can save a huge chunk of the cost, usually half, by doing the work yourself. Keep in mind, however, that deck construction isn’t easy. You need specific tools, such as a bandsaw, and the cost of the tools can be very expensive, especially if you don’t plan to use them again.

If you decide to hire a contractor, shop around before you choose someone to work with. Make sure you get at least three quotes, with specifics, from the contractors you interview. Thoroughly check references for the contractors before you agree to a contract or work order, and watch out for home improvement repair scams. Sites like Angie’s List can ensure you hire a contractor you can trust.

 

6. Energy-Efficient Insulation

If your home lacks basic insulation, and has old doors that let in plenty of hot and cold air, home inspectors working with potential buyers will include this in their reports. Homes that haven’t been modified with energy efficiency in mind cost more to live in and maintain.

Updating your home to save energy doesn’t have to cost a lot of money and can make your home more appealing to potential buyers. You can save $2,500 or more each year just by making some changes. For example, you can add extra insulation to your attic for $200 or less, and this small change can save you hundreds each year on your utility bill.

Seal cracks around the house to save even more money on energy costs, and to make your home more appealing to buyers. The U.S. Department of Energy (USDE) estimates that the average house has enough leaks to equal a 3×3 foot hole in the wall. You can find leaks in your home during the winter. Anytime you feel a draft or cold spot, you’re in an area that leaks air. You can purchase a thermal leak detector for $40 or less (e.g. Black & Decker TLD100 Thermal Leak Detector). These handheld devices alert you to temperature differences around your home. This then allows you to add caulk or insulation where you need it the most.

You can often discover leaks, and areas that need more insulation, in these areas:

• Around doors and windows
• Around electrical sockets and light switches
• In recessed lighting
• Around the attic hatch
• In the basement
• Anywhere ducts or wires go outside the house

Another easy retrofit is to use CFL light bulbs in all light fixtures. CFL bulbs use 75% less energy than traditional bulbs and each one saves, on average, $40 in energy over the course of its lifetime. You also save on cooling costs because CFLs emit 75% less heat than traditional bulbs. You can easily calculate how much you can save simply by counting the number of lights you have in your home.

You can also install a programmable thermostat. Most buyers expect to see programmable thermostats these days, and they can save you money. Energy Star estimates that installing a programmable thermostat will save the average homeowner $180 per year in heating and cooling costs.

If you need to replace your hot water heater, consider spending a bit extra to purchase a high-efficiency water heater. Savvy home buyers know these water heaters can really trim energy bills. If you use less than 41 gallons of water each day in your household, a tankless water heater saves you 24%-34% on your water heating costs. If you use more, count on a savings of 8%-14%.

7. Basic Updates

Basic updates add the most value to your home. Keep the paint fresh, fix the roof when it leaks, replace wood that rots, and get rid of any mold that you find. These types of chores keep your home from deteriorating over time. Buyers want a healthy, solid, safe home, and they look carefully for signs of routine maintenance.

I’ve replaced the electric wiring in my home, repainted the outside, replaced the plumbing, and repainted the interior. These projects keep my home in tip-top shape so that when I do decide to try and sell again, buyers will see a well-cared-for home.

10 Home Improvement Projects to Avoid

If you plan on moving in two to three years, don’t invest money in home improvement projects that won’t increase the resale value of your home.

Some of these low-value home improvement projects include:

1. In-Ground Swimming Pools

In-ground swimming pools cost $30,000-$75,000, depending on the type of pool installed. While installing a pool may seem like a good idea, a swimming pool makes your house more difficult to sell. Many people, especially families with small children, do not want to buy a house with a pool. Eliminating families with small children drastically reduces the number of people willing to buy your home. In addition, installing a pool increases your energy costs, and raises your homeowners insurance. A swimming pool also requires a lot of maintenance, and usually costs around $1,000-$2,000 or more to operate.

If you live in Southern California, the Deep South, or in the sunny Southwest, a swimming pool may positively impact your home’s value. You may recoup, at most, 30%-50% of your investment in a pool. If you live anywhere else, however, installing a pool may decrease the value of your home, due to the significant operating costs.

Invest in a pool if you plan to stay in your home for several years and use it often. Otherwise, a new pool can cause some significant financial headaches.

 

2. Gourmet Kitchens with High-End Accessories

While you may love your $10,000 commercial stove, and top-of-the-line Tuscan tiles, these costly additions don’t pay off when you list your home for sale. If you plan on moving within the next 3-5 years, and you want to remodel your kitchen, invest in quality, serviceable appliances that appeal to many people. In general, too much customization in a home turns buyers away.

Stay on par with your neighbors; too many high-end additions and you will own the most expensive home on the block. You can recoup a fair amount of money on a kitchen remodel, but expensive, fancy gourmet kitchens don’t help you attract that perfect buyer.

Of course, if you have a high-end home in an upscale neighborhood, then upgrading your kitchen to “gourmet” status may increase its value, since buyers expect to see a gourmet kitchen in a high-end home. But even in a high-end home, you may not recoup your entire investment in an expensive kitchen remodel when you sell your home.

3. Whirlpool Baths

It may sound fun and relaxing to take a hot bath after a long workday, but potential buyers will not pay extra for a newly installed whirlpool bath. In addition, the costs for installing a whirlpool tub can be prohibitive. Many homeowners install luxury bathtubs, only to discover they need to invest in a larger hot water tank for the tub to work properly. Furthermore, installing a tub may result in high energy bills, and additional monthly maintenance costs.

Think twice before installing a whirlpool bath. This project can cost you thousands of dollars, and if you run into problems, the costs climb even higher.

4. Sunrooms

This home improvement project goes straight to my heart; I really want a sunroom. Unfortunately, this expensive project adds very little to a home’s value. A sunroom only recoups $486 for every $1,000 spent on construction, or 49%-59% of the initial investment. In addition, glass doesn’t provide insulation, so a sunroom also raises energy costs in the winter and summer.

We ultimately decided not to add a sunroom to our home, since we know it won’t add to the value of our house. However, if you live in the South, or on the beach, where many homes have sunrooms, adding one to your home may actually help you stay competitive when and if you decide to sell. Plus, adding a sunroom to your home may make your house more attractive to a specific group of buyers, but you probably won’t recoup construction costs.

5. Expensive Landscaping

Landscaping can transform the way your house looks, especially to potential buyers. However, going over the top to create a backyard paradise, while nice, won’t add to your asking price. If you plan to stay in your home for a while, this project can improve your quality of life, especially in the warmer months. If you plan to sell your home, you won’t recoup the cost of expensive landscaping in the sale.

Instead of investing in expensive landscaping, make changes to your lawn to add curb appeal to your home. “Wow” potential buyers with a well-kept lawn, and some well-laced shrubbery or small trees. The Cost vs. Value report states that projects that boost the “wow” value of the front of the house recoup a decent percentage, depending on the changes made. Go for classy, subtle changes to the landscaping to really make your home shine.

6. Room Additions

Adding a room to your home can easily cost thousands of dollars. If you build a new master suite, you might see a 66% return on your investment. If add a family room, expect a 62% or less return on your investment. Many budget-minded buyers don’t want to heat and cool a huge house.

However, adding another bedroom to your home is the only exception to this rule. An extra bedroom makes your house appealing to a whole new group of buyers. Save money on renovations by dividing a large space with a wall, in order to form an extra room. In order to qualify as another bedroom, the room will need some other additions, including a window and a closet. You can also consider bedroom interior design ideas on a budget.

Your builder can help you navigate complicated building codes to determine the requirements for building a bedroom. If the room doesn’t qualify as a bedroom for the real estate listing, list the new space as a bonus room instead.

7. Home Office Remodeling

Most people don’t need luxury home offices. The average home office renovation costs around $28,000. You will receive about a 46% return on investment for this pricey remodel. Technology quickly becomes outdated, so investing in new wiring, and other home office components, won’t generate additional income at the time of the sale.

Most people only need good lighting, and room for home office furniture like a desk and a chair. Unless you work at home full-time, you may want to skip this upgrade.

8. Roof Replacement

We replaced our roof last year. When we listed our house, I thought we could raise the asking price by $6,500, to include the cost of the new roof. It hurt when our realtor told us we couldn’t raise our asking price to cover the cost of the new roof. A brand new roof was another feature we could add to our listing, but raising the sale price of our home was out of the question.

Roofs do need replacing eventually, and the consequences of waiting could be very costly, including ruined walls, mold, and mildew stains. Most experts say you only receive 55%-60% of the cost to replace a roof when you sell your home. Conversely, a damaged roof or an old roof may turn prospective buyers away. A new roof can make your home look crisp to prospective buyers, and help you stay competitive in the market.

9. Garage Additions

According to the Cost vs. Value report, homeowners who build a garage see a 62% return on investment. A garage addition can cost tens of thousands of dollars. Knowing that you only recoup a fraction of your investment, don’t build a new garage to increase the value of your home.

If you plan on staying in your home for a while, then a garage can greatly contribute to your quality of life. After all, you’d have someplace to park your car, and store your lawn and sports equipment. If you currently store these items under a carport or in a shed, a garage might sound like a great investment.

10. Necessities

According to real estate experts, some necessities, including a new septic system and new plumbing, do not generate more income when you sell your home. Buyers want to know that the sinks and toilets work, but most of them don’t concern themselves with the specifics.

A costly backup power generator might interest to buyers living in an area fraught with tornadoes or hurricanes. Otherwise, a new generator does not add value to your home.

Did any upgrades you made to your house pay off when it came time to sell? What home improvement projects will you work on this year?