Make Your Home Search Easier and Mobile

Whether you have and Evo, a Blackberry, a Droid, or an iPhone, this simple addition to OC Real Estate Voice may just help make your home search a bit easier when you are out on the road.

• Do a full search from your phone
• Find homes that are listed within a specified radius of your location
• View listing details for a specific home
• View photos for a specific listings
• Easily contact me with questions

What Will It Look Like?

If you are in a neighborhood you like, or in front of a home that interests you, simply use the GPS feature to get the list of homes within a specified radius of your location.  Select GPS and authorize your mobile device to use your location. (BTW – for all of you that love to make fun of my iPhone’s battery life, feel free to continue….)

Specify the radius (as low as .25 miles for example).

Home Search Results

Listing Detail on Mobile Search Device

Listing Details

Listing images

How Can I Use This Search?

Simply go to http://m.ocrealestatevoice.com on your mobile device.  If you are using an iPhone, use the ‘+’ sign and click ‘Add to Home Screen’.

You are in action!  If you have questions, or any problems, don’t hesitate to let me know.

Interesting conversation, but not particularly uplifting.  Simonsen indicates that it

“…could be a decade of recovery.  Banks have tons of homes on their books and they are reluctant to let them go at all because they have to then start doing things like ‘marking to market’ if they sell them at depressed prices.  So they dribble them out, and they may be dribbling them out for 10 years.”

For a long time I’ve felt as if we kicking the proverbial can down the road with band-aid loan modifications (that continue to have high default rates) and artificial stimulus like the Housing Tax Credit.  None of these things solve the larger issues of high unemployment, negative equity homeowners, the outstanding loans that are still resetting, and overall poor economic conditions.

When Sanders is asked what do we do to help the housing market, he mentions fixing unemployment, keeping the Bush tax cuts in effect, and

“Government’s got to pull back out of the housing market and let the private sector work.  They have done no good whatsoever.  Like the ‘Midas Touch’, it’s just the opposite.  They’ve got the ‘Medusa Touch’; they touch the housing market and it turns to stone.”

Here’s the full interview. Well done Mike – love the purple tie trio.

Skip the Weather Forecast – It’s 70 and Sunny:  No disrespect to the local weather forecasters, but we don’t rely on them for much.  If they predicted 70-something for temperatures year round, they’d be right (or close to it) most of the year.  For many folks, this is the ideal and is one of the reasons so many people love living here.  If you enjoy seasons, it may be an adjustment.  5 minutes of rain = Storm Watch & Traffic

• The Mello Roos Dilemma:  Buying a newer home, sans the Mello Roos bond are contradictory goals.  By and large, homes constructed after 1982 will have a mello roos bond.  The newer the home, the higher that bond is likely to be.  Newer homes and mello roos go hand-in-hand.  Sorry.  I don’t like it either.

• It’s Expensive:  No kidding.  Orange County real estate is still expensive, even after prices have fallen.  As of today, $500,000 will likely get you an entry level home with little or no yard – depending on where you are in the OC.

• Land of the Beautiful People: With nice weather, comes lots of opportunities to be outside to play, to exercise, and enjoy beaches making it easier and desirable to stay in great physical shape.  Cosmetic surgery doesn’t hurt either.

• We Aren’t  ‘Orange County Housewives’:  We aren’t all like that.  Okay – some of us are, but not all.

• ‘Large Yard’ is a Relative Term: The high cost of housing for Orange Country primarily resides in land value.  Land is at a premium and builders structure tracts to maximize return – meaning much smaller lot sizes.   Homes sit on smaller lots and are closer together.  If you are looking for a large yard, with some exceptions, older is often better.  And FYI, generally a 10,000 square foot lot is considered BIG.

• It’s the Burbs:  A lot of Orange County is made up of suburban living with all it’s wonderful pros and a few cons.  Great schools, beautiful parks, proximity to shopping and restaurants, community activities all account for some of the positives.  As for the downside – architecture isn’t always unique and if you’re not careful, you just might find yourself pulling into your neighbor’s driveway.

• Yes, Homes Are Cheaper In Corona:  It never fails; every time I work with someone relocating to Orange County that is unfamiliar with the area there are 3 distinct stages: 1 – Excitement, 2 – Sticker Shock, 3 – So I hear you can get a much bigger house in Corona….  And, yes you can.  Before we go look at those homes however, you are required to sit on the 91 freeway during peak traffic hours and visit during peak smog season.  Then we’ll talk.  Sorry Corona lovers.

• We Like National Chains:  We do have some amazing strip malls with lots of chain stores and restaurants.  But if you look hard enough (and I have as of late) there are some wonderful, privately owned restaurants.  Coastal towns like Laguna Beach, Corona del Mar, San Clemente, Costa Mesa, and Newport Beach are always guaranteed to have some things a bit more eclectic.

• There’s Lots To Do: Kids play outside year round, outdoor exercise is common, skiing isn’t far (Big Bear, or just a bit farther is my favorite, Mammoth Mountain), beaches, amazing surfing, skate parks, and of course, the all-important Disneyland (although you may go less than you think you will).

Alright you OC folk – enlighten me.  What have I failed to mention?

Disclaimer:  This post is deeply biased and written by a 4-Season-Loving, ski fanatic, Oregonian that has called Orange County home for some of the early days of her childhood and the most recent 12 years.   Go Figure.

Guess I’m not entirely surprised to see that the interest in relocating to Orange County, during one of the worst housing crisis’s we’ve seen, was not particularly high.

There are specific contingencies outlined in the RPA – loan, appraisal, inspection, to name just a few. The default in the contract is 17 days for all of the contingencies. In years past, it has been possible to meet that time period with a strong lender. Today, the environment has changed dramatically and there are some things you must be aware when you remove that loan and appraisal contingency.

Appraisal Contingency

The appraisal can general be completed during that 17 day period.  There are some exceptions with conventional loans that are out of your lender/broker’s control.  The appraisals are now ordered through third party companies which can create a delay.  However, let’s say the appraisal comes in at the contract price and within the time frame of the contingency.  Do you remove your contingency?  What are the risks?

The challenge in today’s environment is that the underwriter has the right to order an appraisal review during their review process that takes place prior to final loan approval and the drawing of loan documents.  This is generally late in the game, and certainly after your contingency period.  If the appraisal review brings in a lower value and you have already removed your appraisal contingency, what are the choices?

• Cancel the escrow – in which case you may lose the deposit
• Come up with the difference in sales price versus contract price (be aware, this may impact qualifying if the lender is watching your cash reserves closely)
• Negotiate with the seller (who may be less amenable if they see you have removed you appraisal contingency)

Loan Contingency

This is particularly challenging in today’s environment.  Given the June 1st implementation of the Loan Quality Initiative, Fannie Mae is now requiring that a buyer’s credit is pulled just prior to close of escrow – regardless of the previous approval status.  This makes removal of your loan contingency even more crucial.

Underwriter reviews, large amounts of buyer documentation, and late credit review can make the loan approval status fall into areas of less certainty than we have had before.  If you remove your loan contingency and find that late in the game you no longer qualify for the loan, you are likely to lose your deposit, so be cautious and thoughtful when you remove your loan contingency.

Ways to ensure your loan approval will remain secure:

• Do not make any purchases on credit
• Do not deplete your cash reserves
• Do not move money around without a conversation with your lender
• Do not do anything that might have an adverse impact on your credit score
• Do not pay off credit cards without direction from your lender
• Do not change jobs
• Provide the documents that your lender requests of you in a timely fashion
• Be aware, requests for new documentation come in throughout the buying process so be prepared to respond quickly
• Communicate with your lender
• Interview lenders and find someone that you trust!

Do I Have To Remove My Loan or Appraisal Contingency?

No.  But there are risks.

So what happens?  First, be aware of the time frames in your contract.  Sometimes the loan contingency may run until the loan is funded if the offer is written this way.  But, if you are required contractually to remove it in 17 days, for example, the Seller has the right to issue the Buyer a Notice to Perform.

The Notice to Perform may require that in a specified period per the RPA, the Seller will have the right to cancel if the Buyer does not remove the contingency.  The Buyer should be entitled still to their deposit – but you risk loosing the property.

The real estate agents should be in communication however, and in some cases a listing agent and seller may feel that the buyer, the contract, and the escrow are worth moving forward with leaving the contingency in place.  Just be aware – they do have the right to cancel – depending on the structure of the RPA.

As I’ve said before, there are several things that have me concerned about the housing market in Orange County.

1. The large number of negative equity homeowners
2. The disproportionate number of homeowners that qualified for their loans with adherence to minimal guidelines
3. The number of homeowners that have negotiated short term solutions to long term loans problems
4. The lack of solid and accessible financing for current buyer demand
5. The long process for handling the abundance of short sale inventory

Some of those concerns, and others, are voiced by Stan Humphries, Zillow’s Chief Economist, in this recent article in the Orange County Register.  According to Humphries, we are looking at 3rd quarter for the ‘bottom’ of this year and a long, flat recovery that will take us into 2013.  His view was one of a national market, and given the magnitude of our housing crisis, I believe it may very well take at least that long.

If you are a seller: consider your options carefully.  Can you hold on for the next few years?  Can you lease the property?  And if you are hanging on to it, think seriously about that decision if you are holding out for growth – that won’t be happening any time soon.

If you are a buyer: Lending will be one of your primary concerns.  Investigate your options carefully and know what you can qualify for before you shop.  Opportunities will be out there, but don’t buy unless you plan on owning for at least 5 years right now.

I also am leery of anyone claiming to be a short sale expert. Although there are some wonderful agents and representatives that are often assertive and diligent in their efforts, resulting in improved time frames for their clients, every bank is different and ever-changing, and the loans are often sold in the secondary market making the process very removed from the ability to directly to influence.

And while we have consistently been promised a more streamlined, expeditious process, it’s still a rarity.

Thankfully, there are a couple of bright spots.  The good news, is that if you loan is currently with Wells Fargo, but was originally with World Savings and Loan Association, World Savings Bank, or Goldenwest Financial you may very well be eligible for a unique short sale approval process rarely seen.

Darlene Lapeere with Wachovia (confused? Hang in there – World was bought by Wachovia, then Wells Fargo bought Wachovia) is their negotiator for Orange County short sales.  She spoke at a meeting I attended last week and shared their unique short sale process.   Here are the highlights:

• Approval can happen in as little as 48 hours thru 10 days, if going through their fast track process

• Foreclosure may be halted as late as the day before the Trustee Sale as long as there is a purchase contract (on a case-by-case basis)

• Applies to both Owner and Non-Owner Occupied

• You do not have to be delinquent

• Be aware, HAFA eligibility may delay the process

• Ms. Lapeere is the one and only single point of contact. No additional negoitiator is needed

• Will have to determine HAFA eligibility

• They will pay the 2nd lien holder up to 10% of the loan amount as long as the lien has existed on the subject property for 12 months or longer

• Must show evidence of a hardship

Obviously, lack of deliquency requirement, short processing, and the Non-owner occupied property eligibility make this a very unique program. Why is it so rare to see this?

Their ability to work in such a timely manner and with such unique terms is that these are portfolio loans – not loans sold in the secondary market. Often times, the lengthy periods are tied up in securing approval from multiple investors.

If you have questions about whether or not you might have one of these loans, and your are considering a short sale, please don’t hesitate to reach out to me or you may also email Ms. Lapeere with your address and loan number at darlene.lapeere@Wachovia.com.

Whattya know – you just might find a fast – a ’short’ – short sale afterall.

There’s no question that we’ve taken a hard fall in our Orange County values – a very hard fall and we all long for the days that we could comfortably calculate our net worth, even if it was funny money and we weren’t planning on selling.  Others are hoping to just see values climb back into the vicinity of their purchase price.

There isn’t good news here.  It will be a while, likely a long while. But when I heard the question again this week, I had some better frame of reference to keep all of this last decade in perspective.

“Where would our homes’ value be if the bubble had never occurred at all?”

This may in fact be the better question.  If the unsustainable appreciation was never a factor and we experienced a normal rate of growth, what would that look like?

Recently Mike Simonsen, of Altos Research, turned me on to the company that’s examining and providing some of those answers in Macromarkets excellent web application Gap Gauge.

If you are curious about where we stand nationally, in various cities around the country, it’s a fascinating perspective and way to judge where we are in the ‘burst’ of this unfortunate bubble.  Although Orange County is not specifically charted, Los Angeles and San Diego are.   It’s interesting to note, we are still slightly higher (using Los Angeles numbers) than we would be had we just experienced ‘normal’ growth.

Sadly, I know many of us are looking for the day when homes will return to previous values (I know I do), however, it may be time to get comfortable again with a slow, more sustainable type of appreciation.

It’s sorta like the difference between the motorcycle and the minivan; it ain’t sexy, but it might just be a little safer.

The rising trend of ‘Strategic Foreclosure’, allowing your home to foreclose even though you can afford the payment, is a force to be reckoned with.  Recently, a colleague, Amanda Wernick, shared her view of this trend on her blog.  She has found that when a homeowner tries to go through the loan modification channels they often “have contacted their banks to work on loan modifications, only to be run around by what seems to be inept phone answerers who only follow scripts and have no authority what-so-ever to make these kinds of decisions”. This is the kind of run-around that leaves homeowners at a loss and without options.

Schlesinger shares a rule of thumb – if you are underwater by 20% or more, this may be a strategy to consider.  The example given was a $240,000 mortgage and a $200,000 home value.  I cringe slightly when I hear these national numbers because I know the values in Orange County are extreme versions of the national numbers.

Example:  $1,050,000 purchase price, 10% down, loan amounts $945,000 – Today’s Value is $720,000.  That’s nearly 24% and rather than a $40,000 discrepancy you are looking at a $245,000 discrepancy!  Additionally, in Orange County our taxes are assessed based on purchase price.  The original buyer paid $10,500 annually plus his mello roos bond.  Today’s buyer of the same home has a $7,200 annual tax liability plus his mello roos bond.  To manage the tax consequence, a buyer would have to apply every year to the County Tax Assessor for a reduction in those property taxes.

Some of the industry folks bantered this topic around online and a good friend, Rob Hahn, asked me if I ’supported’ strategic foreclosure.  ‘Support’ implies that I encourage it, which isn’t necessarily the case, and yet I understand it. I don’t think it’s a black and white answer.  It’s deeply personal for every set of circumstances and in Orange County with property values and unemployment rates high, rent becomes an attractive option for those struggling with ways to justify paying for a home deeply underwater.  Are there better uses of their funds long term?

Frankly, I don’t believe that anyone who carefully considers their options and chooses foreclosures does so lightly.  There is no real win here.  For 7 years there is terrible damage to one’s credit.  The ability to secure credit, buy a car, acquire a student loan, easily find a rental, will all be impacted by this decision for 7 years.  In fact, those types of purchases will likely be more expensive in light of the lower credit scores.  Strategic Foreclosure is not an easy out, but it is undeniably an option.

The greater impact on our economy cannot be ignored.  And while homeowners struggle with ways to weather the storm, the real solution, in my opinion, lies in how the banking systems response to their borrowers.  Simply leaving this sizable problem in the hands of low cost, undereducated call handlers, turns a massive blind eye to this industry reality.

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