What California Homesellers Sometimes Overlook: 10 Things, Part I

Regardless of when and where the homeseller could be selling in California, or whether there's a shortage of inventory or not, the transactional issues and facts are still tied to the contract between buyer and seller.

Here's a handy list for the Top Ten Legal Mistakes, with some added commentary by me.

What are the other contractual terms?
Sellers quite naturally want to sell at the highest possible market price, and have very good reasons for doing so. But selling price is not the only term in the contract-- for example, what if the buyer has a contingency to sell their own property, or what does it mean if the buyer is willing to remove their appraisal contingency but not their funding contingency? What if you agree to the liquidated damages clause? In a short sale, do you understand all the terms of the short sale addendum? And what do you need to consider with an all-cash buyer vs. a financed buyer?

What may happen with multiple offer situations?
In multiple offer situations, many buyers could be submitting offers but the seller is not obligated to any one buyer. The seller may respond to all buyers or choose one (but without discrimination). But what if additional offers are submitted in a regular sale after a signed contract exists with buyer no. 1? And what if you're a short sale seller, and a higher offer comes in after the first offer was submitted to the bank? (Hint: the short sale addendum states property may continue to be marketed after contract with the 1st buyer, and other offers may be presented to the bank.) Or, what if the buyer is submitting multiple offers on multiple properties, should they tell you that, or not, in their offer?  (Hint: Yes, they should disclose.) 

These are issues the seller should take time to review carefully and ask questions, preferably before a contract is signed--it saves on remorse later.

Every Day There is Another Story That Housing is Recovering, and Then It's Not: Read More

What is the real story on short sale numbers and borrower delinquencies? The story seems to vary on a daily basis.

But according to the Mortgage Bankers Association, which keeps track of these statistics, the delinquency/foreclosure rate was still 11.33% as of the end of the 1st quarter of 2012.  That's the lowest since 2008, but is still a lot of homeowners on a national basis.

The Potection of the Mortgage Debt Relief Act Coming to End

With some recent news about positive signs in the real estate market, some owners may be taking the pressure off themselves.  However, the national statistics seem to indicate that about 30% of properties nationwide are in negative equity.

The federal Mortgage Debt Relief Act was passed at the end 2007 to allow homeowners debt relief on their principal residences if foreclosed on or sold in a short sale. California later passed a bill also helping homeowners in this situation.  Currently, it is set to expire at the end of 2012, meaning that if the deadline is not extended by Congress, owners after that date will be responsible for debt after a foreclosure or a short sale. Previous to this Act, the amount forgiven in a short sale, or walked away from in a foreclosure, was treated as "phantom income" to the owner, and taxed.  California's Debt Forgiveness Relief Act also expires as of January 1, 2013.

So, after December 31, 2012, if a property is approved by the bank in a short sale and sold for

Sellers, Buyers Are Competing With Multiple Offers

Did you know that Long Beach and surrounding areas have less than two months of inventory?
This chart covers up to 2011, and the trend of multiple offers in the lower price ranges is even stronger in 2012.
Think you can't sell?  Think again, and call me.

Long Beach Parks Summer Concerts for 2012

Now that "House" is over and gone forever, there's no reason to not remember the summer concert schedule for the Long Beach Municipal Band.
Long Beach is lucky to have such a music resource, not every city can maintain its own group of musicians.  Plus, Larry Curtis, the band conductor, used to be the conductor for my high school band eons ago, so that's another reason I like this band.

				Week 2:
Week 1:				July 10 TBD
July 5 Marine Stadium July 6 El Dorado Park West				July 11 Los Cerritos
				July 12 Marine Stadium
				July 13 El Dorado Park West
Week 3:				Week 4:
July 17 TBD				July 24 TBD
July 18 Los Cerritos Parks				July 25 Los Cerritos Parks
July 19 Marine Stadium				July 26 Marine Stadium
July 20 El Dorado Park West				July 27 El Dorado Park West
		Week 5:
		July 31 TBD
		August 1 Los Cerritos Parks
		August 2 Marine Stadium
		August 3 El Dorado Park West

http://www.longbeach.gov/park/recreation/lb_municipal_band.asp

Don't Overlook California CO Detectors

Carbon monoxide is colorless, odorless and toxic. It's called the "silent killer" in homes because some victims are not even aware that the deadly condition exists.
In California, detectors must be installed:

(1) For all existing single-family dwelling units on or before July 1, 2011.
(2) For all other existing dwelling units on or before Jan. 1, 2013.

Where should they be placed?  For minimum security, a CO detector should be centrally located outside of each separate sleeping area in the immediate vicinity of the bedrooms, and  should be located at least 6 inches from all exterior walls and at least 3 feet from supply or return vents. I have even heard that during escrow, some appraisers will "call out" a missing detector on their appraisal. If you're a homeowner or landlord, don't wait to comply with this requirement now.
Property owners must be concerned about unmaintained furnaces, water heaters and appliances that can produce the deadly gas. Other sources could include leaking chimneys, unvented kerosene or gas space heaters and even exhaust from cars operating in an attached garage.
The Environmental Protection Agency suggests the following to reduce exposure in the home:

• Keep gas appliances properly adjusted
• Install and use an exhaust fan vented to the outdoors over gas stoves
• Open flues when fireplaces are in use
• Do not idle your car inside a garage
• Have a trained professional inspect, clean and tune-up central heating systems annually

Lower levels of carbon monoxide poisoning can be mistaken for the flu.

It's also possible to buy them in combination with a smoke alarm. Read more at HouseLogic.

Investor Buyers are Making a Difference in This Market

Investor buyers, do you know you make up about 27-30% of the current buying market?  Most investor buyers are looking to hold onto their properties for a while--only 5% of properties purchased last year have been re-sold.

The second home market surged in 2011, according to data from the 2012 NAR Investment and Vacation Home Buyers Survey. The combined market share of investment and vacation homes rose to the highest level since 2005.

Investment home sales in 2011 jumped 64.5 percent over 2010. Vacation home sales climbed seven percent, year-over-year, and accounted for 11 percent of all transactions last year.

How Many Single Family Homes Under $300,000 in Long Beach?

Since this Spring of last year, the last time I wrote this post, not as many as last year.

The great majority of residential properties included here are single family houses and condominiums; the list also includes lofts (a separate MLS designation), own-your-owns and co-ops. The grand total from SoCalMLS is 340 listed as "active", regardless of selling condition (short sale, REO, probate, etc.), or the amount of HOA dues in the case of common area properties.

This inventory is quite different from one year ago when there were a total of 618  on the market.

The breakdown includes the following:

Increase in April Home Sales Prices for Long Beach, and Nearby Cities

Based on MLS data, 10K Research&Marketing

Long Beach home sellers may finally take heart at some continuing good news. While the citywide accumulated median and average price for single family home sales continues to decline from last year, the April 2012 comparison to the same time last year actually shows an increase in median and average sales price:  Median - from $374,500 to $381,000;  Average - from $421,796 to $424,441.

The average price from April 2011-April 2012 for condos and townhomes also shows a 10% increase, from $211,280 to $232,676. 

As above, the "rolling" 12-month calculation for both categories still shows a decrease in prices, however.  With the increase shown in pending sales compared to last year, more buyers are buying. But the 50% cut in inventory levels say that many possible sellers have yet to decide to put their properties on the market.  In fact, Long Beach had the highest number of closed sales (226) in April over all the other 60+ cities in this report area.

6 Don’ts After You Apply For A Mortgage

I learned a long time ago that “common sense is NOT common practice“. This is especially the case during the emotional time that surrounds buying a home, when people tend to do some non-commonsensical things. Here are a few that I’ve seen over the years that have delayed (and even killed) deals:

1. Don’t deposit cash into your bank accounts. Lenders need to source your money and cash is not really traceable. Small, explainable deposits are fine, but getting $10,000 from your parents as a gift in cash is not. Discuss the proper way to track your assets with your loan officer.
2. Don’t make any large purchases like a new car or a bunch of new furniture. New debt comes with it, including new monthly obligations. New obligations create new qualifications. People with new debt have higher ratios…higher ratios make for riskier loans…and sometimes qualified borrowers are no longer qualifying.