Is Now a Good Time To Buy?

I received an email this Christmas evening which every potential buyer must be asking themselves right now..."Is this a Good Time to BUY?"

Well, here is the actual email I received and the return answer I provided...

Comments:
i'm moving into the area and am indecisive whether to jump into a full fledged mortgage. can you tell me whether it's a good time to buy? thanks, aaron

My Answer:
Aaron,

You sure have asked a loaded question...one that has so many variables...most of which depend on you and your own personal situation.

I can say over time, you will always be better off building your own equity in your own home as opposed to helping a landlord feed his investments.

There is speculation that interest rates are back on their way up - no one can say for certain, but it is my gut feeling supported by many so called 'experts'.

It is certainly a 'buyers market' which translates into a lot of inventory to choose from and the ability to control the transaction better than in the past.

The question that looms is the price of homes going to go down. If I only had a crystal ball...

My thought is that it will not go down as bad as it did in the early 90's. 2 Important economic indicators will prevent that. 1) we still have historically low interest rates; as in the 90'2 they were close to historically high; and 2) we have very low unemployment so I cannot see a class of homeowners being wiped out.

Real Estate is like any other commodity, governed by the principle of 'Supply & Demand'. In California, we will always have people moving here - both from outside our borders as well as across the nation.

I personally believe that now is a good time to buy. The worse case scenario is you may take a 3-6% hit in value over the next year, maybe 2 before we see a rebound, for the reasons stated. When you consider the tax advantages and other benefits you receive by being a home owner the reward far outweighs the risk.

I hope you can accept this as an unbiased opinion. Yes, I have a vested interest in the industry, but this does not change my opinion.

If you would like to discuss over the phone, please send me your number and the best time to contact you. Of course, if I can assist you in any way, I am at your service.

Sincerely,

JOHN OCCHI, HEMET REALTOR

PS: Check out my blog at HemetRealEstateBlog.Com for some articles that I have written that you may find interesting.

Holiday Shopping Scam

Holiday Shopping Scam at a Supermarket Near You!
by John Occhi, Hemet REALTOR

It seems every holiday there are new products for sale - things that we would have never thought possible just ten years ago. I remember I was on the cutting edge of e-commerce in 1999 - 2001 when I was promoting custom gift cards for small businesses as well as e-commerce enabled websites. It's amazing how skeptical people were.

Is there a reason to be skeptical of new technologies. I suppose. My theory has always been to embrace the new and replace the old. Unfortunately, with the new, it feeds the element of human nature that preys on others, to create new innovative ways of doing this.

Fast Forward - Christmas 2006. Every supermarket I have been to in the last several months have a kiosk with gift cards for 20, 30, 40 or even 50 or more different retail stores. No longer do you have to go to Best-Buy, to buy a Best-Buy gift card. Today, you can do all of your holiday shopping, while getting ready to cook the holiday meal.

Now how easy is that?

So here is the scam. The low-life's copy down the card information while they are being displayed on the rack. This includes a card number and the toll free customer service phone number. In some cases, there is even a website.

So now the con artist waits a few days (checking back as often as needed) until the card has been "activated" and their is a balance on the card.

BINGO! It's time to go shopping on line.

An Ounce of Prevention...Worth a Pound of Cure

So, the best way to avoid this scam altogether is to ONLY purchase your gift cards from a customer service rep, where the cards have been safely stored behind the counter and not accessible to the public.

Please be careful. Pass this on to your friends and loved ones.

Wells Fargo Hopes to Cash in on Risky Borrowers

REALTOR Magazine Online
Wells Fargo Hopes to Cash in on Risky Borrowers
Daily Real Estate News December 5, 2006
Source: Los Angeles Times, E. Scott Reckard

Here is another greal little article from the REALTOR Magazine Online, that I receive daily. In this article, Wells Fargo announces a new program that will help educate high risk borrowers, known as "Sub-Prime" in the industry. This can be very good for the Hemet Real Estate market if more borrowers are aware of what they are getting themselves into and how to manage theier affairs, once they have bought a new Hemet home.
- John Occhi, Hemet Realtor

Despite the trend toward rising delinquencies, Wells Fargo & Co. is increasing its lending to risky borrowers in the hopes of making money on additional services like checking accounts and credit cards.

In a strategy it plans to announce today, the banking giant says it will automatically enroll these borrowers in a financial education program that will include free consultations in English or Spanish with specialists who can help them create financial plans and try to clean up their credit. This program will encourage auto-pay, which requires having a checking account.

The program, dubbed Steps to Success, will help address advocacy groups' previous allegations of predatory lending at Wells' sub-prime lending subsidiary, Wells Fargo Financial.

It's the most comprehensive program of its type ever offered to borrowers in the sub-prime market, says Stephanie Christie, a senior vice president at Wells Fargo Home Mortgage.

How to Get a Fair Deal on Title Insurance

Daily Real Estate News December 4, 2006
How to Get a Fair Deal on Title Insurance
St. Louis Post-Dispatch, Michael Sorkin

Here is a short article that I found in the 'REALTOR Magazine - Daily News' this morning. I thought it was helpful for consumers in the Hemet Real Estate market to help answer questions about Title Insurance - since it is one of the most expensive line items, when it comes to closing costs - for both the buyer and seller.
- John Occhi, Hemet REALTOR

Title insurance businesses have been criticized recently for overcharging customers. Here are some suggestions for making sure that you and your clients get a fair deal.

Purchase title insurance from a title insurance agent or company. Don’t let a banker of builder mandate a company – that’s illegal.

Make sure the title company is properly licensed with the state.

Ask to see the rates the agency files with the state to make sure you are paying the appropriate premium for the risk involved.

Identify the underwriter that will insure the title.

Demand and review the results of the title search and the cost of title insurance and fees before the closing date.

Ask for itemized charges. The cost for the insurance itself can’t be negotiated, but the fees can be.

Check for any exceptions to the coverage, for things such as mechanics' liens, by reviewing Schedule B before closing.

Ask if your title agency's underwriter will provide a "closing protection letter." It protects you from title defects arising from negligence or dishonesty of the agent.
File any complaint promptly with your state insurance regulatory agency.Source:

More Expired Listings Than Sales

More Expired Listings Than Sales
By John Occhi, REALTOR®

This is a very early observation. I spent some time this weekend crunching the numbers that are available to me through the Hemet MLS.

I have been looking at numbers over a 3 month period – from September 1 through November 30, 2006.

Perhaps the most startling observation to me is that over half of the properties that came off the market, came off because they expired!

That’s right, during the specified time period there were 281 Residential listings that EXPIRED and only 280 that SOLD!

Please keep your eye on this BLOG for more details as I dive deeper into the numbers and try to make some sense of our current Hemet Real Estate market.

Good News For Hemet Investers

Study Pinpoints Best U.S. Markets to Invest
— By Camilla McLaughlin for REALTOR® Magazine Online

Here is some good news for Hemet Real Estate and Real Estate throughout the Inland Empire region. This is an article that appeared in yesterdays Realtors Online Magazine, an official National Realtor Association (NAR) publication. the article specifically mentions Los Angeles, but as we all know, what happens in Los Angeles happens in the Inland Empire - only a bit more sanely. So read this short post and rejoice there is light and the 'bubble' may not be all it's cracked up to be.
- John Occhi, REALTOR

The top U.S. markets for real estate investment prospects next year are global gateway metros such as New York, Washington, D.C., Los Angeles, Seattle, and San Francisco, says the Urban Land Institute and Pricewaterhouse Coopers in Emerging Trends in Real Estate 2007,an annual outlook for U.S. real estate investment and development trends.

In spite of real estate’s unusually long run up in prices and sales, interest from investors hasn’t waned.

"Real estate is still viewed favorably as an asset class and there’s still a lot of money — especially from private funds and institutional investors — looking for the right opportunity," says William Croteau, U.S. real estate practice leader for Pricewaterhouse Coopers. "Although we don't expect any major downturn in the marketplace, it's likely that real estate's overall performance will be more modest in 2007."

Location Still Rules

Most promising? The report says it’s “investment Meccas on both coasts,” noting that “location becomes even more important in real estate investing as the transforming global economy increasingly determines where companies and people need and want to be.”

In addition to being located along “global pathways” with international airports and harbor ports, top markets are characterized by:

• 24-hour features
• Attractive settings in reasonably comfortable climates
• Geographic barriers limiting sprawl
• Brainpower jobs attracting an affluent, highly educated workforce

Although a number of cities in the South and Southwest, including Atlanta, Dallas, Houston, and Phoenix, are described as “development magnets,” because of the amount of current new construction, the report says “their tendency toward oversupply compromises their standing with investors."

Sunbelt development havens consistently fall behind global gateways for investment prospects, even as their economies continue to grow, the report says. They remain relatively affordable, but these areas lack strong 24-hour cores and mass transit systems. In addition, their locations away from coasts "make them secondary destinations for international business.”

San Bernardino Woman Arrested in Theft of House from Boyfriend

San Bernardino Woman Arrested in Theft of House from Boyfriend
Reported by MortgageFraudBlog.Com

This is not exactly Hemet Real Estate related, but geographically it is very close - so what happens in San Bernardino could very well happen in Hemet. I share this article, becasue I want you to be careful - sometimes when you least expect it...
- John Occhi

Ana Morales, 35, San Bernardino, California was arrested by the San Bernardino County District Attorney’s Office-Real Estate Fraud Prosecution Unit and charged with two counts of forgery and two counts of offering a false/forged document (Grant deeds) for recording at the County of San Bernardino, California, Recorder’s Office.

According to authorities, Morales told Antonio Ramirez, her boyfriend at the time, that he and his brother needed to sign some documents for income taxes purposes and for a house improvement loan. Both Antonio Ramirez and his brother Arturo signed the documents. One of the documents signed was a blank grant deed, which was filled out later by Morales. This removed Antonio and Arturo Ramirez from the deed to his home and placed the property into Antonio Ramirez and Morales’ name. The investigation also disclosed that Antonio Ramirez had unknowingly signed another grant deed that granted the property to Morales as the sole owner.

Morales subsequently recorded the false grant deed and applied for a debt consolidation mortgage loan in the amount of $117,500. Morales acquired the equity out of the home and used it to pay off more that $30,959.54 of her own debt, in addition to obtaining a cashier’s check for the remaining sum of $11,431.18 from the escrow company. It was during a 2005 income tax appointment that Antonio Ramirez learned that he and his brother had been removed from the title and Morales was the sole owner of the property.

10 Questions to Ask the Condo Board

10 Questions to Ask the Condo Board

This report is provided by the National Association of Realtors, as a consumer handout. I thought it was particularly valuable to the Hemet Real Estate market, not so much because of all the condos we have, but rather because of the number of Mobile Homes and other communities with Home Owners Associations. The same questions are all relevant. So, if you are looking to buy any type of home in any area that is governed by a HOA or has any common areas, do yourself a favor and check out this valuable resource...
- John Occhi, REALTOR

Before you buy, contact the condo board with the following questions. In the process, you’ll learn how responsive — and organized — its members are.

1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can’t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them. And have an attorney review property docs, including the master deed, for you.

3. How much does the association keep in reserve? How is that money being invested?

4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.

5. What does and doesn’t the assessment cover—common area maintenance, recreational facilities, trash collection, snow removal?

6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy.

7. How much turnover occurs in the building?

8. Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.

9. Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren’t in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property? In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.

Used with permission from Real Estate Checklists & Systems, www.realestatechecklists.com

Another Interesting Statistic…

Another Interesting Statistic…
Or More Listings Equals More Expireds!
By John Occhi

I was doing some work looking at some of the statistics for the Hemet Real Estate market and determined what ‘I knew to be true” is in reality a fact, that can be backed up with cold hard facts.

I have been looking at the Expired listings in Hemet, on the MLS. Expireds are properties that have been under contract and listed in the MLS with a REALTOR®. For a specific period of time – typically somewhere between 90 and 180 days, and the contract has expired without the property being sold.

Just to show you the significance of the numbers, for the sake of this article, I am comparing all 30 days of November 2005 to the first 20 days of November this year. I can guarantee that the numbers will shift more, highlighting the significance of the difference a year can make.

The first number I looked at was for all of Hemet. I looked at all 3 Hemet zip codes, 92543, 92544 & 02545. I also looked at all of the different classifications of property as a whole. These numbers not only include single family residences, but mobile homes, vacant land, commercial property and business opportunities are all included.

Last year, there were a total of 74 listings that expired during the month of November. In the first 20 days of November this year there have already been 123 properties that have expired from the MLS. – a 40% increase!

Next, I narrowed the search down to just the single family homes – in all 3 zip codes. Last November there were only 36 listings that expired compared to the 84 so far this year – that’s more than double!

So, now, let’s break it down by zip code:

Zip Code: 92543 Last Year: 8 This Year: 18
Zip Code: 92544 Last Year: 19 This Year: 34
Zip Code: 92545 Last Year: 9 This Year: 32


What this information means is that it is a Great Time to shop for a home!

Can You Really Tell when the Best Offer Price is Coming?

Can You Really Tell when the Best Offer Price is Coming?

by John Occhi

Here it is the week before Thanksgiving and the Hemet Real Estate market has not shown any signs of improving. Not only do we have all of the homes for sale that would normally be for sale, due to traditional reasons like job transfer, divorce, death, etc. but we also have every investor attempting to dump their real estate investments on the market so they can maximize their return.

Well, sellers are not happy, nor should they be if they stop and consider how much more they could have made, had they sold a year earlier. Not only is it a question if they could have gotten more, but how much easier it would have been in a much quicker sellers market.

NEWSFLASH: The coveted ‘sellers’ market is officially over and it is now a ‘buyers’ market. So deal with it.

So, let’s talk about offers and why the first one is generally the best.

It must happen everyday. A seller puts their home on the market, fairly priced. Anticipating they will generate a buyer frenzy and they should generate multiple offers, driving up the price of their Hemet Real Estate.

So the house gets listed for a fair price. The Hemet Realtor holds an ‘Open House’ or two and a full price offer comes in. The seller knows his home is worth more than that, after all, ‘it is the best one in the neighborhood’ and counters for a higher price which the buyer then rejects and buys another home.

In a panic, the seller raises the price to what he feels the palace is worth. The home now sits on the market for weeks with no activity at all. Tension starts to show between the Realtor and the Seller. Finally, the seller concedes and lowers the price once again to the original asking price.

By this time the home has been on the market for about 2 months and is considered ‘tired’. Everyone wants to know why the house had not sold yet, looking for a flaw that probably does not exist.

Once the Hemet home for sale has been lowered back to its original price, two more offers come in – almost simultaneously. Both for less than full asking price. The seller accepts the best of the two offers, with his tail stuck between his legs and the Realtor is feeling vindicated.

Granted, this probably would not have happened a year ago. The lower price would have certainly seen buyers competing for the Hemet home for sale. Had it gone on the market at an over priced point, it would not have been long for the market to catch up to the asking prices and generated interested buyers. But not today.

Today there is not the limited supply of homes there once was. Today, every seller has to carefully consider the merits of every offer, even if they think the actual price is lower than where it should be. Remember, price is NOT the only consideration in accepting an offer.

The big problem most sellers have is accepting a less than perfect offer shortly after the home comes on the market. They justify that if we can get this much now, then with a little more exposure, certainly there is a better offer right around the corner.

Of course, this is possible.

What most sellers don’t take into consideration is that the offer was generated by a serious home buyer who is very familiar with the local market and recognized Hemet home for what it is – a new listing on the market. They are probably very familiar with the local markets and have undoubtedly been in every other home for sale that meets their criteria, on paper. When the right property comes along, they are ready to move on it.

When evaluating any offer, make sure you understand the market, on the day your offer comes in. Ask your Hemet Realtor for some facts and figures to justify the price. Find out how many homes similar to your are for sale then. What is their price range? How many have sold in the last couple of weeks? How did the other homes form your neighborhood, that recently sold, compare to your? Do you know how competitive the buyers were?

When you are selling your home you have to be objective and not personal. Of course, there is a personal attachment to the home, especially if you have been there for many years – but start to think of it as a piece of dirt with sticks on it. It is nothing more than a house. The sooner you can separate yourself the sooner you will be able to objectively consider an offer when it comes in.

Do yourself a favor and have your Realtor take you on a tour of similar homes and other homes in the same price range. Then you can ask yourself if you had so many dollars to spend, what really is the best home on the market, today?

Buying or Selling a Hemet Home During the Holiday? Please consider these points . . .

Buying of Selling a Hemet Home During the Holiday?
Please consider these points . . .
By John Occhi

There is no doubt about it, the number of homes that sell during the holiday season takes a dramatic dive over any other time of year.

Does this mean you should not try and sell your home? Absolutely not, read my article about why this is such a great time to sell your home!

Does this mean you should put off buying a home until after the holidays? NO…NO. . .NO! This is the absolute BEST time of year to be a buyer.

The real question is do you have the ‘right stuff’ to buy or sell a Hemet home during the traditional holiday period, which begins some where around Thanksgiving and extends into the new year. After all, the holidays are traditionally a very stressful time, regardless if you enjoy them or not (believe it or not, not everyone looks forward to this time of year).

So, if you want to SELL your HEMET home during the holidays, what should you consider? How about…

1) Don’t think that everyone believes as you do. What may be appropriate and traditional in your home during this time of year may actually be offensive to some. So as you decorate, please consider scaling back on the religious artifacts. Don’t skip them, just scale back to moderation – but do please remember the ‘reason for the season’.

2) Decorations in general should be scaled back. Tastefully decorated rooms often only employ minimum touches to bring the flavor of the holidays into a home. Please don’t do a “Griswalds” (if you don’t know who I am talking about, rent the Christmas classic – “Christmas Vacation” with Chevy Chase).

3) Don’t get an oversized Christmas tree this year. Now is not the time to get a tree that reaches to the ceiling and occupies valuable space or landscape that will now appear to be much smaller than what it actually is.

4) Don’t be the first with the decorations – up or down. Traditionally Christmas decorations start to go up the day after Thanksgiving and don’t come down until New Years Day. You’ll do yourself major justice if you can wait and put them up no more than two weeks before Christmas and no more than2 weeks after (but New Years is even better).

5) If you are planning on having guests stay with you for any period during the holidays, please inform your REALTOR and have him restrict showings until after the guests are long gone and their space fully restored to it’s original condition.

6) Remember to showcase the home highlighting the great features of the home year round. If you have photos from the spring and summer, please display them – this is a great way to showcase your garden in full color.

7) Keep up with seasonal chores. In Hemet, we do not have to worry about shoveling snow, but we do have the Santa Ana’s come through and blow up a mess. So please keep the yard raked and the sidewalks swept and free of all debris.

Take this advise into consideration and you should have a great chance of showing your Hemet home for sale as long as it is properly priced, because we all know the buyers who are shopping now, are motivated.


So if you want to BUY a HEMET home during the winter holiday season you will find yourself in a position of power.

Not only is the current market a true buyers market, with approximately a 6 month inventory of homes for sale in most market segments in Hemet, but there a lot less buyers spending their holiday time shopping for a home, when the mall is open.

So, as a buyer of a Hemet home during the 2006 Christmas holiday season there are a few pointers I would like you to consider maximizing the time you will spend, making sure you find the absolute best Hemet Home for sale.

1) Yes there are some real bargains right now, and as a buyer you are definitely in control. Please don’t get too cocky though. Do your homework to present any offer. Make sure you look only at the comps in the neighborhood you are considering and be selective in the comps, only considering the homes that have sold in the same neighborhood in the last 3 months. Anything older really is not relevant to today’s market.

2) Now is a great time to negotiate. Price is not the only negotiable in many cases but many times other valuable concessions can also be had for the asking. You might ask for the appliances or even certain items of furniture that just ‘go’ with the home. Other common concessions include having the seller pay all or a portion of closing costs such as pro-rated property and transfer taxes; escrow and title fees, inspection costs or anything else that you would like to negotiate. One last thought is asking the seller to pay load costs.

3) Often times in the winter certain systems of the home are shut down and not operable. Well, when you are inspecting your home, make sure everything is working the way it should. If we had snow in Hemet, you might be able to ask for an extension to inspect a roof perhaps – but we don’t have those problems – so do it right the first time. However, if we get into0 a wet spell, put off your inspection until the rains stop. It is very important to check the home thoroughly and you don’t want anyone taking any shortcuts because they might get wet.

4) Please be patient. At this time everyone is very busy. Presumably you have your own holiday schedule to adhere to and so does the seller and so do the real estate agents on both sides of the transaction. Sometimes it may take an extra day or two to view a particular property or schedule an inspection. Remember, ‘the reason for the season” and don’t stress anymore than you already are.

So, you see there are many things we can all do to improve our chances at a successful offer and escrow during the holidays, if we just all take a deep breath and do what has to be done.

I’d like to leave you with this parting thought, believing you will find yourself celebrating the holidays knowing you have a moving date set. Plan f0r the close. Make sure your Hemet Real Estate Agent is going to be around when escrow closes and that your Escrow officer will too. Although delegation of responsibilities is common, you really don’t want to be in a position where someone from the office is ‘covering’ for your agent while they are off having a good time. Your agent should be on top of the situation, like any other escrow at any other time of the year. Your agent should KNOW that both escrow and title have all of their documents and that the lender is on top of the situation.

Have a wonderful time and Merry Christmas to you and yours…

Real Estate Mortgage Fraud - Bonnie & Clyde Behind Bars

The "Bonie & Clyde" of Real Estate Fraud
Caught andBehind Bars
by John Occhi

I was reading through my morning industry newsletters when I got a special alert on a story that I have been following. On the surface, it might be a strange story for a Hemet real estate agent to follow, but what can I say…I have the same law and order fascination that the rest of the country has. After all, why else would there be 3 different CSI programs and 3 different Law & Order shows eating up our television airwaves night after night.

This story is about a modern day ‘Bonnie & Clyde’, as they have been called by both the media and law enforcement. Call it coincidence if you want, but I find the humor in the fact that the day ‘Bonnie’ is sentenced to a mere 6 years for her part in the multi million dollar scam, Clyde gets picked up in Nashville, TN. While Bonnie got off with a light sentence for her cooperation Clyde is on the hot seat facing charges that carry a potential 400 year sentence for his mastermind work in the real estate fraud crime ring.

If you want to learn more about the activities of this particular criminal, then you might want to check out the archives at RealEstateFrauBlog.Com.

If you would like to educate yourself and learn about three types of mortgage fraud, please read this article, published at the Money website.