New home sales fell 2.2% in December to a seasonally adjusted annual rate of 307,000 units from a revised rate of 314,000 units in November. Compared to a year ago, new home sales are down 7.3%. On a year over year basis, pending home sales are up 5.6% and pending home sales, a forward-looking indicator based on signed contracts, fell 3.5% in December after a 7.3% increase in November. On a year-over-year basis, pending home sales are up 5.6%. 

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending January 20 fell 5%. Refinancing applications decreased 5.2%. Purchase volume fell 5.4%.

Orders for durable goods, which are items expected to last three or more yearss, rose $6.2 billion or 3% to $214.5 billion in December. This increase surpassed the 2.2% economists had anticipated and follows a 4.3% surge in November. Excluding volatile transportation-related goods, orders posted a monthly increase of 2.1%.

According to ICSC-Goldman Sachs index, retail sales fell 1.4% for the week ending January 21. Retailers saw sales increase 2.8% on a year-over-year basis.

The Commerce Department announced that gross domestic product, the total output of goods and services produced in the U.S., increased at an annual rate of 2.8% in the fourth quarter of 2011. This follows a 1.8% pace of growth in the third quarter of 2011. For all of 2011, initial reports indicate the economy expanded 1.7%.

Initial claims for unemployment benefits rose by 21,000 to 377,000 for the week ending January 21. Continuing claims for the week ending January 14 rose by 88,000 to 3.554 million.

Upcoming on the economic calendar are reports on the housing price index on January 31, construction spending on February 1 and factory orders on February 3.

Dataquick stated that investors have pushed home sales in Southern California apx. 14% higher in December than November. The real estate research firm also reported that there were a total of 19,247 resale, new homes and condos sold in Southern California California area in December. 

Demand grew for homes priced under $300,000. The fact that more lower-cost homes were sold during the period pushed the median Southern California sales price down to $270,000, compared to $275,000 a month earlier.

The median home value in the area fell 46.5%, when compared to the medain price of $505,000 in mid-2007.

The number of homes that sold for less than $200,000 rose 5.9% from a year earlier, while the number of transactions in the $300,000 to $800,000-price range dropped 10.7%. Sales above $800,000 dropped 21.2%.

Short sales made up 20% of the area's resales in December. Foreclosure resales represented 32.5% of the December home sales in Southern California, up from 31.6% in November and down from 35.1% a year earlier. 

Are you looking for Malibu or Topanga Real Estate?  View the list below for this Sunday's Malibu & Topanga open house list below. Open houses are Sundays from 1 - 4p. View all Malibu properties currently on the market at our Malibu Real Estate website. This site also lists the Malibu Short Sales and Malibu bank-owned properties currently on the market. 

OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Nelson Shelton & Associates Mary Mehrnaz Tahbaz DRE:# 01063408 310-395-4352 MLS Number: 11-545467   30608 LA SONORA DR  MALIBU 90265  4 bedrooms    3.00 bathrooms $1,399,000  Active Listed On: 08/01/2011 VERY BRIGHT SECLUDED 4BEDRM+3BATH WITH MOUNTAIN VIEW, FRESH PAINT AND NEW CARPET, FAMILY ROOM OFF THE KITCHEN, LAUNDRY ROOM, LIV W/FIREPLACE,NICE YARD ROOM FOR POOL,VERY CLOSE TO SCHOOLS, BEACH AND PRIVATE CLUB,EASY TO SHOW, FOR LEASE $6250 PER MONTH, SELLER WILL CONSIDER LEASE OPTION  OPEN HOUSE INFORMATION:  Residential Lease  Sunday - January 15, 2012 Time: 1 - 4 PM Nelson Shelton & Associates Mary Mehrnaz Tahbaz DRE:# 01063408 310-395-4352 MLS Number: 11-545473   30608 LA SONORA DR  MALIBU 90265  4 bedrooms    3.00 bathrooms $5,900  Active Listed On: 08/01/2011 SECLUDED VERY BRIGHT 4BEDRM+3BATH FAMILY ROOM HOUSE W/MOUNTAIN VIEW, FRESH PAINT, NEW CARPET, LIV RM WITH FIREPLACE, LAUNDRY ROOM INSIDE, NICE YARD, CLOSE TO SCHOOLS, BEACH, SHOPS, EASY TO SHOW, FOR SALE $1,475,000. SELLER WILL CONSIDER LEASE OPTION  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Sotheby's Int'l Rlty-Pac Pal Robert Radcliffe DRE:# 01132704 310-255-5454 MLS Number: 11-555033   20229 INLAND LN  MALIBU 90265  4 bedrooms    3.00 bathrooms $1,499,000  Active Listed On: 09/19/2011 Pristine single-story Spanish hacienda located in the Big Rock area of Malibu. Approximately 2,852 square feet with 3 large bedrooms and 3 baths which have been completely remodeled. Natural rock pool designed by Don Burgess with a tropically landscaped back yard providing privacy. Formal dining room, living room and family room. The home has classic Spanish arched entryways, completely remodeled kitchen with new cabinetry and granite counters, wet bar with eating counter, office with built in desk, cabinets and bookcase. 4th bedroom currently used as study/office  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Hilton & Hyland Rodrigo Iglesias DRE:# 00994039 310.699.3435 MLS Number: 11-572207   18459 COASTLINE DR  MALIBU 90265  4 bedrooms    3.00 bathrooms $1,495,000  Active Listed On: 12/20/2011 Trust Sale with no court confirmation needed- Beautiful 4 BR 3BA home in Sunset Mesa. Tenant Occupied. No showings until January 3,2012  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-BH Joyce Rey DRE:# 01372678 323-610-7191 MLS Number: 11-514265   24420 MALIBU RD  MALIBU 90265  4 bedrooms    4.50 bathrooms $11,995,000  Active Listed On: 03/17/2011 A newly constructed modern masterpiece on prestigious Malibu Road! This 4 bedroom, 4.5 bath home sits on the beach with 65 feet of frontage. Huge sliding Fleetwood doors open to fresh salt air as the sound of crashing waves envelops the home. A massive entertainer's balcony, installed flat screen tv's, a state of the art Lutron Control Home Automation System, and custom fine finishes allow the occupants to relax in this tranquil showpiece. Two large activity rooms included for creative use.  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-BH Joyce Rey DRE:# 00465013 MLS Number: 11-567831   11768 ELLICE ST  MALIBU 90265  5 bedrooms    7.00 bathrooms $14,900,000  Active Listed On: 11/15/2011 UNDER CONSTRUCTION. The Lot 8 Spanish Estate includes: two master suites, three additional bedrooms, a massive 60' wide great room with 16' ceilings, a state of the art theater, wine cellar, wet bar, office & chef's kitchen. There is an additional 3,000 sq.ft. of sheltered courtyards, one with a fireplace, outside TV, BBQ, sink, bathroom and serving area, providing a total of 10,000 sq.ft. of indoor-outdoor living. Security cameras cover the entire site and imposing perimeter stone walls provide further security. Lighting, audio, visual, irrigation, alarm system, intercom, phones, window shades, security cameras, fireplaces, TV's, and other electronics are centrally controlled by remote control and, additionally, via your iPhone or iPad from anywhere in the world. The outside grounds will be landscaped with an infinity edge lap pool, a separate spa, patios, terraces and the estate grounds include a private bluff-top, sand beach with an elegant wood deck. See private remarks.  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-BH Joyce Rey DRE:# 00465013 MLS Number: 11-567841   11802 ELLICE ST  MALIBU 90265  4 bedrooms    6.00 bathrooms $17,000,000  Active Listed On: 11/22/2011 Awarded the Pacific Coast Builder's Conference 2011 "HOUSE OF THE YEAR" Award. With nearly 10,000 sq.ft. of single-story, indoor-outdoor living space, the Showcase Estate features a 60-foot-wide great room with 14-foot-high ceilings, a fully equipped wet bar, twin master bedrooms with towering French oak ceilings and views of surfers below. Also, there are two additional bedrooms with mountain views, a state-of-the-art theater, an open chef's kitchen, a breakfast room, a refrigerated wine cellar, a gym, & an office. The exterior includes beautifully landscaped grounds with an infinity-edge lap pool, 3 patios, a Viking BBQ and outdoor dining pavilion, an ironwood deck on a 4,000 sq.ft., bluff top, "private beach," a water wall of sandstone set in a magical fern and oak garden & a driveway of cobblestone hand hewn from native rock and parking on site for 10 cars (3 garaged). Includes a state of the art security & central electronic system. Minutes from the Camarillo Airport.  OPEN HOUSE INFORMATION:  Residential Land  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-BH Joyce Rey DRE:# 00465013 310.285.7529 MLS Number: 11-569887   11744 ELLICE ST  MALIBU 90265  Residential Land $8,000,000  Active Listed On: 12/07/2011 MariSol presents to the market 17 Malibu real estate sites, including, in its first phase, two magnificent homes & 5 perfect, 1-acre, ready-to-build, oceanfront, bluff top lots. Homes on these sites possess a one-of-a-kind exemption from coastal development permits & are not subject to City restrictions, enabling owners to build their dream home free of the uncertainty, restrictions & delay of City processing. The lots include gated driveways, drainage, water meters, stone privacy walls, pertinent reports & landscaping. Also included with the purchase price, is the Homebuilding Program which expedites and brings extraordinary value to the homebuilding process. The lots range from $4 to $9 million, and specifically, lot 9 (11744 Ellice Street) is offered for $8 million. Lot 9 is elevated 97ft above sea level with 135 feet of panoramic ocean frontage. Let MariSol's award winning Homebuilding Program facilitate the construction of your dream home, in a relatively seamless process.  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Prudential California Realty Eric Knight DRE:# 00977963 310 994 9410 MLS Number: 11-561441   30612 LA SONORA DR  MALIBU 90265  4 bedrooms    2.50 bathrooms $1,349,000  Active Listed On: 10/19/2011 Beautifully redone Malibu West home with expansive views of the Trancas Canyon Mountain Range. Enjoy the unobstructed panoramic views from the large wrap around entertainment deck, complete with BBQ area, fire pit, spa and outdoor shower. This 4 bed, 2.5 bath plus den is redone with beautiful granite kitchen and stone counter tops in bathrooms. With bamboo floors and high quality finishes, move right in to this tranquil single story home. Included is membership to the Malibu West Beach Club and tennis courts. Coming soon, the new Trancas Center Country Mart is currently under construction.  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Pritchett-Rapf & Associates Jeffrey Chertow DRE:# 00976750 MLS Number: 12-574001   20152 PACIFIC COAST HWY  MALIBU 90265  4 bedrooms    4.50 bathrooms $2,495,000  Active Listed On: 01/09/2012 Awesome oceanfront duplex on 60' feet of big rock beach. Both units have been extensively remodeled and ready to occupy. The upper unit is 2 beds and 2.5 baths with all major rooms on the water that opens to a large beach front terrace. Beautiful stacked stone fireplace in living room. The lower unit is a 2 bed 2.5 bath with all major rooms also on the water. Fireplace in living room huge beach front terrace and large master suite with sitting area. Both units with separate private entrances and each have own retractable beach stairs. 6 car uncovered parking. City of Malibu septic operating permit on file. Priced to sell.  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-Malibu Colony Paul Grisanti DRE:# 0621552 310.317.9328 MLS Number: 10-457419   27312 WINDING WAY  MALIBU 90265  4 bedrooms    5.50 bathrooms $6,750,000  Active Listed On: 06/14/2010 STAGED & REDUCED! The Bridge House, Christopher R. Sorensen AIA. Incredible ocean views from every room of this private gated cul de sac location. This brand new home is complete and ready for move in. Rift sawn Oak floors, contemporary style and a pool with your own mountain to hike and enjoy. Great separation of the private and public areas make this home ideal for entertaining. Seller has had meetings with the city and the property could easily have a two room GH added over the garage.  OPEN HOUSE INFORMATION:  Residential Lease  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-Malibu Colony Irene Dazzan-Palmer DRE:# 0597226 310.317.9354 MLS Number: 10-480611   24680 MALIBU RD  MALIBU 90265  5 bedrooms    4.50 bathrooms $14,900  Active Listed On: 09/24/2010 Carmel by the sea in Malibu. Wood and glass spacious 3 story beach home on 50 ft of sandy section on Malibu Road. Beautiful remodeled kitchen, decks on all levels, oceanfront spa. High vaulted wood ceilings throughout home. Oceanfront master with fireplace and balcony. Lower level with 3 bedrooms, living area and own entrance. Summer lease $55,000/month.  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-Malibu Colony Madison Hildebrand DRE:# 01413280 310.317.9353 MLS Number: 11-535897   20729 EAGLEPASS DR  MALIBU 90265  4 bedrooms    4.50 bathrooms $2,850,000  Active Listed On: 06/20/2011 Newly constructed modern & efficient living at its best featured in this 1-story home w/ exceptional white water ocean & mountain views. Designed & built by Michael Torrey of Avalon Construction Corp to meet LEED standards, this home is appointed w/ the finest amenities; floor to ceiling windows & sliding doors opening to a private flat yard w/ herb garden, covered patios, cumaru decks all of which embrace the dramatic pristine & unobstructed ocean/mnt views. Detailed & careful thought went into every element of design; custom 3 sided fireplace, custom cabinetry, custom closet build-outs, French oak wd floors, custom windows with window seats, energy efficient appliances, and. wired for; security cameras, srrnd snd & power shades. Eaglepass Dr is a private culdesac street only 1 mile from PCH. Enjoy the benefits of this beautiful design with sensational views w/i 10 Miles to SM! Also for lease at $9700/mo unfurnished. Easy to show!  OPEN HOUSE INFORMATION:  Residential Lease  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-Malibu Colony Madison Hildebrand DRE:# 01413280 310.317.9353 MLS Number: 11-544827   20729 EAGLEPASS DR  MALIBU 90265  4 bedrooms    4.50 bathrooms $8,900  Active Listed On: 07/29/2011 Newly constructed modern & efficient living at its best featured in this 1-story home w/ exceptional white water ocean & mountain views. Designed & built by Michael Torrey of Avalon Construction Corp to meet LEED standards, this home is appointed w/ the finest amenities; floor to ceiling windows & sliding doors opening to a private flat yard w/ herb garden, covered patios, cumaru decks all of which embrace the dramatic pristine & unobstructed ocean/mnt views. Detailed & careful thought went into every element of design; custom 3 sided fireplace, custom cabinetry, custom closet build-outs, French oak wd floors, custom windows with window seats, energy efficient appliances, and wired for; security cameras, srrnd snd & power shades. Eaglepass Dr is a private culdesac street only 1 mile from PCH. Enjoy the benefits of this beautiful design with sensational views w/i 10 Miles to SM! Also for sale @ $2,850,000. Easy to show!  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Coldwell Banker-Malibu Colony Brian Goldberg DRE:# 01900604 310-403-4623 MLS Number: 11-569371   21766 AZURELEE DR  MALIBU 90265  4 bedrooms    4.00 bathrooms $3,495,000  Active Listed On: 12/01/2011 Walls of glass open to wrap-around decks with head-on views of Catalina Island and sweeping panoramic ocean views from Santa Monica to the Malibu Pier to Point Dume and beyond. Built in 2008 by renowned architect Steve Kent, this modern architectural masterpiece boasts the finest materials and high-tech systems with incredible attention to every last detail. 4800 square foot, 4 bedroom, 4 bath, office, media room, plus entire guest suite with separate entrance. Boffi kitchen, Miele appliances including stove, ovens, coffee maker, and washer dryer. Dual Sub-Zero refrigerators/freezers and wine cooler, Toto bidet toilets, FIOS fiber optic internet, central vacuum, and entire house and outside wired for sound. Incredibly private and peaceful natural setting. Less than 5 minutes from PCH, includes membership to the new private, gated section of Rambla Pacifico. Barely lived in and fabulously maintained, pictures cannot do this home justice - you must see this work of art to appreciate it.  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 11 - 1 PM Coldwell Banker-Malibu Colony Rick Dunlap DRE:# 01144849 310-962-7683 MLS Number: 11-571925   4262 AVENIDA DE LA ENCINAL  MALIBU 90265  3 bedrooms    3.50 bathrooms $1,200,000  Active Listed On: 12/22/2011 Incredible ocean views, 3 bedroom and office, 3 and a half bath, large open floor plan, and tropical landscaping. Needs TLC. With swimming pool and spa, handicap accessible elevator and bath, short-pay subject to lender's approval.  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Prudential Malibu Realty Lea Johnson DRE:# 01006000 310-317-1703 MLS Number: 11-563115   7111 GRASSWOOD AVE  MALIBU 90265  4 bedrooms    4.00 bathrooms $2,799,995  Active Listed On: 10/27/2011 ENJOY THE PANORAMIC OCEAN VIEWS YOU'VE ALWAYS DREAMED OF! ALL FLAT, GRASSY & MANICURED YARD W/ MATURE SYCAMORE TREES WILL TAKE YOUR BREATH AWAY! BIG OCEAN VIEWS FROM BOTH INSIDE AND OUTSIDE THE HOUSE! GORGEOUS HOME, IMMACULATE, MOVE-IN CONDITION, WITH HIGH CEILINGS, BIG LIVING RM., W/ HUGE OCEAN VIEWS, BRICK FIREPLACE, LG, FORMAL DINING ROOM, CUSTOM WET BAR, BEAUTIFUL KITCHEN W/ PROFESSIONAL APPLIANCES, OPEN FLOOR PLAN, GLEAMING HARDWOOD FLOORS, BIG FAM. RM, GENEROUS SIZE ROOMS, LOVELY MASTER UPSTAIRS W/ STUNNING OCEAN VIEWS, LG, DECK, WALK-IN CLOSET, MASTER BATH W/ MOTORIZED TUB. THREE CAR GARAGE, BIG DECKS WITH MORE OCEAN VIEWS! GATED PRIVACY! - HIGHLY DESIRABLE PT. DUME LOCATION CLOSE TO THE BEACH, SCHOOLS, SHOPPING. SUPER VALUE! - ENJOY THE BEST MALIBU LIFESTYLE IN THIS AMAZING HOME!  OPEN HOUSE INFORMATION:  Residential Single Family  Sunday - January 15, 2012 Time: 1 - 4 PM Keller Williams Rlty Bvly Hill Kathryn M Reitzen DRE:# 01433796 310.617.4047 MLS Number: 12-572549   11077 PACIFIC VIEW DR  MALIBU 90265  4 bedrooms    5.00 bathrooms $1,699,000  Active Listed On: 01/01/2012 PANORAMIC VIEWS OF CHANNEL ISLANDS, SERRANO VALLEY, CITY LIGHTS, MOUNTAINS AND GREEN BELT FROM THIS UNIQUE 19 ACRE HORSE RANCH. THERE ARE 3 HOUSES ON THE PROPERTY; THE OLD HOUSE 1+1 APPROX 1650 SF, GUEST HOUSE 1+1 APPROX 700 SF, AND A NEW HOUSE UNDER CONSTRUCTION NEARLY FINISHED FEATURING 2+2 APPROX 2100 SF - FLEETWOOD WINDOWS, MAHOGANY ATRIUM DOORS, THOMASVILLE CHERRYWOOD KITCHEN CABINETS, AND MORE. ALL STRUCTURES OFFER VIEWS AND FIREPLACES. FOUR CAR GARAGE AND AN OFFICE AREA. LONG GATED AND PAVED ROAD LEADS TO THE HOUSE.   The information is copyrighted in 2012 by the Combined L.A./Westside Multiple Listing Service, Inc. L.A., CA. Any dissemination of this information in violation of copyright laws is strictly prohibited. Information last updated 01/15/2012 12:27:04 PM www.TheMLS.com

According to Fannie Mae economists, the housing sector is expectd to take steps forward in 2012, though total originatons will fall on fewer refinances. 

They also say that the second half of the year should outpace the first 6 months, with relation to growth, and political uncertainty and fiscal policy in Washington is expected to drive consumer & business activity.  

Chief Economist Doug Duncan said positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year. He stated that we're moving into 2012 with decent employment on the employment side which is resulting in positive consumer and household behaviors. 

Total home sales were reported to increase about 3.5% to abouve 4.74 million in 2012 from 2011, and it's expected there will be a 5% gain in 2013 to close to 5 million. 2012 new home sales are expected to jump 10.4%. 

For Lease - Available Now - Flexible lease terms

Not in the MLS

$2295/mth

7816 Woodlake Ave. West Hills, CA

Near West Hills Medical Center. See the pride-of-ownership and attention to deal in this ranch home that has never been rented before. Smell the roses as you enter this recently updated home. Fresh paint and new flooring are just some of the many upgrades throughout. Enter the light and bright living room, which opens to the kitchen and dining areas. The oversized master bedroom has a huge, customized walk-in closet. Dual sinks in the master bath.  Large, manicured grassy backyard with covered patio. Laundry room with full-size washer & dryer. Gated carport & street parking. Good credit a must. Near West Hills Medical Center.

MLS #12-574001

20152 Pacific Coast Highway, Malibu, Ca 90265

For Sale - $2,495,000

Awesome ocean front duplex on 60' of Big Rock Beach. Both units have been extensively remodeled and are in move-in condition. The upper unit is 2 bedrooms and 2.5 baths with all major rooms on the water that open to a huge beach front terrace. Open kitchen to living room with stacked stone fireplace. The lower unit is a 2 bed 2 bath with all major rooms on the water. Big Master suite and sitting area. Large ocean front terrace. Open kitchen to living room with fireplace. Both units with separate private entrances and both have private retractable stairs to beach. 6 car uncovered on site parking. City of Malibu septic operating permit just obtained. Priced to sell quickly. Listed with Pritchett-Rapf - Jeff Chertow.

The temporary property anti-flipping rule waiver has been extended through the end of 2012, by the Federal Housing Administration (FHA). The FHA rules prohibited insuring a mortgage on a home that the seller owned for less than ninety days. However, in 2010, the FHA waived this regulation and has extended it through the end of this year.

Buyers will be able to continue to use FHA-insured financing to purchase bank-owned properties and HUD-owned with this extension. This waiver will help stabilize prices a revitalize communities with high foreclosure activity.

According to the FHA’s Acting Commissioner, the waiver has strict guidelines and conditions which are implemented in order to prevent “predatory property flipping” in which properties are sold quickly at inflated prices. 

Additionally, all transactions must be arms-length, where there is no link between the selling and buying parties.  And when the sales price of the property is twenty percent or more than what the seller bought it for, the waiver will only apply if the lender meets specific conditions and justifies the increase in value.

The property flipping waiver does not apply to the Home Equity Conversion Mortgage program.

Research done by the agency found that in today’s market, it often takes less than ninety days to acquire, rehabilitate and resell foreclosed properties. As a result, FHA says prohibiting the use of its mortgage insurance for a subsequent resale within 90 days would adversely impact the willingness of sellers to consider offers from potential FHA buyers, mostly  because they would be required to cover holding costs and the risk of vandalism that comes with allowing a property to sit vacant over a ninety day period of time.

You've heard it before.  Someone you know bought a house without a home inspection and got a big surprise.  Over 40 percent of the previously owned homes on the market have at least one serious defect. 

Don't take over someone's problem.  Most "used" homes need some type of attention.  Be sure you are aware of any major problems in a house you are considering purchasing, and what it will take to correct or repair the situation.
 
Here are some of the more serious defects to watch out for:

1.Insect infestation -- termites, ants, etc.

2.Chimney settling or separation

3.Foundation cracks

4.Major house settlement

5.Cracked heater exchange

6.Failing air-conditioning

7.Hazards including lead paint, radon, water contamination, asbestos, and underground storage tanks

8.Moisture in the basement

9. Defective roofing and/or flashings

10.    Mixed plumbing  (example: copper mixed with steel)

11.       Electrical system with undersized capacity

12.         Aluminum wiring

Although most of these problems can be repaired, depending on the specific problem, the cost can be substantial.  The cost could become a factor in whether you ultimately buy the house.  If you enter negotiations to buy a particular house, your agent should advise you to provide a provision in your contract for renegotiating or backing out of the contract if a home inspector finds major problems.

Be careful before you involve your mortgage lender when in negotiations.  Often, they will insist on certain repairs being done prior to you closing, no matter what.  Anything that is an imminent health or safety issue is almost always required to be done prior to closing.  Generally, mortgage lenders will not allow a seller credit back to the buyer for repairs.  Here are a few ways to negotiate repair problems.  Sometimes a combination is the best way to go.

1.Have the seller complete the suggested repairs prior to close.

2.Lower the purchase price by the cost of the repairs needed.

3.Have the seller pay for your "non-recurring" closing costs at the close.  These includes points, origination fees, title fees, appraisal and more.  They cannot include things that recur, such as homeowner's insurance, mortgage interest and property taxes.  Again, the credit is the cost of the repairs or non-recurring costs, whichever is less.

4.If the repairs cannot be completed before the close of the purchase, ask the mortgage lender to consider a seller "withhold".  That is money held in escrow equal to 1.5 times the cost of the repairs.  This money is released when the repairs are completed, with the balance going back to the seller.

A home inspection usually costs between $250 and $400. Hire a qualified inspector. Your Realtor or lender should be the first people you ask for a referral.  You can try to get referrals from people you know who have had a satisfactory experience with a home inspector. Look for affiliations with organizations like the American Society of Home Inspectors or the American Association of Home Inspectors.  When you make an appointment with a home inspector, you should accompany them during the inspection.