Joseph & Cheryl Melendez's Blog

Rental Properties are Still a Good Investment

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 20 May 2010 13:33:13 -0700

Rental properties of one to four units are both a good choice for many of today's investors, and a good area of specialization for many of today's real estate professionals.

Why rental properties? For one thing, a growing number of people will seek out new places to live, and an increasingly attractive choice will be renting. In fact, vacancy rates have already begun to ease. A recent study cited by The Wall Street Journal reported that apartment rents rose in the first quarter of 2010 after five straight quarters of declines.

In the past, investors bought rental properties based on the reasonable expectation that their market value would rise along with rents, and that they could take advantage of tax benefitsl.

In addition to tax advantages, investors have been able to realize a positive cash flow early in the process. In fact, in many markets, it may be possible to structure transactions that provide an immediate positive cash flow. This is not always the case, of course, and investors will benefit greatly from professional guidance.

For investers who like a hands on experience, operating rental properties can prove to be a satisfying experience. The more work the investor is willing to do for himself or herself, from painting interior walls when tenants move on, to handling the books, the higher the profits will be

Great Home in Mabury Ranch

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Fri, 23 Apr 2010 16:28:22 -0700

I am doing a Open House in Orange County, Cal in the city Orange. The address is 6209 E. Bryce Ave, this is near Villa Park/ Orange Park Acres bordor. It will be Sunday April 25th from 1:00pm to 4:00pm.

New Estimated Home Value Website

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 10 Mar 2010 16:25:08 -0800

There is a new website you have to see for a estimated value for your home in todays changing market. Unlike some of the others, it uses real and current home value information. Go to LaHabraHomeValues.com and see it in action. Click on the Home value button and the rest is easy.

What a Game!

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 01 Mar 2010 13:56:34 -0800

Did anyone see that USA-Canada men's or women's hockey game? This is why I love the Olympic's to watch games that have so much excitment and wow to them. Let me know if you watched it and what you think.

Short Sales Becomming Easier

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 22 Feb 2010 13:15:10 -0800

I just wanted to let my fellow agants know that we love doing short sales for Wachovia. Wachovia has make their process so streamline and enjoyable to do. Their Fast Track request form speeds up the whole process as well as having a short sale contact person that actually will pick up the phone or send you a email in a very timely manner. I hope all of the other lending institutions take note on how Wachovia is working with the Real Estate agents to get their properties sold.

New Marketing Idea

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 17 Feb 2010 15:37:05 -0800

Cheryl and I have piggy backed on the Winter Olympics. We are running a contest for our farm to guess how many metals th U.S. will get this year. As a tie breaker they have to guess how many Gold metals the U.S. will get. The need to email us there answers with their name. So we get there name and email for future marketing items.

Great Having Serious Buyers Back

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 17 Feb 2010 15:28:06 -0800

Like many of us in real estate, the term buyers are liars was a mantra in 2009. Over the last 6 weeks we have seen a change of perception of a buyer. We have met and represented many buyers since the new year and have found them to be more realistic and comitted to buying a home. I hope this trend continues for the rest of the year. Let me know how buyers are thinking in your areas?

Fun Lead Generation Day

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 15 Feb 2010 12:02:57 -0800

Cheryl and I put on a Home Run Derby for our cities Little League every year for the last 5 years. This a very inexpensive way to market yourself. We make a party of it with a DJ and some Metals for the kids in each bracket. The parents have to sign up the kids so we get emails and names and phone numbers with no hassles. We add them to our data base and we have gotten not only our name and facial recognition, but several deals form it.

Heard This Last Night Very Funny

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Fri, 12 Feb 2010 15:14:06 -0800

Two hunters (Realtors from California) got a pilot to fly them to the Canadian wilderness to hunt moose. They manage to get two big bull moose. As they were loading the plane to return, the pilot said the plane could only take the hunters, their gear and one moose. The two hunters objected strongly. "Last year we shot two. The pilot let us take both and he had the same plane as yours." Reluctantly, the pilot (who happened to be an ex-mortgage banker and not wanting to be outdone by another pilot) gave in and everything was loaded. However, even on full power, the little plane couldn't handle the load and went down crashing in the woods. Somehow, surrounded by the moose, clothing and sleeping bags, George and Mike survived the crash. After climbing out of the wreckage, George asked Mike, "any idea where we are?" Mike replied, "I think we're pretty close to where we crashed last year".

FHA Short Sales and Short Payoffs

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Fri, 12 Feb 2010 15:06:50 -0800

FHA Short Sales and Short Payoffs

Borrowers that were in default at the time of the short sale (or pre-foreclosure sale) of their previously owned primary residence are not eligible for a new FHA loan for three years from the date of the pre-foreclosure sale. This means, that buyers wanting to purchase a similar or superior property within a reasonable commuting distance will not be able to obtain a new FHA loan.
Borrowers are considered eligible for a new FHA loan if they were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and the proceeds from the short sale serve as payment in full.

FHA Short Sales and Short Payoffs

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Fri, 12 Feb 2010 15:04:03 -0800

FHA Short Sales and Short Payoffs

Recession Not Only Affects The U.S.

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Fri, 12 Feb 2010 14:58:41 -0800

The biggest influence on mortgage rates this week came from outside the US . Concerns about the possible default of sovereign debt in smaller nations caused investors to seek the relative safety of US fixed income securities. This week's economic data was roughly balanced in terms of positive and negative surprises. The added demand for safer investments helped mortgage rates move lower during the week.

The recession has impacted countries in different ways. Some of the hardest hit have been smaller European nations, such as Greece and Spain . As members of the European Union, they must adhere to certain restrictions which limit their flexibility to adjust domestic economic policy. As a result, some countries may be at risk of defaulting on government debt. Investors responded by buying relatively safer assets such as US bonds, including agency mortgage-backed securities (MBS). Investors also withdrew money from global stock markets during the week. In the US , the Dow fell about 200 points.

Friday's important Employment report contained mixed news. Against a consensus forecast for a gain of 15K jobs, the economy lost -20K jobs in January. The big story, though, was an unexpected drop in the Unemployment Rate to 9.7% from 10.0% in December. Two separate sources of data are used to compute the change in jobs and the change in the unemployment rate, and during volatile periods the two methods can show widely divergent results. The decline in the unemployment rate in January was viewed as very good news by many economists, pointing to an improving labor market. On a more negative note, revisions to older data showed that the economy has lost 8.4 million jobs since the start of the recession in December 2007, from the previous reported level of 7.2 million.

Short Sale Tips for real estate professionals:

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Fri, 12 Feb 2010 14:52:53 -0800

Below, we have provided some tips for agents and homeowners to help you better understand the short sale process and identify areas in which you can aid in advancing the process as well.

Tips for real estate professionals:

Advise clients to contact their servicer as early as possible

Ensure all customer financials are in PDF format
Help clients complete all documentation accurately and as soon as possible
Make sure the purchase offer is a legitimate offer and fully executed
Submit the best possible purchase offer at fair market value
Provide listing information and comparables to support price.

New Guidelines for FHA Loans

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Tue, 02 Feb 2010 15:04:04 -0800

FHA announced changes to its guidelines. It will raise the minimum down payment required for borrowers with credit rating scores below 580 to 10%, while the down payment for higher-ranked borrowers would stay at 3.5%. The upfront MI premium is also going from 1.75% to 2.25%. HUD is seeking congressional approval to allow it to raise annual mortgage insurance premiums. Lastly, FHA also said it was cutting the amount of seller contribution to buyers down to 3% of the purchase price from 6%; a move it said could help lessen incentives to inflate appraised home values. Lastly, HUD has put together a list of lenders that are under investigation for excessive claims.

New Listing for La Habra

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Fri, 15 Jan 2010 14:21:51 -0800

We have a new listing in La Habra the address is 791 Durham. This home has been totally remodeled inside, look at the pictures and be amazed. Open house will be January 23 & 24 from 12:00 to 5:00pm both days. See it online at www.791durham.com

Lots of Important Changes for 2010

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 04 Jan 2010 11:41:54 -0800

Lots of important changes are coming as of January 1st. The most important change has to do with the new government mandate to change to the new Good Faith Estimate which is going from 1 page to 3 pages which will completely confuse the buyers. After January 1st, any loans closed using the new Good Faith Estimate will also require escrow companies to provide a new HUDI. We are hearing many escrow and title companies are not geared up and ready for this which is going to cause lots of problems.

How Does This Affect Us As Agents?

In an effort to make the lending and escrow process easier to understand and provide more protection to the consumer, the government has created a complete monster. Out industry will now completely bury the consumer with needless paperwork. These new RESPA requirements together with the already cumbersome HVCC appraisal issues will make the first few months of 2010 a real adventure. Patience and communication will be the key to getting through this mess. Everyone has a different opinion on how these new guidelines will be implemented and lots of questions remain unanswered. Working together with our lenders and we will all get through this.

What a Weird and Crazy Year

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 14 Dec 2009 15:40:13 -0800

As we come to the close of 2009 we can sum the entire year up into a couple of good news and bad news comments. The good news is that interest rates are still close to historic lows and property values have stabilized in our area and in may cases have started to increase again. The bad news is short sales are still taking forever and financing is still very tough to get. Most experts predict interest rates to remain low through most of 2010 and home buying should remain strong with the extension of the home buying tax credit. The government is putting increased pressure on banks and servicing lenders to not foreclose on properties and either modify the existing loans or short sale them.

How Does This Affect Us As Realtors?

By all accounts the next few years should be very strong with regard to real estate sales. Home loan financing will get easier and guidelines will relax as soon as property values begin to increase. We have all been through quite a bit over the last few years and I believe the worst is over. The next few years will not be easy for any of us but there is light at the end of the tunnel.

How Low Can Interest Rates Go Next Year?

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Tue, 01 Dec 2009 13:31:38 -0800

When you see very low interest rates you will also hear whisperings of the dreaded inflation as they go hand in hand. Low interest rates are designed to stimulate the housing market and thereby the economy as a whole. Common sense tells us that as the "velocity" (new term many economists are using) of money increases and people borrow more money at low interest rates, demand for goods and services increases and prices go up which causes inflation. The main function of the Federal Reserve is to manage the economy and keep inflation under control. The Fed's main tool to combat inflation is raising interest rates. Most of the experts feel interest rates will remain low through most of 2010 but if inflation begins to heat up the Fed's are expected start raising interest rates so prices don't get out of control.

How Will This Affect Us As Agents?

With the extension of the home buying tax credit, continued low interest rates, and very attractive home prices, the end of 2009 and the start of 2010 should be strong for real estate sales. Get the word out that prices and rates will not stay low forever and now is the time to get into the market and buy something.

Home Prices In Orange County, California are Climbing

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 18 Nov 2009 11:49:33 -0800

Great article on the front page of the Orange County Register today. DataQuick reports that the median price of a home in Orange County now stands at $436,500 which is up almost 4% over a year ago and up a whopping 18% from January's price bottom. It also says most of the sales are centered in the entry level market and that higher-priced home sales are sluggish. I think we already know that piece of information.

How Does This Affect Us As Agents?

With the extension of the home buying tax credit, continued low interest rates, and very attractive home prices, the end of 2009 and the beginning of 2010 should be good for the Southern California real estate industry. Hopefully this upward trend continues and helps lead the economy out of the recession. It will take several years to get the economy healthy again but this is a good start.

I Just Love The Media

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 11 Nov 2009 13:22:59 -0800

It is always interesting to me how the media works. I guess it is just easier to say that they print whatever sells the most papers. The same real estate reporters that predicted doom and gloom from 2002 up until the actual crash are now publishing positive real estate articles. Last week was an article about two separate studies that predict the Orange County home prices will increase (yes increase) by 9% to 16% in 2010. Today there is an article in the business section of the Register reporting that the amount of households that owe more then they are worth went from 20% in the second quarter of this year to 14% in the third quarter. They are also reporting that with the extension of the homebuyers tax credit and the continued low interest rates, we could see a bump in demand that could help offset the predicted increase in foreclosure activity.

How Does This Affect Us As Agents?

This is good news for the real estate industry no matter how you look at it. People are responding to low prices, low interest rates, and the tax credit and moving out into the market. As we all know there is a serious lack of inventory and loans are not easy to get through but with activity up and inventory down it is a good sign. Get the word out and keep talking about it.

Tax Credit Extension For Buyers/Sellers

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 05 Nov 2009 16:10:52 -0800

Lots of stories out today with slightly different details but both the House and Senate have approved the $8,000 tax credit for first time homebuyers through the middle of 2010. The program has also been expanded to include those people who purchase an owner occupied home within the past 5 years although the tax credit in that case is reduced to $6,500. The exact details will be out later.

How Does This Affect Us As Realtors ?

This is obviously good news for the housing industry. As the economy continues to stabilize and hopefully begins to improve it is essential that the housing market continue to improve. As companies begin hiring again more and more buyers will jump into the housing market wanting to take advantage of low interest rates and affordable prices. Get the word out to everyone you know.

Potential Good News For Homebuying !

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 29 Oct 2009 15:03:35 -0700

News out of the government seems to indicate that they will be extending the temporary loan limits for conventional and FHA loans through 2010. This is great news as right now there are very few investors buying loans over the conforming loan limit of $417,000. As I mentioned the other day it also appears the extension of the home buying tax credit is closer to being a done deal. No word yet on exactly how long the tax credit will last or if it will be opened up to all buyers and not just 1st timers.

How Does This Affect Us As Realtors?

This is all good news. Remember that Fannie Mae and Freddie Mac buy loans and set underwriting guidelines for loan amounts up to and including $417,000. Loan amounts over that amount are considered "Jumbo" loans and are sold to "other" investors. Right now the "other" investors do not really exist. Part of the Stimulus Package caused a temporary increase in the conforming loan limits. In LA/Orange Counties the new conforming limit is $729,750 and these temporary limits were set to expire at the end of this year. News that the government will be extending these limits through 2010 is huge news. It appears that FHA loan limits will also be extended.

Is The Homebuyers Tax Credit Done?

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Tue, 27 Oct 2009 13:15:11 -0700

The word is the Senate could vote on the extension of the $8,000 tax credit as early as today. There is lots of debate going on with some people feeling it should not be extended while others feel it should be extended and possibly expanded to offer tax credits to anyone buying a home or property and not just first time buyers.

How Does This Affect Us As Realtors?

The fear is that if the tax credit goes away so will the desire of many buyers to get out into the market and actually buy something. As with many of the policies and programs we have seen over the last few years, this has never been done before so nobody really know what the positive or negative effects will be if the tax credit is extended or suspended. Stay tuned for more information.

Setting Goals for 2010 It Can Be Done!

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 22 Oct 2009 12:51:41 -0700

Here are some ideas I think will help you with setting goals for 2010:

1) Your goals must be your own. They cannot be dictated by your spouse, your broker or any other individual.
2) Goals must be ambitious yet attainable. The key is to set goals that are realistic yet challenging.
3) Goals must be exciting. It is the excitement that fuels the engine. Simply ask yourself what it is you want, or want to do, that would really wind your clock.
4) If goals are not measurable, they will not work. You must be able to measure progress as you move toward your destination.
5) Your goals must have time limitations. If you don't have a finish line with time constraints, you will procrastinate.

So, what are realistic goals for the average real estate agent? The following are my "minimum" standards (please note the word minimum):

1) 4-6 listing presentations monthly.
2) 4 listing contracts every month. These listings must be priced and conditioned correctly.
3) 4 opened transactions monthly.
4) At least 95% of all opened transactions should close successfully.
5) At least 15 leads generated by an agent's website monthly.
6) 100% client satisfaction rating.
7) After 24 months in our industry, at least 70% of an agent's success should come from the four "R's"; repeat, referral, recognition and residual sources.

I can honestly say I have never met an full time agents who is not capable of meeting the minimum goals. And yet, I can also say that only a small percentage of the agents I have met are actually performing to these standards. Why such limited success? I would bet the ranch that a lack of challenging goals, and/or a lack of focus on goals, is a factor.

California Governor Signs New Mortgage Laws

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Tue, 13 Oct 2009 13:44:33 -0700

These has been lots of talk and press yesterday and today about our famous Governor signing a package of mortgage related bills into law. Some of the key components to these laws is prohibiting loan officers from "steering" people into higher priced loan program (the higher priced or sub-prime loans have not been available for over 3 years), outlawing negative amortizing loan programs (these programs have also not been available for several years), limiting pre-payment penalties to 2% of the loan amount (pre-payment penalties do not exist on any government or conventional loan anymore), and a few other cleanup type laws.

How Does This Affect Us As Agents ?

I remember reading several years ago how many millions of dollars it takes to push legislation through the government and make them actual laws. These new lending laws are a case of closing the barn door after the animals have left. The lending industry, as we all know, has taken care of most of the problems of the past. As of right now no one sees a return to the crazy 100% stated income purchase loans that were available several years ago. Lending guidelines are tough and will probably stay that way for quite a while.