Joseph & Cheryl's Blog

I Just Love The Media

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 11 Nov 2009 13:22:59 -0600

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 -0600

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 -0500

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 -0500

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 -0500

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 -0500

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.

Funny Video on Why It Is Hard to Buy A Bank Owned Home

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 12 Oct 2009 12:27:33 -0500

This one of the funnest video's I have ever seen. http://www.youtube.com/watch?v=SM7oWKgCVo4

Underwriting Woes

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 07 Oct 2009 14:26:08 -0500

As we all know, the underwriting process is very tough right now. Source of funds and building permits are two areas to be aware of. Over the last couple of weeks lenders have become increasingly picky about "sourcing' any and all monies deposited into escrow or the buyers bank accounts. Monies given to the buyer as a gift for down payment or closing costs must be sourced and traced with paperwork showing the person had the money to give the gift, proof the money came out of the identified account, and proof the money is deposited into either the buyer's bank account or escrow. If the appraiser mentions that a property has building additions the lender will want permits. Before the new appraisal guidelines (HVCC) the appraiser would go down to the city building department and research the property for permits. Because the appraisal management companies are paying the appraisers less money to do the appraisals, in may cases the appraisers are no longer doing the research.

How Does This Affect Us As Agents?

The more you know about the lending situation the better prepared you can make your buyers and sellers. Lending requirements will remain tough until property values start to increase and banks and lenders begin to feel confident in the housing market again. The government is working hard to inject money into the banking system to make loans easier to qualify for but until the banks and investors ease their underwriting guidelines we all need to put our seat belt on and hold on for a wild ride.

1515 Dorothea La Habra Heights, Ca

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Fri, 18 Sep 2009 13:37:13 -0500

Hi to my friends, I have a open house on Sunday 9/20/09 at 1:00pm - 4:00pm. This home is a huge 6100+ of living space on a 7600+ lot with a pool. Stop by and see us.

Homebuyers Tax Credit Is Ending ?

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 09 Sep 2009 13:34:33 -0500

The Federal Tax Credit for first time homebuyers will expire as of December 1, 2009. The transaction must be closed by that date to qualify for the tax credit. There is talk and rumors that the government will extend the tax credit through next year and possible make it available to anyone buying a home and not just first time homebuyers. We need to stress the fact that the extension of the tax credit is not guaranteed or set in stone but only speculation at this point.

How Does This Affect Us As Agents ?

We are getting a lot more people wanting to purchase a home and take advantage of the tax credit. Unfortunately the market for entry level homes is getting very competitive as we all have seen. Buyers are getting frustrated with the process and the amount of offers they are competing with. As I see it buyers have two choices, quite looking and do nothing or get into the game and make offers on property. Getting into the game at least gives them a chance to have an offer accepted. Doing nothing will produce nothing results.

Media, Media, Media

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 27 Aug 2009 13:06:20 -0500

Here we go. The roller coaster of the media is starting to attract some attention. As I mentioned yesterday some positive economic and housing news has been reported over the last few days and yesterday I began hearing on KFWB radio that housing in Southern California had "turned the corner". More good economic news came out today in the form of new home sales and inventory turn times. They are quoting in Orange County it would take 2.4 months to sell all the houses on the market as opposed to over 12 months a year ago. Makes you wonder where they get these numbers from.

How Does This Affect Us As Agents ?

Lots and lots of activity. We are seeing bidding wars and sellers who want all contingencies removed after 7 days. Be careful with this as the new MDIA (Mortgage Disclosure Improvement Act) makes it tough to order an appraisal until the borrower has received advance disclosures which can take up to 3 days. Once that 3 days is up the appraisal is ordered through an appraisal management company (no control over the appraiser) and they have 2 to 4 days to make contact for the appraisal. All this due to our wonderful GOVERNMENT getting involved in the loan process. Give me a call if you have any questions regarding MDIA, HVCC, or any of the other new government mandated laws

Improving Housing Numbers In OC

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Tue, 25 Aug 2009 16:41:57 -0500

The Case-Shiller Home Price Index showed an increase in home prices for the second month in a row. This index measures home prices in 20 cities across the country. Couple that with the Orange County Register reporting an increase in the median price of a home in this area and you get a feeling that prices have stabilized in our area and that people are becoming more and more aware of it.

How Does This Affect Us As Agents ?

It would appear we can all agree that sales activity and in some cases prices are increasing. I have met with several buyers who have decided to get off the fence and get into the "game" to try to find something to buy before it is too late. Affordable prices, tax credit, and low interest rates are a good reason to buy right now. We are also hearing rumors out of Washington that the government may be planning to extend the home buyer's credit through next year and may include anyone buying a home and not just first time buyers. As always it is important to get the word out to prospective clients and referral partners. We may never see this good of an opportunity to buy property again.

City of La Habra Corn Festival

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 10 Aug 2009 14:27:29 -0500

Great weekend at the Corn festival in La Habra, California. A fun weekend filled with a parade, carnival rides, great food booths and a marketfare ares for vendors. Cheryl and I had a booth and in was so much fun, but long days. We met some new friends and saw somw old ones and reconnected. We also got some great leads, one man asked " can you help I have 900,000 cash and want to find a property can you help me" I was stuned. We are going out Tuesday morning, well worth the time at the festival. We are listing another home in the City and some other great contacts.

If you are in the area next year stop by, you will have a great tome and tasty food.

The Media Our Friends ?

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 30 Jul 2009 11:10:35 -0500

Our friendly Orange County Register (yes the same paper that bashed real estate for 3 straight years) reported in the Wednesday business section that "the housing market is on the mend". They also report that this is the "fourth consecutive month the index indicated prices have turned the corner and are heading back towards positive territory".

How Does This Affect You ?

As always perception fuels the economy as well as the housing market. Lack of inventory has been the biggest reason for the increase in sales activity. We are all seeing multiple offers and in some cases bidding wars. One of my clients is now engaged in a bidding war in Chino of all places. The next big issue will be appraised values. As prices begin to stabilize and increase it takes time for these sales to close and be used as data for new appraisals. I do believe we have turned the corner and people are beginning to notice. Hang on tight as I am sure it will be a bumpy ride.

Is It Over ???

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Tue, 28 Jul 2009 12:36:41 -0500

Newsweek magazine says it is. Leading economists say it is. The media says it might be. So the big questions continues to be, is the recession over? With corporate earnings up and resale housing numbers improving it would appear that the economy may be turning the corner. There is a long road ahead and unemployment is still a huge concern but some of the reports and numbers are very encouraging.

How Does This Affect Us As Realtors?

A possibly recovering housing market brings both good news and bad. The good news is sales activity is up considerably and inventory is down. The real bad news is that appraisal values tend to lag behind improving home prices and sellers tend to hold out for higher prices as they feel the housing market begin to stabilize. Just another issue to deal with. Make sure to communicate with your clients and know what is going on in your area. If you have questions about values call a appraiser to give you additional information to help make intelligent decisions with your clients

Is The Media Back in O.C. ?

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 09 Jul 2009 16:40:28 -0500

For years the Orange County Register was forecasting a bursting of the housing bubble when real estate prices were going up and the market was strong. As in any economic cycle they were bound to be right at some point and the economy fell into recession taking the housing market with it. That was two years ago and not much has been heard from the real estate reporters as the paper has downsized and other news has taken the headlines. All of a sudden over the last few weeks I have noticed several positive articles about the real estate market in Orange County. I saw this same type media turnaround in October of 1997 when the then sluggish real estate market started it's rebound.

How Does This Affect Us As Realtors?

I have stated before that the media has a huge influence on how people view the housing market. Lets all face it, low interest rates, affordable home prices, lack of inventory, tax credits, and now positive media articles are laying the groundwork for a housing recovery. The only thing missing is a turnaround in the employment numbers. The employment numbers will improve and as they do so will housing. So get ready and ramp up your activity. The housing market is set for a strong recovery.

Update on HVCC Mess For Realtors

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Tue, 30 Jun 2009 14:51:16 -0500

As you all know by now, any lender ordering appraisals on conventional loans must go through an appraisal management company. Loan officers, processors, or anyone associated with the origination side of the business cannot be involved as it could "influence" the appraiser. The big banks are also having to let their appraisal management departments assign appraisers. This is of course a mess in many cases as out of area appraisers not familiar with a market area are bringing values in low. Since the appraiser is randomly assigned there is also no accountability as to the quality or timeliness of the appraisal being done.

How Does This Affect Us as Realtors?

I heard that complaints are coming in from all over the country and as a result last week two Representatives introduced legislation calling for an 18 month moratorium on the Home Valuation Code of Conduct (HVCC). One industry expert stated "in the period of time since its implementation , the HVCC has increased costs to consumers and decreased the quality of appraisals and has provided a level of uncertainty in an ailing housing market". This legislation could be move through and be adopted or it could be killed and never heard of again so stay tuned for further updates.

Is The Orange County, California Housing Market Turning?

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Sat, 27 Jun 2009 11:18:05 -0500

Another article in the Orange County Register quoted a report from the California Association of Realtors that says the median priced home in Orange County increased 10% to $474,110. They state that number is up 9.7% from April and it is the fourth monthly gain in the last five months. It would appear that lack of inventory, low interest rates, and very affordable housing is indeed getting buyers off the fence and into the housing market.

Does This Affect Us As Realtors ?

We have said it before and we will say it again, perception, perception, and more perception is what drives any type of market. If people perceive that the housing market is close to the bottom and that prices and interest rates will not be this low for a very long time then people will buy. I saw this exact situation in 1997 when the media began reporting favorable news about real estate. October of 1997 the housing market turned the corner and began to take off. Will it happen again in 2009? Stay tuned.

Good Housing News for Orange County, California

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 18 Jun 2009 17:58:48 -0500

The Orange County Register which bashed real estate for the last several years seems to be back on the real estate bank wagon. On the front page of the Business section is news that Orange County's median sales price rose to $410,000 which is the highest it has been in 7 months. The main reason given for this increase is reduction in the number of homes for sale.

How Does This Affect You as a Realtor in the OC?

While not out of the woods by any means this type of news will help get buyers, sellers, and investors off the fence and into the market place. Everyone is seeing an increase in activity and many properties are experiencing multiple offers. Pass this information around and make sure you have information at open houses for people to see and read. Any kind of good news we can pass along will benefit all of us later on.

Locking In an Interest Rate

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 15 Jun 2009 14:53:28 -0500

With the wild spike in interest rates last week it is important to understand how locking an interest rate in works. Once a property is in escrow we have the options of locking in an interest rate for the term of the escrow. If the rates go up the buyer is protected and if the rates go down we have the option of renegotiating a lower rate with the lender we locked in with or taking the loan to another lender and getting a lower rate. There is no cost or obligation when we lock or relock a buyer. Most lenders will charge an extension fee if the loan is not funded by the time the lock period expires but the locked rate is not lost.

How Does This Affect You ?

All kinds of strange things seem to happen when interest rates spike upwards. Real estate transactions are put in jeopardy because lenders do not get their buyers locked in and as rates go up the buyers are either unwilling to take the higher interest rate or worse yet, do not qualify anymore using the higher interest rate. Keep tabs on what interest rates are doing and talk to your clients and referral partners to keep everybody up to date and informed.

Condo Sales Heads Up

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Wed, 20 May 2009 14:44:51 -0500

Over the last couple of months we have had a couple situations you rarely see on condo purchase transactions. On conventional loans (not FHA or VA) the lenders usually need a HOA Certification to verify information about the condo complex. This information includes the number of rental units in the complex as opposed to owner occupied, any pending litigation, and the number of units that are delinquent on their HOA dues. Recently this is becoming a problem as more and more units are bank owned or the current owners are not paying their dues. If the percentage of units delinquent on the HOA dues is over 15% lenders will not fund the loan.

How Does This Affect You ?

This is another of those situations that does not happen often but when it does it is usually at the end of the transaction. The HOA Certification is usually sent out by the escrow company to the management company responsible for the condo complex. It is a good idea to make sure this document is sent out as early in the transaction as possible to avoid any last minute problems.

The New "Normal for Agents"

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Mon, 11 May 2009 16:00:11 -0500

I think most everyone would agree that the real estate business right now is frustrating. The sheer amount of paperwork required to get a transaction closed is incredible . Everything is of course taking longer and delays on everything from inspections to appraisals are an every day occurrence . I would love to say I thought things would get back to normal but in reality I think this is the new "normal". We will all adapt to how the business has changed and learn to work with what we have. As the saying goes "it is what it is".

How Does This Affect Us the Agent?

After getting spoiled during the boom years of real estate where all you needed was a loan application and a credit report, we are now back to 3 inch think files containing everything including the kitchen sink as far as paperwork goes. It is up to all of us to educate our buyers and sellers about the reality of today's real estate market. The great news is rates are at all time lows and property values are affordable to a much larger segment of buyers. Communication will get us all through this and on to better days. Make sure you are up to speed on the new appraisal process, on escrow operations, title situations, and other real estate related topics. The better informed you are the easier the process.

Good News for Orange County Realtors, California

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Tue, 28 Apr 2009 13:21:08 -0500

Orange County Register newspaper reported today that the demand for housing is up 33% over a year ago. They also reported that the time a property is on the market for sale now stands at 2.97 months as opposed to 6.55 months a year ago. This could be signs of the market beginning to stabilize.

How Does This Affect You As A Realtor?

Perception, perception and more perception. The more people who believe that the bottom of the market has arrived, the more people who will get off the fence and actually buy something. We are now seeing some people who may have waited too long as the entry level homes listed for sale are being inundated with offers. This is still a very tough market and it will be a while before it is anywhere close to normal but it appears we are headed in the right direction.

Why Is It So Difficult to get a Loan?

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 16 Apr 2009 12:34:03 -0500

I get a lot of questions from clients on why it is so hard to get a loan right now. The short answer is that these is a shortage of investors to buy closed loans. The better answer has to do with who is buying the funded and closed loans. Remember that almost all lenders sell their closed loans on the secondary market to investors and in return get more money to make more loans. Most of the investors who purchased these closed loans in the past are now struggling to survive. The major buyer of closed loans right now is the government. FNMA (Fannie Mae) and FHLMC (Freddie Mac) were taken over by the government last year and tasked with buying closed loans to keep the flow of mortgage money going. Lenders who sell to Fannie Mae and Freddie Mac are being inundated with closed loans that these government entities are sending back or refusing to buy due to documentation problems. As a result the lenders are over documenting their files in an effort to satisfy the auditors at Fannie Mae and Freddie Mac.

How Does This Affect Us As Agents ? Underwriters and funders are continually asking for more current paystubs or another bank statement or other documentation that appears to be redundant. I tell all my clients that right now the lending environment is tough and to be prepared for all kinds of requests and hoops to jump through. The flip side of course is that interest rates are the lowest they have been in 30 years. Be happy that somebody is buying closed loans as the alternative would not be good.

How Octomom is Affecting Homes in La Habra

Joseph & Cheryl Melendez (Coldwell Banker Excellence) — Thu, 26 Mar 2009 15:05:49 -0500

As a Realtor in La Habra as well as a neighbor of Octomom I have first hand information about how a public figure can impact property values. Her street has been packed with news trucks and onlookers daily, which makes getting home for us very hard and frustrating. Our neighbors have had to use police barricades to be able to just get to their own homes and keep people out.

The real big issues are when new babies come home and the news channels have their helicopters hover to do a report. When they come every hour till 11:00pm it gets to be a HUGE nuisance to all of us. Try and get kids to sleep with the thump, thump of the rotor blades hovering over your house

As for the property values of surrounding homes how much would pay for a home to be near Octomom and have people and news trucks in your front yard daily?

I will keep you all posted with more blogs to come.