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Redlands Real Estate Blog

Blog from the Lon Mapes Team at Orangehill Realty

By Lon Mapes | Broker in 92373
  • Top 5 Myths About Home Buying Today

    Posted Under: General Area in Redlands, Home Buying in Redlands, Home Ownership in Redlands  |  September 10, 2013 11:19 AM  |  571 views  |  No comments

    NEW YORK (MainStreet) — The fact is, buying a home today is absolutely, totally different from buying one in 2003. And right there is why so many myths swirl around a process that, in many ways, is utterly novel from what it has been. What was true isn't anymore.

    Be ready to be shocked as we bust some myths below.

    Myth 1: You need a 20% downpayment even to think about buying a home, and that means maybe a couple hundred thousand in cash for a would be Manhattan apartment hunter.

    Totally false. "A down payment can be very low," said Joe Parsons, senior loan officer with PFS Funding, a mortgage banker in Dublin, Calif. "There are conventional loans requiring just 3% for a down payment or even zero - the VA home loan program for veterans will cover 100% of the purchase price."

    Maybe five years ago, in the belly of the beast of the mortgage meltdown, 20% was in fact a necessity, but today most lenders are way more flexible. And if yours isn't, go elsewhere.

    Myth 2: Only those with golden credit need apply for home mortgages.

    Rubbish. The past half dozen years have been rough. High unemployment, a housing implosion, you know the realities. So do lenders, and an upshot is a heightened willingness to overlook past pecadilloes such as a foreclosure.

    "Credit dings and blemishes, even a bankruptcy, short sale or foreclosure do not prevent you from getting a loan, even with a very low down payment such as 3.5% for an FHA loan," said Bruce Ailion, a realtor with RE/MAX in Georgia.

    A new FHA initiative called "Back to Work" explicitly cuts the time to qualify for a new mortgage after a foreclosure, bankruptcy or similar to as little as one year for borrowers who can prove their past financial difficulties were due to extenuating circumstances out of their control.

    Myth 3: Fixed rate mortgages are the only way to go.

    Not true, said David Reiss, a professor at Brooklyn Law School who specializes in real estate. He elaborated: "The necessity of getting a 30-year fixed rate mortgage is one of the biggest myths about homebuying. The average American household stays in their home for about seven years. Typically, 30-year fixed rate mortgages have higher interest rates than adjustable rate mortgages (ARMs). Homebuyers should take a hard look at their plans for the new home."

    Only 6.5% of applications for mortgages in a recent period were for ARMs, according to the Mortgage Bankers Association. A typical ARM went out at 3.21% interest, versus 4.69% for a typical 30 year fixed rate. That adds up to a difference worth tens of thousands of dollars over, say, a seven year probable life of the loan.

    Do the math.

    Myth 4: Cut out the realtor, rep yourself and you will save a fast 3%.

    That is just about never true.

    The realtor's commission - 5 or 6 % in most of the country - is paid by the seller. In most contracts that realtor agrees to "co-broke," which means he or she will split his commission with a buyer's agent.

    Explained Sam DeBord, a broker with Coldwell Banker Danforth in Washington State: "Most listing agents sign a contract with the seller for a certain commission percentage - for example, 6%. They offer to share a portion of that if a cooperating buyer's agent enters the picture - for example, 3% - but if there is no buyer's agent involved, the full 6% is still paid by the seller to the listing agent."

    The buyer has absolutely no say in this, at least in theory.

    Could a tenacious and persuasive buyer negotiate, say, a 1% cut in the selling price by self representing? Probably.

    But saving the full 3% just isn't going to happen, said multiple sources.

    Myth 5: If you can, you should buy a home right now.

    Very probably homes will be a strong investment over the next 10 to 20 years, mainly because in most markets prices have been savaged compared to 2005 through 2007 highs. What goes down goes up and the same will be true with housing.

    However there are plenty of reasons why renting is the better choice for many. It's flexible. There's little commitment. Take a new job in a different part of the country, and it's usually easy and low cost to move on.

    There also is no knowing how long recovery will take for housing where you live, and in some parts of the nation, experts predict it will be another 20 years before the 2006 highs are hit again.

    "Just because you can afford to buy a home, doesn't mean you should," said Steven Alexander, the president of Private Mortgage Services, a division of Private Bank of Buckhead in Atlanta. "There are many factors that need to be considered before making that type of commitment. Do I have the time and financial wherewithal to maintain a home? How long do I plan to stay?"

    Home buying makes sense. Often. But it is not a financial fast track to wealth. Know that, and the decisionmaking gets that much easier.


    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 648-4091

    http://www.OrangehillRealty.com
    Follow me on Facebook
    http://www.facebook.com/orangehillrealty

  • UTILITY SCAM: Imposters tell Inland victims they owe electricity bills

    Posted Under: General Area in Redlands, Crime & Safety in Redlands, Using Trulia in Redlands  |  September 2, 2013 5:57 PM  |  693 views  |  No comments

    Area businesses and individuals are getting phone calls seeking payment for bogus electricity bills they don’t really owe

    Southern California Edison imposters are cold-calling people in the Inland region to ask for immediate payment for supposedly past-due bills, the utility’s representatives said.

    Edison spokesmen say the telephone-based scam is occurring across Southern California, with reports filed by 800 of Southern California Edison’s 4.9 million customers this year.

    SCE investigator Art Chico said the utility has taken reports from about 150 commercial and residential customers. Ninety-five percent are commercial accounts, he said, with most victims reporting losses in the area of $800.

    Roughly 40 calls of attempted scams were logged last week.

    Typically, SCE customers report being told they have a past due electricity bill that has to be paid immediately or their service will be disconnected. In another version, potential victims are told their utility meter is overloaded and will explode unless they pay immediately for it to be replaced.

    The calls are being placed to customers in Orange, Kern, San Bernardino and Riverside counties, Chico said.

    Outside of SCE territory, Chico said other utilities have been fielding calls of scam activity. “There’s no boundary,’’ he said.

    Chico advised Edison’s customers to be especially vigilant.

    “We will not go to a house and we are not cold-calling customers,’’ Chico said.

    Calls to gather information for identity theft may also be taking place, he said.

    One homeowner in the Coachella Valley received an unsolicited call this week from a man who garbled his name and said he was from a company that was collecting information from clients who were on the CARE program, which offers discounted utility service to low-income, elderly or disabled residents.

    When the client asked the unsolicited caller to repeat his personal and company name or provide an employee ID number, the caller hung up the phone.

    The call was traced to a phone in El Centro. Calls to a business there with a similar sounding name were not returned.

    Energy surveys authorized by Edison are being taken, the utility said, but no personal information — including credit card, Social Security, calling card numbers, or personal ID numbers — are being sought be sought by those callers. Also, callers who fail to clearly say their names or repeat who they are, or who they represent, is a definite red flag.

    One potential victim got wise to the scam when asked to provide an account number.

    “She told the caller, ‘Wait a minute. Shouldn’t you have that information?” Chico said. “When pressed, the imposter hung up.”

    If the caller refuses to give the information, customers should end the call and report what happened to police or to SCE. The number to call is 800-655-4555.


    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 648-4091

    http://www.OrangehillRealty.com
    Follow me on Facebook
    http://www.facebook.com/orangehillrealty

  • Southern California's Housing Recovery: An Interactive Map

    Posted Under: General Area in Redlands, Market Conditions in Redlands, Home Buying in Redlands  |  June 27, 2013 11:39 AM  |  240 views  |  No comments

    Check out this great interactive map of Southern California's Housing Recovery.


    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 648-4091

    http://www.OrangehillRealty.com
    Follow me on Facebook
    http://www.facebook.com/orangehillrealty

  • Orangehill Realty Debuts in Homes & Land Magazine

    Posted Under: General Area in Redlands, Home Buying in Redlands, Home Selling in Redlands  |  May 28, 2013 1:28 PM  |  278 views  |  No comments

    Check out our debut advertisement in the Redlands area's Homes & Land Magazine this week.  We're very excited!  We have a half page ad on page 11.

    Homes & Land Magazine



    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 648-4091

    http://www.OrangehillRealty.com
    Follow me on Facebook
    http://www.facebook.com/orangehillrealty

  • Great Quote for the Day

    Posted Under: General Area in Redlands, Agent2Agent in Redlands  |  May 8, 2013 8:29 AM  |  295 views  |  No comments

    "A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large." -Henry Ford

  • Eight Ways to Improve Your Home Appraisal

    Posted Under: General Area in Redlands, Home Selling in Redlands, Home Ownership in Redlands  |  April 30, 2013 8:36 AM  |  470 views  |  2 comments
    When Kellie and Michael May decided to refinance their home in the New York suburbs, they wanted to take advantage of historically low interest rates. But before landing a new 30-year fixed-rate mortgage, they had to get through a home appraisal.

    "It was a major stumbling block," says Kellie May, who has owned the 4-bedroom, 3-bath colonial for seven years. Not that she and her husband were unprepared; they'd been through an appraisal for another refinance in 2010, so they knew to point out improvements they'd made to the 3,400 square foot home, and supply prices for other neighborhood properties that had sold recently.

    But the appraisal came back roughly $70,000 less than the $1,230,000 the Mays were expecting, and too low to support their new loan.

    They responded with a paperwork arsenal aimed at their lender, asserting that the appraisal had been based on faulty recent sales data. The loan squeaked through, after the bank crafted an exception for the Mays. It was able to do that because their loan was a jumbo loan, not subject to the more rigid underwriting standards they would have encountered if it were a conventional loan aimed at secondary buyers like Fannie Mae and Freddie Mac.

    Low appraisals are becoming a bigger problem for many would-be buyers and refinancers as home values have started to stabilize and rise in some markets.

    In Leesburg, Florida, for example, low appraisals have caused the cancellation of as many as 15 percent of home sales for local real estate broker Gus Grizzard.

    "We are seeing higher price appreciation and are starting to run into appraisal problems," said Charlie Young, chief executive officer of ERA Franchise Systems, a firm with a national network of real estate brokerage offices, including Grizzard's. The National Association of Realtors reported on Tuesday that inventories of homes were low and the median price a home resale was, at $180,800 in December, up 11.5 percent in a year.

    Appraisals are based on recent sales prices of comparable properties. And in rising price markets, those sales prices might not be high enough to support the newest deals. Young said there were many places in California reporting appraisal problems.

    On Friday, the federal government issued new rules aimed at improving the appraisal process as it pertains to high-interest mortgages on rapidly appreciating homes.

    But those rules don't go into effect for a year, and don't apply to most conventional loans. It pays to protect your own loan before the bank even thinks about sending that guy with the clipboard over to your house.

    "The reality is that the appraiser is only there for 30 minutes at most," says Brian Coester, chief executive of CoesterVMS, a nationwide appraisal management company based in Rockville, Maryland. "The best thing a homeowner can do to get the highest appraisal possible is make sure they have all the important features of the home readily available for the appraiser."

    Here are eight ways you can bolster your appraisal:

    MAKE SURE APPRAISER KNOWS YOUR NEIGHBORHOOD

    Is the appraiser from within a 10-mile radius of your property? "This is one of the first questions you should ask the appraiser," says Ben Salem, a real estate agent with Rodeo Realty in Beverly Hills, California.

    He recalled a recent case where an appraiser visited an unfamiliar property in nearby Orange County and produced an appraisal that Salem said was $150,000 off. "If the appraiser doesn't know the area intimately, chances are the appraisal will not come back close to what a property is really worth."

    You can request that your lender send a local appraiser; if that still doesn't happen, supply as much information as you can about the quality of your neighborhood.

    PROVIDE YOUR OWN COMPARABLES

    Provide your appraiser with at least three solid and well-priced comparable properties. You will save her some work, and insure that she is getting price information from homes that really are similar to yours.

    Websites including Realtor.com, Zillow and Trulia offer recent sales prices and details such as the number of bedrooms and bathrooms in a home.

    KNOW WHAT ADDS THE MOST VALUE

    If you're going to do minor renovations, start with your kitchen and bathrooms, says G. Stacy Sirmans, a professor of real estate at Florida State University. He reviewed 150 variables that affect home values for a study sponsored by the National Association of Realtors. Wood floors, landscaping and an enclosed garage can also drive up appraisals.

    DOCUMENT YOUR FIX-UPS

    If you've put money into the house, prove it, says Salem.

    "Before-and-after photos, along with a well-defined spreadsheet of what was spent on each renovation, should persuade an appraiser to turn in a number that far exceeds what he or she first called out."

    Don't forget to highlight all-important structural improvements to electrical systems, heating and cooling systems - which are harder to see, but can dramatically boost an appraisal. Show receipts.

    TALK UP YOUR TOWN

    If your town has recently seen exciting developments, such as upscale restaurants, museums, parks or other amenities, make sure your appraiser knows about them, says Craig Silverman, principal and chief appraiser at Silverman & Co. in Newtown, Pennsylvania.

    DISTINGUISH BETWEEN UPSTAIRS AND DOWNSTAIRS

    Many homeowners covet that refinished basement, but that doesn't mean appraisers look at it the same way. "Improvements and additions made below grade, such as a finished basement, do not add to the overall square footage of your house," says John Walsh, president of Total Mortgage Services in New York. "So they don't add anywhere near as much value as improvements made above grade."

    According to Remodeling magazine, a basement renovation that cost $63,000 in 2011-12 will recoup roughly 66 percent of that in added home value. That's not as good as an attic bedroom, which will recoup 73 percent of its cost. Even similar bedrooms typically count for more if they are upstairs instead of downstairs.

    CLEAN UP

    Even jaded appraisers can be swayed by a good looking yard. "Tree trimming, cleaning up, a few flowers in the flower beds and paint touch up can all help the appraisal," says Agnes Huff, a real estate investor based in Los Angeles.

    That advice holds true indoors, too. "Get rid of all the clutter in your home," says Jonathan Miller, a longtime appraiser in New York. "It makes the home appear larger."

    GIVE THE APPRAISER SOME SPACE

    Don't follow the appraiser around like a puppy. "I can't tell you how many homeowners or listing agents follow me around in my personal space during the inspection," he says. "It's a major red flag there is a problem with the home."

    And while you're at it, make the appraiser's job as pleasant as possible by giving your home a pleasant smell. At a minimum, clean out the litter box. Baking some fresh cookies and offering him one or two probably won't sway your appraisal, nor should it. But it couldn't hurt.


    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 726-5935

    http://www.OrangehillRealty.com
    Follow me on Facebook
    http://www.facebook.com/orangehillrealty

  • Selling Your Home? The Cards Are In Your Favor

    Posted Under: General Area in Redlands, Home Buying in Redlands, Home Selling in Redlands  |  April 16, 2013 8:23 AM  |  324 views  |  No comments

    Six years after prices collapsed, housing has begun to climb out of its hole. So what are the best moves to make now? In a three-part series, we offer smart strategies for buyers , sellers, and owners in today's market.

    Selling your home? In most parts of the country, you have finally regained the upper hand.

    To get your best price, though, you need to finesse your timing, list competitively and match your marketing strategy to local conditions. 

    Lower your sights to make more money.

    Rising prices breed rising hopes: In a recent poll, brokers complained that 75% of homeowners think their agent's recommended listing price is too low. Pricing your property above recent sales to cash in on the momentum may slow down deals, and sitting on the market too long can stigmatize a house.

    Catch buyers' attention -- and get multiple offers -- by pricing your home in line with comparable sales, says Rick Turley, president of Coldwell Banker San Francisco: "Then let the market take it higher."

    Trading up? Move fast. Downsizing? Go slow.

    It's tempting to postpone selling to hold out for a better price. But if you want to move to a larger place, act sooner rather than later. True, higher-end homes aren't rising as quickly, but the gap is small. So while you'll be able to sell your home for more if you wait, the appreciation on the trade-up home will be greater.

    Related: 5 best markets to sell a home

    When you're downsizing, the math works the other way, so it pays to wait.

    The case for these strategies should strengthen as gains slow for cheaper homes. "Investors are driving the lower end of the market, and there is a point when the investor opportunity becomes less attractive," says Richard Green, director of the University of Southern California's Lusk Center for Real Estate.

    Smooth out your home's rough patches.

    Repair that leaky roof and address other obvious structural problems, or you'll have to subtract the cost of doing so from your price. "In today's economy, many buyers don't have as much savings left over after their down payment for improvements," says Teri Herrera, a broker in Bellevue, Wash.  

    Smaller fixes that pay off the most, according to a HomeGain poll of real estate professionals and consumers: cleaning and decluttering, brightening (adding lamps and clearing window obstructions), and solving electrical and plumbing problems.

    Get ready for your home's close-up.

    Sellers who stage their homes -- rearranging or replacing furniture to bolster appearance -- usually do so just before an open house. The better time to glamorize: right before you post your listing online, where 90% of buyers look first. Says Realtor.com president Errol Samuelson: "Web appeal is the new curb appeal."

    Related: 5 best markets to buy a home

    Use a professional photographer and get tight shots of fixtures and other details. The cost: $200 to $500 for a gallery of 30 to 40 photos. Homes between $300,000 and $400,000, shot professionally, sold for about $3,000 more than those with amateur images, Redfin found recently.

    Guard against low appraisals.

    While rapidly rising prices may attract more buyers, the upswing can make it harder to close a deal. One-third of realtors polled in December reported setbacks from low appraisals, including delays in closing, lowered prices, and cancellations.

    Related: Guidelines for selling a house

    The problem: Appraisals can come in low because they're based on transactions as old as six months -- out of date, perhaps, in today's market.

    Solution: Have your agent personally oversee the process, accompanying the appraiser to point out improvements and supplying data about the latest comparable sales.

    Help investors find what they're looking for.

    Investors amounted to one-fifth of all homebuyers in January, but are a much larger share of some markets; 38% of deals in Sacramento and 45% in Orlando, for example, involved absentee buyers. Signs of an investor market: a steady stream of resales of foreclosed homes (you can find that info at zillow.com/local-info) and the conversion of many homes in your neighborhood into rentals.

    If your area fits the bill, choose an agent experienced in investor sales; she should create a flier that highlights how easy it is to attract tenants, the rents that nearby homes command, and other pertinent bottom-line info. Says Atlanta real estate agent Charlotte Sears: "All investors want to know is what their margins look like."


    Lon Mapes - Redlands Broker/Owner & Consultant

    Multimillion Dollar Sales Producer
    (909) 726-5935

    http://www.OrangehillRealty.com
    Follow me on Facebook
    http://www.facebook.com/orangehillrealty

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