2008 May

Local Voices Lynda Mason – Saving money on everyday purchases.

May 16, 2008 By Ted Mackel Leave a Comment

One of my good friends and client has sent me some valuable information to pass along. The following is a copy of local Simi Valley resident Lynda Mason’s email. If you have any money saving tips, please use the comment section and let us hear from you.

Hi Ted, Just thought I’d share with you a money-saving tip that I started doing a little while ago that you may want to share with your website “people”. To save gas, time, sales taxes (usually), and get it at a discount to boot!

I save up a list of items I will need in the next few weeks or so. Then I search the online Pharmacy stores that offer free shipping on minimum orders (i.e., drugstore.com or walmart.com). I search their sites for the best prices on the items I need (which are usually less than local stores), select the items that qualify for free shipping, and then place my order. If they don’t offer free shipping on minimum orders, I don’t buy from them. Your order is delivered to your door in about 5 to 7 days. You don’t waste your time or gas driving around town looking for the best prices, which, in most instances, you’ll save sales taxes as well. With gas prices rising, the economy slowing, and anyone working on a limited budget, this works great.

P.S. I also use this method for stocking up on my pets’ food and supplies.

Have a nice week!
Lynda

Filed Under: Money matters Tagged With: gas, money-saving, Simi Valley, tips

Facts Simi Valley Moorpark Home Sellers Need to Know

May 15, 2008 By Ted Mackel Leave a Comment

Planing on selling your Simi Valley or Moorpark home? This table was create so you could get an idea of who the buyers for your Simi Valley or Moorpark property are and what they can afford. The taxes and insurance are based on homes in the Ventura County – Simi Valley Area. Insurance rates may vary due to different conditions i.e. flooding.

Table 1

Purchase Price	20% Down Payment	Interest Rate	Monthly Payment	Monthly Taxes & Ins.	Yearly income needed to qualify

$300,000	$60,000	6.25%	$1,477.72	$400.00	$91,200
$400,000	$80,000	6.25%	$1,970.30	$500.00	$106,000
$500,000	$100,000	6.25%	$2,462.87	$600.00	$122,000
$600,000	$120,000	6.25%	$2,955.44	$700.00	$138,000
$700,000	$140,000	6.25%	$3,448.02	$825.00	$154,000
$800,000	$160,000	6.25%	$3,940.59	$930.00	$171,000
$900,000	$180,000	6.25%	$4,433.16	$1,040.00	$189,000
$1,000,000	$200,000	6.25%	$4,925.74	$1,155.00	$204,000

Table 2

Purchase Price	20% Down Payment	Interest Rate	Monthly Payment	Monthly Taxes & Ins.	Yearly income needed to qualify

$300,000	$60,000	5.50%	$1,362.69	$400.00	$88,000
$400,000	$80,000	5.50%	$1,816.92	$500.00	$103,200
$500,000	$100,000	5.50%	$2,271.16	$600.00	$117,600
$600,000	$120,000	5.50%	$2,725.39	$700.00	$133,200
$700,000	$140,000	5.50%	$3,179.62	$825.00	$150,000
$800,000	$160,000	5.50%	$3,633.85	$930.00	$162,000
$900,000	$180,000	5.50%	$4,088.08	$1,040.00	$177,000
$1,000,000	$200,000	5.50%	$4,542.31	$1,155.00	$193,000

Certain assumptions are made in the above tables. The above are estimates and are not to be considered as actual. The above information is deemed reliable but not guaranteed.

Before commenting that the new conforming rate is now $729,000 and the Buyers will only need 3% down under FHA guidelines, it is still obvious what kind of income will be need and how large the monthly payment will be required. The above 20% down tables will not require mortgage insurance.

Filed Under: Sellers Tagged With: home, income, moorpark, property, real estate, Simi Valley, Ted Mackel

Huell Howser California’s Original Video Blogger

May 15, 2008 By Ted Mackel Leave a Comment

If you have ever watched public TV in California over the last 30 years on a Saturday or Sunday, then you will have no undoubtedly encountered Huell Howser. The greatest thing about Huell’s show is that he is a good ol’ boy from down south and his program “California’s Gold” is all about exploring California. Huell’s boyish curiosity and witty expressions “Amazing” made weekend afternoon TV fun.

If Huell was just starting out today he’d be a leading video blogger.

Filed Under: Personal Ramblings, WIKIs Tagged With: California's Gold, Huell Howser

Four reasons why MY future in Simi Valley Real Estate is bright!

May 14, 2008 By Ted Mackel 4 Comments

The following Blog post Jump Start the Housing Industry by Mandating Blackberry Usage by Matthew Ferrara & Co is something I have been talking about for long time. Yeah, I am more of a techie than most, but these tech tools are being used by the public and they are being used more by the public than by my colleagues in real estate related activities.

1. Latops are mandatory tools in this business and not just any laptop will do. I’m talking about small & light notebook style laptops not the boat anchor media center laptops rookie computer users purchase for their first laptop. This has been a mandatory tool for several years now.

2. A PDA cell phone is mandatory. At minimum a Blackberry. The iphone is moving in on our industry and will take over with the RE.net crowd when the next upgraded release hits the streets (which is soon). In the Southern California Area the Palm Treo is still a stong tool as the Supra ibox keysafe system works only with pda phones that have infrared capabilities. However even with the the lack of infrared capability on the Blackberry and iphone, both these phone features make some compelling trade offs. Still the iphone is light years a head of the Blackberry and is the front runner the RE.net crowd if you are willing to drop the Supra ibox compatability issue.

3. This entry should really be a subset of number two. Text messaging, picture, video capture and email needs to actually be used on these PDA phones. Youtube, Flickr and other services make it too easy to upload photos and video on the fly.

4. Paperless online transaction management systems and skills. This still takes some computer skill, like feeding the documents in the scanner and scanning them into a PDF file and then uploading those files to software designed to securely monitor and give access to those documents. This will be the mandatory system in just a few years Arizona is taking the lead on this one; it should be now, but Realtors have always lagged. All the consumer printer manufacturers still make all-in-one printers with a fax machine probably because there are so many Realtors that refuse to scan-to-email. I have not even touched on electronic signature packages which will make tablet PCs obsolete.

The four areas I touched on above are not James Bond type systems. Everything above can be purchased for very reasonable prices. The cost to be a Realtor is a fraction of what it would cost to open a franchise or start up any other business, so the cost is very a poor excuse. The costs for a PDA phone, Laptop and software it is still under $2,500.00. Has anyone checked to see what it costs to open a Subway Sandwich franchise lately?

When I look through the listing data on the Simi Valley – Moorpark Multiple Listing Service or when I call other agents to show their property or get feedback when they show my listings, it is painfully evident that I have the easy upper-hand in this business. My future is bright!

Filed Under: Personal Ramblings Tagged With: housing, moorpark, real estate, Simi Valley

Simi Valley Swat Team Fundraiser

May 14, 2008 By Ted Mackel 3 Comments

The Simi Valley Police Foundation http://www.svpf.org organized a great evening at the Simi Valley Town Center to raise funds and create awareness of the recent achievement obtained by our Simi Valley Swat Team. Enjoy my Video Blog! Please comment on this post and show your support for our officers!!!!

Filed Under: Simi Valley News Tagged With: Simi Valley, Swat

Home Inspection Nightmares

May 12, 2008 By Ted Mackel 1 Comment

I promise not to completely trash the home inspection industry, but I think it is very important that everyone understand that there is NO REGULATION in this industry. If I want to be a home inspector:

I can have business cards printed up and some letterhead, Buy a few basic tools, a clipboard and I am good to go.
If I have a few bucks to fund this experiment, then I can buy all the inspection forms online and look a little more professional.
If I decide to really make this a business, then I can sign up for classes and work to get CREA and ASHI certified.

CREA – The California Real Estate Inspection Association (CREIA) is a voluntary, nonprofit public-benefit organization of real estate inspectors.
ASHI – The American Society of Home Inspectors

Looking at the construction industry (where many of these inspectors come from) the average length a contractor’s licenses stays active in California is 18 months. With over 300,000 licenses in the state and 650 applications coming in per week the turn over in the business is high.

Here are a few of the problems I have encountered with inspectors. (Please note these were inspectors brought by the buyer when I was representing the Seller).

Case #1

This home was located in Simi Valley. The inspector called for an anti-siphon cover on the pool drain and call out exposed wires in the pool light socket (pool light had been removed).
The inspector never removed the skimmer cover to inspect the skimmer. Had he done his job he would have seen that the drain line was plugged permanently with cement, so a anti-siphon cover was not needed. More importantly his clients should have been notified on his report of the plugged drain line.
If the inspector knew the mechanics behind pool lights, he would have known that this would have been impossible. Pool lights are hard wired with a very long wire to reach the junction box. The entire wire goes with the light when installed or replaced. The Seller abandon the use of the pool light years ago. There were no exposed wires.

Case #2

On another home I represented the Seller, the buyer’s inspector claim the HVAC was broken, yet the inspector never turned it on because he could not locate the thermostat.

In these two instances the buyers were dis-serviced by the inspector they paid and the the sellers were harmed because the buyers started to make demands based of the faulty inspection.

Another problem these inspectors make is calling out new code on older homes. As long as it is not a governmental mandatory retrofit standard then an older home does not have to be brought to current code. The inspector should explain this to his clients.

Last I do have to put some heat on the agents. Here in my trade area the two governmental mandatory retrofit standards are bracing the water heater and smoke detectors. KNOW THE LAW.

There is a certain type of state approved material to strap a water heater, Rope is not approved.
Smoke detectors are not required in every bedroom on homes built before 1992
unless more than $1,000.00 of permitted improvements have been done to the home. I had a 25 year veteran Broker try to make my selllers put smoke detectors in every room in the house. I felt funny having to show him the current regulation.

I have several inspectors I work with and trust. Here is the criteria that is important when helping buyers find a good home inspector.

Time in the business. How many inspections have they done?
Area they work? If they have been working your trade area for many years, then they will know the idiosyncrasies that are common with certain tracts, developments or builders.
Member of ASHI and CREIA?
References
Bonded and Insured (E&O)

DON’TS when hiring and inspector

He is the popular guy everyone uses at the office.
No construction background.
No Certification
Might have long experience but is from out of the area.

Please add to my List. I’d love to see what everyone has experienced!

Filed Under: Buyers, Sellers Tagged With: ASHI, CREA, home, homes, inspection, real estate, Simi Valley

Acoustic – Popcorn – Cottage Cheese – Ceiling Removal

May 11, 2008 By Ted Mackel 3 Comments

Acoustic – Popcorn – Cottage Cheese – Ceilings or whatever you want to label the typical spray on ceiling textures of years past, accomplished two tasks.

There was less finish plaster work to finish the drywall ceilings.
This texture help keep the echo chamber effect down in large rooms. Typical in the Simi Valley Homes built in the 1960s & 1970s many homes came without carpet, rather they came with asphalt or linoleum style floor tiles. A smooth ceiling under these conditions would have created the sound quality of a gymnasium.

The Acoustic ceiling has fallen out of favor as a interior design style and many homeowners are faced with the dilemma on how to remove the material safely and if they do, there is a worry about asbestos. Homeowners should really take the approach that the material needs to be tested no matter how old or new. The homeowner can take samples and send it in for testing. Precaution should be taken when taking samples.

Homeowners in California can remove acoustic ceilings containing asbestos on their own (make sure to verify this with your local building and safety department), but as soon as the homeowner hires some one to remove any of the asbestos ceiling, the homeowner must hire a license contractor that is registered with the state to handle asbestos removal.

If a homeowner chooses to remove the material on their own, a word of caution, this material is very dangerous and is extremely hazardous to your health and any anyone living in your home as soon as you disturb (remove) the material. The preferred method of wetting the material with water mixed with a small amount of dish soap can help but is not guaranteed to keep Asbestos fibers from becoming airborne.

Warning: Any of the comments to this blog regarding the removal of ceilings is for information purposes only. If you decide to remove an acoustic ceiling, you do so under your own risk and you are advised to seek profession advise and assistance. Nothing contained here on this blog is intended to encourage you to take part in this hazardous activity and you do so under your own free will.

Now that I have the disclaimer out of the way; if the tests comes back negative, still take precaution to use a respirator similar to the type in the picture and not the one that is crossed out. This is a messy job. Typically the material is removed by wetting the material with a garden mist sprayer, letting the water soak in and then using a 5″ drywall taping knife to scrape the material off. You will need to use plastic protective sheets taped to the walls and spread across the floor to keep this mess off the carpets and furniture. A disposable painting paper suit with hood will keep the material out of your hair and clothes.

I want to encourage comments to this blog post by both homeowners and contractors on this topic. Any tips and precautions especially. If you are a licensed contract registered to remove asbestos please make sure to post your contractors license number if you are soliciting business.

Filed Under: Home Improvement Tagged With: acoustic, Acoustic ceilings, ceiling, cottage cheese, cottage cheese ceilings, homes, popcorn, popcorn ceilings, removal, Simi Valley

The Perfect Real Estate Storm

May 10, 2008 By Ted Mackel 1 Comment

During the last several years we have lived through a Real Estate Boom, unlike most have ever seen. Simi Valley Housing prices were rising at double digit rates year by year. Homes sold with multiple offers in days and Sellers had the upper hand in 99% of the negotiations. Fast forward to today and most of us ask what happened?

George Clooney starred in the film The Perfect Storm (2000), which is the story of the crew and the disappearance of the fishing boat, the Andrea Gail. The Andrea Gail launches out and has an epic swordfish catch. These seasoned commercial fishing veterans navigated those seas before and were experienced in working in very hostile conditions. The difference this time as opposed to all the other times they went fishing was that this event could only happen under very particular conditions and the probability for these conditions to converge simultaneously was historically rare.

Alright where the Real Estate Connection? In 1991 three storm fronts converged and created the disastrous storm off Massachusetts that claimed the Andrea Gail. Similarly, over the last several years 4 conditions converged and hit Southern California that caused the real estate market to erupt into a storm. These four conditions were:

Low home prices
Good income to home price ratio (Affordability)
Low Interest rates
Loosening of Loan qualification requirements

Home Prices – The recession of the early 1990s combined with our local economy created very low home prices. When the Berlin Wall came down, defense contracts dried up which impacted Simi Valleyand the San Fernando Valley with many lost jobs. While this was happening the Northridge Earthquake hit further affecting the prices of homes in the San Fernando and Simi Valley areas. Simi Valley’s depressed Real Estate Market was created in part by these unique conditions.

Income to home price ratio – During the mid to late 1990s inflation was extremely low. The Consumer Price Index was moving at a snail’s pace. Jobs began to recover, incomes were increasing and our depressed real estate market made homes very affordable under these conditions.

Interest Rates – As the 1990s came to a close 30 year mortgage rates were dropping. As mortgages pushed to 7.0% and lower, a typical buyer’s monthly payment was now lower on larger loan amounts, which meant that buyers could pay more if competing with other buyers for the same property. Lower payments created opportunity which led to increasing competition for homes available for sale.

Loosening of Loan qualification requirements – Lenders began to change their qualification standards. 100% financing, fewer income documentation requirements, and lower credit requirements brought even more buyers to market.

The overall effect of the above conditions made money cheap which meant payments went farther. Cheap money created a large pool of buyers, a large enough pool that began to outweigh the available inventory. This cheap money and low inventory made bold buyers; bold enough to bid over asking prices for homes. As interest rates dropped into the 5.0% range and just about anyone could qualify for a loan; the prices of homes shot up at unprecedented double digit rates. Soon inexperienced people looked like real estate tycoons as they rode the wave. What was to come was inevitable; inevitable, because at some point, the potential buyer’s monthly payment to income ratio would eventually become unsustainable.

This unsustainable ratio is where we are today. The income to monthly payment ratio is no longer in sync. Affordability has been jeopardized today due to the rapid increase in home prices and the slower moving increase in incomes. Consider that the price of gasoline, eggs, milk and other goods has doubled in this time, the income-affordability ratio is impacted to a greater extent.

Additionally the four conditions of The Perfect Real Estate Storm resulted in over 20% of all buyers using 100% financing. In the first time home buyer category, 40% of the purchases were with 100% financing. This made sense to many borrowers as they figured their home would increase in value as much as 20% and they could either sell and capture a profit or refinance into a better loan with this new gifted equity.

Almost in reverse order outlined above, lending requirements are no longer loose, but very strict. Many buyers who once qualified for loans (they should have never been qualified for) have been knocked out of the market.

Considering most first time buyers do not have large reserves or down payments, these tighter lending practices will make it more difficult for buyers to obtain financing. Even in the move-up market, sellers in 2006 and 2007 do not have enough equity from the sale of their existing home to afford the down payment on a move up without having to look to savings to make up the difference. Keep in mind that the U.S. Commerce Department’s Bureau of Economic Analysis dished out some discouraging news recently, saying that Americans spent more than they earned in 2005 more specifically a negative savings rate of 0.5 percent for the year. This is the first time that this has happened since the Great Depression.

The low savings rate and the lower equity available for move-up buyers were resulting in Jumbo mortgages on almost 50% of every purchase. In areas like Simi Valley, FHA lending has increased the conforming rate limit to $729,00 but with only a 3% down payment required sellers now have to be concerned that the monthly payments on these larger mortgages are affordable to their prospective buyers.

Those waiting around for the fast paced biding wars of a few years ago will be in for a long wait. The Bear Sterns collapse is an indicator that this is not over just yet.

So why all the bad news? Well this is not bad news, I’m giving you the facts and if you plan on selling your home in these market conditions you need to be armed with the facts so you can make the proper decisions. The question I have is who will you choose to be the captian in your wheelhouse during these turbulent times.?

Filed Under: Buyers, Personal Ramblings, Sellers Tagged With: andrea gail, george clooney, homes, housing, real estate, Simi Valley, The Perfectstorm

Simi Valley Real Estate Homes Sales update

May 10, 2008 By Ted Mackel 1 Comment

This report is an update report of all the closed sales of single family dettached homes for Simi Valley. The good news is that we are definately seeing more units close as this trend started in April and is continuing into May; however the the Average Selling Price is dropping and dropped significantly over the last two weeks from $585k to $550K.

Total Solds – Single Family Detached as of 5-8-08		267	% of Total
Closed Sales	Avg. SP $550,696 and under	225	84%
Total Homes in Escrow		215
In Escrow Back up or 1st right contingentices	Avg SP $604,000 and under	39	18%
In Escrow	Avg SP $519,000 and under	55	26%
SubTotal In Escrow Short Sales or Forclosures		64
In Escrow – Short Sales or Foreclosures BO or 1stR	Avg SP $508,000 and under	17	29%
In Escrow – Short Sales or Foreclosures	Avg SP $466,000 and under	33	52%

THE BULK OF THE SALES ACTIVITY IS IN THE BELOW $600,000 MARKET.

The largest buyer pool for Simi Valley Real Estate Homes is clearly shown in the numbers above. If your home is in a value range above these homes, PRICING & purpose MARKETING is critical as there are fewer buyers.

Filed Under: Market Updates Tagged With: Escrow, homes, real estate, Sales, Simi Valley