Simi Valley

Garage Conversions – How they might affect a home buyer or seller

April 16, 2012 By Ted Mackel Leave a Comment

Garage Conversion Simi Valley Real Estate

Yellow lines denote where the main Garage Door was prior to conversion, this one was not permitted

Garage Conversions. In Simi Valley Garage Conversions are pretty common; not that every one has one, but I run into them often. It is understandable why people convert Garage space to more living space, but these conversions seldom comply with local building codes. Here are the most common issues involving a garage conversion.

Setback – Local building codes require a set back from the street to the front of the house. Twenty-five or more fee may be required. This setback will make it next to impossible to put covered replacement parking in front of the garage.

Required covered parking – Local codes typically require covered parking. This covered parking may allow only a carport style cover, but this structure needs to comply with setback requirements.

Water Heaters and Laundry Hookups – Many garages are the location for the water heater, laundry hook ups and even the Heating and Air Conditions systems. Because these systems can use natural gas, local building codes will specifically dictate how these systems are properly ventilated when installed in living space areas.

Heat – The converted garage will require heat as per local building codes.

Converted Garages that are not permitted may not receive any value consideration on an Appraisal. So if a seller perceives value with the conversion over surrounding homes, a buyer may not be able to get a loan to cover an increase sales price due to the garage conversion.

While this may not be an exhaustive list of all the issues a buyer or seller should consider, these are the more common issues. The city of Simi Valley Building & Safety Department is very accessible and easy to visit for details about permits on a property and they can answer questions right over the counter about the requirement to convert a garage.

Related Articles:

The Appraisal Bottleneck

Top 5 Upgrades

Home Staging a No Brainer

Filed Under: Buyers, Sellers Tagged With: building codes, garage conversion, setback, Simi Valley

Open House Myths – Concerns for Simi Valley Home Sellers

April 13, 2012 By Ted Mackel Leave a Comment

The open house maybe the most misunderstood practice in home selling business. Simi Valley Home Sellers generally have no idea the risks they have signed themselves up for when demanding or requesting their listing agent provide open houses as part of the marketing plan. Some may say

“Did Ted just say there are a risks to having an Open house?”

Yes I did!

#1 – Just about every real estate training manual I have seen in the real estate business clearly states that the open house is really not about selling the house you have open, but rather it is about gaining new clients. Sure there is always going to be that one real estate agent who says they have sold the house they held open, but in statistical numbers it is a very rare occasion that this is happening. Real estate agents are trained that the people who visit open houses seldom buy that home, but might make good prospects for other homes. So while you think your agent is extolling the virtues of your Simi Valley home, in reality the buyer that came to visit is in your home learning about other homes that better match their needs, because the buyer realized when they got to your home, your home did not fit their needs.

#2 – The people who visit your home through an open house are the lowest quality prospect you can possibly go after to purchase your home. What do I mean by lowest quality? If you rank all the potential buyers for your Simi Valley home, people that stumble in after following the open house sign trail would be a ‘D’ or ‘F’ rating and buyers that come to your house with a Real Estate Agent would be rated as a ‘A’ prospect. Why? Lets look at the following:

Those that come off the street have no idea if the house at the end of the open house sign trail is going to match what they are looking for in size, bedroom, bath count, price, etc. Most of the time your house does not.
Those that come off the street may not be qualified to get a loan to make a purchase, yet they are shopping for a home blindly, traveling solo they are not at the point to be able to write an offer if they see a home they like.
Those that come off the street may not be interested in buying a home, but are either nosy people or even people with criminal intent. Prescription drugs are a big target for these kinds of thieves, some real estate agents have had purses, computers, cell phones stolen while they hold open houses. There have been reports of real estate agents how have been physically assaulted and even raped at open houses. Remember, you the home owner, are allowing signs pointing to your home, to attract anyone one off the street in your home. You would not do this by yourself, real estate agents are not trained security experts nor law enforcement. Professional thieves and con artists can gain the upper hand in an open house situation faster than you can imagine.

Lets look at the difference in buyers that come to your home with a real estate agent.

First and foremost, these buyers are much further along in the decision process and the commitment process. By the time they have engaged representation, they are ready to write an offer when they view the home that meets their needs.
Their finances have been most likely pre-qualified. A good seasoned real estate agent is not going to spend time showing homes to people who cannot get a loan or have the proper finances to make a purchase.
A real estate agent’s pay only comes from a commission paid when the sale of a house is finalized. The real estate agent is highly motivated to get qualified buyers into homes that those buyers will act on and write offers.
The real estate agent and the buyer have “narrowed down” homes the buyer wants to see on a short list, meaning your home is now a much higher candidate for the buyer.

Yes you can have an open house. Yes a buyer for your home might show up at your open house, but when looking at the statistics on how often this happen, you really need to weigh out the risks. Do you want to open your house like a local free public attraction, all in a very low percentage effort to attract a buyer? If your answer is yes, hide your medications, valuables, portable electronics and understand if your open house is visited by a profession thief, they know all the common hiding places and if they are determined, they will succeed.

Think even further that many pictures of your home have been syndicated across many many websites. There is a ton of information about your home posted on the internet when you market it for sale. It does not take much for those people how are up to no good to utilize this information and plan their next caper. So weigh out the risk before you plan your next open house. Ask yourself if you want focus efforts into attracting agents with well qualified buyers or total strangers who may or may not be qualified or ready to make a purchase.

Filed Under: Sellers Tagged With: agent, home for sale, open house, real estate, Simi Valley

Simi Valley Free Tree Replacement and Wood Chip Programs

April 12, 2012 By Ted Mackel Leave a Comment

If you live in the City of Simi Valley and need wood chips for your yards, the City of Simi Valley’s Free Wood Chip Program is just a phone call away. By calling (805) 583-6400 or sending an email to PW-WorkOrder@simivalley.org, you can request either an approximate 8 cubic yard load or 16 cubic yard load. The City will dump the load on your property, usually on your driveway at no charge. The Wood Chip-mulch mix consists of leaves, twigs and wood chips.

If you have trees in the parkway in front of your home, damaged, diseased or missing trees can be replaced under the Self-Help Street Tree Replacement Program. The parkway in front of your home needs to be at least 5 feet wide to qualify. You, the home owner will need to participate in the program under the following terms:

Be willing to plant a 15-gallon tree(s) (materials as needed will also be provided).
Keep the tree(s) watered on a regular basis (approximately 10-20 gallons of water per week).
Keep grass and weeds away from the base of the tree(s) and water basin area. Be careful not to use tools that would harm the tree bark.
Fertilize tree(s) on a regular basis.
Protect tree(s) from vandalism.
Agree to plant the tree(s) within the parkway planting area in front of your home and agree to care for the tree(s) in perpetuity as outlined above

To apply for a tree, you can call call (805) 583-6400 or E-mail the City of Simi Valley Public Works department at PW-WorkOrder@simivalley.org.

Filed Under: Home Improvement, Sellers, Simi Valley News Tagged With: public works, Simi Valley, tree replacement, wood chip

Improved Foreclosure News – Time To Read Carefully

April 11, 2012 By Ted Mackel Leave a Comment

RealtyTrac recently reported that 1st quarter 2012 shows the lowest foreclosure filing activity since 2007. This news sent waves of cheerleaders spreading the news of improving real estate market conditions. Recently and more locally, Simi Valley and many parts of Southern California are seeing reduced inventory. This reduced inventory is giving the appearance that market conditions are improving. Low interest rates and reduced pricing are adding to this very rosy picture, but the underlying details cannot be ignored.

In RealtyTrac’s April 5, 2012 Forclosure Market Report, Brandon Moore, chief executive officer of RealtyTrac stated:

“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated, there are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March. The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity.”

As I mentioned in my Simi Valley March 2012 Market Report, Wells Fargo projects 2 million homes making up the shadow inventory that are up to 90 days behind in payment, with no filings or proceeding against those properties. Wells also projected another 6% decline in pricing for 2012. I am not sure that following the filing activity is going to do anything other than create more frustration. In my dealings with Short Sales over the last 3 years, many of the people in these properties are many months behind before starting the foreclosure process and that process takes another 4 months to complete. Understanding that the banks are trying to keep from flooding the market with foreclosures and approving more Short Sales, reports on filings can be misleading.

We still have a significant way to go before any real recovery can be claimed. The process is going slow and I do not see anyway the banks or the government will favor any plan to speed it up. Realtytrac’s report seems to support that stating that the average time for a foreclosure in California is currently trending at 350 days.

RealtyTrac’s report included the following for California:

Although California default activity increased from February to March — up 14 percent — the state’s overall foreclosure activity in the first quarter was down on a quarterly and annual basis. The California foreclosure rate still ranked second highest among all states in the first quarter, with one in every 103 housing units with a foreclosure filing.

This all is good new for home buyers and any chance of a run up in prices will be held in check by the distressed market. This is a great time to take advantage of low interest rates and prices that are at all time affordability levels.

Filed Under: Real Estate News Tagged With: foreclosure, realtytrac, Simi Valley, southern california

One of Two Rumored New Simi Valley Walmart Locations Finally Disclosed

April 10, 2012 By Ted Mackel Leave a Comment

simi valley mervyns and walmart In a surprising disclosure, Simi Valley Councilman Glen Becerra announced that Walmart is indeed the Tenant that will occupy the vacant Mervyn’s building at the corner of Sycamore and Cochran. In February I wrote about the two new locations; both the Mervyn’s and the vacant Von’s on Tapo Street. (see: 3 Walmarts in Simi Valley?)

The announcement at the very tail end of Monday’s Simi Valley City Council Meeting by Councilman Glen Becerra, leaves more questions and concerns, than it helps clear the air. In my February article I was very clear, that I was not against Walmart occupying this location. The old Mervyn’s building is properly zoned for this use. Public outcry could not stop Walmart, as Walmart does not need approvals to occupy this building. Some of my concerns are the following:

Why all the secrecy? Assistant city manager Gabler claims he was sworn to secrecy in interview with the Ventura County Star. Who swore him to secrecy and why was that necessary?

Why are the exterior changes to Mervyns not being sent to the planning commission? A great example is that cell phone antenna locations that are put on top of existing office buildings are required to go through lengthy approval process with the city and must go in front of the planning commission. Yes I know that the CUP triggers a planing commission review, but the wailing and moaning that goes on over the changes to the roof line of the buildings seems to be the bigger deal out of those projects. The modifications to the tops of these office buildings are infinitesimal compared to the exterior changes we will see on the Mervyn’s building. It would have been nice for the public to have had some input on the updating of that shopping center as Sycamore and Cochran hosts “The Simi Valley Business District”. The Sales Tax Revenue and the Jobs at Sycamore and Cochran that the City has benefited from demands the city include the public in these kinds of projects. Even if the developer for the Mervyn’s building refused to name the new tenant (Walmart), the exterior modifications to the building and the shopping center that will be coming as a result of the new tenant, deserved public discussion and input.

How convenient that the disclosure was made after the appeal period expired to bring this issue in front of the planning commission. Kudos goes to Simi Valley Planning Commissioner Bibb for being the lone voice on this issue. From the outside this looks very calculated between the City Council and City Staff. The fact that the other four Simi Valley planning commissioners remained silent and did not help with the appeal may indicate that the city does not understand the importance of keeping the public informed and opening the discussion for public comment. The Simi Valley City Council has a great track record of playing Father Knows Best and the voters got tired of it and voted in two new council members to shake up the council. Lets hope they look back on the poor handling of this Mervyn’s building and get it through their heads that open public discussion will be rewarded.

I don’t agree with Simi Valley Councilman Becerra’s postion that having staff explain how the process is working would be a sufficient explanation why the public was left out of the discussion on the changes to the Mervyn’s building and shopping center. Again going back to my example, last week Verzion was in front of the planning commission because they are going to change out their antenna on a building and raise roof screening 1 foot – in comparison, it makes no sense why the planning staff would handle this Walmart internally and exclude the planning commission, thus shutting down any public input.

Councilman Becerra lamented that Planning Commissioner Bibb could not get support from another Planning commissioner for an appeal, yet Councilman Becerra neglects to explain if he was so concerned, why didn’t he appeal it from the Council and get the project in front of the Planning Commission.

One would think that after watching the train wreck of how the last City Council under Mayor Miller tried to keep the landfill expansion out of the public discussion, that it’s a no brainer that a major retail location in the center of Simi Valley should be up for public input and comment on the exterior changes to the building and shopping Center.

One of the more amusing comments by Councilman Becerra was that he did not think Simi Valley was a two Walmart Town. Is that because Simi Valley is going to be a 3 Walmart town? Councilman Becerra has his share of the blame for Simi Valley becoming a Two Target and Three Walmart Town; past decisions of prior councils set the ball in motion for this to happen, the question remains if Simi Valley can learn from it’s mistakes on the dais. History always provides a lesson as we had a City Council member back in the 1980s that stated we needed “Low Traffic Generators” for businesses in Simi Valley. I am not sure if that disastrous philosophical view has ever left our city. We have built our retail hopes on attracting shoppers from outside Simi Valley and have rejected the needed internal growth that would have sustained our retailers and attracted new employers. Low traffic generators don’t bring quality jobs and only provide anemic sales tax revenues. So far Simi Valley batting 1000 in both those categories.

Filed Under: Simi Valley News Tagged With: City Council, councilman becerra, Mervyn's, planning commisioner, Planning Commisioner Bibb, planning department, Simi Valley, staff, Walmart

Carbon Monoxide Alarms – Do you have them in your home?

April 9, 2012 By Ted Mackel Leave a Comment

Beginning July 1, 2011, the Carbon Monoxide Poisoning Prevention Act brought by California Senate Bill – SB 183 now requires all single-family homes with an attached garage or a fossil fuel source to install carbon monoxide alarms by July 1, 2011. In Simi Valley almost every home I have been in, has a natural gas furnace in the house or attic and most homes have gas appliances in the kitchen. These gas appliances and the furnace trigger the installation of the carbon monoxide detectors.

The alarms are required to be installed outside of each sleeping area and at least one per floor of living space. The mounting height according to the National Fire Protection Association (NFPA 720), appears to not effect performance. I have read that density of carbon monoxide is similar to that of air at room temperature, and carbon monoxide generally mixes readily with air. Considering that the CO alarms come in a plug in style, battery operated or hard wire installation mounting height may not be an issue. However, some firemen I have spoke to recommend a lower installation height rather than up on the ceiling. You can buy a combination smoke alarm/carbon monoxide alarm, but plug in CO alarms are readily available and require no mounting hardware. Smoke alarms are still required, this new law does not change the smoke alarm requirements. For those who want to be extra cautious you can place a CO alarm in each bedroom.

Filed Under: Buyers, Home Improvement, Home Safety, Sellers Tagged With: Carbon Monoxide Detectors, CO, Simi Valley, smoke alarms

The Difference Between Updating & Remodeling your Simi Valley Home

April 8, 2012 By Ted Mackel Leave a Comment

The primary reason anyone should have when improving their personal residence should be for their own enjoyment and comfort factor. The side effect or secondary benefit of adding to the comfort factor of your own Simi Valley home, is that those improvements could add value to your home if at some point you decide to sell. These improvements have a much shorter lifespan than most homeowners understand.

As of September 1, 2011 the new Uniform Mortgage Data Program® (UMDP) has gone into affect to provide common set of requirements for appraisal and loan delivery data. This program was established by Fannie Mae and Freddie Mac. I have included some of the definitions and ratings to give you a better idea how the GSEs are trying to create more uniform standards for appraisals.

Not updated - Little or no updating or modernization. This description includes, but is not limited to, new homes. Residential properties 15 years of age or less often reflect the original condition with no updating, if no major components have been replaced or upgraded. Those over 15 years of age are also considered not updated if the appliances, fixtures, and finishes are predominantly dated. An area that is not updated may still be well-maintained and fully functional, and this rating does not necessarily imply deferred maintenance or physical functional deterioration.

Updated - The area of the home has been modified to meet current market expectations. These modifications are limited in terms of both scope and cost. An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not include significant alterations to the existing structure.

Remodeled - Significant finish and or structural changes have been made to increase utility and appeal through complete replacement and/or expansion. The remodeled area reflects fundamental changes that include multiple alterations. These alterations may include some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation plumbing/ gas fixtures/ appliances, significant structural alterations (relocating walls, and or the addition of square footage). This would include a complete gutting and rebuild.

Below are a sample of a few of the ratings and definitions to give you an idea what this may mean to the value of your home.

Condition Ratings and Definitions (C1-C6)

C1 – The improvements have been very recently constructed and have not been previously occupied. The entire structure and all components are new and the dwelling features no physical depreciation.

C2 - The improvements No deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category either are almost new or have been recently completed or renovated and are in similar condition to new construction.

Quality Ratings and Definitions (Q1-Q6)

Q4 – Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standards or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Material, workmanship, finish and equipment are of stock or builder grade and may feature some upgrades.

Q5 - Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. The dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.

The above sampling was created by Fannie Mae and Freddie Mac and any loan underwritten with Fannie and Freddie guidelines is going to be appraised with this new system. So if you are planing updating or remodeling, keep this in mind so you can maximize your investment.

Filed Under: Buyers, Home Improvement, Sellers Tagged With: remodel, remodeling, Simi Valley, upgrades

Top 5 Upgrades Simi Valley Home Buyers look for in a Purchase

April 7, 2012 By Ted Mackel 1 Comment

Simi Valley home owners considering selling their home who would like to know what upgrades will make the difference when it comes time to sell, should look at the following list to understand what kind of competition they may be up against in the market place. Home owners not looking to sell, but who are trying to figure out where to put their money should look at the following list as a good place to start:

1. Upgraded Kitchen – This tops the list. Don’t start anywhere else in your house before you tackle the kitchen. The home remodeling channels, cooking channels, and the numerous infomercials for kitchen products are enough indicators that the kitchen the focal point of any house. A full kitchen remodel can run from $15,000 to $100,000 depending on the size and what people desire. If you have the ability to do work yourself and hire subcontractors then the saving can be huge. Buyer will know the difference between new cabinets and old cabinets dressed up with new doors and paint. Old outdated tile, vinyl flooring and old appliances can make the entire house feel tired and detract form other updates that may have been done.

2. Master Bathroom – This is where the new home owner is going to spend their mornings getting ready for the day and at night getting ready for bed. Before putting money into a hall bathroom or guest bathroom, the master comes first. As little as $5,000 can go a long way.

3. Windows – Simi Valley has plenty of homes built in the 1970s and 1960s with single pane aluminum framed windows. Old windows shout loudly to potential home buyers that your home is going to be expensive to keep warm in the winter and cool in the summer. Simi Valley can get windy and older windows also allow plenty of dust in your home in the high winds. A standard bedroom window, vinyl-dual pane with low-E glazing from Home Depot can run as low as $400 for a retrofit window. There are a ton of do it yourself videos on Youtube that show how the retrofit windows are measured, ordered and installed that you might be able to handle a window upgrade on your own.

4. Heating and Air Conditioning System – Much like the problem with old windows in Simi Valley the HVAC system on your home is important. AIR CONDITIONING is not optional. If you dont have it, you home is going to suffer in the market place, and when you finally do get an offer, it is going to be a big negotiating point with the potential buyer.

Why? If you have an old furnace, good luck finding a reputable HVAC contract that is willing to risk placing a new Air-conditioning system on an old inefficient furnace. The point really is that California has minimum energy standards and you may not be able to keep your old furnace. A complete system installed in Simi Valley for heating and air condition on a 1500 – 2000 square foot home is going to run around the $8000 range. An important issue to consider on homes built before 1980 is that the ducting system in the attic is most likely going to contain asbestos with will keep the the price of the system upgrade up around that $8000 price tag.

5. Roof – The majority of homes selling in the hast 3 years are in neighborhoods where composition shingle roofs dominate the material used. This style roof will last 20-30 years and some simple maintenance along the way can gain the longer lifespan. The ridge caps on this system will fail long before the field shingles. replacing the ridge caps will make the whole roof look better and help prolong the life of the field shingles. When you have the ridge caps replaces have your roofing contractor tune up the whole roofing system by resealing around all penetrations and spay painting vent pipes and roof vents with a matching color. One of the common problems I have run into with cement tile roofs with leaks is cracked tiles and failing underlayment. A roofing contractor can remove the tiles carefully and replace the underlayment paper. IMPRORTANT NOTICE: Anytime you have your roof replaced or in the case of replacing the underlayment in a tile roof replace any wood damaged by dryrot, insects and/or termites – it will be less costly in the long run. If you think you have termites, get a termite company out for treatment.

Look for my follow-up article “The difference between upgrades and a remodel” comming soon

Filed Under: Buyers, Home Improvement, Money matters, Sellers Tagged With: Home Buyers, Home Sellers, remodel, Simi Valley, upgrades

The Appraisal Bottleneck Adding a Twist to our Current Simi Valley Real Estate Market

April 5, 2012 By Ted Mackel 1 Comment

Housing inventory has plummeted to 1.75 to 2.25 months supply for Simi Valley. This super tight market condition has real estate agents excited, home sellers excited and is creating stressed out buyers. While sellers have become more reluctant to put their homes on the market over the last couple months; the same pool of buyers during this time frame, having fewer homes to choose from, are not ready to drive prices up and the Appraisal Value is one of the key reasons that will keep this rally in check.

Simi Valley saw in the market run up between 2000 and 2007, Appraisals that were brought in over value all the time; so much that part of the responsibility of the meltdown was related to those jacked-up appraisals. Dodd-Frank reigned in the appraisers and in some cases went too far, but as indicated by Well’s Fargo’s 2012 outlook on housing, with 2 million homes in serious default and with the large amount of homes sold as short sales, underwriting guidelines for purchase loans will single out any attempt to jack-up prices with appraisals again.

Another factor for the Simi Valley housing market is that we have seen on average a 10% (even more in some tracts) decline in selling price over the last year and those declines were continuing in to February of this year. The same Wells Fargo report is projects an addition 6% decline in pricing for 2012. Since that is an over all average for the country we need to remember markets are local and sometimes hyper-local. Could we see some bounce up in pricing for Simi Valley home sales in April and May? It is likely, but more likely for homes in top condition. Homes with deferred maintenance and lacking core components will continue to significantly lag their updated and upgraded counter parts. Long gone are the days where (as in 2005) buyers ignored significant issues and competed for average homes in bidding wars.

Sellers facing the current market conditions, trying to get the highest price possible for their home, now face a tougher appraisal process and more cautious buyers. Home Sellers trying to get a handle on an appraisal value for their home should consider the following:

1. Sites like Zillow and Trulia cannot give you an accurate value, the algorithms that are used to create their estimated values are limited by many factors that will make an accurate assessment difficult. These values can be a starting point, but only an appraisal attached to a purchase contract will give a justifiable value.

2. Draw a one mile radius around your home. That is the limit. Homes in that radius are going to be used as the bench mark for your home.

3. Age, Size, Bedrooms and Baths – An appraiser cannot skip over a comp. If your home is 3 bedrooms, 40 years old and 1500 square feet and there are 15 closed sales in your one mile radius with similar characteristics, the appraiser cannot skip over those, pick a 4 bedroom and adjust your home value.

4. 90 days may be as far as the underwriter will allow the appraiser to go out for closed sales. That number in the past was 6 months and in some cases may still be 4 months, but again if there are enough homes with similar characteristics in the one mile radius the appraiser is going to use the most recent sales and older comps are given less weight in determining value.

5. Your home may have upgrades. Your home may be the nicest in the tract, but increases for those upgrades are not granted liberally by appraisers and the value will certainly not be moved up by the replacement value. You will receive a favorable appraisal compared to the surrounding homes, but not an unrealistic appraisal.

A tight inventory tilts the advantage in negotiations to the Seller, but the Appraisal process is going to be the bottleneck on any properties with multiple offers. Sure we will see a few properties where the buyer will bring in additional money over the appraised value, but as we are seeing in the majority of these multiple offers buyers are responding to counter offers cautiously.

Filed Under: Buyers, Sellers Tagged With: appraisals, appraisers, comp, Home Buyers, Home Sellers, Simi Valley, Trulia, Zillow

FHA Loans are about to get more expensive

April 4, 2012 By Ted Mackel Leave a Comment

On April 9th the Federal Housing Administration announced that the cost of mortgage insurance premiums are going up. This will affect home buyers in the following ways:

An increase from 1% to 1.75% in the upfront mortgage insurance premium
A .10% increase in the annual mortgage insurance premium.
On June 11, 2012 loans exceeding $625,000 will see a .25% annual mortgage insurance premium increase.

An example would be if a Simi Valley home buyer was purchasing a home with 3.5% down and financing 96.5% with an FHA backed loan, that buyer would pay a 1.75% of the loan amount as upfront mortgage insurance premium. This would be part of the buyer’s closing costs. The Buyer would also be charged an annual premium at 1.25% (this fee is higher for FHA Loans over $625k after 6/11/12) for all FHA case numbers assigned after April 9th, 2012. If the buyer is borrowing 95% or less of the purchase price that annual premium is 1.2%.

Filed Under: Buyers Tagged With: Federal Housing Administration, fha, Home Buyer, Mortgage insurance, Simi Valley