South Orange County Blog from Bob Phillips

3 Common First Time Home Buyer Mistakes Can Cost Thousands

First Time Home Buyer TipsBuying real estate for the first time is a very exciting step in life.

It is likely to be one of the biggest financial commitments that you make, so it’s very important to navigate the purchasing process wisely.

Many first-time home buyers make rookie mistakes that bring on negative consequences and a lot of frustration.

Outlined below are common errors home buyers make, so you can learn from their missteps and avoid them yourself.

1. Buying More Than What You Can Truly Afford

Just because the bank says that you qualify a certain amount for a mortgage doesn’t mean that you have to choose a house at the very top of this price range.

Many people get carried away and buy the most expensive house that they qualify for.

If something unexpected happens, they may find it difficult to keep up with their monthly mortgage payments later on.

Remember that you will also have student loan payments, vehicle costs, credit card bills, health insurance, groceries, retirement savings and other expenses, so make sure that your mortgage payments will comfortably fit within your budget.

2. Failing To Get A Home Inspection

Before buying a house, you should always have a professional inspection done. Not doing so is a big mistake.

You don’t want to get stuck with hidden damage that could saddle you with the expense of ongoing repairs.

Hiring a professional to assess the home’s condition is absolutely essential before making your final decision.

3. Disregarding Your Future

When you are buying South Orange County real estate, don’t just think about how the home will work for you in the immediate future.

Also consider what your needs will be five, ten or even 20 years from now.

Find out the development plans for the neighborhood.

Look for reputable schools if you intend to start a family.

And consider whether the street’s home values are likely to increase or decline in the future.

Your Next Steps

Don’t let the home-buying process overwhelm you!

Learn from these common first-time home buyers’ mistakes, so you can avoid them.

A great next step toward planning for your first home purchase is to consult with a trusted, licensed mortgage professional who is trained in providing the best advice on how a new home will affect your budget.

I have a couple of recommendations for just such a mortgage professional. I also have an excellent recommendation for a Realtor who works well with all kinds of buyers, including those buying for their very first time. Shoot me an email or give me a call.

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7 Quick And Inexpensive Ways You Can Improve Your Home’s Curb Appeal

Posted in Existing Home Sales, Home How To, Home Selling, Home Values, Real estate, Real Estate Tips by southorangecounty on March 28, 2013

Improve Your Curb Appeal For Better Sales Results

Have you ever heard the saying, “You never get a second chance for a first impression?”

If you’re going to have a South Orange County home for sale, it is important to appreciate the significance a first impression has on your potential buyer.

When buyers drive up to your property and take their first look at your home, they will instantly be forming ideas about your house and how it might fit for their family.

When you are trying to entice a buyer to make an offer on your house, you must consider the curb appeal – how your house looks from the outside, or while standing on the curb – of your home for sale.

In fact, some surveys show that curb appeal can affect a buyer’s decision even more than price or square footage.

Below are seven simple and inexpensive things you can do to improve your home’s curb appeal.

  1. Plant a few shrubs or decorative flowers in the front yard to bring color to your lawn.
  2. Is your front door looking a little worse for wear? Give it a fresh coat of paint or replace it with a new one.
  3. Keep your grass well watered so it appears green and lush.
  4. Remove anything your pet leaves lying around, such as bones, chew toys or droppings.
  5. Take a look at your gutters. If they look damaged or are hanging loose from the roof, be sure to have them repaired before showing the house.
  6. Clean up your flowerbeds by removing weeds and trimming overgrown plants.
  7. Add a bench, a garden ornament or a couple of beautiful pots to make your front yard more attractive.

These are just a few ways you can improve the curb appeal of your home for sale and make a great first impression on buyers.

A good next step for preparing your home for sale is inviting a trusted, local real estate professional to your home for a preview. In South Orange County, with over 36 year’s local experience, I would be such a choice.

An agents experience in the real estate market can help you plan your strategy to get top-dollar for your home and help you improve the curb appeal at the same time.  If you’re thinking of selling your house, shoot me an email, or give me a call, and let’s talk about the possibilities.

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Rising Sales Prices Are Excellent News For Homeowners Across America

Posted in Consumer Confidence, Home Selling, Home Values, Housing Analysis, Pending Home Sales, Real estate by southorangecounty on March 27, 2013

Existing Home Sales Up March 2013

The National Association of REALTORS® released its monthly Existing Home Sales report on March 21 and gave investors and home sellers something to cheer about.

While February sales of existing homes didn’t meet investor forecasts of 5.00 million homes sold on a seasonally adjusted annual basis, the actual number of existing (previously owned) homes came close at 4.98 million homes sold.

This number surpassed January’s revised reading of 4.94 million homes sold by 0.8 percent.

Sales of existing homes comprise approximately 85 to 90 percent of homes sold in the U.S.

Investors watch existing home sales for evaluating housing markets and short-term economic trends related to home purchases such as goods and services associated with home ownership.

Existing Home Sales Up For 20 Consecutive Months

Existing home sales have increased by 10.2 percent as compared to 4.52 million existing home sales for February 2012, and have increased for 20 consecutive months.

A short supply of homes available for sale and better job prospects are creating more demand for homes.

In February, available homes increased to a 4.7 month supply of homes, which is up from January’s 4.3 month supply of available homes, the lowest number since May of 2005.

With that said, current listed inventory of homes is 19.2 percent below last year’s 6.4 month supply of available homes.

Increasing demand for existing homes also suggests growing competition between buyers for available homes.

Mortgage Rates Remain Near Historic Lows Increasing Affordability For Home Buyers

Getting pre-approved for a mortgage before making an offer on a South Orange County home can help buyers, as sellers know that pre-approved buyers won’t have potential delays related to the mortgage approval process.

The National Association of REALTORS® reports that the national median selling price for existing homes of all types was $173,600, which is up 11.6 percent year-over-year.

This suggests that potential homebuyers may want to act now as mortgage rates typically increase along with home prices.

Regional Average Selling Prices Show Positive Results For February

  • Northeast: The median selling price was $238,800, 7.6 percent higher than for February 2012.
  • Midwest: The median selling price was $129,900, which is 7.7 percent above the median selling price in February 2012.
  • South: The median selling price was $150,500. This represents a 9.3 percent increase since February 2012.
  • West: The median selling price was $237,700, a substantial increase of 22.7 percent over February 2012.

Multiple buyer bidding and limited inventory choices are fueling higher prices for existing homes, particularly in the West.

This is the strongest year-to-year rate of growth since November 2005, when existing home prices had increased by 12.9 percent as compared to the previous 12 months.

Another advantage for today’s potential sellers is that the Realtors they hire should be more negotiable than usual, as new housing inventory is in extraordinary demand.

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What’s Ahead For Mortgage Rates This Week – March 25th, 2013

Posted in mortgage rates by southorangecounty on March 25, 2013

What's Ahead For Interest Rates March 25 2013Last week’s economic news was dominated by events in Cyprus and the Federal Open Market Committee (FOMC) meeting on Wednesday.

Mortgage rates fell last Monday as investors became concerned over news that a Cyprus bank bailout was in the works.

Federal Reserve Holding Course With Mortgage Backed Security Purchases

The FOMC met on Wednesday and in a press release after the meeting, noted that no immediate changes to the present economic easing program would be made.

The Fed officers will continue to monitor the nation’s economy, and are eventually expected to implement a gradual reduction of their monthly bond and mortgage backed security (MBS) purchases when the nation’s economy has recovered sufficiently.

The Fed currently purchases $85 billion in bonds and MBS in an effort to keep long term interest rates low.

If the Fed should reduce its purchases, mortgage rates would be likely to rise. 

Investors viewed the Fed’s announcement as positive news and bond prices fell, which caused mortgage rates to rise, but mortgage rates finished the week slightly lower than last week.

Continuing Economic Turmoil In Europe May Encourage Lower US Mortgage Rates

In global news, the European Union (EU) threatened to withdraw its promise of aid to Cyprus banks if they cannot raise funds required as a condition of the bailout.

A one-time tax on bank deposits was suggested, but ultimately rejected as Cypriots nixed the idea of taxing their savings, even on a one-time basis.

Cyprus banks provide a tax shelter for foreign citizens, and the banking system in Cyprus is disproportionately large compared to its size.

Failure of this banking system could create serious repercussions for global financial markets.

The EU has set today, March 25 as a deadline for Cyprus to find the funding required for the bailout to be given.

Investors could seek safe haven in bonds if the EU withdraws its offer of a bailout to Cyprus banks, which usually creates downward pressure on mortgage rates.

If the EU offers Cyprus banks a bailout, then investors may respond positively and buy more stocks which would likely cause mortgage rates to rise.

Upcoming Economic Reports Could Affect Mortgage Rates

Other economic news scheduled for next week includes Treasury Auctions on Tuesday, Wednesday and Thursday.

The Department of Commerce issues its monthly New Home Sales report on Tuesday.

This report measures sales of new privately owned single family homes, and indicates buyer interest in new homes and also future demand for goods and services used by homeowners.


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28,000 Orange County Homeowners Are No Longer Underwater

28,000 Orange County Homeowners Are No Longer Underwater

By Jeff Collins of the Orange County Register, March 19th, 2013

Rising home values pushed nearly 28,000 Orange County homeowners “above water” last year, meaning their homes no longer are worth less than the amount owed on their mortgages, CoreLogic reported Tuesday.


The number of underwater homeowners fell to 15.3 percent of all homes with a mortgage versus 20.2 percent in the fourth quarter of 2011. 

Overall, 84,524 Orange County homeowners owed more for their homes than they were worth in the fourth quarter of last year, the Irvine-based property-data firm said. That’s 27,756 fewer than in the fourth quarter of 2011.

Nationwide, 1.7 million U.S. homeowners moved out of negative equity during 2012. CoreLogic reported that 10.4 million – or 21.5 percent of borrowers – were underwater. That’s down from 10.6 million, or 22 percent in the fourth quarter of 2011.

“The scourge of negative equity continues to recede across the country,” said Anand Nallathambi, president and CEO of CoreLogic. “With fewer borrowers underwater, the fundamentals underpinning the housing market will continue to strengthen.”

Nallathamb predicted that the trend will continue throughout this year.

CoreLogic also reported:

  • 19,828 county homeowners, or 3.6 percent of borrowers, had zero to 5 percent equity in their home.
  • The total of negative equity and “near-negative equity” borrowers is now at 104,352, or 3.6 percent of all Orange County borrowers.
  • A significant chunk of homeowners likely remain unable to sell their homes without a loss after paying commissions and closing costs.
  • In California, 1.7 million homeowners, or 25.2 percent of California borrowers with a mortgage, were underwater during the fourth quarter of 2012.” ( End of article.)

As this year’s extreme seller’s market gains momentum, even more “underwater” home owners stand to be lifted into an equity position.  Because of the serious lack of housing inventory, this has become the best time in the past 6 years to be selling a house in Orange County – especially if you won’t be buying again, for a while, in this area.

As a CDPE ( Certified Distressed Property Expert.) I am both well trained and highly experienced, to assist you in considering your options, whether to try to stay in your home, modify your existing mortgage, sell your underwater home in a short sale, or sell it in a standard or equity sale.  Drop me an email or give me a call, and let’s discuss your options.

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The time to sell is a waiting game for some

Posted in Home Leasing, Home Renting, Home Selling, Housing Analysis, Real estate, Real Estate Tips, short sales by southorangecounty on March 22, 2013

The time to sell is a waiting game for some

By Megan Hopkins, of  • March 21, 2013

“Real estate is always a game of knowing when to make your move.

With that in mind, industry experts suggest move-up buyers remain mindful of how quickly home prices appreciate while riding the current market recovery.

For move-up buyers wanting to wait out rising home prices to ensure they can sell their current home at a maximum price, analysts say the value of such a move depends on when the homeowner purchased their current residence.

Daren Blomquist, vice president of RealtyTrac, says homeowners who purchased during the down market of the last two or three years would be wise to move up in 2013.

“Because they bought near the bottom, these homeowners should have built up some good equity that can go toward the purchase of a new home, and waiting longer to build more equity likely won’t provide much advantage given that other homes that they might want to move up to will also be appreciating at roughly the same pace,” said Blomquist.

He added, “In addition, the low interest rates of 2013 are certainly not guaranteed to last forever.”

According to data from the Mortgage Bankers Association, mortgage rates are expected to reach 4.4% in the next 12 months and the 20-year average could possibly hit as high as 6.5%.

Real estate broker Redfin says this is precisely the reason why some homeowners wanting to sell their current home in lieu of finding a nicer one should not wait.

While waiting a few years will most likely mean the selling price of the current home will be higher, it also means the price of the new home will rise as well.

“If you’re selling one house just to move up to another, it does you no good to wait for prices to rise — the price of the move-up home will increase faster than the price of the place you’re leaving behind,” said Redfin CEO Glenn Kelman.

With that being said, Blomquist warns potential homebuyers against rushing to buy a home once they have sold their current home.

According to RealtyTrac data, more foreclosure inventory will become available in the next six to 12 months in markets with rebounding foreclosure activity in 2012. Markets such as Florida, Illinois, Ohio, Pennsylvania, New York and New Jersy will see the strongest growth in foreclosure inventory, according to RealtyTrac.

“Particularly in these markets it might be good for the move-up buyers to sell in the spring when inventories are still tight, rent or stay with family for a few months, and then buy in the fall when that additional foreclosure inventory is listed for sale,” said Blomquist.

However, for homeowners who purchased near the peak of the housing market — in the past five to seven years — it’s probably better to wait for home prices to rise further before they sell and move up, Blomquist advises.

“If these folks need to move because of a job or other reason, it is worth considering renting out the property in the short term to take advantage of the strong rental market,” said Blomquist.” ( End of Megan’s article.)

She’s correct – the local real estate rental/lease market is almost as strong as the for sale market. As a residential Realtor for more than 36 years, here in South Orange County, I am well qualified to advise you in your decision to sell or lease your present property.

Give me a call or shoot me an email, and let’s talk about real estate.

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How To Spot And Treat Mold In Your Home

Posted in Around The Home by southorangecounty on March 22, 2013

How To Spot And Treat Mold In HomesThe first sign of mold you notice may be a musty smell in your home.

After looking around, you spot what looks like mold — don’t panic!

You can remove unhealthy mold from your house without it costing a small fortune.

Check To Be Sure It’s Really Mold

Mold can look many different ways, which depends on the type.

Some are grayish-white or black and can look like a dirty smudge.

If you’re in doubt that a spot is mold, you can do a test with chlorine bleach.

Simply put a drop on the spot. If the color immediately fades away, you have mold.

Mold Infestation Ususally Means Leaks Too

Mold needs moisture to grow.

If you find mold, you know that you probably also have a water problem in your South Orange County home.

So first, you’ll need to find the source of the leak and repair it.

After that, you can begin getting rid of the mold.

How To Kill Mold

A lot of people think mold clean up has to be expensive.

The truth is that most mold problems can be eliminated with chlorine bleach.

Bleach is a strong chemical, so for safety you’ll need to wear gloves, an air filter and goggles while you clean.

Remember, when cleaning with bleach you need to work in a well-ventilated area, and never mix bleach with anything that contains ammonia.

The CDC (Centers for Disease Control and Prevention) recommends using bleach to kill mold on hard, non-porous surfaces.

Killing mold with bleach is a simple process:

  • Thoroughly soak the area in full strength bleach.
  • Let it soak for fifteen minutes.
  • Scrub the area with a mixture of one-part chlorine bleach, three-parts water and one teaspoon of dishwashing soap.

Finishing The Clean-up

Once everything has been washed, you’ll need to do another inspection of your home.

Look for moldy papers, clothes or anything porous that could be a good home for mold.

These things will need to be bagged and thrown away.

Allow two to three days for the surfaces to dry.

Then, continue to inspect the areas for mold re-growth, and pay attention for any moldy odors.

Congratulations, you have eliminated the mold problem in your home and saved a lot of money by doing it yourself.

If you’d like additional maintenance tips or are looking to buy a new house, contact a licensed real estate professional right away!

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Orange County home listings inventory near 9-year low

Orange County home listings inventory near 9-year low

March 20th, 2013, 11:58 am · by Jeff Collins, of the Orange County Register

“The number of homes for sale in Orange County last week fell to their second-lowest level in numbers dating back nearly nine years, Steve Thomas of reported this week.

As of March 14, 3,183 Orange County homes were listed for sale in the Realtor-run Multiple Listing Service, or MLS. The only time in the period that listings were lower was on Jan. 3, when there were 22 fewer homes for sale. 

A year earlier, Orange County had 7,000 homes for sale. The average in figures dating back to June 2004 is 10,000 listings.

Although the inventory “sits at an unprecedentedly low level,” the local housing market shed 54 homes in the preceding two weeks and 89 in the previous month, Thomas said.

“The inventory is off to such an anemic start because the number of short sales and foreclosures coming on the market thus far this year has plummeted compared to 2012,” Thomas said.

Orange County had just 226 distressed property listings – foreclosures and homes selling “short” of the amount needed to pay off the mortgage. That’s the lowest number in the past nine years, accounting for 7.1 percent of all listings.

A year ago, the county had nearly 2,200 distressed listings, or 30.4 percent of the market. The market shed about a third of its distressed listings in the past month, Thomas reported.

Thomas’ “market time” measure – the time needed to sell all the inventory at the current sales pace – also fell to a nine-year low: 1.11 months, or 33 days. The average is four months and 13 days.” ( End of Jeff’s article.)

Anyone who is actively out searching for an Orange County house to buy – in almost every price range – had better be fast on the draw, and very well qualified.

As for anyone considering selling, this is the best seller’s market we’ve seen in this area in a long time.  It is also a great time for prospective sellers to negotiate the commission they pay to a listing agent.  One to one and a half percent to the listing agent, along with two and a half percent to the buyer’s agent – or a total of three percent to an agent representing both sides, is not uncommon, in today’s low inventory marketplace.

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Fed Meeting Statement Reveals Good News For Real Estate

Posted in Federal Reserve by southorangecounty on March 21, 2013

Fed Meeting Minutes ReleasedThe Federal Reserve’s statement after yesterday’s Federal Open Market Committee (FOMC) meeting left no doubt as to the Fed’s dual commitment to keeping long term interest rates down and encouraging economic growth.

No changes to the Fed’s current bond-buying program were made during today’s FOMC meeting.

The Fed’s monthly purchase of $85 billion in bonds and MBS works by boosting bond prices, which typically helps with keeping mortgage rates lower.

The Fed reaffirmed its position that it will not withdraw or reduce monetary easing until the unemployment rate is substantially lower.

Unemployment Rate Improving Nationally

Fed predictions for the national unemployment rate improved; December’s outlook for 2013 estimated the unemployment rate at between 7.4 to 7.7 percent; the Fed now expects unemployment rates of 7.3 to 7.5 percent by the end of this year.

February’s jobs report likely influenced this revision as the unemployment rate fell from 7.8 to 7.7 percent.

The Fed notes that while employment rates are improving, they remain elevated which supports the Fed’s decision not to modify its bond purchase program in the near term.

Lower unemployment rates suggest that more people will be financially prepared for buying homes or refinancing their existing mortgage loans, and the unemployment rate is also expected to fall due to growing numbers of baby boomers leaving the workforce.

Lower Inflation Rates Boost Consumer Purchasing Power

The Fed slightly revised its December forecast for 2013 economic growth of between 2.3 to 3.0 percent.

Now the Fed predicts economic growth to range between 2.3 and 2.8 percent in 2013, but negative influences including a higher payroll tax and government spending cuts are expected to slow the rate of economic growth.

Concerning inflation, the Fed expects an inflation rate of between 1.3 and 1.7 percent this year and for inflation to remain below 2 percent through 2015.

Lower inflation rates allow consumers more discretionary spending power, which can further boost the economy and improve consumer confidence in making big ticket purchases including homes and related items and services in California and around the country.

Fed Keeping Tabs On European Economic Issues

Fed officers are continuing to monitor economic developments in Europe, and expressed concerns that the situation remains fragile.

Commenting in a press conference held after the FOMC meeting, Fed Chair Ben Bernanke characterized economic issues in Cyprus as “difficult”, but said that the Fed doesn’t expect these developments to have major impact on U.S. financial markets.

Its plan to keep short term interest rates near zero until unemployment rates reach 6.5 percent or the inflation rate exceeds 2.5 percent further support the Fed’s plan to keep its monetary easing policy intact for the near term.

Unless unexpected or catastrophic events occur which would cause sudden or rapid economic changes, the Fed appears unlikely to announce major changes in its policy.

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NAHB Housing Market Index Shows Builder Confidence Slip In March

Posted in Housing Analysis by southorangecounty on March 20, 2013

Home Builder Confidence Index March 2013The National Association of Home Builders (NAHB) released its NAHB/Wells Fargo Housing Market Index for March on Monday.

The HMI measures builder confidence in the market for newly constructed single family homes.

A reading of 50 for the NAHB Housing Market Index (HMI) indicates that more builders are confident of housing market conditions for new single family homes than those who are not confident.

Home builder confidence fell for the third consecutive month with a two-point drop to a reading of 44 in March.

Several Factors Create New Home Bottleneck

An NAHB leader noted that several situations are causing a “bottleneck” in the supply of new homes as compared to those wanting to buy them:

  • Low supply of developed lots available for new construction
  • Rising costs for labor and materials
  • Stricter mortgage credit requirements for homebuyers and lowball home appraisals. (These circumstances are typically caused by some mortgage lenders taking a conservative attitude toward risk management by tightening credit requirements and appraisers erring on the side of caution when valuing single family homes.)

Would-be buyers may find themselves stuck between a lack of buildable lots and ready building supply chains and lenders reluctant to risk mortgage defaults caused by lenient loan approvals.

Keep in mind that this only one perspective; if you’re looking for a new home, don’t give up.

Future Sales Confidence Creates Bright Spot

The HMI also measures builder confidence in three categories including current sales conditions, sales conditions within the next six months and the amount of foot traffic in new housing developments.

Confidence in current sales conditions dropped from 51 points in February to 47 points in March, but the news is not all bad.

Confidence in sale conditions for the next six months rose by one point from 50 to 51, and builder confidence in buyer foot traffic rose by three points to 35.

Foot traffic will likely increase as warmer weather arrives and the peak home buying season gains momentum.

Housing Market Conditions Vary By Region And Community

The three-month rolling average of builder confidence in four geographic regions of the U.S. showed mixed results for March.

The index reading for the Northeast had no change and remained at 39.

Index readings for the Midwest and Southeast declined by one point each to 47 and 46 respectively.

The March index reading for the West came in gaining four points to 58.

If you’re ready to buy a home, check with a licensed real estate professional specializing in the area where you want to buy.

This is the best way to gain specific information on the South Orange County area’s market conditions and home prices.

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