Considering Various Efforts Aimed At Keeping California Foreclosures From Increasing Drastically

By Jerry Springstein

Examining California's effort to keep the rate of California foreclosures down invariably means that one needs to examine how foreclosures went up over the last two to three years, much of which can be chalked up to rampant speculation. Additionally, California has been suffering from a number of structural defects in terms of its real estate markets for quite a while as well.

To begin with, it's pretty much been an accepted fact that California real estate is always pricier than the real estate in most other parts of the country with several notable exceptions (Honolulu, Hawaii and certain parts of New York City and Boston, Massachusetts market to name a few). Whether this high prices were really sustainable forever, is now being shown to be a falsehood.

Many people, though, believed that real estate out in California was going to increase in value pretty much forever. Of course, this totally disregarded the fact that economic cycles (and real estate plays a part in those cycles) will always go through an expansion and contraction, though it's the case that this particular contraction was put off for longer than is usually the case.

California also had a few structural defects in its real estate market that made it attractive in one way but that same attractiveness also was thought to be a detriment to the state and its ability to generate revenues in several other ways. In 1978, the people of the state pushed through a change to the California Constitution that limited property tax increases to certain predefined levels.

For anybody who was out looking at property in California, it's certainly the case that Proposition 13 tended to make Golden State real estate look attractive because of its damper on property tax raises. With taxes relatively reasonable, at least for California, a large number of buyers jumped into the markets over the decades. When the recession hit, though, the markets were bound to be affected more intensely than might usually have been the case.

Because of all these issues, California is being forced to dig itself out of a partly self-created hole that has only been deepened by the rate of CA foreclosures. One way it's doing so is through the "California Foreclosure Prevention Act, " which is a law aimed at trying to slow down the speed and the rate of residential foreclosures in the Golden State.

This is mainly done through what the state calls a 90 day "holding" period, which is added on to the normal time line that most standard foreclosures must adhere to. It is requiring that lenders wait an extra 90 days after they've sent a notice of default to be recorded before they can move to record and publish a Notice of Trustee's Sale. There are certain criteria that must be met, by the way.

Even though California foreclosures have climbed steadily to heights not seen just several years ago, that rate actually shows some signs of decline and improvement though there are an equal number of economic experts who say that it is sure to climb further in the future. At present, what's more important is that California is trying to stop the bleeding and stabilize its rate and force it down. There are many people who are hoping it succeeds, and soon. - 31862

About the Author:

Buying A Home - How To Know If a Neighborhood Is Right For You

By Sarah P. Shimanski

Buying a home can be a significant event in your life. One important feature that can't be ignored is the location of the home you want to buy. If you're a renter, this may have been something you've taken for granted due to the fact you could easily move at the end of your lease. But choosing a good location for your new home could mean the difference between living happily or living miserably.

Buying a home commits you to that location for at least a few years. It's a place where you connect with your
neighbors and community. When buying a home, you want to buy one with a great location. This will increase your chances of a higher resale value.

Each person has distinct needs and preferences when it comes to the features desired in a neighborhood. You need to choose the neighborhood that matches your particular needs. Here are five features you need to match to your individual preferences:

1) Is The Neighborhood Safe? - Who doesn't want to live with low crime? While everyone wants this positive
feature, it's not without a trade off. The outskirts of a major city tend to have less crime, but it also means
you'll have less shopping choices and fewer opportunities. You'll also spend more travel time just to access these

2) Local Amenities - Time is a valuable commodity in todays busy world. Juggling work, going to the market,
children's activities and school, daycare, dentist, entertainment, and time waiting for public transportation
consume most of your day. If you decide to live in a community farther away, you'll be dedicating more time to
traveling. It's important to put a great deal of thought into how much extra time you're willing to sacrifice towards traveling.

3) Appeal of the Community - Some of you will prefer uniform master planned communities while others prefer the historic charm where a variety of home styles are displayed. Neighborhood characteristics such as the landscape, trees, and surrounding restaurants should match your tastes.

4) Schools - The quality of the public schools will be an important feature if you have children. Even if you don't
plan on having children, your home will have a higher resale value when you do sell. If your kids will be attending private schools, this feature may not be as important.

5) Are There Zoning Restrictions? - If you plan to remodel a home to suit your particular needs, be sure to
check if the city has any zoning restrictions that might interfere with your plans. Some zoning regulations limit the changes you can make to a home. This ensures a uniform look throughout the neighborhood. - 31862

About the Author:

Buying A Home - How To Make Your Offer Shine In A Hot Market

By Sarah P. Shimanski

If you're considering buying a home when the real estate market is hot, or if you're up against some tough competition trying to offer on the same house, you've got to go that extra mile to beat out your competition. Here are some tips to make your offer jump ahead of the rest:

1) Move Quickly - If you fall in love with a particular house, the chances are great there are other hungry homebuyers who feel the same way. If you want to increase your odds of having your offer accepted, you need to act quickly and be one of the first buyers to submit an offer.

2) Let Your Real Estate Agent Personally Present Your Offer - If the seller doesn't object to this technique, this will give your agent a chance to show why your offer is the best.

3) Bump Your Offer Higher Than Everyone Else - Money talks so if your offer is the highest, you'll stand out from other homebuyers. To make this strategy work, your offer only needs to be a few thousand dollars higher than the competition.

4) Make It Personal - This technique involves drafting a letter telling the seller why their home is perfect for you and how you'll continue caring for it after the sale. Be specific in the letter and reference specific features of the home you'll continue to care for. For example, if the seller takes a lot of pride in their prize garden, mention how you'll continue to maintain it just like the seller. Your agent may dismiss this strategy, but it could make the difference between your offer being accepted over another one.

5) Limit Your Contingencies - While it's normal to have standard loan contingencies and inspections, be careful not to overdo it. If the home market is hot, some buyers will even be willing to pass up inspections just to get their hands on a home. While this isn't advisable due to the risk of hidden defects, be prudent when it comes to the number of contingencies you submit.

6) Do Your Loan Pre-Approval Early - Many homebuyers are ahead of the game by getting their pre-approval before searching for a home. If you don't have a pre-approval letter ready when you make an offer, a seller won't give your offer serious consideration because you may not be able to satisfy the loan contingency.

7) Make It Easy For The Seller To Say Yes - If you're trying to shop when the home market is hot, you can eliminate most of your competition by making it easy for the seller to say yes. Try making an all cash offer and remove any loan contingency. If possible, try borrowing additional funds from family and friends to supplement your down payment to fund the initial purchase. After you move in, it'll be easier for you to apply for traditional bank financing. - 31862

About the Author:

Gaining Mastery Over California Foreclosures By Remaining In California Housing Markets

By Shane Jones

Dealing with California foreclosures by sticking with California's real estate market in the face of, until recently, increasing foreclosure rates will take a very strong investor who comes to the game with strong financial backing and a lot of patience. It wasn't always the case that an investor needed to be this way out in California, because (prior to the real estate bust) any people played the game with little or no financial backing to speak of.

Why this is so has mainly to do with a string of unrealistic expectations and a fair amount of irrational exuberance, especially out in California real estate markets. Many people basically looked at home buying as an investment instrument rather than an actual home and got into the buying and selling of real estate with little capital and with ridiculously lax lending backing them up.

This sort of phenomenon -- which many real estate industry experts refer to as flipping -- went on with surprising vigor out in the Golden State, to name just one region. Of course, no housing boom has ever lasted forever without being accompanied by a subsequent housing bust. The current rate of California foreclosures is prime evidence of this axiom, though many didn't really believe it would ever happen.

Now, with nationwide foreclosure numbers at well over 300,000 in a month -- and with California along with several other states contribute in nearly 60% to that number -- many weak investors, and more than a few home owners, have been forced out of the market. In most cases this was involuntarily, which is another explanation for why CA foreclosures have become a common sight in the Golden State.

Whether or not any investor has the fortitude to stick with California real estate depends on that investor's tolerance for risk, for one. Patience and tolerance or not characteristics that many investors in the old California real estate market possessed in large degree. But, long-term prospects for an eventual rebound look strong, meaning the patient investor could make something of even the California market over time.

It doesn't look as if short-term prospects, at least at present, are going to improve for the next few years even out in California, which has some of the most desirable properties in the country. Just a few years back, an investor in property in California could make a 30% profit in a single year, which is exceptional but which is also clearly unsustainable over the long run.

Today? Any investor hoping to get into the market at its bottom and take advantage of all those CA foreclosures with the realistic in expecting, at most, a 3% rate of return over 36 months, though that promises to improve as California gets control of its housing markets and its budgetary problems. Though that rate is an average or generalized figure, it's still probably reliable over the short-term.

Some experts feel that this deep correction was necessary for California on at least a macro scale. The rate of California foreclosures has made investors realize that there are times when they "buy and hold" strategy makes more sense than a flipper-like strategy, which can be after mental to any real estate market. Investors in California properties, therefore, should go into it with good finances and equally good amounts of patience. - 31862

About the Author:

Buying a Home - 10 Facts You Need To Know About Buying An Older Home

By Sarah P. Shimanski

If you've wondered what owning a charming historical home would be like, there are certain advantages and disadvantages you need to be aware of before deciding to buy one. Let's explore these in detail:

1) Lower Price - As you search through listings of homes for sale, you'll find older homes selling for less than newer ones. This feature makes it an attractive option for homebuyers on a tight budget. However, the opposite can be true in certain metropolitan areas where land costs are high.

2) Construction - You'll find the workmanship and construction materials used in older homes to be higher in quality. Most older homes feature thicker beams, solid fixtures, heavy wood doors, and thicker walls.

3) A Community With History - In an established neighborhood, it's easier to experience the ambiance by driving through the area. When you look at new homes, it's difficult to get a feel of the community when you only have empty lots and drawings to look at.

4) Completely Developed Landscaping - Living in an older community allows you to enjoy the beauty of a mature landscape. Tall trees and fully grown bushes and flowers accentuate the charm of the community.

5) Charm - Older homes exhibit unique decorative accents and character such as beautiful crown moldings, durable built-in cabinetry, and sturdy hardwood flooring. You won't find these upgrades in a new home unless you invest money to add these details.

While there are wonderful advantages to buying an older home, there are also drawbacks such as:

6) Improvement Costs - The appliances and fixtures in an older home have endured years of use and will require money to replace and upgrade. The water heater, light fixtures, and faucet handles will need to be replaced.

7) Energy Efficiency - Older Homes are constructed of less energy efficient materials so you'll spend more on energy costs to keep your home warm in the winter and cool during the summer.

8) Decor - An older home will usually feature old outdated colors, wall coverings, and flooring. Plan on spending extra money and time changing the decor to appeal to your individual taste.

9) Floor Plan Layout - Older homes were built for a different time period so you'll find smaller rooms and a less functional layout. Unless you plan on remodeling your home, you'll have to use your creativity to fit a flat screen plasma TV or home office.

10) Expect A Lower Resale Value When It's Time To Sell - For the same reason why you were able to afford your home in the first place, older homes tend to have a lower resale value compared to a similar sized newer home. - 31862

About the Author:

Buying A Home - 10 Facts You Need To Know About New Homes

By Sarah P. Shimanski

New home planned communities or developments are sprouting up all over the U.S. Statistics show that up to 1.6 million new homes are being constructed each year. If you're a homebuyer searching for a new home, there's nothing like the anticipation of moving into a brand new home tailored just for you. In spite of the positive features offered by a new home, there are negative features you should be aware of. First let's go over the positive features:

1) It's Untouched! - A new home has never been lived in by anyone else and it's spotless clean just for you.

2) A New Home Is Tailor Made Just For Your Taste - When you buy a brand new home, you get to select the paint colors, flooring, and accessories to suit your particular taste. You also have the ability to select the ideal floor plan layout to suit your lifestyle.

3) Modern Conveniences - You'll find new homes offering features designed just for today's lifestyle. Convenient features like an attached 3 car garage, open floor plan, and high speed phone and cable lines. New homes also come with built-in energy saving appliances that won't need replacing for at least a few years.

4) Environmentally Friendly - New homes for sale are constructed with energy efficient materials so you'll not only save on heating and cooling costs, you'll use less of mother nature's resources.

5) Community Planning - New homes tend to be built in master planned communities which feature convenient facilities such as swimming pools and community centers. These developments usually have homeowner rules and regulations you need to abide by.

Now let's examine the disadvantages to buying a new home:

6) Higher Cost - New homes typically cost more than an older home, but they tend to have a higher resale value. Plus you'll find some good financing deals offered by the developer to help you buy your new home.

7) Limited Representation - Unless the builder cooperates with outside agents, you'll have to deal only with the builder's sales agent. This limits the amount of protection you'll receive because you won't have another agent looking out for your best interests.

8) Break In Period - As the first owner, you get to be the first one to test out the features of your home. It's not uncommon to discover flaws or defects in materials or workmanship when you first live in the property.

9) Delays - Developers try to complete a home by the estimated deadline, but there will be times when delays move the finish date farther out. Unfortunately developers rarely compensate you for your inconvenience.

10) Rules - Many planned communities require you to live by their written rules regarding use of the property. Unless you plan on moving out, you'll have to live with those rules. - 31862

About the Author:

Buying A Home - 5 Tips On Finding A Home To Fit Your Lifestyle

By Sarah P. Shimanski

If you're considering buying a home, it's important to consider what your life will look like in a few years. it's so easy to become occupied with our present lifestyle and choose a home to match today's needs. But you need to
be aware there are 5 main factors that can influence the quality of life in your home. Let's go over 5 tips to help you find the right home:

1) What's your ideal lifestyle? - Think about what you'd like your social life to look like. if you want to be able to party on the weekends and enjoy the local nightclubs and bars, you'll probably want a home close enough to walk home. If your job requires traveling, buying a townhouse or condo near the airport would save you
lots of travel time.

2) Number Of Household Members - If you don't plan to marry, live with a partner, raise a family, or have your
parents move in, a home with less square footage may be fine. But if you expect your household to grow, be sure to evaluate other features such as quality of public schools, number of bedrooms, bathrooms, and lot size.

3) Suitable Floor Plan - Before you decide on a home, be sure the floor plan suits your daily activities. Be sure
there's adequate space for your hobbies, home office, and
entertaining. Don't choose a home with a small family room if this is where your family spends a lot of time.

4) What Activities Do You Plan On Doing At Home? - Are you a handy person who dreams of restoring a vintage home to pristine condition? Do you dream of working on a backyard arboretum? Then a home in the suburbs with a big yard may be what you're looking for. But if you like to
throw big birthday bashes and parties, a metropolitan home may be more to your liking.

5) Buying a Home For An Investment? - If you're financially challenged and only able to buy a smaller home, a good strategy would be to purchase a smaller home that needs minor cosmetic work in a good area. Over time with a little investment of effort, you could restore the property to mint condition and sell if for a large profit. Then you can use the profit generated from the sale to fund the purchase of a larger home or even investment property such as a duplex.

By paying close attention to these 5 suggestions, you'll increase your odds of finding the right home for your
unique lifestyle. One eye opening exercise is to ask a friend or family member to help your think about the
possible directions your life may take within the next 5 years. To get the most benefit out of this exercise, it's
important to be honest with your expectations. The end results may change the type of home you decide to purchase - 31862

About the Author:

Sign Up for our Free Newsletter

Enter email address here