Why appraisals are useless in the 2013 Los Angeles Real Estate Market

Appraisals are useless in the 2013 Los Angeles Real Estate Market

Theoretically an appraisal is supposed to represent the current market value for a piece of residential real estate.  If you look at a standard appraisal done on the Fannie Mae form 1004 an appraiser will use 3 different methods to determine value: Cost Approach, Income Approach and the Sales Comparison Approach.  In the Residential market the value typically used is the Sales Comparison Approach, meaning the appraiser uses prices of comparable properties (similar age, square footage, lot size, condition, amenities, neighborhood, sold within last 6 mos within a 1 mile radius).

Becasue HVCC appraisers are using past sales (typically distressed) to determine value of a property with…

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Los Angles Property Inspection Checklist for Section 8 HACLA

Here is the checklist that the Section 8 inspector will use to determine if your property is in adequate condition for the Section 8 program.  The checklist is pretty much self explanatory.  If you have any questions about getting your property enrolled in the Section 8 program feel free to call me 323 412-9060.

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Explanation of Low California housing Inventory levels: Large metro areas of California experiencing declines of 50 to 70 percent from last year.

Are you trying to buy a property in the city of Los Angeles under $350,000?  

Having problems getting your offer accepted?  
Are you blaming your lazy Real Estate Agent for not working hard enough?  

While this may be true in some cases there are some important macro trends influencing inventory levels of Residential Housing in California that are having major impacts on the Los Angeles Residential Real Estate market and people trying to buy homes in Los Angeles.  Before getting pissed at your agent or frusturated with the process take a look at this well written article on doctorhousingbubble.com explaining some of the reasons the Los Angeles Real Estate market is experiencing such low inventory levels.

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New CA Real Estate Law- Disclosure of Foreclosure to Prospective Tenants - Landlord in Default Addendum

As of January , 2013, property managers and landlords in California are required to disclose in writing to any prospective tenants if a notice of default has been recorded against the property (Landlord in Default Form LID).  The law applies to rentals of single-family homes and apartment buildings of no more than four units.

The disclosure also includes a notice that if a new owner takes ownership of a property following foreclosure, the owner will not be able to evict the tenants for a least 90 days written eviction notices in many cases.

Supporters of the new bill say that such a disclosure is critical for tenants in making an informed decision about where to live.  Opponents, however argued that such disclosures could worsen the financial conditions…

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A quick reference on Los Angeles Rent Control

WHAT IS RENT CONTROL?

Rent control, or rent stabilization, is much more than the 4% maximum increase to which people refer. It is a collection of laws that regulate how much a landlord can raise (or must reduce) the rent, limit the reasons for eviction, and more.

ARE YOU UNDER LOS ANGELES’ RENT CONTROL?

the City of Los Angeles itself is a huge area covering neighborhoods we know by name, which are so large that we think of them as cities. See the Map to be sure. (http://www.caltenantlaw.com/LAcommunities.htm)

IS YOUR UNIT EXEMPT? Next, you need to know if your unit is under rent control. Rent control covers all residential units EXCEPT those fitting specified categories. The two biggest exemptions are (1) single family dwellings and (2) units…

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Fannie Mae Extends Offer to Cover Closing Costs for Buyers of their HomePath Properties

As part of their neighborhood stabilization program, Fannie Mae is offering buyers’ assistance through a couple of different programs, HomePath and First Look.

HomePath

HomePath helps buyers buy covering their closing costs, up to 3.5% of the home’s purchase price.

To qualify, buyers must be purchasing a HomePath property; this is a home that is owned by Fannie Mae, usually as the result of a foreclosure or owner forfeiture.  Buyers need to make the initial offer on the home on or after June 14, 2011, and the purchase must close by October 31, 2011; initial offers made prior to June 14 are not eligible.

View full details on qualifying for this program.
Search for HomePath properties.
Read an FAQ on the HomePath program.

First Look
In addition to…

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Earthquake Insurance: Do I have it? Should I get it?

With the recent natural disasters in Haiti, Chile and Japan I know many Californians have been asking themselves if they are properly prepared for an earthquake of similar magnitude.  I think many people realize they are not adequately coverd but either aren't sure what they should do, don't know if they can afford to insure themselves against the risk or don't know if the cost of the insurance makes financial sense.  The website below has some great information to help people answer questions regarding whether or not earthquake insurance is right for you.

http://earthquakeauthority.com/ 

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Good First Time Homebuyer Data to keep in mind for Los Angeles Real Estate Investors

  According to an article published 2/8/2011 in National Mortgage Professional Magazine, a recent Coldwell Banker survey of 300 consumers who had just purchased their home found that 87 percent said that finding a "Move-In" ready home was important.     In addition to looking for "Move-In" ready homes there were several additional interesting trends among first time home buyers in 2010:  

• 67 percent said the market afforded them the opportunity to buy a home sooner than expected
• Half said they found a home in a more desirable neighborhood than expected
• 61 percent were able to get the home at a better price than expected
• 40 percent got more space than expected
• 43 percent locked in a lower interest rate than expected

According to the…

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Waiting for Los Angeles Real Estate prices to rise before selling?

Standard and Poors Rating Services are predicting it will take 49 months to clear out all the bank owned "Shadow Inventory" held by U.S. financial institutions at the end of the 4th Quarter of 2010.  This is only 1 of the important factors that has to take place for home values to begin to rise, we also need unemployment levels to decrease and general consumer confidence to improve.  If you are thinking of waiting to sell for prices to "come back" to what you think your property is worth based on 2005-2007 market peaks I advise preparing yourself for a significant waiting period.

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FHA extends anti-flipping rule for additional year

Federal Housing Administration has extended the time they will allow sellers who have owned for less than 90 days to re-sale a property.  I'm assuming the same restrictions as before will exist (i.e. 20% max appreciation, full home inspection by lender, 2 appraisals etc., etc.)  If you are interested in finding out more info on this topic please call me at 310 874-1278 http://www.latimes.com/business/realestate/la-fi-harney-20110116,0,6473194.story  This is good news for Real Estate Investors, First-Time Homebuyers and the Real Estate market in general.  Which basically means this is good news for the overall economy. 

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