What is Debt-To-Income Ratio?

February 4, 2013 By 1 Comment

What is DTI Ratio?

By  on January 23, 2013

Debt-to-income ratio (DTI) is one of the key factors mortgage lenders use to determine whether or not a potential borrower can afford a mortgage. The debt-to-income ratio is calculated by dividing total monthly debt payments by total monthly income. Monthly debt payments generally include expenses such as mortgage payments, auto payments, student loan payments, credit card payments, and child support payments. Monthly expenses such as utilities, auto insurance and phone services are not included towards the monthly debt calculation. Monthly gross income generally includes the borrower’s monthly income, his/her spouse’s monthly income, any savings income, and any business or side incomes.

To learn how to calculate DTI, let’s consider the following example:

Monthly Mortgage Payment: $1200
Monthly Auto Payment: $500
Credit card payment (minimum): $300
Total Monthly Debt Payment = $(1500+500+500) = $2000

Suppose the monthly incomes are as below:

Borrower’s Monthly Salary: $3500
Spouse’s Monthly Salary: $2500
Other Income: $500
Total Monthly Income= $(6000+2500+500) = $6500

Debt-to-Income Ratio = Total Monthly Debt Payment/Total Monthly Income = (2000/6500) = 30.76%

When underwriting a mortgage, a lender will typically consider two kinds of debt-to-income ratios. First is the front ratio, which includes all housing costs (i.e. mortgage principal, interest, mortgage insurance premiums, and property taxes). The second is the back ratio, which includes non-mortgage debt such as credit card payments, auto loan payments, child support payments, and student loan payments.

As a general rule of thumb:

  • Front ratio = Housing DTI: Total Monthly Housing Payment / Gross Monthly Income Before Taxes
  • Back ratio = Total DTI: Total Housing Payment + Other Debts / Gross Monthly Income Before Taxes

The maximum allowable DTI to qualify for a loan is going to depend upon your lender, your financial situation, and your loan program.  Underwriting standards may vary from lender to lender, so you will want to contact your lender of choice to find out how it calculates DTI for a given loan program.

Courtesy of your Arcadia Real Estate Agent

Filed Under: Brian Peralez, Market Tagged With: , , , ,

Improve salability of home riddled with permit issues

February 1, 2013 By Leave a Comment

REThink Real Estate

BY TARA-NICHOLLE NELSON, THURSDAY, JANUARY 31, 2013.

Inman News®

<a href="http://www.shutterstock.com/pic.mhtml?id=43156006" target="_blank">Kitchen remodel</a> image via Shutterstock.
Kitchen remodel image via Shutterstock.

Q: I’m having trouble selling my place because I added a second kitchen in what was the garage without permits. My bad, but I will have to take it out to get conventional lending. It’s a two-story house with one bedroom (with a walk-in closet), a living room and kitchen in the upstairs unit. The downstairs has a kitchen and dining area in the converted garage space, another room that can be used as a bedroom with closet space under the stairwell, and a three-quarter bath.

This is on one acre of horse property on a dirt road with a section of state land across the street. It was listed last summer and had four offers within a month, but because I didn’t have the permits for the second kitchen no lender will finance the place.

Here’s my question: Should I spend the money to install a real closet in the downstairs bedroom, or just leave it as it is? –Jan

A: It sounds like the big selling point of your place is its fundamentals, the land, the horse zoning and the location near the undeveloped/state land. But as you’ve been through this odyssey with trying to get this place sold, I can tell that you are in danger of getting off track and unfocused with respect to how you move forward. Here’s how I’d suggest you avoid that:

1. Solve for the real problem. Stay focused on solving for the real problem that stopped you from selling the place the first go-round. If you had four offers right off the bat when you listed it, I would say that adding a closet is really not going to increase your chances of selling the place this go-round. Stay strategic and devote your additional investment and preparation efforts to what really matters: rendering the place mortgage-worthy and salable by either removing the second kitchen or obtaining permits for it.

That said, if you happen to know that the downstairs kitchen was a big selling point for the buyers who made offers before and you decide to remove it before relisting the place, then I’d say you can put the closet conversation back on the table. It might, in fact, limit how some buyers might like to use that living space, but I’d first talk with your agent and get her sense for whether the earlier buyer feedback suggests that a closet would be greatly valuable in that room to the average buyer for your property. I just doubt that a closet will be a major deal maker or breaker on a property that already had such a high level of buyer interest without the closet.

2. Don’t make the same mistake twice. To carve out an exception to my earlier advice, if installing a closet gets you an additional, legal bedroom, then you should consider doing it. That would allow you to list the home as a two-bedroom vs. a one-bedroom — and that does have major, incremental buyer-attracting value. But for that to happen, you’d have to apply for permits to turn the space into a bedroom with a closet. The fact that it is under a stairwell makes me suspect that it might not qualify for bedroom status, but talk that over with your agent and a local, licensed contractor.

And be aware that if you do apply for permits to turn the open space into a bedroom, you could be opening up a can of worms by inviting inspectors into the property who may begin to require other upgrades of the property to current building code standards. Given that you’ve heavily modified the home already without permits, this could be a train you’ll wish desperately you could put back in the station — and might not be worth the risk, even if you do think you could get an extra legal bedroom out of a closet addition.

3. Don’t assume removing the kitchen is the only solution. Allow me to add one more layer of complexity to this decision tree you face. Is it possible that you can get permits for the downstairs kitchen? Talk with your agent. If she feels like the property will get just as much buyer interest and just as many offers if you just pull the kitchen out, because of the nature of the place, then I’d say you should do that.

But if the downstairs “unit” was a primary reason buyers were interested last time, talk with your agent and contractor about whether it’s possible to cost-effectively get the kitchen permitted. If so, consider going that route, but do keep in mind the reality that applying for permits on the kitchen might expose you to additional inspector demands, like upgrades to electrical and other systems. So make sure you have a trusted, legitimate contractor on board who can tell you in advance what such demands would likely be.

Tara-Nicholle Nelson is a real estate broker, attorney and the author of two critically acclaimed books on real estate. Tara also speaks and writes on the art and science of life transformation at RETHINK7.com.

Courtesy of your Arcadia Real Estate Agent

Filed Under: Make Over, Market Tagged With: , , , , , , , ,

Common surprises in real estate negotiation

January 28, 2013 By Leave a Comment

When contingencies are involved, expect the unexpected

BY DIAN HYMER, MONDAY, JANUARY 28, 2013.

Inman News®

<a href="http://www.shutterstock.com/pic.mhtml?id=22697938" target="_blank">Underwater minefield</a> image via Shutterstock.Purchase offers usually aren’t accepted as written. Commonly, buyers and sellers engage in the equivalent of a tennis match, counter offering back and forth until they meet a mutually agreeable purchase contract. At this point, you might be inclined to think the negotiation phase of the transaction is over.

That may have been the case decades ago. But the home sale process has become more complicated over the years. Today, it might be more appropriate to say that the negotiations are over when the transaction closes. That is, if there aren’t any after-closing issues, like a leaky roof that wasn’t disclosed that could require more negotiation.

After a purchase contract is signed — including all the addenda and counteroffers — it is said to be ratified. A ratified contract is binding on both parties and usually can’t be unilaterally changed by one party without agreement from the other party. Any modification to a ratified purchase contract needs to be in writing. Verbal agreements to sell real estate are not binding.

Most purchase contracts include contingencies that provide buyers a time period to comply with certain parts of the transaction. The most common contingencies are for inspections and investigations, loan approval, appraisal of the property, and the sale of another property.

Usually, if the buyers use their best efforts to satisfy these contingencies but are unable to do so, they can withdraw from the contract without penalty and have their good faith deposit returned to them.

You should fully understand any purchase offer you sign as well as the impact of the buyers removing or not removing contingencies before you sign the contract. Not all contingencies contain the same language.

For example, some inspection contingencies give the sellers the right to remedy a defect; others allow the buyers to withdraw from the contract for any reason at the end of the inspection contingency period. Any questions should be directed to a real estate attorney.

HOUSE HUNTING TIP: Even though the ratified contract is legally binding on both the buyer and seller, circumstances can change during the transaction that may result in renegotiation. The most common occurs when the buyers’ inspection contingency is due. If buyers’ inspections reveal new information about the property, the buyers may agree to remove the inspection contingency but only if the sellers repair defects or contribute financially to repairs.

This puts the contract in limbo and requires good faith negotiation to salvage the transaction. Otherwise, the buyers and sellers agree in writing to cancel the contract. The sellers put their home back on the market and the buyers look for another home to buy.

Not all buyers renegotiate the contract when the inspection contingency is due. If the sellers have provided presale inspection reports and thorough disclosures before the buyers made an offer, it’s less likely that the buyers will make further requests from the sellers.

Another trigger for further negotiations can occur when an appraisal ordered by the buyers’ lender values the property at a price that’s lower than the purchase contract price. The effect of this is that the buyers’ lender will lend less than it said it would before the appraisal was done.

The buyers could ask for another appraisal, withdraw from the contract or try to negotiate a solution with the sellers. This might mean that the buyers agree to put more cash down, or they could ask the sellers to lower the purchase price, or a combination of the two. The goal is to reach a price that will work with the lower loan amount.

Buyers who feel they overpaid for the property may be more inclined to request a reduction to the appraised value and hold firm at that price.

THE CLOSING: If the sellers won’t agree, the transaction will fail.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”

 

Courtesy of your Arcadia Real Estate Agent

Filed Under: Uncategorized Tagged With: , , , , ,

4 Reasons to List or Buy a Home in December

December 14, 2012 By Leave a Comment

 / By Zillow.com / Comments
Home For Sale Real Estate Sign in Front of Beautiful New House.

Tis the season to sell and buy! Here are the top four reasons sellers should list and buyers should purchase prior to ringing in the New Year.

The commitment factor

Buyers searching for homes over the holidays are serious, committed and ready to go, often motivated by a deadline-oriented relocation brought on by a career switch or an unexpected change in housing situation.

Furthermore, with vacation time during the season, local buyers generally have more time during the weekdays to look.

Emotional buying

The holiday season also brings out emotions and feelings of nostalgia in buyers, which may help push their decision making to quickly move forward with the purchase.

When staging homes, sellers and agents should try to make the house feel as holiday-homey as possible. Let the buyers picture themselves there.

How about some tasteful greenery, the gentle glow of twinkly lights, a little golden holiday bling and the scent of baking cookies wafting through your open house?

The low inventory advantage

Inventory of homes for sale is excruciatingly low. Buyers have fewer choices, which means sellers’ homes will be in demand — and greater demand equals more money.

Low inventory isn’t necessarily a bad thing for buyers, especially for those who must make a decision quickly.

However, both buyers and sellers must be realistic about desired purchase and sale pricing.

Tax advantages

Purchasing prior to the end of the year can be advantageous and motivating to buyers for tax reasons.

Closing on a home before the end of the year allows you to deduct property taxes, mortgage interest, and loan points on this year’s tax return.

If you can buy your dream home AND save money, why wouldn’t you?

“4 Reasons to List or Buy a Home in December” was provided by Zillow.com. 

Courtesy of your Arcadia Real Estate Agent

Filed Under: Arcadia News, Brian Peralez, For Sale, Pasadena News Tagged With: , , , , , , ,

Housing recovery hinges on mortgage supply

December 11, 2012 By Leave a Comment

Commentary: Outstanding mortgages now below $10 trillion for first time since 2005

BY LOU BARNES, FRIDAY, DECEMBER 7, 2012.

Inman News®

<a href="http://www.shutterstock.com/pic.mhtml?id=97779053" target="_blank">Mortgaged home</a> image via Shutterstock.
Mortgaged home image via Shutterstock.

Markets are very quiet despite the usual first-week-of-month flood of new data. In the last week the 10-year T-note has not traded above 1.63 percent nor below 1.58 percent, and mortgages are holding just below 3.5 percent depending on borrower and property.

The November payroll survey estimate arrived with a 146,000-job gain. That’s better than forecast but garbled by Sandy, and we cannot know whether up or down. The unemployment rate fell to 7.7 percent, but may have been more distorted by Sandy than payrolls: The percent of unemployed fell because the surveyed workforce shrank.

“I’m calling from the Bureau of Labor Statistics. If you are not at work, do you still have a job but just can’t get to it? Have you quit looking for work because you’re demoralized, or because a tree fell on your car? Hello? Hello? You’re too cold to talk? You don’t seem to understand how important this call is to the nation. Hello? Is your phone out? Yes, I know that if it were we wouldn’t be talking. No need to be insulting.”

The Institute for Supply Management (“Purchasing Managers” in old days) takes two surveys at the end of each month. The manufacturing survey for November dumped two points from October to 49.5, the worst since 2009. The second one, for the service sector, rose to 54.7 from 52.3 in October. Tend to trust the manufacturing number: It has longer history, four decades versus one.

This morning the University of Michigan released its consumer confidence survey for December. It had been on a rising trend since late summer, up to 82.7 last month and was expected to stay there or higher, and instead tanked to 74.5. Economy rolling over? Republicans who just discovered who won in November? Nobody knows.


Without added mortgage supply, a genuine housing recovery lives only in the minds of the pollyannas.

Intermission for Fiscal Cliff. The election has brought order to Republicans, most of whom understand they could have had a better deal in 2011. House Speaker John Boehner fired two unruly Tea Pots from their committee posts, and South Carolina Republican Sen. Jim DeMint resigned altogether, headed for the Heritage Foundation, where he can screech in its phone booth undisturbed.

President Obama has less feel for his tax base and the economy than Mitt Romney for the people, but this time might not overreach his way out of a deal in plain sight. I think chances have reversed two bad weeks and improved now.

Back to reality. Each quarter the Fed releases Z-1, describing the movement and landing place of every buck in the financial system. Some new numbers are striking.

The net worth of U.S. households in the last 90 days rose by $1.7 trillion. Feel that?

Didn’t think so. A mere wobble in a base of $64 trillion. Which by the way is not a shabby net worth. Over the last year the wobbles have combined for genuine progress, a gain of $4.5 trillion.

The Fed estimates recovery of $1 trillion of the $7 trillion in home equity lost since 2006, a long way to go but moving. The other $3.5 trillion gained is in financial assets, most buried out of sight in pension funds, insurance company reserves, and retirement accounts, slow and quiet, but real.

Included in Z-1 are mortgage accounts. Yesterday’s release shows a pickup in post-Bubble plodding in some places, but a total stall in another. The overall figure contains both the good and the troublesome news: Aggregate U.S. residential mortgages have fallen by $88 billion in 90 days, $289 billion in the last year, and are now below $10 trillion for the first time since 2005 (from the $11.2 trillion peak in 2007).

Some of the overall decline is from overdue write-offs. Loans also disappear via sales and refis, but there is little of that in the worst stuff. The trash in private-label MBS is down to $936 billion from $2.2 trillion in 2007. Home equity loans (including seconds) from a same-year peak at $1.13 trillion have fallen to $790 billion.

The bad news: Without added mortgage supply, a genuine housing recovery lives only in the minds of the Pollyannas. The nation’s sole supply of new mortgages, Fannie-Freddie-FHA-VA, has been the same since 2009, about $5.8 trillion. All other sources, the “private” dreamland of government-haters, are just as inert as they have been since 2007.

When these mortgage aggregates begin to rise, then we’ll know that housing really is healing, and the economy with it.

Thanks to Bill McBride at www.calculatedriskblog.com, and his best-in-biz charts. He is more optimistic about today’s employment numbers, but I can’t see any of the “sustainable” progress here that the Fed is looking for, and expect them at their meeting next week to continue and even amplify QE3.


Graph via Calculated Risk Blog.

Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He can be reached at lbarnes@pmglending.com.

 

Courtesy of your Arcadia Real Estate Agent

Filed Under: Market Tagged With: , , , , ,

3 things to avoid when buying or sellin

December 10, 2012 By Leave a Comment

Mood of the Market

BY TARA-NICHOLLE NELSON, TUESDAY, DECEMBER 4, 2012.

Inman News®

Advice on what to do and how to do it is everywhere these days. Whether you want to know what to eat, how much money to save or how to learn a new language, it seems that the answers are a mere Google away.

And that has created its own set of problems, chief among them the issue of information overload. Sorting through the overwhelming inundation of information about how to proceed with any major life endeavor — including real estate matters like buying, selling or refinancing a home — has become a sort of pre-action step.

Often, the most helpful action-sorting, order-creating, overwhelm-abolishing advice turns out not to be advice about what to do, but advice about what not to do. To that end, here are my top three real estate don’ts:

1. Buy too soon. As I see it, the drive to buy a home before your finances, your family and even your personal development are truly ready (and the complicity of lenders who were all too happy to make loans to borrowers, prematurely) is to blame for much of the real estate mayhem we saw in the recent real estate recession.

If you have no money to put down, no cash cushion, poor spending, saving and debting habits, or uncertainty about how stable you and your household will be in the next five or so years, geographically and otherwise, buying a home is a move that is highly likely to end in a tale of woe.

As strongly as I believe in the power of homeownership, I have seen time and time again that it is better deferred until you are truly ready than rushed into and regretted.

2. Take it personally. Whatever it is. Buyers who get overly attached to a property, emotionally speaking, put themselves behind the eight ball when it comes to negotiations, and are also likely to panic and make bad decisions when it comes to responding to inspection reports and borrowing mortgage money.

Know that there are literally hundreds, possibly thousands, of prospective homes in your area that might fit your needs, so beware of allowing any single one to get you too worked up, before you have it in contract, have your inspection reports in hand, and have made it through appraisal and underwriting phases.

For sellers, the potential to take things personally is exponentially greater, given that your home is both your largest asset and the place that has been good enough for you and your family to live in for, perhaps, years. It’s very easy to get offended by everything from the real estate agent’s estimation of what your home is worth, staging and property preparation advice (which can feel like your taste and lifestyle are under attack), lowball offers, appraisals — you name it.

The very best practice is to find and work with professionals you trust, six months or even a year in advance of when you want to make your move, then be open and attentive to their advice, even if it hurts. Do not allow your emotional attachment to your home to get in the way of the financial and personal progress you seek from trying to sell it.

3. Avoid discomfort. As a general rule, many of the best things in life require us to go through some discomfort or small, recurring pain to get them. To get fit, you have to get up and exercise when you might feel like curling up and snoozing. To get ahead in your career, you have to exercise discipline in your work habits, putting in hours and ideas even when the going gets tough.

It is no different with real estate; in fact, the nature of the real estate game is so foreign to what most of us consider our zones of comfort and competence that making a series of informed, smart real estate decisions can actually require a series of uncomfortable commitments, several months or even years of agreement to endure little pains to reach your goal.

Whether your personal discomfort zone is triggered by one or all of the following:

  • staunching your spending hemorrhage.
  • saving money when you’d rather take a trip.
  • working through your financial maths repeatedly.
  • negotiating.
  • asking hard questions (and continuing to ask them until you are satisfied).
  • thoroughly reading literally hundreds of pages of disclosure, inspection, and homeowners association (HOA) and loan documents.

My last “don’t” is this: Don’t avoid any of these uncomfortable processes, practices and moments. They are each an essential element of the process of buying or selling or mortgaging a home with wisdom and long-term sustainability.

Tara-Nicholle Nelson is a real estate broker, attorney and the author of two critically acclaimed books on real estate. Tara also speaks and writes on the art and science of life transformation at RETHINK7.com.

Courtesy of you Pasadena Real Estate Agent

Filed Under: Market Tagged With: , , , ,

Is Buying a New Home Like Buying a New Car?

December 5, 2012 By Leave a Comment

DATE:DECEMBER 3, 2012 | AUTHOR:BRENDON DESIMONE

When you drive a new car off the lot, it immediately loses some of its value. Does the same apply to real estate? And if so, should you care?

For years, the new construction and development market has been sluggish. But now, banks are lending again for new construction, and developers are ready to build in full force. In major cities such as New Yorkand San Francisco dozens of new projects are in some phase of planning, construction, development and sale. In the suburbs and country, national home builders with large parcels of land are ready to develop communities of new homes.

Buyers in any market are faced with the decision to buy a “used” home vs. a new one, of course. But it’s becoming a little more likely today that buyers will find brand-new homes from which to choose as well as pre-existing ones. Here are some things to consider when you face that choice.

Real estate generally appreciates

Any chart will show you that real estate values typically rise over a long period of time. So if you’re in it for the long haul and can commit to at least five or 10 years, don’t be overly concerned with your home’s resale value. On the other hand, in today’s highly mobile world, it might be more difficult to realize an increase in your home’s value if you sell too soon. If you’re not sure you can commit to a home, new or used, for at least five years, you might be better off renting.

Does the new car theory ever apply?

If you’re selling a home that’s five to 10 years old, you might think such a property is still “new,” and you shouldn’t have a problem selling. However, a buyer choosing between a brand-new home and a “used” one may go for the newer one if they can afford it. So, given two homes with similar floor plans and locations, the newer one should sell for more. The owner of the older home, then, might believe the new car rule — that the purchase depreciates in value over time — does in fact apply to real estate.

The reality is, you just can’t compare your home’s value to that of a newer home; it’s not an apples-to-apples comparison. Though your home’s value may be less than what a nearby new property sells for, it’s important to consider your original purchase price. At the time you bought your home, that price was based on the fact it was new, as well as the values associated with a new home vs. an older home. The bottom line: Though your home may not be worth as much as a brand-new, comparable home, it has most likely appreciated from the time you bought it, along with the larger market.

Maintenance of a new vs. an existing home

A new home comes with warranties not only on the appliances and systems but often from the developer as well. A good developer will stand by his work for at least one year. That means if there is a leaky window or a broken tile or floorboard, the developer would likely remedy the situation at no cost to you. Though a home warranty is always available through a third party, a buyer of a home that’s five years old likely won’t benefit from the original manufacturer’s warranties in place at the time the home was built.

Many buyers don’t want the headaches associated with a 50- or 100-year-old home. However, there’s some truth to the old saying that “they just don’t make homes like they used to anymore.” For example, it would be nearly impossible, let alone financially unfeasible, for a builder today to construct an Italian Stick Victorian home or a Frank Lloyd Wright-style house. And so, there’s inherent value in owning a historic home. There are fewer of them, and their uniqueness will set them apart. When the buyer goes to sell, she’s likely to find the home is worth more than other comparable, newer properties. Conversely, if you’re selling a 2-bedroom, 2-bath standard floor plan home, you’ll probably be competing with other homes built with similar materials and within the same time period. You’ll need to do something to make your home stand out and be more attractive to buyers.

Home first, investment second

Obviously, the fact that a brand-new car loses some value the moment it’s driven off the lot doesn’t stop people from buying new cars. Nor should it. There’s something to be said for that new-car smell, for the extended warranty it comes with, for being the first to own it. Many people spend a lot of time in their cars. They see it as a necessity, something they should enjoy and be comfortable in.

The same is true for a home. While it’s important to understand its value and your investment over time, don’t obsess over it. If the home is right for you given your situation and your timing, that’s the home you should buy, whether it’s new or old. You’ll be spending a lot of time and making many memories there. It’s where you’ll lay your head at night after a hectic workday or long business trip. It’s your home first and an investment second.

Courtesy of you Pasadena Real Estate Agent

Filed Under: Market Tagged With: , , , , ,

Realtors warn of online rental scams

November 19, 2012 By Leave a Comment

Monday, November 12, 2012


LOS ANGELES (KABC) – Want to live by the Pacific Ocean? In Marina del Rey, a two-bedroom condo can set you back $3,000 per month or more. One listing on Craigslist, however, shows one for just $840 per month, fully furnished with parking included.

 

Beverly Hills is one of the most expensive places to live in the entire nation, so one three-bedroom home described on Craigslist ad as a “beautifully, maintained, country-English” home looks like a screaming for $800 per month. In a different ad, another Beverly Hills property goes for $950, including utilities.

So how can this be?

Rafael Renderos, a realtor from Torrance, frequently comes across fraudulent lease and rental listings like one he found in Beverly Hills. The home leases for nearly $5,800 per month, about seven times the price listed on Craigslist. A scammer reposted pictures from the legitimate ad on Craigslist. The fake listing even included a warning that said “Avoid scams and fraud by dealing locally.”

“Scammers, will go off of the MLS or any other site out there that is listing properties for lease,” Renderos said. “They will just copy and paste the address, photos – and that’s it.”

When Renderos responded to the Craigslist ad, he received an email containing a rent application from a man who claims he’s the property owner. The man said he works as the marketing manager of Shell petroleum in Nigeria. The man said was looking for responsible tenants to take care of his house because Shell transferred him to company headquarters in Nigeria for the next four years.

As with many scams, the letter asked for an upfront deposit of $1,000.

We found a listing for a home on a quiet, tree-lined street on Mount Olympus in the Hollywood Hills. Last year, the home sold for more than $1.1 million. On the realtor’s website, it highlights a kitchen with granite countertops, designer bathroom and lush pool. However, on Craigslist there’s an ad for the very same home with the same pictures, but not the same price.

“The actual rent on this property is about $7,000 per month,” Renderos said.

On Craigslist, it was advertised at $8,000.

Renderos said the scammers use several tactics to hide their identities. They rarely list a contact phone number. Also, they ask for money up front as a deposit, often requesting a Western Union money transfer, which can’t be traced. And the key to the home that’s promised in exchange for the deposit money never arrives. The scammers keep the money.

“You can see that they’ve put a lot of verbiage on it,” Renderos said. “They use very small font.”

Fullerton Police Capt. Lorraine Jones said scammers are tough to catch because they often leave no paper trail and many live in another country.

“With so many people renting properties these days instead of owning them, the criminal element is picking up on that and they’re increasing their target population,” Jones said.

Several months ago, scammers posted an ad on Craigslist luring victims to a Hollywood apartment. One woman paid a deposit of more than $1,300 for the rental property. She was even given a key that turned out to be a fake. She later said her family was displaced by the scam.

In that incident, three people were arrested, but most scammers are never caught.

We contacted Craigslist seeking comment on this story, but the company never got back to us.

On its website, Craigslist offers this warning: “Do not rent housing without seeing the interior. In all likelihood that housing unit is not actually for rent.”

That’s the case with this three-bedroom Sunset Boulevard home. It’s described as a one of a kind getaway in Brentwood for $6,700 per month. In an ad on Craigslist, the same home, the same pictures, goes for just $1,200 per month.

While most rental and lease listings you find online are legitimate, you should never put down a deposit unless you’ve actually seen the property from the inside and outside. Never send deposit money through Western Union or mail it out of the country. You will probably never see that money again.

 

(Copyright ©2012 KABC-TV/DT. All Rights Reserved.)

COURTESY OF YOUR NUMBER ONE ARCADIA REAL ESTATE AGENT

Filed Under: Community Tagged With: , , , ,

Rising rents outpacing home sale prices

November 11, 2012 By Leave a Comment

By Vicki Needham - 11/05/12 04:30 PM ET

Increasing rents are outpacing the rise in home prices as the housing market makes gradual improvement.

Rents rose 5.1 percent year over year, with price increases driven by job growth, fewer vacancies and completed foreclosures, according to a housing index released Monday by Trulia, a group that tracks the market’s trends.

Asking prices rose 0.7 percent in October, while increasing 2.9 percent year over year.

“Home prices are climbing in most local markets and in eight of the 11 swing states,” said Jed Kolko, Trulia’s chief economist.

 

“Rising prices have taken pressure off the presidential candidates from having to come up with detailed plans to help the housing market, and that’s a big reason why they haven’t focused on housing in the 2012 campaign.”

 

Rents were up even in cities where sales prices fell, with bumps of 7.7 percent in Chicago and 8.6 percent in Philadelphia.

Excluding foreclosures, asking prices rose 3.6 percent.

Home prices were up year over year in 69 of the 100 largest metros, with prices in Phoenix up almost 25 percent, while they were down more than 5 percent in Chicago.

The top 10 price increases, which ranged from 8.7 to 24.9 percent, included three cities in California — San Jose, Oakland and San Francisco.

By the end of December, prices nationally should be just 1.1 percent below their level in January 2009.

Houston led the way in rising rents, with the top 10 metros seeing increases between 6 and 16.5 percent in the past year.

“Continued widespread price increases are good for homeowners but not for home-seekers,” Kolko said. “For homeowners, rising prices add to their wealth and help bring underwater borrowers closer to positive equity. For home-seekers, however, rising prices could put homeownership out of reach.”

COURTESY OF YOUR NUMBER ONE ARCADIA REAL ESTATE AGENT
Filed Under: Market Tagged With: , , , , , ,

Pending home sales up for 17th consecutive month

October 26, 2012 By Leave a Comment

NAR: Number of homes under contract in September up 14.5 percent from a year go

BY INMAN NEWS, THURSDAY, OCTOBER 25, 2012.

Inman News®

<a href="http://www.shutterstock.com/pic.mhtml?id=106899653" target="_blank">Housing trend</a> image via Shutterstock.

A pending home sales index maintained by the National Association of Realtors showed an annual gain in September for the 17th month in a row.

NAR’s latest Pending Home Sales Index, released today, showed the number of existing homes under contract in September up 0.3 percent from August and 14.5 percent from a year ago.

The index, which represents contracts signed but not yet closed, has settled at 99.5 in September. An index score of 100 is equal to the average level of sales contract activity in 2001, a year in which sales were in line with historical norms. Signed contracts typically close one or two months after the sign date.

“The level of pending contracts has remained very steady implying that this recovery is holding its momentum,” said Lawrence Yun, NAR’s chief economist. Yun said the steady and strong year-over-year increase in the index “is pointing in the right direction.”

All regions saw double-digit year-over-year PHSI increases, except for the West, where it rose just 0.8 percent to 106.9 for the year (and 4.3 percent for the month) on account of tight inventory.

The Northeast saw the largest yearly jump in September of any region with a 26.1 percent increase to an index level of 79.3, which represented a 1.4 percent bump from August to September in the region.

In the Midwest, the index rose 19.3 percent from September 2011 to reach 89.5, which, however, represents a 5.8 percent dip from August’s level.

And in the South, pending home sales jumped 17.6 percent from September 2011 to settle at an index level of 111.5, a 1 percent jump from the index level in August.

COURTESY OF YOUR NUMBER ONE ARCADIA REAL ESTATE AGENT

Filed Under: Uncategorized Tagged With: , , , ,
«Previous Page
Next Page»