Best Place Real Estate

Lake Forest consistently ranks as one of the safest cities in America. According to a survey done by CQ Press City Crime Rankings, Lake Forest is the 8th safest city for cities with populations of 75,000 to 99,999 and 10th safest city overall.

At the time I saw this article in the city’s newsletter, I was reading The Tipping Point by Malcolm Gladwell. If you have not read The Tipping Point, I highly recommend it. In one chapter, Gladwell discusses the “Broken Windows” theory and the sudden drop in crime in New York City that occurred in the 1990’s. In essence, the theory is that if a city does not address seemingly minor problems, such as graffiti, panhandling, and buildings with broken windows, it is giving the impression that no one really cares and that no one is in charge. A city that can’t control minor crimes may give criminals the idea that they have less of a chance of getting caught in that city for more serious crimes. While it seems that concentrating on serious violent crimes is more important, getting control over minor crimes can be the “tipping point” for controlling a city’s crime overall.

It is this theory that is credited for significantly reducing crime in New York City. In about 1994, New York City started to really crack down on minor crimes and the overall crime rate dropped dramatically. (For a more in depth explanation, refer to The Tipping Point.)

As I read the article in The Leaflet, I couldn’t help but think that part of the reason that Lake Forest is consistently one of the safest cities is because our city is clean and well-maintained. In addition, minor crimes such as graffiti are not tolerated. While I can not say that we have no graffiti, I can say that when it occurs, it is removed promptly. (Graffiti Hotline)

Lake Forest never had the severe crime rate that New York once had and I’m not comparing New York and Lake Forest. They are like apples and oranges (excuse the pun) in many ways. But after reading The Tipping Point I think the “Broken Window” theory has merit.

A loan modification or short sale is not always the answer for a homeowner facing foreclosure. However, at least in some cases, a “deed-in-lieu” option may help. The new Foreclosure Alternative Program (FAP) has a deed-in-lieu program that may help some homeowners. Under this program, sometimes referred to as “cash for keys”, the bank takes back the home from the borrower and agrees to write off the debt. This program does not work for everyone and a lender will only agree to do it under certain conditions. To read more about the program, see this week’s Beyond the Headlines by the California Association of REALTORS.

The Arbor in Lake Forest is the place to be this Sunday, May 17.  The City of Lake Forest is sponsoring “Exploration Day in The Arbor: Carnival of Discovery“.  The event is from 1:00 to 6:00 at The Orchard and Prothero Retail Center on El Toro Rd between Rockfield Blvd and Raymond Way.  The fun includes carnival rides, music, family entertainment and much more.

A few of the local service organizations will have information tables at the event.  They will have information on how they serve the community, upcoming events, as well as how to join if you are interested.  I belong to Soroptimist International of Lake Forest and we will have a table at the event. Soroptimist is a women’s service organization with the goal of improving the lives of women and girls both locally and internationally.

Many people have a collection of some sort. I have a blue bottle collection. Why, I don’t know. I think I had something that came in anice looking blue bottle, so I kept the bottle. I now have about 5 or 6 blue bottles of different shapes and sizes. I keep them in a cabinet in the kitchen and I rarely pull them out.

Some collections are just a few items, like my blue bottles. Others can be quite extensive and often people display them throughout their home. Collections can be a lot of fun and very interesting, something to share with family and friends when they visit. However, when you have your house for sale, it is usually best to put the collection away and out of sight.

For one, they can be a distraction. When prospective buyers are viewing your home, you really want them looking at your house, not at your collection. You want them to remember your house as the one with the nice kitchen or big backyard, not the one with the model airplane collection or all the plates displayed everywhere.

Also, collections often have a tendency to make the house look cluttered. Clutter is probably the worst thing to have in a house for sale. Likewise, removing clutter is the least expensive and best thing you can do to prepare your home for sale.

When preparing your home for sale, the goal is to make the home appeal to the biggest pool of buyers as possible.  Buyers need to be able to picture themselves living in a home. Sometimes sellers make this very hard for buyers to do. For instance, I recently showed a home where the seller had a doll collection. There were dolls displayed everywhere, on shelves, on chairs, and on all the beds.  These were probably antique and very expensive dolls. However, my buyer was a young bachelor and it made it really hard for him to imagine his belongings in among this menagerie of dolls.  If all the dolls had been removed, it would have been easier for him visualize himself living there.  Remember, it is best to depersonalize your home so it appeals to all types of buyers.

By packing up your collection before you list your home for sale, you make your house more marketable and you have one less thing to do when it is time to move.

With home prices down and interest rates really low, most first-time buyers know this is a great time to buy.  But with the constant news of job losses, many are hesitant to make the move.  To help relieve the pressure, the California Association of REALTORS has started a new mortgage protection plan to benefit first-time buyers.
C.A.R. president, James Liptak, sent an email to all C.A.R. members describing the program.  He states: “Through the C.A.R. Housing Affordability Fund Mortgage Protection Program (C.A.R.H.A.F. MPP), first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month for up to six months to help make their mortgage payments. A qualified co-buyer also can participate in the program, for a reduced monthly benefit of $750 per month for up to six months in the event of a job loss. Program benefits also include coverage for accidental disability and a $10,000 death benefit. C.A.R. €™s Housing Affordability Fund is dedicating $1 million to the program this year, and estimates that as many as 3,000 families will benefit from the program throughout 2009.

To qualify for the Mortgage Protection Program, applicants must:
. Be a first-time home buyer someone who has not owned a home in the last three years
. Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
. Use a California REALTOR  in the transaction
. Purchase the property in California
. Be a W-2 employee (cannot be self-employed or military personnel)

First-time home buyers must request an application for the H.A.F. Mortgage Protection Program from their REALTOR “.

There is no cost for this program. To learn more, visit the CARHAF website.

Buying a fixer can be fun and very profitable, but it can also be a financial disaster and very stressful. Here are some tips to keep in mind when you are looking at homes:

Know what you are buying.  A “fixer” can mean a lot of different things, from a cosmetic fixer in need of only carpet and paint to a total dump that needs a complete renovation. Seriously consider how much work is needed. Has the house been well maintained and just needs updating or does it have some serious problems like a leaky roof and structural issues? Always, always, always get a professional property inspection!
Know yourself. If you are planning on doing the work yourself, do you have the skills needed? Many first time buyers or even experienced homeowners have started a project just to find out it is way over their head. It ends up costing them even more because an experience contractor has to do it over or fix what went wrong. Sometimes it is better to do some of the work yourself and contract out other projects. Also, do you really have the time to do it?

Know what it will cost. Whether you plan to do the work yourself or pay someone else to do it, check into the cost  of materials and labor before you buy the house. Getting more than one estimate is also a good idea.  Then add 10 to 15 percent to the total cost.  I have remodeled several homes and they always take longer and cost more than anticipated.

Know why you are doing it.  It depends on whether you are buying the house for a rental or if you plan on living in it yourself.  Fixing up a house to be a rental means bringing it up to par with other comparable rental property.  But if it is a house that you are going to live in, you will want to fix it up just the way you like it.  In either case, don’t over do it.  It is really easy to get caught up in the moment and upgrade more than necessary.

I love buying fixers but I have learned to seriously evaluate what I am buying.

It is already bad enough to have suffer through the heartache and stress of the foreclosure process and the possibility of losing your home. But to be the victim of a scam that takes advantage of you makes it even worse.

The increase in the number of foreclosures has also increased the number of predators preying on vulnerable homeowners.  These unscrupulous people try to convince desperate homeowners that they can rescue them from foreclosure.

The California Association of REALTORS has provided member REALTORS with a document for us to share with consumers regarding foreclosure rescue scams.  It provides some of the warning signs and red flags of a foreclosure scam as well as some resources for homeowners who are already victims of such scams.  Click on Foreclosure Rescue Scams below.

Foreclosure Rescue Scams

I must add that there are a number of very ethical professionals who are seriously trying to help homeowners facing foreclosures.  But, just like everything else, beware of the scam artist.

Lake Forest is a great place to live!!!  It will be 30 years this April that I have lived here.  The community is safe (see page one of The Leaflet Newsletter, Jan.-Feb 2009), the schools are great, and it is close to just about everything.  According to a recent survey, I’m not the only happy camper.  The survey done in November 2008 found that 92% of residents and 87% of businesses are satisfied with the services provided by the City of Lake Forest ( page 4 of the Jan-Feb 09 Leaflet).  And it keeps getting better.

We now have an excellent variety of restaurants as well as plenty of shopping.  One way our residents can keep Lake Forest such a delightful place is to shop and dine locally.  Doing that not only keeps money in our community and supports local businesses, but also encourages more retail and eateries to consider Lake Forest in their search for new locations.  To get an idea of some of our local establishments, go to www.city-lakeforest.com/shopdinelakeforest.

The Internet has made curb appeal even more important than in the past. Today when you list your home, literally the whole world can see the front of your house.

Curb appeal has always been important. If buyers drive by and don’t like the front of the house, it is unlikely that they will want to see the interior. A messy front yard is a good indication of what the rest of the house is like. You know what they say, “first impressions are lasting impressions” and “you don’t get a second chance to make a good first impression”.

The Internet has added a new dimension to this because now most buyer’s “first impression” comes from an online listing of the house. Today buyers do a lot of homework online before they actually go out to look at homes. And when they are ready to go out looking, they often ask their agent to show them homes they have found on their Internet search.

When searching online, buyers particularly look at the photos of the listings. It’s “a  picutre is worth a 1000 words” type thing. But consider this. The first photo of each listing is usually of the front exterior of the house. There are often several more photos of the interior and backyard, but if the front is not appealing, a buyer may not click to view the rest of the pictures.

If you are preparing your home for sale, seriously study the front of your home and determine what needs to be done to improve its curb appeal. When you are ready to put it on the market, ask your agent to take several photos of the front and together pick the one that is the most appealing and likely to encourage a potential buyer to click for more. Make sure you have curb appeal and Internet appeal!

Please note: If the Internet listing of your home does not have photos you may as well not have your house on the market because buyers usually just skip over those listings!!!

In a recent Orange County Register article, “O.C.’s Expert Observers Tell What’s Scary“, REALTOR, Steve Thomas comments on “herd mentality”.  This is similar to what Donald Trump refers to as “group think” in his audio book, Why We Want You To Be Rich, co-authored with Robert Kiyosaki.  Herd mentality or group think is when people do things because everyone else is doing it. Trump encourages people to “think for themselves” rather than just following the herd.

A few years ago when the market was rapidly appreciating, it seemed like some people were buying just because everyone else was.  Many didn’t do their homework and just assumed the market would continue to appreciate indefinitely.  They just figured it was the right thing to do because the rest of the herd was doing it.

But, the real estate market is cyclical. It has its ups and downs, just like most everything else.  Now that we are in a down market, I think that much of the herd of buyers think that prices are going to continue to go down indefinitely. After all, that is all you hear about in the media. Now it seems that a lot of buyers are actually waiting for the prices to start going up before they are comfortable buying. In my article, “Should I Buy Now Or Wait for Prices to Go Down More?“, I discuss trying to time the exact bottom of the market.

However, some people, particularly investors, are taking advantage of our current market.  Those who have strayed from the herd and who can “think for themselves” understand real estate cycles. They know that this down market will not last forever and that we are now somewhere near the bottom.

When the market turns around and starts to appreciate again, people who buy early will eventually make money.  But the buyers who strayed from the herd and bought when others were afraid to buy will be the ones who profit the most.