OC Neighborhoods – Page 18 – Connecting Locals and Visitors

Frustrating to Find a Home or Get An Accepted Offer in Orange County?

Orange County, CA is yet again in a seller’s market which is typical in a region of high demand. Home sellers tell their agent to ask the prospective buyers for their highest and best offer which results usually in a bidding war and of course the seller getting more than asking price.

Buyers sometimes become desperate from all the offers they put in on houses and just want to end the process once and for all.

To make matters worse, the inventory of homes for sale has dropped to much less than average numbers based on the past 15 years. There are 14,400 listed properties for sale in the Realtor operated MLS by Orange County homeowners in 2015. Fifteen years ago, there would be 3,500 additional homes for sale for the same period.

With home buyer demand at record levels, and home inventory very low, it means that buyers have a smaller selection of homes to choose.

Property values aren’t the problem either as they have recovered from the housing crisis levels. In a normal market, people would be listing,” said Chris Arco, Broker for 1^st Nationwide Real Estate.

With so few properties on the market by sellers, many home buyers searching in Orange County are limited to the number of offers to make and their moving plans are delayed for quite some time.

Prospective buyers wake up in the morning to check for listings that meet their criteria and they are disappointed. It is certainly frustrating but buyers need to start looking around six months before to understand how competitive the market is and not expect to find a home and get an accepted offer within 60 days of house searching.

Reasons Why Sellers Haven’t Sold

Below are some factors that have kept homeowners where they are. They include:

• No place to move to: Due to the uncertainty of finding a suitable home, less homeowners want to list their properties on the MLS.

• Locked in Best Rates Ever: Approximately 2 1/2 years ago homeowners took advantage of the lowest rates in 50 years and refinanced into 3 percent fixed interest rates.

• Proposition 13 tax rates: The low property tax rates assured by the 1978 property tax-control measure are wiped away if they sell their home. Prop. 13 limits any increase in property taxes to 2 percent every year up until the home is sold. Thereafter, rates adjust to market values.

• People are staying put longer: From 1980-2000, residents in California and nationally moved once every seven years on average. Nowadays, it’s estimated people move once every 20 years. They simply go to Home Depot or Lowes and do home improvement projects.

Gone in 55 days

The lower inventory is good for those who can sell their homes but bad for buyers.

The hottest market averages 34 days on the market and that price range is $250,000-to-$500,000.

The $500,000-to-$750,000 home price range takes just 5 days more at 39 days to fetch a buyer, while OC properties listed on the MLS for $4 million and above take over eight months to find a suitable buyer.

Making Aggressive Offers

For many buyers who search for multiple months, put in bids and the offer is not accepted, and hardly any new suitable listings come to market, they become more aggressive with their offers.
Home buyers in a seller’s market who finally get a home are the ones who are offering more than the asking price.

What You Need To Understand About Homeowner Associations

When you purchase a home in a Condominium Project or a Planned Unit Development (PUD), you generally have to deal with a Homeowners Association (HOA). And, this HOA can play a huge part in the look and feel of your home.

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What Is A Homeowners Association?

An HOA is an institute that a real estate developer creates in an effort to improve, manage and sell the homes.

It lets the developer to get out of both financial and legal responsibility for the community, generally by transferring association ownership to homeowners after they sell of a predetermined amount of lots.

It lets the city to boost its tax base and decrease the services it would typically provide to non-homeowner association developments.

The majority of homeowners associations are assimilated, which mean they’re subjected to state statutes that pertain to non-profit corporations and homeowners associations.

There’s very little state oversight, usually taken in the forms of laws that are not consistent from one state to the next.

What Are The Positive and Negative Aspects of HOAs

HOAs have the power to dictate what color our home should be, the amount of pets you can have and what kind of grass that’s permitted.

They can also impose fines, dues and assessments – they may also collect a few dollars annually to ensure the grass is cut in common areas.

Covenants, Conditions and Restrictions (CC&Rs) set HOAs up and are included in your deed. The CC&Rs mandates the way the HOA works and what the guidelines are that must be obeyed by homeowners, guests and tenants. It’s important that you look what the CC&R guidelines are before you purchase a home to ensure it meets the lifestyle you want to live.

For example: If you own your business, the CC&R may dictate that your business is not allowed. If you have three dogs and two cats, you could be informed that only one pet per household is allowed.

Bear in mind that CC&Rs are just one part of the HOA.

Another part of HOA are bylaws, which must reflect the association’s intent.

HOAs have either a managing Board of Directors or third-party property management company.

Look at potential assessments.

For example, a Condo Association recently had an issue with foundation and assessed each unit member more than $10,000. Another PUD owned a pool that needed routine maintenance and be certified.

PUDs are usually set up in subdivisions with a homeowners association along with it.

The builder is generally the head of the HOA until completion of the subdivision. Once completed, management is then turned to the homeowners during a special membership meeting.

Realtor Services: Full Commission vs. Discount Listings

Discount realtors — those who charge less than “standard” commission to list your home for sale — have become popular in some markets. Is this a realistic way to save money? Although there are no laws governing real estate commissions other than tradition, the “normal” range is a total of 5-6% for residential transactions.

Practices vary, but quite often the old adage holds true: You get what you pay for. The problem lies in knowing exactly what you get.

What’s the difference?

A listing agreement with a full-service realtor will detail the time frame, explain provisions for extending the contract or terminating it, detail all the services to be performed, and fully disclose the amount of the listing fee as well as the commission split to be paid out at closing to listing and selling brokers. It’s all in black and white.

You should expect a detailed market analysis, a listing of “comparables” and some pricing advice, and you may also be offered helpful advice on preparing your home and keeping it “show-ready.”

The full-service broker is your advocate during the entire process and operates under strict legal and ethical guidelines.

Discount brokers are also licensed professionals, but because they agree to less compensation, their services are generally less broad. Some who charge flat fees do little more than arrange for an MLS listing. They may place a sign in your yard, but may not even field telephone calls for you, preferring to pass all inquiries directly to you. Others charge a low listing percentage of 1-1.5% and perform standard services, but may not be as accessible or responsive as full-service realtors. Others, especially if the market is “hot,” will hope to make money based on volume of business. They may, indeed, represent a dollar savings to the seller.

Remember, however, that the seller is almost always responsible for the total commission. If you opt to list with a discount broker, be aware that you are still responsible for a stated percentage of sales price to be paid to the selling realtor.

Enter into any transaction with your eyes wide open, by asking the necessary questions up front.

How Much Down Payment Should I Put Down?

Sure, it can be a daunting task to come up with enough cash for a down payment on a purchase mortgage. Oftentimes, it is one of the single largest deterrents for prospective home buyers. So how much do you really have to have?

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The Typical Down Payment
A lot of lenders would like to see 20% down payments. In Southern California’s Orange County, home prices hit $429,000 in April, the highest in 7 1/2 years. That’s $86,000 on a $429,000 home. By having a down payment of 20%, lenders will feel a lot better about your finances. To start with, your chances of getting a loan approval are increased. Your mortgage interest rate will be better. There will be no requirement for mortgage insurance or getting a second mortgage. Property taxes and insurance are also not required to be impounded. More importantly, your monthly mortgage payment be a lot lower.

Okay so you have a down payment but you’ll also need to have your loan closing costs too. If that starts to break the piggy bank, let’s check out a few reduced down payment options.

It is possible to purchase a home with only 3.5% down.

The government agency known as the Federal Housing Administration ( FHA) helps home buyers, particularly first time buyers, to get approved for a residential mortgage. The FHA guarantees a percentage of the loan balance which helps mortgage lenders. This one of the big reasons why borrowers are able to come in with little money down to the tune of just 3.5%.

If you have served in the military or still on active duty, or are living in a rural area, you might have the benefit of no money down programs from the Veterans Affairs or the Department of Agriculture’s Rural Development.

Is Less Down Payment Good or Bad?

Most borrowers would like to put down $15,000 instead of $85,800 on a $429,000 home. How does that zero down program sound? There are some small details in the pudding you must not overlook.

A down payment less than 20 percent causes you to become a greater risk to the lender. That’s why it will seek out assistance from the FHA to assure a portion of the loan. It’s known as mortgage insurance. An upfront fee will be charged and integrated into your monthly payment.

While the VA financing programs doesn’t call for mortgage insurance, it will charge an “upfront funding fee” for most service members.

The down payment is only the initial hurdle to overcome. Speak with a lender to find out the rest and it’ll come second nature to you as the process is not very difficult to get through.

Living in Laguna Beach

Laguna Beach is a coastline jewel of sheer cliffs, coves, rolling hills and canyons with deep roots as an artist colony. While interest in the arts has escalated and tourism has boomed, Laguna remains a charming small-town village.

Just like any other city there’s many varieties of areas as well as types of people. The one thing people share are the awesome beaches, friendly neighbors, and feeling of being in a community. The festivals held in the summer and winter are world famous.

Daytime activities are plenty and can please anyone with bike rentals, hiking trails, kayaking, helicopter tours, live music, or enjoy some of the finest whale watching at Newport Landing which has served the city and Newport Beach for more than 20 years.

For local eateries, the cuisine in Laguna Beach most likely has a place to eat for just about anyone’s taste including the finicky gluten-free strict vegetarians. You can easily locate a Mexican, Italian, Japanese, Chinese, Caribbean, or Contemporary restaurant with a stunning view of the ocean and city.

Cultural attractions include the local highly acclaimed Laguna Playhouse, the Orange County Performing Arts Center, and the Pageant of the Masters in Laguna Village. Make plans after a short walk from the beach, dining, or shopping.

As for the neighborhoods, each one has a flavor of its own; from cozy and comfortable to the trendy South Laguna to the more upscale Emerald Bay. Even though Emerald Bay is one of the most expensive areas for homes in California, the vibe in the community is actually still all about the ocean, sunshine, family and friends.

If you’re shopping around for home, you can find anything from historic beach cottages to multi-million dollar state of the art contemporary homes mixed in with Spanish & Mediterranean style homes. Charming cottages abundant with lush gardens fill the bluffs over sandy coves along a picturesque coastline that extends for miles. Further in from the coast, you’ll find homes with ocean views and lush vegetation that blanket canyons and ridges which tower upwards of 1,000 feet above the coast.

Some of the most desirable gated communities in Laguna Beach are in: Three Arch Bay, Blue Lagoon, Lagunita, Emerald Bay, Smithcliffs and Irvine Cove.

If you are considering making an offer, there’s good news and bad news. The good news is multiple offers for properties is declining which means less competition from other buyers. The bad news is properties for sale in Laguna Beach is down 17.2% in January from December 2014, and down 13.2% year over year.

The median price for residential homes in Laguna Beach December 2014: was $1,875,000 which is up 17.7% month to month and an increase of 28.5% year over year.

According to Redfin & Realtor.com, the median sales prices in these Laguna neighborhoods are:

Laguna Village 1.67M

Temple Hills $1.64M

Crystal Cove $5.22M

South Laguna $1.08M

Montage Beach Villas – $1,953M

Emerald Bay – $2.77M

Arch Beach Heights – $1.72M

Three Arch Bay – $2,323,000

To learn more about real estate and homes in South Orange County or specifically about Laguna Beach, please call 949 273-1355 or get Email Alerts