San Clemente - Kids of Marines and Sailors Mentored at Boy & Girls Club

Boys & Girls Touts Summer Mentoring Program - San Clemente, CA Patch:

The San Clemente Boys & Girls Club mentored more than 100 kids over the summer, and they touted the success of their program to the San Clemente City Council Tuesday.

Find Beach Homes at bargin prices on our (Free MLS) search

www.oc-coastalhomes.com

Doug Pemberton/Tom O'Donnell

949-273-0018  - 949-292-1418

DRE# 01767969

'via Blog this'

Pending Home Sales Up in May, Continue Pattern of Strong Annual Gains

Pending Home Sales Up in May, Continue Pattern of Strong Annual Gains


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Douglas Pemberton
949-273-0018

How to purchase distressed homes and property

Many of the houses coming on the market today are foreclosure sales, which usually sell "as is" and are often in poor condition. This may create a buying opportunity for some buyers, but it may be a hazard for others.

Purchase opportunity

A purchase opportunity arises because many potential buyers don't want the hassle of fixing up a house in poor condition, which means that there are fewer competing buyers. In addition, those who sell houses "as is" are frequently in a hurry to get it done, which means that they are disinclined to wait for a higher offer.



The buyers in the best position to take advantage of such opportunities are those with the skills and knowledge required to assess what needs to be done and how much it will cost.

Risk of value uncertainty

But purchasing a house in poor condition has serious risks. One risk is the greater uncertainty connected to its value. The worse the condition, the more costly the improvements required to make the house livable, and the larger the potential error in judging in advance what these costs will be.

The appraisal may reduce but not eliminate the uncertainty connected to the property's value. Appraisers mainly rely on the sale prices of comparable properties, after adjusting for the differences between the subject property and the comparables.

But because information on the condition of comparables is often difficult for appraisers to obtain, the error in making price adjustments is relatively large when the property is in poor condition.

Risk of not finding a mortgage

But today the greater risk in buying a property in poor condition is that the buyer will be turned down for a mortgage or forced to find a lender who will make the loan but at a premium price.

This problem seldom arose before the financial crisis because there were very few foreclosure sales, and lenders generally operated on the assumption that valuation errors would be erased by property appreciation. Today, those looking to buy a house in poor condition need to consider this risk very carefully.

Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA) recently developed a classification system for housing condition ranging from C1 (the best) to C6 (the worst), but only C6 is unacceptable to the agencies in "as is" condition. Nonetheless, many lenders require a C4 or better.

Rationale for condition requirement

It is understandable why the agencies that bear the risk of default would either require that the condition of mortgaged houses meet some minimum standard, or base their purchase prices or insurance premiums on house condition.

As noted above, the potential error in appraisals is larger for houses in poor condition, which would result in greater losses on loans that default. When defaults occur early, furthermore, the house that was in poor condition when the loan was made is very likely to be in poor condition at default, which increases marketing costs.

Why some lenders are stricter than the agencies, however, is not clear. Presumably the servicing of loans on properties in poor condition is less profitable, perhaps because these loans have relatively short lives. It is also possible that the cost to servicers of managing foreclosures of properties in poor condition is relatively high.

Whatever the reasons for lender caution, homebuyers looking for bargains in the sale of distressed properties need to take it into account in planning their purchase strategy.

A purchase strategy for distressed properties

An inspection report from a licensed expert will help in the decision as to whether to buy the house but will not eliminate uncertainty regarding how an appraiser will classify the condition of the house. If the house is classified C5 or C6, a loan may not be available.

If the sales contract has a mortgage contingency clause, which is a standard provision in some states, the buyer who can't get a mortgage because the property is classified C6 or C5 will get his earnest deposit back and the deal is canceled. However, the thwarted buyer will not be reimbursed for the cost of the inspection or the appraisal, which might total about $700.

If a property is being sold "as is" and the standard sales contract does not have a mortgage contingency clause, I would pass unless the seller agreed to return my earnest deposit if the property is classified C6 by the appraiser. You could be more conservative and require the return of the deposit with a C5, which would avoid a mortgage problem because most lenders will accept a C4 or better, but it may substantially reduce the number of sellers who will deal with you.

While accepting a C5 will give you access to more houses, you must find one or more lenders who will accept a C5. You would be well advised to do this in advance of purchase.

Jack Guttentag is professor of finance emeritus at the Wharton School of the University of Pennsylvania.



Contact us with any questions you may have about purchasing any distressed property
www.oc-coastalhomes.com

Douglas Pemberton
White Water Realty Inc.
608 Avenida Victoria
Across from the San Clemente Pier
dougpemberton@gmail.com
949-273-0018

There is a new method for expunging relevant credit report records if YOU have recently suffered a foreclosure or short sale. This tactic may allow you to buy another home almost instantly, potentially you could repurchase in the same neighborhood, keeping the same schools for your children, their friends and your neighbors, etc. To learn more about it,

Web: www.oc-coastalhomes.com
contact me at 949-273-0018 or myOC@me.com

San Clemente 90 Day Market Data on Single Family Homes

 

 

Whether you are a first time home buyer or an Investor, San Clemente has what you need.

 

The Beach, The lifestyle, The attitude, The Entertainment and of course The Friends.

 

Come live in San Clemente you will love it..

 

 

90-day Market Stats for Single Family properties in SAN CLEMENTE, CA as of September 23 2011
Median List Price:	$738,740	Average List Price:	$1,030,560
Total Inventory:	420	Price Per Square Foot:	$288/SqFt
Average Home Size:	2,932 SqFt	Median Lot Size:	7,070
Average # Beds:	3.92	Average # Baths:	3.48
Homes Absorbed:	22	Newly Listed:	19
Days on Market:	170 days	Average Age:	23 years
Data provided by and ©2011 Altos Research LLC

 

Call me today for your free customized list of properties.

 

VA Loans are now less expensive for our Military.

 

The VA department of housing will be reducing their Funding Fee starting October 1st 2011.

See the new schedule of fees below

 

 

Purchase Loans Funding Before October 1st, 2011
Down Payment	Active Duty	Reserves/NG
0% to 4.99%	2.20%	2.40%
5% to 9.99%	1.50%	1.75%
10% +	1.25%	1.50%
Second time use, purchase of an eligible property
Down Payment	Active Duty	Reserves/NG
0% to 4.99%	3.30%	3.30%
5% to 9.99%	1.50%	1.75%
10% +	1.25%	1.50%
Purchase Loans Funding On or After October 1st, 2011
Down Payment	Active Duty	Reserves/NG
0% to 4.99%	1.40%	1.65%
5% to 9.99%	0.75%	1.00%
10% +	0.50%	0.75%
Second time use, purchase of an Eligible Property
Down Payment	Active Duty	Reserves/NG
0% to 4.99%	2.80%	2.80%
5% to 9.99%	0.75%	1.00%
10% +	0.50%	0.75%

 

 

As housing prices drop, closing costs are rising - money - TODAY.com

As housing prices drop, closing costs are rising - money - TODAY.com

Rare shark sighting close to Laguna shore

DANA POINT About 80 people on a noon Friday whale watching trip out of Dana Point harbor came upon a rarely sighted 20-foot basking shark, according to Dana Wharf Sportfishing and Whale Watching.

"I have never seen a Basking Shark this close to shore in 90 feet of water off the coast (of) South Laguna Beach," said Capt. Tom White in a news release.

About 80 people on a noon Friday whale watching trip out of Dana Point harbor came upon a rarely sighted 20-foot basking shark, according to Dana Wharf Sportfishing and Whale Watching. "I have never seen a Basking Shark this close to shore in 90 feet of water off the coast (of) South Laguna Beach," said Capt. Tom White in a news release.

PHOTO COUTESY OF DANA WHARF SPORTFISHING AND WHALE WATCHING; TEXT BY VIK JOLLY, THE ORANGE COUNTY REGISTER

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The Encyclopedia Britannica describes the shark as a "huge, sluggish shark of the family Cetorhinidae. ... Named for its habit of floating or slowly swimming at the surface, the basking shark inhabits temperate regions of the Atlantic, Pacific, and Indian oceans."

The encyclopedia says the giant shark grows as long as 46 feet and "is exceeded in size among fishes only by the whale shark."

Basking sharks are not considered dangerous. They eat plankton.

Capt. Larry Hartmann, who was also on the boat, characterized the encounter about a half mile off the beach across from Three Arch Bay as "off the charts."

"It was amazing," he said. "It took us about two hours to decompress."

"You don't expect to see something enormous like that that weighs about 6,000 pounds this close to shore," said Hartmann. "And then he decided to swim right in front of the boat and had his mouth wide open. He then swam under the boat and popped up on the other side."

Hartmann scrambled to get a camera and started snapping pictures.

"The tail was so enormous that it was just sort of shocking actually," said the 46-year-old captain. "It was nice to see such a beautiful animal."

The noon whale watchers also found gray whales, dolphin, and sea lions on the trip, the news release said..

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CLICK TO SEE VIDEO, courtesy of Dana Wharf.