Why flippers & home warranty companies don't mix

My buyers have closed and the dishwasher is broken – now what?

My wonderful clients moved into their beautiful dream home; they purchased it from “flippers” & the dishwasher is a problem – it is leaking and according to the home protection company was improperly installed. So the big question is: who is responsible?

The easy answer is:

More than likely the seller; because during the inspection the seller had a dish rag on the floor near the dishwasher & this seems to indicate that the seller knew it was leaking and this may indicate that the seller was attempting to mask the defect… the inspector only tests the system so if the seller is sneakily drying up leaks... the inspector really wouldn’t know.

The home protection company has been contacted because if they will repair the dishwasher, this will be the quickest solution. We are waiting to hear back from the home inspection company’s evaluator. If the home protection company will not repair the dishwasher (and they may not because it is a “preexisting condition”) then the buyer must “look to the seller” – obviously it will be less money to settle in small claims court than to hire an attorney. Will keep you posted!

Additional information regarding home protection plans and the home buying process, check out my Buyer's Guide.

A buyer's dilemma

If you presently own a home and wish to buy another it can be a disappointing and frustrating process.

I am sure that you can understand from the seller's point of view that the least desirable offer is one that is contingent upon the sale of a home that is not yet sold. Of course if the seller has no other offers than they would certainly consider a contingent offer. In the event the listing lingers on the market, we would then have an opportunity that the seller would consider a contingent offer on their home. However, you will generally not be in a strong negotiating position as far as price, because we will have to negotiate the contingency. I wish I could change this aspect of home buying, but I can’t.

So we have three options:

don’t list your home, keep looking & hoping that we will find a home where a seller will take a contingency because they don’t have any better prospects

List your home & ask for 60 day escrow & two 30 day rent back options I have done this successfully with many sellers and have only had one in a rental (but that is a long story…and her family is now in their dream home); I have had a 95% success rate with families moving only once.

Buy a house while your home is not listed or in escrow and then carry 2 homes & 2 mortgages until we sell your house

Glendale Online Community

I was born & raised in Glendale and thought of a fun way to keep in touch with friends & meet new people in the area. I have created a Glendale Online Community – where we can share our opinions on different topics – they can be related to Glendale or not! Please stop by and register.

Also, check out our “Ask the expert” section – where you can ask questions & have a professional answer it. Currently we have a CPA, an interior decorator, and a real estate agent (me, of course!) at hand.
www.GlendaleOnlineCommunity.com

Market Update

Just when we think rates are dropping, new economic data pushes them back up a bit...
Reports issued on Wednesday showed a narrowing of the U.S. trade gap and a jump in mortgage applications, prompting investors to speculate that the Federal Reserve will not begin lowering interest rates any time soon.

Additionally December's employment showed that the U.S. economy added 167,000 jobs.
Lastly, today's jobless claims report suggests there is still some underlying strength in the U.S. economy.

Though rates are not shooting up, there is upward pressure at present.

View homes available by searching the MLS (Multiple Listing Service) at www.RealtorHarb.com

Another Outlook for 2007

Despite the current economic slowdown, Federal Reserve interest-rate increases, home price declines, higher oil prices, and the war in Iraq, Wells Fargo’s senior economists forecast U.S. economic growth in 2007

“The [stock] market’s recession fears are overblown and the U.S. economy will reveal incredible resilience in 2007,” said Dr. Scott Anderson, senior economist for Wells Fargo & Company, during the company’s annual economic forecast teleconference earlier this week. “The drivers that had been pulling down the U.S. consumer and economy in the first half of 2006—such as rising energy prices and interest rates, sluggish wage growth, and a sharp drop in housing demand—began to recede or stabilize in the second half of 2006.”

“The housing slowdown has been offset by strong stock market wealth, so household wealth continues to grow.”

Anderson said most of the damage in the housing market already has occurred and there are signs of recovery—mortgage purchases are up about 15 percent since the beginning of November. Existing home inventories have plateaued over the last four months, and the Wells Fargo National Association of Home Builders index has held above its September low for three consecutive months with builders reporting an improved sales outlook.



Happy Holidays to you and yours and a prosperous 2007 to all !

2007 Housing Market Predictions

New home sales will continue to fall in the first three months of 2007 while existing home sales are expected to recover, says the National Association of Realtors (NAR).

The NAR’s latest forecast says new home sales will fall 17.7 percent to 1.06 million in 2006. That’s the fourth highest total on record, according to the NAR. And sales will fall an additional 9.4 percent in 2007 to 957,000.

According to the NAR, lack of supply will be the main factor behind lower new home sales. Builders cut back on building new homes in order to maintain higher prices. Plus, high construction costs have been eating into builder’s bottom lines, forcing them to reign in building efforts.

Housing starts, which are the number of homes builders break ground on, are expected to drop 12.3 percent to 1.82 million units in 2006. Starts will then fall another 15.1 percent to 1.54 million units in 2007, says the NAR.

Existing home sales are forecast to drop by 8.6 percent to 6.47 million in 2006. That’s the third best year on record, according to the NAR. However, existing home sales are expected to recover in 2007 from the current cyclical low to sales of 6.40 million or 1 percent lower than this year’s total sales.

"By the fourth quarter of 2007, existing home sales will be 4.6 percent higher than the current quarter," says NAR chief economist David Lereah.

Though home prices have shown signs of weakness lately, the NAR says prices of existing homes will rise 1.4 percent to $222,600 in 2006 and they’ll gain another 1 percent in 2007, rising to $224,700.

New home prices, on the other hand, will be mixed. The NAR is predicting prices will ease by 0.5 percent to $239,700 in 2006, but will edge up 0.8 percent in 2007 to $241,700.

"Keep in mind that overall home prices were still appreciating at double digit rates in the first quarter of this year — prices in this buyer’s market are temporarily a little below a year ago when we were in a strong seller’s market," Lereah said. "This correction is one of the factors drawing buyers into the current market, but most sellers are still seeing very healthy long-term gains," notes Lereah.

Overall, the NAR is not expecting a repeat performance of the past three or so years.

"Roughly three-quarters of the country will experience a sluggish expansion in 2007, while other areas should continue to contract for at least part of the year," he said. "Most of the correction in home prices is behind us, but general gains in value next year will be modest by historical standards."

The housing market certainly has reached a plateau this year, and time will tell if the NAR’s predictions come true. The wild card will be interest rates and the economy. If the economy were to, for example, slip into recession, all bets are off as to how far the housing market could fall.

For more info, go to NewsMax.com

We're on "Pause"

The Fed has just announced they have decided to remain in a "paused" mode and will NOT be making any changes to the Fed Funds Rate at this time. But as expected - Fed President Jeffrey Lacker still disagreed with the vote, and said another .25% hike was needed.

Because the Fed Funds Rate influences many Adjustable Rate loans, as well as being tied to the Prime Rate - the Fed's decisions can impact you greatly, especially if you are one of the millions of Americans who have an Adjustable Rate Mortgage, Home Equity Line of Credit, credit cards, or any one of the other debts impacted by the Fed Funds Rate or Prime. So for now, a continued "pause" is good news.

The Fed's main charge is to control inflation - not just for us, but for our future generations as well. And although inflation remains above the Fed's "comfort zone", they appear willing to be patient a bit longer, and see if their previous string of seventeen rate hikes will be enough to help inflation settle back down. In fact, the Fed said that it expects inflation to moderate in the coming months.

NCRC Files FTC Complaint Against Zillow.com

NCRC Files FTC Complaint Against Zillow.com

October 26, 2006 – Today, the National Community Reinvestment
Coalition (NCRC) filed a consumer protection complaint to the Federal Trade Commission (FTC) alleging Internet financial services and real estate provider Zillow.com is misleading consumers, real estate professionals and financial service providers in on-line home valuations. According to NCRC, Zillow.com - who represents to offer unbiased valuations to over 67 million homes across the country - knowingly uses an automated valuation model (AVM) that is highly inaccurate and misleading. “Zillow is placing the American dream of homeownership at risk for countless working families,” says John Taylor, NCRC President and CEO. “For a company that represents to consumers that they are the ‘Kelley Blue Book of Homes,’ this is a very dangerous situation. We call upon the FTC to intervene and ensure that Americans receive accurate appraisals and valuation information to protect the single most important investment of their lives: their home.”
Recently, Zillow entered into partnership with Yahoo! to offer home valuations services to a larger market. However, in the FTC complaint, NCRC charges Zillow with falsely representing to the public that its on-line valuations are within ten percent of the homeselling price. It further states that Zillow has a less than 30 % accuracy rate when offering the valuations for public consumption.
“NCRC and its members are aware of a growing number of real estate and lending professionals who use the misinformation on Zillow.com to perpetrate fraud in our nation’s markets, often by targeting consumers in violation of Federal and State Fair Housing Laws.” continues Taylor. “During this time in our economy when the real estate market is changing and consumers are already at risk of being over extended due to the increased access to nontraditional loans, Zillow’s misinformation exacerbates the situation. Practices like theirs undermines the critical importance of valuation protections that benefit consumers and lenders alike, and guide the actions of all valuation professionals.”

The complaint further alleges that Zillow.com’s over and under valuations are causing substantial injury to consumers nationwide when they consider selling their home, using their home equity or buying or refinancing property. Vicky Cassens Zillioux, a member of the Center for Responsible Appraisals & Valuations (CRAV) Partners Council and a respected valuation professional affiliated with Strategic Development Worldwide, commented on the significance of the FTC filing. “Valuing a property for a financial decision is not a game - and should not be treated lightly by the consumer, lender, or the vendor supplying that value. When you consider how much testing and due diligence the banking regulators require for lenders to use AVMs, it seems that a similar level of accuracy should be expected by the consumer at www.Zillow.com” The complaints, can be downloaded in PDF format at www.NCRC.org or www.responsibleappraisal.org. Consumers who believe that they have been victimized by discriminatory and/or predatory lending practices may contact NCRC’s fair housing and Consumer Rescue Fund staff either on-line at www.NCRC.org or by calling 800-475-NCRC. NCRC is a national non-profit membership organization that promotes economic justice and equal access to credit, capital and financial services to traditionally underserved communities. For more information on NCRC, visit us on line at www.ncrc.org or call 202-628-8866. The Center for Responsible Appraisals & Valuations, founded by NCRC, is comprised of appraisers, lenders and other real estate/mortgage professionals dedicated to best practices in the field of home valuations. For more information on CRAV, visit them on line at www.responsibleappraisal.org or call 866-244-9708.

You can contact Phyllis @ www.RealtorHarb.com to find out what your home is worth.