2009 end of year wrap-up and list!

Hey, it’s the time for year-end lists and predictions, right? Why not from a local Realtor? So here are the most important real estate trends that I observed in 2009. Again, this is a very local, personal take, and is not necessarily in order of importance.

Mega-Listers of REOs/Foreclosures. Lots of foreclosures seem to be concentrating in the hands of a very few Realtors. Just try to buy one of these. Heck, just try to find out information on these. If you’re a mega-lister, please hire more staff and train them to answer questions, please. And please don’t pretend something is available when you’ve already sold it yourself. Deplorable.

The experts were wrong. Who was it that said, “Nobody knows anything”? How many times were we told by experts and statisticians that the market was crashing, it would have lost 50% of its value by this time, it would never come back, etc, etc? Yes, I know that there are regions that are in far more dire straits than ours. And the “foreclosure crisis” may not be over. But it appears, in spite of expert predictions and bubble market blogs, the local real estate market bottom has come and gone. To quote Elvis Costello, I used to be disgusted, now I’m really just amused.

Real estate marketing is more and more on line and less and less in print. This trend has been occurring for quite some time but it has become more evident this year. I can’t remember when I last placed a print ad in L.A. Times, for example. And the LAT doesn’t seem to care -- it doesn’t even have a real estate blog anymore, let alone a real estate section. I’m surprised, however, at how few Realtors really take advantage of all of the internet outlets out there. Not really surprising.

People still want to buy houses. Again, many buyers were scared off by bubble predictors and experts (see above). Many, however, still feel that a house is a worthwhile thing to own, even if one is not making money from it. Hey, we all need roofs over our heads, right? And with such low interest rates… Encouraging.

More and more properties are difficult to show. Realtors, most notably foreclosure listers, seem to be getting away from the call-first-then-use-the-supra-lockbox form of showing property (in fairness, this has never been big on the Westside or with high-end listings). Instead, it’s been “call for code” but your calls are returned, or “text for code” and good luck with that. Last weekend, for example, I placed calls to 17 Realtors for codes. Only two ever called back. See my mega-listers comments above. Frustrating.

Flippers are back. Many property flippers lost their shirts in 2007, 2008 and parts of 2009. I think it was because it looked easy, and many amateurs got into the flip business and didn’t realize the time and effort it took. Thanks for nothing, HGtv. But now, the pros are back – they seem to be buying up properties in bulk at court sales. The results have been mixed. I had a very good experience with a pro flipper on a NoHo house this summer – the house was well priced and well remodeled. I also just had a very bad flip experience just recently in Pacoima. Overpriced and NOT well-done. Mixed.

The bloom is off the lofts. Loft living in an urban area is really fun if you’re young, single, and have lots of money for your mortgage (these places aren’t cheap). But the loft concept trend/fad seems to be over – or is it just that there are too many lofts and condos out there fore sale? Predictable.

Multiple offers and deliberate underpricing. See past posts for more details. Who knew we’d ever see multiple offers again in our lifetimes? And as for underpricing, I don’t think it gets a sale made any faster than proper pricing (for example, see my listings on Birmingham, Lincoln and Chandler. Priced at what they’d likely sell for and sold fast). It just creates a lot of excitement, and heartbreak for buyers who would never be able to afford the house anyway. Frustrating.

Okay, this should be the part where I predict what’s going to happen in our local market in 2010. But I truly don’t know – and after the wild 2009 ride, I think I’d be crazy to predict!

My visit to mostly northeast, mostly Hispanic L.A.

Although I don't usually sell properties in San Fernando, Sylmar, Pacoima and Panorama City, clients Melinda and Gerardo and I looked at several townhomes and gated communities there this weekend. Home prices are much lower than they are in, say, Studio City. There are many short sales and foreclosures in all four of the communities. Here are my other impressions.

San Fernando: nicely laid out, quaint and quiet, probably because it's a separate city. It even has a cute trolley! We found several nice, newer townhouse communities and PUDs.* The home we liked the best had three big, beautiful chickens on the patio. What's that got to do with anything? Nothing, I'm just an animal lover.

*PUD stands for planned urban development. These communities consist of several stand-alone homes on smaller lots and have home owners associations and governing rules. They usually don't have more than 20 homes a piece, and a 5-home community is not uncommon. While few have amenities like pools and tennis courts, many have small outdoor yards and green belts. In my opinion, these communities are great ideas as they offer less congestion than condo communities. However, most developers don't agree as they can't make as much money by building them.

Sylmar: Actually in the L.A. city limits, and a little farther out than San Fernando. Again, nice, newer condos and PUD communities. Sylmar also has many communities with land leases. This means that you can purchase a home, but can only lease the land it's on. The upside is that the homes are much less expensive.

Pacoima: More urban, more congested than the other two. Hansen Hills, close to Hansen Dam is the nicer area, but Pacoima also butts up against many industrial areas. There were many street food vendors along Glenoaks Boulevard, and some had some pretty big operations going on. We were actually in escrow on a house in Hansen Hills, but it didn't appraise and it had lots of physical problems. That's right, it was a flip.

Panorama City: Much more congested than the other towns. Lots and lots of large condo developments, many of which are looking a little run down.

Happy and Merry!

Have a great holiday! I'll be back at going on about real estate next week.

Not much new as we head into Xmas

There's only a little r.e. news this week. The LAT and Daily News report that foreclosures are down and prices are up. One of my escrows is still wobbly, thanks to our favorite lender, Bank of America. (Apparently, BofA wants us to put a new roof on a fixer house that was sold at a fixer price.) Another escrow hasn't "set up" yet as we're still dealing with inspection issues. And I'm preparing for two new listings at the beginning of the year. Ho Ho Ho.

Don't flip this house

As has been reported here and elsewhere, the flippers are back. And these aren't the moms and pops who watch a lot of HGtv. These are the hardcore investors who buy properties for all cash at sheriffs' sales, run crews of workers through the house, and put them back on the market a month later for $100k profit. This past summer, I had a very good experience with a pro flipper of a house in North Hollwood.

It seems the fast, cheap and out of control pro flippers are back, too. This past week I've seen two of the sloppier, cheaper flips of the year. Yes, they have nice coats of paint and granite counter tops but, uh, hey the heater hasn't worked in years. They couldn't be bothered to replace funky old windows, scrape ceilings, strap water heaters, or make sure that kitchen cabinets don't bump into appliances when they're opened, among other things. Do they think that potential home buyers don't notice? Yes, when a buyer is initially dazzled by a house, they may over look things. But then there's this little inspection period, see? where the buyer is looking for reasons to walk. And during that period, we'll notice everything. Advice: flippers, do it all the way or don't do it at all.

An NYT explanation of why loan modifications aren't working

I always find Gretchen Morgenson, New York Times business columnist, to be very user friendly and readable. Here's her article from yesterday's New York Times about why loan modifications aren't working out so well. An interesting quote:

"The terms of loan modifications also make them especially failure-prone because the government calculates “affordability” (how much mortgage debt a borrower can actually manage) in a highly unusual way — raising serious questions for the housing market over all and for the program’s effectiveness for borrowers. For example, in devising what it considers an affordable mortgage payment, the program doesn’t account for all of a borrower’s debts — the first mortgage, second lien, credit card debt and automobile payments. Instead, it calculates affordability using only the borrower’s first mortgage payment, insurance and property taxes."

The article also goes on to address the issue of high-interest second mortgages held by major banks.

How to cut your monthly nut by at least one third

Okay, owning a home isn't for everybody. And I know I'll take flak for this. But.

The house in the picture is 9953 Aldea. It just closed. I'd been working with the buyers for quite awhile, and they went through the same thing that all buyers are going through now -- short inventory, rising prices, multiple offers. They finally decided to buy the house that they have been renting and living in for the past three years.

With me so far? Okay, their monthly rent was $3000/mo. Typical for a mid-Valley, 2500+ square foot pool home in good shape. Their mortgage now is $1568/month. Yes, property taxes will add an extra $500+ a month. They paid $565,000 and yes, their down payment was large. But still, thanks to today's low interest rates, they cut their monthly housing expense by about one-third. And that's not even taking into consideration the mortgage tax deduction.

Not bad, if you ask me. Just sayin'.

Rumor: stated income loans may make a comeback

I heard a rumor yesterday that stated-income loans may be available again after the first of the year. These are loans eliminate the verification of income requirement, and were popular until the real estate market started to go south. No lender has made these for many, many moons. I'm told the requirements, such as FICO scores, will be much stricter and there will be no 100% stated-income loans.

Opinion: the jury here is out. This will be good for many folks in the entertainment industry and other industries here in L.A. who have decent incomes, but are 1099'd instead of w-2'd because they go from job to job. The downside is that many folks will also take advantage and wildly overstate their incomes in order to get homes they can't really afford.

2400 W. Chandler is in escrow

A full price offer was signed today. Cross fingers.

806 Harvard sold for all cash

This house is 806 Harvard, Burbank. It's a very pretty, nicely maintained two-bedroom that listed last week for $659k. It sold last night for full price, all cash, no contingencies. Wow, where is all this cash coming from?

Realtors, forget listing new buildings

If you're a Realtor, you've probably salivated at the prospect of listing an entire new condo project for sale. All those units...all those commissions...but in reality, it's all that work. And it doesn't stop after the units close.

My buyer recently closed on a condo in a brand new North Hollywood building. The building is listed by the stalwart Aaron Scott, and he and I have probably talked more since the unit closed than we did during escrow -- mostly all about newly discovered construction problems. See the previous post on this subject.

On behalf of my client, Aaron and I have discussed construction issues, parking issues, alarm removals, contractors, cabinets, refrigerator doors, stoves that smoked, non-working toilets, intercom info, etc. etc. The Realtors on these new buildings handle everything -- they set up appointments with contractors, track down info, and communicate with the buyers and the buyers' agents about it all. In theory, a Realtor's responsibility ends when a property closes. But obviously, there's no such "statute of limitations" on these new places.

Tax credit for move-up -- or even move-down -- buyers

Yes, here's another article from the L.A. Times. This one is about the brand new tax credit -- up to $6,500 -- for home buyers that want to move up. Or even move down. The key word is "move." The article highlights some of the program details. For clarification, please check with your accounting professional (although this is so new that they may not know details, either).

LALand is defunct

My favorite real estate blog, The L.A. Times' real estate blog, LaLand, is no more. It is moving in with Money & Co., the Times' economic blog. I'm sorry to see it go, but I guess we all should have suspected this would happen -- everybody knows LAT is cutting itself down to the bone.

Peter Viles was the original editor of the blog, then Peter Hong, then Lauren Beale. They all had really good grasps on our local market and its various permutations. Yes, LALand's posters were infuriating more often than not, and I was occasionally a poster target for my perceived pro-real-estate market, anti-bubble posts. But it was stimulating, to say the least.

At least we still have L.A. Curbed.

Got rental income? Got extended family?

I've just listed this two-on-a-lot at 2400 W. Chandler in Burbank's Magnolia Park for $499k. The main house is a fixer with 800+ sf, living room with fireplace, spacious galley kitchen and separate laundry room. The side house is 500+sf with new kitchen cabinets, counter tops and appliances, a darling patio, plus other upgrades. The lot is 6865 sf and has lots of yard, greenery (the squirrels are hilarious) and a two-car garage. The neighborhood is superb and the property is opposite the Chandler bike and walking path. The schools and city services here are top-notch, too. More details and pictures can be found at www.judygraff.com.

Maybe this is why Glendalians are such bad drivers

Remember about a month ago when an informal poll showed that Glendale drivers are the worst in the county? Well, now we know why, thanks to the L.A. Times. Read about Glendale's drug problems here.

"According to the city's Quality of Life report, which was released Oct. 30 and uses 2005 data from the L.A. County Department of Public Health, Glendale had L.A. County's highest percentage of adults who reported using marijuana and cocaine." Considering, it's probably a good idea to avoid Glenoaks Boulevard whenever possible.

Another great thing about North Hollyw...uh, I mean Toluca Terrace

...is the public dog park at Victory and Whitnall. I checked it out last night and was very amused by all the doggies getting their runs in and seeing their doggie friends. There's a spot for little dogs and one for big dogs, although yesterday seemed to be German Shepherd day there.

TJ Maxx is coming to Burbank

Burbank and the east SFV are finally getting a TJ Maxx. It's going into Empire Center, in one of the (several) spaces that have been vacant there since last year. Now, we won't have to drive to La Canada (unless we want the real designer stuff) or Granada Hills to get our Maxx on.

Burbank still has lots and lots of empty large retail spaces. Is there anything else that can fill those besides Korean churches and fly-by-night schools? I think we pretty much have all the other retail chains.

What's taking so long, not that we even care anymore

My clients made an offer a week ago Monday on the house above. It was a decent offer, a little less than full price. At the time we were told that there were 3 other offers. I was also told that the seller, who is flipping this, would look at the offers mid-week.

It's eight days later and we still haven't gotten a counter. I can only imagine how many offers there are in on this property now. I was told that the listing agent isn't in the office much because he spends his days at trustee sales and doesn't come in until after 4:30. And then I was told that the seller only reviews offers on weekends. And then I was told that we'd have a counter offer at full price yesterday after 5:30. It didn't arrive. What a way for a listing agent to service a listing!

But all is well. My clients have not only lost interest, but are already in escrow on another home.

Problems with new construction

My clients Briana and Michael closed yesterday on a unit here at 5227 Denny in North Hollywood. It's a brand new building and the escrow went very smoothly (the developer was smart and secured FHA financing before marketing any of the units). However, in spite of our inspections, walk throughs with the contractors, lists of repairs, etc., many items still remain to be fixed or done in the unit. At our walk-through the contractor indicated it all would be done before closing. Now, the story is that all the remaining work has to be arranged, scheduled, and coordinated with the other recently sold units in the building. Am I naive to think this should have been done before closing?

Since I know you don't believe me, here's...

This is from non-client friend Joselle about her brand new purchase and what she had to go through to get it.

"It's a little 1950 house with some nice period details. Big lot (for L.A.) It's... in a lovely neighborhood in Sherman Oaks. We will be just the third owners! It was the 4th house we bid on. Each had many offers. We lost one even though we went $110,000.00 over asking price! Crazy market here!"

Her purchase price is in the high $400's.

More truth from the real estate 'bots

More snarky fun from our friends, the real estate 'bots.

L.A. Times AND Daily News say home prices are up...

Our local papers are reporting that housing prices posted gains for the third month in a row. On a year-to-year basis from August 2008, our total decline is now a statistical 12% for L.A. I don't think this has to do with the $8k credit. Rather, I think it's because of historically low interest rates and very short inventory.

Nice surprise in North Hollywood

Yesterday, my client Steven and I took a look at several townhouses. I was very pleasantly surprised by this pud/townhouse development in North Hollywood, of all places. The borders are Saticoy on the north, Laurel Canyon on the east, Whitsett on the West and Runnymeade (I think) on the south. Although I thought I knew all the complexes in the area, this was a new one for me (there's a joke here someplace about old dogs and new tricks).

There must be over 300 townhomes and single family homes in this subdivision and the development is remarkably well kept up. Further, it looked like everything had just had new windows installed, new paint, and a fairly new roof. Best of all, the asking prices are low -- around $300k and less for a big townhouse with an attached garage! However, there isn't much available there now, naturally. But still, this is certainly a subdivision that's going on my radar from here on out.

Back from the South

I'm back from my trip to Savannah, Charleston and the low country in between those cities. Loved the residential architecture in the historic city centers. The historic preservation people in those cities must run them with an iron hand. Of course, the ability to get tax credits for restoring historic houses does not hurt, either. Lots of homes are for sale and naturally, they are very very expensive. There went my hopes of picking up a pre-Civil War 10,000 square footer for $60,000 -- prices seem to start around $2 million and go up from there. I did notice many new planned developments between the cities although most were hidden by forests -- I think developers are aiming for the retirement market. All in all, a very interesting trip!

Underpricing reaches a ridiculous new low

This is 9801 Rincon, in Pacoima. It listed today. It's a foreclosure. These pictures hardly do it justice -- it's a historic hacienda-style Spanish, built around a central courtyard, 2500 square feet on a 9469 square foot lot. Probably built in the teens or '20's. Beautiful architectural details, but needs updating. And it's at Osborne and Laurel Canyon, which is not the most desireable neighborhood in the SFV. But still, a very, very special house. How much do you think the sellers are asking? $600k? $500k? Nope: $287,100. Since I have an interested client, I called the listing agent and was told they already had two offers in, were expecting several more, and expected it to go way over this price. They are turning the offers into the bank at the end of the day Friday and I was told, "We're only required to market this for three days." Hence, the low price in order to get lots and lots of activity in a very short time. But jeez, why get so many people excited when you know you could list it much higher and still get lots of offers?

House prices stabilizing

Hi, L.A. Times clipping service here. The title above links to today's story "Housing upturn occurring in some parts of So. Cal., data show." This is not news to those of us with our boots on the ground. Of course, there are all sorts of caveats in the article, and median prices are still lower than they were in 2006, but still.

But still indeed. There's also another L.A. Times story here, stating that mortgage professionals expect foreclosures to rise next year.

Governor signs several new mortgage laws

The title above links to an L.A. Times story about mortgage- and real estate related bills that our Governator signed into law yesterday. Among them:

"The new law also bans so-called negative-amortization loans, which offer the option of monthly payments so low that the loan amounts can actually grow over time." - This is huge.

"Late Sunday night, the governor signed AB 260 by Assemblyman Ted Lieu (D-Torrance). The measure, which takes effect Jan. 1, tightens restrictions on mortgage brokers so they cannot steer borrowers to riskier, higher-interest loans when they qualify for less-expensive ones. " - Also huge.

"AB 957, by Assemblywoman Cathleen Galgiani (D-Stockton), allows buyers of foreclosed homes to choose local escrow officers, rather than being forced to use the escrow company chosen by the seller." - Not so huge, in fact this is completely useless. Now, if there was a bill that prevented seller banks from making buyers prequalify with them, that would be huge.

NYT: A bounce? Indeed. A boom? Not yet.

Economist Robert J. Shiller has recently completed a very interesting study of current home buying habits. The title above is the link to his article about it in today's NYT. Among the more interesting quotes: "This year’s survey coincides nicely with the upturn in home prices, the sharpest change in direction we have ever seen," "The sudden turn could signal a new housing boom, but is more likely just a sign of a period of higher short-run price volatility," and most especially, "The suddenness of this shift surprised me. In my column in June, I wrote that home prices might well continue to decline for years." Nice to know that noted economists can admit they were wrong.

How to buy a bank-owned home from YouTube - hilarious!

So funny and so true.

From today's L.A. Times: Realtor org says prices will rise next year

L.A. Times clipping service here! Today's business section has the following article: State median home price to increase next year, Realtors group says. This is from the California Association of Realtors, and they predict a 3.3% rise in prices next year. Candidly, since this is statewide, it really has very little meaning for each individual neighborhood. But anyway, here are a few other quotes that I agree with [emphasis mine]: the number of purchases will decline slightly because there will be fewer foreclosures available and It will continue to be hard to sell higher-priced houses because values have dropped and financing is hard to get.

EWWWW in Mount Washington

Collegue Stacy represents the buyers in an escrow in Mount Washington. She and the seller just had to go there to secure the house. It is vacant, and some vagrant broke in, drank a beer and pleasured himself. Apparently, in addition to the empty beer bottle, they found a wad of stuck-together kleenex...ewwwwwwww.

Clea Duvall spotted at Aroma

I visited Aroma, the very cool Studio City cafe today, and spotted actress Clea Duvall there. If you are thinking it must be a slow week in real estate if this is all I have to post about, you are right!

Another just great showing

Another non-optimal showing today of another 2+1, 1245 square feet house:
-The place was a cluttered mess.
- Bedsheets for curtains.
- A newer kitchen but every inch of counter space was being taken up by stuff and the sink was full of dirty dishes.
-Somebody sleeping in one of the two bedrooms.
-Pitbulls.
-Crying kids.
-Garage converted to guest house/shack.
-Owner with scary-looking prison tats, plus lots of underwear showing.
And they want $600k for this? I know it's in Toluca Lake, but...

Latest questionable Realtor trend

The latest trend is home marketing has appeared this week: many Realtors are only showing a property once or twice. No, not once or twice to you. Once or twice, period. The house is usually held open for a couple of hours one day, then maybe a couple of hours another day. And then offers are due. But what if you want to come back and see the house when it's quiet? Or bring parents or spouses back? IMO, a home should be very easy to show for at least seven days in order for everybody who is looking to have an opportunity to see it. If you're a seller, casting your net wide is the way to get the highest and best sales price. If you're a buyer, you should be able to take a second or third look to make sure it's the house for you.

Real Estate Downfall

Click the title for Hitler and the definitive reaction to the real estate bubble.

Silverlake townhouse for lease

I've just listed 850 Lucile, #4 for lease. This gorgeous townhouse features 2 beds, 2.5 baths and lots of upgrades, including a remodeled kitchen with new cabinets and new appliances, new lighting and lighting fixtures, pergo floors, plantation shutters throughout, remodeled bathrooms throughout, and new paint. It also offers a patio, two subterranean parking spaces, a security building plus extra security system inside, 1146 square feet, bathroom off each bedroom, and a terrific neighborhood! Sorry, no pets or smokers, but there is a newer refrigerator and in-unit washer and dryer as a consolation prize. It's immediately available for $2500/month and a one-year lease. Please contact me if you'd like to see this.

Two GREAT articles from today's L.A. Times

I know, this blog seems like just a clipping service for the L.A. Times. But today the Sunday business section has two great real estate articles.

The first is from Peter Hong and is titled Don't bank on the home as an ATM. It's full of all sorts of interesting statistics and facts about the housing market over the last several years. Personal story: I know somebody that bought a duplex with partners in 1994 for $200+k. She bought her partners out a couple years later. Two years ago she sold it for $1.1 million. But she had no profit as she had pulled every cent out of it by refinancing and spent it on god-knows-what. Don't be like her.

The second story is A primer for the first-time home buyer. Although it doesn't really pertain much to our home prices here, the advice is excellent.

Interest rates below 5%? True.

Check out this story from today's L.A. Times regarding below-5% interest rates. Personally, I think interest rates are heating up the market more than the first-time buyer tax credit. Here are a couple of very interesting quotes:

But look out ahead: The Fed also said this week it would stop buying mortgage bonds at the end of March. Although that's three months later than previously planned, the central bank's withdrawal from the market is likely to push mortgage rates back up.

The FHA buyers are getting outbid by people putting down 20% or 30%,... "Houses are affordable, rates are low, but there's just not enough inventory."

I'll say.

How is a short sale like a Beyonce song?

You find the perfect one. The perfect one toys with your affections, strings you along, and then rejects you for another. But they haven't totally forgotten you. The perfect one's love interest rejects them, and they circle back around to see if you're still interested. In the meantime, however, you've licked your wounds and MOVED ON.

Sound like your love life or the latest Beyonce song? I'm talking about short sales. The process takes so long that buyers just plain lose interest in the property. Short sale properties that had multiple offers often keep the second and third offers as backups in case the first buyer drops out. By the time the second buyers are notified that their offer would be accepted by the seller and then sent onto the bank for approval, the second buyers have developed doubts, lost interest, and just plain gotten over the house. C'est l'amour, I guess. Banks have to figure out a way to speed up this process.

New API test scores are out for Burbank

New API school test scores are out for Burbank. The already high-scoring district is now over 800 for every school except for Washington Elementary. This is obviously outstanding. By way of comparison, in our local area, you'd have to go to La Canada to find another school district with so many schools on all three levels with such high scores.

Studio City's Oyster House

If you live in or travel through Studio City, chances are that you've seen the Oyster House on Moorpark. If you haven't been there, you may have been put off by the kinda-seedy-tavern look of the place. Don't be. We went there last night and had a great time. Yes, it's about as un-Entourage of an L.A. dining experience as you can have. And forget the NYC "raw bar" experience. And it is also a neighborhood watering hole. But the food was really good, prices were extremely reasonable, and the service was terrific -- when was the last time that all of the wait staff in a restaurant came over to thank you for stopping in? It was packed with a very convivial crowd too. And then there were the complimentary shots of homemade peach schnapps...

Glendale is on track for another honorarium: local community with most a-hole drivers!

Curbed L.A. occasionally runs posts asking its readers to identify communities with the worst drivers. And today, you can Curbed's piece about awful West Hollywood drivers. But wait! Check out the comments! It appears that Glendale is, uh, coming up fast on West Hollywood and may even over-take it! Major props, Glendale! I can hear the chants from speeding beemers on Glenoaks now: "We're number 1! We're number 1!"

Frequently asked questions about the home buyer tax credit

As you may or may not know, you may or may not be eligible for an $8000 tax credit if you're a first-time home buyer. Here are frequently asked questions and answers about the program from the Nat'l Assoc. of Home Builders. Yes, this is a long post. Caveat: this comes from a third-party site and not HUD or the IRS, please check again with your tax professional before relying on this info.

Frequently Asked Questions About the Home Buyer Tax Credit

The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

1. Who is eligible to claim the tax credit?
   First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner. A limited exception exists for certain contract for deed purchases and installment sale purchases. See the IRS website for more detail.
   
   
2. What is the definition of a first-time home buyer?
   The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
   
   For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
   
   
3. How is the amount of the tax credit determined?
   The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
   
   
4. Are there any income limits for claiming the tax credit?
   Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
   
   
5. What is "modified adjusted gross income"?
   Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.
   
   To determine modified adjusted gross income (MAGI), add to AGI certain amounts of foreign-earned income. See IRS Form 5405 for more details.
   
   
6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
   Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.
   
   
7. Can you give me an example of how the partial tax credit is determined?
   Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phaseout range of $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
   
   Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
   
   Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
   
   
8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
   The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
   
   
9. How do I claim the tax credit? Do I need to complete a form or application?
   Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on line 67 of the 1040 income tax form for 2009 returns (line 69 of the 1040 income tax form for 2008 returns). No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests. Note that you cannot claim the credit on Form 5405 for an intended purchase for some future date; it must be a completed purchase.
   
   
10. What types of homes will qualify for the tax credit?
    Any home that will be used as a principal residence will qualify for the credit. This includes single-family detached homes, attached homes like townhouses and condominiums, manufactured homes (also known as mobile homes) and houseboats. The definition of principal residence is identical to the one used to determine whether you may qualify for the $250,000 / $500,000 capital gain tax exclusion for principal residences.
    
    It is important to note that you cannot purchase a home from your ancestors (parents, grandparents, etc.), your lineal descendants (children, grandchildren, etc.) or your spouse. Please consult with your tax advisor for more information. Also see IRS Form 5405.
    
    
11. I read that the tax credit is "refundable." What does that mean?
    The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
    
    For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
    
    
12. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
    Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
    
    
13. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
    Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.
    
    In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
    
    
14. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
    Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
    
    
15. I live in the District of Columbia. Can I claim both the Washington, D.C. first-time home buyer credit and this new credit?
    No. You can claim only one.
    
    
16. I am not a U.S. citizen. Can I claim the tax credit?
    Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
    
    
17. Is a tax credit the same as a tax deduction?
    No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.
    
    A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
    
    
18. I bought a home in 2008. Do I qualify for this credit?
    No, but if you purchased your first home between April 9, 2008 and January 1, 2009, you may qualify for a different tax credit. Please consult with your tax advisor for more information.
    
    
19. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
    Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.
    
    Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
    
    In addition, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. As a result, some state housing finance agencies have introduced programs that provide short-term second mortgage loans that may be used to fund a downpayment. Prospective home buyers should check with their state housing finance agency to see if such a program is available in their community. To date, 14 state agencies have announced tax credit assistance programs, and more are expected to follow suit. The National Council of State Housing Agencies (NCSHA) has compiled a list of such programs, which can be found here.
    
    
20. The Secretary of Housing and Urban Development has announced that HUD will allow "monetization" of the tax credit. What does that mean?
    It means that HUD will allow buyers using FHA-insured mortgages to apply their anticipated tax credit toward their home purchase immediately rather than waiting until they file their 2009 income taxes to receive a refund. These funds may be used for certain downpayment and closing cost expenses. (From Judy: I don't know if this actually was made into policy. We have no info on it.)
    
    Under the guidelines announced by HUD, non-profits and FHA-approved lenders will be allowed to give home buyers short-term loans of up to $8,000.
    
    The guidelines also allow government agencies, such as state housing finance agencies, to facilitate home sales by providing longer term loans secured by second mortgages.
    
    Housing finance agencies and other government entities may also issue tax credit loans, which home buyers may use to satisfy the FHA 3.5 percent downpayment requirement.
    
    In addition, approved FHA lenders will also be able to purchase a home buyer’s anticipated tax credit to pay closing costs and downpayment costs above the 3.5 percent downpayment that is required for FHA-insured homes.
    
    More information about the guidelines is available on the NAHB web site. Read the HUD mortgagee letter (pdf) and an explanation of the FHA Mortgagee Letter on Tax Credit Monetization (pdf). An FAQ about monetization (pdf) is available at the NAHB web site.
    
    
21. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
    Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
    
    Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
    
    
22. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
    Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.

Where, oh where are the good deals? In brand-new condos.

I looked at several new condo projects with buyers yesterday. As we all know, there's a glut of new condos on the market. I think you have to be an optimistic person to be a real estate developer these days. Either that, or you just don't let facts confuse you. Anyway, most of the developers are wheeling and dealing as they are very anxious to get these units sold, and there are actual good deals to be had. As financing has been difficult over the last several years, most of the buildings have already gone ahead and gotten approved for FHA loans, which used to be a major hurdle. Many developers will also not only negotiate on price, but pay some/all closing costs, buy down rates, etc.

Anyway, here's my take on several of the buildings I saw. All offered units from the low $400's to the high $500's. Yes, there were a couple of units in the high $300's.

5254 Corteen Place, Valley Village. Nice, typical finishes: wood and stone floors, neutral colors. Each unit is three stories, with the top floor leading to a roof top patio. The views weren't great. This street is all multi-unit dwellings and parking can be a problem.

5232 Satsuma, North Hollywood (pictured). This 28-unit development is represented by one of the all-time broker class acts in local real estate, Anita Rich. Unfortunately, the developer made many design choices which will be unpopular, I think. The units are very loft-y, and as such, there are next to no kitchen cabinets. Whew! I've never heard any potential buyer say that they needed less cabinets, not more. Some units had painted concrete floors. That's an interesting choice, but again, I don't know too many people who would want that over wood or carpet. I know this "loft" style is cheaper for designers and developers, but let's stop pretending we live in an abandoned industrial building on the lower east side of NY, okay?

5227 Denny, North Hollywood. The top floor units have incredibly high ceilings. Very nice finishes -- at least the ones we could see, as the building electricity was off. Seems like they're offering lots of incentives.

10609 Bloomfield, Toluca Lake. Certainly the nicest location that we saw. This is a bank liquidation (the bank took it back from the developer) and there are only two units left. Nice finishes, but unfortunately the units have no patios or balconies.

FHA changes to loans for condos

There's news on FHA loans for condos, and restrictions are even tighter than they were before. Yes, they will still guarantee purchase money loans, but with the following stipulations:
- The units have to be 51% owner occupied (that isn't new);
- No more than 15% of units can be more than 30 days' delinquent on dues;
- There needs to be "walls-in" insurance. This insures replacement of items like kitchen cabinets, bathroom fixtures, etc. Most condo insurance policies cover the walls to the studs, and that's it;
- there is a restriction on how many units may be FHA financed. This is sort of like "I don't want to join a club that would have people like me as members."
This is not all-inclusive, and I understand there's some case-by-case flexibility.

Do you yelp?

In case you haven't checked it out, Yelp.com has lots of business and restaurant reviews written by actual customers. You can go on and write/rate your favorite local restaurant, or talk about an establishment that deserves to be burned to the ground. Today, Yelp's weekly Los Angeles east guide features Van Nuys! Learn about everybody's favorite greasy spoons, bars, and yes, Van Nuys nightlife. (No pic because Yelp won't let me copy their logo. Dang.)

2845 N. Lincoln has closed over asking; maybe 30 times is the charm

My listing at 2845 N. Lincoln in Burbank closed yesterday. This modest 3+1 was marketed as a light fixer and is in the excellent Jefferson elementary school district. Yes, it closed over full price -- it listed at $489,000 and sold for $520,000!

We listed it at $489,000 not because we wanted a bidding war but because that is what the comparable sales indicated the home would likely sell for. The sellers and I were very surprised to receive six offers immediately, with all but 2 offering over full price. Three of the four offers were for conventional loans with 20% down, too.

Were we worried about the appraisal? Oh yes -- but the appraisal came in at $520,000. Was I worried because Bank of America was doing the loan? Yes, but they actually managed to fund it more or less on time without too many screw ups.

And it was an incredibly smooth escrow, thanks to the sellers, buyers, buyers' agent, and our escrow officer. The buyers had made offers on 30 other houses before they got this accepted! I bet they have something to teach us about patience.

The government already mandates insurance - fire insurance

Mercifully, the local fires have not yet destroyed many homes. Are people who own homes in high fire hazard areas able to even get hazard insurance? Yes, thanks to the government. And you.

California Fair Plan was adopted by the state legislature in 1968. It guarantees that insurance companies who do business in CA must contribute to an insurance pool that will issue a fire insurance policy of “last resort.” In other words, if you live too close to stuff that burns up and can endanger your home (see Glendale’s information here for example), nobody will issue you insurance – except the California Fair Plan. At a great rate, btw. And it’s financed through the payments the rest of us make on our hazard insurance premiums. Does this encourage home building in high fire hazard areas? Of course it does -- and has.

With fire season just beginning, and with substantial areas of the state already in flames, I wonder if any so-called “tea baggers” who live in fire-endangered areas are happy they have government-mandated fire insurance on their property?

I know the appraisal issue has been done to death here, but...

Okay, this whole wacky appraisal environment is obviously not bugging just me, and here's an article from yesterday's L.A. Times to prove it.

5915 Irvine closed yesterday

5915 Irvine in North Hollywood closed yesterday! This was the house with the three appraisals in three weeks with a span of $100,000 between the three. However, the buyers really wanted the house and bravely worked through the drama and the seller and his agent were very kind and patient with us. Sometimes difficult deals do work out...

Fun site discovery

Are you obsessing about decorating your home or the home you'll own one day? Here's a great new site for you: Younghouselove.com. These folks just won't quit redoing their house, and some of their ideas are so easy that even I could tackle them. Yes, there is a lot of personal stuff on this site that you won't really care about, but just get past that. Thanks, Floris and Rose Anne, for the heads-up here.

Home inventory drops as sales rise, as if we didn't know

California Association of Realtors is reporting that the supply of available homes for sale is diminishing as sales increase. Oh, really? Gosh, how long has that been happening? Thanks to LALand, the LATimes real estate blog, for picking up this story, as I am never particularly interested in what CAR says.

Am I cool because I know what a gastropub is?

This is about my second-favorite obsession: food. The husband and I recently discovered two newish restaurants in the area, Laurel Tavern and Henry's Hat. Both are really bars that also serve terrific small meals ("gastopubs"), and both are casual and (relatively) inexpensive. Both are cavernous rooms with long full bars, and phenomenal hamburgers. And both are on the same stretch of road, although they're about two miles apart.

Henry's Hat, pictured above, is at 3413 Cahuenga Blvd., right across from the southern Universal City entrance. It's owned by Luna Park, and is a little more sports-bar-ish of the two. Laurel Tavern is on Ventura, east of Laurel Canyon, in Studio City. The decor is remarkably similar at both places. Laurel Tavern is the more "foodie" of the two (it has marrow bones on the menu and fewer tvs). Again, the burgers are terrific and the atmosphere is friendly and casual at both places. Welcome to the area, gastropubs!

Against the odds, 500 Amherst closed today

I represented the buyers in the purchase of 500 Amherst Dr. in Burbank, which closed today. We never thought it would. The house was on the market for $985,000 for months. The sellers had several offers, and even had it in escrow once before us. My clients bought it for $910k, which I thought was still a little high, but it appraised just fine. And we even cancelled the escrow once. But the real estate Gods apparently wanted my buyers to have this, and thanks to everybody's patience this has happened.

Architecturally, the home is a little different -- most homes in the neighborhood are traditional, not contemporary. And for such a big home (3800+ sf), it only has two bedrooms. That's right. Two. The entire upstairs is one massive master suite. And it was last redone in the early 1960's. The decor is straight out of Mad Men, complete with pinch-pleat drapes, wallpaper, a built-in high-fi cabinet, and lots of wood paneling. Nevertheless, there is something really charming about it, and the backyard is huge and gorgeous (it has drainage issues, but that's another story).

My clients are extremely creative and I look forward to seeing exactly what they do with this.

L.A. Times catches up: "Home sales and prices on the rise"

Sorry for two LAT posts in a row, but this was the headline on the front of today's times: "Home sales and prices on the rise." (The hard copy headline is slightly different from the LALand headline, where I got the link.) I know you won't believe me, but Peter Hong interviewed me for this article. I didn't make the final edit. Bah.

In fairness to the media and how under-reported this story has been, most of the major journalists use financial statisticians and data experts for their sources. As we all know, those folks measure what has occurred, not what's happening this minute.

As far as all that foreclosure inventory, don't hold your breath for it to hit the market. My sources tell me that it will trickle on to the market over the next two years.

Monday evening reading from LAT -- who saw the bubble coming and do they see it going now

Here's an article from today's L.A. Times. It's about financial experts who saw the housing bubble and impending crash coming (like, that's everybody) and sold their homes. Now, some are buying again. And some are not. For those who are timing the market: are they right? Or just lucky? Or what? To me, as much as I love Paul Krugman, it just goes to show: nobody knows anything.

iPhone app I'd like to see

Here's an iPhone app I'd like to see: Put-rude-lying-Realtors-and-their-venal-grasping-clients-on-a-rocket- ship-and-shoot-them-into-the-sun app. Or how about a death-ray-from-Mars -for-home-buyers-attempting-"claw back"-strategies app? Can some iPhone software developer help me out here?

Tale of two appraisals.

It was the best of appraisals, it was the worst of appraisals. And both were on the same house. Names and addresses are left out here to protect bla bla bla.

Backstory: the house was bought at a foreclosure auction in May, fixed up, and sold to my clients in July. Our purchase price is $525k.

The first appraisal came in at $425k. The appraiser was from out of the area. We knew we were in trouble when the cover page picture was of some other house. And two comps used were on major streets, not residential streets. What happens when an appraisal comes in so low? The lender will only loan 80% of the appraised value.

The second appraisal was done two weeks later after the clients switched lenders. The appraiser used realistic comps. And the value came in at $525k. Not only will the bank loan more money on this property, but my buyer clients are relieved that the house is currently worth what they agreed to pay for it.

How can two appraisals be so different? The answer may have to do with new appraisal regulations. Banks and lenders now have to order their appraisals from pools of appraisers, rather than just calling individuals they've worked with before. And these pools are undercutting each other on price. So what you get are inexperienced appraisers doing as much as they can, as fast as they can, as cheaply as they can. And often not doing a very good job in picking comparable properties. If you're in this situation, don't be afraid to ask for an appraisal review if you think that something about the appraisal just doesn't quite smell right.

Foreclosures and statistics

For those of you waiting for an increase in home inventory due to foreclosures, and sure that the banks are going to dump a bunch on the market any minute, here's the latest from Realtors who handle many bank-owned properties: it's going to be a trickle, not a flood. One of the reasons: the banks don't want to dump a lot of houses on the market at once because it will depress prices further.

And Market Metrics has come out with this statistic: there is only a month-and-a-half supply of inventory right now in the SFV. No surprise. The supply of houses for sale is as low as I've ever seen it, not counting brand new condos.

Real estate gone wild!

Local real estate was so giddy with excitement this week that it pulled up its shirt and flashed us. Seriously, this week was the busiest I've had in a long time, and Wednesday and Thursday were the busiest days I've had as a Realtor ever. Let's save the reasons for another time and look at my numbers:
- Number of people at my Sunday open house on Birmingham: 80+. Number of people who attended the Lincoln open house that a colleague held: 100+.
- Offers on my listing on Lincoln by Tuesday: 6. Number of offers at or over full price: 4. Sellers accepted an offer substantially over full price.
- Offers on my listing on Birmingham by Tuesday: 5 -- one accepted at full price. And these listings were not deliberately underpriced at all.
- Number of offers previously submitted by prevailing buyers on the Lincoln house: According to their agent, 31. Anymore, it seems that buyers are submitting eight or nine or nineteen offers before they get one property.
- Of all offers received, number that were offering less than 20% down (and yes, I ask for proof of funds to close): only 1.
- Offers written by me for clients this week: 2.
- Offers written that were then accepted: one (yay!). The other offer was one of 11, and even though my buyers came in $40k over asking, they were still $60k from getting it.
- Transactions that appeared to be falling apart by mid-week: 3. All transactions look solid now.
- Problems with lenders: 1
- Problems with appraisals: 1.
- Unnerved clients: everybody.
- Realtor who wished this week that she were paid by the hour: 1 and that's me.
- Drinks needed: plenty.

Mamas, don't let your babies grow up to get home loans through BofA

Bank of America and Countrywide are bringing their "c" game these days. While they agressively market their purchase money lending services, they apparently can't deliver on what they're promising. We're hearing many stories -- more each day -- about their loans crashing and burning and/or taking forever to fund -- up to 70 days.

This doesn't surprise me as my own refinance took five months to go through.

Notables of the week

Nicest house of the week: My two listings, of course, at 648 Birmingham and 2845 N. Lincoln in Burbank. Both will be open Sunday from 2 to 5.

Second nicest house of the week: a townhome on Valley Spring in Studio City. Just lovely, and with its own garage! I'm not going to advertise it further here in case my buyers want to buy it.

Best view of the week: from the for-sale house on Via Montana. You can see all the way to the County Hospital and the Ralph's warehouse! And downtown, Glendale and across the Valley.

Laughable seller statement of the week: "You don't need a/c in the summer in the Valley."

Trend of the week, continuing: Realtors that make their listings impossible to show.

Trend of the week, new: Realtors that don't read showing instructions on the mls.

Bank of the week: None other than Bank of America. If you read this blog often, you know that my recent BofA refinance took six months. Bank of America isn't doing much better with purchase money loans, apparently. I've heard lots and lots of anecdotes in the last few days about how long it takes for their loans to be approved, funded, etc. Way to bring your "A" game, BofA!

All sorts of funky new lending rules are about to take effect -- or not

Update 7/31/09: Apparently, what follows only applies to Wells Fargo home loans at present. Fannie Mae and Freddie Mac have instituted all sorts of new regulations for loans that they buy -- which is most property loans that are made. I don't have many details yet, and I don't think many lenders do either. For FHA loans, an investor-seller had to own the property for at least 90 days before an FHA buyer could purchase it. That makes sense -- we don't want the government guaranteeing loans that only benefit flippers. Now, however, it looks like the 90-day rule will cover ALL non-jumbo loans for all single family homes. I have a dog in this fight as one of my current escrows is a gorgeous flip that has only been owned by the present seller since June. I represent the buyers. Stay tuned for more details, I hope.