Donne Knudsen

Recently, hubby and I took a sunset cruise on Westlake Island with some Realtor friends. Besides the wonderful weather, good wine and snacks and the company of good friends, one of the joys of cruising Westlake is the view of some interesting homes.

My favorite is the pirate house, which I'm told is owned by some retired Disney executive. Hope you enjoy the pix and have a wonderful Sunday afternoon everyone.

Because of the dramatic rise in foreclosures, FHA has decided to temporarily waive one of its eligibility property requirements for certain distressed areas. Effective September 14, 2009, FHA has decided to waive the 90 seasoning requirement for FHA insured properties in NSP eligible areas.

This is great news for NSP buyers because typically, NSP areas are established simply because the foreclosure rates are incredibly high in these areas. The whole purpose of the NSP is to revitalize these areas with first time buyers.

Unfortunately, many of the foreclosed properties in these NSP eligible areas are being scooped up by all cash investors and then become ineligible to FHA buyers for 90 days.

More often than not, these properties are then purchased by either another cash investor or a conventional buyer within 90 days, thereby completely shutting out the FHA/NSP buyer. I want to also mention that while this new guideline applies to NSP eligible properties here in LA county, it really only applies to NSP LIPA buyers. It does not apply to standard NSP buyers.

This temporary waiver of the 90 day seasoning rule will only be in effect for one year and will expire on September 13, 2010. I have already contacted my NSP buyers and their Realtors to let them know what this means for them.

Los Angeles REO Listing Agents & Sellers: You can now consider FHA purchase offers on those properties that you've just purchased recently.

Los Angeles NSP Buyers: You are no longer disqualified from making offers on foreclosures that were just recently purchased by an investor.

Buying a home is one of the most important decisions someone can make, right up there with getting married and starting a family. Today's real estate market can be really scary, which is why it's important to get as much information as possible before starting your search. The pre-approval process is a relatively simple process (collecting your documentation is the hardest part).

So if you have any questions and/or concerns, please feel free to contact me. That's what I'm here for and I would love to be able to assist you in your search for an affordable home loan.

I came across a post today by Jessica Horton titled, I may be a real 'twit', but I won't ever try to scare you into buying. Jessica writes about how she won't scare her clients into buying now simply because of the $8,000 tax credit. It was a good post and I enjoyed it, so much so, it inspired me to write my own post.

While Jessica's post was written from her perspective of a Realtor in Georgia, the perspective of an LO here in SoCA (specifically Los Angeles & Ventura counties) is quite different. One of the things about Jessica's post that I really liked and identified with was her comment,

"Consumers making decisions from a position of strength is what will help improve our economy...".

So true Jessica and I couldn't agree with you more.

In the past few months, I've been noticing a rather disturbing trend among some of my clients and their escrows - they don't like the property they're buying! Some have actually hated the property they're buying and are actually dreading the close of escrow.

Yes, in some cases this may just be a case of buyer's remorse but for others, it is most certainly a bad decision and one made from a position of desperation. This is very sad folks and I feel sorry for these people for feeling that this is what they have to do in order to please all the people telling them to hurry up and buy something - anything but just hurry up and buy now.

I hear the stories from my buyers of how they feel pressured to hurry up and buy something or they'll lose the $8,000 tax credit. I hear their stories of how they feel pressured because they don't want to write an offer on every run-down, dilapidated dump they see. I hear their stories of how they feel pressured to waive all of their contingencies, which very well set them up for some sort of heartache later on in the transaction.

I hear my buyers stories of how they got caught up in the whole bidding war frenzy and how the only reason their offer got accepted was because they overbid everyone else - to the point that the property won't appraise for what they offered and they have to either come up with the difference (which many don't have) or walk away and start over again.

While I have promoted the $8,000 credit as a bonus to buying a home this year, I stop short of scaring my clients into buying something that doesn't serve their needs just because of the $8,000 tax credit. I have even been criticized by some of my clients Realtors for my comments to our mutual client when they're complaining to me about the absolute dump they've just put an offer on and how horrible it is and they don't know why they did it.

Once upon a time, I wondered what would make a person do something like that. Personally, I would never buy a house that I didn't like. When I started posing the question to my clients, the answer most often was because of FEAR! Fear of losing the tax credit. Fear of not finding something before their lease was up. Fear of disappointing someone. FEAR! FEAR! FEAR!

Jessica posted a bunch of tweets about not being afraid of coming from a position of strength. BRAVO JESSICA! I second that motion. However, the power positions that Jessica outlines in her tweets to her market don't necessarily apply to my market here in LA & Ventura counties.

I just want to offer buyers in my market some tips that I think might be a better strategy for them and their situations then the one they're using now. The thing about these strategies is that they don't involve the $8,000 tax credit.

1. While the media may be screaming at us everyday that it's a "buyers market", here in LA & Ventura counties, the "buyers" they're most often referring to are all cash investors. If you're planning to finance your purchase, you will not have as much negotiating power as an all cash investor - regardless of how much more you offer.

Accept this fact and realize that you are already at a disadvantage and work with your Realtor and LO about ways that they can make you a stronger buyer/borrower that don't involve over paying for a property you don't want.

2. Stop overbidding! Stop bidding what the area comps will not support! While your offer may be rejected and you lose out on the property, you save time, money and anguish by not having to walk away a couple of weeks later.

Don't get mired in self-pity because you lost another one. Suck it up! Immediately move on to another property. You'll be that much stronger and smarter for it because you didn't waste your time, energy and money on an over-priced dump that you really didn't want anyway.

3. While many properties have been artificially listed below market, these are merely suggested list prices and the starting point for the bidding wars. You still need to have your Realtor run the comps for the area so that you can make a fair market offer for the property. With LA & Ventura counties being declining markets, by making a fair market offer, you're still going to get a good price for the home, better than you would have a few years ago.

4. While there may seem to be a lot of inventory out there, there really isn't. LA & Ventura counties are down to about 2-3 months worth of inventory. This is historically low inventory for this area. Furthermore, there will be quite a few properties that say "NO FHA" or "CASH ONLY". Try and see if your Realtor and/or lender can find out why.

Sometimes, it may because the property won't qualify for a standard 203b but it may be a good candidate for a 203k. It may be because the property was flipped less than 90 days ago. There are some exceptions to that rule that the listing agent may not be aware of. Maybe day 91 is fast approaching and it's just a matter of stalling for a couple of days before dating the contract.

Just because the MLS is disqualifying you doesn't mean you may not still write an offer and possibly get it accepted. Some properties may just need a little more footwork to be done before you can submit an offer.

5. While it's true that builders are offering quite a few buying incentives (especially in the Santa Clarita & Antelope valleys), be very careful of what you may be getting yourself into by using the builders sales office and in-house lender to represent you. If possible, really try and have your own Realtor and lender represent you and your best interests. You will probably be very grateful in the end for their services.

6. Many REO seller banks will absolutely dictate the terms and conditions of the purchase transaction. If you don't sign all of their addendums as well as waive most of your contingencies, they may not accept your offer. If this is not in your best interest - walk away! Actually, RUN AWAY! Run as fast as you can and move on to another property. If they come back to you later, don't cave in - stand up for yourself and your best interests.

7. Real estate is a long term investment and in this market, it may be several years before you may be able to afford to move up. Be sure the place you're buying is somewhere you can see yourself living for at least 3-5 years.

The only people making money flipping in this market are cash investors and even some of them are having a hard time. If you can't stand the place now (even if you clean and fix it up) and if you can't see yourself being there for a few years then move on to another property.

Remember, REAL ESTATE IS VERY LOCAL! What works in your market may not work in my market and vice versa. Unless you're here in SoCA, you may not have any idea of what our buyers are going through here.

I would love to hear from some SoCA Realtors about how they are getting their FHA buyers offers accepted. This would be useful info for me and my buyers and the Realtors here in LA & Ventura counties.

The ones that I've been closing this year seem to be taking a long time to even get into escrow. Most of my closed escrows this year were the result of my clients looking for many, many months and losing dozens of offers before getting one accepted.

Just this past week, I have spoken with two of my clients who are thinking of putting their home search on hold until the first of the year. A couple of weeks ago, I had another client who came to the same decision.

While I was saddened to hear that these clients (that I have been working with for most of the year) have just become so disgusted with the whole process, I certainly understood their need for a break from the insanity. They assured me that we would keep in touch and that they would let me know when they were ready to start again.

I've seen this before - a lot actually. These people are just so drained with working their full time jobs, taking care of their families or themselves and spending every spare moment looking at properties (evenings and weekends). At this point, they don't give a %@#$ about the $8,000 tax credit, which probably should have been their attitude all along.

California Homebuyers Fund (CHF) is now offering CHF Access to low-median income buyers. CHF ACCESS was designed to assist qualifying homebuyers with their down-payment and/or closing costs by offer a low cost second mortgage of up to 3% of the sales price.

While many low-median income buyers are disqualified for many of the current down-payment assistance programs because they are not first time buyers, CHF Access is not limited to first time buyers. Additionally, for those first timers who don't qualify for many of the first time buyer programs because they may make a little too much, CHF Access income guidelines can be a little more flexible for some individuals.

There are also no sales price limits for CHF Access and no recapture tax requirements either. Maximum loan amounts are based on current FHA county loan amounts for both conforming and jumbo loan limits.

There are also no sales types requirements; CHF Access can be used for traditional sales, REO's or short sales (approved or not). There are also no location restrictions; eligible properties include any CA property.

CHF Access is for owner occupied purchases only but eligible borrowers may own other properties. Additionally, CHF Access is only eligible with an FHA 203b or 234c first trust deed (not eligible with a 203k).

The 3% second trust deed can be used to fulfill FHA's 3.5% minimum down payment requirement or it can be used towards closing costs.

The pre-approval process is relatively simple so contact me, Donne Knudsen, today to get pre-approved for this incredible program.

In the shadow of Placerita Canyon State Park and the Angeles National Forest and minutes from Stetson Ranch Equestrian Center, is an incredible home located at 12751 Bradley Ave. that is a great starter home for today's first time buyers.

This 3bd/2ba home with more than 1,200 sq. ft. of living space sits on a large lot of nearly 15,000 sq. ft., which is listed for $279,900 and is move-in ready.

Don't worry about having to fix up this home after the close of escrow because this isn't another run-down and dilapidated dumpy REO like all the rest of the properties you've probably been seeing.

This home has been completely remodeled with all new double pane windows, all new appliances and kitchen cabinets. The bathrooms have also been completely remodeled with new fixtures and facilities including vanity and tub/shower enclosure. There is also new sod and sprinklers in both yards.

The best part, this home is eligible for up to $75,000 in down payment assistance and the seller is offering a $10,000 credit too.

As part of HUD's Neighborhood Stabilization Grant Program, the Los Angeles Housing Department (LAHD) is offering their Low Income Purchase Assistance (LIPA) program. The LIPA program offers assistance in the form of a "silent second" of up to $75,000 to low income households for down payment and closing cost assistance for homebuyers who wish to purchase properties in NSP eligible areas.

Eligible buyers are those who do not currently own a home, whose household income meets the programs income guidelines and who plan to occupy the property as their primary residence.

For more info on this incredible home, contact Erin Toussieng of Americross Real Estate at 888.5083522 or at erin@fssocal.com. For more info on how you can qualify for the LIPA down payment assistance to purchase this wonderful home, contact me, Donne Knudsen of Cobalt Financial Corp, at 805.5278554 or info@donne4loans.com.

Today's real estate market and lending environment can be really scary, which is why it's important to get as much information as possible before starting your search. Finding out more about affordable home loan options and getting pre-approved is an absolute must.

The pre-approval process is relatively simple so contact me today to get pre-approved for this incredible program and make this fantastic property your next home.