Vicki Lloyd ~ MBA, ACRE, e-PRO, Realtor Lake Forest and South Orange County, CA

At least once a week, while checking the MLS, I find awful photos that an agent has loaded in to the MLS with his latest listing. I have been collecting them in a folder for a while, and sending them to my friend, Athol Kay, a Conneticut agent who has posted them on his "Bad MLS Photos" blog. Athol has since left the business, and I decided that I will just post them myself occasionally as I find them.

To me, the whole purpose of adding photos of listings is to present the attractive features that might make a potential buyer want to come see the property in person. With that in mind, see if you can figure out why an agent would include these photos (these were all actually in the SoCalMLS!):

I would really expect an agent to let his client know to clean everything up before the photos would be taken. In addition to the clutter all over the counter, and the open drawer with something sticking out of it, this agent couldn't even figure out how to get out of the way to avoid the flash in the mirror!

If the purpose of this photo is to prove that there is a lockbox on the door, couldn't the agent have at least pulled the junk mail and coupons off the door before taking the picture?

Sellers - before you sign a listing agreement, ask the agent to show you examples of his or her other listings and the photos that were used! Just because someone says they will put 20 photos in the MLS, doesn't mean they will be 20 good photos!

If you are thinking about buying or selling a home in Lake Forest, or other communities in South Orange County California, please contact me to help!

Vicki Lloyd, MBA, e-PRO, Realtor
The Real Estate Professionals
(949) 457-0281
email :Vicki@VickiLloyd.com
http://LiveLakeForest.com

Now that prices in Lake Forest have declined almost 30% in the last year, the "fundamentals" that so many "bubble bloggers" talk about are getting much closer to justifying a purchase!

My word-of-mouth, shoot-from-the-hip, gut feeling, and informal survey of average rents in Lake Forest give me the following starting basis for comparison:

2 bedroom average rent = $1550

If you have decent credit and have saved up about 6% for a down payment plus closing costs (or can get a relative to "gift" it to you), and use an FHA loan with the mortgage insurance premium added to the loan balance, the payments after tax consideration are very close to the same as paying rent!

Basic Assumptions :

FICO score = 680+

Down payment = 3.5% (can be a gift from your parents, or other close relative)

*Closing costs = 2.5% (title insurance, escrow fees, loan fees, etc.)

Mortgage insurance premium of 1.75% added to loan balance

*You may get the seller to pay some or all closing costs, but you will generally end up paying a higher price by that amount.

Sample purchase of $225,000 of a 2 bedroom condo:

Down payment = $7875
Closing costs = $5625

Loan amount = $220,924 (includes upfront mortgage premium)
Interest rate = 6.25%

Mortgage Insurance = 0.5%

Condo dues = $300/month (includes insurance)
Property taxes = 1.1%

Annual interest paid = $13,807
Property taxes = $2475
Net tax deductions @25%* rate = $4070 = $340/month
*I'm not a tax advisor, and this is just a rule of thumb for estimating purposes.

Monthly payment = $1939

Less tax savings = $340

Net effective monthly = $1599

The $49 difference between paying rent and owning can be justified with the emotional reward of being able to paint and decorate your own place to your own taste, keeping your pet without a deposit, and knowing that your landlord will not be giving you notice of either a rent increase, or that he is selling it and you will be having to move!

There are currently 40 condos on the active MLS priced at $230,000 or less. In the last 90 days, 34 have closed at less than $225,000. Are you tired of making your landlord's payments?

Contact me today to get started to find your very own home!

Vicki Lloyd, MBA, e-PRO, Realtor
The Real Estate Professionals
(949) 457-0281
email : Vicki@VickiLloyd.com

If you are planning to buy a condo, or a house in Lake Forest, Mission Viejo, Rancho Santa Margarita, or other South Orange County area, there is a good chance that you will be buying in to a home owners’ association (HOA). If that is the case, make sure you read over all the HOA documents soon after you receive them. These are usually provided to you during the escrow process, and you will normally have 5 days after receiving these to either approve them, or cancel the purchase and get your money back.

What should you look at, or what should you look for?

Start with the budget. This will show you the items that are expected to be paid each month by your dues. Some budget items can be expected to go up almost every year - like costs for electricity, water, utilities, gasoline, insurance, and most labor. Also, look at the year-to-date actual financial statements to see how they compare to the budget. Have there been unexpected or substantially over-budget expenses? Is the income (from dues) under the budgeted amount? If there have been a lot of foreclosures in the association, the unpaid dues from those homes will have to be written off, and the shortfall will have to be made up by an increase to the next year’s dues budget. By law, in California, the HOA dues may be increased by the board of directors by up to 20% without a vote of the homeowners. If a 20% increase is not enough to cover any shortfall, a “special assessment” of up to 5% of the annual budget may be declared by a vote of the board of directors. Most associations publish their new budgets in November for the following calendar year, and the new dues assessments go into effect in January.

Review the Rules. Most HOAs have rules that address many areas of your life. Putting a basketball hoop on your garage, or a portable one in the driveway, may be restricted. Do you have a boat or RV? Many HOAs require that they not be visible from any other property or from the street, or that you may only park your RV in front of your house for the time it takes to load or unload it after a trip. Also, if you drive a commercial vehicle, know that there may be restrictions on keeping that in your driveway. Do you work from home? Some associations will not allow any kind of manufacturing or retail types of businesses, or will restrict the hours that you can operate. What kind of pets do you have? Chickens, ducks and pot-bellied pigs are often outlawed, and some associations put a weight limit on the size of dogs that are allowed. Read over the rules and make sure there aren’t any that you can’t live with!

Architectural Guidelines. Before you plan that room addition, front porch, patio cover, or major remodel to your new home, find out what is likely to be approved by the architectural committee. If you want to add a 2nd story, or change the exterior look of the home, find out before you buy that it will be allowed!

Meeting Minutes. The minutes from the Board of Directors’ meetings will tell you what is going on in the Association. Much of the time, the minutes are quite routine and boring, but check to see what issues are coming up at board meetings. Are neighbors fighting about something? Is the association failing to enforce the rules? Are they anticipating discontinuing any services, or upgrading any of the commonly owned facilities? Are there any lawsuits threatening the Association?

Buying a home that is part of an association means that you are buying ownership in that association. Do your homework - You need to know what you are buying!

Irvine Ranch Water District serves all of the city of Irvine and portions of Tustin, Newport Beach, Costa Mesa, Orange and Lake Forest. They are currently offering rebates on high efficiency water-saving upgrades such as a new washing machine ($335), new high-efficiency toilets (up to $265), weather based irrigation controllers ($60 per valve) and synthetic turf ($.30/square foot). Details of the programs and application forms are available at their website where they also have other tips to save water (and money!)

Now, you just have to figure out what to do with the old, less-efficient items!

I have been getting a number of calls or emails from buyers who think they want to buy a foreclosed home. After I ask them why they would want to do that, I usually hear "Because I want to get the most for my money and I've heard that foreclosures can be a real bargain."

Fair enough answer. Many buyers believe there are lots of bank-owned homes just waiting to be bought for 35% - 50% of market value. But here is what you should really expect :

• If the property is priced well, you will be in competition with many other buyers, and it will probably sell for over the list price, after you and the other buyers have submitted your "highest and best" offer.
• The bank will have a very one-sided contract - you will have to cool your heels and wait, and wait, and wait for them to get the contract back to you in writing, but then they will want you to remove all of your contingencies ("escape clauses") very quickly.
• You will be buying the house in "AS IS" condition, even though you won't know what the condition is until you pay an inspector* to examine it in detail.
• If you find that the cost of repairs will exceed your budget - too bad! They will very rarely re-negotiate the price or give credit for repairs. Your choice will be to cancel the contract, or spend more than you had originally expected.

*Make sure you find an experienced and thorough inspector! The seller (bank) really has no idea what may by right or wrong with the house and you will have no recourse if big problems reveal themselves after closing!