How are Homes Sold?

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What your home is really worth

Excerpt from –NEW YORK (Money magazine)

Appraisers say the following five areas are where homeowners often misjudge the worth of their abode.

1. THE OUTSIDE

The appraiser sees: Overgrown bushes and chipped paint.

What he does: Slices as much as 3% off the value of an average-size home.

Why: Curb appeal is primo. And an unkempt yard is a sign that there may be other issues.

“A good-looking lawn and bushes imply that you also take care of the internal systems in the house,” says Jonathan Miller, president and CEO of a New York City-based appraisal firm that works throughout the tri-state area.

Moreover, the more meticulous your neighbors are about grooming, the more your appraiser will downgrade the value of your home.

“If a lot of the nearby properties are professionally maintained, the one that sticks out like a sore thumb will get a harder adjustment than in a subdivision where there’s more variation,” says San Diego appraiser Armando Ortiz.

2. BASIC SYSTEMS

The appraiser sees: A brand-new roof.

What he does: Nothing.

Why: Just as a knee replacement won’t make you look 20 years younger, a new roof, furnace, or boiler isn’t considered an improvement to your home.

That said, if your roof is in disrepair, replace it: Signs of leaks or discoloration can knock a significant amount off the home’s value.

“When people buy a home, they expect the roof to be working,” says Columbus appraiser Mike Armentrout. “So while a new one isn’t an added feature, it will help your chances of a sale.”

3. THE BASEMENT

The appraiser sees: A recently finished basement with a half bath.

What he does: Adds about 2% to the value of the home.

Why: Yes, your finished basement adds value — but don’t expect it to count like first-floor space.

The addition of a bedroom and quarter bath on the ground floor could increase your home’s value by up to 20%, especially if you’ve got only one other bathroom.

“A below-ground basement normally isn’t included in the square footage of the house,” says Miller.

The same rule applies to outbuildings like a pool-house casita, painting shed, or studio.

4. THE MARKET

The appraiser hears: Two nearby homes just went into contract above their asking prices.

What he does: Nothing.

Why: While a broker might pump up a home’s asking price based on the sense that the market is “hot,” by and large, appraisers are bound by the data of recent comparable sales.

What if prices are suddenly up in your area, and you’re nervous that your house won’t appraise for contract price? In that case, you might want to delay your appraisal until one of those recently contracted sales closes.

5. A REMODEL

The appraiser sees: An expensive, custom-made, built-in entertainment center.

What he does: Makes a negative adjustment to the valuation.

Why: “Cost doesn’t equal value,” says Miller.

Renovations that are at all trendy — or not in keeping with the historical period of the home — will be assessed at the cost of ripping them out.

Timeless improvements, on the other hand, such as a deep sink or new wooden cabinets in the kitchen, will add value.

So if you’re thinking of remodeling, ask a local real estate agent to tell you what’s on the wish list of today’s buyers.

New California Requirements for Carbon Monoxide Detectors

As of July 1, 2011, California landlords and homeowners, including sellers of residential property, must comply with the Carbon Monoxide Poisoning Prevention Act of 2010 (Ca. Health and Safety Code §§ 13260 and following; and §§ 17926 and following). This law addresses the problem of carbon monoxide poisoning, which is the leading cause of accidental deaths in the United States. Carbon monoxide is an odorless gas produced whenever any fuel is burned. It can enter the home from sources as seemingly innocent as a gas stove, furnace, or woodstove, usually due to leakage, backdrafting, or poor venting.

The new California law requires the installation of a carbon monoxide (CO) alarm (or a CO alarm combined with a smoke detector) that emits an alarm and has been tested and certified in accordance with standards developed by the American National Standards Institute (ANSI) and Underwriters Laboratories Inc. (UL).

Detectors must be installed in all dwelling units that contain a fossil fuel burning heater, appliance, or fireplace; or that have an attached garage. (A fossil fuel is coal, kerosene, oil, wood, fuel gases, and other petroleum or hydrocarbon products that emit carbon monoxide as a byproduct of combustion). Heres the installation schedule:

  • July 1, 2011: all single-family homes
  • January 1, 2013: all other dwelling units (such as multi-family residences)

Landlords’ and Tenants’ Responsibilities

Landlords are charged with installing and maintaining the detectors, and may enter the rental for the purposes of installing, repairing, and testing. Tenants are responsible for notifying the landlord if the device becomes inoperable.

Sellers’ Responsibilities

Currently, the law requires sellers of residential real estate containing one to four living units to complete disclosure forms as part of the sales process. Sellers of single-family homes must give buyers written notice of compliance with laws concerning smoke detectors. Sellers of any real property containing a water heater must certify to any buyer that the heater complies with safety requirements.

The new law amends these duties, by changing the disclosure forms so that the seller will certify that the property complies with the requirements for smoke detectors and water heaters. The new seller disclosure forms also now include a section for carbon monoxide devices, and say that installation is not a precondition, or requirement, for sale or transfer. However, sellers should not be surprised if buyers insist that such detectors be installed as a condition of closing.

If youre a home buyer, your inspector should tell you whether the house does, in fact, contain adequate CO detectors. If not, you can either ask for them as part of your negotiations, or simply plan to buy them yourself. The cost is usually between $20 and $90 per detector. The Consumer Product Safety Commission recommends installing a CO alarm in the hallway near every separate sleeping area of the home.

Home prices rise in Los Angeles after 6 years of depreciation

Los Angeles housing market
By Tiffany HsuJuly 24, 2012, 11:43 a.m.

Los Angeles homes are headed for a price spike – albeit a small one – according to new data from real estate website Zillow.

After six years of depreciation, values in the metropolitan area rose 0.2% this quarter, and are expected to increase 0.5% over the next 12 months. Zillow forecasts that nationwide prices will tick up 1.1%.

San Diego will enjoy a 1.6% price increase, while San Francisco values will go up 1.9%, Sacramento 2.5%, San Jose 3.4% and Riverside 5.6%, according to Zillow.

Compared to the same quarter of last year, prices rose 0.7% in the city of Los Angeles.

Rents have increased 2.6% in both the metro area and the city.

Manhattan Beach led the rise in values with a 10.7% spike in the second quarter, followed by a 7.3% jump in Bell Canyon and Maywood, a 5.6% increase in Bell Gardens and a 5.5% boost in West Athens.

Zillow, in its broader national report, said housing prices posted their first year-over-year increase since 2007, edging up 0.2% in the second quarter compared to the same period in 2011. The median value is at $149,300, according to the site.

Southern California’s median sales prices was up 1.7% in June from May and 5.3% more compared to a year earlier to $300,000, according to research firm DataQuick earlier this month. Home sales rose 7.5% year-over-year in their sixth straight uptick.

Downtown LA gets a Grand Park

Downtown Los Angeles  announced the unveiling of the new Grand Park this past Thursday. City planners and enthusiasts have high hopes for the park expecting it to be a new vibrant center of city life. We here at BermanKandel are excited for the growth of our beautiful region.

Source: Grand Park downtown opens with a flourish — and hopes of growing, by Sam Allen, Los Angeles Times

Grand Park downtown opens with a flourish — and hopes of growing

The park gives downtown L.A. a major green space. Officials already are talking about expanding the park and linking it to other projects.

 

Dancers perform in a fountain at Grand Park in downtown Los Angeles.

 

By Sam Allen, Los Angeles TimesJuly 27, 2012

As they celebrated the opening of downtown Los Angeles’ new Grand Park on Thursday, local officials and civic leaders were already talking about the possibility of expanding the space and connecting it to other projects along Grand Avenue.

The rectangular, 12-acre park, which stretches from the top of Bunker Hill to the base of City Hall, provides downtown with its first major green space, and officials hope it can become a new cultural hub for the region.

For all the excitement about the park, officials said that they are aware of its limitations and that the current footprint should be only a first step. The park offers a dramatic view of City Hall and a renovated Arthur J. Will Memorial Fountain, but parts of it are obscured by two large government buildings: the Stanley Mosk Courthouse and the county Hall of Administration.

The hope is that as more development occurs in the area, those buildings will be torn down, creating more space for the park and better linking it to the rest of downtown.

In 2006, officials discussed a plan to raze the courthouse and county administration building, but those talks died during the economic recession. At the opening ceremony Thursday, Los Angeles County Supervisor Gloria Molina said she wants to revisit the idea.

“These buildings have to come down, that’s the one thing we really need,” Molina said. “We need more green and more trees and more open space for people to enjoy.”

When such a plan would be feasible remains unclear, as the state government, which owns the courthouse, and the county have been struggling financially. Both the courthouse and county hall have suffered damage from earthquakes. A county study found that a new headquarters would be more efficient and cheaper to operate than the current building.

But building new facilities would be costly and time-consuming. A few years ago, the Los Angeles Police Department completed a new headquarters to replace the aging Parker Center at a price tag of more than $400 million.

Still, billionaire philanthropist Eli Broad, who helped launch an effort to redevelop Grand Avenue 12 years ago, said this week that he expected both buildings to be torn down at some point in the future.

“It’s inevitable,” said Nelson Rising, a real estate developer and former chairman of a nonprofit that oversaw the park project. “It’s just a question of what funding sources will be there.… We need the economy to be more robust.”

Grand Park was conceived in the early 2000s as part of the billion-dollar plan to remake Grand Avenue into a cultural center with luxury condos, a five-star hotel and upscale retail shops. Much of that project has been stalled by the bad economy. But the park moved forward, thanks to a $50-million down payment from Related Cos., the developer on the project.

Bea Hsu, a vice president for Related California, called the park’s opening a “major milestone” for the broader Grand Avenue project. She said the firm expects to start construction this year on an apartment tower down the block that will connect to an art museum Broad is building at the corner of 1st Street and Grand.

“For us, Grand Avenue is a long-term investment, to which we bring a long-term commitment,” she said.

Hsu, Rising and Broad were among the hundreds in attendance Thursday as the upper half of the park officially opened to the public.

The hourlong ceremony included speeches from politicians, live music, a reading from California’s poet laureate and a restarting of the Will fountain. Dancers in blue bodysuits leaped and tumbled in the fountain while children marched in brightly colored outfits.

“Today is basically a glimpse of the beauty and magic that could happen in this park,” said Lucas Rivera, the park’s recently hired director. “It’s just a teaser.”

Rivera said Grand Park’s biggest asset is its flexibility. Events such as concerts, film screenings and farmers markets will be coordinated through a partnership with the Music Center, which also manages the adjacent Disney Concert Hall, Dorothy Chandler Pavilion and Ahmanson Theater.

On Thursday, officials also announced a last-minute change to the hours at Grand Park: Instead of closing at dusk, as originally planned, it will remain open until 10 each night. Dawn McDivitt, project manager for Los Angeles County, said the change stemmed from a desire to make the park more interactive.

“We didn’t want people to feel they were in trouble if they just wanted to walk through,” she said.

Security remains a concern at Grand Park because of the large homeless population downtown and the recent flare-ups between police and activist groups such asOccupy L.A.

Molina said the county would take a “firm and vigilant” approach toward security at the park, with guards from the Music Center working in conjunction with the Sheriff’s Department. “We don’t want to throw protesters out … but we want this to be a park for everyone to enjoy,” she said.

Grand Park seemed to be a hit in its first hours, as downtown workers gathered for their lunch breaks, children played in the fountain’s new “splash pad” and people walked their dogs.

“It’s fantastic just to have a place to picnic and enjoy an afternoon,” said KT Somero, a music librarian at the nearby Colburn School.

“I want to come here to take a nap every day,” said Megan Hamilton, a coordinator at the Museum of Contemporary Art, who was lying on one of Grand Park’s lawns with two co-workers. “It’s a really nice, Zen spot right in the middle of downtown.”

sam.allen@latimes.com

Simpler Mortgage Disclosure Forms Unveiled

Source:  Simpler Mortgage Disclosure Forms Unveiled, by Scott Reckard and Alejandro Lazo, The Los Angeles Times; 10 July 2012. 

Mortgage forms

The proposed forms, which begin a public review period, are designed to clearly reveal important details of home loans to borrowers before they sign final documents.

The Consumer Financial Protection Bureau released its final proposal for simpler mortgage disclosures — a three-page summary of home-loan costs and risks — to a lukewarm response from industry groups and a key consumer advocate.

The proposed disclosure forms, released Monday, are the product of 18 months of research and consumer testing. The bureau said the forms would benefit consumers by using plain language and lenders by replacing two sets of more complex disclosures that currently must be made.

The comparison sheets are designed to clearly disclose important details of home loans to borrowers before they sign their mortgage documents, preventing nasty surprises at closing and sometimes years later.

The proposed “loan estimate” and “closing disclosure” forms, with the same categories in both, are to be given to borrowers three days after they apply for a loan and three days before it closes to give them time to evaluate the mortgage.

The simple forms for consumers were accompanied by 1,009 pages of material explaining the bureau’s proposed approach and how lenders should implement the new rules.

Bankers and consumer groups reacted guardedly, saying they needed more time to study the details. The Center for Responsible Lending, a leading consumer advocacy group, declined to comment, referring questions to National Consumer Law Center attorney Diane Thompson, who expressed disappointment.

Thompson said the forms make it possible for consumers to compare interest rates and closing costs for loans, and provide assurance those terms won’t rise significantly when the loan closes. They also make clear whether a loan is adjustable, state a maximum payment and examine insurance and property tax costs.

But the new forms downplay a previous benchmark, the annual percentage rate, which attempted to summarize the combined effect of the fees, interest rate and term of the loan in one figure. Thompson said that emphasizing the separate components of a loan at the expense of the overall effect could cause borrowers to select a loan that isn’t the best alternative.

“Nobody has had time to digest the final forms and to read the details of the testing reports,” Thompson said. “But from what we’ve seen, they’ve focused much more on the constituent components of the cost of credit rather than allow homeowners to compare loans that are priced differently.”

A group representing major financial firms was cautiously positive about the proposal.

“We are generally supportive of the effort and have been working with them for a while on this,” said Scott Talbott, chief lobbyist for the Financial Services Roundtable. “We are still reading it and won’t have comments good or bad until a little later in the week.”

David Stevens, chief executive of the Mortgage Bankers Assn., said he welcomed simpler disclosure rules but said the change would “impose massive change on the industry.”

“We will be working with the CFPB to make sure the forms, and the rules surrounding them, are best for borrowers and lenders alike,” Stevens said.

In the past, consumers often complained about hefty finance charges that cropped up just as they were ready to buy a home. Many said they had not realized the consequences of adjustable loans — mortgages whose rising payments helped create the mortgage meltdown that touched off the financial crisis.

“Our proposed redesign of the federal mortgage forms provides much-needed transparency in the mortgage market and gives consumers greater power over the exciting and daunting process of buying a home,” bureau Director Richard Cordray said in a news release.

The proposal also would rewrite rules governing high-cost mortgages, requiring homeowners to meet with financial counselors before taking out the expensive loans. The new rules would ban penalties imposed on borrowers who pay off home loans early and would outlaw most balloon payments, large one-time payments at the end of a loan.

The proposed rules also would cap late fees, ban loan-modification fees and restrict fees charged when consumers ask for payoff statements for their loans.

The new rules are not yet final. The public has until Sept. 7 to review and comment on the proposals. Links to information and the proposed new regulations are provided at the Consumer Financial Protection Bureau website, http://www.consumerfinance.gov.

Source:  Simpler Mortgage Disclosure Forms Unveiled, by Scott Reckard and Alejandro Lazo, The Los Angeles Times; 10 July 2012.