Straight Talk About Real Estate

Most lenders are now adding an extra 1/2 a percent to the interest rate for loans made for condominiums. While most people who buy condos do so because it is more affordable, a higher interest rate doesn’t help at all.

The Los Angeles Times reported that the Los Angeles City Council passed a so-called anti-mansionization measure for the Sunland-Tunjunga area. This attempts to stop builders from tearing down a small home and building a massive home out of character with the neighborhood. The measure restricts square footage based on lot size, even though setback requirements may allow the home to be bigger.

At first glance this seems reasonable. But considering you are not in a private community, is it right for the government to tell you how big you can build your house? They are not talking about safety standards, or a matter of obstructing someone’s view, or meeting setback requirements. This measure is strictly limiting square footage.

I think there is something not right about this. Isn’t it a basic homeowner’s freedom to have his house any size he wants? Maybe they should regulate a minimum size. Maybe everyone else in the area should make their house bigger.

According to the U.S. Census Bureau statistics, the average size of homes more than doubled from 1950 to 1999. From 1982 to 2004, the average floor area of new single-family houses grew 40%, from 1690 square feet to 2366 square feet. These days, more than a third of new houses built in the United States are 2,400 square feet or bigger. Meanwhile, the average family decreased!

What do people need the big homes for? I venture to guess it’s for all the toys - multi-media home theaters, billiard rooms, and lots of closets to store all kinds of gadgets.

Is there any difference between Realtor® and a real estate agent?

Contrary to popular belief, not all real estate agents are Realtors®. By definition, a Realtor® is “a real estate professional who is a member of the National Association of Realtors (NAR) and subscribes to its strict Code of Ethics.” A real estate agent is simply a person licensed to sell real estate.

There are basically three characteristics of being a Realtor®:
1. Realtors® subscribe to a strict Code of Ethics that often go above those mandated by law. This is a commitment to fairness and moral conduct in conducting business.
2. Realtors® have access to resources to further their knowledge and assist their clients. These include legal experts, housing data gathered by NAR, and community profiles.
3. Realtors® have a high commitment to professional development. Many have attended training and classes to obtain professional designations such as the Graduate Realtor® Institute, Seniors Real Estate Specialist®, and Certified International Property Specialist.

When choosing a agent to work with you, ask if he/she is a Realtor®.

A friend, we’ll call him Frank, recently told me he was denied for a credit card. I knew that he maintained a perfect credit history - paying bills on time, no outstanding balances, not too many opened accounts, etc. I advised him to get a free credit report and see where the mistake was so he can clear it up with the credit bureaus. Upon viewing his credit report, Frank saw a delinquent account with a balance of over $900 with a cell phone company - he doesn’t have a cell phone!

Then he remembered back in 2001 he allowed a “friend” to use his name to qualify for a cell phone account. That friend had a bankruptcy and couldn’t get one on his own credit. He assured Frank that he will make all the payments on the account; apparently he didn’t. Now Frank’s credit is negatively affected and the collection agency will come after Frank, not his “friend”. If he was in escrow for a house and was getting a mortgage loan, I would advice him to pay off the balance just so it doesn’t ruin his chance of purchasing the house. Unfair I know, but cheaper than getting a B paper loan, or falling out of escrow.

Lesson learned: I think you can figure that out.

When you apply for a loan such as a home mortgage, automobile loan and credit cards, lenders will determine your creditworthiness by your FICO score.

This measurement was created by the Fair Isaac Corporation in 1989. It is a numeric ranking somewhere between 300 and 850. Your score depends on your payment history, amounts owed, length of credit history, new credit, and types of credit in use. The higher your score, the better loan options are available to you. With a score of 730 and above, you can likely get any loan you want. You can still obtain a loan with a lower score, but your interest rate will be higher and you may not get the loan program you want.

So you see the importance of protecting your credit by making timely payments on all your bills.

According to Darcy Garneau, prinicipal with EDI Architecture Inc. in Houston, the home as a castle is being replaced by the home as personal retreat.

“We’re seeing sanctuary spaces being designed into newer homes,” says Alex Anamos, studio director and project architect at KAA Design Group in Los Angeles.

Examples of these are yoga or meditation rooms, small alcoves, office spaces and a window seat.

“Is it safe to have a lockbox put on my house? Does that mean anyone can come in?”

I have never had any incidence with sellers having a problem with theft when their house is on the market with a lockbox installed for showing nor have I ever heard of such. That is not to say it can never happen.

I always caution my sellers to do two things:

1. Do not leave valuables lying around. Put away all cash, checks, jewelry, watches, credit cards as well as personal identity information such as bank statements, passports, etc into a low drawer. Valuable should be placed in a safe deposit box. Remember do not empty your pocket onto the dresser out in the open with keys, cash, wallet, etc. This way you do not openly tempt anyone, especially teens and children who may come with their parents to look at the house.

2. Pack away breakables, knick-knacks or anything of immense value to you, such as heirlooms. Accidents can happen.