Patti Phillips
Prudential California Realty
6119 La Granada
Rancho Santa Fe, CA 92067
Direct toll free: 800-680-9133
Cell: 619-507-2100 Office: 858-481-2020

Monday, June 30, 2008

The purpose of a home inspection

Why you should get an Inspection?

Whether you are buying or selling a home, you should have a professional home inspection performed.

A home inspection will look at the systems that make up the building such as:

Structural elements, foundation, framing etc
Plumbing systems
Electrical systems
Cosmetic condition, paint, siding etc

If you are buying a home, you need to know exactly what you are getting. A home inspection, performed by a professional home inspector, will reveal any hidden problems with the home so that they may be addressed BEFORE the deal is closed. You should require an inspection at the time you make a formal offer. Make sure the contract has an inspection contingency. Then, hire your own inspector and pay close attention to the inspection report. If you aren't comfortable with what he finds, you should kill the deal.

Likewise, if you are selling a home, you want to know about such potential hidden problems before your house goes on the market. Almost all contracts include the condition that the contract is contingent upon completion of a satisfactory inspection. And most buyer's are going to insist that the inspection be a professional home inspection, usually by an inspector they hire. If the buyer's inspector finds a problem, it can cause the buyer to get cold feet and the deal can often fall through. At best, surprise problems uncovered by the buyer's inspector will cause delays in closing, and usually you will have to pay for repairs at the last minute, or take a lower price on your home.

It's better to pay for your own inspection before putting your home on the market. Find out about any hidden problems and correct them in advance. Otherwise, you can count on the buyer's inspector finding them, at the worst possible time.

I know the best in the business. Contact me for more advice! 800-680-9133

Thursday, June 26, 2008


I found this interesting article regarding the surcharge that was being charged by Freddie and Fannie. This should help our market. It's worth reading.

If you have been thinking of buying investment property- now is the time. I can find you property that will provide a positive cash flow for you. Homeowners who have had their homes foreclosed on need housing. Many of these people are not "deadbeats." When you look at their credit, they have always paid their bills on time- until their loans readjusted. Then they were stuck. Usually everything else has remained paid on time. These previous homeowners make great tenants!

Call me to look at your investment potential!

Fannie and Freddie reverse the policy that made buyers cough up bigger down payments in certain locales.

By Kenneth R. Harney, Washington Post Writers Group
May 25, 2008

WASHINGTON -- Could the controversial mortgage industry practice of listing hundreds of local real estate markets as "declining" -- and restricting lending through higher down payments or credit scores -- be scrapped?

The two biggest players in the home mortgage field, Fannie Mae and Freddie Mac, did precisely that on May 16. Reversing its policy of penalizing buyers in troubled real estate markets with 5% higher down payments, Fannie Mae switched to a nationally uniform policy of charging borrowers the same minimum down payments irrespective of location. A spokesman for Freddie Mac, Brad German, said his company would be "suspending" its declining markets policy indefinitely as well.

Starting June 1, mortgage applicants who are underwritten by Fannie Mae's automated system online will qualify for 3% minimum down payments, wherever the property is located.

Borrowers whose applications require "manual" underwriting will pay 5% minimum down payments.

Under Fannie Mae's prior system, applicants buying in designated declining markets had to contribute 5% extra in upfront equity compared with borrowers in nondeclining market areas.

Freddie Mac's policy, which never employed a list of areas designated as declining, relied instead on lenders to flag applications using appraisal data or home price indexes. Freddie's policy also required 5% higher equity contributions upfront.

Critics -- including the National Assn. of Realtors and consumer advocacy groups -- had charged that Fannie Mae's policy served to further depress sales and real estate values in areas tainted as declining.

They also argued that many metropolitan markets experiencing price decreases contain sub-markets performing relatively well, and they do not deserve to be underwritten as high risk.

Marianne Sullivan, Fannie Mae's senior vice president for single-family credit and risk management, said the policy reversal was possible because of improvements to the company's automated underwriting system, allowing it to "assess each loan more precisely."

The change was welcomed by national real estate and housing groups.

Dick Gaylord, president of the National Assn. of Realtors, said the termination of a policy that "stigmatized" certain communities will "help stabilize the credit markets."

David Berenbaum, executive vice president of the National Community Reinvestment Coalition, said his group hopes the revised policies at Fannie Mae and Freddie Mac will prove to be "a model for others to follow."

Whether that happens any time soon, however, is far from certain. Private mortgage insurers, who provide loss protection to lenders on loans with low down payments, have virtually all adopted highly restrictive policies affecting ZIP Codes or metropolitan areas they designate as declining.

MGIC, the largest-volume insurer, recently expanded its list of distressed markets along with a series of cutbacks on specific types of low-equity loans. As of June 1, MGIC will not insure condominium mortgages in the state of Florida. It also has abandoned cash-out refinancings and loans on investment properties.

PMI Group, another major underwriter, has banned cash-out refis or investor loans in areas it judges to be distressed. Genworth Financial will not consider applications on second homes anywhere in Florida. AIG United Guaranty no longer will write insurance on condominiums in any of hundreds of ZIP Codes around the country that are on its declining markets list.

Asked whether his firm might reevaluate its declining markets restrictions in light of the abrupt changes at Fannie Mae and Freddie Mac, Terry Souers, a spokesman for Genworth Financial's mortgage insurance unit, said: "We're aware of their actions and will take them into consideration to see if additional steps are necessary."

But Michael J. Zimmerman, senior vice president of investor relations for MGIC, shot down hopes for any quick abandonment of declining markets restrictions at his firm. "We're not contemplating any changes," he said.

MGIC, which reported a $1.4 billion loss for the fourth quarter of 2007 and a $34 million loss for the first quarter of this year, has been hit hard by claims following foreclosures and extended delinquencies in once-booming housing markets.

What's the trend line here?

Fannie Mae's and Freddie Mac's policy switches should open the door to some additional low-down-payment mortgages -- and home sales -- in local areas once tagged as declining.

However, without the participation of private mortgage insurers -- who report solely to stock market investors rather than to Congress -- many borrowers will likely have to turn to the Federal Housing Administration, which accepts 3% down, does not have declining markets restrictions and whose loans can be purchased by Fannie Mae and Freddie Mac.

Ken Harney can be reached at

Monday, June 23, 2008

Prepare your grounds

The Back Yard
You only get one chance to make a first impression. When buyers are looking at your home, they will usually know almost instantly whether they like it or not. Make sure that by the time they get to looking at the back yard, you keep that great first impression going. Especially during summer months, when buyers will be thinking about barbeques and children playing, the back yard can make an important impression.

If you have a pool or hot tub make sure you keep it looking clean and neat. If your lawn is looking a little bit weak, some fertilizer and watering will bring back the deep green color. Be sure you mow and edge your lawn frequently until your home is sold. Cut back overgrown shrubs to show more of the exterior of your home. It will look more tidy and also makes the yard look bigger. Fences should be in good repair, and you should consider painting them. Make sure all latches and hinges are in good working order. If you have a dog, be extra vigilant to keep the “evidence” to a minimum. You can plant a few annuals to add some instant color that looks great. If you have a patio, make sure the furniture is clean and strategically placed. Consider adding some potted plants.

In short, do everything you can to make your back yard look as inviting and large as possible. It could mean the difference between an excited buyer and one with nagging doubts!

I have many more tips for showing your home in the best possible way! Contact me at 800-680-9133.


This following report was just released. I thought you might find it interesting. This could be the time for you to invest in low priced "sale" property, so that when the market bounces back, you can make money on your investments. Right now, if you invest, rent your investments out to those who have been displaced due to foreclosures.

Harvard report finds immigration, other demographic trends will fuel housing demand over the next decade.

By Beth Braverman, contributing writer
Last Updated: June 23, 2008: 7:56 AM EDT
NEW YORK ( -- The current housing market is bleak: home prices and sales are plummeting, foreclosure proceedings are skyrocketing and mortgage rates are on the rise.

When will things be better?

A new study from the Joint Center for Housing Studies of Harvard University, "The State of the Nation's Housing 2008," finds the country poised to see an increase in housing demand over the next decade.

"The good news is that we still have a growing population," said Nicolas Retsinas, director of the Joint Center for Housing Studies and one of the study's authors. "As long as you have more households, more people are going to need places to live."
Social trends - people getting married later and divorced more often - are making single-person households the fastest growing household type, the study finds. In addition, a long-term net increase in potential home buyers will be driven by demographic factors: the aging of "echo boomers" into adulthood, an increased life expectancy for baby boomers and projected annual immigration of 1.2 million.
From 2010 to 2020, the number of households in the United States will grow by an average of more than 1.4 million per year, the study finds.

Unsold homes block growth

Still, before the housing market can turn around, it must first work off the record numbers of unsold homes on the market. From 2005 to 2007, the number of new and existing vacant homes for sale rose 46% to 2.12 million.
The nationwide glut of unsold homes has hit the real estate market hard, forcing down sale prices, stemming new construction and leaving millions of homeowners with properties worth less than the value of their mortgage.
In early 2008, the nation had an 11-month supply of unsold new homes and a 10.7-month supply of existing single-family homes, according to the Harvard study. A six-month supply of existing homes is considered a buyers' market. Reducing the current supply will require price declines, a decrease in interest rates, employment growth, a return of consumer confidence and the revival of accessible mortgage credit.
A reduction in new home construction is another key to decreasing inventory, Retsinas said. Privately owned housing starts fell 3.3% to a seasonally adjusted annual rate of 975,000 in May from 1 million in April, according to the Commerce Department.

A sharp drop-off in housing starts has precipitated housing turnarounds in previous bubble-bust cycles, said Karl Case, a Wellesley College economics professor and a co-founder of real estate consulting firm Fiserv CSW. Case also sees long-term growth in the housing market and agrees that immigration and other demographic trends will help fuel a long-term recovery.

"If household formation continues at pace, prices will recover and starts will rise again," Case said.
In the housing bust of the early 1990s, cities with big immigrant populations, like Los Angeles, recovered more quickly than other metropolitan areas, like Boston, with lower foreign-born, said Case.

"Not all immigrants buy houses, but many immigrants buy houses," Case said. "That has a positive effect on the prices in a market."

Regional recoveries

Retsinas said parts of the country, such as the Northeast, with fewer vacant homes could see signs of a recovery in spring 2009. He was less sanguine about markets like the Southwest, where excessive overbuilding at the height of the market means it could take two years or more to sell off excess inventory.

Recovery in the Midwest represents that biggest challenge, because the housing downturn there stems from regional economic problems beyond overbuilding.

"They're not reacting to an overheated housing market there," Retsinas said. "They live in an economy that is shedding jobs."

First Published: June 23, 2008: 3:49 AM EDT

Monday, June 16, 2008

Manufactured vs Modular Homes

What is a manufactured home and how does it differ from a modular home?

A manufactured home (also known as a mobile home) is a single or multi-sectional home built on a permanent frame, like a steel undercarriage/chassis, with a removable transportation system (hitch and wheels). The unit is permanently attached to a site-built foundation and is subject to the 1976 federal standards established by the Department of Housing and Urban Development (HUD).

A modular home is constructed in a factory using conventional home floor joists and delivered to a site on a trailer or flat bed truck. The delivered home may be in the form of panels that are assembled at the site, may be pre-cut and assembled on site, or may be pre-built and delivered in one piece. The home, panels or pre-cut panels are lifted from the trailer and attached to a foundation. A modular home may be single or multi-storied. Modular homes are not subject to HUD standards, but must be built to state and local Uniform Building Codes.

I specialize in senior communities as well. Contact me at 800-680-9133 if you are thinking of Downsizing? Selling? Puchasing?

Monday, June 9, 2008

Is a Gated Community something for you?

Gated Communities

The popularity of living in gated, or private communities has been rising in recent years. It used to be that gated communities were thought of as being only for the rich. But today they are becoming more and more popular with middle and upper middle class families. Security is usually given as the biggest reason for choosing to live in a gated community. Among the other reasons people are attracted to living in these communities are protecting property values and lifestyle.Many gated communities are designed with amenities built around a particular lifestyle, with golf courses, tennis, swimming pools, or equestrian facilities.Gated communities are usually located on some of the most desirable land in the area. Prime land, combined with careful planning and HOA rules create an environment where home values hold up extremely well.

Aside from the gates or walls, the second most defining characteristic of gated or private communities is the Homeowner’s Association (HOA).The HOA is made up of all the owners of the development. The HOA is responsible for collection of the Association fees and making and enforcing the “rules” of the community.It is often also responsible for maintaining the public aspects of the community, such as streets, security, parks, etc.

The rules set by the HOA can vary a great deal, depending on the individual development.Typically the HOA will have rules pertaining to upkeep and appearance of homes within the development, specifying the colors of paint on outside walls, types of fencing, guidelines for landscaping and storage of boats or recreational vehicles.

Gated communities aren't for everyone.But with strong protection of property values, increased security, less traffic and amenities for your specific lifestyle, they are appealing to more people each year.

If you are interested in purchasing please call me at 800-680-9133

Monday, June 2, 2008

Deciding if a Fixer upper is good for you

Be sure you are prepared for a Fixer-upper.

The oft heard phrase "Buyer Beware" is never more appropriate than when considering the purchase of a fixer-upper.You really need to know exactly what you’re getting into before buying.

It’s commonly believed that fixer-upper properties represent easy money that is ripe for the taking - that you can buy it, do a little work on it in your spare time, and then resell quickly for a large profit. Usually, this simply isn't the case. Although, with proper planning and foresight, good profits can be made by buying "distressed" properties at less than market value, making appropriate improvements and repairs, and then reselling. And for many first time buyers who intend to live in the house while working on it, buying a fixer-upper can be the very best option. It’s less risky buying a fixer-upper when you can live in the house while fixing it. And of course, by living in the house for at least 24 months you should be able to avoid paying regular income taxes on the profits.

The most important thing to know before making a decision on such a purchase is what needs to be fixed. Any time you are spending money on improving a home with the notion of selling it later, strive to spend your money on things that buyers can easily see. Things like new paint and removing trash from the property cost little but have instant impact on curb appeal. Houses that have only cosmetic problems like peeling paint, a trashy yard, bad carpet or wallpaper are the best bet. This is especially true for the first time buyer looking to live in the house for a while before reselling. Fixing and cleaning cosmetic issues is fairly easy and inexpensive. It virtually always gives gives a good return on investment, particularly when you can do the work yourself. Kitchen and bathroom remodeling usually pays a nice return. Don’t be afraid of buying a fixer-upper in need of this kind of repair. Properties with structural damage, or a floor plan that requires major work to remedy, usually can’t be "fixed up" at a profit.

Always have an inspection for hidden damage performed by a home inspector or construction professional before buying a fixer-upper. Make sure that satisfactory completion of such inspections are a condition of purchase in any contract you sign. Then be sure to negotiate to try and get the seller to pay for all or part of the cost of needed repairs uncovered by the inspection. Often, sellers will be willing to lower the sales price to sell the home "as is" instead of paying for the repairs.

Be careful that you don’t over pay. Especially if you plan to resell quickly, paying too much up front can doom your plans for quick profit. Research the market for reselling and have an exit plan for selling the house in place before making an offer.