On My Own!

In an attempt to provide the best and most knowledgeable service possible to my clients, in the past few months I have studied for, and passed the Real Estate Broker’s Examination. This resulted in me starting my own Real Estate company, Robert Jonez Real Estate, also known as Robert Jonez et Cie. I am, as always, dedicated to providing the very best and most comprehensive service possible to my clients, and in this transition, I sincerely hope that no one is adversely affected.

Please feel free to check out my website, http://www.robertjonezetcie.com, to see how I can better serve you, or e-mail me at robert@lacarealestate.biz if you have any questions or observations. You can also call me at 323-387-0001 if you so desire.

I greatly appreciate your constant support in the past, and feel confident that I will continue to earn it in the future.

Best to you as always,

Robert Jonez

Making the Best Offer – REO Purchases

In the very different Real Estate climate of today, first-time buyers are becoming baffled, confused, frustrated, and angry with the process of buying a REO or bank-owned foreclosure property.

In the past, your Real Estate Agent would tender an offer for you, based on the listed price of the property, and then you would wait for the Listing Agent to come back to you with a counter offer, and the process would proceed until you you reached an agreement with the seller, the offer would be accepted, and you would proceed to escrow.

That is not happening now, especially if you wish to purchase a REO or bank-owned property. Now, because there are so many foreclosed properties on the market, many banks are not writing counter offers, but are requesting that all potential buyers submit Best and Final offers on the property, and then the bank chooses the best one. This process is difficult for the buyer to understand. Many consider it unfair, because it becomes much like shooting fish in a barrel, there is no counter offer to give a foundation for a higher offer; the buyer just has to guess what kinds of offers will be coming in from other potential buyers and go from there. But that is how it is right now, so we must adjust our tactics.

This is where the Real Estate agent has to get busy and do their homework. If they haven’t already, they should run careful and thorough comparisons on several houses in the immediate area to see what price should truly be offered on the property. In this market, many savvy Listing Agents offer REO properties at discount prices in order to generate multiple offers, expecting that knowledgeable Realtors will offer considerably more than the listed price, if the property warrants it. One of my clients just offered $75,000.00 above list price for a house, and still did not get it! And then you must consider the strength of your offer. All cash usually comes in first, with large down payments of 20% and more plus solid financing second, and FHA and VA loans last, because of the small down payment and more stringent financing rules. Banks also like shorter contingency periods and shorter escrows. Knowing this, you can adjust your offer further to make it more attractive to them.

Above all, be patient. And remember, you are buying an already discounted property, so don’t insist on lowballing the price.  Eventually you will find an REO property that you can make a realistic offer on, and the bank will accept that offer. Even if you have an FHA or VA loan with a small down payment, there just are not that many all cash buyers in the market, as well as those with large down payments. You are in the majority, and will eventually win.

Another $$$ Pride $$$ Goes By

West Hollywood is recovering from yet another Pride celebration.

This one seemed to be lower key than usual, and far more commercial. You could not turn around without someone  haranguing you for donations for some cause or trying to sell you some product or service on the streets, street corners, in the festival, in fact, just about everywhere.

Many people that I have talked to have become weary of such blatant commercialism, and are planning trips to the  Chicago, New York and San Francisco Prides in an effort to rediscover pride festivals that are not so closely tied to dollar signs. Wouldn’t that be a blessed relief?

What has gone wrong with Christopher Street West that they have lost sight of gay pride in favor of gay dollars?

Newest WEHO Restaurants and Clubs

In the past several months, four new restaurants and one refurbished nightclub have opened/re-opened on Santa Monica Boulevard. I visited them all, dined in two of them, and here are my opinions.

Tender Greens – 8759 Santa Monica Blvd. This establishment specializes in salads. Not just salads, but gastronomic creations.  I have not dined there yet, but everyone I talked with is extremely enthusiastic about the menu, decor, and service.

Caffe’ Primo has finally opened its new location in the shopping center that fronts the Ramada. I have not eaten at this location yet, but the sleek decor, fine menu, and attentive staff will draw me in soon.

Baby Blues – 7953 Santa Monica Blvd.,  is undoubtedly going to make the location a success, finally! The joint serves very tasty pulled pork, brisket, ribs, catfish, shrimp, and chicken, to name a few items from their big menu. Some people have a problem with the BBQ sauces, as they are a North Carolina recipe that is vinegar based, rather than sweet tomato based.  I liked them fine, but must admit that I still craved the thick, sweet tomato based sauce that I am used to. I took  most of my meal to go, and sauced it up at home. The side dishes are quite good, especially the greens. The full bar is a great addition also, especially when you are waiting for a table, which you will probably do unless you go early. Service is cheerful and rapid.  Portions are large, prices are medium expensive, (about $25.00/person not incl. beverages)

Mexico Restaurant – 8512 Santa Monica Blvd. This establishment, (formerly the old Benvenuto Cafe) is a paradox to me. A normal-sized Margarita cost me $15.00. Not Patron, mind you, but Cuervo Silver, I believe. It was a good drink, but I fastened my seat belt  in anticipation of the rest of the evening. For our main courses, while squinting  at the menu in the darkness,  I ordered the Chiles Rellenos, and my friend ordered Chicken Mole’. We munched through 2 baskets of chips and all of the three flavors of excellent salsa on the table before our food arrived. I have never experienced Nouvelle Mexican Cuisine before, but there it reposed in front of me, two rellenos the size of my thumb, scattered with salsa and goat cheese. No beans, no rice, no nada. My friend’s 1/2 chicken must have been raised in a prison camp, it was so tiny. Both my mini rellenos and the teeny chicken mole were extremely tasty, but I had become convinced that this was going to be a MacDonalds evening, where I go to the drive-through afterwards to get full. To drown our appetites, my friend and I ordered more Margaritas; I ordered a peach one this time for, I believe, $13.00  which, maybe because it was blended,  came in a much smaller glass than the original Margarita that I had ordered previously. Over all, for $60.00 apiece, we got slightly tipsy and ate delicious appetizers. I don’t think that West Hollywood will stand for this kind of restaurant, but I might be wrong…

Micky’s – After about 18 months and tons of speculation, the New and Improved Micky’s has finally opened its doors. And the club is beautiful, with lights embedded in the bar-tops, a great new patio with its own little bar,  and a fabulous lounge upstairs. The gorgeous stable of dancers is cool too. However, I am a little put off with the nightly cover charges, and the exorbitant drink prices, so I will do what everyone else does, spend my drinking money elsewhere, and go there to dance, if I get around to it.

Try these places out! Let me know your reactions!

First-Time Buyers Reap Recovery Act Benefits

Here is an article that I copied and pasted from an e-mail that I received from a first-class mortgage broker that I know. Enjoy.

First-Time Home Buyers in 2009 to Reap Recovery Act Benefits

Homeownership Could Unlock Variety of Additional Deductions

February 23, 2009: 02:31 PM ET

Taxpayers on the fence about buying their first home may want to consider the American Recovery and Reinvestment Act’s tax credit that could mean up to an $8,000 break on their taxes. Not only will this tax credit lower a taxpayer’s tax liability by the amount of the credit, but these first-time homebuyers may reap additional benefits when filing their tax return now and for years to come while they own the home.

According to Amy McAnarney, executive directory of The Tax Institute at H&R Block (NYSE: HRB), many first-time homeowners aren’t aware they may be eligible to itemize deductions for the first time. “Homeownership is the key that could unlock thousands of dollars of tax savings,” McAnarney said. “The taxpayer’s joy from signing on the dotted line can extend to recognizing all of the additional tax deductions they can claim on their taxes — if only they know how.”

The benefit of the Recovery Act credit can be received now because taxpayers who have purchased a home in 2009, or who will do so before Dec. 1, 2009, can claim this credit on their 2008 original or amended return. Taxpayers, who purchased a home in 2009 and already claimed the $7,500 credit that was part of the Economic Stimulus Act, should amend their 2008 return to claim the additional credit, up to $500.”The Recovery Act is doing its job of trying to stimulate the housing market,” said McAnarney. “This is one credit where taxpayers can reap the benefits almost immediately.”

To qualify for this year’s first-time homebuyer credit, the homebuyer must not have owned a home in the previous three years and the home must be the primary residence. Unlike last year’s credit, if the property remains as the homeowner’s primary residence for at least three years, then the payback requirement is waived. However, if a taxpayer bought the home in 2008, when the maximum credit was $7,500, the payback provision still applies and the credit must be repaid to the government over 15 years starting in 2010. There are also a number of other tax benefits to consider in owning a home.

For example, owning a home makes a taxpayer more likely to itemize deductions on Schedule A. Possible tax deductions to consider when itemizing include: — Mortgage interest — Real and personal property taxes — Charitable contributions — State and local income taxes — Loan origination fees — Qualified medical and dental expenses — Employee business expenses — Tax preparation fees — Investment interest and expenses.

There is something in the Recovery Act for existing homeowners, as well. The Act also includes increased tax credits for energy-efficient improvements such as qualified new furnaces, windows and doors to existing homes. The amount of eligible credit was increased from 10 percent of the equipment cost to 30 percent. The credit applies to 2009 and 2010 tax returns, with a lifetime cap of $1,500.

Dana Dukelow

Senior Loan Consultant Metrocities Mortgage

310-461-1893

Direct Office 323-394-1909

cell 866-201-2632

e-fax ddukelow@metrociti.com

The Great Home Bargain Sale Is Ending!

Attention all you K-Mart shoppers! The Great Home Bargain Sale is coming to an end!

When things are just chugging along, we tend to think that they will just keep chugging forever. This has been the case with the foreclosure market, which has, in turn, depressed the regular real estate market. But now, even though Freddie Mac and Fannie Mae are stumbling off the blocks in an effort to alleviate the nation’s foreclosure woes rather than making confident strides to clear up the mess, there is an end in sight. Soon, there will not be any more surplus of foreclosures, and the real estate market, no longer depressed by a plethora of  cheap REOs, is bound to rise somewhat, and the great deals of the past will start to go away.

Last Saturday I took a client to look at 7 homes in San Pedro and Long Beach in the $350,000 range. We have looked at many properties in the past several months, and there has been no urgency in making offers; the properties have been turning over very slowly, if at all.  On Monday, after both of us doing due diligence, (researching building permits, crime stats, etc),my client decided to place an offer on the one that he liked the best. It is a nice home in a very good area, but when we saw it on Saturday, the carpet had been torn up, it was in the process of being painted, and it reeked of dog urine. It also had a non-permitted garage conversion. Not the best circumstances to show a house. However, my client is a do-it -yourselfer, and these things did not phase him. Unfortunately, we did not know that 5 offers had been received on Saturday and Sunday, and the listing agent had accepted the highest and best that Monday morning, just before my call. I then called the other 2 properties that my client was interested in, which were also located in nice areas, but did not need any major renovation. and found that one, after 8 offers between Saturday and Monday, was pending, and the other, after 10 offers between Saturday and Monday, was pending also.

The week before, I had conversations with several Realtors in the Long Beach/San Pedro area, and they were telling me that in the prior several days they had sold properties with multiple offers and above listing price, some of which had been listed only a few days. At the time, I thought it was a fluke, but my experiences last weekend make me think otherwise.

So it looks like, at least to me, that many other people are realizing that the time to buy a great home at a bargain price is ending, and they are out there making above-asking-price, multiple  offers on property in much greater numbers than before.

At the moment, there is still a large inventory of foreclosed homes out there, but it is dwindling rapidly,  and it will go away, sooner or later.

If you are in the market for a first-time home, or are looking for investments, I would suggest that you immediately get your credit in tip-top shape, get pre-approved, not pre-qualified for a loan in the amount that you can afford, be prepared to offer above asking price for properties, and above all, both you and your realtor must act fast! Do not be shy about making an offer on a weekend. Others certainly aren’t, and they are getting the prizes.

The Next 2 Weeks Will be Amazing!

The next two weeks will be fast and furious for West Hollywood. The Creative City will be celebrating Halloween with a series of events during the week prior to the spooky day.

The Halloween Youth Carnival will be held on Saturday, October 25 from 6PM – 9:30PM at the Softball Field at West Hollywood Park. Check with the city for specifics.

WEHO will again host the Annual Doggy Costume Contest on Sunday, October 26, 2008 starting at 1 p.m. at West Hollywood Park, 647 N. San Vicente Boulevard (south grass area). Please check with the city for registration details and prizes.

Also on Sunday, October 26, from 4 p.m. to 6 p.m. in the West Hollywood Park Library parking lot, the Annual Halloween Drag Race and Beauty Pageant will take place. The Drag Race awards prizes to 1st through 3rd place finishers. High-heel shoes with a minimum of a two-inch heel are required to participate. Following the Annual Halloween Drag Race, the City will also host the 2nd Annual Beauty Pageant beginning at 6 p.m. Prizes will be awarded in the following categories: Best Hair; Most Outrageous; Best Pumps; Most Creative; and Best Overall. Please check with the City of West Hollywood for more information.

To wrap up the festivities, on Friday, October 31the city hosts the infamous Halloween Carnival, attended by hundreds of thousands of revelers. The Carnival, which will take place on Santa Monica Blvd. between 6-11PM is a must-see for people watchers. Please contact the City of West Hollywood for parking and other information.

Don’t forget to set your clocks back one hour to Standard Time on November 2 at 2 AM. If it seems like we’re a little later than usual in setting back the clocks, you’re right. Daylight Saving Time was actually extended by an entire month this year as a result of the Energy Policy Act, enacted in 2005.

And then there is the Most Important Election of Our Lives on Tuesday, November 4th! Besides electing Obama to the white house and starting to heal this country financially and emotionally, there are California issues that we all must address, most importantly Proposition 8, which would eliminate the right of same sex couples to marry. Rational people, no matter what their sexual orientation, cannot allow this kind of bigotry to become law. Please vote no on Proposition 8.

OK. I’m done stumping. Have a great two weeks.

An In Depth Look at Causes of the Crisis

Many of us are baffled and confused as to what really caused the present financial crisis, so I turned to Jeff Cook, one of the Senior Account Managers at Metro Sunset Mortgage for some enlightenment. Here is an article that he wrote today and published on the web. I copied the entire thing and dropped it in here, because he does a better job explaining things than I can.

An In Depth Look

My clients, co-workers, referral partners, family and friends are all asking “what the heck is going on?” And it’s truly a question I am getting hourly. Here’s an in-depth look at some of the cause of the current situation we are in so you have an overview.

We ALL are learning more and more about our economy and how it “really works” daily.
Whatever the political posturing, a plan needs to be passed – and passed soon. Credit markets are frozen and banks are going bust every day. This is not totally because of so-called “toxic” mortgages as the media has portrayed. This has a lot to do with new legislation and rules passed last year by the SEC (Securities and Exchange Commission) and the FASB (Financial Accounting Standards Board) with the SEC’s elimination of the uptick rule for Wall Street and the FASB’s 157 ruling, also known as “mark to market”.

Uptick rule: The uptick rule was a securities trading rule used to regulate short selling in financial markets. The SEC eliminated the uptick on July 6, 2007 causing short-selling to be at record levels by early 2008 and wild swings of the markets. The problem with the elimination of the uptick rule is that without it, short sellers were devaluing perfectly solid stocks. On September 19, 2008 the SCE halted short-sales temporarily of 799 financial stocks.

FASB 157: http://www.fasb.org/st/summary/stsum157.shtml Each day lenders must mark their assets to the marketplace. It’s like you having to appraise your home everyday and if your neighbor was under duress because they got very ill, divorced, lost their job and was forced to sell their home quickly they may have sold it super cheap. Now, does that mean your house is worth that super cheap price? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But “mark to market” does not allow for this, which creates a vicious cycle.

Why is this so bad? Because as lenders mark down their assets the amount that they have loaned previously becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to “mark to market” requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio…at cheap prices. And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages, are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn’t just A paper or B paper etc. it’s everything. Its got some A paper, B paper, C paper, and even what looks like toilet paper. An “A” investor buys the whole pool but because they are an “A” investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this the opportunistic shorting that was done, while the uptick rule was eliminated, on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem.Thank goodness for the recent temporary ban on shorting in the financial sector mentioned above.

As for the plan the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posture from both sides is just part of the process – and it is never, ever pretty.

This is not easy to understand for the general public. In fact most politicians don’t get this either. That’s why it is a difficult yet critical bill for them to vote on. Once this bill is done it will take some time but the markets will stabilize. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to fix our industry. We just need to be patient.

I hope that you found this ecomonic information helpful and informative – as it’s important to me that my clients, referral partners, family and friends are kept up-to-date and in-the-know! If you have any questions whatsoever, let me know.

Make it a great day!

If you have any questions or comments on the above article, please don’t hesitate to contact me at robert@lacarealestate.biz, or leave feedback here on the blog.