How to Speed up the Sale of your Home

By Marni Jameson
Special to The Times

June 22, 2008

BACK WHEN the real estate market was hot, sellers barely had to make their beds and do the dishes for their houses to attract buyers. Any extra effort often elicited multiple offers for over the asking price.

In today’s cool market, however, those same extras can mean the difference between getting one offer or none at all, says Lisa LaPorta, cohost of HGTV’s “Designed to Sell.”

Sellers frustrated with the stagnant market should consider turning their anxiety into action. As inventory grows, a few inexpensive moves can make your house stand apart.

Here are 12 cheap tricks real estate experts recommend sellers consider to speed sales:

1. Get the right mindset. Once you list your home, detach yourself. Treat the house as a commodity, which means making changes that will broaden its appeal but that may erase some of your personal style. “I tell sellers in our first meeting that I may say things that offend them, but if I do it’s because I feel it’s for the benefit of the sale,” says Dan Verbin, general manager of Re/Max Marquee Partners, which oversees 14 offices in the South Bay and throughout Greater Los Angeles.

2. Start at the curb. Look at what people see when they pull up, says Sandy Fish, broker owner of Re/Max Ranch and Beach in San Diego, where she’s been selling real estate for 20 years. Trim hedges, prune trees, mow the lawn and plant oodles of colorful flowers. If the mailbox is tired and the address numbers are falling off, replace them. Walk around the house. Get all debris — old patio furniture, rusty barbecues — off the property. Everything outside should look perfect.

3. Paint — it’s money in a can. Outside, if a good power wash isn’t enough, a coat of paint is one of the best facelifts you can give a house for a relatively low price. If you don’t want to paint the whole house, do the trim. Inside, paint walls a soft neutral such as warm beige, sage or gold. Paint not only says new start, but it also masks odors.

4. Focus on the entry. Put some energy into the front door, because it makes a strong first impression. A few years ago, LaPorta fixed up a Pasadena home for her show. The home had a traditional old-fashioned front door, which looked like all the other doors on the street. She bought a stock door from a lumber supplier, painted it glossy burgundy, put a pediment over it, thick molding around it and flanked it with two large potted topiaries. The whole upgrade cost $2,000. The result? After the listing agent saw the improvements, she raised the original asking price by $40,000 to $739,000. The owners received multiple offers and sold in the high $700,000s, LaPorta said, “because we made an ordinary entry look stately and elegant.”

5. Catch up on maintenance. Get around to the repairs you should have been doing all along. “Fix the little stuff,” Re/Max Marquee Partner’s Verbin says. “Repair the cracked tile in the bathroom and torn screens. Replace broken light-switch covers and burned-out lightbulbs. Tape up or pin wires from audio systems and computers.”

These easy fixes show potential buyers that you pay attention to detail, which signals that you must care about the big stuff too.

6. Look for alternatives to expensive or messy upgrades. “Don’t take on a big remodel when you’re thinking of selling,” says Reva Kussmaul, a remodel coach and owner of Eye for Detail, in Pasadena. “Keep improvements small and manageable. A major project creates more mess and can take up time you could be on the market.”

However, do investigate small ways to get big results. If your tile is 1950s pink or 1970s brown, look into companies that can spray tile to make it a new color, she says. Miracle Method, for example, gives a clean, fresh look without the demo, dust or fat price tag.

If dated cabinets still work well, consider painting or staining rather than replacing them. Today’s house hunter prefers either dark wood cabinets in shades of espresso or ebony, or painted cabinets. Mid-toned browns and grainy golds are out. A dark stain over light, coarse-grained wood will quiet busy grain and make wood a color more people prefer, as will painting. Put on some new knobs, and for a couple thousand dollars, your kitchen will look as though it had a $20,000 makeover.

7. Consider new appliances. In LaPorta’s experience, sellers typically get every dollar back that they spend on new appliances. “When people see new kitchen appliances, they often see a new kitchen,” LaPorta says. “That rates high on people’s radar, especially men’s.”

8. Add some house bling. Make anything metal in your home look new and shiny. “People see shiny new metal and say ‘Oooh,’ and it’s not that expensive,” LaPorta says. You can pick up a new dining room light fixture for $200 and one for the porch for $40; people will notice. Change the front-door handle, faucets and curtain rods if they’re worn and dull. These should all look fresh.

If you have an ’80s shiny polished brass fixture, try painting it with an updated metallic that looks like oil-rubbed bronze, brushed nickel or iron. If you have metal grills on your stove, spray them their original color, using paint meant to withstand high heat.

9. Start packing. “The average home would show much better if it had 50% less stuff,” real estate broker Fish says. Since you’re already going to move, give yourself a head start by packing away all the clothes, books and dishes you won’t need for the next few months. Thinning out bookcases and closets lets buyers actually see and appreciate the space and gives the illusion that the house offers more-than-adequate storage.

Take out extra furniture, especially if it’s blocking the flow of foot traffic. “It’s better to have just a corner of a room decorated nicely with a little vignette than an overcrowded space, or a room where the furniture is of mixed styles or not to scale,” LaPorta says. If you can get all the stuff off-site in a moving pod or in storage, do so. If not, stack neat, labeled boxes in the garage.

10. Remove the “you” factor. Sorry but home buyers don’t care about your trophies, your hobbies, your taste in art or your photos. Pack all that away. Depersonalizing a home lets buyers imagine themselves in the house. “You want people looking at your house, not your wedding photos,” Fish says. “Those are just a distraction.”

Once personal art is off the walls, patch and paint over holes. While you’re at it, clear countertops. In kitchens, leave out just one appliance and, on your desk, just a phone and a lamp. Think nice hotel.

11. Clean house. “Clean is a relative term,” says LaPorta, “but we often don’t notice our own dirt. Look hard, starting with the switch plate by the front door. Wipe it down along with all light switches, doors and baseboards. If you’re not the best housekeeper, hire a service. . . . Every surface should sparkle.”

12. Banish smells. When people first walk in, they should either smell nothing or a nice scent, like cinnamon or citrus. Set out potpourri, fresh-cut flowers or subtle air fresheners. Have carpets — if not replaced — professionally cleaned and deodorized.

Some carpet-cleaning companies will also clean hardwood, tile or stone floors and grout and buff countertops. “For a 3,000-square-foot house, expect to pay under $1,000,” says Fish, adding that it’s money well spent.

Besides making suggestions as to what buyers can or should do to get a “sold” sign out front, real estate experts also suggested a few things not to do:

* Don’t avoid an upgrade with the idea that you’ll give the new owner a carpet or paint credit.

Most buyers are tapped out and don’t want to spend a lot the minute they move in. Plus, that’s one more hassle for them. They want clean surfaces when they move in. And many people lack the imagination needed to picture how much better the place will look with new carpet. Your job is to make buyers say, “I could move in tomorrow.”

* Don’t ignore the competition. Fish helps clients get realistic about their homes by showing them what else is on the market in the same price range.

“When they see what they’re up against, including new homes, that often motivates them to get real about their price and what they should fix up,” Fish says.

* Finally, don’t get so carried away making improvements that you forget the original goal: Be a bargain.

“The best way to sell your house quickly in a down market,” real estate agent Verbin says, “is to be the best deal out there.”

Marni Jameson is a syndicated home columnist, and author of “The House Always Wins.” She may be contacted through her website, marnijameson.com.

Short Sales, Not that Fun

Short sales: A tough road

By Diane Wedner
Los Angeles Times Staff Writer

June 15, 2008

RESIDENTIAL short sales sound like a picnic: Owners need to sell their homes for less than they owe, lenders forgive the difference and buyers grab a good deal.

If only. This is one picnic that requires a long wait for dessert. The only “short” thing about short sales, buyers and sellers say, is one’s patience.

“The waiting is torture,” said Mark Shandrow, a Keller Williams Realty agent in Long Beach who specializes in such transactions. “The banks are overwhelmed with short-sale requests, and some make sellers wait five months for an answer.” That answer, in many cases, he added, is “no.”

Yet despite the obstacles to successful short sales — lenders holding the first and second mortgages don’t agree on the terms, buyers often ditch the deal midstream or banks nix the agreement just before escrow closes — they’re on the rise. Countrywide Financial Corp. of Calabasas, the largest U.S. home lender, reports a nearly 60% increase in those transactions nationwide in April, the latest month for which statistics are available, from the same period a year earlier.

In the Santa Clarita and San Fernando valleys, the number of short sales increased from at least 31 sales from May 2006 to May 2007 to at least 1,956 sales from May 2007 to May of this year, according to the Southland Regional Assn. of Realtors.

The reason for the rise, experts say, is that as more financially strapped homeowners fall behind on their mortgage payments — and see their homes’ values plummet to less than what they owe — they’re turning to short sales as an alternative to foreclosure. Banks, once loath to take on short sales because, among other reasons, they were understaffed for the application onslaught, are tackling them now mainly because they’re more cost-effective than foreclosures.

“Banks aren’t happy about short sales,” said Sherri Frost, a senior loan officer with Sherman Oaks-based Metrocities Mortgage, “but they have few options.”

Unlike a foreclosure, in which the lender takes ownership of a property after a borrower misses several payments, a short sale is a transaction in which the owners, not the bank, sell the home; they receive no proceeds from the sale. In a foreclosure, the defaulting owner may receive sales proceeds once the lender has been paid, if the amount exceeds that of the outstanding loan.

If a short-sale borrower owes $500,000 on a home, the bank may accept a payoff amount of $450,000, the amount a buyer has offered to pay. The sellers need not be in default — meaning they stopped making mortgage payments — in order for a lender to consider a short sale, but they must be able to show a real hardship to receive the debt forgiveness, which may have tax consequences.

Then there’s the wait

It sounds straightforward, but the short-sale road is a long one. Once sellers have an offer, they must assemble a package to present to the bank, including a “hardship letter” explaining why they had to put the house up for sale — loss of employment, a spousal death, a divorce, a disability or a mortgage resetting, for example — and asking the bank to accept a short sale, according to a Countrywide spokeswoman.

The sellers also must provide income verification, their most recent bank and income-tax statements, the listing history of the house and other documentation. Then comes the wait. And frequent follow-up calls to the bank to make sure the file isn’t buried.

“Banks won’t grant face-to-face interviews because of the volume of short sales and foreclosures,” said Mary Ebersole, a Re/Max Realty Specialists agent in Long Beach. Even if the seller gets approval, she added, “there’s only room for cautious optimism.”

That’s because impatient buyers sometimes head elsewhere while the bank’s loss-mitigation officer, or negotiator, sifts through the pile of short-sale packages. Or buyers put offers on five or six other properties to see which comes through first.

Sometimes, while awaiting a bank’s decision, interest rates go up and buyers no longer qualify for a previously approved loan because their lock-in rates expired. Worse yet, a seller may get an initial approval from the bank, but in the eleventh hour the bank adds a contingency that skewers the deal, or pulls the plug without explanation, agents say.

Second and third mortgages and even home equity loans can further complicate matters. Last fall, Pam Kennedy, a Coldwell Banker Ambassador agent in Whittier, was disheartened when her short-sale client’s lender demanded, after a long wait and with a buyer already on board, that the seller sign a promissory note for $15,000, which would be interest-free and amortized over 10 years. The seller had taken out a second mortgage awhile back to buy a recreational vehicle for $25,000 and pay off some debt. The lender wanted to recoup some of the loss it was absorbing.

The seller was going through a divorce, starting a new job and was afraid she couldn’t make the payments. Also, despite months of effort, she couldn’t sell the RV — an asset, in the bank’s opinion. The deal fell through and the bank foreclosed on the property. The experience left a bitter taste in Kennedy’s mouth.

“I avoid short sales and advise buyers to avoid them,” Kennedy said. “They are miserable.”

Sticking it out

True, most participants say, but some eventually have happy endings.

Mari and Joe Abrams found the house of their dreams in Porter Ranch in December. They got quick loan approval to buy the four-bedroom, three-bathroom home, and feeling optimistic about the new purchase, they put their Encino home on the market.

The couple offered $650,000 for the new house, which had been listed earlier in the $699,000 to $749,000 range. They paid a $10,000 good-faith deposit, agreed to pay all of the escrow fees (which usually are split between seller and buyer) and agreed to buy the property as is.

They expected the bank to quickly counter-offer. For one thing, the seller’s second-mortgage holder already had agreed to the sale, a major hurdle in short-sale transactions. But without the first bank’s approval, the deal stalled. (Both the first and second mortgage holders must settle to complete a short sale.)

The couple’s own house sold three months into the process, so they moved, with their toddler, Daniel, and 50-pound dog into Mari’s mother’s condo.

By April, Mari, 32, started peppering the first lender with daily phone calls, seeking a response to their offer. As the deal dragged, the Abramses extended the escrow. It closed, finally, on May 2. The family plans to move in later this month.

“Our hearts sank a hundred times,” Mari said. “It was a roller coaster.”

“If we didn’t like the house so much, we wouldn’t have hung on that long,” Joe, 37, added. In the end, however, they’re glad they stuck it out. It is, Mari says, just what they wanted. Even if they didn’t get the “deal of the century,” Joe said.

Bargain bins

Lenders will not accept short-sale offers that are far below market value. To the contrary, many banks “net about 90% of the current market value” on many of these sales, agent Shandrow said. Also, the homes usually are sold as is, which sometimes can mean a missing kitchen sink, ripped-out bathroom fixtures and stained carpets.

Marty Rodriguez, a Century 21 agent in Glendora, says she won’t take a short-sale offer to the bank unless it’s reasonable. “The negotiator doesn’t want to look at 12 offers,” Rodriguez said. “He wants the best, highest and the most qualified ones.”

Buyers looking for bargains should wait until short-sale and foreclosure prices are down about 35% from the peak market in their search area, said James Joseph, owner of Century 21 Ambassador in Brea and Whittier.

“Short sales and foreclosures are the nails in the floor of the market,” Joseph said. “That’s where the bargains are.”

diane.wedner@latimes.com

Home Will Sell if the Price is Right

To sell home, make sure the pricing is right

By Lew Sichelman
United Feature Syndicate

June 15, 2008

WASHINGTON — You can spruce up the outside of your house to the point where it stops passersby in their tracks. You can “stage” the inside so it looks roomy and brand-spanking new. You can give away a car or vacation to your eventual buyer. You can even offer a cash bonus to the selling agent.

But in today’s market, if your place isn’t priced correctly, it probably isn’t going to sell. More than likely, it will languish on the list of unsold inventory until the market adjusts back up to your asking price. And that could be months — or even years in some places.

A far better plan is to adjust your price to local market conditions, and let the market come to you.

“I have learned that a great strategy for sellers who are serious about getting their homes sold is to price the property ahead of the market,” said Michael Selvaggio, president of the Council of Residential Specialists and a broker in Townsend, Del.

In a seller’s market, Selvaggio said, there’s nothing wrong with setting your price a little higher than the last one because prices are steadily rising. But in a flat or declining market, your price should be a little lower than the last comparable sale.

And not just a few percentage points lower, either.

“When was the last time you rushed out to the mall to take advantage of a 2% sale?” asked the 32-year real estate veteran. “You need to have a real sale, so how about 5% to 10% off, for starters?”

Price adjustments

Owners instinctively know, perhaps with a little prodding from their agents, that they’ll have to adjust their price if their homes are not in great condition. Ditto for houses that are not in the greatest locations. But many sellers today are reluctant to trim their asking numbers in a “challenging” market, clinging unflinchingly to the notion that their homes are worth what they paid for them — and then some.

Sellers who have the best results realize the logic and marketing advantage behind placing a realistic price on their homes, Selvaggio said. “Make no mistake about it — price sells.”

If some sellers haven’t yet gotten this message, some real estate agents haven’t either. There are plenty of agents who continue to accept overpriced listings on the theory that if you throw enough mud against the wall, some should stick.

But according to Robert Jenson of the Jenson Group, a luxury Las Vegas real estate agency, an overpriced house will wither on the listing vine, putting it at a strategic disadvantage to other, newer listings.

Ultimately, Jenson said, the owner of an overpriced property is often forced to accept less than what he might have sold it for had he been more realistic in the first place.

Market controls

Howard Brinton, a sales trainer from Boulder, Colo., said too many agents let the market control them, instead of the other way around. An agent, he says, needs to be a counselor and educator as well as a salesperson.

“Pricing, specifically correct pricing, is the only answer for today’s changing market and the most important thing a Realtor can do for his client,” Brinton said.

To price your home properly and achieve a prompt sale, you need to anticipate the market and get in front of it. “You never want to get caught chasing the market down,” the realty educator said. “You want to get ahead of it.”

To price their homes properly, sellers need to know how fast properties in their specific market segment are being sold. You also need to know how much competition you have for today’s skittish buyers, most of whom are worried about jumping into the ocean while the tide is still going out.

And you need to know market statistics such as absorption rates (the number of homes sold in any given time frame), inventory (the number of unsold houses) and days on the market (how quickly or slowly houses are selling).

Of course, it is difficult, if not impossible, for sellers to perform this kind of research on their own. And if your agent can’t do it for you, find one who can.

Above all, heed Brinton’s final bit of advice: Selling houses is like standing in line at the grocery store. Eventually, you are going to get to the cashier. But if someone breaks in line with a more competitively priced property, you are going to have to wait longer.

Lew Sichelman can be reached at lsichelman@aol.com.

Will Rogers State Park Saved!

In an article on Wednesday plans to close to state parks was abolished.  Read below:

If state’s numbers don’t come up, bet on a sales tax hike

By Evan Halper and Jordan Rau
Los Angeles Times Staff Writers

May 14, 2008

SACRAMENTO — In his latest plan for closing a budget shortfall now estimated at $17.2 billion, Gov. Arnold Schwarzenegger will propose giving voters a choice between borrowing against the state lottery and paying more sales tax.

The sales tax proposal is a turnabout by Schwarzenegger, who came to office as an anti-tax crusader and throughout his tenure has steadfastly insisted he would never consent to new taxes. In recent days, the administration repeatedly denied reports that it has been laying the groundwork for a sales-tax increase.

Deep cuts in services would still be needed to balance the budget. According to advocates and lobbyists briefed by the administration, Schwarzenegger will propose reducing health services for the poor even further than he had suggested in January, in his initial spending plan.

At the same time, he is walking away from some cuts he proposed then that triggered loud howls of protest.

Schwarzenegger Communications Director Matt David said the latest proposal restores billions of dollars in school spending and abandons plans to close 48 state parks and release tens of thousands of prisoners early.

The governor’s new plan, to be released today, has already drawn resistance from GOP lawmakers, who have pledged to vote against any new taxes.

The lottery proposal, according to David, would come before voters as early as November and hinges on administration estimates that California could borrow against future profits to generate as much as $15 billion over three years.

The governor also will propose changes to the lottery intended to lure more gamblers, such as increasing payouts and updating the games offered by the state to include blackjack and poker themes.

Under the plan, if voters rejected the borrowing, or if the proposal fell through for any other reason — such as lawsuits or lack of a viable lender — state sales taxes would automatically increase by 1 cent to cover the loss.

The sales tax increase would stay in effect until the state’s finances were out of the red, for up to three years. A 1-cent sales tax increase would generate roughly $6 billion per year, according to state statistics.

Republican lawmakers, who support squeezing more cash from the lottery to help close the budget gap, said the governor’s plan to link it to a sales tax is a deal breaker.

“This is not something we can support,” said Assembly Republican Leader Mike Villines of Clovis. “The lottery is a great asset that we can use to pay down debt, but tying that to a tax increase is fundamentally the wrong way to go.”

The tax trigger would not go before voters but would need approval by two-thirds of the Legislature, requiring the support of at least eight Republicans.

Administration officials defend their plan as a responsible way to bring long-term balance to state finances.

They note it includes spending restraints, which would also go before voters, that would force the state to put billions of dollars into a rainy-day fund. It also would refund some of the new sales taxes if the state began generating budget surpluses.

Democrats say they will keep an open mind. State Sen. Darrell Steinberg (D-Sacramento) said the state will need even more new revenue than Schwarzenegger is proposing.

“But we may not have the luxury of discounting any potential source of revenue to avoid devastating cuts,” Steinberg said.

A similar plan was enacted under former Gov. George Duekmejian in the early 1980s. But voters never had to pay the tax because revenues picked up and the state made its way out of the red before the 1-cent sales tax kicked in.

Schwarzenegger’s proposal may be more likely to hit voters in the wallet.

It is linked to changes to the lottery that could run into legal trouble and resistance from well-funded gambling interests that could finance a significant campaign against competition from an expanded lottery.

Some of the biggest new cuts in the governor’s budget are aimed at Medi-Cal, which provides healthcare for the impoverished, including people receiving in-home support services.

The January version of the budget had $4.7 billion in healthcare cuts, including termination of Medi-Cal coverage for dental work and optometry, and increases in premiums for the state’s Healthy Families program.

Healthy Families provides medical care for about 800,000 children whose parents earn more than the poverty level but still are low-income.

The changes restrict eligibility for these programs. But defenders of in-home supportive services, which the governor has selected for cuts in the past, have noted that it is far cheaper to care for ailing people in their own homes than to put them in nursing homes.

The administration sought to brace healthcare advocates in a private briefing Tuesday. Aides to the governor said they have not given up trying to expand healthcare in California — the goal of a $14-billion Schwarzenegger proposal that the state Senate rejected in January — but it would have to wait at least until next year, according to people at the meeting.

Healthcare advocates said they were not assuaged and plan to loudly criticize Schwarzenegger’s proposal when it is formally released.

Schwarzenegger’s decision to drop his prisoner release plan will allow him to avoid continued protest against it. The proposal infuriated law enforcement and victims’ groups, and no state legislator has agreed to sponsor it in the nearly five months since he offered the idea.

Matthew Cate, Schwarzenegger’s newly appointed secretary of corrections, said projections for the state prison and parole population had fallen enough that the early release plan was no longer needed to save money.

“We agreed the first thing we’ve got to do is take the early release off the table,” Cate said. “We’ve got a golden opportunity here to do that, and that’s what we’ve done.”

Since January, the state has cut its projection for the prison population next year from 177,000 to nearly 171,000, and the estimated number of those on parole was cut from 133,000 to 123,000.

evan.halper@latimes.com

jordan.rau@latimes.com

Times staff writer Michael Rothfeld contributed to this report.

Use the Web to Research Neighborhoods

Don’t Be left in the Dark

Don’t be left in the dark: Locate utility off/on valves

Culver City is the hottest market in Los Angeles right now!

Cultivating Culver City

By Martha Groves
Los Angeles Times Staff Writer

April 7, 2008

Factories, oil derricks and houses were sprouting all over Southern California in 1913 when Harry H. Culver outlined his plan for a city midway between Los Angeles and Abbot Kinney’s seaside resort. “If you draw a straight line from [downtown’s] Story building to the oceanfront at Venice,” he told the gentlemen of the private California Club, “at the halfway mark you will find three intersecting electric lines — the logical center for . . . a town site.”

His Culver Investment Co. bused potential lot buyers to free picnics, awarded parcels to the parents of pretty babies and placed newspaper ads reading “All roads lead to Culver City.”

Nearly a century later, the electric rail lines are long gone, but Culver City, denigrated in years past as a backwater on the Westside, is starting to live up to its founder’s hype.

In recent years, dozens of galleries, design houses and architecture firms have moved in. Wine bars and upscale eateries — many with alfresco dining — are garnering raves, and more restaurants are in the works.

Young families and singles are replacing retirees, and developers are demolishing duplexes to build condos. Rising office rents reflect the discovery by high-tech, media and creative employers — Symantec, National Public Radio, the Tennis Channel, Ogilvy & Mather — of a well-situated alternative to pricier Santa Monica or Beverly Hills.

City officials and many residents cheer the cultural and culinary renaissance in the city’s downtown and the ongoing commercial revival there and in other pockets. But detractors contend that the once sleepy hamlet is paying a steep price in increased traffic, congestion and competition for parking spots that not long ago seemed plentiful. Downtown businesses are clamoring for a valet parking plan.

“We’ve become a victim of our own success,” said Andrew Weissman, a Culver City planning commissioner who is among nine candidates vying in Tuesday’s election for three City Council seats.

Density and traffic

As in much of the region, the overriding issues on the minds of Culver City voters are development, density and traffic — the slow midday crawl on Sepulveda Boulevard or the weekend evening jam-ups where what is purported to be the world’s shortest Main Street joins Culver and Washington boulevards in the city’s core. Commuter cut-through traffic compounds the woes.

“What’s been happening in Culver City is an enormous amount of development,” said Judith Miller, a resident battling a developer’s plan for 26 condos and office space with below-ground parking next to her Spanish colonial revival house, a city-designated landmark near City Hall. “The council members also make up the redevelopment agency and have been historically predisposed to development without being responsive to the community’s concerns.”

One redevelopment official countered that the new businesses provide much-needed revenue and a sense of vitality at a time when Sacramento is threatening to cut funding to cities.

“It’s been fascinating to see the evolution from having no identity, to struggling to achieve an identity, and now we’ve achieved it and are struggling to deal with that identity,” said Todd Tipton, redevelopment administrator. “It’s taking some effort to come to terms with this as [the city] grows and prospers.”

‘Run-down things’

In years past, residents of Culver City, population 40,000, might have welcomed packed sidewalks and thoroughfares.

“When I moved there in 1993, there wasn’t a restaurant to be had,” said Laura Stuart, a resident of the Sunkist Park neighborhood near the 405-90 freeway interchange in southwestern Culver City. “Downtown was pool halls and run-down things.”

It wasn’t always that way. Founder Harry Culver had emphasized the need for a solid economic base. The motion picture industry, which in the 1920s and ’30s found the city’s wide-open spaces ideal for back lots and filming, was a boon.

Enticed by Culver, Thomas Ince had built the town’s first studio, Ince/Triangle Studios — later Goldwyn Studios and then Metro-Goldwyn-Mayer. (Since 1990, the lot has been the headquarters of Sony Pictures Entertainment, which employs 3,300 people in or near Culver City.)

Hal Roach Studios filmed Laurel and Hardy silent comedies around town. Other movies filmed there include “Meet Me in St. Louis,” “Citizen Kane,” “Gone With the Wind” and “The Wizard of Oz.”

But by the early 1990s the city had lost most of the military, aviation and entertainment jobs that had created a strong local economy, if not a scintillating social scene. Much of the city became blighted.

In 1992, “other managers told me our basic job was to slow the rate of decline,” said Mark Winogrond, then the director of community development who was later credited with implementing the downtown revitalization. “I viewed Culver City as a town trapped in 1958 trying desperately to get into the 1970s.”

Even though Culver City’s motto continued to be “The Heart of Screenland,” Winogrond said, some residents had grown distant from the city’s rich history as a production hub for motion pictures and television.

The revival plan aimed to celebrate that connection. It called for downtown to be bookended on one end by Sony and the Kirk Douglas Theatre (a lovingly refurbished former movie palace) and on the other by Culver Studios and the Actors’ Gang Ivy Substation. Movie theaters, long absent, would help lure patrons, for whom public garages would provide ample free parking.

With the city providing incentives, such as helping to negotiate favorable leases and pay for remodeling, businesses gradually repopulated the area.

Meanwhile, developers Frederick and Laurie Samitaur Smith were revamping the Hayden Tract, the largely abandoned industrial sector along National Boulevard just east of downtown. Architect Eric Owen Moss’ futuristic designs for what the Smiths call Conjunctive Points attracted postproduction companies and Internet-related firms. More recently, the captive audience of office workers, as well as the prospect that the light-rail Expo Line could soon be transporting commuters along National, has helped spur the opening of trendy cafes.

Rules revised

Redevelopment officials also have their sights on the area near Westfield Fox Hills, a shopping center in southern Culver City that’s undergoing a $160-million face-lift. Nearby, developer Robert Champion floated ideas for building a massive mixed-use project on an arguably underused stretch of Sepulveda that features tire shops, banks and other businesses.

Leery of traffic, neighbors revolted and Champion backed off. Sensitive to the opposition, the City Council revised a mixed-use ordinance to scale back the allowable heights and densities.

Bonnie Zucker and her husband, Eric Magnuson, who moved to Culver City five years ago, say they enjoy the downtown’s new walkability and hope that the metamorphosis continues.

“Clearly, Culver City is on the rise and will continue to be,” said Zucker, a UCLA psychologist.

For Akasha Richmond, who recently opened her namesake restaurant in a landmark brick building downtown, Culver City sparks comparisons that would have been unthinkable in Harry Culver’s day.

“I feel the collective energy of all the creative people in the area,” Richmond said, “just like in New York.”

martha.groves@latimes.com

Is this the Time to BUY?

HOUSING SCENE

Is this the time to buy or stay safely on the sidelines?

By Lew Sichelman
United Feature Syndicate

February 24, 2008

WASHINGTON — With humble apologies to Shakespeare, the question in today’s housing market is “To buy or not to buy?”

Right now, there are several compelling reasons for anyone who needs a house or wants to upgrade his or her family’s current living arrangements to venture forth. At the same time, there also are perhaps even more compelling reasons to remain on the sidelines at least a little while longer.

Of course, buying a home at any time, good or bad, is an intensely personal decision based on any number of factors. So, to help you sort through the process and determine what’s right for you, here’s a list of yeas and nays.

First, why now is, indeed, a great time to buy:

* Selection: A few years ago, when houses were flying off the shelves, would-be buyers had to move at warp speed to get what they wanted. Now there are a record number of new and existing homes on the market — in just about every price range and style, in just about every neighborhood. The options are plentiful.

* Interest rates: Loan costs are extremely attractive. You can find fixed-rate, 30-year conforming mortgages at less than 6%. Jumbo loans are a little more expensive, but not by much.

* Competition: There simply aren’t nearly as many buyers as there used to be. Professional investors who knew what they were doing have all but vanished, and those who thought they knew what they were doing are home licking their wounds.

* No bidding: Unlike the halcyon days, when buyers were falling all over themselves in an effort to outbid one another for that prized house, today’s purchasers are not likely to go up against anyone else.

* Patience: The gold rush is over. Now you can take your time, look at all the houses you want, go home and mull over the choices.

* Due diligence: Similarly, once you find a house worthy of your consideration, you can hire an independent home inspector to examine the place for warts. Sellers fully expect you to exercise this right. Some builders are now welcoming home inspectors, whereas they have been persona non grata in the past.

* Fixes: With an inspector’s report in hand, you can go back to the seller and tell him or her to repair whatever defects may have been uncovered. You shouldn’t use the findings as a laundry list of demands, especially when it comes to inexpensive cosmetic fixes. But sellers now are more willing to mend serious problems.

* Bargaining: Everything today is up for grabs. Certainly, you can make an offer that is somewhat below the asking price. Realtors report that the list versus price ratio is about 95%. But other things are on the table too. Apart from repairs, you might want to ask for help with closing costs.

Now, here’s why, even if all of the factors above line up in your favor, you may not want to buy at the moment:

* Falling prices: This is far and away the key issue for most buyers. Above all else, there is an overriding concern that housing values haven’t yet reached bottom. Even folks who plan to live in their new digs long after the nose dive ends are afraid to pull the trigger for fear that prices still have further to fall.

* Doubt: Uncertainty about the economy is another troubling issue. If you are concerned that your livelihood is in jeopardy, you certainly don’t want to take on a major financial obligation.

* Financing: Interest rates may be great, but financing for people who have more than a few dings on their credit records has all but disappeared. And if it is available, it is expensive.

* Sellers: Some sellers still don’t get it. They have yet to grasp the fact that prices have fallen and that they are going to have to be a little more amiable to the bargaining process. Even some builders, who should know better, are holding out.

In that case, you might have to move on to your second choice.

Lew Sichelman, who has been covering real estate for more than 30 years, can be reached at lsichelman@aol.com

Seniors are Turning to Reverse Mortgages

Reverse mortgages provide more seniors with a safety net

Amid the loan market crisis, more seniors are turning to reverse mortgages.

By Patrick S. Duffy
Special to The Times

February 24, 2008

IMAGINE a scenario in which, instead of struggling to come up with the money for a mortgage payment that’s resetting to a higher level, you could tap the unused equity in your home not only to pay off that loan but also to have money for living expenses, remodeling, traveling or even investing in a vacation home. For seniors, there is such an option: the reverse mortgage.

And that’s exactly what 73-year-old Betty Jenkins chose after being laid off from her job with a health maintenance organization. Unable to afford the $1,500 monthly payment on the Chatsworth home she bought in 1988 after a divorce, Jenkins signed up for a reverse mortgage through Financial Freedom, a unit of IndyMac Bank and the nation’s largest provider of such loans. Not only did she keep her home and retire her existing mortgage, but she also was able to remodel her kitchen, pay her property taxes and insurance, maintain her car and keep her two dogs enjoying the lifestyle to which they’d become accustomed.

“It seemed too good to be true,” said Jenkins, who shares her home with companion Eddie Applegate, 72. But after talking with the Federal Housing Administration and the Department of Housing and Urban Development, the couple found out it was for real. “We would not have to pay loan payments ever again.” That’s because this type of loan truly does work in reverse: Instead of the homeowner paying the lender each month, the lender gives the owner money upfront and takes the existing home equity as collateral.

Fortunately for the couple, with less than a $200,000 balance on the existing mortgage and a home worth close to $500,000, the remaining equity was more than enough to also provide for a modest $25,000 credit line, which can, depending on home values and interest rates, be reduced or increased throughout the life of the loan.

Such flexibility is one big reason why reverse mortgages have grown extremely popular. Of the 345,762 reverse loans insured to date by the FHA, nearly one-third were made in 2007, according to the AARP Public Policy Institute and HUD, and 27% of those were in California.

With traditional home equity credit lines increasingly difficult to get in a time of declining home values and tight underwriting standards, eligible seniors older than 62 are finding that one benefit of reverse mortgages — other than no pre-payment penalties and no credit or income qualifications — is the ability to get rid of the sub-prime and other adjustable loans facing payment increases.

Reverse mortgages are also gaining popularity in upscale areas such as Newport Beach, where $2-million homes are commonplace, said Wells Fargo loan agent Alyson Lloyd. Unable to qualify for traditional home equity loans because of low credit scores but wanting to remain in place for a long time, some house-rich but cash-poor borrowers are now able to tap equity gains to avoid foreclosure and even to leverage these funds as investments in second homes.

“It has become an investment tool, allowing people to leverage their money,” Lloyd said. For example, homeowners over age 62 could take the net proceeds from downsizing to a smaller home and then pay off the new purchase loan with a reverse mortgage. Or, assuming the homeowners live in their primary residence at least 50% of the time, they could obtain a reverse mortgage and use the proceeds as a down payment on a second home.

Although the loans have been available in various forms since 1961, it wasn’t until the late 1980s that Congress allowed the FHA to insure what become known as home equity conversion mortgages and safeguards were put into place to protect both borrowers and lenders, starting with mandatory consumer counseling for all applicants.

Homes that may qualify

In general, eligible properties for the FHA program must be a principal residence and can include single-family homes, condominiums, manufactured homes built after 1976 or even two- to four-unit multifamily properties. Besides borrowers retaining ownership of the home for the duration of the loan, cash advances can be used for any purpose and don’t count as income against Social Security or Medicare benefits — although it can affect Medicaid and other state or federal assistance, so it’s definitely best to check details with an attorney or local expert.

As reverse mortgages have become more commonplace, both the demographics of borrowers and their cash needs have changed.

“When they first started, the typical borrower was a 77-year-old widow who needed it for medical bills and upkeep of lifestyle, but today we’re seeing fewer people with the property debt-free,” said Richard Pittman, director of housing and counseling for ByDesign Financial Solutions, a HUD-approved credit counseling agency. “I just went through 15 files, and the average client was 74, had an income of $1,618 per month and owed $106,000 on their mortgage. Not a single one had any savings, half had credit card debts, 25% needed major home repairs and 25% needed money for cars, vacations and helping families.”

As promising as they sound, however, reverse mortgages do have limitations. Since borrowers need to be at least 62, it can get complicated when one spouse is younger than that. Although some borrowers have solved this problem by transferring the ineligible spouse’s interest in the home into a trust, such a plan can backfire when the eligible spouse dies, which would require the original loan amount, all interest charges and fees to be repaid.

Homeowners who are currently in bankruptcy do not qualify, neither do owners of most mobile homes, co-ops or homes on leased land. And even for those owning eligible property types, there has to be sufficient equity remaining in the home after other mortgages and home-equity lines are paid off to close the deal, in which case a traditional home-equity line may suffice. Consequently, experts often counsel applicants to discuss options with their extended families before moving forward.

“It’s a fabulous program for some, the worst thing for others,” said ByDesign’s Pittman. Fees can amount to 5% of the loan amount. “With $14,000 to $18,000 in upfront costs, you’ll hopefully take a pause and consider what you’re using the money for.”

He suggests that before signing up for a reverse mortgage, owners also consider alternatives such as downsizing to something more affordable, splitting up the house into shared housing with lockable areas or even selling the home to adult children and then renting it back from them on a long-term lease.

Other experts suggest first looking into grants and no-interest loans from local governments or nonprofits if, for example, applicants are simply looking to repair homes or defer property taxes.

Yet for borrowers facing immediate cash shortages, a reverse mortgage can be a financial lifesaver. For Myrna Reese, the cash proceeds and timing of the reverse mortgage on her home in San Diego County’s Rancho Bernardo were perfect. She and her husband, Lou, had shared the home since 1980. When health problems prevented the couple from running their advertising and public-relations agency full time, a mortgage-broker friend suggested a reverse mortgage that ended up closing one month before her husband died.

“I was so glad we were able to do it because I wanted to stay in the house, and this way, the mortgage would be paid off,” she explained. “I would never do this without the government behind it.”

Today, however, government-insured mortgages are no longer the only option for those hoping to live on untapped home equity. Given strict HUD lending formulas, which cap the amounts that can be borrowed, and high costs added to the loan balance — such as 2% of the loan amount and another 2% for mortgage insurance — lenders such as Financial Freedom and Countrywide recently introduced “jumbo” reverse mortgages offering higher loan limits and lower upfront costs. Fannie Mae has offered its own HomeKeeper program since 1996.

But since the FHA still insures nine out of 10 reverse mortgages, industry experts anticipate the agency will protect its turf by making its home equity conversion mortgages more cost-competitive. And for many seniors, the FHA-insured program is the only one they’d choose.

Many more eligible

“We still have only tapped 1% of eligible households, and this has been around since about 1990,” said Jeff Taylor, vice president of the Senior Products Group with lending giant Wells Fargo. Taylor defends the high fees of the FHA-insured program, which are sometimes cited as a hurdle to participation. “People want to jump on the costs, whereas it’s the ability to provide an annuity without the obligation for repayment, should the market go south.”

For Jenkins and Reese, such upfront costs are worth the peace of mind that their reverse mortgages are providing. Both have children who agreed that a smaller potential inheritance was a small price to pay for happy, independent parents. Added Reese: “It helps when kids don’t have to think about what’s going to happen to their parents.”

Still, due to the rapid growth of reverse mortgage programs that are not insured by the federal government, some experts urge caution and advise applicants and their families to choose brokers who specialize in these types of loans.

Liliane Choney, who was the founder of the nonprofit ReVisions Resources nearly 20 years ago to provide services and information to older adults and their families and now runs the group’s Reverse Mortgage Experts program, said consumers should look for loan experts willing to spend time addressing family members’ questions and concerns.

“One of the myths is that these loans are for the indigent, frail homeowner with no family and no other resources,” she said. “But it’s becoming a mainstream financial solution to make retirement possible — almost like today’s version of ‘burn the mortgage.’ ”

If a borrower falls ill and needs to stay in a hospital or a nursing home, most reverse mortgages don’t come due until 12 months after the property is no longer a principal residence. That gives families time to plan for other options such as selling the home or refinancing with a traditional mortgage to repay the loan in full. And, since reverse mortgages are “non recourse” — meaning the borrower and any heirs will never owe more than the market value of the home at the time it is sold — the estate is protected if the homeowner outlives the projected life of the loan or the market value of the property plummets.

If you ask Rancho Bernardo’s Myrna Reese, it’s that kind of financial security that also provides some psychological benefits.

“What’s the point of paying off a mortgage when you’re older?” she asked. “This is a way for people to grow older and it’s not a hardship on anyone. Don’t use the money to invest or try to make money — it’s much better for just maintaining a lifestyle.”

pduffy@metrointel.com

Downpayments Just Got Bigger

Real Estate Down payments just got biggerBuyers in so-called risky areas will need to pony up more cash at purchase time.By Kenneth R. Harney, Washington Post Writers Group
February 3, 2008 WASHINGTON — Critics call it the new redlining: Many of the country’s largest mortgage lenders are imposing restrictions on entire counties or ZIP Codes that they rank as risky or declining.

Other national lenders have their own such lists. Minneapolis-based GMAC-ResCap even has a website allowing loan officers to type in a ZIP Code and learn whether the area is ranked as risky.Restrictions imposed by Fannie Mae late last year have prompted lenders to compile area-by-area risk ratings and impose down-payment penalties. In a notice to lenders on Dec. 5, Fannie Mae said all loans delivered after Jan. 15 of this year on properties in declining areas would be subject to higher down-payment requirements. The company’s electronic underwriting system began flagging selected markets as high risk last summer.

So, if a lender has tagged your area, you’re going to need more cash upfront.