Electrical Safety - Safety Saturday Project Starter

Cooper Wiring Devices is a proud supporter of Home Safety Council's electrical safety education.


Our homes are filled with things that run on electricity. Electricity makes our lives easier, but it can also be dangerous if you’re not careful. Electricity is especially dangerous to curious children and if it comes in contact with water.

A special outlet called a ground fault circuit interrupter, or GFCI, can prevent you and your family from being hurt by electricity. A GFCI outlet will quickly stop the flow of electricity if an electrical appliance comes in contact with water or if a ground fault occurs.

GFCI’s should be installed in outlets near any source of water in your home. If young children live in or visit your home, you may want a “tamper resistant” GFCI. These have a built-in shutter that prevents children from putting things into the outlet and getting an electrical shock.

Set aside one Saturday this month as a “Safety Saturday” and work with your family to look at all of the different ways you use electricity in each room of your home. Use the Home Safety Council’s room-by-room guide to find and fix potential hazards before a shock or other injury occurs.

Laundry Room: In most homes, a lot more than doing laundry takes place in the laundry room. With your washer, dryer and utility sink all likely in close quarters, it’s especially important to have a GFCI in the laundry room. All electrical outlets near water should be protected by GFCIs. If the outlets in your laundry room aren’t already protected, an electrician can install a GFCI for you. Also make sure all appliances in the laundry room are kept dry and away from water at all times.

Kitchen: With so many kitchen gadgets available, many families struggle to find enough outlets for their appliances. Take a look at the outlets in your kitchen and make sure you don’t have too many appliances plugged in at once. Unplug your toaster oven, coffee maker and other small kitchen appliances after using them. If you don’t have GFCI’s in your kitchen, call an electrician and ask to have them installed.

Bathroom: The combination of water and electrical appliances in the bathroom make this an important area of the home for your electrical safety makeover. Make sure the electrical outlets near your tub and sink are protected with GFCI’s or call an electrician to install a GFCI for you. Store hair dryers, curling irons and razors away from water and always unplug appliances after using them.

Nursery: Electricity can especially be dangerous to curious children. Inspect the outlets and appliances in your nursery and take steps to make sure the nursery offers a safe place where your baby can learn and grow. Install special child safety receptacles to keep children from putting things into outlets. Tamper-resistant receptacles have a built-in safety shutter that opens when a plug is plugged in, but will not open for a single object such as a key, hair-pin or paper clip. Tamper-resistant receptacles are safer than small outlet covers that can be taken in and out. Small outlet covers also present a choking danger for young children.

Visit the Safety Guide for a complete list of electrical safety tips.
To learn more about electrical safety, visit MySafeHome. Be sure to tour the laundry room, kitchen, bathroom and nursery for tips you can use to protect your family from electrical problems.

The Next Wave of Bad Loans - Option Arms

A friend of mine in Huntington Beach confided in me that they are in serious trouble with their mortgage. My friends earn good money - and their combined income is a lot higher than the medium level for Orange County; which is high to start with. I'll call my friends Lisa and Jim. They are usually investing successfully in various other commodities, but this time I think they put their home in the position of being an investment vehicle. This time, I think they are in trouble.

Lisa and Jim are in thier late 50’s and early 60’s professionals looking toward retirement in a few years; who refinanced their modest home for $750,000, at the peak of the market with an Option Adjustable Rate Mortgage (Option ARM). This loan program allowed Lisa and Jim to decide monthly which of four optional mortgage plans they would pay, each month. Since getting the loan, Lisa and Jim always chose the lowest payment - which was actually less than the interest they accrued.The plan Lisa and Jim had been to sell their home when he reached 65 and retired relocating to the Palm Springs area or Arizona. This seemed like a well thought out plan which showed they knew what they were doing at the time.

Well, the $2800 monthly mortgage jumped to $3200 with another jump to over $4600 looming in the not too distant future.The problem is that despite what appears to be a path of recovery for the housing industry there are still more than a half million option ARMs that are scheduled to reset in the next four years!

Since many of the Sub Prime mortgages have already failed more and more of the Option ARMs are failing and since February, the Option ARMS have exceeded the default rate on the Sub Prime mortgages.

The sad news for Lisa and Jim is that the home is now only worth approximately $550,000, or less, and the balance of their mortgage has risen to over $800,000; since they only made the minimum payments their principal balance went up every month.Between 2004 and 2007 over $750 Billion in Option ARMs were made and remain at risk. The real kicker is that despite the perfect payment history of many borrowers they still cannot refinance their way out of this mess, as their homes are worth so much less today than when they borrowed the money. About one third of all Option ARMs are currently in default, according to industry analysts.
In comparison to the Sub Prime Mortgages, the borrower of an Option ARM typically had much higher credit scores, better jobs and more to lose than the masses of Sub Prime borrowers who literally walked away from their homes and neighborhoods, in droves. The Option ARMs tend to have higher balances and when they reset have been known to double the initial monthly payment.

The industry is expecting to see 600,000 or more Option ARMs reset in the next 4 years. The four payment plans that Lisa and Jim and other borrowers were offered included the interest only, less than the interest (where the difference would be added onto the principal - OK, when you are accumulating equity every month - but really bites in a declining market), fully amortized over both a 15 year and a 30 year fixed-rate-mortgage.

Over 75% of all borrowers never paid more than the minimal payment - less than the current interest rate plan. This plan was set to reset at either 5 years or when the new principal balance reached a pre-determined level somewhere between 110% and 125% of the original loan. Then once the ‘cap' is reached, borrowers have to pay down a higher balance at a higher interest rate in a shorter time period.

Like so many other exotic loans, they were great products if used properly. What most homeowners in this situation need to do is once every 6 months make at least the regular payment. In most cases this will help the balance on the loan not double and helps to reset the minimum payment due. Consult with your lender to make sure this is what will happen in your case. Unfortunately industry experts expect 81% of the Option ARMs that originated in 2007 to default with many of them ending in foreclosure.

The problem is that the loans were not only offered to those for whom they were designed but to just about everyone with a decent credit score. People were not taking on these loans because they believed their income would grow over time - they were used by homeowners who believed the equity in their house would increase and that they could refinance out of the teaser rates.
The losses from Option ARMs promises to be staggering. Another industry expert is projecting at least $112 Billion will be lost by the banks as a result of Option ARMs written between 2005 and 2007.The good news, if there is any, is that interest rates remain low - so loans are taking longer to reach their cap and will not rest at the higher interest rate until they do reach the cap.

ACT NOW!!! July is the deadline for Property Tax Re-assessment in Some Counties

Property and Home Owners, ACT NOW!!! If you get this done before July 1st you could possibly get this year’s property taxes reduced in time for your next property tax billing. Proposition 8 allows for an (annual) reduction in assessed value of your home when your property suffers a “decline-in-value.” A decline-in-value occurs when the market value of your property is less than the assessed value as of January 1, 2009.

The best information you can provide that supports your opinion of the market value of your property is sales of comparable properties. Attached you will find the form for your county. If you provide me with your address, I will send you the comps for your home (free of charge).

Los Angeles:

Property owners guide to decline in value
http://assessor.lacounty.gov/extranet/guides/prop8.aspx

Other la assessor value forms
http://assessor.lacounty.gov/extranet/list/forms.aspx

Decline-in-Value Reassessment Application http://assessor.lacounty.gov/extranet/lac/control/binaryget.aspx?uploadid=193


Orange County:

Orange county assessor’s office
http://www.oc.ca.gov/assessor/

Will A Decline In Market Value Reduce My Property Taxes?
http://www.oc.ca.gov/assessor/pdf/Informal%20Review%205-09.pdf

There will most likely be another one for next year. The 2009 form had to be filed by April 30, 2009


Let me know if this was of help to you; thanks.

Remember me when you hear of someone who is looking to buy or sell or rent

Herm.
949 742 0915
hermia@acastle4u.com

Happy Mother's Day

Short Sales Test Homebuyers’ Patience

By Amy Hoak Print Article RISMEDIA, March 26, 2009-(MCT)-

Those searching for the best housing bargains on the market might consider buying a short-sale property, but there’s an important qualification for buyers interested in going this route: They need plenty of patience.
In a short sale, a homeowner’s lender agrees to accept less than is owed on the mortgage for the property. It’s a useful alternative for borrowers underwater on their mortgage and on their way to foreclosure. As home prices continue to decline, short sales have become a viable option for those who need to sell.
“Over the past three to six months, the servicers have really become aware that short sales are the best way to reduce their losses when a modification is not an option,” said Travis Hamel Olsen, president of National Short Sale Center, a company that facilitates short sales nationwide on behalf of homeowners and real estate agents. The short-sale option also is less damaging to a seller’s credit than a foreclosure, he said.
A short sale can be attractive to a home buyer since the lender often will accept bids on the property that can be 10% or more below the market value, determined by the prices of comparable, nearby properties, Olsen said.
Although the mortgage balance is probably greater than the price a seller could expect in a traditional sale, the lender may be willing to take less than is owed in a short sale if this will help the lender avoid the further expenses of foreclosing and taking over the property. The savings, however, often come at the expense of a home buyer’s time.
“Short sales should be called long sales,” said Leslie Tyler, vice president of marketing for ZipRealty. “In some cases, it could take months for a buyer to hear back from a lender.”
For Kristine and John Williams the savings seem to be worth the wait. Kristine Williams says they’ve found “the perfect house” in Brentwood, Calif., although the process is taking longer than they originally thought. The couple waited four months for an answer from the bank, and then had to revise their bid lower as the market continued to sour.
Their current bid is $550,000, on a home that was appraised at about $1 million three years ago. They’re hopeful the current bid will be successful, but realize it could be months before they find out if the offer is accepted.
“In general, it takes a minimum of two months to get a response from the bank whether they will accept or counter your offer,” said Rob Jenson, CEO of The Jenson Group, a Las Vegas-based real-estate firm. “That process could take longer.”
Are the savings worth it to you? Consider these five points before shopping for a short sale:

1. You’ll wait in the dark. Perhaps just as frustrating as the wait time is the fact that you likely won’t be privy to details as the deal is progressing. That could mean going months without an update.
Banks are “ramping up their capability for short sales,” said Dennis Green, general manager of ForeclosurePoint.com. But it hasn’t made the process much easier.
“Where our buyers have been the most frustrated is the lack of status or information,” Tyler said. Saying “we want an answer by this Friday or we’re going walk … doesn’t make a difference,” Jenson said.
There are reasons for the wait though: A lender could be considering multiple offers. If the seller had both a first and second mortgage, that could also make the process more complicated. The Williamses ran into both scenarios, slowing their process down, and that’s not unusual. The homeowner also has to prove their financial hardship to the lender.

2. Banks will make you a deal, but within reason. There are deals to be found in short sales, but don’t expect outright steals. A buyer needs to make a fair offer, based on comparable homes that have been sold recently, Jenson said. The offer should be aggressive, but not ridiculous.
“The misconception is that banks should be happy to get the property off the books,” he said. “They are, but to a certain point.”
Homes that have already been foreclosed on may be even less expensive than a short sale, Tyler said. But bank-owned properties also might be in worse shape, especially if the foreclosure home has been sitting vacant for some time, she added. It’s important to consider the cost of necessary repairs before buying any distressed property.

3. Sales are “as is.” In a short sale, it isn’t likely that you will get allowances from the seller for repairs that are needed, as you might in a traditional sale, Jenson said. Do a home inspection and know what you’re getting into, but remember that your bid is for the property “as is.”
“The seller will not give you a credit for repairs,” he said. “The last thing they will do is make repairs.”

4. Have a back-up plan. Even if you decide to bid on a short-sale property, it might be best to keep looking anyway.
“There is no guarantee with short sales, and if the buyer is smart, they will put an offer on a short sale they like and continue to look at properties that interest them,” Olsen said. It isn’t uncommon for people to find a home they like better and avoid the short-sale deal, Green said.
That said, when a offer is accepted and earnest money is put down, remember that you risk losing those funds if you decide to walk away and buy another home, he added. It may take months before the deal closes, even after the offer is accepted.

5. It’s not only about price. “One thing to not lose sight of is that you’re buying a house to live in. Buy a house you like,” Tyler said. She recommends that prospective buyers remain open to properties of all types - short sales, bank owned and traditional sales - and compare prices and features.
A short sale is only a bargain if it’s a home that you truly want to live in - not something you’re drawn to only because of its low price tag.

© 2009, MarketWatch.com Inc.Distributed by McClatchy-Tribune Information Services.
RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Should You Let a Tenant Out of a Lease?

Courtesy of http://www.rentalprop.com/tip.htm
Last week's tip, in case you missed it

Q: We had a tenant ask us to let him out of a lease. We don't normally do that. Any suggestions?

A:These are case-by-case decisions. There are a number of considerations.

Why does the tenant want out?

1. If he can't afford the rent anymore, then you are kind of stuck. In that case, he is being up front with you and doesn't want an eviction on his record. Probably the best bet there would be to just go ahead and cancel the lease. You might want to keep the security deposit to pay for some of your loss.

2. If he is being transferred, possibly his company will pay for the rest of the lease. After all, it is their fault he is moving. Many times corporations will pay expenses for moves in addition to the normal moving van and new utilities.

3. If it is a divorce, see what you can work out. Ideas on that below.

4. If he has just decided that he wants to move, say no, the entire contracted amount of the lease must be paid. He can move, but it will cost him the rest of the amount due for the term of the lease.

How is the rental market?

1. If it is good, you can probably re-lease the property quickly for as much or more than you were getting from this tenant.

2. If it is slow, you may have to play a little hard ball. You will have a tough time re-leasing for the rental amount you were getting.

Your responsibility if the tenant moves out before the lease is up: Try to mitigate the damages, i.e., use your best efforts to get the place rented again.

The tenant's responsibility if he moves out before the lease is up: Pay the damages incurred by the landlord.

If you use your best efforts to mitigate damages, and it takes you two months to rent the property for $100 less per month than you were getting from the first tenant, he owes you the two months' rent plus $100 times the number of months left in the lease. For example, say you had a one-year lease for a total of $7,200, or $600 per month. The tenant moves out after the first month, January. You cannot rerent until April 1. ($1,200) You rerent at $500 per month. That means nine months where you made $100 less than the first tenant was paying. ($900) The total the tenant would owe you is $2,100, plus whatever it costs you to in lawyer's fees and court costs to collect.

Two ideas for helping both sides

1. See if the tenant knows someone who would like to move into the property. If he has been a good tenant, chances are his friends would be too. Just do the checking you would normally do for a new tenant.

2. See if you can get the tenant to offer some kind of compensation for letting him out of the lease. Sometimes they'll offer more than you would have gotten otherwise.

(Disclaimer: Laws differ from state to state. Make sure this is the law in your state before you proceed with this advice.)

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