Lack of jobs has been touted as the key factor affecting the U.S. economic recovery.  Lender financing is the key holdout to the housing recovery, even in CA. Buyers are struggling to get a mortgage despite adequate income.

Lenders have gone from one extreme to another.  Pre-financial crisis, anyone could get a mortgage, plus extra cash just for the asking.  Boom!  The financial bottom fell out.  Obtaining credit everywhere in early 2009 was nearly impossible for all prospective homeowners.  Now, as the dust continues to settle, lenders are slowly opening their wallets with the sound of a squeaky hinge.

During 2010, lenders made hurdle jumping an art form for Buyers.  Watching credit scores like a hawk lenders were pulling reports two- or three-times and again just before the loan funds. This became the new normal.  Buyers were forewarned:  Don't get pregnant; don't buy a car; don't get furniture for the new home; don't do anything that affects cash-on-hand or changes to the income-to-debt ratio prior to funding.  Even successful self-employed entrepreneurs who don't have W-2 forms were denied credit.   Escrows were canceled; closings were extended; and the domino effect played havoc on Sellers too. 

CASH IS KING!  When Buyers were lucky enough to pay all cash, they could pretty much state their purchase price.  Sellers who were weakened by several roller-coaster rides of canceled deals or months without selling, accepted prices well below market value in exchange for an all cash, quick close deal.  But, very few people have the cash to buy without selling first. 

That said, the primary Senior readership of this Newsletter has a leg up for today's real estate market.  Sitting on a gold mine, with nothing but equity looming in the family home and very little if any debt, makes for a strong all cash Buyer.  As a retiree without a job, getting a loan is not possible...but, there is no need.

Also, consider the opportunity of Seller financing...become the lender for your home Buyer.  Many Seniors are thinking about renting their next home, and don't need the cash immediately.  Earning income with Seller financing would benefit Seller and Buyer.  Plus, this is a great tool for marketing the family home.  Call me to discuss.

This next installment deals with  paper stacks piled around your home...or office.  Part I suggested tackling the mounds of paper after creating S-P-A-C-E.  Part II offers tips for eliminating the amount of incoming paper; creating a filing system and tossing unwanted mail ~ every day.

If you are still plagued with the
I might need this again, sometime syndrome, ask for this helpful plan-of-action. 

There comes a time when most people need assistance with daily living routines.  Whether you are a Golden-ager, or are responsible for the well-being of a Senior parent, now is the time to take action. 

People have a choice:  To take control of personal decisions or to wait until something happens and let someone else make decisions for you.  While you are still mentally, physically and emotionally able to keep an open mind, start by investigating future residence options, to include: 
1.) Aging-in-place with in-home help, or
2). Moving to an assisted-living residence, sooner than later

- Costs associated with a 24-hour live-in caregiver, which may also require daily skilled-nursing visits
- Making property modifications to ensure a safer home (ex: inside steps, outside stairs, bathrooms, kitchen and lighting) 
- Taking safety risks, as 53% of falls occur inside the home

Although many homeowners believe that it is advantageous to live in a mortgage-free home, there are benefits associated with professional care environments that no one can quantify:  safety,
security, social interaction and peace-of-mind.

Today's Senior residences vary from free-standing homes within a community to apartment-style living in one building.  Many assisted-living communities are homes to very active and independent Seniors who want to age-in-place.

Take into consideration:
- Adaptability:  Make a lifestyle change while it is easier to adapt to a new environment, then age-in- place
- Services offered:  Inclusive or pay as you go, including:  daily meals; in-house seminars; transportation to medical appointments; fitness and
technology classes, etc.
- Social connection:  Spending too much time by oneself and not interacting with others leads to focusing on individual problems. 
A resident can maintain privacy in their personal space and interact with others as desired.
- Safety features:  Regulated by State law, all room features, appliances, and common areas are designed for ease and Senior living.

As a Certified Seniors Real Estate Specialist for more than seventeen years, I work daily with longtime homeowners.  As a result of my experience, here are other factors for you to consider:
- Generally speaking, men do not like change, especially when it pertains to leaving their "castle"
- Statistically, however, the wife is usually widowed and left with a home and finances often beyond her ability to cope.  Homes need repairs; financial and insurance advice needs to be revised, etc.

Start talking to your spouse today about getting re-settled into a condo, an apartment or a Senior residence...locally or closer to your children.  Realize this is a fact of life, and although you are not ready now...you never know what tomorrow may bring.

TERRANEA (Terr-ah-nee-ah)
Resort Vacation Homes
Palos Verdes Peninsula

A unique concept of second-
home ownership with first-class resort amenities.

"Whole ownership; time limited occupancy" (but, not a time share) is the catch phrase for this one-year new oceanfront vacation home development in PV, about 45-minutes from the Westside.  The Coastal Commission requires open access for locals and other individuals, and a chance for everyone to enjoy the elegant ocean front resort and full amenities.

Therefore, Villa and Casitas owners must rent part or all of their property about 9-10 months of the year.  Owners of a Terranea vacation home can utilize a mortgage tax deduction; realize 55% of the rental income; and save up to 50% on resort stays throughout the year.  Owners also have top priority for vacation times.

Overall, the 102-acre Terranea Resort offers 362-guest rooms; and 50 Casitas and 32 Villas for purchase.  Amenities for all include:  a full-service spa and state-of-the-art fitness center; meeting rooms; a grand ballroom; three ocean view pools and eight distinctive restaurants, bars and lounges.  Plus, a rolling par-3 executive golf course.

Now priced from $995K to $2,495K the two- and three-bedroom, fully-furnished Casitas and Villas have been slashed back to pre-construction prices. Almost half of what they asked prior to the economic crash.  Room service, housekeeping and the security of professional rental management is included.

Casitas:  With expansive ocean view vistas, each Casita is 2,040 square feet and is available to owners for 60-days annually.  Included are a Master suite; two additional bedrooms with private entries and terraces; and a spacious kitchen-great room.  First year rental rates averaged from $770 to $818 per day.

Villas:  Overlooking sweeping views of the lush executive golf course and Pacific Ocean, Villas offer four-floor plans with two- or three-bedrooms, and interior space from 1,860 to 2,800 square feet.  The homes include: a gourmet kitchen/great room; indoor and outdoor fireplaces; attached garage and some are equipped with private outdoor spas.  Villa owners have access 90-days per year.  First year rental rates averaged from $449 to $589 per day. 

For more information call me, as I have toured the resort residences, and played the golf course.  Or, call the Terranea real estate office @ 866-998-3772 and tell them REALTOR� Radom referred you.

Terranea:  Close by, but feels like you're days away on vacation.

Last year, the 4th Appellate Court in CA ruled that a "non-refundable" deposit agreement does not necessarily make it so.  Even when the Buyer defaults, or breaches the contract.

When a property Buyer submits a purchase contract, the offer includes a deposit (or earnest money) equal to 3% of the purchase price for liquidated damages.  But, both principals must sign the Liquidated Damages provision in the original contract; paragraph 26, to implement the assignment. The deposit money is retained in an escrow account until closing or cancellation of the contract.  The C.A.R. Purchase Contract states:  "If a Buyer fails to complete this purchase because of Buyer's default, Seller shall retain, as liquidated damages, the deposit actually paid" (3% being the maximum allowed). 

However, according to the 2010 Court ruling, deposits are not automatically non-refundable without Seller proving "actual" damages, which can be measured by the difference between the contract price and the property's value at the time of breach.  For example:  If a back-up offer is utilized by the Seller and the new purchase price offsets the previous Buyer's earnest deposit...no "actual damage" was incurred by the Seller.  Any forfeiture provision without regard to the actual damage suffered is an unenforceable penalty.

Other "Non-refundable" Deposits:
When multiple offers were the norm in a Sellers' market, a Buyer was often asked during the negotiations, and agreed to:  Release, as non-refundable, the initial 3% deposit to the Seller upon removal of all contingencies.  The Buyer was indicating to the Seller a seriousness to complete the transaction.  The deposit was still credited toward the purchase price, but the Seller could receive the money prior to the close of escrow.  For whatever reason, if the Buyer breached the contract the Seller kept the deposit.

In negotiation tactics the objective should be to "give and get" among parties.  For example:  If a Buyer asks to extend the closing date, the Seller may counter-negotiate for something desirable in return for the concession...i.e., Buyer immediately releasing the deposit and declaring it non-refundable.  NOTE:  Just because a Buyer asks for a contract change, the Seller does not have to comply, but may be more willing when something in return is received...give and get.

The Court acknowledges that parties to a real estate contract can agree to a non-refundable clause that stipulates a breach will result in a certain amount of damages.  No
proof of "actual" damages to the Seller would be required.  C.A.R. form RID "Receipt for Increased Deposit/Liquidated Damages" would need to be signed by Buyer and Seller clearly indicating that the 3% deposit is expressly given as consideration for a stated purpose and is to be non-refundable.

Another extension has been given by Congress to keep the conforming loan limit at $729,750 through September 2011 for high-priced housing areas like CA.  The conforming loan cap determines the maximum mortgage amount that government sponsored Fannie and Freddie (and FHA) can buy or guarantee.  Non-conforming, or jumbo loans, carry higher interest rates making home ownership less affordable in high-cost areas like CA. 

Originally increased through 2009, interest rates for the higher conforming loan limit are guaranteed to be lower than the standard cap of $417,000 in other parts of the U.S.  Hopefully, the "new" Congress will make this a permanent cap limit, which helps CA borrowers.

She was four-years-old in 1937 when her parents bought the family home where she still lives today. That was seventy-four years ago.

If you, or someone you know, surpasses this longevity record, please call me.  This is just as exciting as the 107- and 106-year-old homeowners I know.