Real Estate Appreciation Passes Mortgage Rate

With election season poised to roar into high gear, Weichman Realtors is about to begin officially (oh, all right – unofficially) to discount most of what we’ll read over the next few months. Especially from experts, since many seem to have a horse in the race.

But while we are still in the nobody’s-paying-attention-yet month of August, we thought we should bring Costa Mesa real estate readers — homeowners and future homeowners alike – an item that caught our eye late last week. We had to read it three or four times before it sank in.

The headline read, “Housing: Good Vibrations,” with the subhead, “Real mortgage rates plunge into negative territory.” It’s the kind of negative news we don’t remember seeing a lot, but it certainly sounded interesting.

The author was Charles Schwab & Company’s Chief Investment Strategist, Liz Ann Sonders, who often makes more sense than many of her colleagues. Her point was how “real” gross domestic product (which differs from the simple GDP because it accounts for inflation) is a better capture of the real world. Likewise, the “real” mortgage rate differs from the plain old mortgage rate by taking into account the appreciation or depreciation of the underlying real estate. Right now, with real estate beginning to appreciate in value while the mortgage rate is incredibly low, the RMR (Real Mortgage Rate) has gone negative!

A negative RMR creates an amusing situation. You can look at it as if the banks had gotten together and decided that it would be a good idea for them to be paying us, the Costa Mesa mortgage consuming public, for the privilege of using their money to buy our home. In truth, of course, the banks make some cash. But less than their loan is now earning for the lucky mortgage holders –at least in terms of the growth in their real estate’s value.

To me, it’s the mortgage rate equivalent of not just a free lunch — but a free lunch where the server gives you a nice tip after dessert. Or like checking into a posh hotel, staying the weekend for free, and then — as the bellman piles the luggage into your car — he thanks you and hands you a twenty. It’s nearly like the IRS sending you a notice that (if it’s all the same to you) they would rather not deduct anything from your paychecks. For the next 30 years.

Or like eating cake and having it, too.

It may be an exaggeration, but in any case, this is the kind of ‘negative’ we haven’t heard for a while. Call us if you would like to check out some of our Costa Mesa real estate offerings that could let you take advantage of today’s environment.
Weichman Associates Realtors is a full service real estate agency located in the heart of Costa Mesa offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976. It’s Weichman’s mission to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. Weichman Associates Realtors was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, Weichman Realtors has grown to a full staff of 20 serving over 300 clients a year.

Weichman Realtors is not limited to serving just its clients; it is also committed to serving the community. Not only has Weichman donated hundreds of hours to many area charities, they have also received the prestige of being named one of the top real estate companies in Costa Mesa.

If you’re interested in buying or selling in Orange County, turn to the experts. Turn to Weichman Realtors and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact Weichman Realtors today at 714-444-4663 or email us at info@WeichmanRealtors.com

Costa Mesa, CA 2nd Home — Part of Your IRA?

Investors are still shaking off the memory of watching what happened to their IRA stock portfolios during the nightmarish global financial crisis. Even the groggy recovery that’s been under way ever since has featured the kind of stomach-churning drops that drive investors to the Pepto-Bismol.

So it’s not surprising that some have been searching for alternative assets that could grow tax-free within their retirement accounts. And lately the agents at Weichman Realtors have been hearing from more clients who are asking about the possibilities in real estate, including Costa Mesa second homes and even vacant acreage.

You read that right: real estate is a little-publicized yet entirely legal vehicle for IRAs! Right now, when prices are at bargain-basement levels, investing for the long run in what many see as the most ‘real’ of all holdings certainly is an opportunity worth looking into. Nevertheless, there are some big cautions.

First off, let us emphasize that our area of expertise is real estate — not financial advice. Anyone who is serious about placing real estate in their IRA will absolutely need expert financial and tax advice.
They will explain that traditional IRAs can not include real estate; only ‘self-directed’ IRAs are eligible (although they are fairly easy to open or steer existing IRA assets into). Despite the fact that some extra freedom is granted such accounts, when you ‘self-direct’ an IRA, you are subject to some very firm prohibitions. In the case of a real estate investment, just one of those is that you can’t use the investment (for instance, if you purchased one of our Costa Mesa or nearby second home) for your own benefit until you retire. In other words, your pretty little cabin by the lake can be rented out, but you or your family can’t spend the weekend there. You also can’t hire yourself (or a company you own) to manage it. And if brother Fred wants to vacation in it (even if he would pay rent for the privilege), you have to tell him no.

The general idea is the same as with any IRA: you or family members cannot benefit from account assets until you retire. That makes perfect sense, because the funds used in it have been contributed tax-free, and any gains are appreciating tax-free. Still, if you can secure a non-recourse loan, that might allow you to effectively double your investment dollars.

The penalties for not following the rules make that not worth even thinking about. That means that most everyone will probably want to use an administrator or custodial firm with real estate experience. But for those who find second homes or other income-producing Costa Mesa properties, the prospect of building a tax-free revenue stream within a self-directed IRA is certainly intriguing. It could mean the Pepto-Bismol stays on the medicine shelf.

I hope you will think of Weichman Realtors whenever you decide to discuss the current prospects for any real estate investment. We are standing by!

Weichman Associates Realtors is a full service real estate agency located in the heart of Costa Mesa offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976. It’s Weichman’s mission to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience. Weichman Associates Realtors was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, Weichman Realtors has grown to a full staff of 20 serving over 300 clients a year.

Weichman Realtors is not limited to serving just its clients; it is also committed to serving the community. Not only has Weichman donated hundreds of hours to many area charities, they have also received the prestige of being named one of the top real estate companies in Costa Mesa.

If you’re interested in buying or selling in Orange County, turn to the experts. Turn to Weichman Realtors and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact Weichman Realtors today at 714-444-4663 or email us at info@WeichmanRealtors.com

When Cookies and Coffee Don’t Work!

Everyone at Weichman Realtors knows that open houses are one of any agent’s most effective tools when it comes to selling houses. The 2011 National Association of Realtors® Profile of Home Buyers and Sellers found that 45% of buyers use open houses as a research tool when they are serious about buying a home.

Costa Mesa, CA open houses can draw potential buyers, then effectively demonstrate not only an attractive physical living space – but a canvas that invites them to project their own ideal living situation onto it.

Nevertheless…be warned! Obvious, clichéd staging can have exactly the opposite effect — even for properties that are standouts in every other way. The danger arises when staging becomes upstaging: when décor rather than the house itself becomes the star. Additionally, there are a couple of common traps it’s worthwhile avoiding:

1. Fake scents. The aromas of baking cookies or brewing coffee have become such clichés that Costa Mesa open houses are better off without them (exception: coffee that’s actually brewing before about 10 a.m.). Homebuyers are simply wise to these overused scents…they are more likely to arouse suspicion than the warm and cozy feeling they are meant to inspire. Their very presence may raise a buyer’s defenses and plant the suspicion that something is being covered up. Instead, simply make sure the house is clean and smells fresh. Don’t use any cloying artificial scents. When a home is well cared-for, opening windows to circulate fresh air half an hour before a showing or open house is usually all that is needed. If the weather doesn’t cooperate, find one of the new, nearly scentless fresheners (one you test in advance) — and use sparingly!

2. Fresh paint. Of course, you should perform repairs and refresh paintwork – just don’t do it immediately before the house is going to be shown. Costa Mesa open houses that smell like fresh paint can set off the same kind of alarm bells we are trying to avoid. Too strong a fresh paint aroma can carry the subtle message that the home has been through a quick cover-up of what might be a worrisome defect (damp walls, cracks in the ceiling – whatever a potential buyer fears most!) It’s just safer to complete all paintwork a couple of weeks in advance.

3. Staging to a niche market. Don’t get carried away by creating a fantasy lifestyle thorough your staging choices. The goal of effective open houses is to illustrate a home’s potential to all buyers, helping them envision themselves in the space. Focusing your décor elements to create an extreme fashion statement may please those who appreciate it, but you can bet it will alienate many more who do not.

Open houses staged properly don’t depend on tricks or deception. Good staging is about showing a house to its best advantage while making it easy for all potential Costa Mesa homebuyers to put themselves into the picture. It should be just one part of a well thought-out marketing effort. Call one of the agents at Weichman Realtors if you’d like to discuss selling your home so we can build a results-oriented plan for you!

Weichman Associates Realtors is a full service real estate agency located in the heart of Costa Mesa offering a wide-array of custom services to meet their clients’ needs with roots in the community since 1976. It’s Weichman’s mission to provide trusted, convenient, responsive service to ensure clients enjoy their real estate experience.

Weichman Associates Realtors was originally formed to offer personal, concierge-level service as an alternative to the large, nationally based real estate companies. From its small beginnings of only two employees, Weichman Realtors has grown to a full staff of 20 serving over 300 clients a year.

Weichman Realtors is not limited to serving just its clients; it is also committed to serving the community. Not only has Weichman donated hundreds of hours to many area charities, they have also received the prestige of being named one of the top real estate companies in Costa Mesa.

If you’re interested in buying or selling in Orange County, turn to the experts. Turn to Weichman Realtors and let them help you make your real estate buying or selling dreams come true. For more information or to get started on finding or selling your home contact Weichman Realtors today at 714-444-4663 or email us at info@WeichmanRealtors.com