Nef Cortez

By Nef Cortez

Everyone that has a “roof over their heads” has a reason to be Thankful.  Many of us were able to sit around the dinner table and enjoy this Thanksgiving with family and friends. In contrast, there are many unfortunate people throughout the world that are spent this Thanksgiving Day 2017 without one of the basic necessities of life…Shelter.

We can be thankful that here in the United States of America we are able to say that anyone who needs shelter has it available to them.  There are many wonderful people that have committed their lives, and others who volunteer so much of their time, to help those in need. Yet, there are many who may be homeless (without shelter) at this time.  Many are there as a consequence of some unfortunate circumstance or due to the outcome of some poor decisions.

There are still over 564,000 people in America that are homeless. That is a huge number, yet in contrast, it is but a very small percentage of all Americans. Less than 1.7 of one-hundredths of one percent are homeless.  Studies have shown that 60-70 per cent of the homeless population is homeless due to their poor mental health.  More needs to be done about that issue.

Many fine organizations like the Union Mission in Los Angeles are provided all the “fixin’s” of the traditional Thanksgiving Dinner this holiday, and many are able to be Thankful for being on either end of the Gift of that “giving”. There are those that receive, and those that Give.  Both are blessed by the exchange.

Happy Thanksgiving Everyone!

This article was written by Nef Cortez, a licensed Real Estate Broker, Cal BRE # 00560181 since 1976. He can be reached via e-mail at: nefcortez@gmail.com. Please feel free to email any questions regarding real estate.

NEF CORTEZ,
Broker  CalBRE # 00560181
Certified REO Broker
Certified Distress Property Expert

ReMax Realty 100

1411 S. Diamond Bar Blvd.,

Diamond Bar, Ca.  91765

e-mail: nefcortez@gmail.com

Office: 909-610-6303
Fax:  909-752-3163
Cell: 909-762-8135

Nef Cortez

By Nef Cortez

The current effort to Reform the Tax Code can have some very disconcerting consequences to homeownership in California.

The incentives that are built into the tax code benefit Homeowners directly in the ability to claim as a deduction the interest paid on a home mortgage, as well as the property taxes paid. Eliminating this incentive from the tax code effectively raises taxes for a majority of middle class Americans. The California Association of Realtors (CAR ) and the National Association of Realtors (NAR) have taken the position of strongly opposing the Congressional Tax Reform Act as long as this issue is not addressed in a manner to retain wholly or in large part within the Tax Code.

Tax reform that is passed without the middle class wage earner retaining this incentive will decimate the housing market. The real estate values of today’s homes have had this tax deduction built into it in some form or another for the last 100 years. Even a 10% reduction in property values will cause a ripple effect that would impact millions of Americans, and in many cases would cause home-owners to dip back into a position of being “underwater” in their home loans.

Removing the incentives to homeownership in on fell swoop would cause many negative unintended consequences to America’s middle class. Culturally, it has been shown that home ownership helps to support a more stable living environment, where residents of a community are vested into its livability. A more stable environment has been shown to be beneficial to children in their teen, pre-teen, and formative years.  Socially, anything that erodes the  stability of households will ultimately affect our communities in a negative manner.

I would encourage you to contact your congressional representative to voice an opinion on this issue, as it is critical to most homeowners’ finances.

This article was written by Nef Cortez, a licensed Real Estate Broker, Cal BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com.  Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

You can save tens of thousands of dollars, possibly even hundreds of thousands, in the repayment of your home loan by using a very simple money management trick.  The typical home loan that is taken out in the purchase of a home is written or amortized over a 30 years period.  The most common reason for this is that is the way to maximize the ability to qualify for more of a home. With prices of homes so high here in Diamond Bar, and throughout Southern California, some homebuyers even opt to get a 40 year amortized loan.

A home purchased with a down payment sufficient to finance a loan of $500,000 amortized over 30 years will have a monthly mortgage payment of $2,387.08 (using a 4 % rate and excluding taxes and insurance). The same home with the $500,000 loan amortized over a 15 year period will have payments of $3,574.41. Even with a ½% lower interest rate for the shorter term, the monthly payment is $1,187.33 more than the 30 year mortgage.  Using the qualifying “Rule of Thumb” of 3 times the mortgage to determine the monthly income necessary to qualify, the Homebuyer would need an additional $3,561.99 monthly income to qualify for the home loan.

The homebuyer, instead of needing to have a total monthly income of $7,160, or $85,932 annual income, would have to have a monthly income of $10,721, or $128,652 annual income. This substantial difference in income required to qualify is the main factor why homebuyers choose the 30 year mortgage over the 15 year mortgage.

The decision to purchase the home with the lower monthly payment over a 30 year mortgage will cost the homebuyer a total of $859,320 over the fully amortized period. If the homebuyer was able to qualify for, and support the higher initial monthly payment of the 15 year mortgage, the total cost over the fully amortized period would be $643,393.8.

The simple disciplined payment of an additional $100.00 to the 30 year amortized loan will result in the loan paying off in approximately 24.5 years, saving approximately $78,000 in interest payments. This is the effect of a disciplined, consistent, managed plan that, although small in scope, has great benefits in the long term.

This article was written by Nef Cortez, a licensed Real Estate Broker, Cal BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com. Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

One of the most important considerations when one is looking to buy a home is the safety of the community in which the home is located.  Diamond Bar has consistently ranked as one of the safest cities in the US, and without a question, in California.

I attended Supervisor Janice Hahn’s first Annual Public Safety Appreciation Barbecue Lunch today. It was co-sponsored with the Regional Chamber of Commerce of which I am a Board Member.  I was proud to help represent the Tri-Counties Association of Realtors in honoring our First Responders at this event.  I joined fellow Realtors Laura Greene, William Jia, Lily Valdivia-Rodriguez, Dennis Ni, and Raul at their table.

This event honors the men and women who provide us with the sense of safety that we all desire in the excellent quality of life that we are able to enjoy in this beautiful city of ours. Chief Parra represented Los Angeles County Sherriff Jim McDonald, who was not able to attend. He thanked Supervisor Hahn for her support of the work that the men and women of the Department do each and every day.

Los Angeles County Fire Department Chief Daryl L. Osby thanked Supervisor Hahn for her support, and mentioned that the Los Angeles County Sheriffs Department was the first in the world to incorporate the Paramedics within their scope of service. He mentioned that he was proud to have started his service under the leadership of  her father, Supervisor

Buyers looking to buy will always look to the safety of themselves and their loved ones, and they are sure to find it here in the Diamond Bar community.

This article was written by Nef Cortez, a licensed Real Estate Broker, Cal BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com, or on his website at www.nefcortez.com.  Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

Achieving the American Dream of owning your own home requires planning ahead, and a lot of discipline.  The American Dream for many is getting further and further away from their reach, as prices continue to increase.  The Dream Home, having “nice curb appeal” (appearance of the front of the home as viewed from the street), and a nice back yard for the kids to play in or for the Buyer to entertain their guests, is getting more and more expensive.

As prices increase, so does the amount of money necessary for the down payment. The traditional 20 % down payment for many is just totally not achievable.
The median sales price of a home (where 1/2 of the homes sell for more and 1/2 of them sell for less) in Diamond Bar is approximately $725,000.  The “pre-requisite” 20% down payment would amount to a whopping $145,000.00.  Most first time home buyers do not have this kind of cash.
Typically, if the buyers do have money saved anywhere, it is in a 401(K) retirement plan.

Many potential homebuyers are unaware that they can use the money they have invested into their 401K retirement plan as the down payment for their first home.  Most first time homebuyers are under the age of 59 ½ , which is the point at which one can begin to withdraw 401K retirement funds without penalty, typically 10% of the amount withdrawn.

One option for the withdrawal of funds without penalty is to borrow against your retirement plan and pay back the fund over time. The payments that you will be making over time will be back to yourself (via the plan). This allows you to eliminate the 10% penalty for early withdrawal, and more quickly get you into the track of homeownership.

I advise that you first down down and with your tax professional and have them guide you through the process before you initiate any withdrawal from your 401(k).

This article was written by Nef Cortez, a licensed Real Estate Broker, Cal BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com. Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

How much money does a person have to have in order to buy one’s home? The answer to this question, of course, varies in many ways. One variable is in what city one decides to make their home. That decision, of course, will affect the price of homes that a person has to choose from. The price of a home, then, will impact greatly the amount of cash one must come up with as the Down Payment.

Another major variable will be whether a person is buying as a First Time Homeowner, a Move-Up Buyer, or a Down-Sizing Buyer. By the very definition of a “First Time Homeowner”, this buyer usually has a low level of savings. They are just getting started with their home ownership experience, and are usually in their mid to late twenties and into their mid-thirties. As I wrote before, this group of buyers is usually busy getting started with both their careers and their family. The lower income earned by those just beginning their careers coupled with the expenses of getting started in the raising of a family does not allow for the typical First Time Homebuyer to come up with a very large down payment.

One of the more commonly used loan programs for the first time homebuyer is the Federal Housing Administration 203B program.  It is a loan in which a first time homeowner can purchase a home with as little as 3 ½ % down payment. In addition to this type of loan, there are a few “grant” or “subsidy” programs which will also assist this buyer with an additional 2 % for the down payment. This facilitates the purchase of the First Time Homebuyer to finance the purchase with as little as 1 % Down Payment.

The FHA loan limit for a Single Family Residence in Los Angeles County is $636.150.00.  This means that a First Time Homebuyer can purchase a home with a little as $16,500.00.  With other grants or subsidies, this figure can end up as low as $6,500.00, making the purchase of a home very doable, as far as the Down Payment is concerned.

This article was written by Nef Cortez, a licensed Real Estate Broker, Cal BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com. Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

Homeless veterans make up close to 10% of the Homeless population.  Although it is a very large number, it has decreased substantially from what it was 7 years before by approximately 40%.  The National Coalition for Homeless Veterans (NCHV)lists  a very good outline of the types of services individuals or groups can provide which have been recognized as being most effective. These programs have seen better than average results with very  positive outcomes.

NCHV recognizes the following as being some of the more effective services, and which are usually provided by community-based organizations.  These are as follows: Support of emergency shelters; Volunteering as mentors, counselors, or legal aides; Raising funds for programs; Volunteering at “Stand Down” programs; Development of Homeless Veteran Burial Programs. You can find a more detailed review of all of these programs on NCHV.org, the website for the National Coalition for Homeless Veterans.

The prevention of Veteran Homelessness  needs to be centered on providing health services, as the majority of homeless veterans “suffer from mental illness, alcohol and/substance abuse, or co-occurring disorders”, according to the U.S. Department of Veterans Affairs (VA). Research shows that veterans are 50% more likely to become homeless than the general population. Female veterans are two to three times more likely to become homeless than any other group of the general U.S. population.

Local efforts to house the homeless are ongoing and growing.  Along with efforts by the local non-profits, the  1/4 cent sales tax approved by the voters of Los Angeles County is anticipated to fund a much more effective and concerted effort.  Funding, both private and public, is necessary to pay for the work that must be done across all facets of services for there to be positive outcomes and to win the fight against Veteran homelessness.

This article was written by Nef Cortez, a licensed Real Estate Broker, Ca BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com or on his website at www.nefcortez.com. Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

The Housing Inventory Shortage is becoming a bigger problem in many ways.  Economics 101 taught us that the change in either side of the Supply-Demand equation will create a change in outcomes to the marketplace. In this case, the Housing inventory is the supply, and being an illiquid investment, it does not change very fast.  It is fixed and immovable, and therefore more constant than the Demand side.  Major factors that have contributed to the low level of “Supply” growth need to be addressed for the long-term stability of the housing market. If the low levels of new home construction are not encouraged or allowed to grow, we will eventually suffer from an unbalanced, constricted real estate market.  Legislation at the state and local levels needs to become more “builder-friendly”, to allow more units to be built annually. The legislation, policies, and planning has to become more streamlined and less expensive to the developer in order to allow for a more balanced real estate market.  Part of the change has to be in the form of less restrictive zoning regulations.  It doesn’t benefit our communities when only a few can afford to buy and own a home.

The Demand side of the equation is driven more by population growth, and the populace’s desire and ability to purchase a home. The low interest rate environment continues to fuel the demand, as it has continued to keep the homeownership demand at a steadily increasing level. As long as the interest rates stay relatively low, we will continue to see the steady demand that has driven the 7 % annual median sales price increase of homes in Southern California. The positive outlook for the local real estate market was presented to us by Dr John Husing at the Real Estate Research Council of Southern California’s Quarterly Luncheon at Cal Poly Pomona. The improved economy, with employment continuing to grow, and the low interest rate environment is projected to remain steady for the next year.

This article was written by Nef Cortez, a licensed Real Estate Broker, Ca BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com.  Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

The National Alliance to End Homelessness reports that there are currently over 500,000 homeless people in the United States. We have all seen “the homeless” as we drive to and from work, while running errands, at freeway off-ramps, underneath freeway overpasses, along the Santa Ana River near Anaheim Stadium. The 1/2 million homeless is such a large number that it is hard to fully appreciate its “largeness”. The number is equivalent to the population of cities as large as Fresno, Ca or Mission Viejo, Ca.

The nation as a whole has seen a decrease of about 10-15% in the last decade. Although that is encouraging, the homeless population has become more concentrated and increased in large cities such as Los Angeles, Ca; San Francisco, Ca; Oakland, Ca; San Diego, Ca; and Anaheim, Ca. Many non-profit organizations are involved in the effort to end homelessness. Many Cities are have implemented or are implementing programs to deal with the problem.  Residents of Los Angeles County voted this past election cycle to impose upon themselves a 5 cent sales tax to fund the effort to fight homelessness.

Where does organized real estate fit into the picture?

The National Association of Realtors (NAR) has within its stated motto “helping its members become more profitable and successful”. True success for its members is achieved through the preservation of the rights of property owners to own, use, and transfer real property. Without the preservation of these rights, it becomes impossible for the industry to survive, let alone allow for its members to “become more profitable” as stated in the organization’s “Mission”.  In my opinion, Organized Real Estate has an obligation to be an active participant and become more engaged in the effort to fight “Homelessness”.

How does the Real Estate Industry’s current efforts impact the effort to house the homeless? How does their concerted effort combined with the lending industry impact or affect the homeless? How should these organizations “behave” as responsible community members and participate in efforts to “house the homeless”?

I will provide answers to these and other questions submitted to me by readers of this paper. Please feel free to submit questions to me at NefCortez@gmail.com, or visit my website at www.nefcortez.com.

This article was written by Nef Cortez who is a licensed Real Estate Broker, Ca BRE # 00560181, licensed since 1976. He can be reached via e-mail at nefcortez@gmail.com, or website www.nefcortez.com. Please feel free to email any questions regarding real estate.

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NEF CORTEZ,  Broker  CalBRE # 00560181 Certified REO Broker Certified Distress Property Expert

ReMax Realty 100

1411 S. Diamond Bar Blvd.,

Diamond Bar, Ca.  91765

e-mail: nefcortez@gmail.com

Office: 909-610-6303 Fax:  909-752-3163 Cell: 909-762-8135

Nef Cortez

By Nef Cortez

Last week I wrote Part 1 of Housing the Homeless. Questions were posed as related to Organized Real Estate’s efforts to participate in the fight to end homelessness. As evident in cities across the country, it is a big problem that has had very negative effects on the quality of life for citizens across most communities.  This huge problem has seen  a small reduction in its size and numbers over the last decade.

There are many Realtors who individually have been involved with the effort to end homelessness. One of the most widely supported organizations has been Habitat for Humanity. Members of Tri-Counties Association of Realtors have helped to build homes through their involvement with Habitat for Humanity by donating time, talent, and money to the effort.

The primary effort that I found to be the most commonly participated in by members of Realtor associations was the assistance given to First Time Homebuyers through special programs. Many of these programs provide grants of money to assist the buyers in completing their required down payments, or are given in the form of special loans that may be non-interest bearing or have the interest forgiven if the buyer lives in  the home for a given minimum period of years.

There are many other non-profits in communities across the state where Realtors have been very involved. Beside Habitat for Humanity, many Realtors are involved through churches and faith-based organizations to assist in providing food and shelter for the homeless. Many Realtors have found it very rewarding to “Give Back” to their communities by joining the fight to end homelessness.

(In last week’s article, a typo  was made as to the percentage of the increase in sales tax passed by voters of Los Angeles County. Measure H increased the sales tax by ¼ of one cent, not the ½ cent I reported)

Nef Cortez

By Nef Cortez

Home prices of those transferring ownership in Diamond Bar during the second quarter of 2017 maintained the high levels reached in the first quarter.  These prices maintain historically high levels not seen since the housing market peak of 2006. Including single family residences (SFR), townhomes, and condominiums, the current median sales price of homes in Diamond Bar (according to Zillow-a data aggregator), is $641,000. According to the Multiple Listing Service (MLS), a more accurate database maintained by the local realtor groups, the median sales price of all sales in the second quarter of 2017 for Diamond Bar was $625,000.  The Median Sales price of single family residence (SFR) sales only in Diamond Bar for the second quarter of 2017 was $715,000. The median sales price for a SFR in Diamond Bar, as a comparison was $657,000 in the second quarter of 2016. This represents an annual median sales price increase of 8.8 %! That is a substantial gain!

The median sales price for condominiums and townhomes in Diamond Bar for the second quarter of 2017 was $360,000. In comparison, the median sales price for this type of housing stock in 2016 was $349,000 which represents an annual increase of $11,000 (a little over 3% annual increase).

Home prices in the US have continued their steady rise after the dramatic drop in 2007-2008 fiscal year.  Nationally, the expansion in home prices has continued since the low point of $152,000 reached at the end of the first quarter of 2012. Although it has suffered some fits and starts through the 8 year dip and then ascension, the national median price has increased in that period of time by a strong 29 %.

It is evident that the housing market in Diamond Bar continues to increase, and is proving to be a boon to Homebuyers!

This article was written by Nef Cortez who is a licensed Real Estate Broker, Ca BRE # 00560181, licensed since 1976. He can be reached via e-mail at nefcortez@gmail.com, or website www.nefcortez.com. Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

I wrote last week on “Homeownership is Good for Kids!” I explained how in many ways, homeownership impacts children’s development in positive ways. In my 41 year career in the real estate industry, I have seen many instances of this lived out, where my clients bought a home and were able to provide that stable environment for their children. This article explains how homeownership is also good for the parents of those children.

One of the most important benefits to the healthy development of a child is that loving, stable home environment.  Parents who commit to providing that for their children and enhance that effort through the purchase of a home are usually rewarded with the financial benefit of growing equity over the long term.

A stable monthly housing expense is critical to providing that stable home environment that we seek for our children.  Ideally, when buying a home, one is able to qualify for a fixed rate mortgage.  Loan payments are calculated to amortize or pay off over a period of 15, 20, or 30 years. Choosing one with a fixed rate keeps the payments stable and predictable.  If one can make the payments initially- based on the “rule of thumb” that one’s payment should not exceed about a third of one’s monthly income-then it should not be a problem making the payments year in and year out. (This, of course, is barring any unforeseen negative circumstances that may come up, such as loss of job or long-term illness) As time goes by, the equity in the home grows through the pay down of the principal balance or loan amount.  This is a form of “forced savings”, an additional benefit.  Usually, the equity  is increased even more so  through appreciation of property values over time.

Mortgage interest and property taxes paid on the purchase of a home are tax deductible, and are another benefit to homeownership.  This reduces the net or effective payment that the homebuyer makes.  In many cases, the net or effective monthly payment ends up being less than what it would cost to rent a comparable property.  Consistently making the mortgage payment on time will also improve one’s credit, thereby providing an additional benefit of better terms on other interest-bearing debt, such as car loans, student loans, or credit cards.  Factors that contribute to a better financial credit picture will contribute to a healthier financial position. Wealth creation is dependent on good fiscal management, and lower costs on debt supports that effort.

This article was written by Nef Cortez, a licensed Real Estate Broker, Ca BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com.  Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

Homeownership has long been lauded as an important factor in the success of children in school and subsequently in their careers. Much research and many studies have been completed with analysis on the beneficial impacts of homeownership on children. This fact has long been used by the real estate and lending industries to encourage homeownership. I think that the most important factor contributing to the statistical confirmation of greater academic success for children of homeowners versus those of renters…is the improved stability in their family life that homeownership typically affords them.

People who own their homes do not move as often as those who rent. Children of homeowners are able to establish friendships for longer periods of time, going to school together and sharing other community activities that create bonds that sometimes last a lifetime.  This is not to say that children of renters do not do the same thing. It just means that children of homeowners are provided a more stable environment in which to nurture those relationships for longer periods of time. The stability that is provided to children enables them to perform better in school, and it is also impacted by the increased participation in community activities by the homeowners and their families. They become more vested in the community, and the parents are typically more watchful of the participation by their children in healthy activities. Homeowners usually buy in neighborhoods that already have a high rate of homeownership, and therefore the effects of individual homeowners cumulatively have a multiplier effect.

Many of the characteristics exemplified in the actions taken by homeowners, such as the investment of time and money into the improvement of their homes, is a positive modeling of behaviors that are beneficial to the community at large, and to homeowners’ children specifically.  These behaviors are seen and many times adopted by the children involved in these types of activities. Homeowners typically perform these activities more frequently than renters.  These social behaviors that are beneficial to the community are passed on to or learned by the children, and therefore we all benefit.

This article was written by Nef Cortez, a licensed Real Estate Broker, Ca BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com.  Please feel free to email any questions regarding real estate.

Nef Cortez

By Nef Cortez

The Real Estate market in Diamond Bar and Chino Hills are part of the higher end of the real estate market in the East San Gabriel Valley and the West San Bernardino County.  The median home values of  homes in these communities surpass by the thousands of dollars the median home values of many of the surrounding communities.

The media value of Diamond Bar homes is currently running at approximately $650,000, according to Realtor.com and other real estate data aggregators. That represents a median price increase of about 4% in the last 12 months. According to Realtor.com, the median listing price in Diamond Bar is currently $798,000, with the closing price of $575,000. The median home value in Chino Hills is about $629,000, and currently the median listing price of the 272 homes that are for sale in Chino Hills is $750,000, with a median closing price of $623,000.  According to Realtor.com, home values have gone up approximately 8.0% over the past year and are predicted to rise 3.8% within the next year.

What does this all mean?

Generally, when there is such a disparity between the median listing price and the median closing price, it means that the homes in the lower end of the real estate market are dominating the sales transactions volume.  As a matter of fact, the homes in the lower end of the range are selling so fast (when they are priced right) that the median days on the market has dropped from about 65 days a year ago to 38 days on the market this year.

 This article was written by Nef Cortez, a licensed Real Estate Broker, Ca BRE # 00560181 since 1976. He can be reached via e-mail at nefcortez@gmail.com.  Please feel free to email any questions regarding real estate.