Last week, I wrote a post about buy down loan programs. What they are and how these buy down loan programs can be advantageous for both Pasadena home sellers and Pasadena home buyers.

Today, I wanted to give you an idea of the types of temporary buy down loan programs available.

One of the most common forms of buy down in use today is the 3-2-1 interest rate buy down. This is a temporary buy down, which would reduce the buyers overall interest rate by 3% in year 1, 2% in year 2 and 1 % in year 3.

For example, this buy down can reduce the buyers payments by up to $200 per month in the first year, $100 per month in the second year and $50 per month in the third year. The $200 per month reduction in payments is equivalent to giving the buyer an $800 raise in income for loan qualification purposes.

It will increase the effective income ratio from 28% to approximately 38% for the buyer. Probably more importantly, it gives the buyer time to build up to the higher payments.

The cost to the Pasadena home seller to provide the 3-2-1 interest rate buy down is approximately 5% of the sale price. Since many Pasadena sellers are willing to drop their prices by 5% or more to make the sale, this buy down is within the sellers capabilities.

The advantage is the Pasadena buyer will purchase the sellers house at 4% interest instead of 7% during the first year, giving the Pasadena seller a greater competitive advantage, while giving the buyer a greater perceived purchase value!

Read Also: Buy Down Loan Programs help Close the Deal

If I can be of any assistance with your Pasadena Real Estate needs, please do not hesitate to email me or call me at (626)629-8439. Thank you!

City of Pasadena has a great program assisting first time home buyers with down payment assistance. Herere the requirements:

Prospective applicants must be first-time homebuyers and qualify as Lower or Moderate Income:

• A minimum 3% down payment is required. Purchase prices may not exceed $425,000.
• Monthly payments on the HOP (Home Ownership Opportunities) loan are amortized over the 45-year term but in certain circumstances payments during the first 5 years of the loan term may be waived.
• Upon resale of the home or refinancing, the borrower is required to repay the outstanding amount owned on the HOP loan plus a potentially substantial share of the propertys appreciation in value.
• Homes purchased with HOP loan assistance must be owner-occupied. Other criteria and restrictions apply.
• In addition, interested HOP loan applicants must complete an approved NeighborWorks 12-hour homebuyer education program and be recommended for assistance by Pasadena Neighborhood Housing Services (PNHS)

Please contact PNHS at (626) 794-7191. The Program is undergoing modifications which are expected to be in place by July 2008.

For more information contact Aldra Allison, Project Manager at (626) 744-8314 or email aallison@cityofpasadena.net.

If I can be of any assistance with your Pasadena Real Estate needs, please do not hesitate to email me at Irina@Irina4RealEstate.com or call me at (626)627-7107. Thank you!

What makes one company stand out from the rest? Why do you use a particular service provider, real estate agent or go back to the same store time and time again?

As you purchase a product, at a minimum you'd expect to get a knoweldgeable salesperson, a hassle free experience and a fair price. But, what happens when something goes wrong after the purchase? I think what separates companies is how they address issues or problems as they occur.

A couple of weeks ago, I purchased a grill at Barbecues Galore in Pasadena. My sales rep was knowledgeable and explained all the features. The sale went smoothly and I was anxiously awaiting my new grill.

The grill arrived and from the start, I encoutered problems. The cart was bent - no problem. It was replaced immediately. Next, I tried to rotisserie a chicken and the rotisserie burner would not light. After several visits by the repair man and a replacement of the grill with a new one, the rotisserie burner would still not light. So - two weeks later, a new, very expensive grill and it still doesn't work.

My husband and I went into the Barbecues Galore today to see what will be done by the store. Given the recent decline in service, I wasn't expecting much.

We met with the General Manager, LaRae, who immediately advised us that she was aware of the situation and asked for a few minutes of our time while she calls her District Manager to see what she can do to rectify the situation.

After a few minutes, she came back with not one, but three options!

• Option 1: Full Refund
• Option 2: Grill will be repaired and we will get a 50% discount
• Option 3: Pick any other grill in the store - Lynx or Viking included

All I can say is that we were absolutely blown away. A major WOW factor. I can tell you that when it comes time for a new grill or any accessories for a grill, I will only go to this Barbecues Galore store. It's located at 30 South Rosemead just a bit south of Colorado Blvd. Try them out!

How do you handle difficult customer service issues? Can you set yourself apart from the pack? Curious to hear your stories about good or bad service.

As most of my loyal readers know, I love Monterey Hills. I used to live there. My parents still live on the hill. And, what most of you do not know is that I started my real estate career, sort of, in Monterey Hills. I used to show the Monterey Hills condo models when Huntington Terrace and Hudson Terrace was first built back in the early 80s. I was...  yes... a hostess. :-)

So when you are ready to buy your first condo in Monterey Hills what should you look for?

1. Amenities: each Monterey Hills condo complex has different amenities and its own history. Almost all have pools and spa, but some Monterey Hills condo complexes have a recreation room, steam room, sauna, gym and paddle tennis courts.
2. Floor plan: In my experience, Monterey Hills has mostly 2 bedroom condos. Of course, there are 1 bedrooms and 2 plus den (which by the way some sellers try to convert and claim as 3 bedrooms - make sure to check the tax records) Mostly 2 bedroom floor plans come in two types: bedrooms on either side of the living room or together, on one side. Whats important to you? Do you have a small baby that youd want in a bedroom next to you? Or would you like more privacy and have the 2nd bedroom a bit away from you?
3. Floor Location of the condo: what is your preference? Do you like to be on the 1st, 2nd or 3rd floor? Pricing wise, 3rd floor condos are a bit more expensive since you do not have anyone living above you. 2nd floor condos are least expensive since you have someone living above and below you. 1st floor condos can be as expensive as 3rd floor is they have large patios. Some of the Monterey Hills complexes have 1st floor condos with huge patios.
4. Location of the condo within the complex: corner units are a bit more in demand. They usually have only one side neighbor, extra windows and better views.
5. Architecture: some of the older Monterey Hills complexes have more traditional floor plans - clean lines and angles, four wall rooms, etc. The newer ones have more angles in the rooms - a bit more challenging to decorate, but very lovely nonetheless.
6. Rules and Regulations: What are the quiet hours? Are pets allowed? Can you barbecue on your patio? Whats important to you? Review the Rules and Regulations carefully before buying your Monterey Hills condo.
7. History of the complex: some of the Monterey Hills condo complexes have been modified and rebuilt over the years. Some have better reputations and are just more in demand.
8. HOA Dues: HOA stands for Home Owners Association Dues. Each complex has their own dues. Most are based on the amenities and services provided like Post Security. For the most part, HOA dues are based on square footage of your unit.
9. Management of the complex: as you walk around each Monterey Hills complex, you will have a pretty good feel about how this condo complex is managed. Does it look like it has some deferred maintenance? Is the landscaping taken care of? Is pool patio furniture clean and in good shape? Is the gym equipment up to date and the gym looks clean over all?
10. Financial Health of the complex: Always ask to see the financial statements of the complex. Do they have a lot of money in reserves? Is the Association anticipating any special assessments? What are the HOA dues being spent on? Is there a trend of specific repairs that might affect your HOA dues in the future.

READ ALSO: Monterey Hills Neighborhood Overview

Make sure to hire a real estate agent that is familiar with the history of Monterey Hills and can guide you through the process of buying in the Monterey Hills.

If I can be of any assistance with your Monterey Hills Real Estate needs, please do not hesitate to email me or call me at (626)629-8439 . Thank you!

Back in October of 2007, Pasadena's Ritz Carlton was sold to Langham Hotels for $170,000,000 - yes... that's 170 MILLION! Many of us have happy memories of the old Ritz and were quite disappointed when the sale was announced.

Every time, I drive down Oak Knoll Avenue to get to South Lake district, I pass the Langham Hotel and make a mental reminder to go in and visit and see the changes.

June 10th provides an opportunity to do just that. In celebration of Langham Hotels International anniversary of their flagship property in London, Langham Hotel in Pasadena will pay homage to the quintessentially British institution - the afternoon tea.

When The Langham London opened in 1865, the afternoon tea was served for one shilling, six pence.

To celebrate, Langham Hotels around the world will serve afternoon tea on June 10, 2008 for its original price in 1865, which was approximately 15 cents (USD).

Reservations are required since the afternoon tea is expected to sell out quickly. Please call Langham Hotel for more information at 626-568-3900 .

If I can be of any assistance with your Pasadena Real Estate needs, please do not hesitate to e-mail or call me at (626)627-7107 . Thank you!

In my previous posts, I referred to Buydown Purchase Plans that Pasadena sellers should be aware of and use to help sell their Pasadena home in this changing real estate market.

Heres a primer on what a Buydown Purchase Plan is:

Buydown purchase plans or ˜buydowns are monetary subsidies given to a Pasadena home buyer to lower his effective interest rate, his monthly mortgage payments and help him qualify for the loan. In times past the homebuilder or seller of the property was generally the party who provided the funds necessary to provide the buydown from sale proceeds. Today, other parties in addition to seller or builder are allowed to participate in buydown plans, including relatives, employers, the buyers themselves, and in some instances investors.

Buydowns have been available for years but were generally permanent buydowns, that is, the buyers overall Interest rate was reduced between 1/2% and 1 % interest for the entire term of the loan. This permanent buydown resulted in the buyer saving $25-50 per month for the entire 30 year term. However, it was very costly to the Pasadena seller and it only resulted in a small decrease in the buyers monthly payments. Temporary buydowns came into being in the late 1970s as interest rates climbed dramatically, putting the payments out of reach for many would be homeowners.

The temporary buydown only reduces the buyers interest rates and payment for a short period of time such as 1-5 years but it reduces the initial payments much more dramatically for the homebuyer. Instead of a $25-50 reduction for the entire mortgage term, the buyers payments could be reduced by as much as $200 per month in the first year, $100 per month during the second year and $50 per month during the third year. This much larger reduction of the buyers payment puts more buyers in the position to be able to qualify for mortgage loans and make the required monthly payments. The temporary buydown is better suited to many Pasadena home buyers today because they will probably only live in their homes an average of five years, nationwide. As the subsidies are withdrawn the payments will rise but so will the average buyers income. Buydown purchase plans have many names such as discount point buydowns, proceed buydowns, pledged account buydowns, interest rate buydowns and many more.

Even though, the interest rates are at an all time low (or pretty close to it) the Pasadena home buyers can benefit from temporary buydowns since they make it easier to qualify for a loan and allow buyers to afford ˜more house, especially in the first few years of the loan.

The important thing to remember is that all buydowns can be divided into two categories, permanent buydowns and temporary buydowns.

1. Permanent buydowns will reduce the buyers payment a small amount for a long time.
2. Temporary buydowns will reduce the buyers payments a substantial amount for a short time.

Which is best for you as a buyer will generally be determined by the length of time the you expect to live in the home and how much payment you can afford to make.

READ MORE:  Pasadena Real Estate Guide - Buyer and Home Seller Articles and Advice

Fore relocation and community information, please visit Pasadena City Guide.

If I can be of any assistance with your Pasadena Real Estate needs, please do not hesitate to email me or call me at (626)629-8439. Thank you!

Thanks to Jeff Eliass comprehensive guide for detailed information on buydowns.

I am not chicken little, but lets face it, the Pasadena real estate market has been pretty chaotic over the last several months.

We have a lot of different parties to thank for this activity, but mainly, I would say that for the most part, the lenders have given us this lovely gift.

After pushing ridiculously, whats the word that was used - oh yeah - ˜creative financing products on unsuspecting Pasadena home buyers, Pasadena home sellers AND buyers are now feeling the effects.

READ MORE:  Pasadena Real Estate Guide

So where is the Pasadena Real Estate Market overall now?

Looking at Altos Research statistics, there are currently 474 single family homes on the market in Pasadena California. These homes have been on the market for an average of 117 days. Half of these listings have entered the Pasadena real estate market in the last 77 days.
As you can see, the inventory of Pasadena single family homes is increasing dramatically and the median price is on the down swing. Price per square foot has moved from over $500 per square foot to $441 per square foot.

So here we are, going from the lenders giving anyone who is breathing a loan, to going to the other extreme and tightening the requirement to the nth degree.

Mortgage lenders now require:

• A down payment to purchase a home - preferrably a minimum 10% down, most lenders want to see 20% down.
• Minimum credit score of 680.
• Debt ratios of 28/36% - a DEBT RATIO is the allowable percentage of debt in relationship to a borrowers monthly income, used to determine if the borrower is qualified for mortgage loans.

So, if you are thinking of selling your Pasadena home, you need to be creative in making it easier for the buyers to qualify for a mortgage. This, of course, in addition to correct pricing and marketing strategy for the sale of your home.

What can Pasadena sellers do to help buyers qualify for a loan?

• Most banks and mortgage lenders allow sellers to pay up to 6% of buyers closing costs.
• Instead of price reductions, consider helping the buyer with offering cash towards loan buy downs - stay tuned for a series of posts on the different types of buy downs available. A mortgage buy down is simply a subsidy paid to the bank to reduce buyers interest rate. This, in turn, lowers the buyers monthly payment and makes the home more affordable to the buyer. It also makes it easier for the buyer to qualify for the loan.
• Consider a combination of cash towards closing costs and buying down the buyers interest rate.
• Make sure that your Pasadena home buyers have a back up lender or work with a local, trusted professional that is recommended by your Pasadena real estate agent.

READ MORE: What are Buy Down Programs

If I can be of any assistance with your Pasadena Real Estate needs, please do not hesitate to email me or call me at (626)629-8439 . Thank you!

The following question was received from Veronica M. in Pasadena California:

Can the Los Angeles County Assessor reassess my Real Property Taxes?

There are only four events that can cause a reappraisal of your Pasadena home by the Assessor. They are:

1. A change in ownership. For example you sell your Pasadena home or inherit your Pasadena home.
2. Completed new construction.
3. New construction partially completed on the lien date (January 1)
4. A decline-in-value - READ MORE: Proposition 8

Change in Ownership Appraisals will take place when a publicly recorded transfer occurs. The assessor will receive a copy of the deed and will then determine whether a reappraisal is required under the California State law.

Transfers of Pasadena property between husband and wife does NOT cause a reappraisal for property tax purposes. This includes transfers resulting from divorce or death. Also, the addition of joint tenants, whether related or not does not result in a reappraisal.

In most cases, transfer by irrevocable trusts are re-appraisable. Keep this in mind if you inherited a property via trust.

New Construction Appraisals are done when an assessor receives a copy of building permits.

Rule of thumb:

New buildings, additions and other structures REQUIRE a reappraisal.

Structural repairs and/or replacements would NOT REQUIRE a reappraisal in almost all situations.

For more information, please visit the Los Angeles County Assessors Office or call them at 213.974.3211.

If I can be of any assistance with your Pasadena Real Estate needs, please do not hesitate to email me or call me at (626)627-7107. Thank you!

How much will I pay in property taxes when I buy my home in Pasadena? How are property taxes calculated on an existing Pasadena home?

I've been getting a lot of property tax questions lately and decided to write a quick post about how consumers are affected when they buy a home in Pasadena or surrounding cities.

In 1978, California voters passed Proposition 13. As a result, the Los Angeles County Assessor can not exceed more than 1% of a property's maximum assessed value plus any additional bonds and other city specific taxes.

What this means to the Pasadena home buyer is that when you purchase your Pasadena home, the assessor will base your home's property tax bill on approximately 1.2% of the price that you paid for it. 1% for Los Angeles County and a little less than .2% for city bonds, taxes, etc.

For example, if you paid $500,000 for your Pasadena home expect your annual property tax bill to be around $6,000 or $500 per month.

Ongoing, the Assessor will raise your property tax bill due to annual inflation which can not exceed 2%. Going back to our previous example:

Year 1 - Pasadena Property Tax Bill = $6,000 appx. annually

Year 2 - Pasadena Property Tax Bill = $6,120 appx. adjusted for inflation

Year 3 - Pasadena Property Tax Bill = $6,242 appx. adjusted for inflation

And so on...

READ MORE: Proposition 8 and how it helps Pasadena owners save property taxes

There are some exemptions that are available to Pasadena homeowners that you should be aware of:

1. The most common is the Homeowners' Exemption: if your Pasadena home is your principal place of residence (Assessor always looks at January 1st, i.e. if you are living in your home as a principal residence on Jan. 1) you may apply for an exemption of $7,000 from your assessed value. The assessor made it pretty easy for home owners and will automatically send an exemption application. Please beware of companies out there that will send you an official looking document asking you to pay for them to file the exemption form on your behalf. They are out to take advantage of you. This exemption will save you, the homeowner, approximately $70 per year on taxes. Once you file this exemption, you do not need to refile it.
2. Veterans' Exemption: If you are a veteran or a surviving spouse of an eligible veteran, you may apply for a $4,000 exemption applied to the assessed value. You do not need to reside on the property for this exemption. There are asset requirements that apply. Please call Assessor's office for more information on their guidelines at 213.974.3399. This exemption must be filed each year.
3. Disabled Veteran's Exemption: If you are a disabled veteran who is blind in both eyes, has lost the use of two or more limbs, or is totally disabled as a result of injury or disease incurred in military service, you may be eligible for an exemption of up to $150,000 of the assessed value of your home.

Please feel free to email me with additional questions regarding property taxes or use the comment section to ask them. Hope you find this information useful.

If I can be of any assistance with your Pasadena Real Estate needs, please do not hesitate to email me or call me at (626)629-8439. Thank you!

Read More:  Pasadena Real Estate Guide - All You Need to Know about Buying or Selling Your HOME!

Latest Pasadena Homes for Sale:

READ MORE:  Pasadena real estate update 2012 – see luxury home sales.

Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

Are you relocating to Pasadena?  If so, take a look at our 365 Things To Do In Pasadena® .  Call us at 626-629-8439 to schedule a time for your free home buyer or home seller consultation!

Pasadena, CA - there's a lot of talk about Pasadena"short sales" and foreclosures lately. It's in the news. Books are being published about short sales. There are even radio commercials talking about short sales.

I think most people have a pretty good idea what a foreclosure is, but there's still quite a bit of confusion on what a short sale is.

A short sale simply means that a bank is willing to accept less money than what the owner owes on the property because the house can not sell at a price high enough to cover the mortgage fully.

Here is a quick example:

Home was purchased for $500,000

1st and 2nd Trust Deed (mortgage) is $495,000

House is now worth $450,000

Bank agrees to accept $450,000 less expenses in leu of the full amount owed $495,000

Why would a bank agree to accept less than what is owed?

To avoid the costs and a lengthy process of foreclosure and further loss of home value.

Why would a Pasadena seller consider putting their Pasadena home on the market as a short sale?

In essence, you sell the house for whatever you can get and the lender agrees not to go after you for the deficit that is owed on the property. Even though your credit might be affected, it will not be to the same extent as a foreclosure.

Also the Mortgage Forgiveness Debt Relief Act of 2007 amends the IRS code to exclude from gross income amounts attributable to a discharge of the debt incurred to acquire a principal residence.

READ MORE:  Short Sale Deficiency Protection Extended

A short sale doesn't mean that it's a fast sale.

It's actually more of a long sale meaning it takes on average 3 to 5 months (depending on the bank) to close escrow on a short sale.

Why should Pasadena buyers consider short sales if it takes such a long time?

Simply said - to get a better deal.

There are not too many short sales homes available at this time in Pasadena. There are many Pasadena homes that are regular sales which are certainly worth exploring and you can also get a great deal without the hassle of a long wait and too much uncertainty!

REQUIRED READING:  Pasadena Real Estate Guide - Everything You Need to Know about Buying Your Next Home!

READ MORE:  Pasadena real estate update 2012 – see luxury home sales.

Irina is a Top Realtor and the founder and President of Pasadena Views Real Estate Team™. She is available to assist you in all of your Real Estate transactions. Email or call her today at (626)629-8439.

Are you relocating to Pasadena?  If so, take a look at our 365 Things To Do In Pasadena® .  Call us at 626-629-8439 to schedule a time for your free home buyer or home seller consultation!