Hi Friends,
Spring is officially only one week away, and we have seen a lot of things happen in just a few short months this year. The stock market as well as the crypto market has recently seen all-time highs. We have had record rain fall again this year as well as much cooler temperatures here in LA. We have seen mortgage rates slightly drop as well as rumors of fed rate cuts later this year.
The real estate market is really heating up with more properties coming on the market. Recently, open houses are seeing a large number of potential buyers come through as well as properties starting to go into bidding wars. If this is any indication on where the market is headed, we mostly likely will see prices start to go up. Now, has never been a better time to buy or sell a home!
If you are thinking of buying or selling a property, I would love to help. I am always here to answer any questions you may have.
Check out Barronestates.com for more information on selling, purchasing or leasing your next home.
I will do my best to assist and educate you in finding your place called “Home, Sweet Home” for now or at last!!
Warmest Regards,
Oriana
Mortgage lenders often sound as if they’re speaking a different language, especially to those who haven’t been through the home-buying process before. It’s important to understand the terminology when preparing to undertake a mortgage for the first time.
Here are some of the most important terms you might come across while you are shopping for a home loan.
-
Adjustable-rate mortgage (ARM)
-
Annual percentage rate (APR)
-
Appraisal
-
Closing costs
-
Conventional mortgage
-
Debt-to-income (DTI) ratio
-
Earnest money
-
Escrow
-
FHA loan
-
Home inspection
-
Loan-to-value ratio
-
Mortgage insurance (or PMI)
-
Mortgage servicer
-
Origination fee
-
PITI
-
Title insurance
-
USDA mortgage
-
VA mortgage
Most mortgages are fixed rate, meaning that they have an interest rate that stays the same for the entire loan term. However, there are also adjustable-rate mortgages that have a rate that stays the same for a few years and adjusts periodically thereafter. For example, a 5/1 ARM (the most popular type) has the same interest rate for the first five years, and it can adjust according to a certain benchmark every year after that.
Many home buyers focus on their interest rate, but the annual percentage rate, or APR, is a better indicator of the true cost of borrowing. It includes the interest you pay, as well as any origination charges or points you pay to get the loan. For this reason, the APR is usually higher than the interest rate of the loan.
An appraisal is an assessment of your potential home’s value performed by a licensed third-party professional. This is typically required by lenders to ensure that the home you are planning to buy justifies the amount of the loan.
When you get a mortgage, you’ll have to pay certain expenses at closing. This can include a mortgage origination fee, title insurance, credit reporting fees, local taxes, and more. Closing costs can vary depending on your situation, but typically are in the range of 1% to 3% of the home’s selling price.
A conventional mortgage is one that is not guaranteed by any government agency like the FHA, VA, or USDA. These loans have to meet standards set by government-sponsored enterprises Fannie Mae and Freddie Mac, though.
Your DTI ratio is your debts divided by your gross income, expressed as a percentage. Generally, lenders want to see your debts (including the new mortgage) as 36% or less of your income, although there is some flexibility.
Earnest money is a deposit that you submit when signing a purchase contract to demonstrate your commitment to the sale. If you terminate the contract, and don’t have a valid reason as defined by the contract, the earnest money can be forfeited and paid to the seller.
When buying a home, your lender will typically open an escrow account on your behalf to keep some money separate, and each month a part of your payment will be deposited into the account to ensure that when your annual property tax and homeowners insurance bills are due, there will be money available.
An FHA loan is a type of mortgage that is guaranteed by the Federal Housing Administration. It is designed to allow people without excellent credit scores or large down payments to obtain home financing with competitive interest rates.
When you sign a purchase contract, you’ll typically have a certain number of days to do whatever due diligence you deem necessary. A home inspection (performed by a licensed professional) is usually the first thing you’ll do, and it can reveal any issues with the home that you should know.
The LTV ratio is a metric that calculates the balance owed on your mortgage as a percentage of your home’s value (usually defined as the purchase price initially). For example, if you use a $300,000 mortgage to buy a home for $400,000, your initial LTV ratio will be 75%.
If you put less than 20% down on a conventional loan, you may pay for mortgage insurance. This protects your lender in the event that you cannot make the payments on your loan. FHA loans have their own mortgage insurance, called MIP.
Many first-time home buyers are surprised to find out that the lender that originated their mortgage loan isn’t necessarily the company they’ll make payments to after closing. A mortgage servicer handles the month-to-month administrative work behind your loan, including collecting payments and making sure your taxes and insurance get paid in a timely manner.
Most lenders charge an origination fee, which is their charge for facilitating your mortgage loan. Origination fees can vary significantly between lenders, so it’s important to shop around.
PITI stands for principal, interest, taxes, and insurance, and are the four components of most homeowners’ mortgage payments. Your payment might also include homeowners association (HOA) dues or other fees.
When you buy a home, the seller transfers legal ownership (title) to you. Title insurance is a major component of closing costs and provides protection in the rare event that ownership is disputed after closing.
USDA mortgage loans are guaranteed by the U.S. Department of Agriculture. These are designed to provide 0% down financing with relatively low interest rates to buyers who purchase a home in certain rural areas.
A VA mortgage, or VA loan, is a type of mortgage that is guaranteed by the Department of Veterans Affairs (VA) and is offered to qualifying veterans, military members, and their families.
The bottom line on mortgages
By understanding what these terms mean, you’ll be in a great position to approach the mortgage process with confidence, and to make the best decisions for you and your family. This isn’t an exhaustive list, so it’s a smart idea to learn as much about the mortgage process as possible before you get started.
A refuge for aging parents. Rental income for your golden years. There are plenty of good reasons to build an accessory dwelling unit, also known as an ADU. But don’t assume everyone will be cool with it.
Like Wilson behind the fence on “Home Improvement,” neighbors are lurking. Legally, in California, they can’t stop you from building an ADU — provided it meets state requirements. But they can make your life hell. “Do everything by the book” or complaints to the city could derail your project, warned a marketing professional in Glendale, who wished to remain anonymous to avoid further conflict.
Once he started construction on his ADU, he said, neighbors yelled at him and his contractor and regularly reported minor infractions. At one point, a drone mysteriously crashed into his garage. Despite the stress, his permits were in order, and now he’s renting the space out.
Neighbors have reason to be nervous about ADUs: They can be a terrible inconvenience. Construction can drag on for months or years. Loud tenants can disrupt a quiet block. And an extra car isn’t going to make street parking easier to find. That’s why it’s a good idea to smooth things over before the digging starts.
“Just treat people the way you want to be treated and it will be reciprocated,” said actor Alain Uy, who can be seen in “Power Book IV: Force” on Starz. He and his wife nearly have the permits to start building an ADU in the backyard of their Glassell Park home. But he didn’t wait until work began to reach out to people in his neighborhood. He started that process three years ago, sharing detailed construction plans and even offering to buy tarps to cover his neighbor’s vintage cars.
Being considerate can help you avoid years of icy stares and awkward encounters. Follow these tips and maybe your neighbors will return the favor when they build ADUs of their own.
Talk to your neighbors. Or have someone do it for you.
Reaching out to neighbors before construction comes highly recommended. If you’re already pals, congrats! Your job is pretty easy.
“If your relationship with your neighbors is rocky, particularly with the ones that border your property, it’s even more important to extend an olive branch,” said John Geary, co-founder and CEO of Abodu, which makes and installs prefabricated ADUs. Predictably, not everyone enjoys dealing with prickly neighbors — or any neighbors, for that matter.
“I don’t know why I feel so self-conscious about going out and knocking on doors,” said Marisa Hearn, a teacher in Harbor City. In 2022, she built an ADU for her mother. Her project manager at DeSisto Construction contacted her neighbors for her.
“It was nice because he’s a professional, he does it all the time,” Hearn said. “He’s always dealing with people in neighborhoods. And so I was like, ‘Oh, it’s nice that he’s handling this and I don’t have to worry about it. Perfect.’”
Assure neighbors construction won’t last forever
Ambiguity is not your friend. Alexis Rivas, co-founder and CEO of Cover, which installs customizable, modular ADUs, said his best advice for clients is to share a timeline. Neighbors fear construction projects that never end. Giving them a timeline can alleviate those fears. Here’s the catch: It has to be accurate or resentment can build.
“Do your due diligence,” said Sam Pratt, vice president of construction at Samara, a prefabricated ADU manufacturer. Whether you choose a prefab option or not, he recommended asking around for how well ADU companies stick to promised deadlines. “Talk to their customers, talk to two of their customers, three of their customers,” he said, to make sure you trust they’ll finish your project in a timely, professional manner.
If your neighbors are particularly sensitive about construction time, you might want to go the prefab route. Building a traditional ADU can take anywhere from four months to more than a year, according to the companies and homeowners interviewed for this story. Most makers of prefabricated ADUs, however, minimize the amount of time spent on your property by building the structures in their own facilities and installing them via massive crane. Pratt said Samara’s crews need to be on-site for only 30 working days, about six weeks total.
Good fences (and hedges and design) help
“It’s easy to design an ADU in a vacuum,” said Alex Czarnecki, founder-CEO of ADU firm Cottage. But your neighbors have to live with those design decisions. Try to minimize your ADU’s impact. Window placement is key, especially in walls that face adjacent yards. That’s even more true for two-story structures, like the one TV producer Joanna Vernetti built on her property near Larchmont Village for her three teenagers.
“Pretty much all of our windows face down into our driveway or into our backyard,” she noted, a choice she made with architecture firm Assembledge+. “There’s nowhere you could stand and look out on someone else’s property.” Speaking of being able to see the neighbors, Czarnecki noted that while fencing and hedges can be “surprisingly expensive,” they “make a really, really big difference in terms of privacy and goodwill.”
Another potential problem: A steep, pitched roof might block your neighbor’s view or sunlight, said Rivas. Think low and flat to preserve the peace. Once your plans are final, show them to neighbors to convince them your ADU won’t disrupt their lives.
Choose your tenants wisely
Moving your mom or children into an ADU is an easy sell. But a stranger? That can make neighbors nervous. If you’re going to rent your space, stress that you’re being picky about who will live there. Before construction started, Goldenberg told her neighbor that she “would vet tenants carefully, because my family literally lives across the driveway.”
It also can be helpful to explain to neighbors how you’ll choose and educate tenants. Sill, the etiquette coach, suggested spelling out the neighborhood’s social norms around parking and noise to prospective tenants — and explicitly spelling out the rules in rental agreements.
The driver in the Chevy Suburban seemed bent on testing the Waymo robotaxi on the streets of downtown L.A. this week.
Playing chicken against Silicon Valley’s wheeled robot, he sharply swung into the next lane toward the Waymo. The white, driverless Jaguar swerved to avoid the bigger car crossing the line and striking it.
The human driver then sped ahead of the robotaxi and braked abruptly in front of it. The machine slowed in time to avoid a collision, shifted into the next lane and the Chevy moved on, ending a brief yet anxiety-inducing interaction for a Los Angeles Times reporter and photographer riding in the Waymo vehicle.
Los Angeles, buckle up.
Robotaxis will begin doing business in L.A. over the next couple of weeks as regulators, developers, drivers, passengers and policymakers grapple with safety concerns and all the other scenarios that can play out when machines take over the wheel. Fender benders. Sex in the backseat. Serious crashes. Hostility. Awkward dropoff spots. And yes, skeptics who want to test the technology by putting obstacles in the way.
On Thursday, Waymo One, as the service is known, will begin offering rides across 63 square miles from downtown Los Angeles to Santa Monica. Waymo, owned by Google’s parent company, Alphabet, has already been in testing in Los Angeles-area neighborhoods for over a year. It rolled out a months-long “tour” in October, but until now, the service has been limited to small corners of the city and to those invited from a wait list.
The fleet will be less than 50 cars in L.A., said Waymo. But the fare charge debut in L.A. marks another major milestone for an industry once only imagined in science fiction. The fleet will descend on a city famous for its car culture and the identity people create around it. But no freeways for now, Waymo officials say; the cars will stick to surface streets.
The move comes less than a month after the California Public Utilities Commission, which the oversees deployment of robotaxis, cleared the way for them in Los Angeles and cities across the Bay Area.
“This is going to revolutionize transportation, and people have a wide variety of comfort levels,” said David Margines, Waymo’s director of product management. “You always have people that are scared or nervous and take longer to accept new technology.”
But, Margines said, those who have used it tend to come back.
“They love it and what our users are saying is that they can’t wait for it to scale more,” he said. “They want to use Waymo for every one of the miles that they’re driving.”
More than 50,000 people have signed up for the wait list in Los Angeles. Waymo plans on providing free service for the next couple of weeks for those on the list before it transitions to paid fares through its app, much like Uber or Lyft.
Waymo already operates in San Francisco and Phoenix, where a series of recent incidents with robotaxis in both cities has further stoked existing safety concerns and evoked hostility.
Just last month in San Francisco, a driverless Waymo car crashed into a cyclist, causing minor injuries. The company said its robotaxi had been at a four-way stop when a large truck came into the intersection. The robotaxi waited for its turn, then proceeded through the intersection, but didn’t detect the cyclist behind the truck.
“When they became fully visible, our vehicle applied heavy braking but was not able to avoid the collision,” the company said.
Days later a small crowd lit an empty Waymo car on fire. Other residents in the city have put up cones and otherwise obstructed the vehicles.
In Phoenix, Waymo cars hit the same towed pickup truck twice. The company said “the Waymo AV incorrectly predicted the future motion of the towed vehicle.” The incident prompted a voluntary recall of software.
In Los Angeles, also last month, a Waymo testing vehicle hit a closing gate at USC. Waymo said its car was leaving the campus after dropping off passengers when it drove up to the automatic gate as it was moving. The robotaxi braked but was hit by the gate, resulting in some minor scratches.
The ride taken by Times journalists on Monday afternoon demonstrated the shortfalls of automated technology. The car sometimes did its dropoff in front of driveways where cars were exiting, and with the Waymo microphones set to mute, there was no way to tell it to pull up farther.
At a corner near Crypto.com Arena, a group of teenagers on bikes were loudly telling police that a man had a gun. In most cases, drivers might hightail it out of there. But backseat driving instructions were again futile. There was nothing but a button to call customer service.
Luckily the man accused of having a gun eventually calmly walked over to police, while the Waymo car — already set to pull over near the stadium — stopped nearby. A few minutes later, along Skid Row, the car pulled up several feet from a tent. It was unclear if there was anybody inside, but a human driver might know this is impolite and awkward.
In San Francisco — where Waymo’s largest fleet of 250 robotaxis operate and residents have become more accustomed to their presence — there have been far more serious incidents. A Waymo robotaxi competitor, Cruise, dragged a person down a street last year and the company allegedly failed to disclose the footage to the state Department of Motor Vehicles, which regulates testing of driverless vehicles. The DMV suspended the General Motors-owned company’s permits and Cruise has since suspended U.S. operations.
While Cruise is sidelined, dozens of other robotaxi companies are testing on California streets. According to the DMV, as of Feb. 2, 38 companies had permits to test autonomous vehicles with a backup safety driver, six companies were permitted to test driverless vehicles and three manufacturers could deploy autonomous vehicles. No fatal incidents have been reported, and there have been few crashes with serious injury, according to the DMV.
But the expansion of robotaxis has sparked protests from local leaders over safety concerns, even as Waymo says its driverless cars have logged more than 7 million miles and are better than humans at avoiding collisions. There’s also growing anxiety among some who worry about the implications of a robot primed to take over tens of thousands of driving jobs across the county.
“People are worried that right now that the sophistication level of the AVs is limited,” said California state Sen. Dave Cortese (D-San José), who has introduced a bill that would give local officials more control of autonomous vehicles. Among other things, it would allow local government to cap the number of robotaxis and limit where the cars can drive.
He says cities should have the right to establish no-dropoff zones — for example, near schools — or restrict cars at airports and other locations without having to wait for legislators in Sacramento.
Mayor Karen Bass asked the CPUC in November to increase its scrutiny of the automated vehicle companies and said the city should have a say in how they are regulated.
At the time, she said one of the Waymo driverless cars operating in Los Angeles had failed to initially stop for a traffic officer at Beaudry Avenue and Wilshire Boulevard on Aug. 3, 2023. The officer had been signaling east- and westbound traffic to stop.
There are several other pieces of legislation to impose further regulations on the vehicles. California Assemblymember Matt Haney of San Francisco recently introduced a bill that would force autonomous vehicle companies in California to report to the DMV collisions, traffic violations, occurences of the autonomous mode shutting down and alleged incidents of assault or harassment that would then be published online within 30 days. The bill would allow the public to submit reports of incidents.
Already, the DMV requires manufactures to report crashes with property damage, bodily injury or death within 10 days. And the agency can revoke permits or suspend permits when it determines an “unreasonable risk to public safety.”
But some question what the robotaxis, even if they are safe, have to offer society.
“There are very real social questions about what the future holds,” said Melissa Cefkin, a social and behavioral researcher specializing in people’s interaction with automated vehicles.
Tens of thousands of humans could lose jobs in the future — from taxi to truck drivers — and most people have had little say in whether, where and how this technology will be applied.
“I’m a citizen in the San Francisco Bay Area, and nobody reached out to me to say is that OK, we test our cars on public roads,” said Cefkin, a former researcher at Waymo and in Nissan’s autonomous vehicle lab. “Frankly, there are still questions about, is this important to bother with? Why is it such a big deal to get human drivers out of their seats? You know, there’s world hunger, there’s wars, there’s poverty.”
In another bid at keeping up with the digital age, Michelin has added nine new L.A. restaurants to its guide, including several that have opened in the last six months. Among them you’ll find Sushi Sonagi, Time Out’s best new restaurant of last year, which we loved for its Korean-influenced omakase and warm approach to service, plus other picks that Angelenos might recognize from our best new restaurant and all-time best restaurant guides. In other words, these newly recognized restaurants shouldn’t come as a surprise to our longtime readers or anyone familiar with the city’s dining scene.
To be clear, these nine additions to the guide—labeled simply as “new” for now—haven’t been awarded Michelin stars or a Bib Gourmand, but they potentially could receive either of those distinctions later this year.
In alphabetical order, the nine L.A. area restaurants are as follows. All restaurants are within city limits unless otherwise specified, with any Time Out star designations noted with brackets.
- Amour (West Hollywood)
- Funke (Beverly Hills)
- Little Fish
- Liu’s Cafe
- Pollo a la Brasa
- Quarter Sheets
- (Bar) Sawa [5 stars]
- Sushi Sonagi (Gardena) [5 stars]
- UKA
For those unfamiliar with how Michelin restaurants are selected, here’s how it works: Anonymous Michelin inspectors travel across a given region, awarding the best of the best anywhere from one to three stars. Here in L.A., that’s meant both ultra-special occasion meals like Hayato and Providence, as well as more date-night friendly restaurants like Orsa & Winston and Hatchet Hall. Bib Gourmand makes up a second category of budget-friendly restaurants considered notable by inspectors. These relatively newer picks generally acknowledge the more diverse cuisines of Los Angeles beyond the French and Japanese fine-dining spots typically favored for awarded stars (Michelin will announce those as well as more Bib Gourmands at an awards ceremony much later this year).
In order to be considered for the more affordable category of the French tire company’s world-renowned dining guide, Bib Gourmand restaurants must offer a full menu that makes it possible to order two courses and drink or dessert for under $49 (sans tax and gratuity). These days, that’s a tall order with inflation, but it can still be done.
Here in Los Angeles, there’s plenty to work through if you haven’t already tried these Bib Gourmands. Spanning from the Westside to the San Gabriel Valley, they include annual additions from 2019 to 2023, except for 2020. (Michelin skipped handing out awards that year due to the pandemic.)
“New Look” Barronestates.com
If you’re new to the newsletter or haven’t joined us in a while, I have a brand new website that is an amazing tool if you’re looking to purchase a home. I worked this past year at bringing a new and improved site to all of my clients and future clients. The site is much easier to navigate and allows users to search for properties directly through my site. You will also be able to access all previous newsletters as well as the current one. My goal is to provide a better user experience for everyone to make finding or selling their dream home a success. Please visit Barronestates.com for a new and improved user experience! THANK YOU for all your continued support!
READY TO LIST OR FIND YOUR NEXT HOME?
Contact Oriana & learn more at BarronEstates.com