False expectations of the market breeds a huge throng of unrealistic homeowners.

Unrealistic Homeowners: Orange County seems to be home to a flood of homeowners who refuse to listen to professionals and ignore irrefutable market fundamentals.

Just like last year, Santa should have plenty of homeowners on his “naughty” list. With all of the television, newspaper, and Internet reports exclaiming massive home price appreciation, owners have clamored to place their homes on the market to get a piece of the action. Many are electing to wait until the Spring Market thinking that it is “the best time of the year to sell.”

The trouble is that they are ignoring today’s fundamentally different housing market that requires a completely different approach than the 18-month market that ended in August. That market allowed many homeowners to get away with overpricing a home. Homes were not just a good value, incredible interest rates in the mid-three’s made home affordability seem out of this world. Almost every home acquired multiple offers and the market was dominated with cash buyers. Homes flew off the market and they sold at prices much higher than the most recent comparable sale.

Flash forward to today and homes have appreciated to levels where they no longer look like an amazing deal. Buyers do not feel the necessity to drop everything and do whatever it takes to purchase. Instead, they are demanding to pay the Fair Market Value of a home based upon the most recent comparable pending and closed sales. The expected market time is at nearly three months today compared to as low as 33 days earlier this year and 40 days a year ago. Last year the market never really took a break during the holidays. Not this year, the normal holiday slowdown has infiltrated Orange County housing. Open houses generated more than 50 potential buyers earlier in the year when there was almost nothing on the market. Today, open houses produce only a handful of buyers as the inventory has blossomed considerably and the single open house sign on a busy intersection corner has now been replaced with a gaggle of directional arrows.

The market has changed, but homeowners have not received the memo. Instead, sellers continue to come on the market at unrealistic values. These values are not at all in line with the true Fair Market Value. The prices are arrived at arbitrarily. Reports from the trenches are that many rationalize the price thinking that their home is the “best home in the neighborhood.” They stretch the price based upon new carpet, new paint, or a remodeled kitchen. Unfortunately, they have found out the hard way that the market will no longer reward irrational pricing. There was wiggle room when homes not only appeared to be a value, but throw in a 3.5% interest rate and a buyer did not need much convincing. Today, these homes languish on the market.

There are still homes that fly off the market in the lower ranges and often with multiple offers, but they are priced according to the Fair Market Value, taking into consideration the changed market fundamentals. Will a home sale above the last closed sale? Sure, the right property will secure an offer a few thousand dollars higher, but not tens of thousands of dollars higher like earlier in the year.

So, many of you are wondering about all of the recent reports of mass appreciation. Dataquick, Core Logic, Case-Shiller, and the Federal Housing Finance Agency (FHFA) have all recently released outstanding, favorable housing numbers that entice homeowners to jump into the housing fray. But, what they report is no longer occurring in the Orange County real estate trenches. Dataquick highlighted November sales. Core Logic released October price trends at the beginning of this month. Case-Shiller and the FHFA index released September pricing trends at the end of November and will release October numbers soon. The trouble with all of these indexes is that they are all reporting closed sales activity, so are a reflection of 45 to 60 days prior. October sales are a result of contracts put together in August and early September. The Orange County Housing Report tracks pending sales activity and is a reflection of what is taking place in the streets right now.

Many of these reports highlight year over year statistics. While these figures may be very interesting, they only pinpoint where values were a year ago compared to this year. Instead, everybody should be concentrating on how prices are changing from month to month. But, even these statistics can be misleading, especially reports of the median sales price. The median sales price is when all prices are stacked from lowest to highest; the median is the exact middle value. There are major flaws in the median. It is easily skewed by a change in the sales mix. When the market experiences an increase in the number of luxury home sales, the median is skewed higher; and, when there is an increase in the number of sales in the lower ranges, the median is skewed lower. It is not the most reliable statistic in tracking true price appreciation.

For homeowners waiting until the Spring to place their homes on the market, they will be greeted with increased competition. Yes, in terms of the number of pending sales, it is the hottest time of the year. There may be more buyers who wish to purchase, but it is also when more homeowners come on the market than at any other time. Many unsuccessful sellers who have opted to throw in the towel and wait until the Spring will enter the fray too. Sellers during the 2014 Spring Market will be greeted by buyers only willing to pay the Fair Market Value: OVERPRICED SELLERS BEWARE.

Active Inventory: The inventory shed 7% in the past two weeks as the market moves even deeper into the holidays.

In the past two weeks, the active listing inventory shed 394 homes and now totals 5,149, dipping to levels last seen at the beginning of July. It’s the largest drop since March of last year, beating last week’s second biggest drop of the year of 337 homes. The drop will continue through the New Year celebration and will not reverse course and start increasing until mid-January.

Last year at this time there were 3,254 homes on the market, 1,895 fewer than today.

Demand: Demand dropped by 13% in the past two week and is at its lowest point of the year.

Demand, the number of new pending sales over the past month, decreased by 265 and now totals 1,764, the lowest demand reading of the year. As a matter of fact, this is the lowest reading in six years. Last year the market did not take much of a break during the holidays. Not this year. Buyers have diverted their attention away from housing and are busy attending parties and wrapping presents to be paced under the tree. Demand will reach a low in two weeks as we celebrate the arrival of 2014 and will start to climb as we roll into January.

Last year demand was at 2,413 pending sales, 649 more than today. Those numbers were a bit inflated as there were a lot more short sales embedded in demand, 649 pending short sales compared to 136 today. Since only about half of all short sales ever close, the 513 additional pending short sales skewed the demand totals last year. Even so, the disparity between last year and this year’s demand is large enough that it will result in fewer sales in the coming months in comparing year over year numbers.

Distressed Breakdown: The distressed inventory increased by only one home in the past two weeks.

The distressed inventory, foreclosures and short sales combined, increased by one home and now totals 298. Only 6% of the active listing inventory and 11% of demand is distressed. Compare that to last year when it represented 12% of the inventory and 34% of demand, and two years ago when it represented 38% of the inventory and 59% of demand.

In the past two weeks, the foreclosure inventory decreased by 4 homes and now totals 77. 1% of the inventory is a foreclosure. The expected market time for foreclosures is 42 days. The short sale inventory decreased by 5 homes in the past two weeks and now totals 221. The expected market time has increased to 49 days. Short sales represent just 4% of the total active inventory.

Homeowners in Southern Orange County take their holiday decorating seriously! That's one reason why Orange County is a fantastic place to see some over the top displays. One of the homes in Nellie Gail in Laguna Hills was even featured on ABC's, The Great Christmas Light Fight! Take a look at the list below and take your family out on a personal Holiday Light Tour.

The Blount Home in Nellie Gail

25473 Nellie Gail Road

Laguna Hills, California

Send a Christmas Text Message to Our Show

(313) 312-5473

5 pm - 10 pm Every Night for Lights Until Christmas Night. Our Home Is Open For Tours Wednesday - Sunday from 6 pm (or so) until 9 pm (or so). Fridays nights are collection days for the Firefighter's Spark of Love Toy Drive. Please bring a new, unwrapped toy to give to kids who need a Christmas smile.

View Map to Best Christmas Lights to See in South Orange County on a map

Good ol’ fashioned homeowners with equity have made a remarkable come back this year.

Equity Sellers: 92% of all closed sales in October were homeowners with equity.

The housing market used to be riddled with distressed sales, both foreclosures and short sales. Two years ago, 38% of the active listing inventory was distressed. That dropped to 12% last year and just 5% today.

Banks used to be in control of the housing market. In January of 2009, 63% of all sales were distressed. Nearly two out of three sales were foreclosures, homes owned by the bank, or short sales, which required lender approval to take much less than the outstanding loan balance in order to close a sale. Back then, the market was predominantly foreclosures.

From there, sales began to shift away from foreclosures to short sales. By the end of 2009, short sales made up 25% of all sales and equity sellers made up 58%. Foreclosures dropped to 17%. That was still a lot of distressed sales, and it remained at those levels through 2011. All of those distressed sales eroded home values and prevented the housing market from recovering.

During those years, the term “equity seller” evolved to describe regular homeowners with equity in their homes. Equity sellers were a bit easier to deal with because the banks were not involved to the extent that they were with foreclosures and short sales. Responses were quick, escrows were short, and the process was a relief in comparison to distressed transactions.

In early 2012, the number of distressed homes began to diminish rapidly and so did the active inventory. At the beginning of the year, there were 8,114 homes on the active market and 3,137 were distressed. By the end of the year, there were just 3,254 active listings and 397 were distressed.

With the inventory so low, values increased rapidly. Demand was high and there just were not enough homes on the market to satiate the ravenous appetite of the throngs of buyers. The substantial increase in values helped the housing market recovery seemingly overnight. The number of underwater homeowners, owing more than their homes were worth, dropped from 25% of all mortgaged homes to just 7%. As a result, fewer homeowners have been defaulting on their loans, and the number of distressed homes has diminished substantially.

Only 5% of the active inventory and 11% of demand is distressed. More remarkably, just last month, merely 2% of all closed sales were foreclosures and 6% were short sales, which meant that 92% were good ol’ fashioned equity sellers.

Even more telling is taking a closer look at year to date numbers compared to last year. Distressed sales have dropped

63% from 2012. There are 70% fewer foreclosures and 59% fewer short sales. The number of equity sellers has increased by 33%. These numbers reflect a market that has shifted away from distressed to one that is no longer ruled by lenders. It is a housing market that has made tremendous strides towards healing the wounds of a prolonged downturn.

For buyers looking for a “deal” in purchasing a short sale or foreclosure, expect a lot of competition from so many buyers looking for the exact same thing. These “deals” have quickly become a needle in a haystack and isolating one has become more than a challenge; it’s almost equivalent to winning the lottery. And, with so much demand, the need to discount these homes has diminished considerably.

Active Inventory: The inventory shed 6% in the past two weeks as the market moves deeper into the holidays.

In the past two weeks, the active listing inventory dropped by 337 homes and now totals 5,543, dipping to levels last seen at the beginning of August. It’s the largest drop since March of last year and the largest for this time of year since 2006. The large drop can be attributed to such a large run-up in the inventory from March until October, where it doubled in only seven months. The inventory typically reaches a height at the end of August, but that was delayed for a couple of months. It is no wonder that the inventory is dropping so fast with fewer homes coming on the market and so many sellers throwing in the towel in order to enjoy the holiday season. The drop will continue through the New Year celebration and will start to increase in mid-January. Last year at this time there were 3,482 homes on the market, 2,061 fewer than today.

Demand: Demand dropped by 12% in the past two week.

Demand, the number of new pending sales over the past month, decreased by 266 and now totals 2,029. It may seem like a drastic change, but is quite typical for this time of year. Holiday parties, decorating the tree, and the annual pilgrimage to the mall have replaced the need to find a home right now. Just as many sellers have opted to take a breather over the next few weeks, so have buyers. This phenomena will continue to drop and will reach a low as we ring in 2014, where it will reach the lowest levels of the year. More buyers will enter the fray after the first couple of weeks of the New Year.

Last year demand was at 2,543 pending sales, 560 more than today. Those numbers were a bit inflated as there were a lot more short sales embedded in demand, 684 pending short sales compared to 197 today. Since only about half of all short sales ever close, the 487 additional pending short sales skewed the demand totals last year. Even so, the disparity between last year and this year’s demand is large enough that it will result in fewer sales in the coming months in comparing year over year numbers.

Distressed Breakdown: The distressed inventory increased by 3% in the past two weeks.

The distressed inventory, foreclosures and short sales combined, increased by 3%, or 9 homes, and now totals 297, levels not seen since February. Only 5% of the active listing inventory and 11% of demand is distressed. Compare that to last year when it represented 12% of the inventory and 34% of demand, and two years ago when it represented 38% of the inventory and 57% of demand.

In the past two weeks, the foreclosure inventory increased by 17 homes and now totals 81. 1% of the inventory is a foreclosure. The expected market time for foreclosures is 81 days, the highest level of the year. The short sale inventory decreased by 8 homes in the past two weeks and now totals 216. Short sales remain the hottest segment of the Orange County housing market with an expected market time of 33 days. Short sales represent just 4% of the total active inventory.

It's the holiday season in Southern Orange County, and there are plenty of events to attend! Whether you are looking for something family-friendly, or more adult focused there's something for you! Take a look at the list below and mark your calendars!

Here are more events happening throughout the month in Southern Orange County.

Friday, December 13

Mission Viejo - Holiday Light Tour

5:00PM - 8:00PM at the Murray Center | 24932 Veterans Way, Mission Viejo | $7 must purchase in advance: (949) 470-3062

Adults 18+ are invited to enjoy a chili supper before boarding a bus to view festive holiday lighting and the Mount of Olives Live Nativity.

Saturday, December 14

Laguna Niugel Holiday Parade "Through the Eyes of a Child"

10:00AM | Crown Valley Parkway between Nueva Vista and Crown Valley Parkway, FREE event! Come view over 100 exciting entries including marching bands, floats, equestian units, exotic cars, and local heroes!

Dana Point - Winter Festival & Tree Lighting

12:00PM - 7:30PM La Plaza Park | 34111 La Plaza St., Dana Point | Most activities are FREE. Including Santa Visits, Reindeer, Snow, and crafts for the kids!

Old Town San Clemente Christmas Boutique

9:00AM - 3:00PM | San Clemente Event Center | 111 W Ave Palizada, San Clemente

This boutique will feature the work of various craftspeople as well as representatives from various churches.

Wednesday, December 18

105th Annual Newport Beach Christmas Boat Parade

6:30PM | Repeats nightly through December 22 | Find route at www.ChristmasBoatParade.com

If you're looking for fun activities to do with children this holiday season, then check out this extensive list by the fantastic Popsicle Blog!

Please help us support local children's charities by donating a toy!

Believe it or not, real estate transactions do continue even during the holiday season! Sure the numbers may decrease a little, but there are all sorts of reasons why someone may need to sell their home between November and January.

So if you find yourself in the position of selling during these months don’t fret! We have a ton of experience in optimizing your sale at any time of the year, and will be happy to walk you through the process of selling during the holiday season.

As is true of any time of the year, a thorough deep cleaning and de-cluttering of your home must be done before potential buyers are let in. During the holiday season, this is absolutely essential, especially if you plan on decorating your home with seasonal accents.

Now once this first step is done, there are a few things to keep in mind when preparing to decorate for the holidays.

1) Play Up the Best Features: Make sure to highlight all of the best features of your home. If you have a beautiful fireplace make sure to make it the focal point of the room. This will help potential buyers see themselves around the fireplace with friends and family, and will increase the cozy factor. Another great feature to focus on during the holidays is the staircase.

2) Classy Not Gaudy: It may be best to keep those vintage glass ornaments safely packed in storage this year. While your family may love the colorful reminders of Christmases past, potential buyers want to imagine themselves in the space. The best way to do this is to stick to a cohesive color palette of decorations throughout the home. Take a look at a few home décor websites for inspiration, or check out our board on Pinterest to get ideas.

3) Keep it Simple: A little holiday cheer goes a long way! Buyers won’t be able to see the potential in your home if it’s covered in tinsel!

4) What’s on the Stove? Make sure when potential buyers come through the door they are hit with all of the best smells of the holidays. One way to fill your home with fantastic smells is to warm a pot of apple cider with mulling spices on the stove.

House Guests & Hosting Dinner

The general rule of thumb on house guests while you’re trying to sell your home is, don’t do it. Of course if Uncle Joe has no place else to go, and he has to stay at your house the rule can be broken. However, it may be a good idea to remind your potential guests that the home will continue to be shown while they are there. This can mean a huge inconvenience for everyone, and really put a damper on the holiday family spirit. If possible, try and encourage house guests to find other accommodations.

When it comes to hosting big family meals like on Thanksgiving, the preference is really up to the homeowner. Sure most potential home buyers won’t be banging down the door to see your house on a holiday, but what about the aftermath? Make sure you consider the potential stress of cleanup and holiday recovery before committing to hosting a large gathering. Why not take this opportunity to switch up tradition for one year and let someone else do the cooking? There are now many restaurants and hotels offering fantastic holiday meal experiences!

Orange County Thanksgiving Feasts

Montage Laguna Beach

The Montage Resort in Laguna Beach is offering two Thanksgiving experiences for guests to choose from. The more casual buffet experience will be hosted in their Grand Ballroom with live music, and complimentary family photos. Children are welcome in the Grand Ballroom. The cost for this buffet experience is $110 per adult, and $40 per child, and is available from 12:00pm to 5:00pm.

A more formal 4-course menu is available at The Loft fine dining restaurant. This is available between 12:00pm to 10:00pm, and costs $95 per person.

Reservations for either experienced can be booked at (949) 715-6420

Salt Creek Grille

Salt Creek Grille is open on Thanksgiving between 12:00pm and 7:00pm. They will be offering a special Turkey Dinner at $30 for adults, and $16 for children. Reservations are not required, but are recommended. Call (949) 661-7799 to make reservations.

The Ritz Carlton, Dana Point

The Ritz Carlton is offering a Thanksgiving buffet in their grand ballroom on Thanksgiving Day between 12:00pm and 3:30pm. Reservations must be made through their reservation line at (949) 240-2000. Tickets are $115 per person.

Chart House

In addition to a limited version of their standard menu, The Chart House in Dana Point will be offering a traditional Thanksgiving meal between the hours of 11:00am and 9:00pm. The cost is $25.99 per adult, and $10.99 for children under 12. Reservations are not required, but are recommended and can be made by calling (949) 493-1183.

St. Regis Monarch Beach Resort

The St. Regis resort is offering two Thanksgiving experiences in both of their restaurants. The more formal 4-course meal will be offered in their Stonehill location between 2:00pm and 7:00pm. The meal is $105 per person.

The more casual buffet experience will be found in their Motif restaurant, where guests will also enjoy various live music throughout the day. Children are also welcome. Seating is available for $115 per adult, and $35 per child, between 12:00pm and 8:00pm on Thanksgiving Day.

Reservations for either experience can be made through the St. Regis reservation line at (949) 234-3900

Listing inventory is dropping as more sellers opt to throw in the towel.

Active Inventory: Peaking in October after climbing for over seven months, the active inventory is dropping due to sellers withdrawing their homes that have sat on the market too long.

This time last year, the inventory was running on empty and demand was through the roof. It did not matter that the holidays were fast approaching; homes were procuring multiple offers and purchase prices above the list price despite the time of year. Sellers were not throwing in the towel; instead, they were contacting moving companies and boxing up their belongings after accepting a contract.

Flash forward to today, demand has dropped by 28% and the active inventory is up 64% compared to last year at this time. There are some telling signs that the market is completely different from last year. The plethora of open house signs on major cross streets on the weekends is the current trend. Homes had been selling so quickly that open houses were rare beyond the initial weekend. The steady stream of interested buyers that followed the directional arrows has been replaced by only a few buyers today. Open house activity is way down and the number of open houses on Saturday and Sunday is way up.

Another sign that the market has changed is the considerable number of price reductions. 10% of the active inventory changes the asking price each week right now. This is the time of year where sellers have to decide whether or not they have what it takes to sell, a willingness to lower the price to the true fair market value or do they want to throw in the towel. Since so much of the inventory is overpriced, if a seller really wants to sell, eventually they have come to the realization that a reduction is necessary to achieve success. The market is no longer appreciating like it had been from February 2012 through August 2013. Buyers do not want to pay more than the last guy. Instead, they want to pay the fair market value, the value based upon the most recent comparable sales. If a seller is not close to the fair market value, a price reduction is necessary.

The rise in the expected market time from 33 days back in mid-March to 81 days today is another glaring sign that the market has shifted. As inventory rises and demand drops, the expected market time increases. The inventory swelled from mid-March through mid-October and demand dropped by 39% since June. The net result, the expected market time increased in every price range. Even though sellers are looking at nearly a three month expected market time throughout Orange County, many have ignored the signs and expect the market to perform like it had earlier in the year. They have been questioning why they have not procured an offer after the first week. But, that market is in the past. Today, sellers need to be priced right or they will stagnate on the market with no offer in sight. Pricing a home right also does not mean an instantaneous offer is on its way. The best mentality is that of a fisherman. Knowing that there are fish below his boat, a fisherman casts his line recognizing that eventually he will reel in a fish, but he does not expect immediate success. Sometimes there is waiting involved.

So, where do we go from here? The active inventory will continue to drop through the very beginning of the New Year. It will rise from there. Many sellers who have decided to throw in the towel will market their homes again next year, attempting to take advantage of the best time of the year in terms of market activity, the Spring Market. However, they will be joined by many homeowners who want to cash in on the incredible rise in home values. The likely outcome will be too many homeowners coming on the market all at once and the listing inventory will rise to a much more normal level. The current inventory is actually below long term averages, around 8,000 homes.

In the past two weeks, the active listing inventory dropped by 174, or 3%, and now totals 6,159. After increasing unabated from mid-March through mid-October, the inventory dropped for the first time two weeks ago. It was only a 17 home drop, but a sign that the inventory had peaked. Today’s reading verifies that a peak had been reached. The peak should have occurred back at the end of August, but was delayed by two months on the backs of a flood of overpriced sellers hitting the market in anticipation of continued appreciation. With the arrival of holiday cups at Starbucks and other ominous signs that the Holiday Market is upon us, sellers are throwing in the towel knowing that the market is about to slow further.

Last year at this time there were 3,753 homes on the market, 2,406 fewer than today.

Demand: Demand dropped 1% in the past two week.

Demand, the number of new pending sales over the past month, dropped by 33 and now totals 2,277. Through Thanksgiving, we will continue to see small changes in demand. From Thanksgiving week through the first couple of weeks of the New Year, the Holiday Market, demand will slow to its lowest point of the year.

Last year demand was at 3,179 pending sales, 902 more than today. Those numbers were a bit inflated as there were a lot more short sales embedded in demand, 897 pending short sales compared to 224 today. Since only about half of all short sales ever close, the 673 additional pending short sales skewed the demand totals. None the less, the disparity between last year and this year’s demand is large enough that it will result in fewer sales in the coming months in comparing year over year numbers.

Distressed Breakdown: The distressed inventory increased by 3% in the past two weeks.

The distressed inventory, foreclosures and short sales combined, increased by 3%, or 9 homes, and now totals 285, levels not seen since February. Only 4.6% of the active listing inventory and 12% of demand is distressed. Compare that to last year when it represented 13% of the inventory and 34% of demand. Distressed properties today play only a small role in a housing market dominated by sellers with equity.

For the month of October, only 6% of all closed sales were short sales and 1% were foreclosures. The rest were good ol’ fashioned homeowners with equity in their homes. Last year, 24% of all closed sales were short sales and 7% were foreclosures. The market has changed and distressed sales have only a slight impact on today’s housing market.

In the past two weeks, the foreclosure inventory decreased by 5 homes and now totals 52. Less than 1% of the inventory is a foreclosure. The expected market time for foreclosures is 35 days. The short sale inventory increased by 14 homes in the past two weeks and now totals 233, levels not seen since January. Even with the increases, the number of short sales is still well below the significantly higher numbers from 2007 through 2012. Short sales remain the hottest segment of the Orange County housing market with an expected market time of 31 days. Short sales represent just 3.8% of the total active inventory.

Applebees Free Meal

Veterans and active duty military can choose from a free signature Thank You Meal menu that includes some ofApplebee’s favorite items, including a 7 oz. House Sirloin, Bacon Cheddar Cheeseburger, Three-Cheese Chicken &Sundried Tomato Penne, Fiesta Lime Chicken, Double Crunch Shrimp, Chicken Tenders Platter or Oriental Chicken

Bar Louie Free Lunch or Dinner

Bar Louie is saluting veterans and active-duty this year with a free lunch or dinner, up to an $11 value.

BJ’s Restaurant Free Lunch or Pizza

All veterans and active duty military get a complimentary lunch entree or a one topping mini or individual pizza. Simply present proof of service.

California Pizza Kitchen

California Pizza Kitchen is honoring Veterans and Military personnel by inviting them in to dine for free. Enjoy anpizza and a non-alcoholic beverage for free. Dine-in only. Please come in uniform or bring your military ID or otherproof of service.

Chili’s Free Meal

Veterans and active-duty military get a choice of 7 free meals. Must show proof of military service.

Claim Jumper 15% Off

Official Facebook posting, “Today and tomorrow we are giving all veterans and active military members and theirfamily or friends 15% off all food purchases. Offer is valid on up to 4 people. To receive this offer please show yourmilitary ID or DD form 214.”

Coco’s Free Slice of Pie

Get a free slice of pie with any purchase. Present military ID.

Denny’s All You Can Eat Pancakes

Get all you can eat pancakes for all active duty military and veterans with a valid ID.

Krispy Kreme Free Donut & Coffee

Offering a free donut to all those served or currently are serving. Proof of military service required or those in uniform.

Little Caesars Free Crazy Bread

Receive free Crazy Bread with valid ID.

On The Border Free Entree

15% of purchases will be donated to Carry The Load plus veterans and active-duty will receive a free entréecertificate, valid up to $10 and good through 11/30/2012.

Outback Steakhouse Free Bloomin’ Onion® and Coca-Cola®

Military personnel and veterans get FREE Bloomin’ Onion® and Coca-Cola®. Must have valid identification. Also,receive 10% off the entire guest check (excluding alcohol, taxes and gratuity).

Red Lobster

Free appetizer to all veterans and active-duty personnel.

Sizzler Free Lunch

Veterans and active duty military will receive a free lunch from a select menu. Valid ID required or in uniform or photo

in uniform.

Soup Plantation Free Meal with Purchase

Past and present military can receive a free meal with the purchase of another regular priced meal. Just show proof

of military service or be in uniform.

Tony Roma’s Free Entree

Those who have served and are currently serving get a free entrée.

This photo has been provided by photographer, Sam Howitz via Flickr Creative Commons.

It’s no secret that the housing market has seen a dramatic increase over the last 12 months, and Orange County has had some of the nation’s biggest value increases. However, not every homeowner that wanted to sell this year has been able to get the asking price they were looking for. Should these homeowners take a lesser price, or look for another alternative? For many the answer has been to rent out their main personal residence, and try to wait out the market.

It makes sense in some circumstances considering rents have also seen a dramatic increase over the past few years. According to the Orange County Register, the rents in Southern Orange County saw a sizeable increase just over the last 12 months as well.

However, deciding to rent a home to a tenant is a big commitment, and may not work for everyone. There are a whole host of responsibilities that go along with becoming a landlord, and it’s imperative that all these considerations are understood before making a final decision.

Here is a quick list of items to consider before deciding to rent out your home:

Do you have enough funds to cover the mortgage if a tenant doesn’t pay?

There are many great renters out there, but as a landlord you have to be prepared for a “worst-case-scenario”. So if your tenants encounter a hardship, and cannot pay their rent for some reason, you have to be able to financially cover the mortgage amount for 1-6 months. Hopefully these hiccups don’t last too long, but if an eviction is necessary, a good landlord must be ready.

Will you hire a management company?

Property management companies can make the process of managing your rental much easier, but whether or not they are a good fit for your property is more difficult to discern. It’s important to interview several management companies, and a good idea to seek the advice of a third party before making any decisions.

How will owning a rental property affect your taxes?

In many cases, owning a rental property could mean good news for your tax liability. However, every case is unique, and you MUST seek the advice of a tax professional before making a final decision.

Are you in it for the long haul?

Are you planning on renting out your property for at least 2-5 years? If the answer is “No” it may be wiser to sell now, for the current market value. There’s a lot of time and energy that goes into renting a property. You wouldn’t want to put all of that effort in if you’re only going to sell 12 months later. Tenants may cause damage to your property during those 12 months as well. Carefully consider selling now if this is the case.

Do you have a list of professionals for handy work and fixes?

Make a list of home professionals that you feel comfortable with before renting out your property. When tenants ask for repairs you will be ready to go with someone you trust.

In the end, anyone considering renting out their home must consult with an experienced real estate professional to ensure they are covering all of their bases. Hakola & Associates are very experienced in guiding homeowners through the confusing process of becoming a landlord. Residential rental properties can be a fantastic investment, but should not be jumped into without the proper investigation and research.

Here are a few more resources to check out during this process:

http://www.buildium.com/8-tips-for-new-landlords/

http://realestate.msn.com/article.aspx?cp-documentid=13108384

http://www.nytimes.com/2011/11/20/realestate/tips-for-starter-landlords.html?_r=0

Photo provided by Regina Rentals

OPEN HOUSE SAT 11/2/13 from 1-4PM