July 30, 2016 - Leave a Response


Many people enjoy single family homes that are not under the rules and regulations of an association.  However, there are some association practices that would benefit the average homeowner.  Every year the association prepares a budget for the upcoming year.  This is the basis of the Homeowners Association (HOA) dues.  As one would expect, the budget projects the costs for repairs and maintenance of the complex for the next twelve months.  But it contains something more.

A number of years ago, when HOAs faced expensive replacement costs, homeowners would be hit with a special assessment that needed to be paid immediately.  This practice created a heavy burden on many and California began requiring the associations to prepare reserve studies every three years.  From those studies, a portion of the dues is now earmarked for a reserve account.  So when the roof needs to be replaced, the pool resurfaced, or private streets repaved, the funds are already in a reserve account.

A homeowner can create a similar study.  First, make a list of major replacement projects that must be done every several years. Assign the useful life left on each project and the cost of doing that project today.  The annual reserve amount for a project is determined by dividing the cost by the useful life.  When a project is done, it gets added back to the list with a new useful life.  Costs should be updated every few years.

Project Remaining Useful Life (in years)  Cost  Annual Reserve (Cost/Life)
Paint exterior 3     5,000  $   1,667
Replace roof 15   15,000       1,000
Resurface pool 7     8,000       1,143
Replace water heater 4     1,200          300
Total Annual Reserves  $   4,110
Monthly Reserve  $      342



January 31, 2016 - Leave a Response

Much has been written about the housing market of the last decade, but many still have trouble understanding where we are now as opposed to then.  This is just a microcosm look at one home model built in the Wildwood area of Thousand Oaks, California.house_money_pile_shutterstock_83573653

The tract is Wildflower built between the years 1976 and 1979.  The model, a two-story, four-bedroom, three-bath home of 2,150 square feet, is called Plan 400 or Wild Rose.  This model made up about 30% of the tract which was comprised of four models and has proved very popular with a downstairs bedroom and full bath plus an indoor laundry.  Highs and lows reflect differences in locations within the tract and the degree of improvements made to individual homes.  Since this snapshot is dealing with one model, the median and average prices are very close.  The market still needs to increase over 10% to reach 2005 levels.


Year Low Medium Average High # of
2003    465,000    514,000   505,600    525,000 5
2004    615,000    672,500   707,167    835,000 6
2005    750,000    760,000   765,360    789,900 5
2006    725,000    746,000   746,750    770,000 4
2007    612,000    690,000   690,167    750,000 6
2008    505,000    587,000   568,400    635,000 5
2009    569,000    597,000   588,667    600,000 3
2010    600,000    602,500   602,500    605,000 2
2011    550,000    590,000   618,333    715,000 3
2012    515,000    535,000   535,000    555,000 2
2013    620,000    629,000   638,250    675,000 5
2014    612,000    616,000   616,000    620,000 2
2015    620,000    679,250   687,125    770,000 4


January 1, 2016 - Leave a Response

Veterans-Day-Clip-Art-Images-Free-2A word to our local veterans.  The home loan guaranty program was originally conceived in 1944 as a part of an attack on the harsh aftermath associated with wars. Its overall objective was to diminish to the greatest possible extent the economic and sociological problems of post war readjustments of millions of men and women who served in the Armed Forces.

 Program Features Include:

  • 100% Financing available
  • NO monthly mortgage insurance
  • Limit on costs that the Veteran is allowed to pay
  • Seller can pay up to 4% or closing costs
  • 15 or 30 Year, Fixed-Rate loan periods
  • Purchase or Refinance transactions available

If you would like to speak to a Mortgage Consultant to discuss how the program can help you, please feel free to call us at (805) 217-1960 for a reference. (All readers: please pass this message on to the veterans you know with our gratitude for there service.)

Rich & Jan McMillen



November 14, 2015 - Leave a Response

(or How to make it difficult for your neighbor to sell his home)abandoned_house_royalty_free_080916-026182-569042

  1. Don’t mow the grass or water it.  Two foot high dead weeds are always a neighborhood downer.
  2. Let juniper hedges and ivy overgrow the public sidewalks.  This will keep nosy people from walking past your house while giving rats a nice place to live.
  3. Park all your cars and other vehicles on the street.  Come on – you need your garage to store your beer can collection and the driveway is for your skateboard ramp.
  4. Have your dog bark incessantly – day and night.  Better yet – let him go on a morning romp through the neighborhood sans leash, of course.
  5. Turn up the volume on your music and TV especially when suffering from insomnia.  If you can’t sleep, why should anyone else?
  6. Don’t clean your pool.  Mosquitoes are a great way to scare away pesky humans.
  7. Why replace your wood shake roof just because it’s leaking.  After all, isn’t that what pots and pans are for?
  8. Don’t paint your house, fix broken windows, replace the banged up garage door, take down holiday decorations, or bring in the trash cans.  Who in their right mind would want to buy a house in close proximity to yours?
  9. Don’t replace the almost non-existent asphalt driveway as your neighbors have.  Use the money instead as a down payment on a four-wheel drive vehicle for those rainy days when the mud makes it difficult to get to your front door.
  10. Never smile or have a kind word for potential neighborhood buyers.  Let’s face it – no one’s Dream Home includes surly neighbors.

Just remember these actions can come back to bite you.  If you should need to refinance, take out an equity line, or sell your home, your value will be based on neighborhood sales during the past few months.  If your actions or neglect caused prior sellers to have to accept lower values for their homes, that will lower the value of your property as well.

Rich & Jan McMillen


November 10, 2015 - Leave a Response

“AS-IS”: To Sellers, it means a quick and easy escrow after negotiating only once with a Buyer. Buyers, on the other hand, think it means they are getting a smoke-smelling cosmetic fixer with 70’s green shag carpeting and 80’s ivy-print wall paper for a decent price. At the time a contract is accepted by all parties, the chances are minimal that the Buyers have seen the Seller’s disclosures, let alone know the secrets of the house.
When Buyers exercise their legal right to do inspections of the property (and they usually do), they often walk away with a much-changed perspective of the dream home they thought they were buying. What is a Buyer to think when the Seller says there is no problem with the roof, only to have the inspector reveal that besides water stains on the rafters, there are pots and bowls set out in the attic surrounded by towels? (Yes, this happened.)

What about issues that even the Seller may be unaware? Broken sewer lines, unsafe fireplaces, and compromised electrical systems are often discovered in these inspections. What would anyone’s reaction be to learning that the firebox in the furnace is cracked?
Most of the concerns of Buyers have to do with health and safety issues and code violations. Even if the Seller has lived with these issues for years, the Buyer may not wish to test their luck. They may have been ready to tackle paint and flooring, but not have the funds to remove asbestos ceilings or correct serious code violations. However, with some concessions by the Seller, the Buyer may be willing to continue in the transaction. This will mean another round of negotiations where the Sellers need to stay focused on their ultimate goal and what is in their best interest to reach that goal. Sometime a $500 or even a $5,000 concession is better than starting the whole process over again with a new Buyer. By the way, the Seller will need to give any inspection reports or quotes received from the previous Buyer to the new Buyer.

Rich and Jan McMillen



March 23, 2015 - Leave a Response

When considering buying a home, one of the first topics of conversation is the down payment (and closing costs) – how much is needed and where is it coming from. Do you know what’s OKAY and what’s NOT okay? While not everything is covered here, these are the most common money sources mentioned.

house_money_pile_shutterstock_83573653Acceptable Sources of Money

  • Deposit accounts, vested retirement accounts, stocks, bonds, trust funds
  • Gifts (minimum investment requirements)
  • Sale of asset (home, car, boat – proof required)
  • Secured loans: Vehicle, 401k, home equity
  • Rent-to-own: Credit toward down payment cannot exceed the difference between Market Rent and the Actual Rent paid for the last 12 months.
  • Seller contributions: Certain percentage of the sales price depending upon LTV (loan to value ratio) & Occupancy
  • Down payment assistance: Grant funds or community loans

Money in MattressUnacceptable Sources of Money

  • Undisclosed, interested-party contributions
  • Payment abatements
  • Sweat equity
  • Funds that have not been vested
  • Personal unsecured loans
  • Cash

The bottom line – Buyers will have to PROVE with documentation the source of their Down Payment funds. “Unacceptable sources” of these funds make it difficult to get approved for a mortgage loan. For this reason, speaking with a loan professional should be at the top of your To-Do list when contemplating the purchase of a home.

Rich and Jan McMillen


March 21, 2015 - Leave a Response

Water Heater 1Effective April 16, 2015, higher energy factor ratings will be required by the National Appliance Energy Conservation Act (NAECA) on virtually all residential gas, electric, oil and tankless water heaters.

For homeowners, these changes will ultimately result in a better, more efficient product with lower operating costs, but the upgrades come with some cost. Changing the capacity and insulation factor of the water heater increases overall size of the unit. If your water heater is installed in a tight space now, there is a good chance that the new models will not just slide into place. This might mean relocating the water heater to a new location or retrofitting the current space to accommodate the upgraded model. Upgrading the venting to the new standards also affects replacement; expect increased installation times to adapt current venting to new EF requirements. The addition of the new electronics could result in increased maintenance costs due to increased complexity of design. Expect a few extra visits to fine-tune the water heater for optimum performance and possibly working out the bugs in new technologies.

When products become more complex, it is less likely that they will be purchased and installed by the do-it-yourself consumer. Also, some homeowners may now take notice of tankless technology as it already incorporates the demands of the new NAECA guidelines. The units are wall-hung, meaning that they will readily fit into tight spaces that cannot accommodate the new and larger tank water heaters.

 Rich and Jan McMillen


March 16, 2015 - Leave a Response

• Small changes can make a big difference. Tour your home and make a punch list of all the little items needing repaired (e.g. broken or missing faceplates on outlets and switches) or could be updated (e.g. changing the outdated color of the family room or ratty towels in the guest bathroom). Then, start tackling them one at a time. You’ll feel a sense of pride when finishing each task and you’ll also feel better about your refreshed home.
• Make a major improvement. Remember a home should always be a work in process so update the kitchen countertops, change out that nasty shower stall, replace those 40-year-old cloudy windows with energy-efficient dual-pane ones, or add central air conditioning . If not now, when?
• Surprise by design. Change you child’s nursery to reflect the princess she has become or the superhero he wishes to be!
• Stop and smell the roses or some other flowery delight. Plants and flowers are known mood lifters. Attractive landscaping is key for adding curb appeal to your home and is a gift to your neighbors too. Bring nature inside as well to improve air quality and to treat yourself to spring all year long.
• Light up your home. Update light fixtures starting with outdated chandeliers in the entry and dining room. Install recessed lighting in living rooms, family rooms and kitchens to increase your home’s value.
• Reclaim your garage. Jerry Seinfeld quipped that once items move to the garage, they never make it back into the house. So take some time to decide between donating that old couch to an organization that could make good use of it or sending it to the landfill.
• Learn a new skill. YouTube videos can teach you how to lay tile in a bathroom and install a closet organizer in a home office. A well done Do It Yourself project will bond you to your home.
• Rekindle the romance with your home. Your most valuable asset and the place you spend the majority of your time is probably your home. Treat it with love.


Rich and Jan McMillen


October 30, 2011 - Leave a Response

A man in Michigan is suing his in-laws because he fell through their attic helping them retrieve Christmas decorations.  So we are using this opportunity to remind everyone most attics are built for one purpose – to hold up the roof.  The rafters and trusses are designed to support the weight of the roofing material.  They are not normally engineered for the weight of stored items.  Stressing the trusses, rafters, and joints beyond the structural integrity they were designed for can cause damage and ultimately failure of the roofing system.

Unfortunately, many people think that the attic and the rafters in the garage are great places to store stuff.   They often lay wood flooring in the attic and will install a ladder to create permanent storage space unconcerned with the weight of the items they store.  We have seen boxes of books and paper records, furniture and more stuffed into these spaces.

To compound the problem, homeowners often wish to promote an attic storage area as a feature of the house when they list it for sale. They don’t understand the potential future liability of promoting this illegal storage space in the event that the trusses are structurally compromised later by the unwitting buyer.

We recommend homeowners not to utilize their attics for storage; and when selling their home, never advertise it for that use.

Rich and Jan McMillen


October 13, 2011 - Leave a Response

This was one of the easiest short sales we have handled until today

Last Monday our clients signed their loan docs so escrow could close Friday.  All they had to do was wire the rest of their down payment and closing costs to the title company.  Before leaving the office, the buyers were given the wiring instructions to give to their bank.

Being a techie and doing most of his banking online, he was used to sending wire transfers to family through the Bank of America website.  So as soon as he got to his computer, he completed the online form and felt comfortable that he had completed the task.  Unfortunately, what he actually sent was an ACH (Automated Clearing House) payment which is commonly called a wire transfer though that is not correct.

Though both ACH payment and the wire transfer are performed through the Federal Reserve Bank System, each is handled by different departments at a bank.  Also, a wire transfer is the movement of funds in real time.  Escrow usually has these “good funds” in a matter of hours so the transaction can proceed immediately.

The ACH payment is a batch-process; it is stored and forwarded for future settlement.  In other words, it takes longer (in this case three days) and they are not “good funds” as required by the title company.  Therefore, their wire was rejected today by the title company and sent back to Bank of America.

Our clients were told by a bank clerk that it could take up to a week for the funds to be put back into their account and then properly wired.  Unfortunately, that runs afoul of the deadline for closing as set by the conditions of approval for the short sale by the seller’s mortgage holder.

Following our advice, our clients went to their Bank of America branch and talked with the manager this time.  They were there for two hours as the manager not only talked to her ACH department, but the one at Union Bank (the title company’s bank).  She verified that the latter had received an authorization to return the funds which are to be transferred back tonight.  Once received, the funds will still need to be cleared through the electronic fraud department and reviewed, but there is now an escalation process in place.

The manager will be monitoring the situation tomorrow, and will execute the correct wiring instructions as soon as the funds are available.  At worse, this will push the closing until Tuesday, but we will still be on this side of the deadline date.

Rich and Jan McMillen