Mmmmmm….good mexican food!

My current favorite restaurant for Mexican food is Me & Z’s in Arroyo Grande. It’s located across from Spencer’s Market but they are planning to move down to 4th and Grand in Grover Beach in a few months. This will expand their seating!

They start you out with really good chips and salsa. Then a partial cup of soup, which is just enough, IMO. They have a couple really good soups and change them regularly. The entrees we’ve tried taste good too. They even serve you dessert with A small dish of vanilla ice cream with caramel on it.

Check it out!

Non-refundable deposit not enforceable

A recent court case in Southern California dealt with a home sale in 2005. The purchase contract stated that the deposit was non-refundable and the liquidated damages part of the contract was not initialed by each party. The Buyer ended up canceling the contract but the Seller was able to sell the property for $1 Million more than the original offer (the first price was $14M but ended up selling it for $15 Million to another Buyer).

The Seller’s were keeping the $620,000 deposit and the Buyer sued to get it back. The court ruled that since there were no damages as a result from the first Buyer canceling the contract, the Seller couldn’t keep the deposit.

If you’re interested, read more about it here.

Cal Poly University Union Construction

(submitted by one of our San Luis Obispo agents)

Lot’s of big changes going on at the University Union Plaza. The $2.5 million renovation is scheduled for completion in the spring and is the first major change to the UU since it was built in the late 1960’s. They are expanding the stage and adding grass in hopes of making it more open and inviting to students. The University Union has always been the main hub for student events and activities. It was definitely the happening place when I attended Cal Poly in the late 70’s. We had so much fun in that space. It is nice to see the administration doing what they can to ensure future generations will have the same opportunities. More information about the project can be found at

SLO Condo’s

Here’s a couple of graphs that show what’s been happening with Condos in San Luis Obispo.

The first graph shows the monthly median condo price over the last 2 years. The second graph tracks the monthly inventory of SLO condos. The third graph shows the price distribution for SLO Condos sold the last 365 days.

(click graph for a larger view)

It’s No Great Depression Again

Mortgage rates improved and US stocks fell for a fourth straight week as concerns grew about the possible default of smaller European nations, Greece and Spain, will stall the economic recovery. These countries are limited in their ability to adjust domestic economic policy as members of the European Union, increasing the risk of defaulting on government debt. The National Association of Realtors reported that Pending Home Sales increased 1% following a record 16% decline in November. According to the Bureau of Labor Statistics, the unemployment rate fell from 10% to 9.7% in January, while job losses were essentially unchanged compared to the month prior. Employment fell in construction and in transportation and warehousing, while retail and temporary employment gained jobs. Additionally, the under-employment rate, the broadest measure of unemployment (U6), fell from 17.3% to 16.5%. Currently, the 30-Year Fixed sits at 4.625% (4.804% APR) and the 15-Year Fixed is at 4.125% (4.432% APR). Retail Sales, which account for approximately 70% of economic activity, will headline a light week for economic data.

Thanks to an article written by First Trust Portfolios’ Chief Economist, I was able to put our financial turmoil in perspective. Many economists have suggested our current downturn is a repeat of the Great Depression, worrying that when government stimulus winds down, the economy will tumble again. Between 1929 and 1933, real GDP fell for four consecutive years, and by a total of more than 25%. The Federal Reserve also made a huge mistake, allowing the money supply to decline by a third. At the same time, President Herbert Hoover increased the top income tax rate from 25% to 63% in 1932, reducing the incentive to work and invest. By comparison, today’s economic growth is on the rise for a second straight quarter after less than 12 months of decline, the Feds are making money readily available with a fed funds rate between zero and 0.250%, and current tax rates top out at 35% and are scheduled to increase modestly in 2011.

Central Coast Lending, Inc.
(805) 439-2300

Are You Considering Getting Your Real Estate License?

Home prices aren’t the only thing declining in this market, Realtor membership is down too. For the California Assoication of Realtors, they expect a 26% drop in membership since the high water mark set in 2006.

In SLO County, there are 1861 MLS agents as of a second ago. There are also 445 Santa Maria MLS agents that can sell property in SLO County too.

There is a misconception of what money you can make in real estate. It doesn’t take that much to get a real estate license. Most take an online course to prepare for the state license exam. I think most people think they can get their real estate license and sell at least one property a month. They do the math using 6% commissions but what the real estate classes don’t cover is how the real estate industry works.

So, here’s an overview for those thinking of getting their license and counting on real estate to support you (and your family).

When you get your license, you need to “hang it” with a Brokerage. As a brand new agent, you probably want your first Brokerage to have good training and hand-holding so you can learn the contracts and get you through your first transactions without messing up someone’s transaction.

When you hang your license with a Broker, you also get a commission split. That’s how much your Broker will take of the commission. A new agent going to a large franchised Brokerage will start typically start off at a 50/50 or 55/45 Agent/Broker split. Most commission plans will raise the agent’s cut as they bring in more sales. Some plans also reset themselves every year, so if you have a good year you get a bigger split towards the end of the year but then go back to the lowest split when you start a new year.

There are also other fees that get taken out of the agent’s commission. If you go with a franchised Brokerage (one using a nationwide name), you’ll pay 6-8% to the parent corporation. There is also errors and omissions (e&o) insurance that some Brokerages don’t include in their split and charge the agent. An agent also needs to sign-up with the MLS and pay quarterly fees. If an agent decides to join the National Association of Realtors, that’s a yearly fee too.

Then there is the business expenses. Car expense (gas, usage) and advertising are the minimum expenses.

So let’s look at an example of what an agent makes with a sale. Using the SLO County 2009 median home price of $400,000 and a 2.5% commission (half of a 5% total commission), and a 55/45 Agent/Brokerage split:

$400,000 x 2.5% = $10,000 gross commission
8% franchise fee = $800
E&O insurance = $125
Broker Net = $4,084
Agent Net = $4,991

If an agent sold 3 transactions, they’d make $14,974 and that is without the Realtor/MLS fees that need to be paid out of this plus their other expenses. If an agent only had this many transactions last year, they’d be below the U.S. 2009 poverty levels of $14,570 for 2 persons. If an agent had 6 transactions in 2009, they’d be making a bigger commission split on the later transactions so say the agent made $30,000. You’ll probably have $4000 in realtor dues/advertising so the net is $26,000. If you were working full time, that would average out to be $13/hour. And remember…you’ll probably be working most weekends, especially when you’re new or don’t have much business because you’ll be sitting at many Open Houses hoping that a Buyer will walk through the door that ready to buy and not already working with another Realtor.

Now a reality check….

The following table shows the number of transactions Realtors had in 2009 for homes and condo sold in SLO County. First you’ll see that if you get one sale a month, you are in the elite. VERY FEW agents averaged one sale a month. The majority of agents had ZERO transactions last year.

This has forced a lot of Realtors that haven’t dropped out of real estate completely to take non-real estate jobs, hoping that the market will turn and they will get more sales. But, the industry has changed and an agent is going to have to invest in their business to be successful. This includes all agents, no matter if they are new or have had their license for 15+ years. Also, if you’re a part-time agent you’re not going to be keeping up with the home inventory and contract changes which lowers your ability to provide a good service.

If you are looking to get your real estate license, make sure you have a PLAN and set realistic expectations of how much money you “might” make.

2009 San Luis Obispo Home and Condo Sales. Buyer is Buyer-side transactions and Listings are Seller-side transactions. Percentage is out of 2300 total agents.

Light, Bright and Airy Home Staging Tips

Happy Groundhog Day! Apparently we have 6 more weeks of winter. Whether you believe that or not, here are some important staging tips for your ‘for sale’ home in these winter months.

  • Mind your weeds! Lots of winter rain brings lots of blooming weeds!
  • If at all possible hire a gardener through the tough-to-keep-up-with growing season.
  • Long hours of darkness and gray days, means turn on extra lights during showings.
  • Upgrade your light bulbs to put out more light during the winter months.
  • If you are repainting rooms, choose lighter neutral colors, especially during these dark months.

Happy Selling! – Shannon D’Acquisto

For more tips or to contact me directly: or go to my website: .

Cuesta Cancels Summer Session

To reduce expenses, Cuesta College is canceling most of its summer session. The press release says “Cuesta College experienced near record enrollment numbers for the 2009-2010 school year. This pushed the college’s Full Time Equivalent Student (FTES) count above the state formulated funding cap, resulting in approximately 400 unfunded FTES.”

So, rising state colleges and university fees create a record enrollment at the Community College and then they shut down classes for those that want to get an education because there are too many students.

When do we declare an education crisis??

Rate Update and the FOMC

After a busy week of economic news, there was little change to mortgage rates. As expected, the Fed made no change in the fed funds rate, and their statement essentially followed the expected script. Demand for the Treasury auctions was very strong, with indirect bidders gobbling up approximately 50% of the $118 billion of 2, 5 and 7-year notes. Ben Bernanke was reconfirmed as Fed Chairman by the Senate for a second four-year term by a 70-30 vote, the weakest endorsement ever in the central bank’s 96-year history. Much of the economic data released during the week exceeded expectations, highlighted by a 5.7% increase in Gross Domestic Product (GDP) for the fourth quarter. Currently, the 30-Year Fixed sits at 4.625% (4.804% APR) and the 15-Year Fixed is at 4.000% (4.307% APR). The big news next week will undoubtedly be the important employment report on Friday.

The Federal Open Market Committee (FOMC) is responsible for open market operations, which influence “the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate.” The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight. The FOMC does not set mortgage rates, but changes in the federal funds rate often affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and mortgage rates. The FOMC meets eight times per year where it reviews “economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.” The FOMC consists of twelve members – the seven members of the Board of Governors of the Federal Reserve System, the president of the Federal Reserve Bank of New York, and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.

During the current economic downturn, the FOMC has taken an exceptional role to support the battered real estate and mortgage markets with their $1.25 billion allocation to purchase mortgage-backed securities (MBS). In addition to last week’s rate announcement, the FOMC offered additional insight regarding future policy. The biggest surprise was that there was one dissenter from the Fed’s decision to keep the fed funds rate unchanged, as he believes economic conditions have improved enough that the Fed should begin to tighten policy. The statement also repeated that the MBS purchase program will be concluded by the end of March, fostering a wide range of expectations about the impact of this change. The Fed has been purchasing roughly 75% of the new MBS issuance, and a decline from one source normally leads to higher yields to attract other buyers. Some argue that the end of the program has been expected for a while, so mortgage rates already reflect the news. Others believe this could lead to an increase in mortgage rates of as much as one percent.

Central Coast Lending, Inc.
(805) 439-2300