Category Archives: Commonly Asked Questions About Laguna Woods/General Information

Financial Requirements for Purchasing in Laguna Woods Village, formerly Leisure World

Although Laguna Woods Village is one of the most affordable senior communities in Southern California, there are financial requirements for purchasing here. For a Stock Cooperative, or Co-op, you need $125,000 in liquid, marketable, or income producing assets above the purchase price of a home and $36,000 per year in income. To purchase a Condo, you need $125,000 in assets above the purchase price and $45,000 per year in income. “Assets” can include equity in your current home or an investment property, 401 k, IRA, stocks, bonds, or a mixture of any of these asset classes.

As an example, if you wanted to buy a home for $200,000, you would need to show total assets of $200,000 + $125,000 = $325,000.

Currently, there is no “exemption” for meeting these financial requirements. BUT, if you make a big enough yearly income, you might need less assets to purchase a home. Conversely, if you have a high amount of assets but do not meet the yearly income requirement, some of your assets may be counted as income…

Another method for satisfying the financial requirements is for a family member (son, daughter, sister, brother, son in law, etc.) to be a ”Guarantor” for you. In that case, for a coop, they would need to have an income of at least $90,000 and $250,000 in assets. The occupying parent must have an annual income of at least $24,000 and $75,000 in assets. For a condo, the “Guarantor” would need to have at least $80,000 in income and assets equal to $200,000 plus the purchase price of the home. The occupying parent must have at least $125,000 in assets. The whole goal in having the financial requirements for purchase is, the association wants to make sure you can live in the community comfortably. You are not “strapped” for cash!

I don’t know if these financial requirements help in making the City of Laguna Woods one of the “Top 10 Safest Cities in the Nation”, which it is, but it sure can’t hurt! It is nice to know your neighbors have met these requirements as well!

Please see my web site if you have any further questions or would like more information about the active senior community of Laguna Woods Village, formerly Leisure World, at: www.leisureworldre.com

Home Owner Association Dues – Laguna Woods Village, Calif.

The senior community of Laguna Woods Village is all about the “Country Club” amenities it offers. These include the 27 hole championship golf course ($10 for residents), the fact that it is a gate guarded community, AND one of the Top 10 safest cities in America. Other amenities include Horse stables, 7 clubhouses, 5 swimming pools, tennis courts, 2 state of the art fitness centers, and only 7 miles to Laguna Beach, California. But how much is all this going to cost? Good question! The HOA dues for Laguna Woods Village are $566 per month for a Co-op and $627 per month for a Condo. Besides all of the fabulous amenities mentioned above (and that is only a partial list), they also cover the following:

Building Insurance (fire and damage other than earthquake)
Cable television
Water
Trash pickup
Exterior building maintenance (painting and roof care)
Grounds maintenance
Plumbing and electric repair
Appliance repair and replacement (Co-op only)
Free Bus transportation, Maintenance of streets, sewers, exterior lighting, Around-the-clock security, Full replacement fire & hazard insurance on buildings
NO MELLO ROOS

The only thing more residents pay for is electricity, phone, and property taxes.

The “average” HOA dues for other condo developments in South Orange County are $275 per month. To compare what you get for your dues in Laguna Woods Village verses what you get in other condo developments, please see the chart below. For further comparison purposes, I have also included a Single Family home. I think you will find the differences striking!

As you can see from the Chart below (when all expenses have been added up) Laguna Woods Village is actually $87 cheaper per month than the average South County Condo! And $112 cheaper per month than an average Single Family Home!

Furthermore, the average price of a Laguna Woods Condo is $250,000 verses $360,000 for a condo in South Orange County. That is a difference of $110,000! That extra $110,000 mortgage (at a 30 year fixed rate @ 4.2% interest) would run you an extra $515 per month! You add this extra mortgage amount to the cost of the HOA dues of $275 and you get $785 So Laguna Woods Village is actually $157 cheaper per month!

So when you add it all up, the expenses in Laguna Woods Village are actually less than they would be in a similar South Orange County Condo or Single Family Home.

HOA Check List Monthly Expenses

hoa_check1 (1)

* Please note the average price of a L.W.V. Condo with GOOD LOCATION and GOOD CONDITION is $250,000. The average price of a Standard Condo in South Orange County is $360,000 in a same “good location” and “good condition.” That means your mortgage would be $110,000 more or monthly, $515 more per month for the same condo, basically.

** A new roof is needed every 20 years and costs an average of $15,000. A home needs to be painted every 10 years at an average cost of $8,000. This totals $31,000 over 20 years or $1,550 yr. or $129 mo.

What is the Difference between a Co-op and a Condo?

We have both types of homes in Laguna Woods Village, but very interestingly, they are many times the same floor plan! So you can buy a “Casa Linda” home as either a “Condo” or a “Co-op” but what are the differences in ownership? Good Question!

In Laguna Woods Village, a Co-op is not any easier or harder to sell than a Condo, it appreciates at the same rate as a Condo. You get the same benefits tax wise from ownership of either a Condo or a Co-op (i.e. – you can write off your mortgage interest and property taxes). You can even rent out a co-op year around, just like a condo. Now they are trying to encourage “home ownership” of the coops in Laguna Woods, so they do have a grace period before you can rent out your home full time, but rest assured, if you “break your hip” and have to go into assisted living, you can rent your home out year-around! So there really is no difference! Obviously, if you are an investor, you would want to purchase a condo since you can rent these properties out “year around” right from the get go! By the way, you can “will” a condo or a coop to your children after you pass away, you do not need to be 55+ in order to own a home in Laguna Woods Village, you just need to be 55+ TO LIVE in Laguna Woods Village. So that is not an issue either.

What exactly is a Co-op? The full term is ”Stock Cooperative” and they are a lot more popular back east where they have the brown stone buildings, in New York as an example. See the Diagram Below:

Coop_condo2

The problem came up in the early to mid 19th century, how can we sell the units in a building? Also, who owns the land underneath the building? So what they did, was come up with an idea where a Corporation buys the building and then each apartment in the building gets stock in the Corporation based on his/ her ownership share.

To make it simple, see the diagram above, if you have 4 apartments in the building, each apartment/ home would get 25% stock in the Corporation (4 x 25% = 100%) What you actually get when you purchase a Co-op is a Stock Certificate instead of a Deed of Trust. Rest assured, it is just as valuable as a Deed of Trust and you can even get a loan on them! Just like a Deed of Trust – getting financing is no problem! Now the interest rate on your coop loan will be 1/4% higher verses a condo loan, but for a $30 difference per month, does that really matter? In general, coops in Laguna Woods tend to be cheaper than condos, so this difference may make this interest rate issue a “wash.”

One final point, the HOA dues on a coop are only $566 per month and HOA dues on condos are $627 per month, so you do save $61 per month in HOA dues with a coop! Also, the association maintains the appliances with a coop which they do not do with a condo.

Feel free to contact me for further information about this! I will clue you in…

Client Testimonials

For this blog, I thought I would include some of the client testimonials that I have received over this past year. I think they give you a good idea of how I work and what you can expect when you hire me to be your realtor.

“Over the years I have purchased seven homes, and by far Patrick McNamee was the best realtor that I have ever worked with. He was extremely knowledgable, hard working, helpful and courteous and made the entire buying process easy. I consider myself lucky to have hound him and plan to use him on all my future real estate transactions and recommend him to my friends in the future.”

- Rich Lapoint (Buyer Client) November, 2011

“I want to tell you about Patrick McNamee, and how helpful, informative and professional he was in helping us in our purchase of a co-op in Laguna Woods Village. Patrick always went the extra mile in providing us with his time, comps, and neighborhood information to help us with our purchase. With our many on-site visits, he was always positive, friendly and co-operative with information about the units. I consider him a great example of professionalism in this industry and tell you that he is a great representative for Century 21 Rainbow Realty.”

A new resident as of 2-26-13.
John McAllister (Buyer Client)

“Patrick is an exceptional professional. His attention to my needs, details, and negotiating skills made the expereince very easy. I plan on calling him again once I am ready to purchase a home.”

- Iris Stone (Home Seller Client)

???I am writing to thank you for your expeditious and conscientious assistance during our search for a suitable home for my dad in Laguna Woods. Your professionalism and extensive knowledge of the community made the entire process efficient, informative and truly enjoyable. I was very impressed, as I sat in the backseat (literally) and watched you ‘determine’ the evolving criteria from my father and then effectively eliminated properties that were not a suitable match. I really appreciate your diligent work, research, always preparedness and great attitude throughout. I do think we helped my dad choose an excellent home and he seems much more settled and comfortable now.???

- Doyle White (Buyer Client)

???Root canal or commissioned salesperson? Personally, I’d prefer the former, but a recent home selling experience with a Leisure World real estate agent may have altered my outlook. Not one for giving compliments, I must admit the sales experience, after a rough beginning, turned out to be a pleasant surprise.

The family recently had to sell my mother’s home, so I contacted the agent who originally sold my mother the house. No reply to either phone calls nor email. Nice…professional, I like that. So I contacted a relative of the “agent too busy to return phone calls” and she, most graciously I might add, went over to the house and reported amongst other negative comments, that the house was located in a noisy area, too close to Avenida Sevilla. Funny, I don’t remember being told that when we purchased the place from the “busy” agent.

I then asked my sister to search the web for another agent in the Leisure World area and suggest one. She found http://www.lagunawoodsre.com, so I made contact and knew immediately I was dealing with a professional real estate agent and not some retired resident of Leisure World who plies the real estate trade by day, solely to relieve boredom.

The agent, Mr. Pat McNamee of Century 21 Rainbow Realty, was informed the house was a “short sale” (a house sale for less than the mortgage amount with lender approval). I fully expected him to hang up when I said this as most agents seem to shy away from this type of sale, but he said “OK, let’s do it”. And he did. He got together all the individuals/organizations required to proceed with a short sale (mortgage lender, short sale specialization firm, PCM representatives and the family Trust attorney), found a buyer within one week of listing and closed the home in 30 days and on schedule. How many Leisure World agents would be able to accomplish this? Our family actually went through five agents before finding Mr. McNamee so we consider ourselves lucky.

Should anyone be interested in a real estate professional whose minimum efforts equate to 110%, then you now know how to contact same.

Oh, pardon me, I neglected to state that Mr. McNamee accomplished all of this from 8,000 miles away. You see, I live in Asia.???

– Dennis Scantlin (Home Seller Client)

Pampanga, Philippines

“I wanted to take a minute to tell you what a very favorable experience it has been working with Patrick. We had two properties managed by him with great renters, then we listed both properties with him, which he then sold. It was a worry free experience, as I live in the Seattle area. In fact I do not believe I could have managed this without Pat’s help. I consider him very knowledgeable about the market in Laguna Woods, and when some of the offers that came in were so low that it angered me. Pat calmed me down and explained the market and the comps to me, although it was still painful to sell the units at such a low price.

I would highly recommend Patrick to anyone looking to buy or sell property.”

– Barry L. Lichter, DPM (Home Seller client)