OK – so who writes this stuff anyhow?
Coming out of Washington, two professors from George Washington University have identified a phenomenon called “cognitive resource depletion” as the reason why homebuyers make bad loan choices. Apparently, after the exhaustion experienced from finding a home in Laguna Beach or any other area, our brains just can’t effectively handle all the loan choices available and we choose high risk loans as a result.
Really?
As they report in the LA Times, “Shopping for a home and choosing between alternative features can deplete individuals’ cognitive resources, resulting in sub-optimal home-financing decisions….”
Wow…so we are more capable of choosing between a gas and electric stove, and less effective at monitoring the financial choices for our families or our wealth buiding.
I guess the professors over at George Washington University haven’t met any of my clients. I think that you are a bit smarter than they give you credit for. Perhaps they need to talk with the scientists that study the awesome capacity and power of the brain.
But there could be another advantage here. If you chose an option arm loan, adjustable rate loan or the like, and are now finding that you cannot refinance because the loan rules have changed in part by the greater credit crises, changing lender and government guidelines, or your home has lost value, perhaps you can blame the loan on a “disease” and a government program will surface to assist you!
Anyhow, one thing that they do mention in this report which I do agree with is that you should obtain a pre-approval before you start your home search. This has nothing to do with the size or effectiveness of your brain; it is simply a time-saver in this new era of underwriting guidelines.
New Listings Over the Weekend:
There are no pictures available for this one yet, but may be something our investors would want to look at. It is described as two charming cottages on one lot in the heart of the village. The 2bed/1ba is rented for $1900/month; the other unit is a 2bed/2ba and us currently owner occupied. Priced at $1,298,000.
New Listing: 1175 Coast View, Laguna Beach
Priced at $2,595,000
Remodeled down to the studs
3200 sq. ft – 5 beds/4ba
New Listing: 1715 Ocean Way, Laguna Beach
Priced at $9,250,000
3000 Sq.Ft. – 3 Beds/4Baths
Steps to surf and sand
New Listing: 1100 Marine, Laguna Beach
Value Priced at $3,400,000 – $3,900,876
First time on the market in North Laguna
3291 Sq.Ft.-3Beds/3Baths
As always, give us a call, or shoot an email if you have any questions or need additional information.
Until next time…
