Navigating New Construction Challenges and LA County Recorder Strike for Real Estate Agents

Hey there, fellow real estate pros! Below are some critical updates and trends you need to know to protect your buyers, especially in the new construction space. Let’s dive into what’s happening in Los Angeles County and beyond and how we can work together to keep your clients happy and secure.

First, a heads-up for anyone with escrows in LA County: a potential strike looming could impact closings. The Union for 55,000 county employees, has announced plans to strike starting April 28, 2025, at 7 PM, due to stalled contract negotiations with the county. This could lead to the closure of the Los Angeles County Recorder’s Office, which means delays in recording deeds and finalizing sales. The looming strike is something we need to monitor closely. If you’ve got a closing scheduled for next week, reach out to your escrow officer now to strategize - don’t let your clients get caught off guard!

Now, let’s talk about a situation that’s got homeowners in the Vesper tract at 5 Points (developed by KB Homes) up in arms. The HOA dues are skyrocketing from around $400 to $1,100 monthly. Why? Insurance costs soared, and KB Homes footed the bill as a subsidy until the project sold out. Now that it’s sold out, they’ve passed the burden onto the owners - and they’re not happy about it. This hits close to home because I stood in a 4,000+ square foot new construction home a few years ago. The builder told us the annual insurance cost was only $1,500. Sounds great, right? But we later discovered it was just for the first year, heavily subsidized by the builder. After that, the actual cost kicked in, and it was a shock for the buyers. These practices aren’t necessarily illegal - builders often disclose subsidies in their contracts - but they can feel like shady games when buyers aren’t fully informed.

This brings me to a crucial point: as agents, you’ve got to be extra diligent when your clients are buying new construction. I’m not here to bash builders - many of them are upfront in their contracts - but you can’t assume your buyers will catch every detail. I remember buying new construction years ago; my realtor got me signed up and then disappeared, thinking I was “handled.” That might have worked back then, but today, with insurance costs spiking and buyers facing unexpected expenses, you need to stay on top of things. Review those contracts with a fine-tooth comb. Look for subsidized expenses (like insurance or HOA dues) that might expire, and make sure your clients understand the long-term financial impact. If a builder isn’t willing to lower the price but offers $10,000 - $50,000 in credits for using their in-house lender, dig into the terms - sometimes those “perks” come with higher rates or fees that cost more in the long run.

Speaking of new construction, let’s address another pain point: builders pushing buyers to go non-contingent 6 - 12 months in advance. That’s crazy! Forcing your clients to sell their current home before they’re ready - or worse before the new home is even finished - puts them in a risky spot. That’s where we come in. We can get your clients pre-approved for a bridge loan (or even a double bridge loan) on new construction, so they don’t have to sell until ready. We don’t need a guarantee at the end of the day - we need you to be able to do business your way, keeping your clients happy and not forcing them to work under the dictatorship of the builders. A bridge loan lets your buyers move forward without the stress of a non-contingent agreement, giving them the flexibility they deserve. It’s a simple process; we’re here to make it seamless for you and your clients. If they don’t need the Bridge Loan at the end of the day, then we cancel the file and wish them luck!

The bottom line? The real estate landscape is shifting, and we need to be proactive. Between the potential LA County Recorder’s Office closure, rising costs in new construction communities like Vesper, and the pressure from builders to go non-contingent, your

buyers are counting on you to have their backs. Let’s work together to review those contracts, secure the right financing, and keep your clients in the driver’s seat. If you’ve got a new construction deal on the horizon, reach out - I’d love to help you explore bridge loan options and protect your buyers.

Here’s to smarter deals and happier clients!

Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

The roller coaster is taking rates lower for the fifth straight day! It’s been a nice run, but there is still much work to do. I am bummed that this week is over, as I would love to milk this puppy for another day or 10!

Loan Programs

• We offer 12-day escrows for pre-approved buyers - Conventional/FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the high 5’s and low 6’s.
• Conventional loans up to $806,500 are in the low to mid 6s.
• High Balance Loans from $806,501 to $1,209,750 are also in the 6’s.
• Jumbo loans above $1,209,750 are in the 6’s and 7’s.
• Bank statement loans are available with 10% down again, with larger down payments in the 6’s ++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No Ratio Loans require 30% down.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

Condos

**Good News for Condos:** – Nothing new!

**Bad News for Condos*** – Nothing this week!  

The full state of California naughty list has been added to MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

Have a great day, and an even better tomorrow! Please call me when you have a client who needs to borrow!