Archive for the ‘homeownership’ Category
Monday, November 28th, 2016
If you have been looking for a home recently you may realize that doing so has become tougher: there is less inventory out there and when a great home lists there are often multiple offers. So how does a buyer get ahead to secure a home when many others are in the same situation? Here are some tips.
Hire a great real estate agent. This is above all the number one way to find a home in a tough market. Not only can your agent give you advice about what price and terms may get you that house you love, but they are also locally connected, which can make all the difference in the world.
Here is an example – After losing out on a few multiple offer situations I found buyers a home through my connections with other local agents – one that had not gone on the MLS yet. In another situation, I notified buyers of a home that was about to come on the market (they lost out on purchasing my listing in the same neighborhood), and they got into contract prior to the home going on the MLS. Some say this is unfair for the other buyers out there as they never had a chance to see or bid on the home, but many real estate sales work this way. Those of us who work particular areas often stay in touch and know when there is a listing coming up. Having that on your side as you search for a home is priceless.
Be Paperwork Ready: There is no better advice than to be ready to make an offer. This means you need to be preapproved with a lender (the lender should have all your paperwork so s/he is ready to go once you write an offer, and you should have a preapproval letter). Have a copy of your latest bank or investment statement showing proof of funds for your downpayment, in order to submit with your offer. Your offer should be as strong as possible so speak with your agent to determine what needs to be in there and what may be left out in order to avoid a multiple offer situation.
Know what you want: Often this is difficult when one is focusing on multiple areas or neighborhoods, but if you really know those you prefer, including floorplans and other amenities, you will be able to act quickly to see the home and make and offer. Even if multiple offers do come in, being first to present can often be helpful. Start looking at areas and homes before you are ready to purchase – the more information you have the better and more prepared you will be when the time to buy is right.
All in all, buying a home in a low inventory market can be tough. With interest rates rising every day counts – if you can lock in a rate prior to another rate increase that is great – and it just means you need to be ready when that right home becomes available. Of all the above tips, having a great buyer’s agent is the best advice I can provide. Many people think they can find a home without an agent, but a good agent is worth her weight in gold when it comes to finding the right home.
Happy home shopping!
Thursday, March 24th, 2016
Many agents and home buyers are aware of the current shortage of homes for sale in many areas. In California there is currently a 4 month supply of homes, where 6 months is the norm and heading into the Spring it usually is higher. When desirable listings do come onto the market there is a rush of activity and often a quick sale. What will happen to the normally busy Spring selling season if inventory levels do not grow?
With interest rates still low and inventory levels down, it is more important than ever for buyers to be as prepared as possible to write a successful offer. Before buyers even start looking at homes, it is important to make sure to do the following:
1. Get preapproved. This is essential. You need to speak with a mortgage professional and get preapproved – not just prequalified – so that you know exactly how much of a loan you can afford and what you will need for a downpayment. There are different products out there so make sure you know which loans will work best for your circumstances. Talk to a qualified mortgage professional and get the preapproval letter before you start home shopping so you are ready to make an offer.
2. Find a good real estate agent. It is great to look at homes yourself online – in fact I always encourage doing so – but to have a skilled agent on your side provides you with an edge. Local area agents often hear of listings before they hit the market, or may even have “pocket” listings (contracted upcoming listings that are not yet on the MLS) themselves. Also, when a listing is on the MLS there may be important confidential agent remarks listed (that only MLS subscribers can see) that could help you prepare in writing an offer. Finally, some third party real estate sites do not list new properties immediately because they don’t sync directly with MLSs, so you may miss out on new listings that other buyers have already seen – even a day can make a difference in a tight inventory market.
3. Write the strongest offer possible. Depending on the circumstances you need to be ready to write the best “on-paper” offer possible, especially in situations where there are multiple offers on a property. Of course, you may not be able to compete with some things (for example, if another buyer is a cash buyer or offers over asking price when you are not qualified to do so), but it is still important to make the offer look as good as it can. This is another reason to have a strong agent on your side – she or he will advise you of the best tactics after assessing the situation, the comparable sold properties, the market and speaking with the listing agent. Your offer still may not be chosen, but there is a chance the one that is chosen could fall through, so you want to be the next best.
4. Be Ready! Make sure you are accessible by phone/text and email, and that you are able to view properties as soon as possible once they list. If a property lists on a Thursday and it looks like a home that meets all your criteria, waiting until the weekend to view it may increase the competition. Even in cases where the seller wants to wait the weekend to evaluate offers, getting yours in first could put you in a better position.
5. Keep an open mind. Check out homes that you may not necessarily find appealing on line, or may not be in your preferred neighborhood. Sometimes buyers reject seeing a listed property, only to later realize that it could have been a great home for them. Pictures can be deceiving, and for the right price a home that needed something to make it “perfect” – like a little updating, could be a great home for you at the right price. The same goes for a home outside of your desired neighborhood.
Monday, December 14th, 2015
California Assembly Bill AB-139 will take effect January 1, 2016. It will allow homeowners to avoid probate and designate one or more beneficiaries to inherit their properties upon their death, without the creation of a trust. Upon the death of the homeowner, ownership would pass immediately to the beneficiary, without having to go through probate proceedings.
Designation of a beneficiary in the deed does not take away any rights of the property owner during her/his lifetime. She/he retains 100% control over the property during lifetime, and can still sell, place liens on the property, or borrow against the property with no need to inform the beneficiary named in the deed. The homeowner is also free to revoke the designation at any time during his or her life.
This low cost alternative is a great way to protect your property from probate. If you would like to discuss taking advantage of this new law, contact my highly recommended colleagues at In a Pinch Business Services at 760-536-3637, or visit www.inapinchonline.com The fee for creation of this document is $95. You can also contact your attorney.
For more information on the new bill please Click here
Thursday, November 12th, 2015
Home owner associations (also called HOAs) can become a big part of the buying decision for home buyers – some love them, some despise them. If you live in an area where there are many neighborhoods that have HOAs, or if you are thinking of moving to one, you may wonder whether they are positive or negative.
Let’s take a look at the pros and cons of HOAs, so that you can decide for yourself.
– Expenses keep the neighborhood and any common areas (streets, landscape, lighting) looking their best, which keeps property values higher. Without a governing body things could get sticky if neighbor participation is needed to fix problems.
– They protect you from having to live with unattractive decisions made by your neighbors (putting a car engine back together in the driveway, painting a garage or front door an unsightly color, dead landscape, neglected painting, siding, trim, etc.). Noise abatement, fire setback landscape maintenance rules, and other rules help keep you sane and protected
– Pet restrictions may save your hearing if your neighbors have dogs that bark a lot or use your yard as a toilet
– HOAs mediate disputes amongst neighbors. If your neighbor’s dog barking wakes you up, or if they over-water landscape and it runs into your yard – or many other types of problems that may arise – the HOA is there to reach out to the neighbor and try to resolve the issue for you. This can save your sanity and prevent strained relations with your neighbors.
– They can be expensive
– They dictate what you can and cannot do on your property (e.g landscape plans, paint choices, structural changes)
– There may be pet policies that restrict types or numbers of pets one is allowed to have on the property
– HOAs can place a lien on your property, or even force a foreclosure in some cases, if you do not pay your dues on time, which can create problems if you decide to sell your home. It can also affect your credit.
– Dues can be increased at any time, especially if there is a big ticket item that needs to be repaired (e.g. if there is a community pool and it needs to be resurfaced, or a clubhouse that needs a new roof).
The bottom line is that HOAs have both good and bad points. You have to give up some freedom to live in an HOA community, but you also can rest assured that neighbors won’t do crazy things to their properties (or at least won’t be able to get away with it) that can affect the value of your home. Also, not all HOAs are equal – some may be very good at management while others may not.
Before you consider buying a home in an HOA community you should do the following:
- Ask the neighbors how they feel about the HOA, and call them with any questions you may have.
- Make sure to read through all the HOA material you will receive from escrow, so you understand the rules and regulations you will be subject to as a homeowner – this caused one escrow to be cancelled in my years working as a real estate agent.
Tuesday, October 22nd, 2013
Tuesday, August 27th, 2013
Monday, July 8th, 2013
One of the biggest questions in real estate right now is whether the market will continue to see rising prices. Many areas, including San Diego county, have seen price spikes over the last 6 months or so, anywhere from 10% to over 20%, depending on the neighborhood. We know that one of the main reasons for this is the lack of inventory combined with the time of year and low interest rates…but what will happen if those rates go up and as we head into Fall and Winter?
Inventory: Inventory will continue to play a big part in the market recovery, as well as help determine whether prices will continue to rise and the response thereto. It is a unique time right now because it is summer – the time when many buyers think of purchasing, and sellers think of selling. The demand is still very high in North San Diego, and I have agents calling me long after I close listings, asking if I have any others coming up in the neighborhood – AND if I have listings coming up in other places, so there are still buyers out there looking, with little to choose from.
There are several schools of thought as to what will happen to inventory levels moving forward, and how this might effect the market. As I always say, this will be determined by the specific market area, but as long as inventory remains low and there is a demand for properties I do not suspect we will see a drastic slow down in price increases; however I do think that as we coast through the remainder of the summer we will likely start to notice a leveling off, due to the factors below.
Interest Rates. If you have looked at the news lately you have seen that interest rates have risen in the last month, several times, and are expected to continue to do so. Some people fear that it will be the end of the housing recovery if they do in fact rise substantially, but as long as there is demand – and there still seems to be a great deal of it in San Diego – I do not think we will see a big drop in sales despite rising rates…after all, if you look at the rates from a historical perspective slight rises will still be considered low interest rates!
Interest rate effect on new inventory. One interesting thing to ponder is what effect rising interest rates will have on would-be sellers: those who have been thinking of selling but have been waiting (most for prices to continue to rise, many who are underwater and are waiting for the break-even point so they can get out from under there hefty mortgages). If we continue to see a spike in interest rates it is possible we may see a surge of inventory hit the market, created by a fear that buyers will no longer choose to purchase should the rates spike. This could be positive news for local markets, as the supply would be welcomed and met by the demand.
Another idea to consider is that those who have been searching for homes, getting outbid and frustrated with not finding homes, may decide to sit back should rates rise; the more probable scenario is that these buyers will want to jump into a purchase even quicker, and may step up their searches and even increase their range and criteria, in order to get into a home before the rates go up even more. It will be interesting to see the effect this has on the market, but I do not think it will be negative, at least not right away.
Distressed inventory. Over the years distressed and bank owned inventory has had an effect on home prices, playing a big role in gains. However, these sales have decreased in the last year, with REO (bank owned) sales decreasing by more than half. Radar Logic reports that from February of last year to April this year, REO sales declined from 26 percent of all home sales to 11 percent. This causes prices to increase more quickly than normal. If we see a return of these types of properties it could have an effect on prices, but I do not believe such would cause prices to go down, rather I think we would see a slower gain period moving forward.
Call it what you will, but a rise in interest rates could be a boost to local markets, at least those that have been climbing out of the doldrums of the crash and appear to be healthy and competitive. If you are thinking of buying or selling, this could just be the perfect time to do so, especially if you are now able to get out of an underwater loan and break even. Remember, after the market crashed many kept waiting for prices to “hit the bottom;” some people waited too long and missed out on purchasing property at the lowest levels. I do not believe prices will drop in San Diego, but rather I forsee a stabilization, combined with a “normal” annual rate of growth moving forward starting in 2014.
If you are interested in a detailed market analysis of your or other San Diego neighborhoods, please let me know.
Wednesday, May 8th, 2013
Thursday, February 21st, 2013
Sellers rejoice: it is finally a sellers’ market in many areas. For those homeowners who need or want to sell, this news has been a long time coming, after the last few years of the housing market collapse and bad news. There are some very positive market conditions that accompany this changeover:
Home price increases: If you follow the housing market in your area you may have noticed that prices are increasing in most areas (of course, you should check with your local real estate professional, as every area is different). The median national home price has increased 12.3% in San Diego county from this time last year, according to the National Association of Realtors (NAR).
The great news is that this will move many homeowners from being underwater, to being able to finally sell and move on. Many of these people were “stuck” in their homes because they owed more than their homes were worth. Zillow reported that over 2 million homeowners came out of the negative equity doldrums on their homes in 2012, and that is expected to continue this year. Over the next year we will see many of these underwater homeowners get out of negative equity situations, which will then increase the inventory levels and bring the market back into “normal,” aka healthy, status.
Increase in buyer demand: Also, according to NAR, buyer traffic has increased 40% from a year ago. There are many buyers out there ready to buy, and less inventory for them to see. This keeps prices climbing and leads to…
Multiple offers: Many listings are obtaining multiple offers, and many are also selling not only over comparable market value, but over appraised value. Lots of buyers are willing to pay cash out of pocket for homes where their appraisal has come in too low (they pay the difference between the appraisal and the sales price), thus driving neighborhood comparables upwards.
Market times have decreased: Due to all the above factors, market times have decreased and homes are selling more quickly. In San Diego county, average market times decreased for almost every city. The average days on market in North San Diego for detached homes was 36, down from 48 days in December 2012. Market time for attached homes similarly fell in the majority of San Diego county cities, some as much as 84%, with the median attached home market time all across the county at 48. (Source: HomeDex)
The market is improving and all signs are pointing toward a healthy 2013 for the real estate market. The biggest plus is that we will eliminate the negative equity situation for many homeowners, creating more inventory for buyers, and allowing many current homeowners to sell and purchase properties that are more cost-efficient for them. All this, of course, will create higher home values, which benefit neighborhoods.
All in all, this is a great time to be in the position to sell, so get your home in tip-top shape and enjoy the turn of the market. If you are thinking of selling your home, it is important to consult with an experienced neighborhood real estate agent.
Sunday, February 17th, 2013
Just in case you needed more reasons as to why it is advantageous to buy a home, here is an extensive list about the advantages and disadvantages of owning and renting…
- May be cheaper than a mortgage payment
- Fewer (if any) maintenance costs
- No down payment required (less deposit)
- No real estate taxes (renters insurance optional)
- Less stress (who cares, it’s not yours!)
- Freedom to move or downsize when necessary
- No risk of home price depreciation
- Some utility bills may be included
- “Free” amenities such as pool, gym, security
- Money can be used for other, more profitable investments
- Can’t be foreclosed on (but you can be kicked out at the end of your lease if the owner is foreclosed upon)
- Rental payment may exceed monthly cost of mortgage
- No ownership or wealth creation
- Payments never stop when renting
- Rent will rise over time
- Must deal with a landlord or management company
- No tax benefits
- Rules, regulations, and limitations
- More temporary, less stability
- Always at the mercy of the property owner
- Pets may not be allowed
- You can build home equity and wealth
- Status- Status-Status
- Sizable tax deductions possible
- Your space, your rules (pets welcome)
- Ability to remodel, expand, tear down
- Pride of ownership (social status, accomplishment)
- Potentially better for children, family structure
- Mortgage can improve your credit history/score
- Ability to borrow against your home (HELOC or cash-out)
- No more monthly payments once mortgage paid off
- Fixed payments (if you choose a fixed mortgage)
- Mortgages are the cheapest loans available
- No landlord
- Can exclude capital gains when you sell (partially)
- Inflation hedge
- Can rent out to others
- Can sell and use proceeds for bigger/better home
- Retirement nest egg
- It’s the American Dream!
- Home prices may lose value
- Could overpay for your property
- Obtaining a mortgage (and finding a home) is a hassle
- Not everyone qualifies for a mortgage
- You must pay taxes and homeowners insurance
- Total housing payment can be more expensive
- Mortgage payment can rise (if an ARM)
- Sizable down payment necessary
- Maintenance costs can be excessive
- Pricey HOA dues (if applicable)
- You’re “stuck” in a home (long-term commitment)
- Increased liability and responsibility
- Transactional costs of buying and selling
- Ownership is stressful!
- Taxes and insurance generally rise
- Your home can be damaged or destroyed (and not fully insured)
- Can be foreclosed on and lose your home
The preceding post was written and shared with permission by Dan Dobbs, of Capital Mortgage Services. He can be reached at DanDobbs6@gmail.com, or http://danieldobbs.org. Or call him at 949-250-3981. DRE#00986886, NMLS# 307631