Posts Tagged ‘North San Diego Realtor’
Wednesday, March 14th, 2018
The reality of rising mortgage rates is of concern to home buyers and sellers. Normally interest rate increases alone would not be much of a concern but combined with continued low inventory and high prices many wonder if the housing market will be able to sustain itself; there are 3 – 4 expected rate increases remaining this year.
I feel it is safe to say that rising interest rates will have an effect on housing affordability and inventory. Here is how I see it:
1. Higher rates mean many buyers will not be able to afford the house they could afford today (if inventory was not an issue). Many people, especially the would-be first time home buyers, may choose to continue renting or live with parents. If there is less demand for the homes that are on the market, prices will drop.
2. Sellers may continue to withhold homes from the market for the same reason – if there is no inventory for them to move either up or down, selling may not make sense. Especially when you take into consideration the higher rates, plus property tax increases for move up buyers. With less homes hitting the market we will continue to see inventory shortages, BUT combined with higher rates, which could lead to lower demand, prices should start to come down.
3. Luxury markets will face even tougher challenges as rates rise. Combined with the new tax laws, which raise tax on purchases for loans over $750,000, many potential luxury buyers may decide to hold off. Luxury sellers will likely see longer market times and lower prices.
It is important to keep in mind that every market is different. Here in San Diego we have year-round desirable inventory due to weather and location – but the coming changes will affect us and could alter the second/vacation home market purchases as well. It is important to consult a local area real estate agent to understand what is going on in your specific area.
If the inventory rut continues on this path it could lead to a big problem in the real estate market. I feel, and many economists and real estate market watchers agree, that it will stall purchases, keep sellers in homes they would have otherwise sold, and have a deep effect on buyers currently in the market and future buyers. As we head into the Spring and Summer it is a good time to think about selling and purchasing, prior to further rate increases.
Wednesday, November 1st, 2017
As a home seller it is imperative that you make sure you do everything you can to avoid lawsuits from your new buyers. Failure to disclose has been one of the most litigious causes of action in real estate law. Upon selling property, sellers must disclose all they know about the property according to state mandated forms â€“ this usually includes past insurance claims, any upgrades or improvements, damage to the property, repairs, noise issues, and many other questions. Sellers must answer these questions to the best of their knowledge, and provide explanations and any necessary receipts to verify the claims. But what happens when other people who work on your home make a discovery that could render the home undesirable?
The most recent case, RSB Vineyards, LLC v. Bernard, was upheld by the California Court of Appeals. The court ruled that a seller must have had ACTUAL KNOWLEDGE to be held liable for non-disclosure, and a contractorâ€™s knowledge is not imputed to the seller. In lay terms, this means that if a seller hires a contractor to do work, and the contractor discovers something about the property, the seller cannot be held liable unless the seller was made aware of the problem by the contractor.
In the lawsuit the contractor had converted a residence into a wine tasting room on vineyard property that was later found to be structurally unsound â€“ the buyers found out after they purchased the home and had to demolish the structure. They sued the seller for failure to disclose. The contractor was found to have known about the problem but there was no â€œactual knowledgeâ€ by the sellers.
In many areas of disclosure here in California, the seller CAN be held liable for items about which they should have known. For example, if the sellers notice water stains on a ceiling of a room and do nothing about it, then have the ceiling painted prior to sale, without disclosing the stainâ€¦this would likely render the seller liable for failure to disclose, as the water stains obviously indicate some kind of problem. Note that had the seller disclosed the stain and not painted over it, s/he would not be liable. It would then be up to the buyer to investigate and ask for repairs if problems were discovered.
If you are selling a property it is very important to answer ALL questions on the disclosures to the best of your ability. Back up any claims with receipts, documentation, etc. I always tell my clients it is better to over-disclose. Put everything out there so that you do not have to worry about liability down the road. If you are made aware of any issues by a third party, make sure to include that in your disclosures so the buyer can look into it further.
If you are ever unsure of whether or not to disclose something, the rule of thumb is that you should do so. However, I suggest obtaining legal advice…or if your real estate agent happens to be an attorney that could help too 🙂
Monday, July 20th, 2015
The real estate market has been literally HOT for some time now – both 2014 and 2015 have shown record sales and that doesn’t seem to be slowing down. It is still a seller’s market, inventory and interest rates are low, and it is the prime “selling season.” But how long can this last?
There are several factors that could have an impact on our real estate market moving forward. Let’s look at those and analyze the possibilities:
1. New federal government policies. There are 2 big policies that are about to take effect which could have an impact on real estate sales. One of these could actually stimulate more sales because it advocates lower downpayment requirements and loosens up loan underwriting standards, which could help buyers, especially first time homebuyers, realize their homeownership dreams.
The other program on the horizon could have a detrimental affect on real estate sales. Home buyers and sellers will face a new hurdle in the sales process, one that could extend escrow periods – possibly for lengthy periods – and may cause other delays and issues.Â New requirements are being implemented that will make loan disclosures much stricter starting October 3, 2015. While the theory behind the disclosures makes sense, the implementation is sure to cause many headaches. In a nutshell, every time there is a change to any terms in the purchase contract, the borrower will receive new disclosures, and with it a new period to review them, which could extend the buyer’s contingencies for lengthy amounts of time, thus extending escrow periods.
For example, say you are purchasing a home and everything is going along well, and you have a few days left to remove your contingencies. You have a home inspection and there are repairs you feel the seller should make, so you present a repair request. The seller agrees to credit you money toward closing costs so you can repair those issues after the close of escrow. Your lender will now have to issue new disclosures to you because you are changing the terms of the contract (by getting a credit back through escrow), and you will have more time to review these new disclosures. This will extend your contingency period – it is risky for sellers because it means their homes will be held up in escrow for longer periods, or at least they will be off market without a non-refundable deposit for a longer period of time. For more information on this topic visit the Consumer Financial Protection Bureau.
2. Foreign investors: Over the last few years foreign homebuyers have invested quite a lot of money in U.S. real estate markets. But with the strengthening of the dollar and weakening of other currency, there are many economists who predict these investments will start to ebb.
3. Decline of new construction: New construction has picked up in some places over the last few years, but in this seller’s market it is not increasing at a rate to keep up with demand for homes, especially entry-level properties in many markets.
4. Interest rate changes -? At some point rates will need to move upwards, and this could obviously put some entry-level buyers out of the market. While it doesn’t look like this will be the case any time in the near future, it is inevitable at some point.
I feel that the current market will remain strong moving forward, at least for some time. With the new policies and state of the factors mentioned above it is foreseeable that things could slow down possibly in a year or so. But like I always say, location is a big part of the picture – here in San Diego we will always have a desirable market due to our weather and proximity to the ocean. For specific market news and predictions in your hometown, consult a licensed and experienced area real estate agent.
Friday, August 5th, 2011
It has been a month and I have yet to hear from three lenders on approval of three short sale offers. While I know a month is not long comparatively speaking, my frustration grows on behalf of my buyers, who are all well-qualified and ready to open escrow. Amidst all the news that short sales are getting shorter (which they are, for the most part), and lender attempts to make the transactions easier to track, it makes me wonder: what do these lenders really want?
The answer should be simple: they want to get another home sold and off their books, in order to avoid the costs of another foreclosure. Theoretically we should all be on the same page – the sellers, buyers, agents and lenders. We all want to get the home sold, right?
From a logical perspective it seems selling the home via a short sale is the best bet for the lender – they save money by avoiding foreclosure (in legal fees, maintenance costs and costs of owning a home). But what DO they get by stalling? Surely there must be something, right? They have all beefed up their staff in the loss mitigation departments, created programs to enable all parties to follow the progress, so what is really happening here?
The bottom line is that banks do what they do for one reason: to make money. So if they are not working faster to close short sales it must mean there is no money in it for them, or more money to be made by going a different route. So here are some possible reasons why banks are not moving along faster in the short sale arena:
1.Â If the mortgage is insured, the lenders and investors can file a claim to recover some of the money if they go to foreclosure instead of agreeing to a short sale. This idea centers around the practice of lenders pooling a bunch of properties they own together, in order to sell to investors, and then obtaining mortgage insurance on the bunch. Most of the time the owners of those properties have no idea about the mortgage insurance, yet lenders try to make them pay for the losses in many short sale cases, and/or the mortgage insurance companies have to approve the sale…this is insane!
2.Â By keeping the short sales off the books they pay less money to the government by keeping their quarterlies down. Thus the reason some homes sit vacant for a long time…banks must make more money down the road by stalling, thus the reason many homeowners end up living in their homes rent-free for long periods before the lender evicts them and initiates foreclosure.
3.Â The lender may decide a foreclosure will net a higher sales price down the road, or more money in the lender’s pocket in some other way, in the long run . This reason is a bit of a catch-all…there may be other factors we don’t know about in time that will net more money for the lenders.
4.Â Senate bill 458, which just went into effect in July (and prevents junior lien holders from going after the seller for the money owed on the loan post-sale), although well-intended to protect sellers, could put a snag in the process as well. There are reports that junior lien holders are now asking for higher sums of money in order to sign off their acceptance of the short sale – from the several thousand many have accepted in the past to tens of thousands, which in most cases the seller cannot pay, nor are most buyers wiliing to do so.
Trying to figure out why short sales still take so long is not an easy task, but you can bet it all has to do with money. If the banks can make more by waiting or going through with foreclosure, they will. While some lenders have taken steps to indicate they do want to embrace these sales and make time frames shorter, we are all at their mercy and it is all about the money.
Friday, July 22nd, 2011
Have you been considering buying a home, maybe for the first time, maybe to move up or down? Have you been waiting for the market to hit bottom, for prices to fall, for loan rates to get lower? Guess what? It is that time. Yes, I am a Realtor, and my telling you this may sound self-serving, but let me tell you why that is not the case:
1.Â Rates are still low. They will get higher – that is something I would be money on. There are a few reasons why. One is that they have been historically low for a long time and it is inevitable. Another reason is that there could be some big changes coming up in the loan industry (see below), which will make them rise.
2.Â Qualifying for a loan is not going to get any easier. Lenders are still reeling from the housing crash and make it difficult to qualify new borrowers (believe me, I have seen it happen to my own clients). If the new rules pass in September, come October 1 loan limits will decrease, meaning buyers will have to put MORE money down in order to qualify for a loan, and limits will be lower so that means less of a loan (buyers will have to buy smaller homes, or maybe even consider different areas/neighborhoods).
3.Â Down payment requirements could rise. If the loan limit rates decline the downpayment amounts will increase. Borrowers will have to pay more money up front to get a loan. This will make buying a home a pipe dream for many Americans.
4.Â There are still some great loan products out there. FHA loans require much lower downpayments and better interest rates. If the new limit restrictions pass they will have an effect on these loans.
5.Â Selling a home could get much more difficult. If the loan rates change it may effect sellers the most, especially in higher priced areas like San Diego county. Buyers who could qualify for a loan to buy a home may no longer be able to afford that much house, so sellers may have a hard time finding qualified buyers. Many homeowners may not be able to sell their homes, which could lead to more foreclosures. Property values will go down, but who will buy these properties? One theory is that the lenders will simply rent them out rather than try to sell.
6.Â It is a great time to negotiate! With the market slower than usual for the time of year, and the many well-priced homes out there that are available (especially short sale and lender owned properties), buyers are in the driver’s seat as far as negotiations are concerned. There are some stubborn sellers out there, but if you encounter that situation you can always find another property that is ripe for negotiation.
7.Â Learn from who is buying now. If you look closely, especially in the attached home market, you will see many investor buyers. As I have said before, this is a sign. It is a sign that now is the time to buy. I am personally working with multiple investor clients right now, and they are getting great deals on short sale and lender owned properties.
I get asked all the time what the market is like, how we are faring here in North San Diego. The market is doing much better than in some other areas of the country, but we are still struggling a bit. Prices have come down, and will likely continue to do so. If the new loan limit reductions pass it will create qualification problems for many buyers and for sellers as well. Right now you can still lock in a very low rate (today’s conforming rate on a 30 year fixed mortgage isÂ 4.5% with no points). There is a decent amount of inventory out there.
So, here is my pledge to you: I will do my best to help you find the right property, at the right price – if you don’t there is no pressure at all. Use me as a tool to help you, because that is what I am here for. I will provide all the information you need about any home we find. You don’t need to sign any agreement, I won’t make any demands on you. I offer you honesty and professionalism, and all you have to do is call me. I will be around all weekend. 760-310-9466