Last month, San Diego County saw its highest home-sale count for a March month since 2006 as it entered another spring home-buying season, Tuesday's numbers from DataQuick show.
A total of 3,237 homes were sold in March, up 19.5 percent from February and up nearly 6 percent from a year ago. Big percentage bumps are natural from February to March throughout Southern California, historical records show, but it appears this is the best March San Diego County has seen in six years, when a total of 4,367 homes were sold.
Related: San Diego housing inventory dips
Improvement aside, sales are still far below from pre-recession levels. The current housing cycle's peak was 6,926 transactions in June 2004.
"The year is young and lots could still change," said DataQuick John Walsh in the company's latest Southern California report. "But the results from the first big sales month of 2012 suggest the market is stuck in low gear. This remains a very gradual – not to mention fragile – recovery."
Sales saw the most oomph in the markets of single-family resales and new properties, in which tallies increased almost 10 percent and 27 percent, respectively, from a year ago. However, both submarkets saw their values in March fall from a year ago. Prices for single-family resales dropped 4.2 percent to $350,000, and almost 26 percent to $392,000 in the new-home market.
Can the county keep the sales surge alive this spring?
Clemente Casillas, a real estate broker in the South Bay, said it's too early to tell and that March's surge could be a fluke. Still, historically low mortgage rates and lower-than-normal prices in certain areas could push potential buyers off the fence, he added.
"I have a listing that hadn't gotten a call in a while," said Casillas, referring to a College Area home being offered in the $200,000 range. "(Now,) I've gotten two or three offers ... The price came down."
The median price for total sales bumped up 5.1 percent from February to $320,500, but fell 1.4 percent from a year ago. Prices fared the best among condo resales: The median price last month was $220,000, up almost 14 percent from February and up 6.3 percent from a year ago. Again, despite the improvement from a year ago, condo prices in the county are still far below their peak of $400,000 in March 2006.
The consumer demand for Southern California homes in the different price ranges continues to look disparate. Sales of homes below $300,000 increased more than 2 percent from a year ago, and sales exceeding $800,000 dipped 5.6 percent during the same time frame.
Thanks to Lily Leung for writing this piece.
Wednesday, April 18, 2012
Monday, January 30, 2012
Condo Buyers Frustrated in Hunt for FHA Mortgages
CHICAGO (Source: By Mary Ellen Podmolik Chicago Tribune) — Buying a condominium is getting trickier for anyone who wants to put down only 3.5 percent and have the government insure their mortgage.
The issue isn’t just the borrower’s financial wherewithal. It’s the building’s, and plenty of condos no longer get a thumbs-up from the Federal Housing Administration.
Since Feb. 1, 2010, condo buyers haven’t been able to secure unit-by-unit “spot” approval for FHA-backed mortgages if an entire building was not certified. Instead, the federal government set criteria to determine the financial viability of an entire building before deeming the project as FHA-approved, even if it had previously been certified. An approval lasts two years.
The number of rejected buildings is adding up, due to bad paperwork and bad balance sheets as an increasing number of condo associations struggle with rentals, short sales and foreclosures. It is jeopardizing the plans of condo sellers who rely on the FHA’s stamp of approval as a marketing tool and condo buyers who either want or need an FHA-approved building.
The effects of those rejected buildings are likely to linger, particularly if more stringent down payment requirements take effect for homebuyers, and could hamper any recovery of the housing market.
For the first nine months of 2011, the FHA’s share of the overall home purchase market was 37.4 percent nationally, but the share for condos would have been higher because FHA-insured loans are popular with condo purchasers, said Guy Cecala, CEO and publisher of Inside Mortgage Finance. “They have the most-used program out there,” he said.
Since Oct. 1, 38 percent of condominium communities that have gone through the certification process have been rejected by the FHA.
“It’s a critical year for buildings,” said David Hartwell, a Chicago attorney who represents condo and homeowner associations. “This is a whole new world that we live in now. I see more rejections than acceptances, and the reasons I see clients rejected aren’t quickly curable.”
For buyers like Kristy Fender, of Chicago, FHA certification is a must-have on her list, and not just because it lets Fender and her fiance, Dan Harvey, make a smaller down payment on a home purchase. She also figures that in approving buildings the FHA is doing the due diligence that she would otherwise have to do.
But the process has been much more complicated than Fender imagined, and she’s wasted a fair amount of her time. During the past few months that she’s looked at units in Chicago’s South Loop, she’s incorrectly been told that a unit can get spot approval and has looked at units that were listed as FHA approved, only to find out the certification had expired. Her real estate agent, Bette Bleeker of Prudential Rubloff, wound up routinely checking property listings against the FHA’s website of approved buildings.
“It’s been very frustrating,” Fender said. “There’s a lot of wishy-washy information out there.”
Fender and Harvey now plan to make an offer on a South Loop condo, but the offer will be contingent on the association getting the building certified for FHA financing. Bleeker has spoken with the building’s management company.
“If sellers were aware of it, they would certainly be more proactive with their management companies and not let their certification lapse,” Bleeker said. “There’s a whole education curve that needs to be done here, at the buyer level and the seller level.”
Many times, particularly in smaller buildings, it is a real estate agent or lender that informs an association that its certification has expired.
In addition to not knowing about the process, a lack of knowledge of the rules and the many gray areas within them is compounding issues for condo buildings. So, too, is not submitting all the required documentation. Many buildings are denied simply for missing or incomplete paperwork, which has led to the creation of a cottage industry of companies and attorneys that help shepherd associations through the process.
“It seems like there’s always something additional that (the FHA) wants,” said Steve Stenger, president of Condo Approval Professionals LLC. “Once it expires, FHA lending stops. Lenders can’t get case numbers; the FHA won’t insure them. That whole section of financing dries up.”
(EDITORS: BEGIN OPTIONAL TRIM)
Among the specifics that the FHA looks at is that a building is 50 percent owner occupied, that no more than 10 percent of units are owned by one investor or entity, that no more than 15 percent of the units are 30 days past due on their monthly assessments, and that at least 10 percent of the association budget be set aside for capital expenditures and deferred maintenance. But some of those rules also come with a little wiggle room.
The FHA also looks at special assessments and pending litigation, two areas that can raise red flags.
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“It’s really not that onerous,” said an FHA spokeswoman. “A lot of it is just basic information. We do have some that have been appropriately rejected because they are unstable.”
Financially, the 249-unit condo building at 1620 S. Michigan Ave. in Chicago is stable, said condo board President Jeanette Johnson. Nevertheless, she worries that the building won’t pass the test when its certification expires next month because of the high number of renters residing in units.
“I’m anticipating that the board will try to do the recertification, but I don’t know if we’ll qualify,” she said. “We’ll need to evaluate that before we spend any money. It’s definitely on the radar screen.”
If the building doesn’t qualify, Johnson said, it’s likely the board would look to change its declarations and bylaws, itself a difficult and lengthy process, to gradually reduce the number of renters allowed in the building.
The Community Association Institute believes the FHA’s requirements are having a “chilling” effect on the market, and the trade group has asked for flexibility in the guidelines.
“When it comes to the condo market, that is the gateway to affordable housing, and FHA should play a critical role in that,” said Andrew Fortin, a vice president at the trade group.
(END OPTIONAL TRIM)
The FHA hopes to publish its condo certification rules in the Federal Register this year for public comment. Among the areas that may be open to additional flexibility is the requirement that no single entity can own more than 10 percent of a building’s units, a spokeswoman said.
But in the meantime, associations continue to grapple with the rules.
“There are new, more onerous guidelines to comply with, and there are definitely challenges,” said Jason Will, national condominium sales manager for Wells Fargo Home Mortgage. “The smaller or self-managed homeowners association might not be aware of the guidelines changes until they have a buyer. You actually have a real transaction in jeopardy.”
(EDITORS: STORY CAN END HERE)
Some associations are deciding that the effort and the expenses tied to the application process, which can run into the thousands of dollars, aren’t worth the payoff and are letting their certifications lapse. In some instances, that position reflects a bias against what are thought to be lower-caliber buyers who need the FHA’s backing.
“It’s the owners that are trying to sell their units versus the owners that want to live in their units,” said Jonathan Bierman, a property manager at Forth Group, a condo association management company.
Many in the housing industry say that position is short-sighted, given consumer demand for FHA-backed mortgages.
“In an economy where it’s difficult to sell your condo, (FHA approval) is almost imperative,” said Kerry Bartell, a Buffalo Grove, Ill., attorney who represents homeowners associations. But, she noted, “We have a lot of clients that say they want to do FHA certification, and we say, ‘Don’t spend the money, because you’re not going to make it.’ ”
___
©2012 the Chicago Tribune
Source: By Mary Ellen Podmolik Chicago Tribune
Tags:Condo Buyers, financial markets, Mortgage Market, real estate news,san diego real estate,short sales
The issue isn’t just the borrower’s financial wherewithal. It’s the building’s, and plenty of condos no longer get a thumbs-up from the Federal Housing Administration.
Since Feb. 1, 2010, condo buyers haven’t been able to secure unit-by-unit “spot” approval for FHA-backed mortgages if an entire building was not certified. Instead, the federal government set criteria to determine the financial viability of an entire building before deeming the project as FHA-approved, even if it had previously been certified. An approval lasts two years.
The number of rejected buildings is adding up, due to bad paperwork and bad balance sheets as an increasing number of condo associations struggle with rentals, short sales and foreclosures. It is jeopardizing the plans of condo sellers who rely on the FHA’s stamp of approval as a marketing tool and condo buyers who either want or need an FHA-approved building.
The effects of those rejected buildings are likely to linger, particularly if more stringent down payment requirements take effect for homebuyers, and could hamper any recovery of the housing market.
For the first nine months of 2011, the FHA’s share of the overall home purchase market was 37.4 percent nationally, but the share for condos would have been higher because FHA-insured loans are popular with condo purchasers, said Guy Cecala, CEO and publisher of Inside Mortgage Finance. “They have the most-used program out there,” he said.
Since Oct. 1, 38 percent of condominium communities that have gone through the certification process have been rejected by the FHA.
“It’s a critical year for buildings,” said David Hartwell, a Chicago attorney who represents condo and homeowner associations. “This is a whole new world that we live in now. I see more rejections than acceptances, and the reasons I see clients rejected aren’t quickly curable.”
For buyers like Kristy Fender, of Chicago, FHA certification is a must-have on her list, and not just because it lets Fender and her fiance, Dan Harvey, make a smaller down payment on a home purchase. She also figures that in approving buildings the FHA is doing the due diligence that she would otherwise have to do.
But the process has been much more complicated than Fender imagined, and she’s wasted a fair amount of her time. During the past few months that she’s looked at units in Chicago’s South Loop, she’s incorrectly been told that a unit can get spot approval and has looked at units that were listed as FHA approved, only to find out the certification had expired. Her real estate agent, Bette Bleeker of Prudential Rubloff, wound up routinely checking property listings against the FHA’s website of approved buildings.
“It’s been very frustrating,” Fender said. “There’s a lot of wishy-washy information out there.”
Fender and Harvey now plan to make an offer on a South Loop condo, but the offer will be contingent on the association getting the building certified for FHA financing. Bleeker has spoken with the building’s management company.
“If sellers were aware of it, they would certainly be more proactive with their management companies and not let their certification lapse,” Bleeker said. “There’s a whole education curve that needs to be done here, at the buyer level and the seller level.”
Many times, particularly in smaller buildings, it is a real estate agent or lender that informs an association that its certification has expired.
In addition to not knowing about the process, a lack of knowledge of the rules and the many gray areas within them is compounding issues for condo buildings. So, too, is not submitting all the required documentation. Many buildings are denied simply for missing or incomplete paperwork, which has led to the creation of a cottage industry of companies and attorneys that help shepherd associations through the process.
“It seems like there’s always something additional that (the FHA) wants,” said Steve Stenger, president of Condo Approval Professionals LLC. “Once it expires, FHA lending stops. Lenders can’t get case numbers; the FHA won’t insure them. That whole section of financing dries up.”
(EDITORS: BEGIN OPTIONAL TRIM)
Among the specifics that the FHA looks at is that a building is 50 percent owner occupied, that no more than 10 percent of units are owned by one investor or entity, that no more than 15 percent of the units are 30 days past due on their monthly assessments, and that at least 10 percent of the association budget be set aside for capital expenditures and deferred maintenance. But some of those rules also come with a little wiggle room.
The FHA also looks at special assessments and pending litigation, two areas that can raise red flags.
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Please go to the plugin admin page to paste your ad code.
“It’s really not that onerous,” said an FHA spokeswoman. “A lot of it is just basic information. We do have some that have been appropriately rejected because they are unstable.”
Financially, the 249-unit condo building at 1620 S. Michigan Ave. in Chicago is stable, said condo board President Jeanette Johnson. Nevertheless, she worries that the building won’t pass the test when its certification expires next month because of the high number of renters residing in units.
“I’m anticipating that the board will try to do the recertification, but I don’t know if we’ll qualify,” she said. “We’ll need to evaluate that before we spend any money. It’s definitely on the radar screen.”
If the building doesn’t qualify, Johnson said, it’s likely the board would look to change its declarations and bylaws, itself a difficult and lengthy process, to gradually reduce the number of renters allowed in the building.
The Community Association Institute believes the FHA’s requirements are having a “chilling” effect on the market, and the trade group has asked for flexibility in the guidelines.
“When it comes to the condo market, that is the gateway to affordable housing, and FHA should play a critical role in that,” said Andrew Fortin, a vice president at the trade group.
(END OPTIONAL TRIM)
The FHA hopes to publish its condo certification rules in the Federal Register this year for public comment. Among the areas that may be open to additional flexibility is the requirement that no single entity can own more than 10 percent of a building’s units, a spokeswoman said.
But in the meantime, associations continue to grapple with the rules.
“There are new, more onerous guidelines to comply with, and there are definitely challenges,” said Jason Will, national condominium sales manager for Wells Fargo Home Mortgage. “The smaller or self-managed homeowners association might not be aware of the guidelines changes until they have a buyer. You actually have a real transaction in jeopardy.”
(EDITORS: STORY CAN END HERE)
Some associations are deciding that the effort and the expenses tied to the application process, which can run into the thousands of dollars, aren’t worth the payoff and are letting their certifications lapse. In some instances, that position reflects a bias against what are thought to be lower-caliber buyers who need the FHA’s backing.
“It’s the owners that are trying to sell their units versus the owners that want to live in their units,” said Jonathan Bierman, a property manager at Forth Group, a condo association management company.
Many in the housing industry say that position is short-sighted, given consumer demand for FHA-backed mortgages.
“In an economy where it’s difficult to sell your condo, (FHA approval) is almost imperative,” said Kerry Bartell, a Buffalo Grove, Ill., attorney who represents homeowners associations. But, she noted, “We have a lot of clients that say they want to do FHA certification, and we say, ‘Don’t spend the money, because you’re not going to make it.’ ”
___
©2012 the Chicago Tribune
Source: By Mary Ellen Podmolik Chicago Tribune
Tags:Condo Buyers, financial markets, Mortgage Market, real estate news,san diego real estate,short sales
Tuesday, January 10, 2012
New VA Loan Guidelines!
It is estimated that less than 50% of veterans take advantage of their VA benefit to purchase a home, studies show the main reason they do not is because they are unaware of the excellent purchase benefits they are entitled too. With over 2.3 million veterans now living in California alone, and with a large percentage of these based in San Diego, working with VA buyers presents a tremendous opportunity to help you grow your business and to also help our veterans purchase a home. VA purchases do have some different rules to follow when compared to regular purchases, so here are some tips to help you close more VA transactions.
San Diego 2012 VA loan limits drop from $537k to $477k
The VA just released their loan limits for 2012. Unfortunately for San Diego the VA lowered our 2011 VA loan limit from $537k down to $477k. This means that 100% VA financing is now only available to $477k for buyers in San Diego, whereas in 2011 this was available to $537k. You can check here for the new 2012 VA loan limits for your county. *For a purchase price over $477k, there is a special formula the VA uses to calculate what a VA buyers down payment requirement is. Feel free to contact me if you have a VA scenario and you want to calculate what a buyers new down payment requirement is.
Here are the most frequently asked questions in regards to VA purchases.
1. Who is eligible for VA financing?
A veteran is eligible for VA financing if he/she served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard and was honorably discharged after 24 continuous months of active duty, or the full period for which called, or ordered to active duty, but not less than 90 days (during wartime) or 181 continuous days (during peacetime).
2. VA buyers can purchase with $0 down payment?
As mentioned above, VA buyers can get 100% financing here in San Diego to $477k? VA financing is still the only loan program that allows 100% financing in any area (FYI the USDA allows 100% financing, but this is strictly for rural properties). As the FHA still requires a 3.5% down payment and most conventional loan programs still require anywhere from 3% to 20% down payments depending on the credit profile of the buyer, this is still putting home ownership out of reach for many buyers.
3. Easier qualification rules for VA buyers
Most banks have easier qualifying and credit guidelines for VA buyers. Because many first time buyers typically don’t have a lot of established credit, getting qualified for a conventional loan can be more difficult. Most VA lenders only need a 620 credit score to offer 100% VA financing. Also some VA lenders allow a buyer to qualify up to a 60% debt to income (DTI) ratio on VA loans, Fannie Mae is now capped at 50% and 45% in some cases.
4. VA buyers pay no monthly Mortgage Insurance
Another huge advantage for VA buyers is that they do not have to pay any monthly mortgage insurance (MI) on their loans, as these are backed by the government. Remember all FHA loans require mortgage insurance. So having no monthly mortgage insurance allows VA buyers to either purchase a bigger home or have have a lower monthly mortgage payment.
3 Tips to ensure VA purchase offers get accepted
There is a misconception out there that sellers discriminate against buyers using VA financing because of the following three reasons: 1. The low down payment requirement means less skin in the game. 2. The (misguided) perception that the seller must pay for some or all of the buyer's closing costs. 3. The (false) belief that VA appraisers are less generous in their appraisals. Here are 3 tips to debunk seller held credit myths about VA financing, so you can ensure your purchase offers will get accepted.
1. The zero down payment requirement means less skin in the game
We can't argue with this because VA does allow 100% financing, so this does amount to very "little skin in the game". But here is what you can do to strengthen the VA buyers profile, show the seller that the borrower has a DU approved loan (automated VA underwriting approval) and also include asset documentation (proof of reserves etc) to support that approval. This will assuage the fears a seller might have about a buyer (and that buyer's lender) performing with their financing.
2. The (misguided) perception that the seller must pay for some or all of the buyer's closing costs.
On VA transactions, the seller is NOT required to pay ANY costs for the buyer, but is allowed to pay up to 4% towards a VA buyers costs. There are certain "VA non-allowable" costs for which a VA buyer is forbidden to pay, (for example No escrow fees, wiring, notary, tax service or processing fees are allowed to be charged).
So here is a good tip to help get a VA offer accepted, so this issue of who covers these VA non allowable fees does not become an issue when negotiating a purchase price. It is advised that the following language be inserted in to the purchase contract so the seller is not put off by the VA offer: “Seller not responsible for any buyer closing costs, regardless of the selected loan program. All agency-related "non-allowable" costs to be borne by lender”.
3. The (false) belief that VA appraisers are less generous in their valuations.
There is a common misconception that VA appraisals usually come in lower. While I am sure that a lot of people have had a VA appraisal come in lower, I am sure they can say the same about FHA and conventional financing too. Underwriters and appraisers will point out, as long as the property is properly priced and the offer is reasonable, the VA appraisal should go smoothly. We have done on average 2-3 VA transactions a month for the past few years and I have only seen a value come in lower in maybe 10-15% of these VA transactions, which is similar for other forms of financing too.
VA Appraisal TIP. One of the most common appraisal value "hits' I have seen is when the purchase price is increased, above listing price, to accommodate for the seller-paid contribution. Be wary of that when submitting/accepting offers and have a back-up plan. If the appraisal does come in low make sure the buyer has additional reserves to potentially come in with more cash to close, because Remember the lender will only approve financing to 100% of the appraised value.
A great marketing opportunity, support our troops!
Because of the large number of veterans that are living in California, this represents a tremendous opportunity to work with VA buyers. My wives dad is ex military and her brother is currently in the Navy, so I especially enjoy working with VA buyers. I have always found that VA buyers are a pleasure to work with because they are very loyal and they communicate very well too, and it also feels good to know you are giving back a little to our armed forces by helping them obtain home ownership, as they sacrifice so much for all of us on a daily basis.
If you have any questions in regards to VA purchases please feel free to contact me directly at 619-325-4111. My lender is approved directly with the VA, so we are able to offer all the best programs that are available to our military friends. I look forward to chatting soon.
San Diego 2012 VA loan limits drop from $537k to $477k
The VA just released their loan limits for 2012. Unfortunately for San Diego the VA lowered our 2011 VA loan limit from $537k down to $477k. This means that 100% VA financing is now only available to $477k for buyers in San Diego, whereas in 2011 this was available to $537k. You can check here for the new 2012 VA loan limits for your county. *For a purchase price over $477k, there is a special formula the VA uses to calculate what a VA buyers down payment requirement is. Feel free to contact me if you have a VA scenario and you want to calculate what a buyers new down payment requirement is.
Here are the most frequently asked questions in regards to VA purchases.
1. Who is eligible for VA financing?
A veteran is eligible for VA financing if he/she served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard and was honorably discharged after 24 continuous months of active duty, or the full period for which called, or ordered to active duty, but not less than 90 days (during wartime) or 181 continuous days (during peacetime).
2. VA buyers can purchase with $0 down payment?
As mentioned above, VA buyers can get 100% financing here in San Diego to $477k? VA financing is still the only loan program that allows 100% financing in any area (FYI the USDA allows 100% financing, but this is strictly for rural properties). As the FHA still requires a 3.5% down payment and most conventional loan programs still require anywhere from 3% to 20% down payments depending on the credit profile of the buyer, this is still putting home ownership out of reach for many buyers.
3. Easier qualification rules for VA buyers
Most banks have easier qualifying and credit guidelines for VA buyers. Because many first time buyers typically don’t have a lot of established credit, getting qualified for a conventional loan can be more difficult. Most VA lenders only need a 620 credit score to offer 100% VA financing. Also some VA lenders allow a buyer to qualify up to a 60% debt to income (DTI) ratio on VA loans, Fannie Mae is now capped at 50% and 45% in some cases.
4. VA buyers pay no monthly Mortgage Insurance
Another huge advantage for VA buyers is that they do not have to pay any monthly mortgage insurance (MI) on their loans, as these are backed by the government. Remember all FHA loans require mortgage insurance. So having no monthly mortgage insurance allows VA buyers to either purchase a bigger home or have have a lower monthly mortgage payment.
3 Tips to ensure VA purchase offers get accepted
There is a misconception out there that sellers discriminate against buyers using VA financing because of the following three reasons: 1. The low down payment requirement means less skin in the game. 2. The (misguided) perception that the seller must pay for some or all of the buyer's closing costs. 3. The (false) belief that VA appraisers are less generous in their appraisals. Here are 3 tips to debunk seller held credit myths about VA financing, so you can ensure your purchase offers will get accepted.
1. The zero down payment requirement means less skin in the game
We can't argue with this because VA does allow 100% financing, so this does amount to very "little skin in the game". But here is what you can do to strengthen the VA buyers profile, show the seller that the borrower has a DU approved loan (automated VA underwriting approval) and also include asset documentation (proof of reserves etc) to support that approval. This will assuage the fears a seller might have about a buyer (and that buyer's lender) performing with their financing.
2. The (misguided) perception that the seller must pay for some or all of the buyer's closing costs.
On VA transactions, the seller is NOT required to pay ANY costs for the buyer, but is allowed to pay up to 4% towards a VA buyers costs. There are certain "VA non-allowable" costs for which a VA buyer is forbidden to pay, (for example No escrow fees, wiring, notary, tax service or processing fees are allowed to be charged).
So here is a good tip to help get a VA offer accepted, so this issue of who covers these VA non allowable fees does not become an issue when negotiating a purchase price. It is advised that the following language be inserted in to the purchase contract so the seller is not put off by the VA offer: “Seller not responsible for any buyer closing costs, regardless of the selected loan program. All agency-related "non-allowable" costs to be borne by lender”.
3. The (false) belief that VA appraisers are less generous in their valuations.
There is a common misconception that VA appraisals usually come in lower. While I am sure that a lot of people have had a VA appraisal come in lower, I am sure they can say the same about FHA and conventional financing too. Underwriters and appraisers will point out, as long as the property is properly priced and the offer is reasonable, the VA appraisal should go smoothly. We have done on average 2-3 VA transactions a month for the past few years and I have only seen a value come in lower in maybe 10-15% of these VA transactions, which is similar for other forms of financing too.
VA Appraisal TIP. One of the most common appraisal value "hits' I have seen is when the purchase price is increased, above listing price, to accommodate for the seller-paid contribution. Be wary of that when submitting/accepting offers and have a back-up plan. If the appraisal does come in low make sure the buyer has additional reserves to potentially come in with more cash to close, because Remember the lender will only approve financing to 100% of the appraised value.
A great marketing opportunity, support our troops!
Because of the large number of veterans that are living in California, this represents a tremendous opportunity to work with VA buyers. My wives dad is ex military and her brother is currently in the Navy, so I especially enjoy working with VA buyers. I have always found that VA buyers are a pleasure to work with because they are very loyal and they communicate very well too, and it also feels good to know you are giving back a little to our armed forces by helping them obtain home ownership, as they sacrifice so much for all of us on a daily basis.
If you have any questions in regards to VA purchases please feel free to contact me directly at 619-325-4111. My lender is approved directly with the VA, so we are able to offer all the best programs that are available to our military friends. I look forward to chatting soon.
Thursday, September 29, 2011
5 Home Improvement Projects that Will Get You Top Dollar For Your Home
..5 Home Improvement Projects that Will Get You Top Dollar For Your Home
.It’s a highly competitive market for home sellers right now. More homes to compete with means that the impression your homes makes - from the curb, and on the inside - matter now more than ever. You can increase your chances of selling faster - and at today’s top dollar - by investing in a select few home improvement projects that have been shown to make a big impact on buyers.
Bad news alert: it might cost you a little time, effort and cash. The good news, though, is that the best projects for quickly increasing your home’s resale value tend to be cosmetic and fairly simple and inexpensive to do. Here are five projects with big-time return on investment for home sellers-to-be, in terms of their power to attract buyers, and to attract dollars from those buyers.
1. Painting: Adding a fresh coat of paint to ceilings and walls is a tried and true way to increase your home’s appeal to buyers. Go for white or neutral tones that help lighten your rooms. (Now is not the time to show off your fascination with fuschia and lime green.) Buyers will have an easier time envisioning how they will infuse their own personalities into your home if they’re looking at a relatively blank slate.
Painting lightens and brightens rooms, instantly removes scuffs and dings and gives every room a fresh, polished feel.
Fresh exterior paint - even if your time or cash budget limits your efforts to accents like eaves, shutters, doors and trims - is also a quick, inexpensive way to polish the look of your home from the curb.
2. Landscaping: Everything you’ve heard about curb appeal is true. First impressions matter - especially if your house is one of eight or nine a buyer has seen in one day. Buyers will be more excited to look at the inside your home if the outside looks clean, charming and inviting. Mow the lawn, trim the hedges, pull the weeds and plant some flowers, bushes or shrubs for the biggest impact - and be diligent about keeping your landscaping very well-manicured throughout the time your home is on the market.
Be sure to keep it low-key, relatively low maintenance and neutral, though. This is not the time to indulge your personal fantasies of living in an exotic paradise, unless that matches the existing look and feel of your home, nor is it the time to install a time-intensive English garden that buyers will love, but not want to take on. Think clean, simple and elegant for the biggest boost in value.
3. Cleaning and de-cluttering: Start by removing all your family photos from the walls and all sorts of tchochkes and clutter from the tops of tables, desks, dressers and counters. Buyers want to be able to envision their lives in the house, not yours. Personal items - and the visual clutter they create - have been shown time and time again to block buyers’ ability to create this vision.
Also, remember that buyers are coming to see the house and evaluate its space, not to bear witness to all the fabulous furniture that means so much to you (no matter how amazing your personal taste). Remove furniture that takes up too much space and fills up rooms. Get rid of clutter such as clothes, boxes, piles of mail and other items.
And then clean - and keep cleaning obsessively, the entire time your place is on the market. Kitchens, bathrooms and bedrooms should look unlived in when they are shown. And don't forget to clean less obvious places like windows, walls, doors and and floors, to dust off shelves and furniture, and to polish appliances.
4. Plumbing repairs and water stain/damage repair: Paying a plumber to make a few stops throughout your home can be well worth the investment. Leaky faucet in the master bathroom? Get it fixed. Does the space under your kitchen sink look like a science experiment? Leaks and water stains definitely provoke disgust and exasperation on the part of the buyers you want and need to impress. And they can be pretty cost effective to fix - ask your agent for a referral, if you need one.
5. Staging: Staging your home can make a dramatic difference in the price for which your home sells. Good staging is equal parts:
(a) removing your personal belongings and replacing it with more artwork, decor and cleaner-looking furniture,
(b) and tweaking the home’s paint, wall coverings and even landscaping to show the place in its very best light.
When done well, staging can convert your home from just another listing on a buyer’s list to the setting for a fresh, new start to the fresh, new life of their dreams. Professional stagers, in particular, have special skills and materials they use, from convincing you to get rid of a bunch of things you value (but read: junk to a buyer), to items like mirrors, plants, art work, lamps, pillows and even furniture that tells a visual story of the life buyers can fantasize about living in your home.
Talk to your agent about staging - some agents have the skill to do this on their own, while others might have a professional stager they frequently work with.
In some cases, you might want to take on even larger projects. Before you go that route, talk with a local real estate agent; they are well-positioned to know what sort of updates and features will make the most impact on local buyers. Not all major, non-cosmetic upgrades to your home will create a significant difference in the price it commands, so take advantage of your agent’s expertise as you make decisions about whichproperty preparation investments to make (and which to forego).
Thanks to my Tara in San Francisco!
.It’s a highly competitive market for home sellers right now. More homes to compete with means that the impression your homes makes - from the curb, and on the inside - matter now more than ever. You can increase your chances of selling faster - and at today’s top dollar - by investing in a select few home improvement projects that have been shown to make a big impact on buyers.
Bad news alert: it might cost you a little time, effort and cash. The good news, though, is that the best projects for quickly increasing your home’s resale value tend to be cosmetic and fairly simple and inexpensive to do. Here are five projects with big-time return on investment for home sellers-to-be, in terms of their power to attract buyers, and to attract dollars from those buyers.
1. Painting: Adding a fresh coat of paint to ceilings and walls is a tried and true way to increase your home’s appeal to buyers. Go for white or neutral tones that help lighten your rooms. (Now is not the time to show off your fascination with fuschia and lime green.) Buyers will have an easier time envisioning how they will infuse their own personalities into your home if they’re looking at a relatively blank slate.
Painting lightens and brightens rooms, instantly removes scuffs and dings and gives every room a fresh, polished feel.
Fresh exterior paint - even if your time or cash budget limits your efforts to accents like eaves, shutters, doors and trims - is also a quick, inexpensive way to polish the look of your home from the curb.
2. Landscaping: Everything you’ve heard about curb appeal is true. First impressions matter - especially if your house is one of eight or nine a buyer has seen in one day. Buyers will be more excited to look at the inside your home if the outside looks clean, charming and inviting. Mow the lawn, trim the hedges, pull the weeds and plant some flowers, bushes or shrubs for the biggest impact - and be diligent about keeping your landscaping very well-manicured throughout the time your home is on the market.
Be sure to keep it low-key, relatively low maintenance and neutral, though. This is not the time to indulge your personal fantasies of living in an exotic paradise, unless that matches the existing look and feel of your home, nor is it the time to install a time-intensive English garden that buyers will love, but not want to take on. Think clean, simple and elegant for the biggest boost in value.
3. Cleaning and de-cluttering: Start by removing all your family photos from the walls and all sorts of tchochkes and clutter from the tops of tables, desks, dressers and counters. Buyers want to be able to envision their lives in the house, not yours. Personal items - and the visual clutter they create - have been shown time and time again to block buyers’ ability to create this vision.
Also, remember that buyers are coming to see the house and evaluate its space, not to bear witness to all the fabulous furniture that means so much to you (no matter how amazing your personal taste). Remove furniture that takes up too much space and fills up rooms. Get rid of clutter such as clothes, boxes, piles of mail and other items.
And then clean - and keep cleaning obsessively, the entire time your place is on the market. Kitchens, bathrooms and bedrooms should look unlived in when they are shown. And don't forget to clean less obvious places like windows, walls, doors and and floors, to dust off shelves and furniture, and to polish appliances.
4. Plumbing repairs and water stain/damage repair: Paying a plumber to make a few stops throughout your home can be well worth the investment. Leaky faucet in the master bathroom? Get it fixed. Does the space under your kitchen sink look like a science experiment? Leaks and water stains definitely provoke disgust and exasperation on the part of the buyers you want and need to impress. And they can be pretty cost effective to fix - ask your agent for a referral, if you need one.
5. Staging: Staging your home can make a dramatic difference in the price for which your home sells. Good staging is equal parts:
(a) removing your personal belongings and replacing it with more artwork, decor and cleaner-looking furniture,
(b) and tweaking the home’s paint, wall coverings and even landscaping to show the place in its very best light.
When done well, staging can convert your home from just another listing on a buyer’s list to the setting for a fresh, new start to the fresh, new life of their dreams. Professional stagers, in particular, have special skills and materials they use, from convincing you to get rid of a bunch of things you value (but read: junk to a buyer), to items like mirrors, plants, art work, lamps, pillows and even furniture that tells a visual story of the life buyers can fantasize about living in your home.
Talk to your agent about staging - some agents have the skill to do this on their own, while others might have a professional stager they frequently work with.
In some cases, you might want to take on even larger projects. Before you go that route, talk with a local real estate agent; they are well-positioned to know what sort of updates and features will make the most impact on local buyers. Not all major, non-cosmetic upgrades to your home will create a significant difference in the price it commands, so take advantage of your agent’s expertise as you make decisions about whichproperty preparation investments to make (and which to forego).
Thanks to my Tara in San Francisco!
Wednesday, September 21, 2011
How will Fed decision affect home loan rates?
Federal Reserve chairman Ben Bernanke — AP file photo
The Federal Reserve on Wednesday announced it's changing its investment strategy, which could translate into lower mortgage rates down the road, market watchers say.
Related: Fed to shift $400B in holdings to boost economy
Related: What's Operation Twist?
The committee's words:
To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.
What does that all mean?
Michael Lea, director of SDSU's real estate center, said officials are basically selling off shorter-term Treasury holdings for longer-term ones and mortgage-backed securities.
"They're changing the composition of their balance sheet," said Lea, a past chief economist of mortgage giant Freddie Mac. "This isn't a new round of quantitative easing. They're reinvesting, not injecting more money into the economy."
The decision could push down long-term interest rates, and in turn, mortgage rates.
Why is this needed when home-loan rates are historically low?
"Mortgage rates are not the problem," Lea said. At issue, is weak demand for mortgages because of income uncertainty and unemployment coupled with tight lending guidelines.
"This will have very little impact on the average person," Lea said. "It's meant to signal to markets that the Feds are still trying to do something."
Greg McBride, of financial site bankrate.com, also weighed in on Twitter.
"What will Fed's Operation Twist do?," wrote McBride, referring to Wednesday's plan. "It might push down mortgage rates. But it will also squeeze bank margins, leading to lower savings yields."
Written by Lily Leung
The Federal Reserve on Wednesday announced it's changing its investment strategy, which could translate into lower mortgage rates down the road, market watchers say.
Related: Fed to shift $400B in holdings to boost economy
Related: What's Operation Twist?
The committee's words:
To help support conditions in mortgage markets, the Committee will now reinvest principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In addition, the Committee will maintain its existing policy of rolling over maturing Treasury securities at auction.
What does that all mean?
Michael Lea, director of SDSU's real estate center, said officials are basically selling off shorter-term Treasury holdings for longer-term ones and mortgage-backed securities.
"They're changing the composition of their balance sheet," said Lea, a past chief economist of mortgage giant Freddie Mac. "This isn't a new round of quantitative easing. They're reinvesting, not injecting more money into the economy."
The decision could push down long-term interest rates, and in turn, mortgage rates.
Why is this needed when home-loan rates are historically low?
"Mortgage rates are not the problem," Lea said. At issue, is weak demand for mortgages because of income uncertainty and unemployment coupled with tight lending guidelines.
"This will have very little impact on the average person," Lea said. "It's meant to signal to markets that the Feds are still trying to do something."
Greg McBride, of financial site bankrate.com, also weighed in on Twitter.
"What will Fed's Operation Twist do?," wrote McBride, referring to Wednesday's plan. "It might push down mortgage rates. But it will also squeeze bank margins, leading to lower savings yields."
Written by Lily Leung
Friday, September 9, 2011
Five Must-Haves For a Fab First Home
Reuters
These days, the term "starter home" is a little misleading. It implies a highly temporary home soon to be traded in for a bigger, fancier model. But because of a troubled real estate market with no end in sight, moving up to a new home won't be easy or quick, says Ken Shuman, spokesman for real estate website Trulia.com.
"We tell people right now that they should plan on staying in a home seven to 10 years," Shuman says.
What constitutes a good first home is more important now because first-time homebuyers have become an increasingly larger share of the market. In 2010, first-time buyers made up about 50 percent of the total homebuyers in the U.S. market, says Paul Bishop, vice president of research for the National Association of Realtors.
Related Stories Now the Time to Invest in REITs? Finding the Right Balance Between Work and Family Life What You Need to Know Before Buying Foreign Property
Related Video
Should Mortgage Lending be More Conservative?
Reforming the mortgage lending system
"Just on a dollars-and-cents basis, a lot of first-time buyers made the decision to stop renting and buy a home because it seemed to be the better financial decision," he says.
The expiration of the federal government's first-time homebuyer tax credit last year may make the decision to buy a little tougher than it was in 2010. But if you decide the time is right, here are some key things to look for in your starter home to make it the right decision for your family and to maximize your resale value when it comes time to sell.
An Affordable Price Tag
An affordable price on a first home is one of the biggest priorities for first-time homebuyers, and with good reason, Bishop says.
"Unlike a trade-up buyer, they don't have any equity to roll into the purchase of their next home, so coming up with a down payment and the financial aspects of buying a home is the first concern," he says.
Coming up with a firm price target for a first home and sticking to it is the key for first-time buyers, says Scott MacDonald, president of RE/Max Gateway in Chantilly, Va.
"Make sure the house is within your budget. A lot of people try to push it and go for the maximum dollar amount they qualify for, trying to keep up with the Joneses. Stay within a reasonable budget so that you don't overextend yourself and get yourself into trouble," MacDonald says.
To be sure, Bishop says, high home affordability is making things easier on first-time buyers because so many markets have stagnated or declined in price in recent years. Also helping first-time homebuyers stay within their budget is the wide selection of housing options. The U.S. housing inventory is still larger than normal. As of March 2011, it would take more than eight months to work through.
A House For the Next 10 Years
Because you'll probably be there longer than you think, Shuman says it pays to buy a first home that accommodates not only the family you have now but the one you plan to have over 10 years.
"Have that conversation. If you're just getting married, ask, 'Do we plan to have kids? How many kids do we plan to have? How many bedrooms are we going to need?'" he says. "The biggest bit of advice I can give for a starter home is to really think about what your future looks like."
Shuman says because many first-time homebuyers do have growing families, space is probably a higher priority than fancy features such as granite countertops.
"Because a starter home is usually a smaller home, in today's market especially you don't want to overpay for features and amenities, or remodels, that you're not going to be able to recoup later on," he says.
Quality of space is also important, MacDonald says. While you want to have at least two bedrooms, a lot of bedrooms aren't going to be much help if they're too small to be useful.
Location, Location, Location
Everyone's heard the old cliche "location, location, location," but what does it really mean for first-time homebuyers? Three years after the implosion of the housing market, the keyword is "stability," MacDonald says.
"Find a neighborhood that's stable -- where yards are maintained, where there's not a lot of 'for sale' signs, where there's not a lot of 'for rent' signs, where you have longer-term people living in that neighborhood -- because those are the ones that are going to get you the best return later," McDonald says.
If you're looking at potential first homes in a housing development governed by a homeowners association, or HOA, one way to assess a neighborhood's stability is to learn the number of delinquencies for HOA dues. A high rate of delinquencies can mean a neighborhood is headed for hard times, MacDonald says.
Beyond that, Bishop says first-time homebuyers should seek the same characteristics of a prime location that all homebuyers seek.
A neighborhood with well-maintained, attractive homes.
A location convenient to local amenities.
Close proximity to work.
A quality school district, especially for first-time homebuyers who plan to have children.
A History of Proper Maintenance
Whether a first home has been properly maintained can have a huge effect on your housing costs in the future, MacDonald says.
MacDonald says there are a few key areas of the home that can give you a general idea of whether the previous homeowner was diligent about home maintenance. If you see these issues, consider looking elsewhere.
Rotten trim on the exterior.
Dirty air-return ducts or a dirty filter in the HVAC system.
A crumbling roof or damaged gutters.
But while a spot check of these features can be a useful guide for narrowing down prospective first homes, a thorough inspection is essential before closing, Shuman says.
"It's pretty important that you have (an appraiser) who you really trust -- who you know is going to do a thorough job, who's going to get up on the roof, who's going to run all the water, who's going to look at the electricity," Shuman says. "Do a very in-depth walk-through with them and understand exactly what you're buying."
Recent Updates in Key Areas of The Home
First-time homebuyers on a limited budget may not get a home that's a totally finished product in terms of recent updates and features. If you have to choose, Shuman says, make sure you prioritize updates to the following.
Energy-efficient windows.
Updated electrical wiring with sufficient outlets.
A new roof.
A new water heater.
"When a lot of folks go into a starter home, they don't want to have to put a lot of money into it because they know it's not their home for life," Shuman says. "If you look at what the big budget items are that may come up during the next seven to 10 years and know that you're in good shape on some of those, that's definitely part of the checklist."
MacDonald says there also are some rooms in a prospective first home where recent renovations are more valuable in terms of resale value.
"Bathrooms and kitchens are the most important pieces of the puzzle when buying a house," MacDonald says. "If they have those renovated, or if the house is new or been updated by the previous owner, those are things that give it the most attraction when you go to sell your house later."
Read more: http://www.foxbusiness.com/personal-finance/2011/07/26/5-must-haves-for-fab-first-home/#ixzz1XVFVbhgV
These days, the term "starter home" is a little misleading. It implies a highly temporary home soon to be traded in for a bigger, fancier model. But because of a troubled real estate market with no end in sight, moving up to a new home won't be easy or quick, says Ken Shuman, spokesman for real estate website Trulia.com.
"We tell people right now that they should plan on staying in a home seven to 10 years," Shuman says.
What constitutes a good first home is more important now because first-time homebuyers have become an increasingly larger share of the market. In 2010, first-time buyers made up about 50 percent of the total homebuyers in the U.S. market, says Paul Bishop, vice president of research for the National Association of Realtors.
Related Stories Now the Time to Invest in REITs? Finding the Right Balance Between Work and Family Life What You Need to Know Before Buying Foreign Property
Related Video
Should Mortgage Lending be More Conservative?
Reforming the mortgage lending system
"Just on a dollars-and-cents basis, a lot of first-time buyers made the decision to stop renting and buy a home because it seemed to be the better financial decision," he says.
The expiration of the federal government's first-time homebuyer tax credit last year may make the decision to buy a little tougher than it was in 2010. But if you decide the time is right, here are some key things to look for in your starter home to make it the right decision for your family and to maximize your resale value when it comes time to sell.
An Affordable Price Tag
An affordable price on a first home is one of the biggest priorities for first-time homebuyers, and with good reason, Bishop says.
"Unlike a trade-up buyer, they don't have any equity to roll into the purchase of their next home, so coming up with a down payment and the financial aspects of buying a home is the first concern," he says.
Coming up with a firm price target for a first home and sticking to it is the key for first-time buyers, says Scott MacDonald, president of RE/Max Gateway in Chantilly, Va.
"Make sure the house is within your budget. A lot of people try to push it and go for the maximum dollar amount they qualify for, trying to keep up with the Joneses. Stay within a reasonable budget so that you don't overextend yourself and get yourself into trouble," MacDonald says.
To be sure, Bishop says, high home affordability is making things easier on first-time buyers because so many markets have stagnated or declined in price in recent years. Also helping first-time homebuyers stay within their budget is the wide selection of housing options. The U.S. housing inventory is still larger than normal. As of March 2011, it would take more than eight months to work through.
A House For the Next 10 Years
Because you'll probably be there longer than you think, Shuman says it pays to buy a first home that accommodates not only the family you have now but the one you plan to have over 10 years.
"Have that conversation. If you're just getting married, ask, 'Do we plan to have kids? How many kids do we plan to have? How many bedrooms are we going to need?'" he says. "The biggest bit of advice I can give for a starter home is to really think about what your future looks like."
Shuman says because many first-time homebuyers do have growing families, space is probably a higher priority than fancy features such as granite countertops.
"Because a starter home is usually a smaller home, in today's market especially you don't want to overpay for features and amenities, or remodels, that you're not going to be able to recoup later on," he says.
Quality of space is also important, MacDonald says. While you want to have at least two bedrooms, a lot of bedrooms aren't going to be much help if they're too small to be useful.
Location, Location, Location
Everyone's heard the old cliche "location, location, location," but what does it really mean for first-time homebuyers? Three years after the implosion of the housing market, the keyword is "stability," MacDonald says.
"Find a neighborhood that's stable -- where yards are maintained, where there's not a lot of 'for sale' signs, where there's not a lot of 'for rent' signs, where you have longer-term people living in that neighborhood -- because those are the ones that are going to get you the best return later," McDonald says.
If you're looking at potential first homes in a housing development governed by a homeowners association, or HOA, one way to assess a neighborhood's stability is to learn the number of delinquencies for HOA dues. A high rate of delinquencies can mean a neighborhood is headed for hard times, MacDonald says.
Beyond that, Bishop says first-time homebuyers should seek the same characteristics of a prime location that all homebuyers seek.
A neighborhood with well-maintained, attractive homes.
A location convenient to local amenities.
Close proximity to work.
A quality school district, especially for first-time homebuyers who plan to have children.
A History of Proper Maintenance
Whether a first home has been properly maintained can have a huge effect on your housing costs in the future, MacDonald says.
MacDonald says there are a few key areas of the home that can give you a general idea of whether the previous homeowner was diligent about home maintenance. If you see these issues, consider looking elsewhere.
Rotten trim on the exterior.
Dirty air-return ducts or a dirty filter in the HVAC system.
A crumbling roof or damaged gutters.
But while a spot check of these features can be a useful guide for narrowing down prospective first homes, a thorough inspection is essential before closing, Shuman says.
"It's pretty important that you have (an appraiser) who you really trust -- who you know is going to do a thorough job, who's going to get up on the roof, who's going to run all the water, who's going to look at the electricity," Shuman says. "Do a very in-depth walk-through with them and understand exactly what you're buying."
Recent Updates in Key Areas of The Home
First-time homebuyers on a limited budget may not get a home that's a totally finished product in terms of recent updates and features. If you have to choose, Shuman says, make sure you prioritize updates to the following.
Energy-efficient windows.
Updated electrical wiring with sufficient outlets.
A new roof.
A new water heater.
"When a lot of folks go into a starter home, they don't want to have to put a lot of money into it because they know it's not their home for life," Shuman says. "If you look at what the big budget items are that may come up during the next seven to 10 years and know that you're in good shape on some of those, that's definitely part of the checklist."
MacDonald says there also are some rooms in a prospective first home where recent renovations are more valuable in terms of resale value.
"Bathrooms and kitchens are the most important pieces of the puzzle when buying a house," MacDonald says. "If they have those renovated, or if the house is new or been updated by the previous owner, those are things that give it the most attraction when you go to sell your house later."
Read more: http://www.foxbusiness.com/personal-finance/2011/07/26/5-must-haves-for-fab-first-home/#ixzz1XVFVbhgV
Sunday, August 28, 2011
open house Aug 28 1-4pm! La Jolla
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