Weekly Real Estate

If you have thought about buying a new home for a while, this spring season in 2020 is the perfect time to do so! Since all the presents are altogether opened, all the New Year festivity has been cheered up and finally, the time has come to prepare yourself to return to work. Well, what can be more amazing, if 2020 is the year for you to get a new house you always dream of? Here are a couple of suggestions that you should keep in mind as you get ready to go home hunting and viewing homes. These tips will help you out to make the whole process systematic and interesting too but when children are also with you, you’ll want to take some extra care in your planning that we discuss below.

·         Do some Pre-Planning

Before going out to view homes, you must do some planning first. It will definitely make this process less hectic, less daunting and will save you time. This pre-planning can be for food, how to entertain your little ones and be aware of their potty breaks as well. Don’t forget to make sure that they've had a proper breakfast or lunch before you set out for the tour. Take a bottle of water with you and some snacks. Keep in mind when going in and out of homes and the car to make these items portable and easy to carry to avoid any kind of a mess. 

·         Be in your own car for home tours

It is often more convenient to follow your agent in your own vehicle rather than traveling in the same car. In your own vehicle, you can have some engaging toys for your child and snacks easily accessible. This will also give you some private time to discuss each home and see if any additional questions about the home or property may come up.

·         Make some rules before starting your home tour

You should never take any of their toys with you into the homes you are visiting just to be sure that they can't lose anything while in the home. Moreover, another rule to be followed is not to touch any toys of other children whenever you are touring someone’s home. Often times homeowners leave toys or items that can be considered toys to a little one out in the home so you’ll want to keep a close eye out.

·         Make a must-have list before visiting

Regardless of whether you are alone while visiting or having your family or a friend with you, prepare a list for what you have to notice as you visit each home. You might be having some preferences and ideas in your mind but after viewing some homes these may change. To make the whole process more comfortable, you’ll need to have your “must-haves” list completed. 

·         Write down some comments about each home

Use the print out your agent provides with each home in your visit and write some comments related to the environment, facilities and other things that you noticed during your visit. It may include details about the interior, architectural style, family room, other buildings in that particular area and neighborhood as well. Having pictures of each home and your own comments about them are ultimately going to help you out to select the best one in the end. While not all pictures are posted online when you have notes that you have made, it helps to track each home and what home had what features.

After all the New Year celebrations, make this spring season of 2020 a little more amazing by buying a new home and make your dream a reality. We really hope that all these tips are really going to be very valuable for you while preparing for home-shopping home tours. We wish you all the very best and sending many blessings to your way. 

Do you wonder what exactly you are paying with a mortgage payment? This article is for you. We are going to discuss how mortgage payments are calculated. Mortgage payments include payments to the base loan amount, annual property taxes, interest for the loan and homeowners insurance. The mortgage payment amount is usually determined by the following factors:

• How large of a loan do you want to have
• What the interest rate on your mortgage is
• The time span of paying your mortgage back

The higher the interest rate, the larger the mortgage payment every month will be. Similarly, the more money you borrow, the larger the loan amount and your monthly payment will be. If you pay back the loan over a longer time frame, your monthly payment will be lower but you’ll end up paying more interest over the life of the loan.  

Buying a house is one of the largest financial decisions of your life, how are you going to finance it and what will your budget be? These are the crucial questions you should ask yourself carefully before you fall in love with a house and find out later that you can’t afford it or you are not comfortable with the monthly payment.

Calculating the costs of your interest rate:

The interest rate is simply the bank’s way of charging their fee for the money that you have borrowed. This interest rate is generally a fixed percentage but can also be adjustable. If your interest rate is 5%, this is your annual interest rate and the amount that will be added to your loan. Most of the time interest is paid on a monthly basis which is why you should know how to calculate it. You can always use an interest calculator but if you prefer to do it manually, you can use the formula below.

• Principal amount X interest rate X mortgage term = interest
  
  

For example: $250,000(Principal) X 0.50 (5% interest Rate) X 1 Year (Time) = $12,500 is your annual interest amount.

Calculating real estate property taxes:

Calculating the property tax can be a little more challenging depending on the area, age of the home and any additional taxes. Generally, newer home communities will have additional Mello Roos that are added to your taxes for things like parks and playgrounds. The amount will vary by the community and area so make sure you check the tax records with the local county which can be done online typically. 

Calculating insurance

To protect your house from unexpected losses, you are required to take precautionary measures such as purchasing a homeowner's insurance plan. Homeowner's insurance is a requirement of your lender as well in case something serious happens, they are not losing the loan amount. Costs of insurance vary from place to place and depend on your priorities and levels of protection. In order to estimate your property insurance, you should connect with a qualified and experienced insurance agent who can ensure you are properly covered.

If you want to get a better understanding of what you would be comfortable with for a mortgage payment or have additional questions about how payments are calculated, please reach out! 

In order for someone to go through a foreclosure, they will have to miss a couple of mortgage payments in a row and then the bank will begin the process. The time frame can be different but typically if someone misses two or three payments, a person falls into what is known as default and that is what begins the foreclosure process.

Foreclosing a property:
The foreclosure process basically means that the property goes back to the bank and they become a real estate owned property, also known as an REO. This process can be quick but most often can be several months to years as the bank regains possession of the property and they bring the property back on the market for sale.

6 phases of a foreclosure
Phase 1: Default in payment:
After missed payments, a notice will be sent by the lender to indicate that they have not received the monthly payment for those months. Usually, mortgage payments are on the first day of each month, and some lenders also provide an offer of grace period till the 15th of that month. But after that, the lender can send the borrower with a missed payment notice and can also charge a late payment fee. If no resolution, a demand letter can be sent by the lender if two payments are missed consecutively. This is a more serious matter than a missed payment notice. At this point, if the lender is trying to make mutual agreements and making arrangements to catch up on the payments, then they are still willing to work with the borrower. Normally, the late payments should be remit by the borrower within 30 days of receiving the missed payment letter to stop things from proceeding.

Phase 2: NOD
After 90 days of missed payments, a Notice of Default is sent. The Notice of Default, in various states, is delivered to the home. The lender's foreclosure department will be given the lender's loan which is in the same county where the property is located. The lender usually gives the borrower more two months in order to resolve the matter, settle the payments and restore the loan. This process is called the reinstatement period.

         

Phase 3: Trustee's Sale Notice:
After two months of the Notice of Default, if the loan has still not been made up, a Notice of Trustee's Sale will be issued and recorded within the county, where the property is located.

Phase 4: Trustee's Sale
The property will be placed for public auction. Then the property is sold to the highest bidder who satisfies all of the required conditions for that property. The firm representing the lender or the lender themselves calculates the opening bid based on the value of the outstanding loan. When the highest bidder is confirmed and the Sale of Trustee is completed, a Trustee's Deed Upon Sale is given to the highest bidder who won the property. Then the purchaser owns the property and is designated to take instant possession.

Phase 5: REO
During the public auction, if the property is not sold, the lender will automatically become the owner and will be eligible to sell the property themselves. It can either be through the assistance of an REO Asset Manager or through a real estate agent. These properties are known as "bank-owned" or REO's. 

Phase 6: Expulsion
The borrower is allowed to stay at the home until the house is either purchased by public auction or purchased as an REO property.

An eviction notice is sent at this point which demands any person to vacate the premises as soon as possible. To allow the occupants sufficient time many days are provided in order to remove any personal belongings. Otherwise, the local sheriff will visit the property and typically lock the property so the previous owners are unable to access the property.

There are also 3 main different types of foreclosures/REO type properties. 

Short sale foreclosure:
Short sale foreclosure is when the homeowner is still on deed they either may still live in the home or they have moved out of the home. When you submit your offer to the homeowner, the homeowner then submits that If the bank is concerned with the offer price, they may send out another agent to do a broker's price opinion and understand how the value better and what are the market conditions.

Bank owned foreclosure:
In this foreclosure, the bank has gone ahead and bought back the property. The homeowner no longer lives there and the bank has decided to advertise the property with a local agent to sell it.

Auction foreclosure:
This is also a kind of bank-owned foreclosure. The bank decides to hire an auction house to auction off the property. Auction properties usually have a low starting price but an auction house fee that is added in addition to the purchase price.

It is possible to buy a house even if you have a lower income by using some effective strategies. Don’t think that it is impossible although you have to be honest with yourself, then you'll be able to accomplish whatever you want.
The following are some strategies to save money if you want to own a house.

Tighten your budget:
The people who are already facing lower incomes have learned how to cut down on their expenses. So the people who want to save money need to have a look at where they are spending their money and are they spending on necessary products.

Make a list:
It’s a great idea to make a budget for the whole month and then remove the unnecessary items from that budget list. In this way, the impulsive buying of products will be controlled which will help you in saving more money from getting wasted on unnecessary items.

Build your qualifications:
Undoubtedly, this is a long-term solution to make and save money for your dream home but certainly the most accurate and sustainable opportunity to build wealth. If you become more qualified with better credit scores, income and reducing debt, there is a chance that you will get a better home loan. The more you can reduce your debt, generally, it will help improve your credit scores and allow better opportunities.

Rent out a room, or a garage:
If you have a spare room or garage in your house, rent them out for some extra income. In this way, you'll create extra income to put towards your new house. If you live in a busy area, you'll likely be able to earn more by renting a garage.

         

Sell unnecessary stuff:
Often we have items that were bought with good intentions but we did not end up using. These items can be sold to cluttered and also provide extra money that you can put towards your new home fund or paying off debt.

Make second income:
Almost everyone can generate a second income for themselves. You can live on your current income and save all the secondary income for your new house fund. You can create a second income by using your talents or you can do other businesses such as reselling of retail products.

Some other very basic strategies which you help you save money in long-term include:
• Eat at home:
Eating at home can save you a lot of money. If you go to a restaurant you have to bear their charges and additional tip. So when you calculate your spending on restaurant food, a considerable amount of money is spent there compared to eating at home. Also, try to bring your food to work instead of eating out every day.

• Always use a shopping list:
Avoid going to the store without a shopping list. According to studies, when you bring your shopping list to the stores, you usually spend less because you avoid taking unnecessary stuff which is not present in the list of necessities. In this way, you will spend less money on impulse purchases and narrow down your expenses.

• Use cash for buying
bring the amount of cash you need to buy the products you need and do not bring extra money that may tempt you. Go to the store and do not take any credit or debit cards along with you.

• Don’t use credit cards
if you want to save more money to own a house you need to avoid using credit cards because they encourage overspending and can get you into debt quickly? This will also affect how much you can be approved for if you carry a debt balance on your credit cards.

• Create an account for your new home fund:
If you want to save money for your dream house, open up a separate savings account so that you don't use the amount of money you're saving for your home. Out of sight, out of mind.

Saving for a home is the biggest and most expensive item most people will purchase in their lifetime. It’s important to take the time to set yourself up for success and create a long term wealth plan that can be handed down for generations. If you are looking to buy a home and want to put together a game plan, let me know and I’m happy to see what we can do!

If you are thinking about selling your home, what condition do you plan to put your home on the market in? I am here today with Aaron Lewis who is a fantastic home inspector with BPG inspections and one preferred inspectors when inspecting our homes. He will share useful tips to follow before the home inspection part of your home selling process.

“I believe one of the main things to focus on during your home selling process include the things that can potentially hang up your transaction and a big one for that is just access. If we, the realtor or home inspector, are not able to access something in the home for inspection it that can potentially scare the buyer and get them nervous. This will result in delaying your transactions because you will need to provide them an access and will have to come back out to reinspect that area, so make sure to address this kind of problem ahead of time,” Aaron said. “When we have clients buying homes we often run into areas we are not able to access such as garages, certain rooms or storage areas which greatly limit what we can inspect.

“Take attics, for example, sometimes these are located in closets where personal belongings are or any part of the home where you are storing a lot of personal belongings. If we are not able to get a ladder in there to access it, then space needs to be cleared ahead of time. We are not going to move personal belongings for risk of a liability. Another example are garages. It is a common place we use when trying to get ready to move. You store a lot of boxes and personal belongings there and frequently in many garages, we find the water heaters, the furnaces, and then some of the newer homes we had had the main water shut off in there and other things. If we are not again, able to inspect these critical components of the home, things can be delayed.

Another big one is the access to particular rooms of the house that might be locked for some the reason. Secondary structures are also of concern. If there is a detached shed or a guest house, a lot of times people won’t think about having access to them ready. So just make sure that everything is unlocked and speaking of locks themselves, keeping them unlocked on electric panels and any other access panels that we might need to get into it should be taken care of before the actual home inspection.” Aaron added.

If you are looking to list your home make sure that you keep an eye out for those specific items just make things a little bit smoother. They are small items that can be unexpected but make a huge difference in time and convenience. I look forward listing your home as well and help ensure you have a smooth escrow!

When you are looking to hire someone to represent you, you want to make sure they are experienced. What exactly does that mean in real estate? One of the main things many folks ask is: how long have you been in the business? Well, if you’ve been in the business for 10 years and you sell an average of 6 homes a year; you’re looking at 60 homes that have been sold in their career, which is great! If you look at other agents that are selling more homes and let’s say they are selling around 20 homes a year, they have that same amount of transactional experience in 3 years compared to 10 years.It really does make a significant difference for you as a client and how they’ve managed their business. How often are they working for their clients with attending inspections on a regular basis, marketing a home, negotiating for your home and other qualities that can make a huge impact in the long run? These all need to be done regularly to keep all of your negotiation skills sharp, you are knowledgeable about current trends and make sure you’re doing the best you can for your client.

When asking an agent about their experience, also make sure you’re asking how many transactions they have personally closed. I can promise that will tell you far more than how many years they’ve been in the business! I often ask this to home inspectors and other vendors that we contact when purchasing or selling a home in order to make sure they’ve been hands-on in their trade and have been working with a lot of clients. This also helps ensure they are not just doing this as a side gig and may or may not work out for my clients in the long run. One of the most important things to me is that you have a good experience. I want to make sure that happens! Make sure you ask the same questions of the real estate agent you are considering and hire the best agent for YOU!

It is vital for you to meet with potential real estate agents and ask them about their experience and track-record of success before you hire someone for likely the largest purchase or sale of your life. While knowledge counts for a great deal, ultimately only real-world experience will give an agent the tools required to generate speedy, profitable sales. One of place that you can look at that is helpful to be able to independently look at agent status in terms of how many homes that they’ve sold, the price points that they work in, how many buyers or sellers they work with and the actual reviews from clients are all going to be on Zillow. Make sure you’re working with a quality agent and I look forward to being able to interview for that position soon.

What’s an open house about anyway? Generally, when you're going to an open house, the seller is not going to be there. You have an opportunity to view the property at your own leisure, and it gives you a little bit more time to look at the property more thoroughly. There are a few things you may want to aware of when viewing properties. Some of the things we're seeing currently with today's technology are that sellers are putting in audio or video in their home to be able to record what is happening in their home while they're not there. Sometimes this is to protect belongings, sometimes they just want to know what's going on. Most importantly, as the buyer, you need to be aware and know of this.

Sometimes your comments, things that you may say about the home or the decor can ultimately go back to the seller and may not have a positive opinion with them when it comes down to writing your offer. So, when you're out doing an open house, always be respectful of the home and keep in mind that you may be on audio. Therefore, you can always talk about these things once you leave the property and freely talk amongst yourselves.

When you sell your home there are also a few things to consider with an open house. A few things you can do for your open house with your agent are to remove a lot of your personal belongings that may not necessarily be the best idea to leave out for everyone. Make sure you're putting away any jewelry, firearms, medications, etc to make sure that it's safe for people to view your home. So, make sure that when you're preparing your house for the open house, put those belongings away in a more secure spot or even better if you're able to just remove them from the property altogether.

The last piece of advice you also want to consider is this will be the first impression for home buyers. You'll have a little bit of time to prepare for that open house so really make your home stand out. Make sure you do that last cleaning before you leave the property for your agent to hold the open house, just so that your home really shows its best. There's nothing worse than when you walk into an open house and you can tell that they left in a hurry and nothing has really been prepared. Whereas, if you walk in and everything is neat, orderly and looks nice, it really makes a significant difference to a buyer and gives a better opportunity to sell your home.

 So, if you are looking to go visit an open house or you're going to be holding an open house that your property, make sure you take these tips into mind.

When we talk about real estate, one platform that commonly comes to mind is the online real estate company called Zillow. Zillow has been a leading real estate and rental marketplace for millions of renters, home buyers, and sellers. However, an online company that gives out estimate prices of a physical property might turn out not as reliable as an estimate given by a professional.

“How much is your home worth on Zillow?” I get this question a lot. Well, Zillow says my home is worth this much. It's often tough to work with Zillow because they actually have in their own Zillow disclosures that their estimates are off. I’ve had seen some within a realistic ballpark but typically the will say it is a little bit higher or sometimes lower. We do see them off, quite a bit even from home to home when they are right next to each other with no significant differences. The main issue is nobody from Zillow is coming out and viewing your home, seeing the upgrades and the condition it's in and any differed maintenance. Those items plus many more can have a significant impact on the value of a home. Therefore, when you're looking at Zillow's estimate, it's really not that accurate for your home is actually worth. On the other side, we often have clients who want to make an offer on a home, they say that it's listed at this price and then Zillow has it at another price. The only thing is that it is still going to be off unfortunately and as a seller you want to get the most amount of funds you can and as a buyer you want to not overpay for a home.

What you really want to do is either rely on either real estate agent or appraisal to be able to put together an analysis of recent home sales in that specific area. They'll give you a better idea of what the homes are worth in that direct area depending on the condition and upgrades that the homes have completed and they will give you a better idea of the overall price range.

If you're looking at doing a Zillow's estimate, if you're looking at using that as a list price for your home or thinking about using that for the price that you'll use to purchase a home, you should speak with a real estate agent first to ensure you are not leaving more on the table when selling or overpaying for a home when buying. We will help you get to us in the right direction and give you a much more accurate idea. If you do have questions, make sure you reach out to me I'd be happy to give you a better idea on some of the values in the area.

What is the earnest money deposit anyway? It is the good faith deposit that you'll submit typically within three business days of an offer being accepted on a home. Typically this deposit is roughly 1% of the purchase price, sometimes a little bit lower, sometimes a bit higher depending on the individual situation. Generally speaking, the higher we make it, the more aggressive we're trying to be with our offer and it helps really stand out to the seller in general. Now, what happens with those earnest money deposit funds though? It's an important thought.

The point of having a deposit when we submit an offer is to safeguard the process of bidding and the time and resources spent during the process by all. If this is not done, any bidder will withdraw at any stage and the offer process would be taken much less seriously. With no such financial guarantee, the home buyer would not take the bidding process seriously in terms of time, process, offer and conditions. After the offer process is over and the contract is finalized, the home buyer also has to start working at their time frames noted in the contract. In short, an EMD is one type of guarantee that once the home buyer enters the offer process and the owner accepts the offer, the home buyer can neither withdraw nor change any terms of the contract of the bid and has to perform per the contract terms unless all parties agree.

Once the offer is finalized, escrow is opened and the funds are held by escrow. Escrow is a neutral third party. They do not work for the seller nor the buyer, they work for both. If anything were to change with the contract or anything changed with the finances, they need to have mutual instructions from both parties before they release any funds or make any changes. While they hold your deposit funds, we continue through the escrow period. If we end up canceling on the transaction and not proceeding with that home, then the deposit is actually returned back too you shortly after cancellation assigned.

Should we proceed forward with that home, let's say we put down a $5,000 deposit. You'll be required to come up with $5,000 less of your total out-of-pocket cost to purchase the home once we close. Let’s say you owe $40,000 for the out of pocket costs, you’d now bring in $35,000. All your final costs are going to be at the end. This is when you need to bring in the final funds for the home and at that time your deposit amount will be reduced from those.

If you do have questions, if you are looking to submit an offer, make sure you reach out and be happy to point in the right direction on how to best handle the deposit portion.

Buying a home requires a lot of time and attention because it is a major financial commitment in which you have to consider some factors before rushing into the property market. When is the right time to buy a house? Is it now? Six months from now? A year? Five years? Has the time already passed? I'll be honest with you, there's no real “best time” to buy or sell a home. Right now we're seeing the interest rates increasing for home loans and your overall loan environment has been changing in terms of the loan programs, interest rates as I mentioned, different guidelines, and the home values have also been increasing.

However, if we do see the prices decrease, which sounds better to a buyer, then your monthly payment will likely increase due to the interest rate still increasing, meaning your monthly payment will actually still be higher. Sometimes you're not really getting a whole lot of bang for your buck in that regard, you may be paying less for the home but you're still paying about the same in the long run for the home.

When you're looking at home prices and waiting for them to come down, is it always the best strategy to also watch the interest rates and loan programs available. When is the best time to buy a home? The time is typically right when it makes financial sense. If you're renting right now and the rent has just gotten too high, then it may be time to purchase a home. If the monthly payments of purchasing a home are less expensive than that of renting, buying a home will make a lot more sense. However, if you have a rental that has a lower rent amount and it’s below market value, then it may not make sense to purchase a home.

When you're also looking at selling your home, it may be more beneficial to try to wait for the peak of the market so you can get the most money you can on your home, which makes sense to most people. However, if you have to purchase a home at the same time as you’re selling one, the market is still going to be a bit challenging since you are balancing both. You are still going to have different interest rates and different loan programs for you use compared to when you first bought your home.

Many factors create a different environment overall in the real estate market which makes it tougher to say: "This is the best time to sell" or "That will be the best time to buy." If you're thinking about when is the best opportunity to buy or sell a home, you should really consider time--the time that makes the most sense to you, to the loan programs available to you, and ultimately to your goals.

If you do have questions if you're trying to decide where you are, where the markets are at, or what programs you can available, make sure you reach out. I'll be happy to help out and will give you a little bit more direction!