Tag Archives: buying

First-Time Home Buyer Consultation

Posted on March 14, 2009 | Leave a comment

Last night I consulted a newer married couple (at Coffee Garden, a local Curtis Park, Sacramento coffee house) who just wanted me to de-mystify the home buying and loan process.  coffee-cup2 Two hours flew by in a blink.  It was such a refreshing conversation.  I love seeing people’s “light bulbs” go on when provided with valuable information.  I really enjoy attempting to make complex things more easy to understand (yet not always successful at this).  I get inspired when I feel that people are really being educated and are better off as a result of our conversation.  They seemed to leave with opened eyes and excitement toward buying a home, which before we met, never thought they’d be able to afford.

Our conversation reminded me of when I was turned on to buying my first home.  I remember my dad suggesting that I think about purchasing a home, instead of renting.  I laughed out loud and said, “Yeah right!  How could I ever afford to buy a home?”  I thought, “Who could ever save $400,000, $2o0,000, or even $100,000?”  That’s when my dad explain to me the process and began to mentor me further in the buying and investing process.  This couple that I met with told me that their families never talked about buying or investing in homes, let alone finances in general.  This scenario is more common than not.

By being a coach and consultant, I continue to attempt to distance myself from the unfortunate (and sometimes deserved) used-car-salesperson-image that comes with the territory of being a Realtor.

What do you need demystified regarding real estate, investing or loans?

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Want to Buy a Foreclosure Property in Sacramento?

Posted on March 11, 2009 | Leave a comment

foreclosuresignIt seems as though many buyers that I’ve worked with lately have a misunderstanding or just a lack of understanding of foreclosure properties. This makes sense, as there is a lot of confusion surrounding the process.

Pre-foreclosure, otherwise known as a short sale …

Once a borrower misses 2 payments in a row the lender issues a notice of default (NOD) and the foreclosure process begins. The borrower has roughly 3 ½ months (maybe longer) before their home is foreclosed upon, unless the default amount is brought back to good standing.

Typically a home owner, that falls on hard times and cannot make their mortgage payment any longer will sell the home, if only to get out and break even. During time as these where homes values were inflated and now in decline, many owe more on their loan than their home is worth. A short sale is an option… that few find come to fruition.

A short sale is the scenario described above, where the loan(s) on a property exceed the amount of the home’s value. If the short sale is to close, the home owner will have to

1) Procure an offer during the 3 ½ month default period

2) The seller has to show hardship – e.g., loss of employment, divorce, medical condition, etc.

3) [The hardest piece of the puzzle] The lender will have to forgive the difference between the loan amount (plus real estate expenses) and the offering amount. This piece is why most short sales do not close. Prior to listing a short sale, most agents do not know if the lender will entertain a short sale, let along be willing to take a huge loss on the property.

4) [The second most difficult piece of the puzzle] The buyer will have to be very, very, very patient while they see other, potentially better deals pop up all around them. Lenders usually take a long time to respond. I’ve heard claims of short sales closing in 30 days – since I believe in miracles, I believe it. But from my own experience and the other agents I’ve surveyed the process is usually in the realistic range of 2 – 4 months. AND, many times a potential buyer waits around 2 month or longer, only to be denied by the bank, or to see the house go into foreclosure.  I love the marketing remarks on one short sale listing that read,”If you do not like disappointment and let-down, or are at all  impatient, then this home is not for you.”

I’ve had many potential clients call and say, “I’m looking to buy a foreclosure.” I think what they are really saying is, “I want a good deal and I heard on the news [or from a friend] that there are some great foreclosure buys out there!” And they are right, sort of. There are great buys in Sacramento, but they are more likely than not Bank Owned properties, rather than a true foreclosure.

Foreclosure

This may just be semantics, but a true foreclosure is sold at auction at the county courthouse. There is a minimum price set and the auction begins. The potential buyer has to attend the auction and has to have cash in hand (a cashiers check will do) to pay the full payment immediately following the sale. As you can see, buying a foreclosure at the courthouse auction is not for the faint of heart.

Bank Owned

If no one meets the minimum bid then the property reverts back to the bank. Sometimes you will see the initials R.E.O., which mean Real Estate Owned, another term for Bank Owned. These are the properties that are most prevalent in the Sacramento area and most of the time the best deal.

Still want to buy a foreclosure? Let me show you a less painful way of buying…

Give me a call to discuss your next move, whether it will be your first home or 50th.

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Buying Real Estate in Sacramento CA

Posted on December 10, 2007 | Leave a comment

Quote of the day – I heard this while listening to a seminar entitled Real Estate 2.0 –

The more educated the consumer, the more likely to use a Realtor.

I thought this was interesting because usually one would conclude the opposite – the less sophisticated or informed, the more apt to use a real estate professional.

A majority of buyers that I am working with these days are searching for and many times finding their property on their own. I can find out further details on a property and may see it hit the market a bit sooner, however, information on residential housing is now easier to acquire than ever. In the past, it seemed as though Realtors were the gatekeepers of information. Now someone with a computer and an internet connection and a little time on their hands can do much of the leg work on their own. I even find many clients really enjoy hunting for a home or next property. Many have commented, “I love looking for and at home… I should get my license.” And many no doubt do – the market is saturated with Realtors (I think I figured out that one out of every ten people in CA have a real estate license).

You may be asking in the back of your mind, “Why then do I need a Realtor to buy a home?” Or I’ve heard many comments like, “Your job is easy,” and “Soon no one will use agents any more to buy their home.”

Finding a home is the fun part and just a small portion of the job. Realtors are no longer the “gatekeepers” of information. For a buyer, I believe that you need an agent primarily for:

1) Consulting – To have someone as a sounding board, someone to give objective feedback, and someone who can assist you in making an educated decision is invaluable. This is the same reason why a struggling couple will usually not be able to fix their relational problems – they need an outside, unbiased counselor to speak truth and help develop skills for a successful partnership. Oh by the way, run away from the “desperate agent” – the one that will attempt to sell you anything and everything. Find someone who listens well and acts upon what you have told them.

2) Negotiations – Find an agent that is a skilled negotiator, one that will act diligently on your behalf to find and get you the best possible deal.

3) Contractual Guidance – Getting the best deal and navigating through the transaction with grace and the least amount of hassle are two separate things. Most people are not aware of the deep legal issue that can ensure over lack of contract knowledge.

4) Orchestration – A good agent has built a network of associates that will facilitate putting the pieces of the transaction together. This factor is indispensable and has helped save many deals that would have gone sour.

One recent transaction almost fell apart because the buyer (whom I represented) wanted the pest report cleared, and the company that performed the report wanted upwards of $10K to remedy the problem. Neither side wanted to pay this money to have the work done. We were at a standstill. I had our contractor, that we use for all of our property management jobs, come in and do the work and clear the pest report for almost half price. I negotiated with the buyer and seller’s agent to split the repair work.

I have saved many deals through sound consultation, timely negotiation, and a strong network of professionals that will assist in making each transaction as fluid as possible. Contact me to discuss your situation in more detail.

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The Real Estate Market in the Winter – The current position of a buyer.

Posted on December 8, 2007 | 1 comment

I showed a home this morning (an REO – that is bank owned). It’s amazing how the shift in the market changes how one views a property. The typical buyer is now saying:1) “How low can I go with my offer?” – Everyone wants a deal. The reality is, sellers have not compromised as much as the buyers hope. While it is no doubt a seller’s market the economy has not fallen into the decline that creates a situation where seller realize that they have to grab the first offer, no matter how low. Also, the general public sees “Bank Owned” of “Foreclosure” and they translate that to mean “Half Price” or “Going out of business sale.” Think about it, bank are the tightest group of people on earth. Do you really think that a bank is going to let go of a property they own for 50%, 40%, 30%, even 10% off the asking price. Okay, there are times when 10% is reasonable, but in most cases the bank has several reliable appraisals done prior to listing the property. And there is an account executive who scrutinizes all offers and whose job may depend on getting every nickel possible out of that property. A quick caveat… Banks do generally list their properties slighty below the market, so as to move it fast.

We have investors that get great deals on REO’s, but that is usually all cash offers closing in the shortest time frame possible to accommodate the the bank.

After pricing a listing of mine, at what I thought was pretty aggressive, in order for it to sell, we got an offer the first week! However, it was $30K under asking on a home under $300K. The agent said, “It’s only 10% under asking.” I replied, “We all know that it is a buyer’s market, but there is a difference between negotiable, or should I say motivated, and desperate.” We countered saying we’d meet them half way, and the buyer walked away, saying, “no thank you.”

The answer to this question of “how low?”is related to many other factors”

– What is price of the property? What are the comps.? It’s easy to think that one should just arbitrarily offer 10% lower than asking. Go ahead, but making random offers is different than getting an offer accepted on a good deal. How long has it been on the market? Some sellers and agents actually price properties a little below the market – ask your agent to give you the comparative sales in any given area to help determine your offer.

– Why are you buying this property? Investment? Short-term living situation? A place to raise your family? Your motive for buying will play a big part in what you offer. I paid full price for my home in a declining market. Call me crazy, but the house was priced right; there was other interest; this is where I will raise my family; and most important, my wife wanted to live there! It’s a long term hold, so I am not worried about the market going down.

– What is your time line? A long period of time to make a decision gives the buyer more power in the negotiation.

I begin negotiations based on the situation and scenario of the buyer and seller. Sorry, there is no standard dollar amount or percentage to begin negotiations.

2) What else is available?” is the other question that the buyer is asking. This is RE or economics 101 – Supply and Demand. Right now there is more supply (inventory/housing) than demand, which drives prices down. As a result, the buyer has much to choose from and has the freedom to take their sweet time.

I still counsel the buyer to hone their “criteria for buying.” We discuss their top 3-5 priorities – their must-haves in a home. Unless you find your perfect location, design and have your home built from ground up, you will never find the “perfect” home. I cannot tell how many times the buyer says to me, “If only I could have THIS home THAT location with the OTHER home’s features…. Keeping focused on your top 3-5 buying priorities will bring you into a realistic frame of mind and save much frustration.

Good counsel is essential in making wise decisions – this is one of my strengths.

Contact me to discuss fine

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