1. Don’t even start looking without your loan or cash in place. You’re just wasting everyone’s time.
2. The property must be a great deal. Check the comps
3. Buy locally. You know your area and all the large and small events taking place. If possible buy in the path of growth.
4. Make sure you are in an active market where property is selling, especially if you are purchasing to resell quickly.
5. When looking to buy a foreclosure, be sure to include property at all stages of foreclosure. Short sales take patience, but can be excellent deals.
6. Cost of repairs and vacancy must be considered when calculating the numbers. Sufficient funding to repair and periodically carry the property vacant is necessary.
7. Location! Buy property that is very attractive to your potential renters. Your rents will be higher and your vacancy rate will be lower.
8. Make sure there is a steady job base and the population is stable.
9. Be realistic about your success. Even making little profit on your first deal is worth the education.
10. Be sure to keep good records of your repairs and fix ups. This is critical for the IRS as well as for documenting the condition prior to renting.
11. If you are working with partners, have a complete detailed partnership contract written. Having an attorney assist in this is money well spent.
12. Let me be your professional Broker. I can guide you through the process of finding, evaluating, and negotiating for the right property.
13. Know the rules if you are going to attempt to buy directly from a distressed owner. There are laws to prevent fraud in place, so be careful.
14. Know what reasonable rent would be for the property. Call a local rental agency; look in the classifieds to get this information. You may be willing to have a temporary negative cash flow, if the property will sell at a profit, or rents will go up in the future.
15. Don’t be embarrassed to say no thank you and walk away if the numbers don’t work. Everyone else watches those numbers. Do what’s best for you.
There…that’s what I think.
The Federal Tax Credit is over. With these latest mortgage interest rates, the opportunity is even better NOW.
Many people interested in buying real estate on the Central Coast wonder why they should buy now, since they missed the Big Tax Credit. The answer is simple. Interest rates have fallen dramatically since April 30th. The following example illustrates how interest rates can dramatically increase your buying power. Think about it in terms of a $250,000 loan. The average interest rate in April was 5.34 percent, meaning that the principal and interest every month on a 30-year fixed loan would be $1394.48 and cost $502,012 over the life of the loan. The average interest rate is currently around 4.83 percent, meaning that the average principal and interest payment on the same loan would be $1316.20 per month and cost $473,832 over the life of the loan.
By purchasing the same home right now versus in April, you would save $78 per month and over $28,000 over the life over the loan. Since the homebuyer tax credits ranged from $6,500-$8,000, it is obvious that a lower interest rate will save you much more money in the long-run.
Since there was a mad dash in April to purchase a home by the April 30th deadline, there is less competition out there right now, meaning that you have more homes to choose from and you have more negotiating power.
...So it is a great time to buy! Whether you are interested in buying a house in San Luis Obispo for your Cal Poly student, or want a great deal on a condo in Arroyo Grande, there are some wonderful deals out there.
Visit the Property Search on my website to take a look for yourself.
The foreclosure process takes anywhere from two to 12 months, so if you're in danger of losing your home, you do have time to seek alternatives.A record high 2.8 million properties were hit with foreclosure notices in 2009. That’s the bad news. The good news: About two-thirds of notices don’t result in actual foreclosures, says Doug Robinson of NeighborWorks, a nonprofit group that offers foreclosure counseling.
Many homeowners find alternatives to foreclosure by negotiating with lenders, often with the help of foreclosure counselors. If you’re facing foreclosure, call your lender right now to determine your options, which can include loan modification, forbearance, or a short sale. Foreclosure process takes time
The entire foreclosure process can take anywhere from two to 12 months, depending on how fast your lender acts and where you live.
Once you miss at least one mortgage payment, the steps leading up to an actual foreclosure sale can include demand letters, notices of default, a recorded notice of foreclosure, publication of the debt, and the scheduling of a foreclosure auction. Even when an auction is scheduled, however, it may never occur, or it may occur but a qualified buyer doesn’t materialize.
Bottom line: Foreclosure can be a long slog, which gives you enough time to come up with an alternative. Meantime, if your goal is to salvage your home, think about keeping up with payments for homeowners insurance and property taxes. Otherwise, you could compound your problems by getting hit with an uncovered casualty loss or liability suit, or tax liens.
Read the fine print
Start by reviewing all correspondence you’ve received from your lender. The letters—and phone calls—probably began once you were 30 days past due. Also review your mortgage documents, which should outline what steps your lender can take. For instance, is there a “power of sale” clause that authorizes the sale of your home to pay off a mortgage after you miss payments?
Determine the specific foreclosure laws for California. What’s the timeline? Do you have “right of redemption,” essentially a grace period in which you can reverse a foreclosure? Are deficiency judgments that hold you responsible for the difference between what your home sells for and your loan’s outstanding balance allowed? Get answers.
Pick up the phone
Don’t give up because you missed a mortgage payment or two and received a notice of default. Foreclosure isn’t a foregone conclusion, but it’s heading in that direction if you don’t call your lender. Dial the number on your mortgage statement, and ask for the Loss Mitigation Department. You might stay on hold for a while, but don’t hang up. Once you do get someone on the line, take notes and record names.
The next call should be to a foreclosure avoidance counselor approved by the U.S. Department of Housing and Urban Development. One of these counselors can, free of charge, explain your state’s foreclosure laws, discuss alternatives to foreclosure, help you organize financial documents, and even represent you in negotiations with your lender. Be wary of unsolicited offers of help, since foreclosure rescue scams are common.
Be sure to let your lender know that you’re working with a counselor. Not only does it demonstrate your resolve, but according to NeighborWorks, homeowners who receive foreclosure counseling are 1.6 times more likely to avoid losing their homes than those who don’t. Homeowners who receive loan modifications with the help of a counselor also reduce monthly mortgage payments by $454 more than homeowners who receive a modification without the aid of a counselor.
Lender alternatives to foreclosure
Hope Now, an alliance of mortgage companies and housing counselors, can aid homeowners facing foreclosure. A self-assessment tool will give you an idea whether you might be eligible for help from your lender, and there are direct links to HUD-approved counseling agencies and lenders’ foreclosure-prevention programs.
There are alternatives to foreclosure that your lender might accept. The most attractive option that’ll allow you to keep your home is a loan modification that reduces your monthly payment. A modification can entail lowering the interest rate, changing a loan from an adjustable rate to a fixed rate, extending the term of a loan, or eliminating past-due balances. Another option, forbearance, can temporarily suspend payments, though the amount will likely be tacked on to the end of the loan.
If you’re unable to make even reduced payments, and assuming a conventional sale isn’t possible, then it may be best to turn your home over to your lender before a foreclosure is completed. A completed foreclosure can decimate a credit score, which will make it hard not only to purchase another home someday, but also to rent a home in the immediate future.
Your lender can approve a short sale, in which the proceeds are less than what’s still owed on your mortgage. A deed-in-lieu of foreclosure, which amounts to handing over your keys to your lender, is another possibility. The earlier you begin talks with your lender, the more likelihood of success.
Explore government programs
The federal government’s Making Home Affordable program offers two options: loan modification and refinancing. A self-assessment will indicate which option might be right for you, but you need to apply for the program through your lender. A Making Home Affordable loan modification requires a three-month trial period before it can become permanent.
Fannie Mae and Freddie Mac have their own foreclosure-prevention programs as well. Check to determine if either Fannie or Freddie owns your mortgage. Present this information to your lender and your counselor. Fannie and Freddie also have rental programs under which former owners can remain in recently foreclosed homes on a month-to-month basis.
The federal Home Affordable Foreclosure Alternatives program, which took full effect in April 2010, offers lenders financial incentives to approve short sales and deeds-in-lieu of foreclosure. It also provides $1,500 in relocation assistance to borrowers. Again, talk to your lender and counselor.
Broad Street Village, San Luis Obispo - Announcing a price reduction on 40-3591 Sacramento Dr., a 1,596 sq. ft., 3 bath, 3 bdrm 2 story. Now 
MLS® $385,000 - Short Sale-Price Reduced.
Property information
Conforming to $417k
PRIMARY | 1 pt. | 0 pts. |
30 yr fixed | 4.625 | 4.75 |
15 yr fixed | 4.125 | 4.5 |
10/1 ARM* | 4.125 | |
5/1 ARM* | 3.375 | |
5/1 I/O | 3.625 | |
RENTAL | | |
PRIMARY | | Pts. |
30 yr fixed | 4.875 | 1.0 pts |
15 yr fixed | 4.25 | 1.0 pts |
RENTAL | | 1.0 pts |
PRIMARY | | Pts. |
30 yr fixed | 5.875 | 1.0 |
5 yr fixed | 4.875 | 1.0 |
5 yr I/O | 5.0 | |
FHA 96.5% to $417,000
PRIMARY | 1 pt. origination |
30 yr fixed | 4.75 |
FHA JUMBO 2010 – to $687,500
PRIMARY | 1 pt. origination |
30 yr fixed | 4.75 |
720 credit score, fully documented
income and assets,30 day lock.
Conforming primary fixed: 20% down
Conforming ARMs: 25% down
Conf. Rental: 25% down
Conf Jumbo Fixed: 25% down
Conforming Jumbo Rental: 40% down
Jumbo primary: 25% down.
It is already June! Here are the Market Statistics for May 2010. San Luis Obispo had 30 sales this month, up from 18 the previous. Well, click on the link and check it out. Call me if you have any real estate needs.
I have just listed a very clean, well priced mobile home in Silver City. That's the all age park near the intersection of Tank Farm Road and South Higuera. The address is 3860 S. Higuera Space #180.
This property is a Clean 2005 mobile home with 2 bedrooms, 1 full bath and a sunny eat in kitchen. Each bedroom has a loft bed (included) to maximize the space. Also included: clean little sofa and coffee table, dining set with chairs, stackable washer/dryer, desk in living room. This home was used as housing for a Cal Poly student who has now earned his degree in electrical engineering. He has kept it amazingly clean and in it's near new condition. It's little, but it is sweet!
I hope everyone is having a really nice long weekend. Me? I just keep working....and loving it!
Great market information by California Association of Realtor economist Leslie Appleton Young. This is about 2 minutes long.
http://videos.car.org/mediavault.html?menuID=1&flvID=6
Wow! That's all I can say about these rates.
Remember: There's strength in getting pre-approved! Liz
Chrys Barnes
Pacific Capital Mortgage
805-541-5353
Realtor Rate Sheet 5/24/10 (Rates slightly lower from last week)
Conforming to $417k
PRIMARY 1 pt. 0 pts.
30 yr fixed 4.625 4.875
15 yr fixed 4.125 4.375
10/1 ARM* 4.125
5/1 ARM* 3.375
5/1 I/O 3.75
RENTAL 4.99
Agency Jumbo to $687,500
PRIMARY Pts.
30 yr fixed 4.875 1.0 pts
15 yr fixed 4.25 1.0 pts
RENTAL 5.25 1.0 pts
Regular Jumbo**
PRIMARY Pts.
30 yr fixed 5.625 1.0
5 yr fixed 4.75 1.0
5 yr I/O 4.875 1.0
FHA 96.5% to $417,000
PRIMARY 1 pt. origination
30 yr fixed 4.625
FHA JUMBO 2010 – to $687,500
PRIMARY 1 pt. origination
30 yr fixed 4.75
USDA 100% Call***
720 credit score, fully documented
income and assets,30 day lock.
Conforming primary fixed: 20% down
Here is an interesting chart, well it is to me at least, showing the increase in the number of closed sales
and increase of the average price of homes nationally and by region. I thought I'd pass it along to you:
Realtor Rate Sheet 5/18/10 (Rates slightly lower from last week)
Conforming to $417k
PRIMARY 1 pt. 0 pts.
30 yr fixed 4.75 5.0
15 yr fixed 4.25 4.375
10/1 ARM* 4.125
5/1 ARM* 3.375
5/1 I/O 3.625
RENTAL 5.125
Agency Jumbo to $687,500
PRIMARY Pts.
30 yr fixed 4.99 1.0 pts
15 yr fixed 4.375 1.0 pts
RENTAL 5.375 1.0 pts
Regular Jumbo**
PRIMARY Pts.
30 yr fixed 5.75 1.0
5 yr fixed 4.75 1.0
5 yr I/O 4.875 1.0
FHA 96.5% to $417,000
PRIMARY 1 pt. origination
30 yr fixed 4.75
FHA JUMBO 2010 – to $687,500
PRIMARY 1 pt. origination
30 yr fixed 4.875
USDA 100% Call***
720 credit score, fully documented
income and assets,30 day lock.
Conforming primary fixed: 20% down
Short Sales In San Luis Obispo County
As of today, May 17, 2010 there are 138 short sales on the market in SLO County, (and one of them is my listing of a 3 bedroom, 3 full bath condo that last sold for $525K and is now just reduced to $395K...Wow!)
Are you looking for a good deal in San Luis Obispo County? A short sale may be the bargain you are looking for.
What is a Short Sale?
If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.
A short sale is different from a foreclosure, which is when the seller's lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.
You're a good candidate for a short-sale purchase if:
• You're very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
• Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you're preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer who’s financing is less secure.
• You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property—or you need to be in your new home by a certain time—a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.
Some of the other risks faced by buyers of short-sale properties include:
• Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.
• Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.
• No repairs or repair credits. You will most likely be asked to take the property “as is.” Lenders are already taking a loss on the property and may not agree to requests for repair credits.
The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers. Want Short Sales Information or Lists of Short Sale property offerings? Visit the Short Sale Page of my website:Short Sale Info Request
Broad Street Village, San Luis Obispo - Announcing a price reduction on 40-3591 Sacramento Dr., a 1,596 sq. ft., 3 bath, 3 bdrm 2 story. Now MLS® $395,000 - Short Sale.
Property information
Ideally, buying a home provides you with both a nice place to live and hopefully an asset that will increase in value over time. Buying a home can be daunting. Maybe what we need to do is boil it down to a list of tips...Yes, here are 10 tips for buying property. Remember, I will help you every step of the way.
Get Pre-Approved for a mortgage loan before you even start looking. Find someone you are comfortable with and who will take the time to answer all your questions and concerns. You want someone who will give you a complete assessment of not only how much home you can afford in San Luis Obispo County, but also how much you will pay in fees. A Pre-Approval is much stronger than a Pre-Qualification. A Pre-Approval means you have filled out a loan application and have submitted your financial documentation. After calculating all your financials, a Pre-Approval means the lender will give you a loan up to a certain amount (as long as the property checks out okay). I have a great group of very wonderful lenders in our area; just ask. By the way, I really recommend using a lender local to your search area. They know the area and want to do the best job for the local Realtor as well.
Research Areas and Neighborhoods and Prices. This is easier than never before. Use my website,
www.slocoproperty.com to research areas and prices in San Luis Obispo County. If you live in the area, drive around promising neighborhoods at different times of day. If you find a neighborhood that is new to you and you like how it appears, drive through it in the evening to see what it feels like when all the cars and people are home. The more focused you are, the easier and more fun the buying process will be. Once you find out what you can afford, you may have to be flexible with your property desires to live in the neighborhood you desire. Or, look in areas you haven't considered. You may be pleasantly surprised.
Find a Real Estate Agent Who is experienced and Who Really Cares. Well, you can check this one off as done. You've found your Realtor!
When You First Start Looking, See A Lot of Properties. As you become familiar with prices in the market, refine your list of what you need in a home verses what you want in a home. You may want those gleaming granite counters in a home, but maybe that faux granite Formica works okay too. If you need a two car garage, don't waste your time looking at property with single car garages.
Try to Look Past the Green Shag Carpet (You might save some money!) If a home has a good floor plan and location, remember that you could have those cosmetic snags fixed pretty easily before you move in. It is nice to experience a "move-in" quality home, but when you buy one, you'll pay the premium for it. If you are willing to do a little cosmetic clean up, you may save some money on the purchase price.
Research the Homeowners Association of Places You Like. During during escrow, you will receive a complete CC&R (association rules and regulations) package which you must be okay with in order to complete your purchase. But, wouldn't it be nice to know up front that the edible front yard you are planning to plant is NOT ALLOWED? If there is an area which looks like a subdivision to you, it would be best to have some knowledge of the Homeowner's Association (HOA). You could call me and I'll be happy to share what I know. Also, walk around the neighborhood and ask anyone you see who lives there what they think of the association and of the rules.
Remember to Budget for Property Taxes, Homeowner's Insurance, Maintenance, and HOA dues (if there's HOA). In addition to taxes, insurance and HOA, when you look at a property, consider whether it will need a new roof, water heater, furnace, etc. This is where your home inspection (#9) will be key to your knowledge.
Don't Blow Your Budget and Spend Beyond Your Means. This is the one that got us all into trouble in the last few years. Many buyers can qualify for a larger loan than is realistically comfortable for them. So, with your lender's help, figure out what kind of home you can buy based on what you can realistically afford to pay in mortgage, property tax, and insurance (and HOA). Don't be tempted to stray from that budget, even if your lender offers you a larger loan, or you fall in love with a house that is more expensive than negotiating can bring down. One reason not to take the largest loan you're offered: You don't want to stretch your budget so much that you don't have the money to do things like...hmmmm buy furniture...or groceries! What if you do need to fix the roof next year?
Get the Home Checked Out by a Professional Home Inspector. This is the best $400 dollars you can spend. The home inspector will spend about 3-4 hours going through and testing all the major systems of the home. You will receive a complete at least 15 page report detailing the findings. If there are signs of larger problems than the home inspector is looking for, you may be recommended to seek additional inspectors for things such as the chimney and fireplace, the roof, or the foundation. Our contract has built in contingencies allowing the buyer to fully inspect and approve of the home's condition, so use this opportunity to learn as much as you can about the home before you complete the purchase. You may find that the seller is willing to correct certain problems you discover. After a home inspection can become a time of renegotiation.
Brace Yourself for the "Closing" Process. Obtaining Homeowner's insurance, getting your final loan approval, doing the final walk-through of your home, signing piles of documents and handing over a large cashier's check for closing costs--these are just some of the elements of completing your purchase. Working with experienced professionals improves your chances of a smooth closing.
Thanks for looking over this list. Now, how about
looking for property?