Hi People.
Buyers. This will start off an infrequent series on things to remember when writing a "Residential Purchase Agreement" offer for a home. Sellers. This is what to look out for. The ying and yang, push and pull of negotiating will end up somewhere in the middle called "fair", if both parties are on the ball. One party is often not on his game (Or has a Realtor who was the banjo player in Deliverance) and that party ends up being taken advantage of.
Buyer contingencies. They are there to protect the buyer. Inspection, Loan & Appraisal are the main ones. Inspection is the buyer's right to inspect/ investigate the home, taxes, school district, noise pollution, pollution pollution, area crime and all around niceness. The buyer can hold a seance to check for evil spirits, check the area's demographics or see if the house is Feng whatever. If all of these (But not limited to these) things do not meet the buyer's approval the buyer can back out and get the full refund of the deposit, as long as they are within their contingency period.
Loan and Appraisal Contingencies are tied together and pretty self explanatory. If you can't get the loan or if the home does not appraise you can cancel escrow and get your full deposit back. The longer the buyer's contingency the better for the buyer. Also, you have very little (If any) control over these 2 contingencies. Keep them as long as you can and extend (Before they expire) if the bank/ appraiser need more time.
Obviously, the seller will want as short a buyer's contingency period as possible. When an offer is accepted the seller has to take the property off of the market. Knowing that the buyer can back out legally for something as frivolous as "I don't like the paint at sunset" or "This house makes me look fat" will keep the seller up late at night.
So, what's fair. It depends (Sissy answer). Feel out the situation. If you really want to buy the house and there are several offers on the table maybe you should consider a 10 day inspection period (Plenty of time to get an inspection done if you don't dilly-dally) as opposed to 17 days. This will make you more attractive to the seller. If he doesn't have any other offers and you don't feel like being rushed maybe ask for a 20 day inspection period. He should take it because he's starting to get nervous of never getting an offer or ever being loved. Sad.
People outside of California should consult a local Realtor. Laws, customs and practices can vary state to state.
Either way, call me at 619-507-7449 with any questions on any real estate topic.
God Bless
Thursday, March 11, 2010
Tuesday, March 9, 2010
Housing Market & Corn Farmers
People (You can't see me but I'm tipping my hat to you as if we were greeting each other).
Forbes came out with a pretty bold statement today "Here's a new sign that the housing market is in recovery mode: The number of homes for sale across the U.S. with discounted asking prices dipped to fewer than 20% on March 1". This is great news. But, once again, I think we need to dig a little deeper.
One reason there could be (Has not been verified) less discounts is that builders have caught up to the market prices. The new stuff on the market now has been built with the current market in mind. The builder who started building in '05 and finished in '07 was stuck with a $500,000 home that was only worth $350,000. He had to discount it in order to sell it. The builder who started building in '07 & '08 are building for $300,000 homes and do not have to discount them to get rid of them. Catch my drift?
The other reason they don't have to discount their homes is Uncle Sam is giving money (8000 big ones) to first time home buyers (Biggest portion of buyers out there). That's a built in discount. Kind of like subsidizing the corn farmers. Just grow it and the government will help you out (If I have offended any corn farmers out there I apologize. I didn't think you could read).
Again, this is good news. But let's not strike up the band just yet. There's a lot of corn to grow.
Tell me I'm full of it after you read the attached article (Click on the title).
God Bless.
Forbes came out with a pretty bold statement today "Here's a new sign that the housing market is in recovery mode: The number of homes for sale across the U.S. with discounted asking prices dipped to fewer than 20% on March 1". This is great news. But, once again, I think we need to dig a little deeper.
One reason there could be (Has not been verified) less discounts is that builders have caught up to the market prices. The new stuff on the market now has been built with the current market in mind. The builder who started building in '05 and finished in '07 was stuck with a $500,000 home that was only worth $350,000. He had to discount it in order to sell it. The builder who started building in '07 & '08 are building for $300,000 homes and do not have to discount them to get rid of them. Catch my drift?
The other reason they don't have to discount their homes is Uncle Sam is giving money (8000 big ones) to first time home buyers (Biggest portion of buyers out there). That's a built in discount. Kind of like subsidizing the corn farmers. Just grow it and the government will help you out (If I have offended any corn farmers out there I apologize. I didn't think you could read).
Again, this is good news. But let's not strike up the band just yet. There's a lot of corn to grow.
Tell me I'm full of it after you read the attached article (Click on the title).
God Bless.
Sunday, March 7, 2010
Always Have Protection
People. How do?
The California Board of Realtors are coming out with a new revision for the "Residential Purchase Agreement And Escrow Instructions" or Form RPA-CA. What does this mean to you? Not a whole lot. It does clarify the wording a tad better on some parts re loan and appraisal contingencies. It does explain that if you change financing in the middle of the escrow period than the seller has the right to "VETO" or accept. It illuminates what does, and what doesn't stay with the house (Ceiling fan with one blade), unless there is added verbiage to the contract to correct that (You can have the ceiling fan, but I keep the fuzzy toilet seat). It clarifies some other things to, but all of these things were in the old contract (My clients and I knew they were clear).
The big things that the new contract changes are there to protect the realtor, not the buyer/ seller Buyers and sellers don't pay dues to the board of Realtors. If CAR keeps more Realtors in business then they can make more money. A little cynical.). It moved some wording up front telling the buyer that the realtor is allowed to write offers with other buyers on the same house. Now, the realtor is not allowed to share how much you offered or anything about you. He's just allowed to write offers for "Potentially competing buyers". Nice for him, not for you.
They re-worded how the deposit (Earnest money) is to be handled. This has been a long time coming. Now it states that the buyer will take the deposit directly to escrow 3 days after the offer is accepted. This is to protect the realtor from him (Sexist) self. The #1 way Realtors/ brokers get in trouble is co-mingling funds. Taking deposits and mixing it in with whatever fund (Gambling, drugs, figurines, etc...). I used to write it in that way so I wouldn't have to hold someone else's money. My wife won't even let me have money, how am I supposed to take care of someone else's money.
The point of all of this is is that you better employ professionals who have your back when you are dealing with real estate, money, health and whatever else is valuable to you.
Let me know if you want a copy of the new contract. 619-507-7449.
God Bless.
The California Board of Realtors are coming out with a new revision for the "Residential Purchase Agreement And Escrow Instructions" or Form RPA-CA. What does this mean to you? Not a whole lot. It does clarify the wording a tad better on some parts re loan and appraisal contingencies. It does explain that if you change financing in the middle of the escrow period than the seller has the right to "VETO" or accept. It illuminates what does, and what doesn't stay with the house (Ceiling fan with one blade), unless there is added verbiage to the contract to correct that (You can have the ceiling fan, but I keep the fuzzy toilet seat). It clarifies some other things to, but all of these things were in the old contract (My clients and I knew they were clear).
The big things that the new contract changes are there to protect the realtor, not the buyer/ seller Buyers and sellers don't pay dues to the board of Realtors. If CAR keeps more Realtors in business then they can make more money. A little cynical.). It moved some wording up front telling the buyer that the realtor is allowed to write offers with other buyers on the same house. Now, the realtor is not allowed to share how much you offered or anything about you. He's just allowed to write offers for "Potentially competing buyers". Nice for him, not for you.
They re-worded how the deposit (Earnest money) is to be handled. This has been a long time coming. Now it states that the buyer will take the deposit directly to escrow 3 days after the offer is accepted. This is to protect the realtor from him (Sexist) self. The #1 way Realtors/ brokers get in trouble is co-mingling funds. Taking deposits and mixing it in with whatever fund (Gambling, drugs, figurines, etc...). I used to write it in that way so I wouldn't have to hold someone else's money. My wife won't even let me have money, how am I supposed to take care of someone else's money.
The point of all of this is is that you better employ professionals who have your back when you are dealing with real estate, money, health and whatever else is valuable to you.
Let me know if you want a copy of the new contract. 619-507-7449.
God Bless.
Thursday, March 4, 2010
Should I Stay Or Should I Go?
Cheers, People.
Interest rates dropped a whopping .08 percent from 5.05 to 4.97. They dropped like my jaw when my 2 year old spit out the "F" word. This comes 4 weeks before ugliness could come, or not.
"The central bank's $1.25 trillion program to buy up mortgage securities is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens" says MSNBC.
The Fed, and a couple of economists (Namely Sven Jari Stehn of Goldman Sachs. Are we supposed to trust them? I honestly can't remember.) thinks that the end of this program won't disturb the interest rate waters too much. Other economists say interest rates will shoot up like my cholesterol at a fried chicken eating contest.
The fact is that we wont know until we know. Still, if the Fed does extend the program than rates will stay low, probably.
Click on the link for the full article.
God Bless.
Interest rates dropped a whopping .08 percent from 5.05 to 4.97. They dropped like my jaw when my 2 year old spit out the "F" word. This comes 4 weeks before ugliness could come, or not.
"The central bank's $1.25 trillion program to buy up mortgage securities is set to expire March 31. But the Fed has held the door open to extending the program if the economy weakens" says MSNBC.
The Fed, and a couple of economists (Namely Sven Jari Stehn of Goldman Sachs. Are we supposed to trust them? I honestly can't remember.) thinks that the end of this program won't disturb the interest rate waters too much. Other economists say interest rates will shoot up like my cholesterol at a fried chicken eating contest.
The fact is that we wont know until we know. Still, if the Fed does extend the program than rates will stay low, probably.
Click on the link for the full article.
God Bless.
Tuesday, March 2, 2010
Show Me The Money
People, greetings.
Poway just made a list of the top 10 cities "Where Home Prices Are Rising", says the well renowned Forbes Magazine. It also claims that the year over year price change has went up 27%. It has, but what do they mean by price? Do they mean how much homes sold for? Nope.
They are basing this 27% jump on median home ASKING price (Why the yelling?). That has nothing to do with sells. Who wants to buy my '78 Pinto with a missing hub cap and duct tape pin stripes? I'm ASKING (Again with the yelling) $20,000. If you don't want that my neighbor has a primer gray Ford Escort with 200,000 miles on it and a missing door. He can be talked down to $18,000.
The median home asking price (No need to yell) in Poway is a little over $864,000. That is what's active right now. If so inclined, you may buy one of these homes. The total # of single family detached homes actively on the market is 144. 96 of them are over $700,000 (Close enough to the median price). But, only 11 homes over $700,000 sold in the last 3 months. Those homes took an average of 100 days to sell (That does not count the handful of those that tried to sell earlier and re-listed). Do you see what I'm getting at? That 27% increase in asking price does not matter.
Now, in all defense of Forbes, it does go on to say that a big part of the increase in homes for sale is that all of the less expensive homes get sold quick. But, it still sees these price increases as a turn around in the housing market. It could be, but those homes have to sell at those prices. Other wise, who wants to buy my Pinto (real cherry!)?
By the way, Poway is a great area. Great public schools (Score the best in the county), nice neighborhoods, usually bigger lots. I have put a bunch of my clients in Poway and they all love it (So why am i being a jerk?).
Click on the link to read the Forbes' article.
God Bless.
Poway just made a list of the top 10 cities "Where Home Prices Are Rising", says the well renowned Forbes Magazine. It also claims that the year over year price change has went up 27%. It has, but what do they mean by price? Do they mean how much homes sold for? Nope.
They are basing this 27% jump on median home ASKING price (Why the yelling?). That has nothing to do with sells. Who wants to buy my '78 Pinto with a missing hub cap and duct tape pin stripes? I'm ASKING (Again with the yelling) $20,000. If you don't want that my neighbor has a primer gray Ford Escort with 200,000 miles on it and a missing door. He can be talked down to $18,000.
The median home asking price (No need to yell) in Poway is a little over $864,000. That is what's active right now. If so inclined, you may buy one of these homes. The total # of single family detached homes actively on the market is 144. 96 of them are over $700,000 (Close enough to the median price). But, only 11 homes over $700,000 sold in the last 3 months. Those homes took an average of 100 days to sell (That does not count the handful of those that tried to sell earlier and re-listed). Do you see what I'm getting at? That 27% increase in asking price does not matter.
Now, in all defense of Forbes, it does go on to say that a big part of the increase in homes for sale is that all of the less expensive homes get sold quick. But, it still sees these price increases as a turn around in the housing market. It could be, but those homes have to sell at those prices. Other wise, who wants to buy my Pinto (real cherry!)?
By the way, Poway is a great area. Great public schools (Score the best in the county), nice neighborhoods, usually bigger lots. I have put a bunch of my clients in Poway and they all love it (So why am i being a jerk?).
Click on the link to read the Forbes' article.
God Bless.
Monday, March 1, 2010
No One Wants $6500
Que Pasa People?
The $6500 tax credit is very lonely. Just like an ugly high schooler at the dance or the kid with no skills at the playground, the tax credit is abandoned. Deserted and isolated, the poor tax credit is kicked to the curb.
The Fed added a tax credit last year (Trying to "piggy back" on the tax credit for first time buyers) to try to entice current homeowners to sell their home and buy a new one. This tax credit was put into place to try to bolster the housing market. It did not. Like the fugly 11th grader or the uncoordinated kid, the tax credit begins a life of on line Dungeons and Dragons (Or whatever nerds are playing now).
The reason no one wants the $6500 tax credit is that it has too much baggage (Just like your ex who blames you for something in their past but he/ she couldn't talk about. Or how he/ she threw loud fits in public. Or how they ...fill in the blank, aren't you glad you escaped?).
1/3 of the homes with loans in the U.S. of A. are upside down on their mortgage. They can not step up, only out (Clever?). A big slice of those people will be future foreclosures or short sales. If you remove 1/3 out of anything it will come down, except my cholesterol. Apparently, I have have an endless supply.
There is 10% unemployment in this great country of ours. Some of them will be in the same bunch as the upside down group, but some of them won't (So there). It ain't '05. You can't get a loan without a job (Even a gangster loan shark will need proof you can pay him back. Breaking your legs is fun, but he won't get his money).
$6500 isn't enough to make an American jump through the housing hoop. Don't get me wrong, I like $6500, but I wouldn't spend $40,000+ to get it. Say your house would sell at $325,000. Your closing costs (remember you pay the realtor commission as the seller) would be approx $26,000. Now lets say you bought a house for $325,000 (Why not just stay in the house you had?). You get an FHA loan with a 3.5% down payment, or $11,375. You're already at $37,375 and you haven't paid for appraisal or an inspection or you closing costs. also, your loan amount is higher than if you would have just stayed put. That's a kick in your Louisiana!
The Fed seems like it is trying to come up with programs to help the economy. They're just not that well thought out.
Click on the title and tell me how stupid I am.
God Bless.
The $6500 tax credit is very lonely. Just like an ugly high schooler at the dance or the kid with no skills at the playground, the tax credit is abandoned. Deserted and isolated, the poor tax credit is kicked to the curb.
The Fed added a tax credit last year (Trying to "piggy back" on the tax credit for first time buyers) to try to entice current homeowners to sell their home and buy a new one. This tax credit was put into place to try to bolster the housing market. It did not. Like the fugly 11th grader or the uncoordinated kid, the tax credit begins a life of on line Dungeons and Dragons (Or whatever nerds are playing now).
The reason no one wants the $6500 tax credit is that it has too much baggage (Just like your ex who blames you for something in their past but he/ she couldn't talk about. Or how he/ she threw loud fits in public. Or how they ...fill in the blank, aren't you glad you escaped?).
1/3 of the homes with loans in the U.S. of A. are upside down on their mortgage. They can not step up, only out (Clever?). A big slice of those people will be future foreclosures or short sales. If you remove 1/3 out of anything it will come down, except my cholesterol. Apparently, I have have an endless supply.
There is 10% unemployment in this great country of ours. Some of them will be in the same bunch as the upside down group, but some of them won't (So there). It ain't '05. You can't get a loan without a job (Even a gangster loan shark will need proof you can pay him back. Breaking your legs is fun, but he won't get his money).
$6500 isn't enough to make an American jump through the housing hoop. Don't get me wrong, I like $6500, but I wouldn't spend $40,000+ to get it. Say your house would sell at $325,000. Your closing costs (remember you pay the realtor commission as the seller) would be approx $26,000. Now lets say you bought a house for $325,000 (Why not just stay in the house you had?). You get an FHA loan with a 3.5% down payment, or $11,375. You're already at $37,375 and you haven't paid for appraisal or an inspection or you closing costs. also, your loan amount is higher than if you would have just stayed put. That's a kick in your Louisiana!
The Fed seems like it is trying to come up with programs to help the economy. They're just not that well thought out.
Click on the title and tell me how stupid I am.
God Bless.
Sunday, February 28, 2010
And That's How It's Done
Hi People.
Finally. A good story. A story of how good things happen to good people who work hard and strike when the iron's hot. This story is for everyone who put in an offer to purchase a home after offer after offer with no success. This should be an inspiration to those folks.
Yesterday I was out with some clients ("Clients" sounds kind of sterile. These are friends of mine. I do have friends you know) looking at some property in Poway. We've been trying for several months and have wrote multiple offers on a gang of houses and just have been beaten like the Padres (Sorry), so we finally broke down and decided to start writing offers on the dreaded "short sale" (Short sales are dreaded for several reasons: 1. The ugly short sale can take up to a year to close. The tax credit of $8000 is up in April (You have to be in escrow by April 30th and close escrow by June 30th)Who can wait a year? 2. Since they take so long there is no guarantee that the bank will not foreclose on the property while you're in escrow. Kind of like a 5 year engagement and then you find out your fiance' wants to be a nun. 3. You have no idea what the seller is going to do to the house before you buy it. People selling their house as a short sale are not getting any money back. They are just trying to salvage some credit. Plenty of sellers in this predicament trash the house and take anything that's valuable out of the home and sell it on Craig's List. Bottom line, in a short sale you do not know what you'll get or if you'll get it). But, I digest (big breakfast). so we're looking at these places that my clients really do not want but they realize that in their price range they get what they get. So, we're trying to have a good attitude about the short sales in their price range when my clients got an email.
Right when we were about to leave my clients were notified , via email on their phone, that there was a new home on the market in there price range in that very neighborhood that was a regualr sale(I set them up on an automatic notification of anything within their parameters). We thought we should at least drive by.
We showed up and I knocked on the door. "That was fast, I just put it one the market. Come on in" said the friendliest lady ever. We went in and my clients loved it. Through some conversation I realized that the owner was the listing agent too. I pulled my clients aside and whispered "Do you like it"? They eagerly nodded their heads. I asked them if they wanted to pull the trigger right now. Again with the eager head nodding (Kind of like human bobble heads). I then asked the seller/ listing agent if she wouldn't mind if I used her computer to write up a full priced offer right then and there. She was a human bobble head too. Sold in less than an hour of being on the market.
So, People, keep trying. Don't give up. Your house is waiting for you out there.
God Bless.
Finally. A good story. A story of how good things happen to good people who work hard and strike when the iron's hot. This story is for everyone who put in an offer to purchase a home after offer after offer with no success. This should be an inspiration to those folks.
Yesterday I was out with some clients ("Clients" sounds kind of sterile. These are friends of mine. I do have friends you know) looking at some property in Poway. We've been trying for several months and have wrote multiple offers on a gang of houses and just have been beaten like the Padres (Sorry), so we finally broke down and decided to start writing offers on the dreaded "short sale" (Short sales are dreaded for several reasons: 1. The ugly short sale can take up to a year to close. The tax credit of $8000 is up in April (You have to be in escrow by April 30th and close escrow by June 30th)Who can wait a year? 2. Since they take so long there is no guarantee that the bank will not foreclose on the property while you're in escrow. Kind of like a 5 year engagement and then you find out your fiance' wants to be a nun. 3. You have no idea what the seller is going to do to the house before you buy it. People selling their house as a short sale are not getting any money back. They are just trying to salvage some credit. Plenty of sellers in this predicament trash the house and take anything that's valuable out of the home and sell it on Craig's List. Bottom line, in a short sale you do not know what you'll get or if you'll get it). But, I digest (big breakfast). so we're looking at these places that my clients really do not want but they realize that in their price range they get what they get. So, we're trying to have a good attitude about the short sales in their price range when my clients got an email.
Right when we were about to leave my clients were notified , via email on their phone, that there was a new home on the market in there price range in that very neighborhood that was a regualr sale(I set them up on an automatic notification of anything within their parameters). We thought we should at least drive by.
We showed up and I knocked on the door. "That was fast, I just put it one the market. Come on in" said the friendliest lady ever. We went in and my clients loved it. Through some conversation I realized that the owner was the listing agent too. I pulled my clients aside and whispered "Do you like it"? They eagerly nodded their heads. I asked them if they wanted to pull the trigger right now. Again with the eager head nodding (Kind of like human bobble heads). I then asked the seller/ listing agent if she wouldn't mind if I used her computer to write up a full priced offer right then and there. She was a human bobble head too. Sold in less than an hour of being on the market.
So, People, keep trying. Don't give up. Your house is waiting for you out there.
God Bless.
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