Author: Chris

Tips to Sell Your Home in Orange County Before the New Year

As the year comes to an end, it’s time to see if you’ve achieved your goals for the year. It’s quite possible one of those goals are plans to move to a new neighborhood, city, or county that’s a better fit for you and your family in California. The following are some of the things to do before the New Year hits to sell your home and before new work goals take priority.

Make basic repairs
You want your home to be as attractive as possible to potential buyers to sell your home quickly. But not so attractive that you start second guessing the decision.

As you get further into the Fall season, it is a perfect time to landscape and snip the trees, clean out rain gutters, replace an older roof, and upgrade weatherstripping on doors and window frames. You should also fix any door repairs, update the lighting, and maybe paint a room or two to a neutral color if it’s an unusual color presently.

Make your home really appealing
A potential buyer will probably determine if they want to see the inside of your home within the first 30 seconds of viewing the front door. This means that curb appeal, how your house looks from the street, is among the most crucial steps you can do if you want to sell your home fast.

By simply planting some small plants or vibrant flowers near the front door can achieve this. Trim the tree branches and bushes. Take down any outside flags or personal decorations that could be interpreted as controversial.

Do a Comparative Market Analysis
If you want to sell your home pretty quick in a balanced buyers and sellers market, it has to be priced right. We have seen homes listed for sale for more than nine months. You don’t want to be that seller. Hire a listing agent to determine the best market price based on a Comparative Market Analysis (CMA) and other factors of your home.

A CMA compares your home to similar homes in your neighborhood. if you’re pretty well versed in these reports and valuing properties,do one yourself and discuss your conclusions with the prospective agent, to be sure you are both on the same page.

Find an agent who knows your market
If you are in a rush to sell your home, don’t sign an agreement to sell with any agent. You need an agent who knows the south Orange County market, because prices can vary a lot depending on which city or school district your home is in. In a perfect world, you want your agent to have recent sales in your neighborhood, and/or adjacent areas.

Stage your home
Small maintenance projects and curb appeal are just a couple of ways to make your home look its very best. The profession of home staging is a strategy to make your home appeal to a larger variety of potential buyers. Staging will highlight the homes assets while being neutral. The ultimate goal is to get buyers to visualize the property as their own.

A few helpful hints are to replace personal effects with stylish decorative objects, improving the lighting by opening the curtains, blinds and cleaning the windows. Add medium to small-sized flowers and plants in large rooms. A professional stager with positive feedback would be a person you can trust and offer their expertise.

Be dedicated to marketing
As soon as you feel your home is in a position for it to be marketed to the public, it’s one-hundred percent go-time for marketing. Photos are going to be your best friend during the marketing period.

Therefore, a professional photographer is one use to take photos of the best features and highlights of your home. The appealing items such as a recently-upgraded kitchen or bathroom would stand out, a view of the mountains, Pacific ocean or park from the bedroom or backyard is nice.

Once you have quality photos of your home, your listing should be displayed on home for sale websites along with authoritative social media channels. A video tour of your home may help as well.

Important Steps to Take When Buying a New Construction Home

Moving into a newly-constructed home is similar to getting a new car, but several happy levels higher. No outdated kitchen cabinets, old and bland looking carpeting, or smells from a smoker or their dogs.

Everything in the home is new, clean, and waiting for that personal touch. While these points may put you on cloud nine, there are things that do require your undivided attention with new construction. The following are some things to watch for when looking to buy a brand-new home.

The builder’s real estate agent
When you drive into the new home community and park, you’ll notice how easy it is to first be guided to the builder’s office before you get to see the model homes. That person sitting in the office is a licensed real estate sales agent for the seller (the builder).

You’ll learn what lots or completed homes are available, the community’s amenities and other relevant info. Before you fall in love with a home and sign a long legal purchase contract that tends to be biased in the builder’s favor, do you want the same agent to represent you as the seller?

Although this does happen, and it’s legally okay, is this big purchase with the same agent looking out for the sellers interest in your best interest?  The agent may say it’s okay but you know very well they were selected by the builder and they are their primary interest.  Otherwise, they would not work for the builder.

Solve this problem from the get go by telling the builder’s agent you have an agent representing you.

Some builders are so controlling that once you set foot in the office for the first time, you better have your agent with you or their commission will not be honored by the builder. Your agent needs to introduce you first. If you see the community advertised first, tell your agent.

Many builder’s agents receive a reduced commission or make a salary plus bonus, as they are working on selling a high volume of homes instead of the 2.5 to 3% commission split they’d normally get on sells of 1-3 homes sold per month.

An agent who only represents you will be your trusted advisor.  Your own real estate agent is required to look out for your interests. You’ll be provided with certain state disclosures along with the positives and negatives concerning the transaction.

The builder’s lender
Home builders realize that they need to lure the buyer when their motivation is high and get the process moving forward. Having an “in-house” or “preferred” lender can do just that.

As long as you know you’re getting a good deal with the builder’s lender because you’ve inquired with other lenders there is nothing wrong with going ahead with the process. Just make sure you tried a bank, credit union, and a mortgage broker.

A mortgage broker has the most options and sometimes their wholesale lenders offer specials and rates that beat your neighborhood bank or the builder’s lender. Similar to a listing agent wanting to use their preferred lender, the builder does the same so they can be kept fully informed about the progress of your financing.

Some builder’s lenders will offer an incentive on upgrades but once you go outside the builder’s lender they remove the upgrade incentive which means somehow the builder was getting repaid for the incentive. This practice should be illegal as the lender and seller should not be affiliated.

It is a good idea to check your credit by asking to see a copy of your credit report and FICO scores. You can order a free credit report through AnnualCreditReport.com but if you want scores a lender see, try MyFICO.com for accurate scores versus fake scores from Credit Karma or your banks monitoring service.

The Builder
Lastly, check out the builder’s reviews if you have never heard of them before. The best method is through the Better Business Bureau and your city’s public records for any lawsuits against the builder.

It would be a nightmare for you to have a deposit with a small builder who files a bankruptcy due to pending litigation or doesn’t have the funds to complete your home. Your deposit money will be long gone or tied up at that point.

As you can now see, purchasing a newly constructed home in California has a lot more elements to think about than purchasing an existing home. Be sure you do all of these steps for maximum benefit.

How We Disproved 7 Home Buyer Myths

Home buyers especially first-time home buyers many times have misguided beliefs about the requirements to become a homeowner. In this post, we are going to disprove some of the popular myths about home buying.

Myth #1. You need to have perfect credit scores to purchase a home.
Credit is among the list of factors your lender will review to determine if you qualify to buy a home. Having excellent credit isn’t required to become a homeowner.

Different home loan products have different credit score criteria.
A home buyer with fair credit score of 650 may be able to qualify for a government-backed FHA loan, USDA loan, or VA loan.  Actually, with FHA you can have a score as low as 580 for a 3 1/2 percent low down payment.

A regular conventional loan requires a 620 or higher score. This is not considered a good credit score so the lender may want to see that you have paid all of your debts on time in the last two years. Speak with a mortgage professional for details.

Myth #2. You can’t get a mortgage if you have student loans
Don’t be discouraged if you have student loan debt of $50,000 or more. Lenders care more about your monthly payment for student loans more than how much you actually owe.  You could owe $100,000 but your payment is only $100-$200/month.

Myth #3. Renting is always more affordable.
Renting is not always less expensive than buying a home.  According to a Rental Affordability Report by ATTOM Data Solutions 2019, “purchasing a median-priced home in California is less affordable than renting a three-bedroom home.”

However, the report further mentions that Southern California rents rose faster than median home prices in Orange County, Los Angeles County, and San Diego County.  Mortgage payments are fixed at a set amount and don’t change while landlords can raise the rent annually or once your lease term expires. So, the belief that renting will always be more cost-effective than buying is one that can be easily disproved.

Myth #4. You need to have a 20-percent down payment.
If you are in the camp believing you need to continue to save for a down payment until you accumulated 20-percent down, there’s some good news. The 20-percent down mantra is from decades past.

Government insured loans by FHA allow as small as 3.5 percent down.  There’s conventional loan products which allow 3-percent down payments with mortgage insurance. Borrowers eligible for VA and USDA loans may get up to 100 percent financing.

Some loans allow your down payment to come from gift funds. Furthermore, California and some private organizations offer down payment assistance programs to help you by a home. Look for options when necessary.

Myth #5. Go look at homes first before you know your loan options.
It can save lots of time and money if you look for the right mortgage before you start searching for a home. Your mortgage lender should pre-qualify you first and then truly pre-approve you based on your verified income, monthly debts, assets, and credit history and scores.

Myth #6. It’s better to pay the full price the seller asks for.
As a final point, home list prices are flexible.  Depending on the situation, you or your real estate agent can make an offer above or below the list price. After all, the appraised value should come in at or above the list price.

Myth #7  Contingencies cannot be changed
You may also be able to negotiate contingency periods. Specific repairs and other maintenance after your home inspection can be re-addressed after your offer is accepted. Examples of what can still be negotiated are the seller paying for a home warranty and the date of closing.

Using the services of an experienced real estate agent can help you figure out  elements of the deal you want to negotiate.  Now that these home buyer myths have been dealt with, speak with an agent or loan originator to get started.

Home Buying Tips: Planning for New Expenses

If you’re a first-time home buyer who has never owned a home and just bought a home in California, there’s a chance you’re thinking about what type of new expenses will you have.

Not surprisingly, many homeowners in the Golden state are satisfied with their purchase due to the evidence that owning a home in California has turned out to be a wise investment.

If your home is in one of California’s larger cities, like the San Francisco Bay area or Los Angeles – Orange County metro this is especially the case. Numerous benefits can be gained by owning a home. However, home ownership is also accompanied by many responsibilities too.

As a homeowner, when you have problems you cannot call on your landlord or the maintenance person to handle it. You are directly responsible for taking care of all the repairs, the property taxes, replacing appliances, or anything else.

Not all, but most California home owners will come across dealing with the following expenses:

  • Homeowners insurance
  • Property Taxes
  • Home maintenance and
  • HOA fees
  • Private mortgage insurance (PMI)

Home Insurance
This may not be a new expense for you if previously had renters insurance on the home or apartment you were renting.   Homeowner’s insurance covers you in case your home is robbed or damaged by fire or weather events.   In California, this is calculated at .0035 * cost of home. You may want to add optional earthquake insurance too.

Property Taxes
This is another expense which is often overlooked by new home owners as they tend to calculate just the principal & interest portion of the mortgage on their new home. Property taxes are usually assessed and required at the county level. Some counties impose an additional tax.

Orange County has the Mello-Roos tax in some newer home developments. Generally, property taxes are based on the value of your home multiplied by 1.25% and due every six months.  If you become late on paying your property taxes, late penalties are added to the amount due . If you become severely behind, the state may place a lien on your home, for the amount due and if not paid for five full years may put your property up for sale.

Home Maintenance and Repairs
When you purchase a home, the homeowner is the one directly responsible for taking care of your place. If an appliance stops working or a floor tile is broken or cracked, you’ll have to pay for the repair costs. If your air conditioning or heating starts to malfunction, or your roof starts leaking, you’ll be the one to pay for these costs. This can add up a lot and surprise your bank account if you didn’t get a professional home inspection prior to buying the home.

HOA feeHOA Fees
If you purchase a condo in California, the payment of a Homeowners Association (HOA) fee will be required. HOA fees are assessed to pay for a variety of maintenance costs in common areas of the community, such as landscaping, trash pickup, recreational facilities, cable TV.

Based on the condo community you select, condos HOA fees can range from just a couple hundred dollars a month to $2,000 per month, or more. See if the community had any special assessments for replacing the roof or other 5-10 year large expense repairs.

The repair can be on a totally separate building in the community but all owners share the expense.  Some detached home and townhome communities also have HOA fees.  Check into it with your realtor.

Private Mortgage Insurance (PMI)
Not every California State home owner will need to obtain Private Mortgage Insurance, Many home buyers who bring in a down payment less than 20-percent will need PMI or they may be able to get a loan with PMI built into the rate. When you purchase a home, you’ll need to figure out which way you want to go, because this expense can be considerable.

How to Prepare for These New Expenses
Aside from educating yourself about these expenses, you should have, or save, some funds dedicated entirely for these types of home ownership expenses.  If you fail to plan for these expenses, they can really add up and make the experience of owning a home not enjoyable. Whether you’re buying a home in Aliso Viejo, Mission Viejo, Laguna Niguel, San Juan Capistrano, or any other area in California, being prepared for these expenses will make the transition to home ownership enjoyable.

Are Bidding Wars in Orange County Over?

The quantity of bidding wars in California and nationally simply continues to fall. Is this just a blip in a healthy housing market or something else?

Based on recent data from Redfin, only 12 percent of buyers went through a bidding war in May. This represents a 52 percent decline from the previous year. That is a big difference.

According to Daryl Fairweather, chief economist at Redfin, the decline probably won’t last very long because mortgage rates fell to yearly lows in June.  Lower interest rates makes it more affordable for buyers to own a home.

It mainly depends on affordability and if the home is priced right instead of too high. Redfin claims they’ve noticed an increase in the numbers of home buyers searching for a home. They just aren’t making many offers.

Where bidding wars dropped off most
Bidding wars fell by 65 percent in San Francisco, which is the most of any city since June of 2018. However, once you dig into the data, approximately 28 percent of all offers in San Francisco had a bidding war last month. This number reflects homes with price points of $1 million and under.   Buyers became more discerning and bid up less for homes above $1.25 million.

Buying a house: How to deal with tough competition
The next city was San Jose with only 19 percent of offers having a bidding war in June. That’s a decrease of over 60 percent from June 2018.

In other California cities the rate of sales slowdown is smaller, but still considerable: San Francisco is lower by 15%; Los Angeles has dropped by 7%, Orange County and San Diego are slower by 6% and Riverside-San Bernardino is off by 5%.

Lots of listings today are contingent on the sellers locating an acceptable replacement property. Moreover, there’s numerous offers that come in with contingencies from the buyers on selling their property too.

As of the end of June 2019, the inventory of homes for sale in Orange County is 9,013 vs. 7,887 in June 2018.

From ReportsonHousing, Here’s how this homebuying lack of interest looks at the county level: recent results vs. a year ago and the five-year average for this time of year.

  1. Orange County: 1,771 listings added this year — compared to an average 2,335 increase — bringing the supply of homes to 7,600. This represents 19% more inventory in a year.
    Escrows of 2,548 — down 2% in a year.
    Times it takes to sell? 89 days vs. 73 a year earlier.
  1. https://www.ocregister.com/2019/07/11/rush-to-sell-by-southern-california-homeowners-puts-listings-at-5-year-high/