Orange County – OC Neighborhoods

How Much Are Closing Costs in Orange County, California?

Closing Costs for Orange County Home Buyers in 2021
When you buy a home in Mission Viejo or anywhere else in Orange County, California, there’s a host of additional items besides your mortgage that you need to cover. You will also find a number of other costs involved with purchasing a home, which are called “closing costs”. The uncertainty home buyers have is how much will they have to pay.

Home buyers in Orange County (and other cities and counties in California) for the most part spend from 1% up to 3% of the contract price of the home in closing fees. What this means is that a high-priced home in Laguna Beach for $2 million could end up with higher closing costs starting near $20,000 and the same is true for lower priced homes.

According to Zillow, the median home price in Orange County was around $792,000 as of Nov. 2020 showing a 7% gain year over year. So, the buyer’s closing costs on a median-priced property in the city could range from $7,920 to $23,760.

Based on ClosingCorp. , a real estate statistical reporting company, California ranked number nine for the top 10 states with the most expensive closing costs. This is despite having a 1.05% average closing cost on a home. A low percentage is good but a higher average selling price makes up for it.

Home buyers throughout the golden state pay an average of $6,537. However that’s dependent on an average home price of $622,881, which “was the average” for the whole state in 2019. As of now, the average home price is $640,300. Houses are more expensive in the Orange County area so naturally closing costs will be higher there too.

How much you’ll actually end up paying in closing costs in Orange County depends on several factors. If you want the lowest interest rate, are you willing to pay points at closing? It’s one of numerous factors that can determine the total amount you pay on the date of closing where you get the keys.

Mortgage lenders and brokers will provide you a loan estimate of your Orange County closing costs in the beginning. Some lenders go a step further by providing guaranteed closing costs. Once the lender fees are disclosed they are guaranteed to not change unless you choose to get a lower rate later in the process.

Third-party fees such as settlement agent, title insurance, appraisal are also supposed to not change. The loan estimate gives you a more accurate snapshot of your total costs to have funds ready for the final closing date.

The following are some of the usual items that reflect a home buyer’s closing costs:
• Fees for running the borrower’s credit report(s).
• Fees for loan or broker origination
• Fees for loan processing.
• Underwriting fee, which covers the cost of evaluating the loan and borrower.
• Discount points or fees, which borrowers may use to get a lower interest rate.
• Home appraisal fees (many times these are paid in upon ordering).
• Title search and insurance fees, for the lender; optional for home buyer.
• Property survey to confirm property lines, encroachment, etc.
• Attorney / legal fees, in some cases.
• Recording fee paid to Orange County County Clerk for recording new ownership records.

This list may be incomplete but it shows you some of the common closing costs when buying a home in Orange County, California. Extra fees and changes may be necessary in certain situations.

Still Have Questions About Closing Costs in Orange County?
Are you all set on the topic of closing costs in Orange County or are you ready to apply for a mortgage, we’ll be glad to help you and refer you to our recommended licensed professionals.

What You Should Know When Purchasing a Condo in Orange County

Condominiums are an individually-owned housing unit usually found in a multi-unit dwelling and sometimes are built as separate one-story buildings with no common walls in Orange County. The difference between an single family home owner and a condominium owner is that the condo owner does not own the land or common areas jointly with other owners. However, each type of owner holds sole title to their property.

Condo owners share common property jointly with other condo unit owners such as exterior hallways, stairs, roof, gym, pool, elevators, etc.) . The cost of maintenance is also shared among the owners. So, if a roof repair, exterior painting, or other necessary maintenance is necessary, all owners share the expense.

The homeowners insurance may be separate or included in the HOA. It all depends on how it is set up. Property taxes however, are each owner’s responsibility to pay on time.

Unlike a large majority of single family homes, the owner of a condo is not able to freely rent his or her unit to anyone without permission from the HOA. Putting your condo up for sale does not require HOA approval.

A Condo that doesn’t meet the guidelines of a traditional lender will have a higher interest rate than a condo that does meet underwriting guidelines. In addition, in some cases a single-family detached home may be offered a slightly lower interest rate.
• This is because lenders view condos as slightly riskier investments due to them being run by an HOA association or condo management company
• Higher rates tend to occur for condos when the lender learns the financial and ownership type ratio of the development is not considered as a “Warrantable” condo. Therefore the condo is referred to as a “Non-Warrantable” condo.
• In most cases, a condo is regarded as “warrantable” if no single person or entity has a 10% or more ownership in the project, a minimum of 51% of the units are primary residences, under 15% of the units are in default on their association dues, there isn’t any pending litigation against the homeowners association (HOA), and commercial space is not more than 25 percent of the total building square footage.
• A condo or co-op unit is considered “Non-Warrantable” if the project has yet to be completed, its developer has not turned over control of the HOA to the owners, the community allows short-term rentals, a single person or entity owns more than 10% of all units, or it’s in a project where the majority of units are rented to non-owners.
*A high number of vacancies can also negatively affect the condo’s status
• Condotels, time shares, fractional ownership properties, and other projects which require owners to join an organization, such as a golf club are considered non-warrantable units. This simply means financing options are less abundant and therefore lenders add a premium to the interest rate
• If you are in the market to purchase a condo, ask your mortgage originator or real estate agent if the development is warrantable prior to going under contract.

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 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.

Why Did the Seller Reject Your Offer?

Rejected offers can result in major stress and problems for home buyers. An answer of “No” from the seller or their agent is all that it takes for your purchase offer to be declined. This may be the 3rd or 10th home you’ve made an offer on in Orange County’s competitive market. So, the home buying process continues but you should learn the reasons why your offer was not accepted to be successful next time.

The following are the four main reasons purchase offers are not accepted.

Declined Offer Reason #1: Your Price Is Far Too Low
1. Sellers can easily feel insulted or angry and turn down the offer instantly.

2. If a buyer offers a very low price, the seller might feel the buyer is not qualified or not serious.

3. If the house was just listed in the last seven days, the seller might think it’s too early to consider and counter an offer that is well under list price.

Reason #2: Selling Agent Is a Jerk
Buyer’s agents who have a reputation as hard to deal with could make the listing agent and buyer’s life miserable while under contract. If the selling agent (buyer’s agent) irritates or bothers the listing agent, particularly while in a multiple offer situation, it shows the buyer’s agent in a bad light. Be certain that your agent isn’t a person who does the following:

Uses an aggressive tone of voice on the phone or in person.
Doesn’t say please or thank you when communicating ever or rarely.
Does not exhibit a level of professionalism towards other agents.
Insults the listing agent by labeling them as stupid, inexperienced or incompetent.
Maintains an attitude of being superior.

When the listing agent has two identical offers to present to the seller they could say, “The Agent for offer number one is difficult to deal with, and the Agent for offer number two is professional. Which offer do you want to consider?” Most sellers given this information will go with offer number two.

Reason #3: Offer Did Not Fulfill Seller’s Specific Needs
Selling agents should always review the agent remarks in the listing. If they are items you buyer can satisfy, don’t forget to put them in the offer.

1 .If the seller needs a 60 or 90-day escrow period, offer a closing date that works for the seller.

2. If the seller requests a sizeable earnest money deposit, add that into the offer.

3. In some cases, the listing mentions the seller will only accept all-cash offers, so don’t write an offer with financing contingencies or it will probably be declined.

Reason #4: Your offer was too high
Let’s say the seller receives multiple offers that are over list price of $750,000 for a home in Orange County. The first offer was $15,000 over list price. The second offer was $30,000 over list price. The third offer was $55,000 over the list price using an escalation clause. While the higher third offer was attractive to accept, the agent explained that the home is not likely to appraise for $805,000.

This meant the buyer would have to bring in an additional $55,000 beyond their 5-percent down loan and closing costs. It was later discovered the buyer from the third offer did not have extra funds and would rely on the home appraising higher or receiving a gift. So, the seller chose the lowest offer of the three over list price because if the appraisal came in low that buyer did in fact provide proof of having an additional $15,000.

These are just some of the reasons among many why a buyer’s offer is not accepted. By working with an experienced buyer’s agent at HomeFinderOC.com, you can feel confident of your chances to securing the first homes you make an offer.

Orange County’s Most Affordable Neighborhoods

Orange County’s Neighborhoods that are the most affordable with decent commutes to the work hub of Irvine.

Trying to find an affordable place to live in Orange County has become gradually harder as of late even if year over year sales have declined. According to Redfin the average sale price for a single-family home in Orange County is $690,000. Although, there are still areas in Orange County where you can buy a home for a reasonable price and still commute to work to its work hub, Irvine.

Some of these areas are scheduled for redevelopment, so buying a home soon could become a smart investment choice. The following are some of Orange County’s most affordable neighborhoods, based on recent data of the average home sales price. Some of these communities are true Orange County gems!

Rancho Santa Margarita
Average Sales Price: $604,834
Median Home Value: $660,700

Rancho Santa Margarita 92688: $575,000 median, down 7.3 percent. (OC Register Nov 26, 2018)

A master-planned community with a population of approximately 50,000 residents with a very high median household income of $102,975. It offers enchanting scenery, safe neighborhoods, newer homes, and a great school district. The city’s local businesses have been a big part of the city’s growth dating back to 1999.

Whether you’re a resident of esteemed neighborhoods like Dove Canyon, Melinda Heights, Rancho Cielo, or any of the other neighborhoods, you’ll find single family homes and condos available.

Rancho Santa Margarita always a variety of festivals, concerts, and other family-friendly activities going on that make living there really enjoyable. Residents use the 241 and 133 toll roads or carpool and use the HOV lanes to and from Irvine.

Aliso Viejo
Average Sales Price: $630,451
Median home value in Aliso Viejo is $632,229

Features a lot of newer built homes with interesting architecture and scenic views. Bordered by Laguna Beach, Laguna Woods, Laguna Niguel and Laguna Hills, Aliso Viejo is a very nice neighborhood with homes enabling buyers to purchase at a very attractive price tag.

Santa Ana
Average Home Price: $566,474
Median Home Value: $549,900

Santa Ana is the underdog that’s seen major improvement over the past year. It was once considered more of a rough area with a long road ahead, but the turn-around has been dramatic and fast. Young people have put a lot of energy into turning this section of the area around, and the ripple effect has been seen across the city. Its additions of hip, new restaurants and pubs and, especially, their contributions to the community with their artistic endeavors will continue to make this area popular for both students and young professionals for years to come.

The French Park, Floral Park, and Park Santiago neighborhoods

Garden Grove
Average Sales Price: $604,834
Median Home Value: $615,100

Garden Grove’s neighborhood known as Little Saigon, has the largest Vietnamese community in the US. This translates to some of the best Vietnamese restaurants in the country.

A part of the city is just 1 mile away from Disneyland, seven miles from Knott’s Berry Farm, only nine miles to the local beaches and 10 miles to Irvine and John Wayne Airport. Another Garden Grove popular area “Little Korea” runs east to west on Garden Grove Blvd. mainly between Brookhurst Street and Harbor Blvd.

This wonderful city is a great place to call home with all the nearby entertainment, eateries, festivals, and events.

The city has an array of home choices from single-family home to condos and townhomes, and manufactured homes. With this variety also comes a range in price. Home appreciation since 2008 to 2018, has been approximately 8% annually.

The median home price in southwestern Garden Grove zip code 92845 is $673,500. Yet that is still good news for home buyers, as it’s below the $726,525 FHA and conforming loan limits. This means borrowers may qualify for a 3.5-5% down financing.

Lake Forest
Average Sales Price: $604,834
Median Home Value: $718,900

Lake Forest is located off Lake Forest Drive and Bake Parkway, where the 5 and 405 freeways split going north

The city is full of young professionals, families, coffee shops, highly-rated public schools, and features over twenty-six public parks. Among them is the Regional Wilderness Park which offers a wide variety of outdoor recreation the entire year including hiking, jogging, swimming, biking, boating, and basketball.

Homeowners are very satisfied they live in a fun and safe area with low property taxes and varied architectural styles. For residents who live very close to the 5 freeway in Lake Forest or Mission Viejo, you can be in Irvine in 15-minutes or less as long if the brief stretch of freeway is not too congested.

Tustin
Median Home Value:$720,500 ** Zillow
Median Sales Price: $678,750 ** Trulia

Tustin is located north of Irvine and east of Santa Ana is referred to as the “City of Trees” thanks to the tree-lined streets seen throughout the city. The city has highly rated public schools in North Tustin and the foothills. Architecture tends to be Contemporary, Ranch, European, Tuscan, and Mediterranean styles.

Westminster
Average Sales Price: $604,834
Median Home Value: $660,700

Another leading city with an affordable home values compared to other OC cities, Westminster has a fairly stable housing market. It has many local conveniences. With its close proximity to the LA metropolitan area and Little Saigon, Westminster offers great fun for families.

Popular neighborhoods include Bishop Place, Boulevard Gardens, Civic Center, Del Prado Bolsa, Edinger, Garden Grove, Green Lantern Village, Huntington Manor, Midway City, North Huntington Center, Smeltzer,Windjammer, Westminster, Westminster Abbey, and The Pointe.

Although not as close to the 405 freeway, additional values and deals can be found in adjacent cities such as Cypress, La Palma, West Anaheim, and southern part of Buena Park.