Christi Nelson's Lake Oroville Real Estate Blog

So your agent has shown you a bunch of  houses and you might be getting a little frustrated if you havent found the right one.  Be patient! Sometimes it takes a few showings to really fine tune what it is that you REALLY want. 

 Then, you finally find it! Let the flood of emotions and questions begin!

In my opinion, it is good idea to educate the buyer as to what the process is and what decisions we will have to be made when finally making the offer.  However there are still little things that will need to be addressed and especially if there are going to be multiple offers on the property.  Thats where you will need to really listen to what your Realtor advises you to do. They have the experience and negotiating skills that will put your offer in its strongest possible position.

Although there are many part to the purchase contract here are a couple examples of things to think about:

The  purchase price. What is the amount you really want to offer? This will usually be a number you come up with according to the sold comps your agent has provided to you. Keep in mind this is probably the toughest part. There are a couple of factors to consider when finalizing the price. Is the seller being asked to give a credit for your closing costs? Are you asking for the seller to pay for all the inspections? How long is your escrow period?  These are things that need to be considered and your agent  will help you fine tune the numbers to make it attractive to the seller.

Escrow Period- How long of an Escrow do you need? Generally the normal time period is 30-45 days. Its a good idea to check with your lender regarding the time period they may need to complete the loan process.

Inspections- What type of inspections do you want to do? What is customary? What do you want the seller to pay for and which ones will you as the buyer pay for?  Your agent will be able to advise you on what the different types of inspections you can do and the importance of them. Your lender may also require certain inspections depending on the type of loan you have.

Here is an example of what a Califonia Purchase contract will look like.

Let the Home Search Begin!

When buying a home, it’s important to think carefully about what it is your looking for in a home. You have heard it before, location location location!  Most people have an idea of the location or area they prefer, whether it is for a certain school district, close to work or to be near family. This would be in my opinion, the first priority of buyers. Then the search begins to find a home with the features you want in that neighborhood. Here is a sample of the Realty World Home Buyer System that seems useful to our buyers.

Where do you search?

Typically when you get together with your real estate agent, they will make a list of your criteria. That can become a search in the MLS system that can be emailed to you daily. There are also many websites available to search on such as Realtor.com and Trulia.com, Trulia gives a lot of  good information such as maps,schools,recent solds,etc…  The listings you are interested in can be emailed to your agent. The agent can then get more information and make an appointment for you to view the home. Some agents have websites that have a customizable search for buyers. The real estate agent and the buyer receive an email when a property that matches the buyers search comes up.

Keep in mind once you have hired an agent work with you, they are spending alot of their time looking for a property and setting up showings for you. If you see a property in the paper or while out driving around, call your agent about it. They will usually have the property info available to them and can give you the information that your looking for.

Happy House Hunting!

 Mortgage interest rates dropped as well as home prices. You have decided its time to buy a house. Now what? Over the next few days I will take you through the process of what to expect when buying a home.

If you’ve never bought a home before or if you currently own a home but have never bought and sold at the same time, the process can seem intimidating. You can ease your anxiety by making a game plan and choosing the best team of professionals you can find.

The two key players on your team are the mortgage person and the real estate agent. Once you have these selected, they can help you line up the additional help you need.

The first step is to find out how much you can afford and what type of loan you will be getting. A lender will qualify you for a certain loan amount depending on how much cash you have available for a down payment and closing costs — the various fees associated with buying or selling a home. Depending on your loan, the house may have to qualify as well.

Other relevant factors are your credit score, your verifiable income and what type mortgage you decide to use for your purchase. There are a lot of different mortgage options: 30-year fixed-rate mortgages, 15-year fixed, interest-only, as well as various types of adjustable-rate mortgages.

Once you know how much you can afford, your mortgage broker or lender can provide you with a pre-approval letter. This is key in the Oroville Real Estate market today with foreclosures, short sales and seller’s alike. This requires that you complete a loan application and have your credit checked. This will put you in a good bargaining position with the seller.

While you’re checking on financing, you should also find a real estate agent, if you don’t already have one. If you’ve never bought a home before, you should use an agent who is a good communicator and who will take the time to explain the process. Also, keep in mind that your agent will be working with the other parties in the transaction. You want someone you trust and who you are sure will represent you professionally and work diligent on your behalf.

With this ground work completed, you are ready to seriously hunt for a home!

New Year still Offers Great Interest Rates!

The 30-year fixed-rate mortgage  averaged 5.06 percent for the week ending January 14, 2010, down from last week when it averaged 5.09 percent. Last year at this time, the 30-year FRM averaged 4.96 percent.

Home sales in the Lake Oroville real estate market, especially for lower-priced homes, increased due in part to the home buyer tax credit and house prices appeared to have changed little.

I want to give you an example again of what the difference between a 5.06% interest rate and say 6.5% rate is on a 30 year mortgage.

Lets say on a $150,000 purchase price at 5.06, the principle and interest payment would be approx. $810.74 per month. Now take that same purchase price of $150,000 at 6.5% and the approx. monthly payment would be  $948.10. This is a difference of $ 137.36 per month, a  savings of $1648.32 a year and $49,449,60 over the life of the loan! That is almost a $50,000 difference. So interest rates play a big role in purchasing a home.

Whether your a first time buyer or looking to move up or down for that matter, you need to take advantage of this!

Speak with a Oroville Real Estate Professional to see how they may be able to help you get into a home. There are alot of programs available.

In my next post ,I will be giving you the information and links you need to get enrolled in  the Mortgage Protection Program. This is a free program that every first time buyer should be enrolled in! There are time periods so stay tuned for details.

 First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers has been extended until April 30, 2010. The  improvment to this? There is now a credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010. Home buyers can still take advantage of the prices in the Oroville, Chico and Paradise Real Estate Markets as well as take advantage ofgreat interest rates!

This is a great  “MOVE UP” market. If you have been thinnking about upgrading to a larger home..there is a credit for you, here is your chance!

Who Qualifies for the Extended Credit? 

• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. 

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. 

Can a Buyer Still Qualify If He/She Closes After April 30, 2010 

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Dont become the bait in this market!

Any property description using “REO”, “Foreclosure”, “Bank Owned”  etc., is drawing a crowd of buyers, especially first time buyers trying to take advantage of the current tax credit due to expire Nov 30^th.  If the property is in decent condition, there will be offers and multiple offers, at that. 

I have had some observations about the  Oroville Real Estate foreclosure market. A number of lenders have hit on a marketing strategy to create a buying frenzy which guarantees an almost instant sale. The properties are marketed well below market value, usually in the price range of the first time buyers and they will not accept any offers before one week on the market. 

A number of buyers may honestly believe that they can make a lower or even close to asking price offer. The result is buyers being disappointed and upset that their offer wasn’t accepted. A number of them believe their offer has a chance of being accepted. In reality, they not only have zero chance of getting their offer accepted, but in the majority of cases, they will not even get a counter-offer. 

Bargains are available and buyers can find themselves to be one of the lucky ones by selecting an experienced agent familiar with the areas in which they  A good agent will be able to advise you on writing a strong offer and which properties are worth the work and which ones to stay away from. Follow that advice! Oroville Home sales

So in our office, we are witnessing many things going on for all the “First-time Homebuyers”. Especially if trying to take advantage of the tax credit, as they are under a time line.  Many of them had no idea what the process of buying a house was. Like talking to a lender, getting pre qualified, learning about the different loan types, learning what properties they would be looking for etc.. they did not speak to a realtor first .You should always consult a realtor, they will educate and guide you through the buying process. Oroville Real Estate

Several buyers went out and traded that old “Clunker” in to get a new car! Don’t they always smell so good!  Then they find out they qualified for the home but cant now because of the “New Car” payment or they are qualified for less..its sad really.  Most would have waited on the car, if they had only known what it was going to do to their dream of home ownership. Oroville Homes

 Majority of the first time buyers also qualifying for the same properties as all the other first time buyers. Majority are properties that are in foreclosure, short sales or are in such bad shape they don’t qualify for the loan. Typically first time buyers are FHA loans. These lower priced properties are getting offers same day and sometimes multiple offers, which multiple is never fun with the banks!

So I thought I would put a few key notes in here I thought might help.  I guess its information and advice.

 It is still a GREAT time to buy! Interest rates are still great and property prices are down. The Magic Combination.

The Tax Credit

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers. You should consult you tax advisor.

Who Qualifies?

First-time home buyers who purchase a home between January 1, 2009 and December 1, 2009. To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase. You must have closed escrow by midnight November 30th.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale. Consult your  tax advisor on this if you do decide to sell.

Short Sales

These can be very attractive. The sellers have taken care of the home , they are usually in good condition and the price is right!.Perfect! However, it is critical that buyers understand the time frames for short sales before they make an offer. Although response times vary from lender to lender, it can take two weeks or as long as 60 days to receive an approval of a short sale from a lender. With the tax credit time frame running out, it could be a real gamble to get it closed on time. 

Foreclosures / Bank Owned

These are usually priced well for the first time buyers. A foreclosure can be that perfect price and they usually close within a realistic time frame. These however need to be checked carefully as they may need repairs that the appraiser will make note of. These will need to be repaired for an FHA loan. FHA loans are stricter with the condition of the property.  Banks may do repairs but most of the time they only care about their bottom line, which didn’t include repairs..

Most properties under $150,000, get ALOT of activity. As soon as they come on the market, there are multiple agents and buyers looking. If you like it ,dont wait. It will either end up with multiple offers and could price you out or it will be gone!

I guess most importantly…Do Not buy ANYTHING during your escrow process. It can change your credit score and/or you debt to income and cause you to lose your loan and so the house.

I came across this article again, and thought it might be a good to share at this time.. Alot of buyers are aware of the tax credit but still are on the fence in fear…What if  “life happens” and I lost my job? Fear of being in the   same  situation as alot of the homeowners now. Well this article may help put your mind at    ease,  but dont forget the clock is ticking on the credit. You MUST close escrow by midnight on November 30th to qualify! Oroville Real Estate

 To help provide first-time home buyers with peace of mind when purchasing a home, the CALIFORNIA ASSOCIATION OF REALTORS® Housing Affordability Fund (C.A.R.H.A.F.) is offering a mortgage protection program to first-time home buyers.

Through the C.A.R. Housing Affordability Fund’s Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.

To qualify for the Mortgage Protection Program, Applicants must:

1. Be a first-time home buyer – someone who has not owned
             property in the last three years (includes co-buyer)
2. Open escrow April 2, 2009, or later, and close on or before
   Dec. 31, 2009 (purchase agreement cannot be dated before April 2, 2009 (purchase agreement cannot be dated before April 2,2009)
3. Use a California REALTOR® in the transaction
4. Purchase the property in California
5. Be a W-2 employee (cannot be self-employed)

Read more…

Recently I went to the Realty World NCA event  where I was introduced to the team at Realty World Financial Services, Inc. I learned of some great programs they have to help homeowners in financial distress.

It is important to remember that we want to do everything we can to help homeowners KEEP their homes. Many homeowners are fighting like crazy to stay in their home and barley making it. Homeowners that are current on their payment but in trouble may find this a perfect solution. With all the different talk of scams and failure to find anyone to do a loan modification, I was pleased to hear that they actually were helping homeowners.

Their goal is to educate you on all aspects of the Short-Payoff-Refinance and Modification so that you are 100% aware of exactly how to obtain the approval that you deserve.
 
Unlike a Loan Modification, where you are modifying your existing mortgage to more  favorable terms, due to some form of ‘hardship’,  the Short-Payoff-Refinance is qualifying for a new FHA 30yr Fixed Loan or “New Money” as they say in the mortgage business, and paying off your existing lender for 90 to 97% of ‘Fair Market Value’ of the home.
 
With a Short-Pay, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor but more importantly the lender.  This negotiation is all done through communication with a bank’s internal department’s.  Once the Discounted Payoff Demand has been obtained by the current note holder, the refinance is completed and the proceeds of the refinance to the original lender is in full satisfaction of the 90 to 97% agreed upon debt.  In such instances, the lender would have the right to approve or disapprove of a proposed loan balance. These circumstances are usually related to the current real estate market and the borrowers’ financial situation. .

They are also very well equipped to perform Loan Modifications by using a streamlined approach using HTI (Home to Income) and NPV (Net Present Value) tools to assist borrowers.

If you are a struggling homeowner, please contact me at mail@ChristiNelson.com so that I can put you in contact with a loan officer.

Thought we could use some positive news! 

The National Association of Realtors®   reported for the first time in five years, existing-home sales have increased for four months in a row. The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999. read more..

On that note, the tax credit is due to run out soon (Nov 30th) so if you are on the fence, act now!

You should be actively looking for a home at this point. Escrow process is averaging 45 days in our oroville market. You would need to have your property going into the escrow process around mid September, as you need to give yourself a little buffer for the whole loan process. This is assuming you are not trying to purchase a foreclosure or a short sale, as they are typically taking much longer just to get an accepted offer. The Oroville market is experiencing multiple offers on many of the lower priced properties. If your offer isnt accepted, this puts you back on the search for a new home!

So take advantage of this great opportunity!