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.

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 have had many people ask me ”are things are starting to pick up in our oroville market”. So I have decided to post our weekly stats for you to come and look at for yourself. Oroville market is its own seperate market. We have not seen quite the devestation some areas have like Sacramento. For this we are lucky.  When the market was good we were seeing people from out of the area come to purchase property and vacant land. However, without those buyers we are relying on mostly buyers from our area or relocation buyers. As we begin to get more lending options available ,like the tax credit, we will see an increase in sales which we are starting to see right now. It still seems to vary from week to week. Mortgage applications slow with each small raise in the interest rates. So until buyers understand that 5.38% is fantastic they will probably be buying later  at 6-7% maybe more..!  When was the last time we had low interst rates AND property values at the same time? As I said before NOW is the time to buy!

I will be adding a chart showing the comparison of 2007/2008 and 2009 up to the first quarter to get you caught up. Come back for weekly updates on how our market is doing!