Christi Nelson's Lake Oroville Real Estate Blog

Interest rates are low and prices have come down. Some buyers have decided that it is a good time to buy, even if it is a little while before the Oroville Real Estate Market fully stabilizes.

Buyers who have a house to sell face a more complicated situation than they did when they bought their first home. They may not be able to afford to buy a new house before selling the old one. And, it may be more difficult to find a home to buy because many sellers are not selling now due to current market conditions.

Despite complications, homeowners who want to trade up in a down market can benefit financially. They may sell their current home for less than it might have sold for a few years ago, but they also could pay a lot to less for the replacement home.

Let’s say your current home that was worth $300,000 two years ago is now worth $200,000, or 20 percent less. Even though you would sell for $100,000 less today, if you buy a $1 million house that two years ago was worth $1.25 million, or 20 percent more, you come out $150,000 ahead.

Interest rates are still at an all time low! Even edging up this week, they are 4.81 on a 30-year fixed. On a $200,000 mortgage the principle and interest payment at todays average rate would be about $1049, compared to $1,199 a year ago. A savings of $150.00 per month.

Combine those two major factors and add the $8000 tax credit to first time buyer and the $6500 credit to move up buyers and you have a win win situatuion!

 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…

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!

Qualified, first-time home buyers using a Federal Housing Administration (FHA)-insured mortgage now can apply the $8,000 federal tax credit toward their down payments, the Dept. of Housing and Urban Development (HUD) announced today.

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent down payment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. 

For more information, please visit:

 http://www.hud.gov/news/release.cfm?content=pr09-072.cfm

What Is an FHA Loan?

An FHA loan is offered by a conventional lender, but the government agrees to insure the loan, meaning less risk for the lender in case the borrower defaults. FHA loans are attractive to buyers as well, as they require lower down payments and are available to those with less than perfect credit. There can be some requirements the property will need to meet for an FHA loan so consult your real estate professional as well as your loacal lender regarding Oroville’s FHA loan limits.