Common Real Estate Myths for Home Buyers! #Realestate #Homes #Buyers #Househunting
I'd like to take a moment to correct some common home buying myths that have been fooling Home-Buyers for years. Here's a look at four real estate myths that frequently come up with first time buyers or buyers who haven't been in the market for a while.
I hope this helps you in making the right choices when preparing for one of the biggest purchases of your lives.
1) True or False. Working with multiple agents will improve my chances of finding the perfect home?
OK, who said true? No one said true? Hmmm, ok...moving it along.
If you did think true and didn't say it, have no fear, for you are not alone. A large majority of consumers think and feel as you do and I feel it's our job as Realtor's to open a dialogue, inform and explain not only to our clients, but the general public as well that the correct answer is FALSE!!
All agents have access to the same MLS listings in your area, so you are not going to gain access to more houses by working with more people. It is in your best interest to find an agent with a communication style and commitment level that matches yours, and let them do the hard work for you.
Not only is there no sense in working with multiple agents, there is no such thing as the perfect home. Homes come in all shapes and sizes and conditions and prices, but it is extremely likely that none will have the exact combination of features you're looking for on the street you want at the price you like.
The thing to do is to prioritize your home wish list, so your dedicated real estate agent (your's truly) can find the homes that are the best fit for your needs... and that will most likely transform into your dream home after you move in.
2. If I see a house I like, I should call the number on the bottom of the yard sign? Correct answer is.....FALSE!
The agent listed on the yard sign is the one who represents the seller, so they are being paid to act in the seller's best interest. That is great and exactly as it should be, but it doesn't mean that they will act in your best interest.
It is best to call the agent you are already working with and ask them to set up a time to view the house. This is yet another reason why it is good to establish a relationship with a dedicated buyer's agent.
3. My first offer should be a lowball offer? TRUE AND FALSE!
Of course it makes sense to offer a lower price than you ultimately planned to pay and negotiate your way up, but there are times when this strategy can backfire. In a hot market, (like the one we're seeing now) a home may have multiple offers and the seller might move yours to the bottom of the pile without ever responding. Even if a property has been on the market for a while, an offer that is too low could offend an already-frustrated seller and prevent them from doing business with you. Or if they do decide to work with you, ill feelings caused by your initial offer could make negotiations even trickier.
The best thing to do is ask your real estate agent for advice and then make an offer that you are comfortable with. If you really want the house, this might not be the time to press your luck. If, on the other hand, this is just one of several you're considering and you're not entirely set on it, it might be worth the risk.
4. If a house appraises well, I don't need a home inspection.
FALSE FALSE FALSE FALSE!
Home inspections and home appraisals are two entirely different things. A home appraisal is an estimate of the property's value that is performed to safeguard the lender. A home inspection is an assessment of the condition of the home done to educate the buyer.
An appraiser notes the value, whereas an inspector notes the condition. Even if the home you make an offer on appraises for the sale price, there could still be broken or unsafe elements. In some instances, you can negotiate with the sellers to have these items fixed. This is just one way a home inspection comes in handy.
Of course, there are many more home buying myths out there than I could possibly cover here in one post. My point here was to open a dialogue, inform and explain some of the most common ones so hopefully they will one day *poof* just disappear!
★7 Tips To Help Get Your Purchase Offer Accepted★
In today’s competitive market where multiple offers are the norm, it is
very important that your offer stands out from the crowd so it is given
every chance of getting accepted!
Here are 6 tips that you can use that will strengthen your offer and ensure your Purchase Offer stands out from the crowd:
1. Submit a Strong Cover Letter!
Submit a strong
cover letter with the Offer explaining a quick synopsis of your
situation and why you are the best candidate to purchase this home. It
is also a good idea to include a personal letter also. If you can tug at
the heart strings of the seller, then they may be more apt to choose
your offer over others!
★It is also important to address upfront any red flags in your profile, so the seller is not put off by anything★
2. Make sure the pre-approval letter advises what type of financing you will be getting.
Provide a pre-approval letter that explains what type of financing you
will be getting and how much of a down payment you are using. For
example, if you're qualified for conventional financing and putting down
20%, make sure to write this into the pre-approval letter, as this will
usually place ahead of a FHA buyer that has a 3.5% down payment or a VA
purchase offer that has no down payment.
3. Provide a DU Underwriting approval with the offer.
Make sure your offer is accompanied by a DU automated underwriting
approval. A DU (Desktop Underwriter) underwriting approval is when your
loan application has been run through Fannie Mae’s, FHA’s or VA’s
automated DU underwriting system and was issued with an underwriting
approval.
A DU underwriting approval displays the most
important information needed on your profile and will give the seller a
good idea of the strength of your offer. For example, a DU approval will
lists the credit scores, debt to income ratios, assets, down payment
and the type of loan program you are approved for.
4. Provide proof of down payment funds.
Always provide proof of funds and where the down payment funds are
coming from. Make sure to send over recent bank statements or statements
from any account you are using for the down payment. Make sure there
are enough funds in the statements you are providing to match the down
payment listed on the offer.
Or if you're are going with FHA
and are getting a gift from a family member, make sure there is a gift
letter provided with the offer. Once again, make sure there is always
enough funds to support the offer.
5. Make sure everything on your offer is current.
It is not uncommon these days for a buyer to be submitting offers for
up to 3-4 months before they find a home, so sometimes many of the
documentation in a buyers file is outdated, and copies of the
pre-approval letter, the DU underwriting approval or proof of funds have
a date that is a few months old.
Therefore make sure all the
dates on your cover letter, approval letter, DU approval and all funds
provided are current and within the last 30 days.
6. Don’t ask the seller for credits to cover closing costs.
A Purchase Offer asking for seller credits to pay for your closing
costs will usually place behind a buyers offer that does NOT ask for any
seller credits! Most people assume because they don't have funds for
closing costs, they will just ask the seller to cover them. This does
happen, but here is a better option.....
"To make your offer more competitive, you can pay ALL closing costs with a lender credit!"
How does this work? It’s easy, instead of taking let’s say a 3.25% 30
year fixed rate on a FHA loan, you can take a slightly higher rate of
3.5% instead, and with this higher rate there is now a lender credit of
roughly 2.5% available that can be used to pay ALL your closing costs.
Not only is this a good negotiating tactic, but it will help you
purchase a home if you don't have the funds to pay for your own closing
costs! I present this option to all our buyers so they know this option
is available to them!
7. Faster closing to entice the seller to accept.
Being able to close a transaction fast is one way to entice the seller to accept your offer in this competitive market!
For example, if a seller is reviewing 3 offers, and there is a 17 day
offer, a 30 day and 45 day offer, more than likely the seller will take
the fastest closing. Therefore being able to close faster is a strategy
that you can use to help get you into contract!
Rodeo's Affiliate, L.A. Mortgage can usually close a Conventional Purchase Transaction in 17 days (FHA and VA in 21 days)
They are an outstanding team set up and dedicated to closing transactions fast!
I hope you found these tips useful. I believe that full transparency
upfront is the key to getting an offer accepted these days, because
usually the “Path of Least Resistance” is what Sellers look for when
reviewing offers!
Have A Great Weekend Everyone!
Connect with me: https://www.facebook.com/StefenLibertiWestLARealtor
~Never take counsel of your fears~
(Andrew Jackson)
So this week, I was talking to a young couple I know that was about to
close on their first home. They were riding the wild roller coaster of
current mortgage rate swings and were not happy about the process at
all. Yet, when they spoke about finally living in a home that they own,
their disposition changed dramatically.
A smile came across
their faces as they talked about decorating the house and how much they
will enjoy entertaining in the backyard. They talked about inviting
friends over for dinner and their family over for the holidays. The more
they talked, the more excited they became.
I asked them if
many of their friends were also buying. I was shocked to find out that
they weren’t. Why not? Their friends believed that home-ownership was
financially unobtainable right now. Many wanted to own but didn’t think
they could afford the monthly mortgage payment. They decided to rent
instead.
I said that, with historically low interest rates and
prices where they are today, owning a home might not be any more
expensive than renting one. The couple agreed but said their friends
were AFRAID; afraid they might not qualify for a loan, afraid to handle
negotiations with a seller, afraid of the home buying process itself.
Wow! I've heard of many reasons, but afraid? People should not make any
decision based on fear. I’m not saying that every young person should
own a home. I am saying that anyone that is qualified and wants to buy
should not be afraid of the process.
I realize the process may
seem daunting but realize over 10,000 homes sell every day in this
country. Sit down and discuss your goals with professionals from both
the real estate and mortgage industries. Get the facts. Make an informed
decision. Don’t let the fear of the unknown prevent you from living the
life of your dreams.
If I can help alleviate any fears, please feel free to contact me.
https://www.facebook.com/StefenLibertiWestLARealtor
Ways to Prepare for a Home Appraisal.
#Realestate #Appraisal #Home #Sellers
The appraisal stage of a contract is one of the most anxious periods
any home owner has to face. It determines the value of your house and the
amount you would receive on selling it.
Whether or not your home gets appraised to a decent price is a matter
of great concern for owners. Experts suggest home owners take some
necessary steps to secure good appraisals for their house.
1) MAKE YOUR HOME APPEAR PRESENTABLE.
Pay attention to every nook and corner of your home and find out what
needs changes or repairs. Present your house in its best state before
the appraiser arrives. Change the linen, put up clean and decent looking
curtains, and get the walls and floors polished. See if there is any
part of the house that needs to be repaired. Also keep your yard clean
and green to make the right impression. Even the smallest negligence can
cost you a great deal.
2) CLEAN AND DE-CLUTTER.
Clean
homes always make a better impression on anyone so let your appraiser
also be influenced by the cleanliness of your house. Remove any clutter
that might have accumulated in the cupboards, closets, etc. Make your
home look nice and tidy. A fresh smelling house is also a pleasure to be
in, so try using some air fresheners before the appraiser arrives at
your place. These tiny things may not be complete in themselves,but they
can form a strong first impression on the appraiser’s mind which can in
turn mold their judgment to a more positive one.
3) GIVE A LIST OF UPGRADES AND MAINTENANCE PERFORMED.
Keep the receipts or some other proofs of upgrades that you have had in
the house in the recent past. Let the appraiser see that you pay due
attention to the maintenance of your house. They are likely to make a
more favorable decision if they sense this. If you have installed high
quality equipment in your house, do let the appraiser know of that too.
4) BE HOSPITABLE WITH THE APPRAISER.
Welcome the appraisers nicely, treat them hospitably, and you’ll see
the result of your good behavior in your appraisal document. If there
are pets in the house, it is best to lock them up for the time being
till the inspection is complete. Try to create as little disturbance for
the professional as possible. Even children should be minded by someone
for as long as the appraiser is in your house doing the inspection.
Selling your house is a major decision and involves many complications.
The biggest one for most people is to get the right price for the
property. However, you can avoid many of the hassles by following the
above mentioned steps. These will only require a small investment of
time and money from you, which will be more than compensated in the
appraised price you would get as a result.
Hope this helps and as always...If I can be of assistance, I'm here if you need me.
https://www.facebook.com/StefenLibertiWestLARealtor
10 KEY QUESTIONS TO ASK REAL ESTATE AGENTS:
Selecting the best agent to list your home for sale and asking the
right questions are key components to a successful sale for top dollar.
By asking the right questions listed below you will maximize the probability of a successful sale.
1) HOW MUCH CAN YOU GET FOR MY #HOME?
The best agents will prepare a written #CMA
(Comparative Market Analysis) form to anticipate your question. If an
agent doesn't leave their CMA with you to study, that agent doesn't
trust you.
2) WHAT ARE THE NAMES, ADDRESSES, AND PHONE NUMBERS OF YOUR 5 MOST RECENT #SELLERS:
The best agents will include this information in their Listing
Presentation.Before signing a Listing with any agent, contact their
recent #Sellers to ask, "Were you in any way unhappy with your agent and
would you list your #home again with the same agent?
Listen to the answers closely, especially if the recent Seller hesitates or gives a vague answer.
3) HOW LONG HAVE YOU BEEN SELLING HOMES IN THIS AREA? ARE YOU A FULL-TIME #AGENT? WHAT COURSES AND DESIGNATIONS HAVE YOU COMPLETED?
Just because an agent is a beginner, that's not necessarily bad. He or She will probably have more time to devote to #selling your #home than will an "old pro agent" who carries many listings.
However, be sure a new agent has adequate supervision from an experienced brokerage office manager.
4) WHAT IS YOUR MINIMUM LISTING TERM?
The correct answer is 90 days. Be wary if an agent insists on a
six-month Listing, unless that Listing includes an unconditional
cancellation clause after 90 days.
5) HOW MANY LISTINGS DO YOU HAVE KNOW? DO YOU HAVE AN OFFICE ASSISTANT? WHAT % OF YOUR LISTINGS SOLD IN THE LAST 12 MONTHS?
Watch out for a numbers agent! These are #agents
who have dozens of Listings and one or two Office Assistants. They work
on Percentages, knowing a certain percent of their Listings will sell,
so they want as many Listings as possible. If you List your home for
sale with a numbers agent, be sure it won't get neglected.
6) WHAT SALES COMMISSION RATE DO YOU CHARGE?
Most REALTORS® will tell you the "#standardcommission" is 6% (or 7%) but #NAR (The National Association of Realtors), in a recent study reports the average nationwide sales commission is 5.1%
7) WHAT IS YOUR #MARKETINGPLAN AND WHAT SERVICES DO YOU PROVIDE?
This question is closely related to the sales commission rate.The best
"Full service" agents will prepare a written list of all their #marketing #services.
8) OTHER THAN YOURSELF, WHO IS THE BEST REAL ESTATE AGENT IN THIS AREA?
The best agents will honestly answer you question.
9) IS MY HOME READY TO SELL OR DO YOU HAVE SUGGESTIONS TO BETTER PREPARE IT TO EARN TOP DOLLAR?
Some agents will want to avoid answering this key question until after
you sign their Listing. But you need to know the answer before signing a
Listing with an agent.
10) SHOULD MY HOME BE SOLD "AS-IS?"
Most states now require home Sellers to fill out a Disclosure statement
listing any known residence defects that materially affect the #marketvalue. This procedure avoids after-sale lawsuits if the #Buyer was informed of all defects.
These questions should serve as a guide to helping you choose the right
Real estate agent. If I can be of assistance, please feel free to
contact me at:
https://www.facebook.com/StefenLibertiWestLARealtor
https://www.facebook.com/StefenLibertiWestLARealtor
★Economic Update for the week of July 5★
#Realestate #Market #Economy #Mortgage #Rates
This holiday week was a short one for many but it ended on a high note.
Mortgage rates stabilized Monday, Tuesday and Wednesday a bit after spikes over
the last few weeks before rising sharply today after the jobs report
was announced. Freddie Mac’s Weekly Primary Mortgage Survey found that
the average for a 30-year-fixed conforming mortgage was 4.29% percent,
down from last week’s average of 4.46%, The 15-year-fixed rate average
3.39% down modestly from last week’s 3.5%. Unfortunately, the FNMA
30-year-fixed rate hit 4.75% today, about a 3/8% rise from Wednesday,
and 1/4% higher than last Friday. High balance conforming hit 5% and
jumbo is around 5.25%. The 15 year rates also rose sharply.
I
do think the rates will settle a little next week as this seems an
extreme reaction given the unemployment rate didn't change. Overall, I
would expect rates will continue to climb more gradually for some time
until we get close to the 6% range.
Tuesday, CoreLogic released
data showing that home prices rose 12.2% in May compared with the same
month a year ago. This was the largest monthly increase since February
2006 and slightly below the predicted rise of 12.5% for May. The
month-over-month rise was 2.6% including distressed home sales.
Excluding distressed sales May prices rose 2.3% compared with April and
were up 11.6% year over year. CoreLogic predicts June’s housing prices
including sales of distressed properties will rise 13.2% year over year
and 2.9% month over month. Excluding distressed sales, CoreLogic’s
year-over-year increase for June is forecast at 12% and the
month-over-month estimate is forecast to rise by 2%.
Among the
100 largest U.S. cities, 97 showed a year-over-year increase in home
prices. The largest gains (including distressed properties) came in the
Los Angeles metro area which was up 19.8%. This is much different from
the Data Quick and CAR which showed year over year price increases in
the 30% range in Southern California. Those were for median price which
means half sell for more half sell for less. This report is for an
increase of individual homes which is not an exact formula as neither is
probably right for every individual area. Either way they both show
what we know, prices are rising sharply and steadily with no end in
sight at the moment.
I hope you had a good 4th and I wish you a great Holiday weekend!
★ MARKETUPDATE ★ for the month ending June 30, 2013★
Realestate
news for the month of June centered around higher interest rates after
the Federal Reserve Chairman, Ben Bernanke, announced that the Fed
would be slowing down the mortgage-and-bond
buying purchases under the program known as QE3 by the end of the year.
He further stated that the Fed planned to end all purchases as early as
mid-2015. The reason for this announcement was because the Fed now felt
that the economy was growing at a strong pace, unemployment levels have
dropped and he expected them to continue to drop, so further stimulus
would no longer be needed. This program helped bring rates to the lowest
level seen in decades. After hitting this year’s low of 1.61% on May
1, the 10-year note spiked soaring to a 22-month peak of 2.667%
Wednesday, its highest level since August 2011, before settling at
2.52% today.
★INTEREST RATES★
#Mortgage #interestrates
were up sharply both for the week and month. A 30-year-fixed conforming
mortgage is now at 4.38% up from 4.24% last week and climbing steadily
from 3.75% a month ago. The rate was 3.57% on May 1, so rates are up
almost a full percent in 60 days. A 15-year-fixed mortgage rate is now
up to 3.46% up from 3.31% last week and up over half a point from 2.90%
last month. Rates on high balance conforming $417,000 - $625,500 ( LA
and Orange county and $598,000 for Ventura county) are about 1/8% higher
than conforming and jumbo loans are about ½% higher.
This week
Federal Reserve officials continued efforts to curb a rise in long-term
interest rates, hoping to calm fears raised by comments made by
Chairman Ben Bernanke that triggered turmoil in global financial
markets. Officials say an increase in the Fed’s benchmark interest rate
is still a way off and bond purchases could also be prolonged if the
economic performance doesn’t measure up to forecasts.
So why did #rates rise? Is #Wallstreet
fed up? Was the Federal Reserve testing the market’s tolerance with
some well thought out comments? Will the Fed begin to unwind its
efforts? Time will tell the answer to all of these questions. But I do
assure you that the ride is not over. As we’ve seen in years past,
there is always a secondary action to the immediate (usually
over-reaction) reaction, but then again, most have been preaching for
months, if not years, that rates can’t stay this low. Can they?
As a real estate professional, I don’t have all the answers when if
comes to the future of interest rates. My guess....#Rates will likely
dip again and level off in a somewhat upward trajectory. We have likely
seen the record low rates come and go. This happens. It is the cycle. It
is not doom and gloom. Rates are still low and people are still
interested in buying houses. In fact, I typically see an uptick in home
sales immediately after an interest rate rise as #Homebuyers
fear further increases. For now, rates will be what they will be, and
while they have an impact, they certainly are not the largest reason
that someone should or should not buy a home.
★HOME PRICES★
Reports on #Home prices continue to beat expectations. The California Association of Realtors reported that the median housing price in #California
increased 31.9% in May, the largest year-over-year increase in 33
years. Inventory levels remain low while the number of sales in May
continue to rise.
In May, there was a 2.6 month supply
listings at the current sales rate, down from 3.6 % a year ago. A
six-to-seven-month inventory represents a balanced market. DataQuick
reported that an estimated 42,293 new and resale houses and condos sold
statewide last month. That was up 8.3 % from 39,051 in April, and up 1.2
% from 41,790 sales in May 2012. The sales count was the second
highest May ever reported behind only May 2006, where 54,099 homes were
sold.
As always, if you need a #REALTOR to help you #Buy,#Sell,#Lease or #Invest, I would love to be of service.
I hope you have a great weekend!
