Category Archives: buying a condo

Homeownership Still a Great Investment

(Courtesy of

Homeownership Still a Great Investment | Keeping Current Matters

Four recent news articles confirmed that most Americans still see real estate as a great long term investment. The Gallup organization polled the American people and discovered that they believe that real estate is a better long term investment than stocks/mutual funds, gold, savings or bonds:

Americans: Real Estate is Best Long Term Investment | Keeping Current Matters

A second survey was done by Edelman Berland which showed that:

Importance of Real Estate to Long-Term Investing | Keeping Current Matters

At the same time, Tim Rood, chairman of the business advisory firm The Collingwood Group, explained that real estate is:

“…one of the last legitimate wealth creation opportunities…The leveraged return if you put down 10 percent on a house, the trajectory of appreciation lately is you’re going to get your money back inside of a year and then after that 5 to 10 percent appreciation rates. It’s phenomenal.”

Bottom Line

Real estate continues to be a sensational long term investment. If you need help with any of your real estate needs, contact a local real estate professional and discuss the opportunities available in today’s market.

California 2015 Housing Market Forecast Preview

2015 Housing Forecast for California
2015 Housing Forecast for California

With more available homes on the market for sale, California’s housing market will see fewer investors and a return to traditional home buyers as home sales rise modestly and prices flatten out in 2015, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2015 California Housing Market Forecast.”

The C.A.R. forecast sees an increase in existing home sales of 5.8 percent next year to reach 402,500 units, up from the projected 2014 sales figure of 380,500 homes sold. Sales in 2014 will be down 8.2 percent from the 414,300 existing, single-family homes sold in 2013.

“Stringent underwriting guidelines and double-digit home price increases over the past two years have significantly impacted housing affordability in California, forcing some buyers to delay their home purchase,” said C.A.R. President Kevin Brown. “However, next year, home price gains will slow, allowing would-be buyers who have been saving for a down payment to be in a better financial position to make a home purchase.”

“Moreover, prospective buyers should know that it’s a misperception that a 20 percent down payment is always required to buy a home. There are numerous programs available that allow consumers to buy a home with less down payment, including FHA loans, which lets buyers put down as little as 3.5 percent,” continued Brown.

C.A.R.’s forecast projects growth in the U.S. Gross Domestic Product of 3 percent in 2015, after a projected gain of 2.2 percent in 2014. With nonfarm job growth of 2.2 percent in California, the state’s unemployment rate should decrease to 5.8 percent in 2015 from 6.2 percent in 2014 and 7.4 percent in 2013.

The average for 30-year fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels.

The California median home price is forecast to increase 5.2 percent to $478,700 in 2015, following a projected 11.8 percent increase in 2014 to $455,000. This is the slowest rate of price appreciation in four years.

“With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While the Fed will likely end its quantitative easing program by the end of this year, it has had minimal impact on interest rates, which should only inch up slightly and remain low throughout 2015. This should help moderate the decline in housing affordability we saw occur over the past two years.”

“Additionally, the state will continue to see a bifurcated market, with the San Francisco Bay Area outperforming other regions, thanks to a more vigorous job market and tighter housing supply.”

Tackling Tricky Cleaning Jobs: 7 Jobs Just Got Easier

clean house funnyThere are a few tricky cleaning jobs universally dreaded for being time-consuming, hard, or just plain confusing. How are you supposed to clean off a ceiling fan without getting dust all over the house and your head? How do you clean a fireplace without creating an indoor dust cloud? The tips below won’t make any of these jobs fun, exactly, but they will make them quicker, easier, and maybe even tolerable.

 

 

Ceiling FanCeiling Fans
Put a drop cloth or old sheet on the floor and furniture over an area about twice the radius of the fan blades. If you want to keep your hair dust-free, pop on a hat as well. Use an old pillowcase to dust blades, sliding the case around the blade so the dust falls into the case. Make a second pass over each blade with a new pillowcase, this time spraying each blade first with a cleanser (a spray bottle of water and two tablespoons of white vinegar works too.) Hop on a sturdy chair or ladder and wipe around the rest of the fixture with a dust cloth or use a long handled micro-fiber duster.

RefrigeratorRefrigerator–Interior
To clean the interior, first take everything out the fridge. Remove shelves, bins, and drawers and wash in warm soapy water (don’t plunge cold glass shelves directly into hot water because they might shatter). Wipe down interior with a mixture of two tablespoons baking soda and a quart of hot water. For extra cleaning power, let mixture sit for a few minutes before wiping off. Use a plastic–not steel wool–scouring pad for stuck-on food and spills. Clean seals with a baking soda paste or undiluted hydrogen peroxide, getting into crevices with cotton swabs. While interior parts are drying, wipe down jars and containers, removing drips and spills. Check expiration dates and toss any out-of-date items. Follow the same procedures for the freezer, adding a plastic scraper to remove frozen-on ice or food.

 

 

 

refrigerator interiorRefrigerator—Exterior
For the exterior of the fridge, wipe down the outside surfaces with soft cloth and a gentle cleaner. Use a toothbrush or plastic scouring pad for grime on handles. Unplug the fridge to clean the condenser and coils. Remove the trim panel from below the door (you may need to unscrew it.) Vacuum or dust the panel, or if it’s plastic, soak it in warm soapy water to loosen dirt. Using the brush or crevice attachment, gently vacuum dust from coils and condenser. You might need to move the unit away from a wall to get at the back. When you put it back, make sure to leave enough space between coils and wall so the unit can run efficiently.

 

baseboardsBaseboards
Make a first pass over the boards with a dust mop, vacuum or a dusting cloth. If there’s leftover grime, wipe down with damp cloth and mild detergent. Use wood cleaner for wooden baseboards. Try a cotton swab to get at intricate designs and corners. Touch up scuffs and scrapes with a bit of matching paint. Finish off by wiping down clean, dry baseboards with dryer sheets to repel future dust.

fireplaceFireplace
Prepare for the job by donning old clothes and a pair of gloves. Cover the area around the fireplace with old sheets or newspaper. Remove grate and andirons and put outside on a tarp. Put a handful or two of used coffee grounds into the ashes to minimize flyaways, then shovel out the old ashes and put in a double-bagged trash can. Use the fireplace brush to sweep up remaining ashes. You can scrub the inside further by scraping with a wire grill brush and a fireplace cleaner, if desired. Clean the andirons and grate with the wire brush and a hearth cleaner or a paste of baking soda and warm water. Let everything dry thoroughly before putting back in.

groutGrout
Grout can be a challenge to clean because it’s porous and often light-colored. To clean, you will need a cleaning agent and a scrubbing tool, like a scrub brush or toothbrush. Use a baking soda and hydrogen dioxide paste, a half and half solution of white vinegar and water or a mix of oxygen bleach and warm water. Spray or apply the solution to the grout and let sit for about 20 minutes. Scrub the grout, reapplying the solution for tougher stains. For mold that won’t come off, you can use a chlorine bleach spray, but the bleach will weaken the grout over time. To maintain your grout and delay another deep cleaning, spray weekly with vinegar and wipe clean.

blindsBlinds
Gentle vacuuming with a brush attachment works for all types of blinds, including cloth, wooden, and metal/vinyl blinds. Close the blinds so they’re fully extended and brush each slat individually, working downward. Swivel the slats to do the other side, again moving downward. You can also dust with a micro-fiber cloth or a duster. Again, you have to go over each slat, front and back. For dingy vinyl and metal blinds, make a mixture of one part vinegar and one part water and go over each slat with a dampened cloth or, for more flexibility, an old sock turned inside out and worn on your hand. Cloth blinds can be spot treated with a damp cloth and a bit of dishwashing liquid. You can cut down on scrubbing time by removing metal and vinyl blinds and taking them to the bathtub or outside to hose them down, then scrubbing with warm soapy water, but you run a greater risk of bending or breaking the blinds. Make sure the blinds are fully dry before rehanging.

6 Things Homebuyers Should Avoid Once They are Preapproved for a Mortgage

black couple loan approved

You have done the hard part in the home-buying process and chosen a lender and a real estate agent to work with. You have also gone out and found the home of your dreams! Best of all, your team has done a great job of negotiating the best deal for you.

Now, as a buyer, all you have to do is sit back and wait for your loan to close … right? Wrong!!

Getting a home loan these days is a very interactive process. I am always amazed by how many clients I work with who come to me unaware of all the pitfalls they face during the loan process. To help avoid any surprises while waiting for final approval, I provide my clients with a short list of “do’s and don’ts” to follow.

Let’s start with the “do’s” …

  1. Do keep the process moving by responding to your loan officers’ requests for documentation as soon as possible.
  2. Do make decisions as soon as is reasonably possible.
  3. Do convey questions or concerns you
  4. Do continue to make all of your rent or mortgage payments on time.
  5. Do stay current on all other existing accounts.
  6. Do continue to work your normal work schedule with no unplanned time off.
  7. Do continue to use your credit as normal.
  8. Do be prepared to explain any large deposits in your bank accounts.
  9. Do enjoy purchasing your home but remain objective throughout the process to help make decisions that are best for you.

After you have been preapproved for your mortgage you will want to refrain from the following…

  1. Do not make any major purchases (car, boat, jewelry, furniture, appliances, etc.).
  2. Do not apply for any new credit (even if it says you are preapproved or “xxx days same as cash”).
  3. Do not pay off charges or collections (unless directed by your loan officer to do so).
  4. Do not make any changes to your credit profile.
  5. Do not change bank accounts.
  6. Do not make unusual deposits into your bank accounts or move money around from one account to another.

Follow these simple rules and you will help to make your loan closing as smooth and hassle-free as possible! Good luck!

FHAs Back to Work Program Waives Waiting Times

(Courtesy NKS Financial)

image
Purchase again sooner than you think

The Federal Housing Administration (FHA) recently announced its “Back to Work” program, which is giving individuals who suffered a long period of hardship during the recent housing crisis a second chance to prove they can carry a mortgage and own a home.

The program will waive many of the waiting periods associated with a significant “economic event” such as bankruptcy (Chapters 7 and 13), short sale or foreclosure.

Potential candidates may be first-time or repeat home buyers, and the program can be used for the 203K rehab loan. It must be approved by an FHA lender, and as some lenders are choosing not to participate, you may want to contact your mortgage professional for more information on this.

Eligibility

To participate in the program, individuals must be able to demonstrate they’ve recovered fully from the “event”, and document the fact that they did have a household income loss of at least 20 percent for a period of at least six months that coincided with the “event.” They also need to prove current, stable and documentable employment to qualify.

As well, they need to demonstrate a 12-month positive payment history, and this specifies on-time payment of all mortgage and installment debt. There is some latitude for credit card debt, but it is slight.

Counseling sessions

Applicants also must attend counseling sessions before being able to participate in the program. This is usually a one-hour session with a HUD-approved counselor, and was designed to help participants prevent the “economic event” from happening again.

Improve Your Chances in Multiple Offer Situations

multiple-offers, Sacramento Listing Agent, Elk Grove Listing Agent
multiple-offers, Sacramento Listing Agent, Elk Grove Listing Agent
(Guest article, Dian Hymer – Client Direct)

Some buyers in hot markets with a low inventory of homes for sale are losing out over and over in multiple-offer competitions. You can improve your chances of having an offer accepted by clearing up any issues that might cause a seller to look askance at your offer when compared to one from another buyer.

If your purchase offer is littered with contingencies that protect you, the sellers are more likely to see the contract as risky, especially if they are looking at other offers that contain fewer contingencies.

A clean contract is free of contingencies, which can give buyers a competitive advantage, especially if they are offering less than full price or are in competition with other buyers.

Timing is everything in the home sale business. Buyers often lose out on the opportunity to make an offer on a listing because they are traveling for business or vacation. One partner may see the home of their dreams, but the other won’t be back in town to take a look for days or weeks.

Making an offer contingent on the absentee buyer’s approval of a property is risky from the seller’s standpoint. If the seller accepts the offer, he takes his home off the market not knowing if the absentee buyer will like the house enough to buy it.

It would be very difficult to get such an offer accepted if there are multiple offers from buyers who have all seen the property. The Internet can give a great introduction to a listing, but it usually doesn’t include photos of items that might cause you to pass on the property, like a neighbor’s home that is in poor repair or a location close to a noisy freeway.

Some buyers buy property without having seen it. To get an offer accepted, these offers usually have a generous price, and close quickly. The buyers may later find problems that they could have discovered had they seen the property before making an offer. It’s better for both buyers and sellers if all potential buyers have seen the property before an offer is made.

HOUSE HUNTING TIP: Try to anticipate if there is any condition of your home purchase that would cause the sellers to shy away from accepting or countering your offer. If such conditions exist, try to address them before you make an offer.

For example, let’s say your parents are willing to give you a large amount of cash for a down payment to make your offer more competitive. Make sure this will be acceptable to your mortgage lender.

Find out what verification the lender will require from your parents. If the lender needs a gift letter that stipulates you don’t need to repay the money, have your parents write this letter and include a copy with your offer.

Sellers are always concerned about the buyer’s financial capability to close the transaction. Your offer should include a letter from your lender stating that you are preapproved for the financing that you need. The letter should stipulate that the lender has verified the cash you need for the down payment and closing costs.

If the verification of funds needed to close is not included in the preapproval letter, make a copy of a bank or brokerage statement that verifies the amount you need. Black out the account number and include a copy of this with your offer.

In some areas, buyers are making offers without any contingencies. That is as clean as it gets. However, there can be problems with contingency-free offers. Buyers can feel pressured into waiving an inspection contingency because they’re sure they can’t compete unless they do. The sellers could end up in a legal hassle with the buyers after closing if problems arise that weren’t disclosed to them.

THE CLOSING: Buyers should ask the sellers for permission to preinspect the property before they make an offer without an inspection contingency.

Qualifying A Condo for an FHA loan

If you are in the market to purchase a condo and are using an FHA loan (most loans now are FHA), then you or your agent can use this site to see if the home that you want to make and offer on is FHA approved.

What does that mean? It measn when many of these developments were constructed several years ago, there were no FHA loans and so no one bothered to go thru the FHA certifiation process. So many of the developments are not FHA approved.

Single family homes are usually approved for FHA financing as long as the price parameter and the condition requirements are met. Attached housing (condos and townehomes) need to be FHA approved. Read further for more details on how this works:

HUD Section 234(c) of the National Housing Act provides authority to insure any mortgage covering a one-family unit in a project coupled with an undivided interest in the common areas and facilities which serve the project. The project may include dwelling units in detached, semidetached, row, garden-type, low- or high-rise structures. Generally these types of properties are referred to as Condominiums.

HUD will insures mortgagees against losses on mortgage loans used for buying a condo or to refinance individual units in eligible condominium projects provided that they meet certain guidelines.

A. Project Eligibility. The condominium project must be on HUD’s approved condominium list.
B. Applicant Eligibility. Eighty percent of the HUD-insured mortgages in a condominium project must be the principal residence of the owners (owner-occupants).
C. Maximum Insurable Mortgage: Same as Section 203(b) (except that the mortgage amount must be in multiples of $50).
D. Minimum Investment: Same as Section 203(b).
E. Mortgage Term: Same as Section 203(b).
F. Mortgage Insurance Premium: Monthly+Upfront MI of 1.5%
G. Refinancing: Same as Section 203(b).

If the Condominium is not approved then the Lender may go through the “Spot Approval” process.

The following requirements must be satisfied before a spot loan is endorsed:

• The condominium project must be complete. There should be no ongoing or anticipated addition of any units, common elements, and/or facilities.
• Control of the common areas of the project must have been turned over to the unit owners association for at least one year.
• The owners association must provide evidence that the project has the appropriate hazard, liability and flood insurance.
• Individual units in the project must be owned in fee simple or be an eligible leasehold interest. The project’s legal documents must provide for undivided ownership of common areas by unit owners. By virtue of this ownership, unit owners must have the right to use all facilities and unrestricted common elements.
• The project’s documents should not place any legal restrictions on conveyance. Any provisions that seek to limit the free transferability of title is generally unacceptable. Such restrictions include rights of first refusal and restrictive covenants. Certain governmental or nonprofit programs designed to assist in the purchase or rental of low- or moderate-income housing are exempted from the restrictions on conveyance provisions.
• At least 90% of the units in the project must have been sold.
• At least 51% of the units in the project must be owner-occupied.
• No single entity may own more than 10% of the units in a project. “Entity” includes an individual partnership, corporation, limited liability company, limited liability partnership, joint venture, investor group or other natural or legal person qualified to hold an interest in real property. The 10% restriction does not apply when the ownership of less than three units would disqualify an otherwise eligible project.
• HUD recognized that the 10% cap on the number of units that may secure FHA insured mortgages in a given project can place a small regime at a disadvantage, since only a few units will invoke the limit. Accordingly, a two-tiered system was established. For condominium projects having more than 30 units, no more than 10% of the units may have FHA insured loans at any given time. Condominium projects consisting of 30 units or less, can have up to 20% of the units encumbered by FHA insured mortgages under the spot loan rule.