For all the first time home buyers who sat on the fence and thought they missed out on the $8000 tax credit which expires November 30, you have a 2nd chance! The tax credit has been resurrected and extended through July 1, 2010. So stop crying and complaining that you missed your opportunity by procrastinating, negative self-talk, doubt and fear. You've been redeemed! Go get your 3.5% down FHA loan and start house hunting.
Oh, and current homeowners, don't feel left out. There's some real thinking going on in D.C. and you've been included this time around too! If you've lived in your home for a consecutive five year period in the last eight years, you're eligible for a $6500 tax credit as well!
Okay, so here's the skinny on how the tax credit will work. You need to have entered into a contract, i.e. you've made an offer on a home and it's been accepted, anytime between now an April 30th of 2010 and you need to close on that contract by July 1, 2010. Certainly doable.
Lot's of "oh,'s" but here's another one...the income limits have been increased as well. Singles can now earn up to $125,000 instead of the $75,000 prior limit and the limit on couples has been raised from $150,000 to $250,000! So, if you simply made too much money to take advantage of the credit, you just may qualify this time around.
Don't count on this credit being extended again. There are concerns about about abuse of the program and the cost to the government. With all the inventory available now and more and more coming on the market everyday, jump in now and grab your piece of the pie before it's really too late.
Friday, October 30, 2009
Friday, October 23, 2009
Thinking of buying a condo?
With all the great prices on condo units right now, I found this article timely:
Things Condo Buyers Should Consider
Buyers who are considering the purchase of a condominium should inspect the health of the home owner’s association before they close.
The seller should provide the buyer all financial documents relating to the association in time for an attorney for the buyer to review them before closing.
Here’s some advice from Leonard Baron, professor of finance at San Diego State University, about the information that the seller should consider:
Does the association budget include money for operating expenses such as water, lights, elevator maintenance, and landscaping?
Is there extra money set aside in a reserve fund for long-term maintenance? If there is an outside reserve study, that should be provided. If not, there should be adequate money in the reserves right now to cover 50 percent of the estimated cost of repairs over the next 30 years.
Do the condo’s expenses exceed revenues due to a high foreclosure rate or other reasons that owners’ debts go unpaid?
If there is a shortfall, does the association have a plan besides cutting back on services for making it up?
Source: The Wall Street Journal, June Fletcher (10/17/2009)
Things Condo Buyers Should Consider
Buyers who are considering the purchase of a condominium should inspect the health of the home owner’s association before they close.
The seller should provide the buyer all financial documents relating to the association in time for an attorney for the buyer to review them before closing.
Here’s some advice from Leonard Baron, professor of finance at San Diego State University, about the information that the seller should consider:
Does the association budget include money for operating expenses such as water, lights, elevator maintenance, and landscaping?
Is there extra money set aside in a reserve fund for long-term maintenance? If there is an outside reserve study, that should be provided. If not, there should be adequate money in the reserves right now to cover 50 percent of the estimated cost of repairs over the next 30 years.
Do the condo’s expenses exceed revenues due to a high foreclosure rate or other reasons that owners’ debts go unpaid?
If there is a shortfall, does the association have a plan besides cutting back on services for making it up?
Source: The Wall Street Journal, June Fletcher (10/17/2009)
Sunday, September 13, 2009
All about short sales
I've had a lot of questions about short sales lately. In my market, Mid Los Angeles/Historic West Adams, there are quite a few properties that are listed as short sales. So here's the skinny....
Thinking of Making an Offer on a Short Sale? What You Need to Know
Are you looking to buy a new home? Are you thinking that now's a great time to find bargains? That's true, but it pays to know a little about the seller's situation before you make an offer.
If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.
A short sale is different from a foreclosure, which is when the seller's lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.
You're a good candidate for a short-sale purchase if:
• You're very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
• Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you're preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.
• You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property—or you need to be in your new home by a certain time—a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.
If you're serious about purchasing a short-sale property, it's important for you to have expert assistance. Here are some people you want to work with:
• Experienced real estate attorney. Only about two out of five short sales are approved by lenders. But a good real estate attorney who's knowledgeable about the short-sale process will increase your chances getting an approved contract. Also, if you want any provisions or very specialized language written into the purchase contract, a real estate attorney is essential throughout the negotiation.
• A qualified real estate professional.* You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many buyers they've represented in a short sale and, of those, how many have successfully closed. A qualified real estate professional will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communications with the lender. (All MLSs permit, and some now require, special notations to indicate that a listing is a short sale. There also are certain phrases you can watch for, such as “lender approval required.”)
• Title officer. It’s a good idea to have a title officer do an initial title search on a short-sale property to see all the liens attached to the property. If there are multiple lien holders (e.g., second or third mortgage or lines of credit, real estate tax lien, mechanic’s lien, homeowners association lien, etc.), it's much tougher to get that short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you’ve waited for months for lender approval. If you don’t know a title officer, your real estate attorney or real estate professional should be able to recommend a few.
Some of the other risks faced by buyers of short-sale properties include:
• Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.
• Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.
• No repairs or repair credits. You will most likely be asked to take the property “as is.” Lenders are already taking a loss on the property and may not agree to requests for repair credits.
The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.
* Not all real estate practitioners are REALTORS®. A REALTOR® is a member of the NATIONAL ASSOCIATION OF REALTORS® and is bound by NAR’s strict code of ethics.
Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA.
Thinking of Making an Offer on a Short Sale? What You Need to Know
Are you looking to buy a new home? Are you thinking that now's a great time to find bargains? That's true, but it pays to know a little about the seller's situation before you make an offer.
If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.
A short sale is different from a foreclosure, which is when the seller's lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.
You're a good candidate for a short-sale purchase if:
• You're very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
• Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you're preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.
• You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property—or you need to be in your new home by a certain time—a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.
If you're serious about purchasing a short-sale property, it's important for you to have expert assistance. Here are some people you want to work with:
• Experienced real estate attorney. Only about two out of five short sales are approved by lenders. But a good real estate attorney who's knowledgeable about the short-sale process will increase your chances getting an approved contract. Also, if you want any provisions or very specialized language written into the purchase contract, a real estate attorney is essential throughout the negotiation.
• A qualified real estate professional.* You may have a close friend or relative in real estate, but if that person doesn’t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many buyers they've represented in a short sale and, of those, how many have successfully closed. A qualified real estate professional will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communications with the lender. (All MLSs permit, and some now require, special notations to indicate that a listing is a short sale. There also are certain phrases you can watch for, such as “lender approval required.”)
• Title officer. It’s a good idea to have a title officer do an initial title search on a short-sale property to see all the liens attached to the property. If there are multiple lien holders (e.g., second or third mortgage or lines of credit, real estate tax lien, mechanic’s lien, homeowners association lien, etc.), it's much tougher to get that short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you’ve waited for months for lender approval. If you don’t know a title officer, your real estate attorney or real estate professional should be able to recommend a few.
Some of the other risks faced by buyers of short-sale properties include:
• Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you’ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.
• Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.
• No repairs or repair credits. You will most likely be asked to take the property “as is.” Lenders are already taking a loss on the property and may not agree to requests for repair credits.
The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.
* Not all real estate practitioners are REALTORS®. A REALTOR® is a member of the NATIONAL ASSOCIATION OF REALTORS® and is bound by NAR’s strict code of ethics.
Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA.
Thursday, March 5, 2009
Women on the forefront
The majority of my clients right now are women...single women, and single moms who are ready and able to own their own homes. They are working women who aren't millionaires but have stable jobs and have managed to save up some money for a down payment and can take advantage of this real estate market.
FHA loans are what's really making this possible for them. FHA loans aren't FICO score driven so there's no need to worry about having "good" credit. 3.5% of the purchase price is required for your down payment however a portion or the entire 3.5%can be gifted from someone else. What this means in real numbers is that you would need a down payment of $7000 on a $200,000 residence (yes, there are single family homes and condo's in this price range in L.A.!). There are closing costs when you buy a home, but sellers are willing to pay a big portion of or all of the closing costs for you.
In light of what seems to be an emerging group of homeowners, I'm putting together a one hour session just for women. It will be packed with information on what women need and can do to capitalize on the current market conditions and become homeowners. Details and date to follow in an upcoming blog.
Congratulations to all you women who are making it happen!
FHA loans are what's really making this possible for them. FHA loans aren't FICO score driven so there's no need to worry about having "good" credit. 3.5% of the purchase price is required for your down payment however a portion or the entire 3.5%can be gifted from someone else. What this means in real numbers is that you would need a down payment of $7000 on a $200,000 residence (yes, there are single family homes and condo's in this price range in L.A.!). There are closing costs when you buy a home, but sellers are willing to pay a big portion of or all of the closing costs for you.
In light of what seems to be an emerging group of homeowners, I'm putting together a one hour session just for women. It will be packed with information on what women need and can do to capitalize on the current market conditions and become homeowners. Details and date to follow in an upcoming blog.
Congratulations to all you women who are making it happen!
Friday, January 16, 2009
It's been a while!
Looks like I got a little busy this past year and blogging was less of a priority. But it's 2009, a new year with new goals; one of which is writing in this blog.
This year has been pretty active so far. The most recent happenings being the new LA Live in Downtown L.A. Lots of restaurants there and things to do. I'll write more about that in the future.
The real estate market is great for some and heartache for others. There's a lot to talk about on that front as well.
As for me, I'm excited about all that 09' has to offer! Check back often. I promise to have some interesting and informative content.
This year has been pretty active so far. The most recent happenings being the new LA Live in Downtown L.A. Lots of restaurants there and things to do. I'll write more about that in the future.
The real estate market is great for some and heartache for others. There's a lot to talk about on that front as well.
As for me, I'm excited about all that 09' has to offer! Check back often. I promise to have some interesting and informative content.
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