Category Archives: buyer advice

How to Locate Assumable Mortgages

Posted on by

Buyers seek refuge from high interest rates. That is why savvy buyers are looking for assumable mortgages.

Whether it is VA or FHA, how do buyers find them?

Generally they can found when Realtors sell a home and check the loan information from the sellers. The loan type is then revealed.

Some Realtors may gloss over the fact that the loan is assumable. It happens when they check the loan information to make the net sheet, but do not ask what loan type it is.

When they miss it, they lose an important marketing element in the sale of the house.

Seller should be on alert for this and share the loan type of their loan to the Realtor.

Hopefully this information gets communicated properly so buyers can enjoy a lower interest rate and sellers get the highest price for their sold home.

How do Realtors go about promoting themselves and managing their online reputation?

Posted on by

Whether it’s word of mouth, community service, or online leads, Realtors seek reliable and
diversified ways of converting clients. Realtors want to present themselves online as trustworthy and
competent and will find clients for free or through paid services.

Realtors self-educate by learning how to find clients for free. One example is managing a local
online group to discuss local restaurants. By creating value for a community, they have access to
members who may hire them later on.

There are also paid leads. Realtors can pay companies to receive leads from nearby zip codes.
Results can be mixed but Realtors will renew subscriptions with the most lucrative ones. Realtors hope
to run into qualified leads and not Looky-loos who make online property viewing a hobby.

Why working with a local real estate agent is beneficial for you

Posted on by

Clients want to served by an agent who knows their service areas well. Let’s talk about why hiring a local real estate agent is useful in the home buying or selling process.

Local agents tend to have a firmer grip on prices than out of town agent counterparts. When presented with the sales data, they can look beyond data to see microtrends within the service area that could aid the client in the offer. Sometimes this insight can be called a qualitative analysis of pricing where local agents see property data but can intuit where pricing is headed in a few months. Communicating this information to clients in a timely manner could save them more money or get more money.

What does ‘local’ even mean? Agents could live in your service area, have an office in your service area, or have a track record in your service area. They don’t need all of them, but imagine finding an agent who was born and raised in your service area. They could provide huge neighborhood insights that other agents might not know.

If they were born and raised in your service area, that condition alone won’t guarantee you’ll have a good experience, but it’s a helpful consideration to take among many factors about whether your local real estate agent will do an exceptional job for you.

When I happen to assist clients who are looking in my service area, I make it to point to tell them I was born and raised in that area and that my knowledge of the area and neighborhoods could help them win offers or sell their house. Knowing the amenities, foot traffic, walking scores, schools, parks, and other details allows them to have a more informed picture of what they are doing.

Sometimes agents serve areas where they do not live. Sometimes their service area is too expensive for them to live in and they have to come from out of town to service it. They could still be experts for the service area, but they should disclose they are coming from out of town to meet you there. In fact, in the listing agreement, there is a place that tells the client whether or not the agent is in the service area for the MLS or not. This industry transparency helps clients get connected to agents who they feel are right for the job.

Is paying two mortgages stressful?

Posted on by

Many people have considered renting out one house and living in another. But is managing two mortgage payments stressful? Let’s look at the scenario.

When people make wages, they want cushions. The thought of paying two mortgages equal to their paycheck is terrifying. They rely heavily on a financially solvant tenant to continue maintaining their investment and occupied home.

What they don’t recall is that both assets could be appreciating and they could be capturing unrealized gain. This unrealized gain makes holding these assets worth it, despite the two mortgage payments feeling intimidating to cover.

So the next time you think about paying two mortgage payments, think about how long you will hold your properties and how much they are valued at. Make your assessment about the economy and listen to what the federal reserve has to say. Contact your Realtor and see what their opinion is of the economy. With these ideas in mind, you could be on your way to become a landlord and live in your own place and have appreciating assets in your portfolio.

What do property directions say about a property?

Posted on by

Sometimes we see ads about a house for sale. Remarks about the house could include directions to the house. Do we take those directions at face value or is the agent trying to tell us something else?

Details are always very important and it’s worth thinking about it a little bit. There’s sometimes multiple ways to get at a property by driving and some routes are more scenic than others.

Agents want to naturally showcase a property’s strengths and maybe play down its weaknesses within the bounds of the law.

Map directions could tell us that the route to the house is the best route to take to show off the house.

What’s the solution to this marketing where you want to be the most informed consumer possible? I recommend taking a different route after seeing the property. You get to see more of the neighborhood this way.

Save this strategy for properties that you have fallen in love with to determine if the initial infatuation is fleeting or real. Scoping out the nearby surroundings is something you will naturally find yourself doing, regardless of what the map directions say.

ARMs as a means to get lower rates in a higher rate market

Posted on by

Feds are hiking rates. Consumers are eager to find substitutes. The adjustable rate mortgage, or ARM, may come back in style again.

Why is it useful? They are hybrid programs offer lower interest rates than the traditional 30 year product as a way to entice consumers to agree to shorter fixed intervals.

Loans make money throughout its life. If the rate is better in the beginning for the consumer, the bank making the loan hopes to make more money in the later stages of the loan. If the opposite is true, the bank will make more money in the front end. This is what occurs in the primary mortgage market. The secondary mortgage market involves selling bank notes and bundling them at discounts for other note holders to purchase, but that will not be discussed here because we are focusing on how the consumer can get better rates.

ARMs have had a bad reputation as they were part of a toxic loan underwriting culture during the mortgage meltdown of 2007, but if their terms are disclosed fully and the consumer consents and understands them, there is no issue to try these products that offer some fixed interest rate and, later, a variable rate interest down the road.

How do we navigate a real estate market with a higher interest rate?

Posted on by

We see the price changes. We see the pending sales fall out escrow. Buyer remorse could hit during the transaction or after. It’s no surprise. Buyers have to pay more for a loan, almost 70% more from a few years ago. Supply is still low but buyers are feeling the cost of purchasing rising, so contenders are falling out of the race and sheltering in the rental space.

I kept telling my clients that the older 3% interest rate on the 30 year fixed product was a steal. Loans being made at 3% is basically free money. If you have that rate, you should congratulate yourself.

Cash position buyers are unaffected by interest rate hikes but they could have better bargaining positions when submitting to sellers.

Buyers need to look at the numbers and see what their monthly liabilities with the new interest rate. Once that number is obtained, it can be contrasted against their current living expenses. They needn’t forget that the home purchase is also an investment that appreciates and they may have a return on that as well. In addition to looking at the numbers, ask yourself how long you intend to occupy the property. Mortgage loan originators are essential here to provide this information to you.

Imagine yourself looking at properties that have spent 30 days on market and have went through 1 or 2 price changes. What should you do? Look at the comparable sales and see what the competition is for this house and determine if any other houses are substitutes to this house. If you feel the house will not go pending by anyone else, calculate a trend of the price decline in your specific neighborhood and discount the property based on that trend. A realtor can assist you with this.

So looking at the numbers plays a large role in how you will proceed. While interest rates are up, don’t be discouraged. You will get a price discount that will help you out. If you own already and want to purchase a larger home, ask the MLO what it will take to rent out the existing property and buy the next property. It could be the start of your own real estate portfolio if you consider it carefully.

 

 

Why Looking at online real estate without being qualified is hurting your financial progress.

Posted on by

We’ve all done it. We look at real estate online and share it with friends, make comments about how bad the carpet looks or how expensive it is. We joke that there’s jumpscares in the drab living room and the walls are yellowed and peeling. It’s a hobby for some. Unlicensed casual real estate agent, they would dub themselves. I’m here to explain that if you are en route to buying a house, that this practice could hinder your financial progress to making your first real estate purchase.

Let’s clear the air first. People do this for leisure with no intention of purchasing a house, ever, because it’s fun. I’m not addressing them. I’m addressing the people who intend to buy a house but they have not spent the time to sit (well… it’s virtual now) down with a Mortgage Loan Originator to get the proper qualifications. Looking at homes you are not qualified for may be interesting from a research standpoint, but is only postponing your actual purchase.

Here is the deal: looking at houses is actually a very draining activity. There’s lots of details, pictures, disclosures, etc. Some clients drive out of town every weekend to see houses and they come back exhausted. Try looking at 5 homes 80 miles away using both weekends for 5 weeks straight– you are going to feel the burn out.

When you look at properties online, you are subjected to a lot of data, and you only have a finite amount of time to actually process this data. If you intend to buy a house and you’re looking in your area, there’s no telling if you qualify for this house or not until you get the pre-approval letter from the lender.

I’ve insulted people when I claim they are looking at houses they cannot afford. It’s an intrinsic sense of pride to look at things you can afford. They tell me they know they can afford it without needing the qualified letter, because they have means. While this may be true, expressing an interest in a house you want to buy without being qualified makes you behind all the buyers who already got qualified. There’s offer deadlines. Lots of competition. You need to step up and play the game and get qualified. Why give yourself a delayed start in the race?

Getting qualified for a loan or making your cash liquid for purchase tells sellers you are serious in purchasing a house. It also tells you what price you should be looking in. Given your time is finite, looking at homes casually drains the energy required to actually look for houses you can afford. It’s OK to look at castles for sale but think of yourself and plan ahead if you are serious about buying real estate.

Beating cash offers in a hot Alameda County market.

Posted on by

Cash offers are king. They dominate because there are less risks associated with the transaction. A lender doesn’t need to fund which shortens contract times. But how can financed offers compete?

Financed offers can remove some contingencies to make their offer more attractive. This can only be some under the serious counsel of a Realtor who can make judgment calls about how to make a financed offer more attractive without endangering the buyer.

Removing contingencies help sellers pick buyers who are more serious than other buyers. Out of 10 offers, all the buyers could be serious, but some may place higher bids, short closing times, and reducing contingencies that make their deposit not refundable under certain circumstances. Naturally, the seller wants to pick the offer that benefits them the most.

The next time you get discouraged by the belief that you are competing against cash offers, know that not all is lost.

Are Real Estate Sales Truly Slower During the Holidays?

Posted on by

You must have heard it at least once. That real estate is slower during the holidays. It’s an anecdotal statement. But as a real estate professional who has seen decades of transactions, let me give you my anecdotal account.

I have worked on holidays– Christmas, New Years, etc. When people have to move, they have to move. Job relocations, death in the family, etc. These things prompt action. And these events do not wait patiently for important holidays to pass. When these things occur, there will most certainly be real estate sales during the holiday.

While buyers are often still in the dark about the seller’s reasons for selling, some of the reasons for selling could be urgent. If buyers are patient enough, they might be able to have less competition when sending offers.

Sellers will use everything in their power to make the listing sell quickly at the highest price– order pre-inspections, pre sale escrow, make repairs, stage the home. They have tools to convert buyers with the help of their Realtor. With enough activity on a listing, it does not matter if the holiday is happening or not.

A holiday is a break of sorts, just like summer. Sometimes persons uses this opportunity to make life transitions while they have these breaks because they are too busy at work to do it any other time. When school is out, parents my find an opportunity to move and purchase before kids start again.

For people who have full control over their buying and selling activities, looking during the holiday appears as an opportunity, but not always. I have seen both quiet and highly active buying and selling periods during the holiday, so I always tell my clients to keep their expectations in check.