Real Estate Agent – Orange County, California – Pat Monahan

A recently published article from the research staff of the NAR (National Association  of Realtors) titled “Economist’s Commentary: Future First Time Home Buyer Perspective” by Tyler Morrison, Research Intern, very clearly describes the first time home buyer’s dilemma from a graduating student’s perspective. The points made are appropriate for any first time home buyer.

Here are some highlights from that article and important things to know before becoming a first time home buyer:

       Buying a home is a very serious event no matter how many times you have done it. You may be signing a contract binding you for the next 30 years. Many FTHBs make a few similar mistakes over and over again. They ask too few questions of their lender and end up missing out on the best deal. They do not act quickly enough and let someone else buy the home. They do not find the right agent for them, one who is willing to help throughout the home buying experience. When they have found their prospective home they do not do enough to make their offer look appealing to the seller. And, they do not think in the longer term about the resale of the home before they buy. To make sure you are making the right moves here are a couple of tips to prevent any mistakes or regrets in your home buying transaction.

• Be picky, but don’t be unrealistic. There is no perfect home.
• Do your homework before you start looking. Decide specifically what features you want in a home and which are most important to you.
• Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and your closing costs
• Don’t wait to get a loan. Talk to a lender and get pre-qualified for a mortgage before you start looking.
• Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion.
• Decide when you could move. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area?
• Think long-term. Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer? This decision may dictate what type of home you’ll buy as well as type of mortgage terms that suit you best.
• Don’t let yourself be house poor. If you max yourself out to buy the biggest home you can afford, you’ll have no money left for maintenance or decoration or to save money for other financial goals.
• Don’t be naïve. Insist on a home inspection and if possible get a warranty from the seller to cover defects within one year.

The best way to insure that you satisfy the above quoted advice is to work with an experienced Realtor who will jump these hurdles with you. A first time buyer cannot possibly know what the requirements are and how to satisfy them; where the pitfalls are and how to avoid them.  Would you go to court without a lawyer?  Would you avoid seeing a dentist for a painful tooth?  Then it is just as important to seek real estate help from an experienced realtor.  

Remember that a home is a place to live, grow and thrive. It is not just an investment.

The market for Orange County real estate has seen a turn around lately. Properties are selling more quickly, many with multiple offers and some for all cash! The most activity is in the price range below $600,000. The fiercest buyer competition is in the under $400,000 price range where first-time home buyers with low down-payments are competing with seasoned investors with cash. The REO and short sale listings are attracting offers within the first few days on market. If you want to purchase coastal real estate in Orange County, be ready to act fast, have statements to prove your purchase-cash and/or be pre-approved for a loan with a direct lender. Buyers who qualify under FHA guidelines must compete with all cash buyers. Be ready to offer above asking price and accept the property in “as is” condition.

Equity sellers who have maintained and up-graded their home may benefit from this buying frenzy, if they are willing to price their home competitively. Special marketing is essential with strong internet presence and the creative techniques of the “New Rules” of real estate. I know how to utilize the “New Rules” and I can provide you with the internet presence that will get your home widely seen. Learn how you can benefit from this specialized knowledge.

If you are having difficulty making your current mortgage payments, contact your lender before you fall behind in your payments. Ask if you qualify for a loan modification from your lender. If you do not, then you have options. Call me to find out about your options. I can help you steer a path in this sea of confusion and shine some light in the right direction. I can be reached at 714-932-5529.   

There’s been a buying spree the past few months. Fueling this spree are a federal government sponsored $8,000 first-time home buyer bonus and historically low (below 5%) mortgage interest rates for conforming loan amounts. Pent-up buyer demand is yielding to this buying opportunity and many people are realizing their dream of home ownership.

The question is “Will it last?” Foretelling the future is always risky. So many factors influence the market. The level of unemployment, the availability of credit and the ever-nebulous consumer confidence impact sales to varying degrees. On a larger scale is the balance (or imbalance) of supply vs demand which can tip the scales toward a buyer’s or a seller’s market, driving values up and down.

Right now the inventory of homes on the market is dwindling, shifting the balance toward sellers.  When more properties are brought “on market”, the balance will shift toward buyers unless the homes are mostly distressed properties. A bank-owned or short sale listing will almost always be in high demand and generate multiple offers which drives the price up. Therefore, a large inventory of distressed sales represent a seller’s market.

The public’s perception is that home sales are mostly in the “distressed” end of the residential market. Advertised “Home Auctions” and “bank-owned” properties plus media stories of displaced families due to foreclosure dominate the realty news.  In some communities this is true, where 90% of recent sales are distressed properties.  In other communities the closed sales are dominated by “equity” sales from sellers who are not in foreclosure.  All real estate is local and it pays to know your market.

A first-time buyer and a home seller would be best served by aligning themselves with a professional who knows that local market.  Both parties will benefit from the knowledge of a local expert who actively works in the marketplace daily.  A local Realtor will know the accurate value range of a home and facilitate the disclosure of the home’s condition and the title clearance that is critical in any transaction. A knowledgeable third party can negotiate in an unemotional way to create a win-win for both sides that will appraise and close escrow! An internet entity facilitating a home sale when the on-line contact has no local knowledge, leaves one or both sides open to liability. Buyer and seller beware.

Therefore, take the guess work out of your real estate transaction. Work with an experienced realtor!

Orange County real estate sales in the price category below $500,000 is taking off big time! Multiple offers by serious buyers are coming at any below market listing. Many of these listings (both condos and single family detached) are distressed sales, either bank owned or in foreclosure. An equity seller must compete with the distressed properties and lower their asking price to be taken seriously.

Investors with all cash or substantial cash downpayments are competing with firsttime home buyers who want their piece of the American dream. It is so very important for firsttime buyers to be pre-approved for a loan and have it in writing from a “direct lender”. A direct lender backs the mortgage from its assets. A major bank or a credit union is an example of a direct lender. There are others who also qualify as direct lenders. Some mortgage companies are direct lenders. It’s important to know who you are dealing with, because many bank owned listings will sell to a buyer who is financing the purchase with a mortgage only if the mortgage is from a direct lender.

The mortgage interest rate is still historically LOW – below 5% for a fixed rate conforming loan. With house values as low as they are it makes sense to be buying a home at this time. Remember that you are buying a home first, not an investment. As we have seen all too clearly, speculating that house prices will always go up can be a big mistake. But if you have been waiting to take advantage of low interest rates and low home values, your time is here!

You may have to bid above list price to get the house you want. As with any auction you may lose to someone who offers more. Don’t be discouraged. Find an experienced realtor to help you find a house and negotiate for it.  Or, visit the auctions and try your luck there. But it is “buyer beware” out there because you purchase a property “as is” at an auction. There can be tax and reconveyance issues to contend with as well as repairs that may cost you more than you bargained for.

As a member of a special group called ROHRS, I have information about bank owned properties and how to “package” an offer for the bank to consider.  Many offers on bank owned homes never get seen by the bank, if they are not packaged properly. You must work with an experienced realtor who will get your offer seen by the bank’s representative. Once your offer is accepted you will have a limited time to have the home inspected and your loan funded. It’s a balancing act that requires everything to happen correctly. Let me know if I can help you.

Now that the income tax deadline is past, there’s another important date to remember. If you purchased residential real estate in Orange County since 2000, you may be eligible for reduced property taxes. 

As stated on the OC Assessor’s website, www.ocgov.com/assessor/, the Assessor will review the value of every property in the County between January 1 and June 2009, and will implement a temporary value reduction for all eligible properties. There is no charge for this service.

There is a question/answer feature on their home page that will explain the assessor’s process in determining property values and how you can appeal that decision. You can request an informal review if you believe that your Market Value is lower than your Taxable Value.

You can download the Request for Informal Assessment Review form from the website at  www.ocgov.com/assessor/.  Completed forms must be returned to the Assessor by April 30, 2009. You will need to provide up to three (3) sales or listings in your area that occur on or before March 31, 2009 to support your claim for a lower valuation. (Foreclosures may not be an indicator of market value.)  However, if your neighborhood has a preponderance of foreclosed and bank owned sales, then your market value may well be dictated by those recent sales.

If you need assistance with obtaining the form or the necessary recent sales information, contact me at 714-932-5529 or email me at pat@patmonahan.com. Remember the deadline to file the review is April 30, 2009.

The Los Angeles Times and the California Association of REALTORS present the Southern California HOME BUYER’S FAIR at the Los Angeles Convention Center, South Exhibit Hall G on Saturday, April 18th from 10 a.m. to 5 p.m. and on Sunday, April 19th from 11 a.m. to 4 p.m.

Admission is FREE!

As seen in the LA Times Custom Publishing insert on 4/16, the Home Buyer’s Fair will educate home buyers about assistance programs, opportunities for first-time home buyers and how to successfully navigate today’s real estate market.  The free event will feature more than 50 “how to” sessions about the home-buying process as well as 70 exhibit booths offering information and guidance to home buyers. Several sessions will also be offered in Spanish.

You will find seminars on monitoring your credit score, finding and applying for a mortgage loan, assistance programs for first-time home buyers and how to choose and successfully work with a REALTOR.  Popular sessions such as “How to Find and Buy Foreclosures, Short Sales and REO’s” will be repeated so you can make the most of your visit.

Free movie tickets will be distributed by C.A.R. for the first 200 attendees each day, immediately following the welcome and opening remarks. One ticket per person.

For information about the event visit www.homebuyersfair.com

C.A.R. launches mortgage protection plan for first-time home buyers

·          Be a first-time home buyer – someone who has not owned a home

         in three or more years

·          Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009

·          Use a California REALTOR® in the transaction

·          Purchase the property in California

·          Be a W-2 employee (cannot be self-employed)

To apply for the program, home buyers must request an application for the H.A.F. Mortgage Protection Program from their REALTOR®.

The Making Home Affordable plan released recently by the Obama Administration has two primary goals.

1. to help homeowners who are current on their mortgage payments to refinance at today’s lower interest rates.  2. to help homeowners at risk of foreclosure.

The intention of the plan is to help people stay in their home under an affordable payment plan. However, the requirements are high and difficult for most folks to qualify  – in many cases through no fault of their own.

The Government is warning homeowners to beware of foreclosure scams: There should never be a fee charged for information or assistance regarding the Making Home Affordable Program. Never make your payment to anyone other than your mortgage company without their approval. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

First-time home buyers are the fortunate ones in today’s market. Interest rates are at historically low levels – below 5% – and home values are affordable and considerably below the high prices of 2006 & 2007.  Those first-time buyers are also eligible for a $10,000 federal tax credit, if the purchase is concluded before December 1, 2009.  The State of California is also helping the New Home market by offering an $8,000 tax credit for purchase of a “new” home from March 2009 to March 2010.

The mortgage market has money to lend to credit-worthy buyers. The dream of homeownership is very attainable for those with good credit, qualifying income from steady work (a good job), and money in a savings account for a downpayment. The downpayment can be as little as 3.5% of the purchase price if the loan is financed through the FHA program and under the loan amount limit placed on it by Congress. 

The Congress temporarily raised the limit from $625,500 to a maximum loan amount of $729,750 in high-cost areas. The extension is good through December 31, 2009 for loans generated through Fannie Mae, Freddie Mac and FHA.

If you want to purchase or refinance a larger amount than Fannie, Freddie or FHA allows then jumbo financing is what you want. Jumbo loans are available to eligible home buyers for homes valued from $730,000 to $1.5 million through Bank of America.  Other institutions are involved with the jumbo loan market at  higher amounts. B of A’s new program requires hefty liquid resources – six months of principal and interest, property tax and insurance payments in reserve plus fully documented income and solid credit.

As you can see, there is mortgage money available for almost any need. There are also excellent buying opportunites available from bank owned to foreclosure homes to realistic equity sellers. 2009 is the time to buy!

On March 4th, the Administration released guidelines for homeowners to determine if they qualify for the new Making Home Affordable program. This program will offer assistance to as many as 7 to 9 million homeowners to support a recovery in the housing market. It will target support to working homeowners who have made every possible effort to stay current on their mortgage payments.

The three basic plans of the program are:

1. 1. A Home Affordable Refinance Program for responsible homeowners suffering from falling home prices.
2. A comprehensive $75 Billion Home Affordable Modification Program to reach 3 to 4 million homeowners with loan modifications that are a shared effort with lenders, loan servicers and borrowers.
3. Support Low Mortgage Rates by strengthening confidence in Fannie Mae and Freddie Mac

 The plan’s two primary goals are

1. To help homeowners in existing Fannie Mae and Fredie Mac loans that are current on their payments to refinance to lower interest rates. Qualified homeowners will be allowed to refinance up to 105% loan-to-value of the current value of their home.
2. To help homeowners who are at risk of foreclosure by offering loan servicers and investors government assistance to help offset the cost of modifying loans. This may be achieved by reducing the mortgage interest rate, extending the term of the loan, principal forebearance or principal cramdown. This program is voluntary and the servicers must agree to contracts with the Treasury to participate.

Some restrictions apply: Only owner-occupied homes qualify and home mortgages no greater than $729,750 will be eligible.

In addition, homeowners are warned to beware of foreclosure rescue scams:

- There should never be a fee charged for information or assistance regarding the Making Home Affordable Program.

- Beware of anyone who says that can “save” your home if you sign or transfer over the deed to your home. Do NOT sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

- Never make your mortgage payment to anyone other than your mortgage company without their approval.

The above information was provided by the U.S. Department of the Treasury and the California Association of Realtors newsletter.

If you or someone you know needs help with a loan modification or has questions about staying in their home, contact me for a free consultation.  I can be reached at pat@patmonahan.com or call 714-932-5529.