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Buyers & Sellers: Zip Your Lips!
LA Times, June 23, 2013
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Do you know about Lease Options? 
How About Owner Financing? 
There are creative ways for a seller to get more for a home while meeting the buyer's need for alternative financing in this time of difficult credit. These techniques will help you get more in the sale of your property while helping someone else attain the dream of home ownership sooner.  



Real Estate Musings

Summer Time in the Desert is a HOT Time to Sell!

by Camille Victour on 06/05/17

The Coachella Valley is an unusual housing market. Our off season is the summer time, which in most other housing markets is considered the best time to sell a home. I’ve been talking to a lot of sellers who had their homes on the market recently and they weren’t able to sell for some reason. Now the listing is canceled or expired unsold. Maybe they weren’t priced right, or maybe they weren’t marketed right, or it could have been a combination of both. These poor sellers are now thinking they have to carry the property over the summer and stay off the market because A) there are no buyers out there and B) The listing will get stale if it sits on the market unsold all summer waiting for the snowbirds to return in the Fall.

But guess what? That’s just not true! There are still home buyers out there in the summertime. There are plenty of people who live here full time that want to move and there are people who will visit the desert in the summertime specifically to shop for a home so they know where they will be spending the winter next season. Those shoppers are not just lookie-loos if they are willing to brave our hot summers to come out and look at homes to buy. They are serious ‘Ready Willing and Able’ buyers! While it’s true that the resort communities do have fewer full time residents than a first time homebuyer neighborhood, there are still a lot of people who would like to buy a home even in July and August.

And guess what else? There is very little inventory for them to choose from! I know there is a shadow inventory of homes but they buyers out there can’t find them. Many of the sellers I’ve talked to in the last few weeks say “Bring me a buyer and I’ll be happy to sell! , But I just don’t want to have my house on the market over the summer.”  Well why not? If you’re still willing to sell, then let the world know that by having your property listed! It’s very difficult to sell a home that’s not listed.

And you know what’s even better for you if you do stay on the market over the summer? There’s very little competition! If you had a hard time selling before, you might have a chance to be the one a buyer will select if there are only a few homes to choose from instead of 20 or 30 in your neighborhood.  Buyers will always choose the best home that fits their needs that is also priced the best. When there are 30 homes to choose from instead of 3, yours might not stand out as a good deal.

Here’s one more thing you might want to know. The new MLS rules in our market place are that the Days On Market will start over with a new listing instead of continue from the old listing as they used to do. In other words, it used to be that a listing that had been on the market for 180 days but didn’t sell and then went back on the market again within 6 months after the listing ended would start the new listing on day 181. That is not the case anymore. Any new listing starts over with a fresh ‘Days on Market’ count of zero no matter how recently it was on the market. Therefore, the listing does not look stale to buyers.

So you see, there really is no reason not to be on the market in the summertime. Yes there may be fewer buyers out there but they are serious buyers and there is less for them to choose from. You have a much better chance of getting sold if you are listed now than if you wait until the Fall when all the other unsold homes come back on the market. Don’t wait! Call me today for a free Market Analysis of what your home is worth in today’s market. I’d love to help you get your home SOLD NOW instead of in 6 months!

The Compound Effect: Building Your Household’s Wealth

by Camille Victour on 03/28/17

Wealth is within reach for many people; however, according to a recent study, 63 percent of Americans said it’s not likely they’ll become rich.1 While younger people are more likely to say they’ll achieve wealth one day, only 34 percent of people aged 30 to 49 and 21 percent of people aged 50 or older say the same. There is no secret to becoming rich: it takes time, sacrifice and good financial sense. Here are a few ways to build your household’s wealth.

 

Let Compound Interest Work for You

Compound interest is your interest earning interest. While the concept may work against you when you take out a loan to buy a car or use your credit card, it works in your favor when you’re saving money. For example, if your savings is growing at a rate of four percent, your investment will double in eight years and quadruple in 16 years. Your money will grow exponentially the longer you save: the more money you’ve saved, the more your money will grow.

 

Tap into Your Home Appreciation

Experts expect home prices to appreciate 3.24 percent and grow by 21.4 percent cumulatively.2  If a homeowner purchases a home this year for $250,000, they could earn more than $40,000 in equity over the next five years. Although the home value of the average American family’s home is $165,000, home values vary by market.3 If you’re curious about the value of your home, give us a call!

 

Build Equity in Your Home

One of the most compelling reasons to own a home is it allows you to build wealth over time. According to one study, the average homeowner has a net worth of $200,000, which is 31 to 46 times the net worth of the average renter.4 Saving for a down payment, especially if you plan to put down more than 20 percent, helps you adopt good financial habits. The more you put down when you buy, the higher your share of equity when you close. Although for the first five to seven years, the majority of your payment will go toward interest, over time more money will be applied to the principal. There are many tools online that calculate your current and future equity in your home, including this one here.

 

Build equity sooner by choosing a shorter amortization term. While your payment may be higher, you’ll likely qualify for a lower interest rate and will pay less interest over the life of the loan.

 

Build Equity Faster in Your Home

Mortgage Term

30 Years

15 Years

Loan amount

$118,000

$118,00

Months to pay

360

180

Annual percentage rate

4.0%

3.0%

Monthly payment

$563

$815

Total interest

$84,806

$28,680

Interest savings

-

$56,126

Source: Federal Reserve Bank of Dallas, Building Wealth: A Beginner’s Guide to Securing Your Financial Future

 

Pay Down Your Mortgage…or Not

Many homeowners grapple with whether or not to pay down their mortgage. On one hand, if you pay it down, or pay it off early, you’ll save money on interest, which you can use to make other investments. On the other hand, if your goal is to be debt free, it’s better to pay off your higher-interest debt, such as credit card debt, first before paying down your mortgage debt. Additionally, if you’re saving for retirement, putting extra cash toward your retirement accounts will help you build a nice nest egg to enjoy later on.

 

If you decide to pay off your mortgage sooner, here are a few ways to do so:

 

1. Pay more money at the beginning of your amortization period and apply it to your principal.

            2. If you receive a tax refund or other windfall, apply it toward your principal.

3. Make one extra payment each year. You’ll save money on interest and pay your loan off sooner.

4. Add an extra $50, or another amount you can afford, to the principal of your payment each month.

5. If you locked into a 30-year fixed loan, refinance to a shorter, 15-year fixed loan. Your payment may be higher, but you’ll pay it off sooner.

 

Your financial advisor can help you decide if paying off or paying down your mortgage is right for your goals.

 

Purchase Investment Property

Investment properties provide passive income to your growing financial portfolio. More than 25 percent of Americans say real estate is the best way to invest money you may not need for the next 10 years.5 While many people flip houses to make money—that is, they buy a home at a low price, fix it up and sell it quickly—others purchase multifamily properties to create monthly cash flow to save or to reinvest in other properties.

 

The longer you own a property, the better investment it becomes as you’ll continue to build equity. While rental costs rise with inflation, your mortgage will remain the same. The best part? Once you pay off the mortgage, your cash flow will increase. Remember to create a budget for maintenance each month, between 10 to 20 percent of the rent you receive, or more if the home is older. This will help you save more money in the long run and allow you to prepare for unexpected repairs.

 

There are tax benefits to owning investment property as well. You may be able to claim deductions for depreciation, as long as it fits within the guidelines; repairs, travel expenses, interest and more. If you’re thinking of purchasing investment property, talk to your tax professional to get the details.

 

Achieve More Wealth by Creating Financial Goals

Setting a goal will help you achieve your desired level of wealth. Once you achieve one goal, reassess and set the bar higher.

 

1. What is your idea of wealth? Your idea of wealth will change as you earn more money. That’s why it’s vital to set goals along the way. What do you want your net worth to be in 5 years, in 10 years and in 20 years?

 

2. Write down your short-term and long-term goals. Once you have determined your goals, write them down. This is the first step towards getting your desires out of your mind and into motion and it will be easier to refer to them later on.

 

3. Develop a budget to help you reach these goals. A budget not only helps you understand where your money goes each month, it may also prevent you from overspending. That way you can have more money to save and invest.

           

Your Budget 

Income

 

Earned

   $

Investments

+ $

Total Income

= $

Daily Expenses

-       $

Monthly Bills

-       $

Total Available for Investment

=

 

To increase the amount you can invest, make adjustments to your daily spending and monthly bills, if possible. Look for opportunities to save money and transfer that savings into your accounts.

 

 

It’s never too late to begin building your family’s wealth. Whether you’re interested in buying a first home, upgrading to a larger home or are thinking of renovating, we have you covered. Give us a call and we’ll answer all of your real estate questions and offer suggestions to help you increase the value of your home.

 

Sources: 1. BankRate.com

            2. Pulsenomics, Home Price Expectation Survey Q4 2016

            3. Statistic Brain, August 1, 2016

            4. National Association of REALTORS, Economists’ Outlook, September 8, 2014

            5. The Motley Fool, July 30, 2016

Foreclosures Are Almost a Thing of the Past

by Camille Victour on 04/15/15

Foreclosures and Short Sales DOMINATED the market  in 2008-2010. Together they made up about 50% of the properties listed for sale, give or take 5-10% in any given month. The usual knee jerk reaction of a lender forced to foreclose is to liquidate the asset at a fire sale price. That made it very difficult for regular sellers to compete and caused a downward spiral in the market that took quite a while to recover from.

The biggest factor in the recovery from this spiral seems to me to be because of a policy shift from FannieMae and FreddieMac, the two largest players by far in the foreclosure arena. They started listing their initial property prices at least 10-20% OVER market price for a regular sale. They started sticking to that price within 1-2% in negotiations with buyers. Their appraisals on short sales tended to reflect a future price 6 months down the road instead of current pricing.

At the same time, they tightened up their policies in dealing with buyers and made it much harder to work with them. Once the market had shifted to a seller's market, they took that mentality to the max. They started using a very short inpsection contingency period while at the same time they made it difficult to impossible to get all utilities turned on for inspections. They took away many of the buyer's rights that are protected in the California Association of Realtor's contracts. They would not negotiate after inspections were done and repairs were found to be needed.  Properties were to be sold AS IS only.  Because of this, some properties that needed minor repairs to be able to be to sold to a buyer needing a loan could only be sold to cash investors.

The bottom of the market in the Coachella Valley was in the Fall of 2011. Since then the market has been steadily improving each quarter. Foreclosures and Short Sales are now less than 10% of the market, sometimes only 5% of the market in a given month. That is almost a normal level of distressed property activity. We still have more to get through before this whole calamity is over, but we are almost there. Foreclosures and Short Sales are not controlling the market anymore. That's very good news for sellers, and it's even good news for buyers.

Have you been shut out of buying again because of a short sale or foreclosure?

by Camille Victour on 08/23/13

FHA Shortens Wait Time to 1 Year for People who Experienced Foreclosure, Short Sale, Deed in Lieu and/or Bankruptcy

I have talked with many people who would like to buy another home after having suffered a loss of their home due to a short sale, foreclosure, deed in lieu or bankruptcy. They have recovered from the financial calamity that caused the default on their loan obligations but have been foreced to wait on arbitrary and punishing 3 year waiting period to buy again. Now there's hope for them, and for you, if you are in that situation.

FHA has just shortened the 3 year waiting period down to 12 months under their new "Back To Work" Program. There are several clear stipulations to the guidelines. First of all, there must be "Extenuating Circumstances".  This is defined as being homeowners who lost their home due to an "Economic Event" defined as a one time occurrence beyond your control resulting in an income loss of at least 20% and for at least 6 months. The "Recovery from the Economic Event" is defined as the re-establishment of satisfactory credit for at least 12 months since.

Satisfactory Credit means no major derogatory credit history on all mortgages (in the case of a BK or if you have other loans)  and on all revolving and installment accounts listed on your credit report. It is unclear at this time what the minimum credit score requirement will be but we are assuming it will probably be set at 640. Housing Counseling will be required for these borrowers, but by whom has not been determined yet.

The Lenders creating the loans under these guidelines are still working out the kinks in their underwriting policies and procedures to accommodate this swift turnaround in policy from FHA. So perhaps by mid-September, lenders will be ready to process loans under these new guidelines.

Applications will be "manually underwritten" rather than automatically processed by computer so count on at least a 45 day escrow period and lots of extra documentation and questions.  Borrowers will need to be thoroughly pre-approved under this new Back To Work Program, prior to going out house hunting.

I have several reputable and hard working mortgage people I can refer you to who can help you through this process. So if you or someone you know could qualify for this program, please give me a call or drop me an email.

Short Sales from a Homeowner's Perspective

by Camille Victour on 02/15/11

By now, pretty much everyone knows the term "Short Sale". But what is it really? And what do you do if you are a homeowner in this situation?  We've all heard horror stories after months and months of waiting for an answer which was..."No." Now, they have better policies and systems in place and in most cases it is not taking such an unreasonable amount of time.  The process is still a bit dysfunctional and it is still a difficult, stressful process where not everyone can qualify. 

Generally speaking however, it is worth the effort to try and sell before a foreclosure happens. It is a fair amount of work from everyone involved to do a short sale. The bank is going to want even more paperwork and financial information than when you took out your mortgage in the first place. You'll need to show some sort of hardship as to why you can't pay your mortgage anymore.

It's important to have a good Realtor who understands the process and has good relationships with the various mortgage servicers to get the home sold before a foreclosure.  It's also very important to price your home aggressively for a quick sale. Don't worry about closing costs and Realtor's fees. The bank will take care of those, assuming you qualify. But a short sale will not hurt your credit or your future home buying efforts nearly as much as a foreclosure will. So if you find yourself in this situation, don't wait until it's too late. At ProNet Properties, we have a short sale negotiator on staff and lots of experience in helping people out of a tough situation. Ask for help from a qualified Realtor NOW!  (Namely me.)

Reverse Mortgages Will Get Tougher
LA Times, April 12, 2015
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