Buying a Bank Owned Home

What a perfect time to get an affordable home in Southern California, especially Temecula and Murrieta. Now there are hundreds of bank owned homes on the market and ready to go.

In the beginning, when you saw a bank owned home, the yard was yellow and the homes were trashed. Now when an agent list the homes for the banks, they require the agents to turn on the water and electricity and clean up the yard.  They have a cleaning service come in and clean. All of that said, they can’t make the carpet new or even beige without spots and they won’t and can’t make linoleum turn to tile or wood. You often find great granite and beautiful stainless steel appliances with terrible flooring!

Now when you do find something you like and want to put an offer on there are two things to remember. One: Get a home inspection if it makes you feel more confident but banks will do no repairs and will not discount the price of the home to make up for the changes you want to make. Two: You will have to make an offer very close to the price the home is listed for or the bank won’t consider it and will just wait for the next offer!

Before the home is listed with an agent, the bank gets an appraisal and sets the price that they will list and sell the house. They consider the price they list to be the price they will sell! Even for the listing agent to drop the price of the home, they have to wait a certain number of days without an offer and then be able support the price they want to lower the price with a number of comps of homes that have sold for less.  Even then, the banks gets a couple of price opinions from two other realtors not involved or from the same area. In in todays market the prices from the banks are pretty much right on.

There aren’t many perfect homes but if you find one, there will be multiple offers “over asking”. The agent will tell you to give you “highest and best” offer.

They know the value and they don’t negoiate. They don’t have to move for a job, they aren’t “losing” the home, they don’t want to move before winter, they aren’t trying to sell to be able to move into their dream home. In other words, it is strictly a BUSINESS decision.

Something I hear ofter is – “I don’t want to pay that price (which is half of what they would have willingly paid in worst shape last year) BECAUSE I have to put in $10,000 to $20,000 to make it the way I want it. The banks could care less! Buy a cheaper home but don’t expect your problem to be their problem. They will just sell to someone else.

Home are so affordable and interest is low – take advantage of this time who knows when it will come again.

Talking about FHA mortgages

I find that most common folks like you and I don’t really understand exactly what an FHA mortgage is and what kind of people the should be looking at FHA loans. I found a great article by Brad Cornett that I thought I would share with to to help decode “FHA”

FHA Home Loans to the Rescue – Help for Homeowners

by Brandon Cornett

You can’t turn on the TV these days without seeing a news story about the U.S. economy in general and the housing market in particular. Starting in 2007, we began to see record numbers of home foreclosures, a trend that continued into 2008 (and one that shows no sign of slowing).

But for many homeowners, help is on the horizon. And it comes in the form of FHA refinance loans. Let’s take a closer look at this new program and what it promises to do.

Housing and Economic Recovery Act

The recently passed Housing and Economic Recovery Act of 2008 will help “at least 400,000 families” who are struggling with their mortgage payments and facing foreclosure. It will do this by providing FHA-insured refinance loans to switch the homeowners from high-rate ARM loans to lower fixed-rate mortgages. For those accepted into the program, the end result will be a lower monthly payment and more desirable fixed rate that will no longer adjust / increase.

History of the FHA

The Federal Housing Administration was created in 1934, during the Great Depression, to make home financing available to a greater number of Americans. The FHA does not actually make home loans to consumers. Instead, they insure certain loans made by private lending institutions.

You’ve probably heard the term “government-backed financing” before. The FHA program is an example of this. By having government insurance in their favor, private lenders are more willing to offer mortgages to borrowers they normally wouldn’t qualify (due to credit problems or other qualification issues). The lender is assured of getting their money back on the loan, even if the homeowner defaults and stops making payments. That’s what the FHA insurance does.

The Refinancing Angle

Traditionally, the FHA program was focused on helping buyers in the purchase of a home. But as a result of the aforementioned Housing and Economic Recovery Act, the program is being opened up to homeowners who want to refinance. According to the HUD website, “an estimated 400,000 borrowers in danger of losing their homes will be able to refinance into more affordable government-insured mortgages.” The program is slated to begin in October of 2008. To find out if you are eligible, visit the HUD website or refer to the Home Buying Institute resources mentioned at the end of this article.

Getting Away from ARM Loans

The goal of this new program is two-fold. It is designed to help struggling homeowners who have adjustable-rate mortgages (ARMs) convert to fixed rates. It’s also designed to lower their mortgage rates in the process. Lower rates and less uncertainty — a double win.

About the Author: Brandon Cornett is the publisher of many consumer-education websites, such as the Home Buying Institute and the Software Learning Center. To reach the author, please visit his software website at www.LearnAboutSoftware.com

4th of July Celebration in Temecula, Ca

Southern California is known for it’s friendly people and it’s wonderful unique areas.

Temecula is one of these unique towns – or should I now say “cities?”  Temecula is known for it’s many wineries, hot air balloons, Old Town, horse events, and it’s 4th of July Celebration.

The event is held at the Sports Park, with our outstanding new library (second library in our town!) overlooking the celebration. There was a Jazz Band, children’s activities, vendors, picnics, blankets, frizbees, children playing, parents visiting neighbors—all in all, it felt like a wonderful “Leave It To Beaver” event.

We Realtors were not selling homes in Temecula on the 4th of July – we were back, hard at work on the 5th but the 4th was for celebrating  and enjoying the great town and people who already here.

Watching the fireworks display while sitting on blankets, surrounded by friends and family was a magical time. Wish you could have been here!

Understanding HomeBuying in this new Economy

This is one of the best articles I have read recently about loans and the home buying process. Our real estate world has been changed in many ways — not just falling home prices and more inventory but also the loan process.

Buying a House in the New Economy – Advice For Buyers

by Brandon Cornett

Jean Chatzky, the financial editor for the Today Show, was on TV recently to talk to consumers about their credit scores. She confirmed something I already knew, but backed it up with some eye-opening numbers.

Specifically, Jean was explaining the credit score you need to qualify for the best mortgage rates when buying a home. Here is how she broke it down:

* May 2006 – Borrowers needed a credit score of 620 to get the best rates.

* May 2008 – Borrowers needed a 760 or above to get the best rates.

That’s an increase of 140 points, which is a significant difference when you consider that the overall credit range only goes from 300 – 850.

Recent Economic Changes

Credit has always been important when buying a house and applying for a mortgage loan, but today it’s more important than ever. To fully understand the reasons for this, we need to look back over recent economic changes.

The subprime mortgage “meltdown” that started in 2007 caused widespread economic changes that we are still seeing today in 2008. Many lending institutions went out of business, and thousands of Americans lost their homes due to foreclosure. This caused a general tightening of credit that affected consumers and businesses alike.

What It Means for Home Buying

If you are planning to buy a home in the near future, this has everything to do with you. As a result of these and other factors, the process of buying a house in today’s market is more challenging. As I’ve already stated, you will need a higher credit score for home buying today than in the past, especially if you want to quality for the best rates on your loan.

Additionally, buyers with bad credit have fewer options today, because the subprime mortgage is practically extinct. This makes financial responsibility all the more important for buyers in the modern economy.

So what credit score is needed for home buying in today’s economy? Well, this will still depend on the individual mortgage lender involved and their particular lending practices. But it’s important to realize that there’s a big difference between qualifying for a mortgage loan and getting a good rate on the loan. For example, you might get approved for a mortgage with a credit score of 580. But you certainly won’t get the best rate at that level. This means you will pay more each month as long as you keep the loan.

According to the figures presented by Jean Chatzky, a couple of years ago you could have elevated your score by just 40 points to qualify for the best interest rates — i.e., you would boost it from a 580 to a 620. Today, however, you would have to increase your credit level by 180 points (from 580 to 760) to qualify for the best rates. That’s a huge difference!

My Advice to Buyers

The home buyers of today need better credit than the buyers of, say, three or four years ago. The federal government is putting more pressure on lenders. The mortgage lenders are scrutinizing borrowers. And borrowers are under increased pressure to have good credit scores to qualify for loans.

All of this is unlikely to change anytime soon. So if you fall into the bad credit range, my advice to you is this:

Do not buy a home until you get your financial “house” in order. Even if you do get qualified with a low score, you are going to pay a huge amount of interest on the loan. So instead of rushing out to buy a home before you’re financially ready, focus instead on improving your credit score. Pay all of your bills on time. Minimize your debt. And start saving money — the more of it the better.

About the Author: Brandon Cornett is the publisher of Home Buying Institute, a website for first-time home buyers with advice on credit scores, home loans, online lender quotes and more. Learn more by visiting the Institute at http://www.homebuyinginstitute.com

Great information!

 

Wine Country is Beautiful This Time of Year!

I just got back from a drive through Temecula Wine Country. What a feast for your eyes! Sometimes I feel very spoiled to be able to live in such a beautiful place.

It is hard to describe. There are rolling hills covered with the green lines made by the rows of grapevines – in the distance you see the purple grey mountains – flowers are everywhere – and in the early morning or late afternoons, you might see colorful hot air balloons drifting overhead.

It is really hard to put into words but it is really, really magical! 

What to Do? What to Do?

Life is certainly different in Southern California Real Estate these days! Temecula and Murrieta have seen falling home prices along with the entire country. What makes Temecula and Murrieta a little more unique is - along with the tragic home foreclosures comes a little hope and breathing room – Young families can have homes they can afford in Southern California. Our younger people were having to settle for either leaving the area or buying way, way, way over their budgets, just to get in the housing market—thus the adjustable loans. Way to much of their income went to desperately trying to make house payments that they really couldn’t afford.

Finally, a sigh of relief, and an opportunity to buy what we can really afford! There is a silver lining in all of this.

 

Let Me Tell You about My Blog

Exactly what is a Blog? It is like a regular website that is updated regularly. You can have current information daily. In today’s housing market, things are changing with the speed of light. Check back frequently as I will be covering anything and everything that is related to Real Estate in Southern California specifically the Temecula/ Murrieta area.

I will introduce you to the various neighborhoods and some great people. Sometimes I may digress into others areas of interest. Anyway, fasten your seat-belt, and hang on—the ride will definitely be interesting! You will get introduced to Temecula Wine Country and all of the beautiful wineries. Oh, and we can’t forget Old Town Temecula and the great little shops.

Real Estate Doesn’t Have to be Self Service

I find that I am just as noisy as the next person! I love Zillow to check out my neighborhood and the homes all around the area. Even though I am a Realtor—who, by the way, knows that most of the homes in the shiny big homes for sale magazines are already sold—because of the lag time in print publishing—I still love to leaf through the pages, comparing the homes.

I even check out the weekend Real Estate sections! All of this even though every day I spend time on the MLS  which is by for the best and most complete listing of homes. I just enjoy “browsing” Real Estate!

Anyone can begin their search for a home by just noseing around the Internet but pictures, unfortunately, never tell the complete story. Of course the unflattering or dingy parts of the home is left out of the pictures. Neighborhoods are hard to read-there are “bad” parts of good school districts!

Luckily you don’t have to go it alone! Getting great direction and help doesn’t cost you a penny! Sellers pay the Realtor’s commission and then only if the home sells.

To begin your search for a home in the Temecula/Murrieta area or to sell your home, call Sandra Williams at 951-662-3973.  I am always available to answer any questions and help you anyway possible.

Western Days in Old Town Temecula

This is why we love this town! Saturday and Sunday there was a wonderful event in Old Town Temecula. Western Days  was full of great “olde tyme” events. There were plays on the streets, bands (my favorite was one called “Older Than Dirt”) complete with a wife playing a washboard with thimbles, people walking in costumes, and a very fancy gun fight!

Saturday there was also a Farmers Market that is a weekly event in Old Town. Children in boots and cowboy hats…and shorts…after all this is still Southern California, and lots and lots of people of all ages. There was food, music on every corner, things to buy and things to see and listen too.

Isn’t this the wonderful thing about great communities like Temecula and Murrieta! Great weather, great event, and tons of wonderful people—and we actually ran into friends and family on the streets! —and people think towns like this don’t exist today—-well they do and it is amazing!!!