Stumbling Blocks to Your Home Purchase
There are a number of hurdles you have to overcome as a first time buyer in order to get that new home. This is true of everyone, of course, but folks who are buying for the first time may not be aware of these stumbling blocks.
Model Homes at CopperWood and Rockledge in Carlsbad
And with the current market, especially in the lower price points in our area (under $400,000), there are other issues to be aware of.
A knowledgeable REALTOR can help you overcome many of these hurdles, but some things you simply need to do yourself.
Here they are, in no particular order:
1. Getting Pre-Approved for a Loan
2. Being emotionally ready to make a purchase and just making a decision
3. REOs = lots of competition and multiple offers, including cash buyers
4. Short Sales = LONG waiting time for short sale approval (4 – 6 months), perhaps never
5. Moving quickly enough on a great deal – keep in mind the competition, you may NOT have much time to “think about it”; a delay can cost you the home
6. The appraisal – many of them are coming in lower than agreed on prices due to the market and changes in the appraisal process
7. Getting a loan – banks are becoming more and more restrictive
8. The home inspection
9. Being realistic – about what you can afford, the trade-offs (wants vs. needs), etc.
10. Do I buy now or wait?
If you need help sorting through these issues or want more information on the matters you really need to think about, please let me know.
What You Should Know About Insurance
There are several things you need to know about with regard to home owner’s insurance for a home or condo that you are buying, especially if you are buying in a high risk area (e.g., fires, floods, earthquakes, ocean front).
Are There Tenants in The Home You Are Hoping To Buy?
Are there tenants living in the home you are hoping to buy?
As a first time buyer there are some things you need to be on the lookout for when conducting your home search. One of these issues is whether there are tenants in the home or not.
While this may seem to be a small issue, it can become a big one.
You should know if a home is occupied, and if so if the residents are tenants. This is important because tenants have some rights in terms of notice to vacate in the event a home is being sold. The laws may vary from state to state, but here in CA you must give a tenant 30 days notice if they have been in the leased property for 1 year or less; if more than 1 year, 60 days is required. Thus this can have an impact on when you, the buyer, can take possession of the property, or when closing should occur so you can take possession at that time if the seller has not provided appropriate notice.
I know of one recent situation where the buyers were not even told that the residents were tenants. Rather they were led to believe the home would be vacated at the time of closing, which was fairly short. And since the closing occurred quickly and the tenants were not given notice, the property was still occupied at the time of closing.
You may never come across this situation but it always makes sense to ask.
Another situation that can arise is that a short sale property thought to be vacant may actually have people living there (e.g., the owner is trying to make a little money). Again, it always pays, as a buyer, for you and your agent to be aware of the situation so you can plan for any contingencies that may arise.
Another recommendation is to be sure to ask that the property be vacant at closing in your offer, which includes a condition that all the seller’s, and/or tenant’s, possessions in the home and garage or on the grounds are excluded from the sale and removed by the time you close.
Some Homes are Not All They Are Cracked Up to Be – Some Are, Literally!!
Buyers – you may find in your home search that some homes are not all they are cracked up to be. But others will be.
However, I’m not talking about what you think I am.
I’m talking about REAL cracks.
There are homes, unfortunately here in North County San Diego (and no doubt elsewhere in the country), that have cracks in their slabs, which can be a serious problem.
- Lenders will not provide a loan on a home with a cracked slab
- A cracked slab can be very expensive to fix (to the tune of tens of thousands of dollars or more depending on the problem based on what I was told by a guy who does this sort of work). It’s also expensive to have an inspection completed to determine the nature of the problem and the remedy.
These issues may or may not be obvious, which is one more good reason to have a home inspection. If there is suspicion of a problem then a further more detailed inspection is definitely warranted.
And certainly if a slab crack is a known issue the seller should be disclosing this (as was the case in a rather charming older home I toured the other day with my buyers – the seller was there and freely shared the issue).
Needless to say, a HOME INSPECTION is essential so you know what you are getting, or can decide that the home is more than you are willing, or can, take on.
Are Those Occupants Residents or Tenants?
A critical question buyers need to consider when buying a condo in Carlsbad, or anywhere else in San Diego, is “are those occupants residents or tenants?“
I don’t mean that we fundamentally care who is living there.
The issue has to do with the mortgage requirements that a minimum of 51% of the units in a condominium complex must be owner occupants (i.e., not second homes or investor-owned properties).
If you can find this out before getting too far along in the offer process (your REALTOR will help with this) you can save yourself some possible disappointment.
During the due diligence process here in CA we investigate the status of the HOA, review HOA docs and budget and other matters, which includes the percentage of owner occupancy. But finding out before you get that far along will save time and heartache. It MAY be stated in the MLS but in my experience it usually isn’t.
While many condos do meet that requirement easily, there are some complexes that are popular with investors so it is an important detail to add to your due diligence as a buyer.
First Time Homebuyer Tax Credit Extended
As many folks know, the government signed an extension to the First Time Homebuyer Credit which includes a tax credit for move-up buyers.
Here is a GREAT SUMMARY of some of the key things to know about this new legislation from a colleague of mine in Arizona, Mike Jones.
This is something worth keeping in mind if you are thinking about buying, in addition to the good rates on mortgages.
Check out this website on the First Time Buyer Tax Credit to get answers to all your questions.
North San Diego County Market Reports
For those of you watching the real estate market in the coastal communities of North San Diego County, here is a summary real estate market report with links to SEPTEMBER 2009 real estate market reports for the following communities:
Carlsbad
Cardiff
Encinitas
San Marcos
Oceanside
Rancho Santa Fe
Del Mar
Solana Beach
Each report also has some links to earlier market reports for those communities (some more than others). I can always provide detailed report susch as these for ANY community in San Diego as well as broken down by area/neightborhoods. Just ask.
Homebuyer Credit Extended?? Not yet
Word on the news and on the street is that the First Time Homebuyer Credit has been extended to the end of April 2010, plus they have added a credit for SOME move-up buyers. BUT IT IS NOT DEFINITE.
I don’t have the details yet but will share once I do. This is great news for some folks if it becomes fact.
NEW California Mortgage Fraud Laws
Finally.
Some new laws have been passed in California to better protect consumers against mortgage fraud, which is rampant (I understand CA has the 4th highest % of mortgage fraud).
If you are in the process of shopping for a mortgage, this is a MUST READ to educate yourself aboutthe laws that protect you.
New Construction Homes in Carlsbad
These may not fit many budgets, especially those of you who are buying your first homes.
Model Homes at Rockledge in La Costa Oaks Carlsbad
There are several communities of new construction homes in Carlsbad that may be of interest. What I find particularly impressive is that these homes are going QUICKLY – quite a change from a year ago when homes were languishing on the market and new home building sorta stopped.
Now there are 5 new communities that are building with another (53 Melrose) just starting in South Carlsbad.
Read more about COPPERWOOD and ROCKLEDGE in the La Costa Oaks master planned community in Carlsbad. If you want new construction for under $250/SF here is your chance – but it’s going fast.
