First Time Home Buyers and Short Sales

Lots of home buyers are interested in buying short sales these days. You may be, too. And no wonder. There is lots of media coverage about the huge number of these distressed properties. And lots of buzz about how they can be a great deal.

Let’s do a little reality check here.

Yep, there are lots of short sales, especially in certain parts of the country. And many first time home buyers may find that most of the homes in their price range are short sales, particularly in the Carlsbad area (and the rest of San Diego). So you may not have a choice but to try and purchase one.

Some buyers believe the term “short sale” means just that…a sale that happens quickly. In fact, nothing could be further from the truth. A “short sale” is really a “long sale”, and sometimes they never happen. Getting approval on a short sale can take days, weeks or even months. So if you need to move in fairly quickly, or have only a moderate tolerance for waiting, a short sale may drive you nuts.

As far as being a deal, well that, too, can be a myth. The list price may be especially appealing, but that is not necessarily what the bank will accept. They will be looking for market value and will decide what amount they will approve based on an appraisal or a BPO (Broker Price Opinion). Consider, also, that if the price is terrific you will have lots of competition also looking for a great deal, with multiple offers and a range of prices. So the dollar amount the bank will accept may be more than the list price, and much closer to market value. So much for the great deal you thought you would get.

Finally, short sales are normally sold “as is.” This means that you must take on the repairs and defects yourself rather than the seller taking care of them. This can cost you more money.

Be sure to factor these issues into your thinking as you embark on your home search. Buying the short sale may be right, and may work for you, Just don’t count on it. And be prepared to switch gears if things are not moving along.

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If I can provide more information about Carlsbad and surrounding areas, or the housing market in general, or otherwise assist you in your homes search, please contact me by phone or text at (760) 840-1360
or email me at JDowler@remax.net.

All content copyright © 2007 Jeff Dowler Carlsbad Homes and Real Estate Tidbits

Daylight Savings Time is Fast Approaching

This has nothing to do with real estate (except that you will have more time after work to see homes in the daylight)…but keep in mind that:

 Daylight Savings Time starts this Sunday, March 9 at 2 AM (it’s earlier this year).

Things to Know About HOAs

As a new home buyer, especially here in Carlsbad and other nearby communities, HOAs are a way of life. And they can, in some neighborhoods, have a significant impact on your lifestyle there. So there are some things to know.

HOAs are generally responsible for the care and maintenance of the community – the grounds, buildings, parking, swimming pools, etc. They take care of paying the bills, such as the master insurance if there is such a thing (common in condo communities), arranging for care and maintenance providers, and so on. And they are responsible for preserving the way of life that has been established, and the appearance of the neighborhood.

But they also oversee the rules, regulations and by laws that have been approved, and which dictate what can and cannot be done in the community. Some rules are very strict and others are fairly loose.

• Some times parking is not allowed on the street, or
  
• RVs must be parked outside the community in a designated area
• You may need permission to make certain improvements on your home, or may not even be able to choose a different exterior paint color, or install a new style of window without approval of a committee, or perhaps not at all
• They may dictate how late you can host outdoor parties, how many guest parking spots you may use, and much more.

Understanding the rules and regulations beforehand is essential so you can decide if you are willing to live with the requirements of that community. In most cases they are fairly unobtrusive, but be sure to obtain copies of the By Laws and other rules so you know what you are dealing with.

You will also want to review the minutes from the HOA meetings. This will give you an idea of the sorts of things that are discussed, the concerns folks have, any on-going issues that could influence your decision to buy, and much more. And certainly if you have questions that arise during the due diligence process you should talk to someone who is a member of the HOA or perhaps the president.

People, in general I think, want to live in harmony with each other, and you should understand how that happens in the HOA where you are purchasing your new home.