Do You Have A Buying Strategy? You Should for 2009

If you are considering buying a home in 2009, or perhaps have been working on it but it hasn’t happened, you might want to do some planning.

What IS your real estate buying strategy?

Do you HAVE a strategy or are you going to just go about it haphazardly?

Consider the following:

DON’T IGNORE THE INTEREST RATES

Interest rates are historically low and there are predictions of 4.5%. It’s worthwhile checking into what programs you can qualify for and what this means financially for your monthly budget. Be aware that loan qualification requirements remain very tight and a good number of folks may simply not qualify for the lowest rates, or at all.

UNDERSTAND NEW LOAN LIMITS AND CHANGES AND GET PRE-APPROVED…

You can read the rest of this article on my ActiveRain blog.

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 © 2008 Jeff Dowler First Time Home Buyer Central

Watch Those Mortgage Rates

As you may be aware, the mortgage rates have been dipping significantly in recent weeks, to a level not seen in decades – below 5% for a 30-year fixed. This can represent a substantial opportunity for buyers who are ready but sitting on the fence.

Here’s a chart showing the trend for 2008.

2008 Fixed Rate Mortgage Trend

But watch those mortgage rates. They are not expected to stay this low and in fact have bumped up a little in the last week or so. You may want to check with a mortgage broker to learn more. Even if the prices drop some more, a decent bump up in rates will negate any price drop.

If you need a recommendation for a mortgage broker, please let me know – I have several terrific contacts that can help you pretty much anywhere.

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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 home search, please contact me by phone or text at (760) 840-1360 or email me at JDowler@remax.net.

All content copyright © 2008 Jeff Dowler

Are Your Expectations Realistic?

Given the buyer behavior I have observed in recent months, I have to wonder…are YOUR expectations realistic?

Primarily I am speaking about pricing, and what you can obtain for the price you would like in a particular area. It can be a challenge in this market, because we don’t have a good handle on what is actually happening with respect to prices. And what we hear and see in the media sometimes leads folks to think they can acquire properties for far less than what we see in reality in the market, despite the already depressed values.

Granted there are some pretty good deals, especially if you are willing to buy a short sale or foreclosure ( and compete with all the folks who are doing the same thing – it is not uncommon to see a dozen offers on a distress property) and have the patience to work through the many months it will likely take. Plus take on the needed repairs at your expense.

Despite the fact that prices have dropped in most markets, and here in the San Diego area we see prices that are similar to 2005 or earlier in some areas, it seems that some buyers are not being realistic in their expectations about what they may need to spend to get what they want. My best advice is to get to know the market by looking at listings and obtaining sold information from a qualified agent in your market area. Don’t waste your time looking for a $150K detached home in a market where nothing is selling for less than $400K.

More on Negotiating Repairs After Your Home Inspection

It is truly rare, and perhaps impossible, to find a home that does not require some sort of repairs…even a brand new home. Often these things are minor, or deferred maintenance issues, but sometimes they are more significant.

A plumbing problem needing a repair

As a buyer you DO NOT have a to buy home that needs repairs or has many defects if you don’t want (but be SURE to check on your offer contract in your area to be sure of this, and how and when you are able to back out of any offer contract). But in most cases it seems that buyers DO want to move ahead but would like to have some or all of the repairs taken care of by the seller, or to receive a credit or price reduction.

Repairs are always negotiable, which means you can ask for them to be taken care of, but that the seller can also respond by taking care of some, all, or none. And depending on the amount of your offer you may be in a better position to negotiate (a strong offer) or not.

Some states, like California, have a specific form that is to be used to request that repairs be taken care of. It is OK to submit a list with the form to outline the repairs and how you wish them to be handled (e.g., the receptacles to be repaired by a licensed electrician).

In other states you might simply provide the seller with a politely written request to take care of certain repairs, or propose a price reduction or credit.

As with an offer, requests for repairs are negotiated until both parties agree on how they are to be handled. Or you decide to walk away.

Be sure to talk with your REALTOR to understand the process in your area and what makes sense for your particular offer contract.

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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

What to Know About Property Taxes When You Buy

One of the big expenses you will have as a first time home buyer will be property taxes.

As part of your due diligence during your search, and once you have an accepted offer, you should be sure you understand how much tax you will be paying so you are not caught unawares.

An estimate of expected taxes should be included when you are getting pre-approved (I would use a fairly aggressive amount) so you truly know the amount you can borrow and can afford based on your budget. Property taxes will amount to thousands of dollars per year.

When you are going to close on your new home, a large portion of the closing costs might be your property taxes. You will be required to pay a pro-rata portion of these property taxes upfront (called an IMPOUND) so that when the semi-annual taxes are due (in California they are paid twice per year) your mortgage company has enough money to pay them.

For example, if you close in December the next tax payment will be due in only a few months, and the mortgage company will not be able to collect enough through your monthly payments in order to pay the full tax payment. So they collect money upfront to ensure they have enough.

The other reason that this is done is that your FIRST mortgage payment is generally not due the month after you close but the second month afterwards. But don’t think you are getting a free month. The lender will collect the pro-rated interest from the time of your closing until your first monthly payment upfront too.

Here is the schedule of impounds that you likely will see and can be expected to pay – keep in mind that this may vary with the lender, who might require more upfront money. Make SURE you know what this amount is before closing so you can plan for your closing costs. Your lender can tell you what upfront money you will need. (this table of information was obtained from a colleague of mine, Michelle Elkins at Nations Title in Carlsbad)

Month of Funding	First Monthly Payment	Tax Impound
November	January	5 months
December	February	6
January	March	7
February	April	2
March	May	3
April	June	4
May	July	5
June	August	6
July	September	7
August	October	8
September	November	9
October	December	4