What You Should Know About FHA Loans
Many buyers these days, especially first time buyers, are attracted to FHA loans, and with good reason.
Down-payment money is often a problem, and FHA only requires a 3.5% down-payment (and it can be gift money).
There are a couple of things you should know, especially if you are looking at condos:
1. FHA requires that the complex be FHA approved. Or, if it is not, you can get what is called SPOT APPROVAL which takes more time and adds to the process time frame. And there are no guarantees.
2. The owner occupancy of the complex must be 51% or better in order to use an FHA loan.
3. There is a 3-year guideline for conversions. Properties converted from apartments to condo in the last 3 years will not likely qualify for FHA financing.
Be sure to check with a qualified loan officer to make sure you understand the guidelines, as some properties that may interest you and fit your bduget may not qualify for this loan.
NOTE: Important update 10/17/09 – SPOT APPROVALS are no longer allowed by FHA with some new regulations that went into effect Oct. 1. Check with your lender to see how this affects you.
Should I Arbitrate or Not?
One of the issues you need to think about when comleting an offer to purchase in California is whether to use arbitration to resolve any conflicts that arise as the result of the transaction (this may not apply to other states).
I am not an attorney and cannot advise you on whether you should or should not, as it is a personal choice. That said, I have been told by legal advisors in our state that arbitration often can be a faster way to resolve issues, if any, adn less expensive than going to court. And most people tend to choose this option.
If you do not elect to use arbitration, the seller will also have to agree, since both parties must agree on which way to go.
Know that there are some issues that fall under the jurisdiction of small claims court (e.g., deposit issues) that can get resolved in court even if you elect the arbitration route first. Our Residential Purchase Agreement (RPA – CA) explains this in more detail.
What You Need to Know about the Recorder’s Office in San Diego
Recording the deed to your new home is a final stage in the process of closing. Often you cannot gain access until escrow has closed and recording has occurred.
Recent changes in how recording occurs and when will have a significant impact for new home buyers. It will no longer be possible for a loan to be funded AND to record on the same day (with two exceptions).
The 10 Buyer Challenges YOU Must Be Aware of
There are plenty of challenges to buying a home in today’s market. Here is a list of the 10 I think are the most relevant to buyers.
First time buyers have some challenges because for many the price range limits them, in large part, to homes that are distress sales and REOs (at least here in Southern California. And that means lots of competition.
And lots of patience.
Take a look at this list so you will be prepared. If I can help, just let me know.
Important San Diego MLS Information for Buyers
Many buyers in our area are looking at short sales, pre-foreclosures, and REOs as part of their home search. And there is LOTS of competition, so it is not really a “buyer’s market” for these kinds of homes. You will almost always find multiple offers on these properties, sometimes the day the new home is listed or within a day or so.
SANDICOR, the MLS for San Diego, has implemented a new status called CONTINGENT, which means there are offers awaiting approval of the short sale, or which have been submitted to the REO lender for approval. They are still ACTIVE but now there are multiple bids.
