Jeff’s Carlsbad Blog for First Time Home Buyers


Are YOU Interested in Buying an REO?

I just wrote an article that may interest you IF you are interested in buying an REO…or perhaps have little choice because of price range.

There are some important questions that I like to ask, so these might be useful for you to consider so you can decide IF buying an REO is right for you.

If nothing else, it will help you be prepared for the issues you need to confront during the search.

SO YOU WANNA BUY AN REO? ARE YOU REALLY READY?

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All content copyright © 2010 Jeff Dowler “The California Relocation Dude”

Do You Give Up Easily?

Posted in Psychological Stuff,REOs,Short Sales by Jeff Dowler on January 13, 2010
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Are you the kind of person who gets frustrated quickly?

Do you give up easily?

I hope not, if you are a buyer, especially a first time buyer, in this market.

In our area there is a ton of competition, with multiple bids on most homes in the lower price ranges (e.g., under $500K), and in particular for short sales and REOs. What this can mean is that you may not get the house you want because you get outbid by someone else. There are more and more cash buyers out there, especially investors, and banks often prefer cash deals over financed ones.

  • Because of the nature of this market, many of you may have to make more than one offer in order to finally get a home, and this can be frustrating. Plus it takes time.
  • The other issue is that in many areas the inventory is not increasing, so there are not a lot of homes to choose from that fit the budget, and the ones on the market often need a lot of work or for other reasons are not very desirable.

However, with the low rates we currently have, and the opportunity to take advantage of the First Time Buyer Credit, buying a home now can be a terrific opportunity for many of you. But try not to let yourself get too frustrated, and BE PERSISTENT. A savvy local REALTOR can be your best defense.

Search for Homes Community Information First Time Home Buyers Relocation Services and more How to get in touch with me

All content copyright © 2010 Jeff Dowler “The California Relocation Dude”

It’s Not Easy Buying a Condo These Days…Especially a “Cheap” One

Buying a home these days is not easy.

Showing homes that you are interested in is not easy either. You have to be prepared, despite our best intentions, to encounter problems with missing keys or lock boxes, limited showing schedules, and other factors.

READ MORE:  It Shouldn’t This Hard to Buy a Cheap Condo These Days

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If I can provide more information about Carlsbad real estate 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.

Search for Homes Community Information First Time Home Buyers Relocation Services and more How to get in touch with me

All content copyright © 2010 Jeff Dowler “The California Relocation Dude” Carlsbad Homes and Real Estate Tidbits

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.

Search for Homes Community Information First Time Home Buyers Relocation Services and more How to get in touch with me

All content copyright © 2010 Jeff Dowler “The California Relocation Dude”

Can Your Transaction Get Audited? YES!

Posted in General Information,REOs by Jeff Dowler on August 22, 2009
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This may not apply to all transactions during the process, but it does at least with FNMA (Fannie Mae) and Freddie Mac if you are purchasing an REO. Perhaps other lenders as well.

I am in the midst of a transaction with a very tight deadline and all of a sudden we learned that FNMA has pulled the REO file for an audit.

It has nothing to do with the offer itself (this is a cash deal, not a loan), the buyers, or the transaction, but apparently is a routine, random, periodic audit that they do of their REOs that are being serviced by various banks. No warning.

This is NOT to say this happens a lot (the listing agent says this is the FIRST in all of her REO transactions in over 2 years) but it CAN happen, without warning.

This causes a delay of an unknown period. Just something to be aware of, although lots of folks get through these deal without this sort of delay.

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.

10 Buyer Challenges for Today’s Market

Before You Open That Refrigerator…

Posted in Due Diligence,House Hunting,Short Sales by Jeff Dowler on January 24, 2009
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If you are looking at distress sales – short sales, foreclosures, REOs – you may want to read this short article I wrote about my own experience with buyers and opening refrigerator doors. The clues may or may not be there.

WARNING – Don’t Open That Refrigerator

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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.

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First Time Home Buyers Relocation Services and more How to get in touch with me

All content copyright © 2009 Jeff Dowler

Are There ANY Homes in My Price Range That Are in Move-In Condition?

Above a certain price range in the Carlsbad area it is possible to find homes that are in move-in condition, or new. But for many first time home buyers, finding a home in their price range that is in move-in condition is difficult, if not impossible. That may be true in your area as well.

Everything else being equal, a home in beautiful shape that needs no updating or cosmetic work will simply cost more. Folks are willing to pay for this so homes that are move-in ready will be more expensive. And they tend to not stay on the market for long because they are ready to go.

The other issue, increasingly, that impacts the number of fixer homes is that there are many more homes at the lower end of the price range, say under $500,000 (less in some communities) that are distress sales – short sales, foreclosures or bank-owned properties (REOs). In most cases these homes need work, sometimes substantial. Some have been poorly maintained or even trashed by the occupants, or occasionally vandalized since they are vacant. You will also see some homes that are not livable until you fix them up, and supply appliances and fixtures.

While some buyers are really looking for a fixer, one that they can put their personal touches on, others prefer minimal work/updating. Being realistic about the market you are shopping in will help you from being too frustrated when every home you see in your price range needs work.

Keep in mind that while having to do work on a home may not be in your plans, or something you planned to do this can work to your advantage. Since fixer homes tend to cost less, you can possibly add more to your equity by buying such a home and fixing it up, rather than paying a premium for a beautifully done one that is otherwise comparable. Just be careful to not overdo it on the redo, or to expect a 100% ROI – an over-improved home will not likely return your investment, especially if other homes in the area are less valuable.

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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.

Search for Homes Community Information
First Time Home Buyers Relocation Services and more How to get in touch with me

All content copyright © 2009 Jeff Dowler

Short Sale vs. Foreclosure Sale vs. REO

money_house.jpgThere is lots of interest in properties that are commonly called distressed properties, as well as concern about the number of these that keep appearing on the market.

Sometimes there is confusion about what these different properties are. So here is a BRIEF description.

SHORT SALE – when the home owner owes more than the home is worth and is in a hardship situation financially where a sale must happen (loss of job, divorce, etc.). Just because a seller WANTS to sell does not mean the lender(s) will approve, and a hardship must be demonstrated and documented.

FORECLOSURE – once a homeowner reaches a point where s/he cannot pay the mortgage and (normally) is behind 3 payments, a NOTICE OF DEFAULT (NOD) is filed by the lender. Often an owner already has the home on the market as a short sale. Foreclosure proceedings vary from state to state.

REO – Real estate owned properties (also commonly called bank owned properties). If a foreclosure property does not sell, it may be auctioned off (e.g., a trustee’s sale here in CA). If it is not bought then, the house becomes an REO that is “owned by the bank” and sold BY the bank on the open market.

Short Sales NO: Bank Owned Properties YES

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I’ve written about the issues involved in buying a short sale home in the past.

I don’t really encourage first time buyers to go after them because they can be so difficult and frustrating. That’s not to say you should not consider them as part of your home search strategy, but beware…they can really try your patience, and they are NOT necessarily a good deal. Doing your homework is ESSENTIAL!

On the other hand Bank Owned Properties can be a good opportunity for you.

Also referred to as REOs, these are properties that have been through the foreclosure process but not acquired at auction so the bank now owns them and is selling them publicly through an agent on the MLS.

  • Some of them can be very well priced because the bank wants to off-load them.
  • And they are generally handled just like any other real estate transaction, as opposed to the complexities of the short sale.

As always, you will want to do your due diligence to see if they are priced well for the market. And as part of the offer process a prudent buyer will conduct a thorough home inspection with a licensed inspector.

Consult with the agent you are working with, or feel free to give me a call/text message (760-840-1360) or send me an email to JDowler@remax.net.

MORE ARTICLES ON SHORT SALES:

Short Sale Contingencies 

Are You Hunting for a Deal? Short Sales – Perhaps Not the Deal of the Century 

Buying a Short Sale

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