Tag Archives: real estate market

What You Need To Know If Buying A Condo?

All right here are some tips for you provided that you happen to be trying to buy a condo in the Santa Maria real estate market or where ever you plan on shopping for one, and what you need to be familiar with before hand.  Initial thing to keep in mind just like not all people are created equal and neither are all homes or condos and more importantly not all Condo associations!
The real estate market has quite a bit of condo complexes and with a number of  of them for sale,just like the homes in Santa Maria some are better than others for a number of reasons.  some of them are run very well and others not so well in addition to are underfunded.  The problem is when a condo association is having problems in addition to you purchase condo within that association their problems now become your problem.
Okay here are some tips for you assuming that you happen to be trying to buy a condo and what you ought to be familiar with before hand.  Initial thing to keep in mind just like not all people are created equal and neither are all homes or condos and more importantly not all Condo associations!
The real estate market has quite a bit of condo complexes and with many of them for sale.  A few of them are run very well and others not so well in addition to are underfunded.  The problem is when a condo association is having problems and you buy condo within that association their problems now become your problem.  When you acquire a condo you basically join a club in addition to take on a portion of the issues which they can be having.  So there are few steps that a person needs to keep in mind when considering a condo, because your decision is something that you will have to live with daily as you continue to own that condo.

1)      What is the Home Owners Association fee in addition to what does it pay for?

Generally this is just acknowledged as the HOA dues you could surely discover that some of those HOA dues as high as almost $400.00 per month.  Which is an extra $400.00 added toward your monthly payment on top of the loan on top of the taxes in addition to on top of the insurance, nevertheless I think you get the idea.  The HOA dues alone could make you or break you as to whether or not you will qualify for that condo or whether or not you even want to consider purchasing it.  The fee comes from the annual expenses to maintain the common areas such as the club house, the pool etc.  It is also a result of whether or not the association is professionally managed or self managed.  Provided that this is going to be your new monthly fee you need to recognize what your getting for what you pay for.

2)       Why Do HOA have rules?

This can unquestionably make acquiring your condo one extremely regrettable decision, considering the rules might prohibit pets, or even your ability to rent out the unit.  You will want to get a copy of the bylaws to see if there will be anything that you can have issues with.

3)      What is the percentage of renters vs. owners?

Usually renters do not at all possess the similar level of consideration for the property they abide in.  Whether or not it be a condo or a home too many renters tend to give unwanted issues.  Another consideration is that provided that there is too many renters in the condo complex the condo may not qualify for FHA financial backing.  Even with the condition that you were to acquire a conventional loan instead of an FHA loan and this was to be your primary home it may have to be financed as investment property due to the high number of renters.  A loan for investment property is normally an extra 1-2 points than the going rate for house which would be considered your primary home.   This could be a problem for certain communities when many homes for sale in addition to condos were bought by investors in the middle of the market frenzy many were used as investment properties.   Use the link below to find out if the Condo you anticipate on procuring will qualify for FHA funding due to having too many renters.

Here is the link to find out if your condo complex may or may not be approved simply go to:

4)     How much cash exist within the reserve fund account?

This is probably the most overlooked in addition to never actually taken into account until it is too late.  Procuring a condo you become part owner of the association in addition to a good number of  the bills which come with it. So with the condition that the association is poorly run or funded the condition of the condo complex as a whole can deteriorate.  Or a lack of funds can be an indication of possible litigation draining the fund which will eventually require a special assessment in regards to all those that intend to keep there condo units.  Reality just like individuals having to cope with bills and bad credit, a condo complex can end up having the issues when the bills and funds to pay them are not available.  You want to know is there an increase of delinquent owners if so the reserve fund will come to be drained.  Request a copy of their budge to look into if there can be any indications for concern.  The last you want is to do is to get a condo plan on a budget and get hit with new and higher HOA dues.   Don’t let this scare you seeing that obtaining a condo does have its benefits such as no yard and maintenance for some of us its simply not at all on the schedule in addition to it does every so often furnish you the luxury of having a pool and lets not forget the hot tub.  A few Condos even possess security which is a nice added benefit for anyone with kids especially supposing that you happen to be a single mom.  Basically look past the price in addition to make sure you will be happy with the condo association in addition to its rules and fees.  Getting a condo is not at all similar to buying a TV ,,,you can’t take it back supposing that you’re not happy with it.

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Why You Should Do A Short Sale Soon!

There are consequences of doing a short sale whether it be within the Santa Maria real estate market or anywhere your house is located this is on the grounds that you owe more relative to your  mortgage home loan than what your home happens to be worth at this time, this is when you are upside down.  Do not get me wrong there are some benefits to a short sale as well, but we are only going to touch a little bit about the dark side.  Reality therea are millions of homes owners facing this and many of the homes in Santa Maria are short sales at this time.
Assuming that you read my last blog then you read with respect to the benefits of carrying out a short sale supposing that you did not you might want to visit that blog seeing that there are some benefits as to why you would want to do a short sale vs. letting your home foreclose if you do not qualify for a loan modification.  The  majority of Santa Maria homes for sale in addition to quite a bit of likely in Calif. are either a short sale or a foreclosure and a number homeowners could be contemplating what course of action to do whether to do nothing but walk away or work in connection with doing a short sale.  So if you are on the fence of just walking or doing a short sale maybe this can help.

You need to take into consideration that you owe $400,000.00 on a house that is just worth $200,000.00.  What takes place towards the difference???

First we choose to talk with reference to the IRS, the Feds also then we choose to talk in regard to the effect with regard to a state level regarding in what way or manner they look at that $200,000.00 dollar variation.   nonetheless what takes place provided that you do a short sale does the bank eat the difference,  The response depends relative to where you live.  You will have to look into the laws of your state, for instance provided that a bank agrees to do a short sale in the state of California whether it be a first or a second the bank will not be able to  come after you for the deficiency amount.  For instance if you had a second on your home in a foreclosure they may be able to take you to court for what you owe them.

Most reading this are probably thinking that’s cool sign me up also let’s do a short sale.  The only problem is that the IRS considers any canceled debt as ordinary income, even when dealing even with credit cards in reference to working on settlements.  So but now the picture is not so rosy especially with the condition that you have never made $200,000.00 in your life in addition to at this time looking at a tax bill of $200,000.00.   supposing that you do a short sale you will be receiving a 1099C for 200k with the condition that you do a foreclosure you will receive a 1099A, these will need to be filed even with your tax return.  So now what should you do?  You should have a couple of alternatives and do please keep in mind try to go to someone that is incredibly experienced with taxes this is not something you want to just let anyone do for you.

So here are some Exceptions towards the rule on paying taxes.. Listen up 😉

1)      The IRS will not collect taxes with respect to the deficiency amount assuming that the homeowner filed Bankruptcy also included the deficiency amount.

2)      The homeowner filed insolvency at the time of cancellation of debt, which means that you owed more than what you have in assets you do not have to file BK this may be done at the time when filing your tax return.

3)      assuming that this was a rental property in addition to you could offset debt by other business liabilities in addition to expenses basically back to being insolvent.

with the condition that you just let the home to go to foreclosure no worries this is straight from the IRS themselves

Update Dec. 11, 2008 – The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection let alone a foreclosure, qualify for this relief.  bear in mind DECEMBER 31, 2012 SO with the condition that YOU ARE THINKING OF carrying out A SHORT SALE DO IT SOON!!

This provision applies towards debt forgiven within calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exception ($1 million if married filing separately). http://www.irs.gov/newsroom/article/0,,id=174034,00.html

In closing the benefits always do out weigh the consequences in doing short sale vs. a foreclosure.  Biggest benefit would be when do you want to become a homeowner again, and stop having to deal with what is going to happen next,  both will impact your credit just one impacts it slightly less.  This was just a brief summary of the tax consequences involved as well as you will need to seek the counsel of somebody that can help you with filing for your taxes.  The real estate market will still have a few years of dealing with foreclosures in addition to short sales as the primary source of homes on the market.

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California Real Estate Market Numbers

By • Oct 19th, 2011 • Category: October 2011 Journal, real estate newsflash

35,404 new and resale home transactions closed escrow in California during September 2011, up 7% from one year ago when 33,176 sales closed escrow. September is the second month in 2011 in which home sales volume surpassed the corresponding month in 2010.

September’s numbers, however, are down 6% from August; a typical drop for this time of year.

The recovery’s overall bumpy plateau trend continues to reflect a leveling in home sales in 2011, following a decline that set in after mid-2010. Annual home sales volume is expected to remain at or below 2010’s numbers through the end of 2012.

Real estate owned property (REO) resales made up roughly 36% of all sales in the second quarter of 2011— down significantly from 46% one year earlier. However, this still-high proportion of REOs is expected to remain a constant for three or four years to come. In 2012, delinquencies are expected to be more efficiently foreclosed by servicers under contracts with big mortgage banks, which have thus far proven hesitant to foreclose in large numbers. [For our most current data on REOs statewide, see the first tuesday Market Chart, REO Resales.]

Absentee homebuyers (a group generally composed of speculators and investors) accounted for 24% of Southern California (SoCal) sales and 19% of sales in the Bay Area, basically unchanged from August, when absentee buyers made up 25% and 19% of all purchases, respectively. Current absentee levels remain near the historic records of 26% and 20%, respectively, set in January and February of 2011.

“Jumbo loans” (loans over the old conforming limit of $417,000) accounted for 18% of sales in SoCal, level with one year earlier, and 33% of Bay Area sales, a minor slip from 34% one year earlier. 2010 saw a sharp rise over 2009 in the use of Jumbo loans, likely attributable to an increase in foreclosures among high-tier properties and the Federal Housing Administrations  (FHA’s) increase of their loan insurance ceiling to $724,000. Jumbo use remains far below its market share height in the boom times of 2006 and 2007.

FHA-insured loans made up 33% of SoCal mortgage recordings, up 1% from August but down a bit from 35% one year earlier. FHA-insured loans made up 22% of Bay Area mortgages, also level with August and slipping from 24% recorded one year earlier.

first tuesday forecasts this percentage for FHA-insured loans will continue to drop in the future, as buyer’s agents become aware that other government agencies and private mortgage insurers now guarantee almost all types of highly-leveraged conventional loans, including loans with low down payments and down payments from unconventional sources (family loans, gifts).

Importantly, the combined rate of interest and private mortgage insurance (PMI) is currently lower than the combined rate of FHA-insured loans, making the FHA loan less appealing by design. [For a comparative cost analysis of FHA and PMI loans, see the first tuesday Market Chart, FHA, PMI, or neither?]

Adjustable rate mortgages (ARMs) made up 7% of all SoCal mortgages, down 2% from last month, but up 2% from one year ago. ARM use in the Bay Area also dropped, for the first time in recent months, to 13% of all mortgages from 16% in August. Bay Area ARM use remains up from 9% one year ago. This volume of ARMs places no pressure on prices

Cash purchases represented 29% of SoCal and 28% of Bay Area sales in September 2011. Although these numbers are down slightly from February 2011’s record highs of 32% and 32%, respectively, they remain abnormally high in both districts, indicating speculators are still at work.

The ongoing spike in cash purchases indicates that speculators are still optimistic about a potential recovery in real estate sales volume and pricing. Both sales aspects have slipped since late 2010; not a good sign for speculators, who require very high profits to be successful.

first tuesday take: Over the last 12 months, home prices have risen and fallen from quarter to quarter, but show no sign of any sustained increase in sales volume, much less prices. The recent trend in both sales volume and pricing was a slow drop since mid-2010, and both are likely to remain low until employment and homebuyer confidence improve significantly. At the moment, interest rates are slipping and prices are low: the right combination for a sales volume increase in the near future (if employment and confidence can support it). [For more on homebuyer confidence, see the first tuesday Market Chart, Trends in homebuyer expectations; for more on California employment, see the first tuesday Market Chart, Jobs move real estate.]

For now, signs indicate that continued vacillation in both home sales volume and pricing on the washboard plateau of a real estate recovery – one quarter up, the next one down – will be the norm for at least two more years, and will probably continue through 2015. Home sales volume, especially, is unlikely to show any sustained improvement until California experiences 18 continuous months of major monthly increases in employment numbers; support that has yet to begin. [For more on current home pricing, see the first tuesday Market Chart, California tiered home pricing.]

In the absence of increased jobs and confidence numbers, low interest rates and home prices remain the sole drivers of real estate sales volume (with help from well-informed agents). The dynamite combination of low mortgage rates and low home prices is certain to spark a slight rise in sales volume going into 2012, but no more than that. Prices movement is years away.

Be warned: any significant increase in sales volume or prices will lead to a corresponding rise in interest rates and put an end to that run within 12 to 18 months (as occurred in following recessions in 1984 and 1994). Only statewide employment gains of 400,000 plus annually, as took place in the late 1990s, can sustain a full recovery for California’s real estate markets. Another bubble, in real estate or jobs, is entirely out of the question. [For more on the influence of rates on home sales, see the first tuesday Market Chart, Buyer Purchasing Power.]

Even after 2015, expect annual price increases to be modest. If the historical trends at the end of the Great Depression in the 1940s are any guide, real estate prices are not likely to rise at or faster than the rate of inflation reported in the Consumer Price Index (CPI). Today’s interest rates, which remain at essentially zero, will do nothing to bolster pricing.

Remember, the game-changer 2008 recession ended in mid-2009, but an ongoing financial crisis remains, superimposed on the economic recovery. Going forward, real estate (asset) prices cannot (generally) rise faster than the rate of consumer inflation without a drop in interest rates or a jump in the state’s gross domestic product (GDP), as happened in the 1980s and 1990s – neither of which are anywhere on the horizon in California.

Copyright © 2011 by first tuesday Realty Publications, Inc.


 

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How To Buy A Home In Today’s Market

If you are trying to qualify for one of the many mortgage home loans out there.  And looking for information on how to buy a home in today’s market whether it be in the Santa Maria real estate market or not but still on the fence.  Here are few things to think about whether you should buy a home now or not as well as a few tips..

The last several years since 2007 have been very interesting to say the least.  Ever since the bubble on the real estate market popped causing housing values to plummet.  Has created some unique things to happen.  Such as this is currently the first time in American real estate history that real estate prices have dropped along with interest rates.  So if you are in the market to buy a home here are few tips that you have to know and to keep in mind when shopping for a home.

 

1)      You Are Not The Only Buyer

Even though there are less and less people that can actually qualify for a home due to new lending standards tightening up.  Homes that do hit the market and priced right will have multiple offers especially when they are at a discount.  If the price is truly a good price having the mentality of trying to low ball the offer even more than what the price is  will only get someone else’s offer accepted over yours.  If you think the price is a good price so will others so expect multiple offers and you may need to be more aggressive in order to get the home you want.  A tactic that some banks are using are under pricing some of the homes just to get the activity and a ton of eye balls on the property with excited buyers, and yes those homes usually sell for a lot more than the listed price.

 

2)      Its Not That Easy To Get A Loan Anymore.

If you have not bought a home in the last several years or refinanced a home loan you will find out that things are very different.  The last thing you want to do is get bad information from friends and family who bought a home before 07 tell you how and what kind of loan they were able to get.  Things have changed tremendously in the last few years for example now you have to prove you can actually afford the home.  The bank will verify your income including requesting transcripts from the IRS to match what you submit to the bank for income documentation as well as what you report to the IRS.  Also any changes or credit charges that you do will be questioned to make sure you are not taking on any new debt.  Or debt that may have not been reported on your credit report, and overlooked.  After you have submitted all your information to the bank they may even ask you to resubmit it again.

3)      Be Patient

If you are trying to get one of the nicest homes that happen to be one of the best deals on the market.  YOU HAVE COMPETITION and will have to try again and again you will have tons of competition meaning that your offer may not be accepted the first time so be patient on getting the home you want it may actually take several offers and even a few months to get you into a home.

4)      Be Prepared For The Appraisal

Appraisals in today’s market are not as aggressive as they once were that means that many times the appraised value comes in lower than the agreed price.  When this happens one of two things must happen.  Either the price is reduced to the appraised value or the you the buyer has to bring in more money to the table.  Which for many buyers can be tough especially if you are talking about $1,000.00’s of dollars.  Reality is most banks know this but some can be stubborn.  They may not want to lower the price and you will have to walk from the house you wanted.  The bank may have to eventually lower the price but that will not do you any good since it will only benefit the next buyer.

 

5)      Buying A Short Sale.

Currently the amount of Santa Maria homes on the market as well as in most markets are either foreclosed on or are short sales.  There are a few regular transactions but in the higher end range of homes for sale.   But keep in mind that when dealing with a short sale that they can take months to close.  Before a short sale can even happen the bank holding the mortgage has to approve the short sale process.  Even though the seller of the home  is currently the home owner and may want to sell his home to you he cannot do anything until the bank actually agrees to the short sale process.  Entering the short sale process requires patience, and being aware that it may take months to close the transaction.  Some agents will steer their clients from short sales since they can take longer to close hence it takes longer for them to get paid.  Not to mention some clients really just cannot wait as long as it may take to do the short sale.  But some short sales can take as little as a month but others can take as long as a year.   But that also means that sometimes you have NO competition for that home that can really end up being EXACTLY WHAT YOU WERE LOOKING FOR.  The length of the short sale depends on many factors out of your control and the Agent’s as well as the homeowner.  Sometimes it doesn’t even matter who the bank is.

Reality is real estate prices are at current lows and with interest rates at record lows.  Why wouldn’t you try to buy a home.

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When Can I Buy A Home After A Short Sale, Foreclosure or a Bankruptcy?

The other day I had someone comment to me that no one really wants to buy a home and no one is really buying, that is not true, they are more like trying to buy but qualifying in today’s world is not the same as it once was.  The latest studies show that 29% of all Americans have credit scores of 580 or below, and in the Santa Maria real estate market that is no exception. The FICO score is one of the first things lenders look at in determining a borrowers qualification for getting a mortgage loan.  Most of my appointments lately have been those that have sufficient income to qualify to purchase a majority of the Santa Maria homes for sale especially with the today’s current interest and with the values that homes are currently at.   The reality is that for the majority of those in Santa Maria or around the surrounding areas the rent of the home that most are living in can be purchased and paying a lower mortgage payment than what they are currently pay for rent.  But the problem is that most of them seem to have low credit scores due to past events.  I have a good majority of my appointments now consist of those that lost their homes 2-3 years ago or those that have had to file bankruptcy for whatever reason 2-3 years ago or more.  But with today’s lending environment banks are not willing to lend money to people with a past history that is still affecting their scores.  In some cases, it is possible for people with bad credit to qualify for a home loan, but it is difficult and the rate is higher. Essentially, this means that nearly one in every three Americans do not have enough good credit to purchase real estate.

But…..

If you did lose your home lets say 3 years ago you do qualify for an FHA loan from the date of sale on your home when you lost it and the biggest factor that may be holding you back is your credit.  People seem to forget to check up on their and verify what is being reported.  It may be accurate it may not be the reality is YOU need to know and you do get a free credit report once a year so why not see whats on there and you can even dispute it if it should of been removed because you have already taken care of that particular account.  To see what is being reported on your credit report you can go to www.AnnualCreditReport.com, just a heads up you will need to have some old account numbers handy to verify that you are you .. also keep in mind this is only to see what accounts are on your credit report they will not disclose credit scores those you have to pay for separately for each credit bureau.

Those that lost their homes due to a foreclosure and even those that did a short sale on their homes 3 years ago are not eligible for an FHA loan so that means

3 years ago you lost your home now you can probably buy that same home in that same neighborhood for less than half what you probably owed on it when you lost it.

Although I know for many at the time of losing the home it was pretty dramatic whether you did a foreclosure or a short sale it really doesn’t matter both events are probably something you never thought you would do or that would ever happen to you.  But you were not alone in this and millions of other home owners had to experience the same feelings of failure and disappointment.  But at the same time I am getting some really happy people when they are qualified and buying a home in the area for less than sometimes even as much as 70% of what they owed on their home.  So sometimes one door closes and another door opens, it just takes awhile.

As for Bankruptcy same thing all you need is 3 years so if you were in the position that you felt you had to file for bankruptcy and 3 years have passed you can buy a home as well.   Now if you lost a home 3 years ago and you filed BK 2 years ago you need to wait till the 3yrs. have passed on the BK and its not from the date you filed but from the date it was discharged basically when you were done and over with it .  Which if you filed a chapter 13 might be a little longer of a process but if you filed a chapter 7 could be much sooner.  But you still have to re-establish your credit.  I once had two brothers that filed BK on the same day due to a failed business they had together one brother I had 700 plus fico scores and the other I could not touch.  The difference was that one brother was diligent about re-establishing his credit and building it back up.  I had clients this year that had filed BK and swore to never use credit again which is fine unless you ever want to borrow money.  So when I ran their credit, they had nothing no scores nothing … they had not debt also which is great and lived by the attitude if we have no cash to buy we do not buy it but I could do nothing with them.

Needless to say that for most people what is stopping them is credit not necessarily their income, from buying a home.   Simple solution is just check your credit and address any issues you see there, and if you see something that should be fixed dispute it.  IT IS FREE TO CHECK YOUR CREDIT YOU CAN ONCE A YEAR WWW.ANNUALCREDITREPORT.COM.

For A FREE List Of Foreclosures & Pre Foreclosures On The Central Coast Click HERE

If you have any questions about buying a Santa Maria home for sale in the Santa Maria Real Estate market or any properties on the Central Coastand need to get a loan in Santa Maria, CA or any where in the state of so I California not just on the Central Coast, so I can do California home loans, and first time home buyer loans, as well as refinance home loans and just plain simple mortgage loans. So please contact me by sending me an email at: GenePerez@GMSLoans.net

I do also service all the nearby communities and other markets such as the Santa Ynez real estate market, Nipomo Real estate market, Arroyo Grande real estate market, Grover Beach Real Estate Market, and all other surrounding areas regarding the homes on the Central Coast.

my goal is to provide you with resources you need. I can also help in getting the financing for your home. If you have any suggestions or questions in how I can provide more or better

information please let me know. I have been helping my clients for the last 15 years on the Central Coast, Gene Perez – 805-448-7101 , DRE 01321588

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Important Disclaimer: Questions and answers provided on this website and by Gene Perez is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice.

Gene Perez is Licensed Real Estate Broker for Valley Hills Realty and a mortgage broker for Greater Mortgage Solutions.

This blog and its content is copyright of Gene Perez 2010. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge Gene Perez as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining Gene Perez’s

 

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