This is a common concern right now; we’re scared to sell because we also have to turn around and buy. It’s a great time for agents because houses are selling so fast! Hey, wait a minute, not so fast. That’s not necessarily true because inventory is down, competition is extremely high, and a lot of homeowners are in the same situation, scared to sell because they have to turn around and buy. Sure, if you are a seller going to the rental market or moving to a different location altogether, selling is easy. Heck, you practically don’t even have to put a sign in the front yard before the home is sold (as long as it is priced correctly). [Read more…]
If you’re in the market for a new home in San Ramon, a condominium can be a charming and convenient option. Condos are often less expensive to buy than houses or townhouses, and they can offer conveniences you might not otherwise be able to afford. Yet there are caveats to condo ownership, as well.
Five things to think about before buying a condo: [Read more…]
A lot of my clientele are over 50 years old and many of them are moving to the Bay area to retire, enjoy the waterfront and a more laid-back, peaceful way of life. However, some homebuyers are still reluctant about purchasing a home later in life. Is it scary? Are there negative connotations? How easy is it to buy a home after 50? [Read more…]
There is not a person we have met out there who does not want to be at their best health. Now more and more people are doing whatever they can to feel and look better and hopefully even younger. Luxury home buyers with busy schedules are now looking for homes that have amenities to help them on their health journeys right at home. [Read more…]
That is, if you have the cash to purchase a property, is there any reason why you wouldn’t pay cash?
In today’s hot market, especially in the Oakland and Tri-Valley area, cash offers can be king but, there are reasons why you might not want to pay cash. I know that many sellers are more likely to accept an offer of cash, but the seller will get the money regardless of whether it is financed or all-cash. Cash offers can tend to close quicker but you really needs to look at all of the details of a purchase and sale agreement including terms and contingencies.
In 2016, 23% of US homebuyers pay cash for their properties. That’s still in the minority. There may be some good reasons not to pay cash.
If you just have enough cash to pay for a house, you may not have any left over for repairs or emergencies. If you have the cash, it might be a good idea to set it aside so that you have at least three months of housing and living expenses should something unforeseen happen was losing a job or having medical issues. If all of your money is tied up into the house, you might end up losing the house to pay for unforeseen items.
A great mortgage.
You might have qualifications for an excellent mortgage. According to a recent study by Money magazine, Generation X and millennial’s are considered to populations with the most potential for growth as borrowers. Taking on a little bit of debt, especially for tax purposes great terms might be a better option for your finances overall.
A better investment.
Buying real estate is an excellent investment that if you have all cash, you might make a better investment than putting it elsewhere. Maybe investing in the stock market, mutual funds or a personal business might be a better option for you in the long run.
Most homeowners will receive some sort of mortgage tax breaks on the interest paid to the lender. Depending on how much you owe and your terms, you could be deducting quite a bit on your taxes.
Home values have no guarantee of increasing even though overall, the trajectory is good. Home prices rise and fall with the economy so unless you’re planning on hanging onto the house for 10 to 30 years, you might be better off investing that cash elsewhere.
I’m not telling you to not get a mortgage or to not pay cash, but there are pros and cons to both. It’s important to talk to your financial advisor and even a lender about the best options for you at this stage in life.
Ready to get started looking at homes? Give me a call anytime.
There are some homebuyers the know exactly what they want and when they see it they’ll know. Other buyers may have no idea what to look for and even though they are open-minded, nothing seems to stand out as a home they’d really want to buy. [Read more…]
Zero down home loans are not as popular as they were five years ago but they are still around. Lenders have gotten a lot more strict when it comes to qualifications and eligibility, so buyer that comes along wanting a zero down home loan does not look too attractive to potential underwriters. Having additional funds, reserve funds and a down payment is much more attractive and may offer lower interest rates and better terms. [Read more…]
I get this question all of the time because buyers think that if they have an all cash offer they can naturally offer less for the home. But is this a wise move?
It all comes down to the house you’re buying, the current market conditions, and the seller. Let’s go over some scenarios where it would be appropriate to offer less in a cash situation and other situations where you shouldn’t even consider offering a penny less than full asking price.
Consider the sellers net. This is the amount the seller is going to walk away from. This is also where your buyer’s agent and the listing agent need to come together to negotiate the best price. If the seller is already at their lowest possible price that they can go and walk away either breaking even or with barely any net profit, you probably will not get accepted on a lower-priced offer regardless of whether it’s cash or not. Sellers don’t want to bring money to the table; they want to walk away with a profit.
You also have to consider the market. In the Tri-Valley area, there are micro markets throughout Pleasanton, San Ramon, and Livermore. Within those cities, there are even smaller micro-markets where the real estate industry is doing very well and other areas where homes take longer to sell. It’s going to depend on the house that you are buying, the net profit, and what the market is doing in that particular community or neighborhood.
If the home is in a popular neighborhood where homes sell within a week or two, you probably can’t offer much less than the asking price if any discount at all. You may also need to increase your price in a hot market. You will have plenty of competition and if there are other cash buyers in your area, coming in with a lower price than your closest competition will get your offer thrown out.
Read More: What is the New SB800 Home Warranty?
Alternatively, if you are buying a home in the neighborhood or community where the properties don’t move as quickly, it will depend on how long the house is on the market and if it has been already reduced. You may have a little bit of negotiating power when it comes to cash in these types of markets. Again, talk to your buyer’s agent about the net profit for the seller and if they can even afford to go any lower.
Terms also matter. When presenting a cash offer the terms will also be either attractive or unattractive. If you’re offering a quick closing, no contingencies, a high earnest money deposit and you’re not lowballing the seller too much, your offer may be considered. Plus, if there are no other offers on the table, regardless of whether it’s cash or a finance offer, you might be more likely to get an accepted offer.
What about a short sale or foreclosure?
If you’re offering cash, this is very attractive to banks, which hold power to accept or decline the offer. Even though you offer less with cash doesn’t mean it will naturally be accepted. Banks will typically respond faster, however, if you’re offering cash. The lender or the bank will need to evaluate their net profit as well to see if they can walk away with as much as possible or as little loss as possible.
[Read More: Should You Always Pay Cash if You Can?]
It also will come down to the condition of the house. If the seller has chosen to list the house as-is, and it is in great need of repair or upkeep, it seems reasonable to offer a lower price if the market does not support its current asking price. This is where a qualified, knowledgeable and experienced real estate agent comes into play. Only professional real estate broker or agent will be able to tell you if the home is priced appropriately as is or if a low price offer would be an acceptable move.
So, you can see that there are a lot of different factors when it comes to offering a lower than the asking price if you have all-cash. Using a real estate agent to find you the best home and off of the best advice when it comes to negotiations and offer is really the key to getting the price you want on a home you love.
While it is a well-known fact that there are a million and one questions when it comes to buying a home, the truth remains that we might not fully be aware of what those questions truly are. Of course the list of possible questions is longer than any of us care to read, however, we are left wondering what questions are the most common and the most likely to be asked. With the chaos and unavoidable stress that comes with buying a home, unfortunately even the simplest and most common questions can sometimes get missed. Whether you are selling your home and are hoping to get an idea of what questions you should be prepared to answer, or you are searching to purchase a home and want to be sure to hit the nail on the head, here are a few common questions to keep in mind.
What Can I Afford: If this isn’t a loaded question then I don’t know what is. There are multiple factors to look at when you are budgeting for a home. While we would like to believe we can spend our full income on our homes that isn’t necessarily the case. With recurring payments on vehicles, daycare bills, medical bills, household utilities, prior obligations, and more you need to make sure you are deducting your allotted funds from your income to get a true and accurate idea of where your budget truly lies. There are many different home calculators available online that will even factor in your revolving debts for you!
When Can I Make an Offer and How Many Homes Should I see First: Sometimes it is hard to know when you can and/or should make an offer. The best answer to these questions is simple; it’s completely up to you! While it is unlikely that homebuyers tour one home and immediately make an offer it is definitely possible. Whether you tour one home or twenty homes, putting an offer in is something that ultimately you should be comfortable with. After all, it will be your home and nobody else’s.
When Do I/We Get Keys: The closing process can often be a long waiting game. While the closing process varies depending on the state of the home, inspections, banks, etc. the average time to wait for a home to close after your offer has been accepted is generally 30-45 days.
What is Fair: We all like to save our finances when possible which can leave us wondering what a fair offer could be. Generally speaking, taking 5% off the asking price of the home is an offer than typically won’t cause any havoc. By offering anything below that you could be offending the homeowners and find yourself in quite the pickle.
Can I sell my Home while Buying a New One: While the answer to this question is yes, you need to be aware that this process is not an easy one. There are many different factors that make the equation of selling and buying a tricky one. The main thing to understand when selling your home is that the timing might now work in your favor either leaving you homeless for a certain amount of time before your new home closes, or stuck with a home that hasn’t sold and being solely responsible for two mortgages. Ask your realtor for more information!
Is a Home Inspection Needed: While we may not see the need for an inspection it could save your butt in the long run. An inspector will look at any underlying problems that we wouldn’t be able to see with the naked eye. Checking things like the roof, electrical systems, heating and air, plumbing and more you can save yourself a pretty penny by foreseeing any issues that could potentially arise in the future. This also allows you to negotiate sale price with the seller should there be any problems.
I Changed my Mind, Can I Back Out: This is common don’t panic. Sometimes we are so caught up in the moment that we don’t realize we put an offer in on a home that might not be the right fit for us. Luckily you are able to back out at any point during the home buying process. The only downfall to this is the possibility is losing your earnest money. Of course, if there is a valid reason to why you are backing out your earnest money will be refunded.
While the questions could continue on until we’ve written a novel with multiple volumes, these common questions are the ones that many people focus on or want and need answered. If you have any further questions regarding either buying or selling a home discuss them with your realtor.
If 2017 is the year you are going to be a homeowner or perhaps you’re going to sell your house and purchase a new one, start now before you’re even looking at any homes.
Let’s start with first-time homebuyers; if you’ve never purchased a property before but you’re tired of renting in 2017 is your year to be a homeowner, start now, immediately, by saving up some money and getting your credit in good condition. [Read more…]