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Auburn CA Real Estate is seeing multiple offers over asking price.

Multiple Offers Gaining Momentum in Auburn CA, and other hot real estate markets.

Remember the “Roaring 90’s”….. Those days when you could list your house on Friday and on Saturday people would be parked in your driveway writing offers and good faith checks on the hood of their cars? Multiple offers were the norm and offered sellers a generous selection of offers from which to choose.

Believe it or not we are experiencing a trend toward multiple offers even in this still difficult market and there is evidence that this trend will continue as buyers compete in a market with limited inventory.

What are the fundamentals driving this “Multiple Offer” revival?

• We are currently experiencing a shortage of inventory. Inventories are down 30% over this time last year. Banks are slower to process and release their inventory of bank owned properties and the building industry continues to search for solid economic signals that would incent them to invest in new building projects once again.
• Interest rates continue at historically low rates and it would appear that they will hold for the near future.
• There are continuing signs that the over-all housing market may have reached its bottom or near bottom and that this is the strategic time to jump in to maximize future appreciation. The latest data from Zillow points to stabilized pricing in almost every major housing market.
• Renters are starting to realize that they can afford a mortgage that is less than their current rent. This will continue as the cost of renting rises as landlords realize they can raise rents to the current market “pain threshold”. The flip side of this is that this represents an opportunity for those who want to invest in rental property to optimize their cash flow income with little risk.
• Successful sellers are pricing their homes at fair, realistic and competitive levels as opposed to pricing that reflected emotional attachment to unrealistic historical home values (Which resulted in “months on the market” and repeated price reductions).

Based on this current shift and what appears to be a continuing shortage of inventory, how do serious buyers improve their odds of success in this increasingly competitive “multiple offer” environment?

• Buyers who are serious and want to be able to get their offer viewed as competitive should always pre-qualify with their financial institution or have strong, liquid cash resources. Cash buyers or buyers with a strong cash content in their offer reduce the buyers risks and get their attention immediately. Remember, you may be competing against cash laden investors who want the property as much as you !
• Be prepared to make a strong and realistic offer that is most likely at or above the asking price.
• Sellers who have fairly priced their homes to prevailing market metrics are well aware of the trend in multiple bids and are not motivated to consider “low-ball” or sub market offers.
• Make sure you have a Realtor that does their homework on the current market value of the property in that micro-market and knows how to write an offer that will attract the attention of the seller and their agent. A professional and experienced agent will be able to show you that the home is or is not properly priced based on recent comparative market data in the neighborhood in question. Savvy agents will research the sales data and insure that the home and the data represent an “apples to apples” comparison scenario.

Watch a recent a recent video from the Wall Street Journal on this latest trend.

Good luck and let the bidding begin!

4 things you SHOULD NOT DO when trying to get a home loan.

There are four things to avoid doing before applying for a loan, and during the loan process itself. Any one of these four things can submarine your loan faster than you can say, “Dive… dive!”

Do not pay off bills

Your loan officer will advise you if it is necessary to pay off bills to help you qualify for a loan. They will also show you the best way to pay off bills to make sure we have the evidence we need to prove that the bills have been paid.

Do not move your money

It is best to leave your money right where it is until your loan is closed. Moving your money to a new bank or even into a new account can wreak havoc with the verification process.

Do not change jobs

Changing jobs before or during the loan process can create a real problem in qualifying for a loan, particularly if the job is in a different line of work or at a lower rate of pay. During the loan process, it can can also create time delays as the new job will need to be verified.

Do not make major purchases

Many borrowers make the mistake of buying a new car, some furniture or some other major purchase without realizing the impact it can have on their ability to buy a home. A large monthly payment can affect the amount of home you qualify for. During the loan process itself, doing so can actually make it extremely difficult to get your loan approved.

Waiting Period after Loan Modification same as Foreclosure or Short Sale?

Most lenders insist borrowers who have received a Loan Modification (even with a simple interest rate change) wait 3 Years to be able to qualify for a loan, just as those who have had either a Foreclosure or Short Sale.

Here is an example:

“Joe” and “Jane” have owned their home for 10 years. They aren’t upside-down like many homeowners and they have never missed a payment. They decide it’s wise to take advantage of the improving interest rates, and so they contact their lender and receive loan modification with an interest rate reduction.

A year later they decide they have outgrown their home and start looking into purchasing a new home. According to Fannie Mae Guidelines, if a homeowner works with his or her lender to modify their loan with a lower interest rate, this Loan Modification is interpreted to be a “Significant Adverse Event,” and is then lumped in with and considered to be as derogatory as Foreclosure or Short Sale.

What does this mean?

Joe and Jane, though in good standing on their loan in every other way, will be turned down by the bulk of lenders based upon this little known fact, and will be forced to wait 3 full years before they can qualify for a loan.

It’s important to choose a lender who looks a little deeper.

According to Roland Benson with iMortgage, “Interest rate change should not be considered a significant adverse event.   However, lenders are declining borrowers because their credit (past or current mortgage) contains a clause stating “modified.”   Just like the hundreds of other pitfalls, borrowers get lumped into this category when they chose the wrong lender.”

It’s important to use a company that thinks outside-the-box, and who will will dig deeper and uncover that the “modified” loan was only a simple interest rate reduction (no late or missed payments) and approve an otherwise well qualified buyer. I have found that Roland Benson at iMortgage is one who truly cares and has success finding ways to help homebuyers who have been turned down by other lenders, and who also consistently closes on time.

Contact me for more information and to get you in touch with Roland Benson.

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Great Deals on HUD Homes for Sale in Auburn, Roseville, Rocklin, Lincoln, CA

Great bargains on FHA owned, or HUD Homes, such as this one on Montrose Lane in Lincoln CA, will be hitting the market starting this quarter, and peaking by the end of the year.

An increase in FHA loan defaults will give rise to the release of 178,000 HUD owned properties nationwide. Of those, 40,000 are said to be in the Northern California region, including homes for sale in Auburn, CA, Roseville, Rocklin, Lincoln, Sacramento, and surrounding areas.

What is a HUD home?

A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Who can buy a HUD home?

Owner occupants and investors can buy HUD homes. Priority is given to owner occupants during the initial listing period.

How can I buy a HUD home?

Only real estate agents with registered brokerages can make offers on HUD homes on behalf of their clients. Contact me if you would like more information on making an offer on a HUD home. The process is quite specific, and you will want an experienced HUD agent on your side.

What about financing?

FHA loans can be used to purchase HUD homes. HUD will pay for a section one pest clearance if the buyer finances using an FHA loan. Some of the benefits of an FHA loan are down payments as low as 3.5% and low closing costs. Buyers must meet loan qualifications. For more information, contact a qualified FHA lender such as Roland Benson at 916-768-1578.

Other types of financing, such as a conventional loan, can also be used to purchase HUD homes, as well as cash.

What is the Neighbor Next Door Program?

HUD’s Good Neighbor Next Door initiative is designed to encourage renewal of revitalization areas by providing law enforcement officers, firefighters, emergency medical technicians and teachers an opportunity to purchase homes in these communities. HUD provides a substantial incentive in the form of a fifty percent discount off the list price of eligible properties. Buyer’s paticipating in the Good Neighbor Next Door program must live in the home for 36 months to qualify for the discount.

For more information, visit the Official HUD Website.

Why pay someone else’s mortgage?

Home ownership costs are dropping below rental costs!

The recent downturn in the housing market resulted in a drop in rental rates, but rents are back on the rise while the cost of home ownership has dropped. As average apartment rental rates have slightly decreased, the decline has been moderate in comparison to home values, which have declined nationwide by 30 to 40 percent since the peak of the housing boom.

Wouldn’t you like a place where you can put down some roots, plant a garden, stay for a while? In this market, it can happen!

For more reasons why now is the prime time to buy a home, contact me and I’ll send you a free ebook!

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Homes have never been more affordable.

For individual home buyers, there are only a few facts that really matter:

• Can I afford this home?
• Is it a good investment?
• Does it meet my family’s needs?

So it’s a bit surprising that the most important housing statistic has gone largely unreported: homes have never been more affordable. Affordability, measured by the median mortgage payment on the current median priced home ($182,400) as a percentage of the median household income ($64,400), is lower than it’s been in a generation.

The chart below, which tracks housing affordability for the past 10 years, shows incredible improvements in affordability since the height of the real estate boom in 2006.

 

 

 

 

 

 

 

 

 

It’s important to recognize an opportunity when we see one! Contact me today to find out how to get started.

This information was taken from the recently published report from Keller Williams Realty: Reasons Why Now is a Great Time to Buy a Home!

Contact me to find out how to get started in this great market!

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7 Reasons why NOW is the Prime Time to Buy.

At a Glance: Why NOW is the Prime Time to Buy!

As a realtor representing home buyers and sellers in Auburn, CA, I have noticed a lull in buyer activity. How can that be, when all indicators point to this being the best time in history for buying real estate? This information is from a brand new report from Keller Williams Realty called: Reasons Why Now is the Right Time to Buy a Home: A Smart Buyer’s Guide to Seizing the Market.

Home affordability is at an all-time high. The median mortgage payment on the median priced home as a percentage of the median household income is lower than it’s been in a generation. Read more…

Mortgage rates are at rock bottom. It’s hard to imagine interest rates going much lower, and when they start to inch back upwards, monthly payments and total loan costs will spike upwards.

Home prices are back on the rise. After declining for 30 months, home prices are trending back upward. The time get in to the market is NOW!

Sellers are motivated. This means that buyers have the upper hand! From banks looking to dispose of foreclosed properties to homeowners who are fiercely competing among an  excess of housing inventory, buyers have untold choices and negotiating power.

Financing is readily available! Banks are back in the game and ready to lend to well-qualified buyers.

Owning vs. renting is increasingly favorable. Since 2009, the average principal and interest payment has fallen below the average rental rates, and the gap is now wider than it’s been in the past 22 years.

Homeownership is still at the core of the American Dream! Owning a home is critical to financial stability and wealth building. It’s a forced savings account, a place to live and a fabulous tax deduction.

9 reasons you should buy your first home now.

It’s a scary thing, buying your first home. You wonder if you’re doing the right thing. It’s funny that first time home buyers had little chance of buying a home at the peak of the market. And now that homes are affordable, they fear jumping in. Here are some things to consider that could help you decide if the time is right for you.

1. First-time buyers aren’t investors. They’re buying to own a home for themselves to live in and enjoy. If the home falls in market value a little, so what? They aren’t planning to sell.
2. Money paid for rent buys a house for someone else to own.
3. Rents do rise with supply and demand.
4. Homes in most areas are now so inexpensive that first-time buyers may be able to make their payments and set aside a few dollars for maintenance for less than their current rent.
5. Interest rates are still low, making inexpensive homes even more affordable.
6. With interest rates so low, a few extra dollars per month on a 30-year mortgage could mean a first-time buyer could own the house free and clear within 15-20 years.
7. Hesitation could cost big dollars. Just a 1% rise in interest rates will add several hundred dollars per year to even a moderately-priced home. And interest rates are expected to rise.
8. This tide will turn, and homes will begin appreciating in value. That trend has already begun in some markets and will begin in others as the foreclosures and short sales are sold.
9. Over time, first-time buyers will be earning more while their house payment will remain stable.

Contact me if you have questions about how to get started buying your first home!

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Real Estate Roundtable – How to get your offer accepted.

So you’re prequalified, your down payment is in the bank, your credit is up to snuff. You are ready to buy a house. You find the perfect home, and an investor comes in with cash and snatches it out of your grasp. Frustrating? Definitely. So what can you do differently to increase your chances of getting your offer accepted?

Today I talked to Scott Cooper at Big Valley Mortgage who has some great tips on how to do just that! Take a look:

If you are thinking about buying or selling a home, or just need questions answered, call:

Noel Crider
Keller Williams Realty
(530) 305-8409
email: ncrider@kw.com

To get prequalified or learn more about the latest loan programs, call:

Scott Cooper
Big Valley Mortgage
(916) 412-9530
email: scooper@apmortgage.com

Buy a Home in 2010

Are you a first-time homebuyer? Are you a homeowner considering purchasing an investment property? Either way, you are among a large group who are planning to buy a home in 2010.

A recent Move.com survey revealed that many Americans have “buying a home” as one of their top New Year’s Resolutions! 17.7% of Americans want to be come First Time Home Buyers and 15.7% are planning to purchase an Investment Property.

Here are the Top Four Reasons to buy now!

1. Record Low Interest Rates.

2. Record Low Home Prices.

3. Tax Credits for Home Buyers – through April 30, 2010.

4. Tax Benefits of Home Ownership over the long term.

Read more about the benefits of buying a home.

If you like what you’re reading here at View From the Foothills, why not subscribe to receive automatic updates!