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Ready, Set, Go!

August 23, 2018

Photo of brochure cover

 

 

Given the deep concerns we all have with regard to wildfires, I think it’s wise to get this document into circulation through all available means. Those of us in San Diego and throughout California need to pay attention to the advice of our fire safety professionals on the front lines.  

 

 

No one knows when or where the next major wildfire will occur in our region. But it is a question of when — not if — it will happen.

That’s why San Diego Fire-Rescue has partnered with the International Association of Fire Chiefs to create the Ready, Set, Go! Wildland Fire Action Guide.

We hope you will read the guide, and follow its advice.

PDF icon Ready, Set, Go! English version

PDF icon Ready, Set, Go! Spanish version

  • Ready — Take personal responsibility and prepare long before the threat of a wildland fire, so your home is ready in case of a fire. Create defensible space by clearing brush away from your home. Use fire-resistant landscaping and harden your home with fire-safe construction measures. Assemble emergency supplies and belongings in a safe place. Plan escape routes and make sure all those residing within the home know the plan of action.
  • Set — Pack your emergency items. Stay aware of the latest news and information on the fire from local media, your local fire department and public safety.
  • Go –– Follow your personal wildland fire action plan. Doing so will not only support your safety, but will allow firefighters to best maneuver resources to combat the fire.

Consider me your #1 resource for all things Real Estate! Household changing? Getting married (or divorced)? Time for a change of scenery or job relocation? Want to invest? Just send me an email or call 619-888-2117 – I can help.

 

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What You Need to Know Before Accepting or Rejecting An Offer

August 16, 2018

The day will come — and it will be a wonderful, joyous, do-a-happy-dance day — when you receive an offer, or multiple offers, for your home.And on that day, you’re going to face a question you may not have previously considered: How do you know if an offer is the best one for you?

Your listing agent will be a big help here. They will understand and help you suss out the merits and faults of an offer because — believe it or not — it’s not always about price.

One buyer’s beautifully high offer might not look so good anymore, for example, if you discover that it’s contingent upon you moving out a month earlier than planned. Or, conversely, you may prefer speed over price, particularly if you’re moving to a new city.

Your listing agent will have a sense of what you want financially and personally — and can help you determine whether the offer at hand satisfies those goals.

Before the first offer rolls in, here’s what you need to know about the offer evaluation process, including the main factors that should go into making a decision — accept or reject? — with your agent.

5 Important Things — Other Than Price — to Consider When Evaluating an Offer

Want to fetch top dollar for your home and walk away with as much money in your pocket as possible? Of course you do. You’ve gone through the time-consuming process of setting your asking price, staging your home, promoting your listing, and preparing for open houses — and should be rewarded for your efforts.

Your first instinct may be to just pick the highest bid on the table. But the offer price isn’t the only thing worth considering.

When vetting offers, evaluate these five areas in addition to price:

1. The earnest money deposit. One important consideration when weighing an offer is the size of the earnest money deposit. The EMD is the sum of cash the buyer is offering to fork over when the sales agreement is signed to show the person is serious (i.e., “earnest”) about buying your home. This money, which is typically held by a title company, will go toward the buyer’s down payment at closing.

A standard EMD is 1% to 3% of the cost of the home (so, that would be $2,000 to $6,000 on a $200,000 house). If a buyer tries to back out of an offer for no good reason, the seller typically keeps the EMD. Therefore, the higher the earnest money, the stronger the offer.

2. The contingencies. Most offers have contingencies — provisions that must be met for the transaction to go through, or the buyer is entitled to walk away from the deal with their earnest money. Contracts with fewer contingencies are more likely to reach closing, and in a timely fashion.

Here are of the most common contingencies:

Home inspection contingency. This gives the buyer the right to have the home professionally inspected and request repairs by a certain date — typically within five to seven days of the purchase agreement being signed. Depending on where you live, you may be required to make home repairs for structural defects, building code violations, or safety issues. Most repair requests are negotiable, though, so you have the option to haggle over which fixes you’re willing to make.

Appraisal contingency. For a mortgage lender to approve a home buyer’s loan, the home must pass appraisal — a process during which the property’s value is assessed by a neutral third party. The appraisal verifies that the home is worth at least enough money to cover the price of the mortgage. (In the event the buyer can’t make their mortgage payments, the lender can foreclose on the home and sell the property to recoup all — or at least some — of its costs.) Generally, the home buyer is responsible for paying for the appraisal, which typically takes place within 14 days of the sales contract being signed.

Financing contingency. Also called a loan contingency or mortgage contingency, a financing contingency protects the buyer in the event their lender doesn’t approve their mortgage. Although the timeframe for financing contingencies can vary, mortgage lenders report that buyers generally have about 21 days to obtain mortgage approval.

Sale of current home contingency. Depending on the buyer’s financial situation, their offer may be contingent on the sale of their home. Usually, buyers have a window of 30 to 90 days to sell their house before the sales agreement is voided. This contingency puts you, the seller, at a disadvantage because you can’t control whether the buyer sells their house in time.

Title contingency. Before approving a mortgage, a lender will require the borrower to “clear title” — a process in which the buyer’s title company reviews any potential easements or agreements that are on public record. This ensures the buyer is becoming the rightful owner of the property and the lender is protected from ownership claims over liens, fraudulent claims from previous owners, clerical problems in courthouse documents, or forged signatures.

These contingencies are standard for most real estate sales contracts. There’s one exception: the sale of current home contingency, which tends to be used more often in strong buyer’s markets, when buyers have greater leverage over sellers.

That being said, contingencies are always negotiable. (The caveat: Mortgage lenders require borrowers to have appraisal financing contingencies, or they won’t approve the loan.) It’s up to you to decide what you’re comfortable agreeing to, and your agent can help you make that decision.

3. The down payment. Depending on the type of mortgage, the buyer must make a down payment on the house — and the size of that down payment can affect the strength of the offer. In most cases, a buyer’s down payment amount is related to the home loan they’re taking out. Your chief concern as a seller, of course, is for the transaction to close — and for that to happen, the buyer’s mortgage has be approved.

Generally, a larger down payment signals the buyer’s financial wherewithal to complete the sale. The average down payment, according to the NATIONAL ASSOCIATION OF REALTORS®, is 10%. Some mortgage products, such as FHA and VA loans, allow for even lower down payments.

If, by chance, the appraisal comes in higher than your contract’s sale price, the buyer with a higher down payment would more likely be able to cover the difference with the large amount of cash they have available.

4. The all-cash offer. The more cash the buyer plunks down, the more likely the lender is to approve their loan. That’s why an all-cash offer is ideal for both parties. The buyer doesn’t have to fulfill an appraisal contingency — whereby their lender has the home appraised to make sure the property value is large enough to cover the mortgage — or a financing contingency, which requires buyers to obtain mortgage approval within a certain number of days. As always, having a sales contract with fewer contingencies means there are fewer ways for the deal to fall through.

5. The closing date. Settlement, or “closing,” is the day when both parties sign the final paperwork and make the sale official. Typically, the whole process — from accepting an offer to closing — takes between 30 and 60 days; however, the average closing time is 42 days, according to a report from mortgage software company Ellie Mae.

Three days before closing, the buyer receives a closing disclosure from the lender, which he compares with the loan estimate he received when he applied for the loan. If there are material differences between the buyer’s loan estimate and closing disclosure, the closing can’t happen until those amounts are reviewed and approved. But this is rare.

Some transactions can take more time, depending on the buyer’s financing. For example, the average closing time for a Federal Housing Administration (FHA) loan is 43 days, according to Ellie Mae.

Whether you want a slow or quick settlement will depend on your circumstances. If you’ve already purchased your next home, for instance, you probably want to close as soon as possible. On the other hand, you may want a longer closing period — say, 60 days — if you need the proceeds from the sale to purchase your new home.

When Should You Make a Counteroffer?

Depending on the circumstances, you may be in the position to make a counteroffer. But every transaction is different, based on the particular market conditions and your home. In some circumstances, you can be gutsy with your counteroffer. In others, it might serve your goals better to give in to the buyer’s demands. Your agent can provide helpful insight about when and why a counteroffer will be the right thing for you.

For instance: If you’re in a seller’s market — meaning that homes are selling quickly and for more than the asking prices — and you received multiple offers, your agent may recommend you counteroffer with an amount higher than you would have in a buyer’s market.

If you choose to write a counteroffer, your agent will negotiate on your behalf to make sure you get the best deal for you.

A caveat: In many states sellers can’t legally make a counteroffer to more than one buyer at the same time, since they’re obligated to sign a purchase agreement if a buyer accepts the new offer.

When Does an Offer Become a Contract?

In a nutshell, a deal is under contract when the buyer’s offer (or seller’s counteroffer) is agreed upon and signed by both parties. At that point, the clock starts ticking for the home buyer’s contingencies — and for the sweet moment when the cash — and home — is yours.

Consider me your #1 resource for all things Real Estate! Household changing? Getting married (or divorced)? Time for a change of scenery or job relocation? Want to invest? Just send me an email or call 619-888-2117 – I can help.

 

Summer Time

August 9, 2018

Consider me your #1 resource for all things Real Estate! Household changing? Getting married (or divorced)? Time for a change of scenery or job relocation? Want to invest? Just send me an email or call 619-888-2117 – I can help.

 

San Diego Short-Term Vacation Rentals

August 3, 2018

 

Many clients are asking about the San Diego City Council final vote on short-term vacation rentals. Here is the nitty-gritty – just the facts – taken from the La Jolla Light.

 

“Tough new regulations that will sharply curtail short-term vacation rentals in San Diego will move forward, the City Council decided Aug. 1, despite legal protests lodged this week by the home sharing industry.

Two weeks after approving the new rules (6-3 on July 16), which will limit short-term stays to one’s primary residence only, the Council reaffirmed its decision in a second reading of an ordinance that will now legalize home sharing. The vote was 6-2, with Council members David Alvarez and Scott Sherman opposed. Council member Chris Cate, who also voted against the regulations in July, was absent.

Under the new rules, individuals will be able to rent out their primary residences while they are not present for up to six months a year as long as they apply for a permit and pay an annual fee of $949. Three-night minimum stays in the more saturated coastal areas and downtown San Diego will also be imposed.

Mayor Kevin Faulconer had originally proposed a compromise plan that would have allowed up to two short-term rental permits for San Diego residents and one for out-of-towners, but a Council majority rejected that idea.

The Council did make one exception to the primary residence-only restriction. San Diegans who have an additional unit on the same property as their residence, as in a duplex, will be able to get a license for a second vacation rental.”

Consider me your #1 resource for all things Real Estate! If you have additional questions regarding the short-term vacation rental regulations just send me an email or call 619-888-2117 – I can help.

Do Property Liens Mean A Home Sale Can’t Happen?

August 2, 2018

 

 

Have property liens on your home? If you’re trying to sell your place, a lien can throw a wrench in things, but that doesn’t mean your efforts are doomed. It all depends on how large the lien is, and how you handle it once it’s found.In other words: Don’t give up hope! Here’s how property liens affect home sales, and what you can do about it.

What is a property lien, anyway?

A property lien, in case you’re foggy on the concept, is a public record filed against your property for unpaid debt. Liens can be filed by an assortment of people and parties for various reasons: the government (for unpaid taxes), contractors (on renovations they weren’t compensated for), ex-spouses (for child support payments), credit card companies, and more.

Sometimes, home buyers may not even know there are liens on their property until they’re uncovered during a title search as the deal moves toward the closing table. Or homeowners may already be aware of the lien, but lack the funds to pay it off.

In either case, all liens must be settled before a home sale can happen.

“If you attempt to put a house up for sale with liens, you are going to run into delays,“ warns Nick Woodward, a real estate agent with Keller Williams in Connecticut.

Do liens mean a property sale can’t go through?

In some cases, liens can mean delays that are only hiccups. The sale can still happen, but the lien is going to eat into whatever profits the seller may have hoped to bring in.

Let’s say, for example, you’ve agreed to sell your house for $200,000 and still owe $100,000 on your mortgage. Normally, at the closing table you’d pay off your mortgage and be left with $100,000 in profit. However, if a $15,000 lien is also found on your property, that will have to be paid off first, so your profits will be only $85,000 (minus any other closing costs, of course).

Issues can arise, however, if you don’t have enough equity in your home to cover the liens.

“If you have enough equity to cover the lien, you should be all set,” says Woodward. “However, if you have low equity, the profits from your house sale may not be able to take care of the lien.”

For instance, if you’re selling your house for $200,000, yet still owe $190,000 on your loan, you have only $10,000 in home equity. If a lien is found on your property for $15,000, your home sale won’t even cover the lien, which puts this sale in jeopardy.

The first step to getting a lien removed from a property’s title is, of course, to pay the debt. But if you don’t have that option, all is not lost. Here are two options:

  • Negotiate with the party who issued the lien. Many will remove liens if you agree to pay just a portion of the amount owed, or set up a payment plan to pay it off gradually. It can’t hurt to ask.
  • Negotiate with your buyer. You could try to persuade the buyer to take on the lien, although the chances of that happening are slim.

“Ninety-nine percent of the time, the buyer will not want to take over a lien,” says Mike Higgins, a real estate agent in De Pere, WI. Or, even if buyers are willing to, they may have trouble getting a loan to purchase a property with a lien on it, as most lenders won’t finance them.

Yet there are some cases where liens are often transferred to buyers. For example, homes purchased in a foreclosure or at an auction may come with liens attached that become the buyer’s responsibility. While those properties may seem like a bargain upfront, a hefty lien can tip the scales.

So, should home buyers run if there’s a lien on a property they’re interested in buying? Not necessarily. says Higgins.

“Always rely on your professional that you are working with—the real estate agent or title company—to get to the bottom of it, and first see if the seller will take care of the lien,” he says.

However, he urges buyers to proceed with caution. “Make sure you know 100% what it all entails before signing on the dotted line,” he says.

 

Article by: ClientDirect

 
Consider me your #1 resource for all things Real Estate! Household changing? Getting married (or divorced)? Time for a change of scenery or job relocation? Want to invest? Just send me an email or call 619-888-2117 – I can help.

Real Estate @ A Glance – July 2018 Edition

July 26, 2018

Local Market Update - San Diego County - Real Estate
Real estate is about location, location, location . . .  If you have questions about the market in your specific area, please contact me via email or call 619-888-2117.

 

Housing markets across the nation are active this summer, and buyer competition is manifesting itself into sales above asking price. While the strength of the U.S. economy has helped purchase offers pile up, the Fed recently increased the federal funds rate by 0.25 percent, marking the second rate hike this year and seventh since late 2015. Although the 30-year mortgage rate did not increase, buyers often react by locking in at the current rate ahead of assumed higher rates later. When this happens, accelerated price increases are possible, causing further strain on affordability.

Inventory may be persistently lower in year-over-year comparisons, and home prices are still more likely to rise than not, but sales and new listings may finish the summer on the upswing. The housing supply outlook in several markets is beginning to show an increase in new construction and a move by builders away from overstocked rental units to new developments for sale. These are encouraging signs in an already healthy marketplace.

 

 

 

 

 

 

 

The Connected Kitchen

July 19, 2018

 

Consider me your #1 resource for all things Real Estate! Are you thinking of buying your first home? Do you know someone who is ready to graduate from renting to homeownership? Just send me an email or call 619-888-2117 – I can help.

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