Now Is a Great Time to Buy A Home.



Buying A Home

 Market prices are at its lowest and are affordable. Home Loan interest rates are still low! 

Property values have declined drastically over the past two years. Not surprising, so have the sale prices. We’ve seen most areas taking a dive at 40% or more in the decrease in value making homes prices affordable and within reach for most buyers now.

I have had clients and friends who say: Nah, we'll wait till the holidays; or after the elections; or even, next Spring "when there is more inventory".  I can't help but wonder: when one has enough saved for a downpayment and the lender says they're pre-approved for a home loan, why not seize the opportunity?

Maybe some are waiting for the interest rates or home prices to go up??? Uhhmmm... Yes, it's frustrating and very competitive for buyers right now, because of the low inventory of homes on the market. But competition is good and healthy.

You just need a great realtor on your side to assist you, especially in negotiating price and terms. Call or email me if you don't have an agent to represent you. Don't be waiting and missing out on the low home prices and interest rates.

Saving Commissions

Saving on Real Estate Commissions.

Looking to save money (who aren't these days?) sounds appealing? Yes, certainly. An owner can sell their own property; a buyer, of course, can buy directly from the seller.

Real estate commissions represent a significant amount to save regardless of the price range of the property. But like anything else, not having a professional handle such a large investment, is risky and can have a potentially high liability down the road, if one is not careful.

For most of you who know me, I am all about saving money. However, at the risk of sounding "just like another realtor", this is one area I wouldn't want to skimp on. Mind you, I would definitely try to negotiate commission and what have you - there's no harm in trying. 

Seriously (as if I was not serious on other things), here are points to consider and ask yourself as a Seller or a Buyer:

1. Do you have adequate and reliable sources to obtain information to determine property value?
2. Are you confident enough to represent yourself in negotiating the many aspects of selling or buying the most important investment you probably will have in your lifetime?
3. Are you familiar with the various State and Federal disclosure requirements; the complexities of securing financing, inspections, escrow process, and so on?

And as an important note: if you are looking to purchase an REO or a foreclosed property, you'll find that most lenders hire real estate brokers to handle their properties.

Something to think about, seriously.

Buying A Foreclosed Home

Buying Foreclosure Homes.

Foreclosures or REO’s (Real Estate Owned properties owned by a lender). These days, we often hear home buyers and investors looking into taking advantage of their discounted market values. However, as with any type of investment, buying foreclosed homes is risky business and has plenty of pitfalls.

Here are some tips you need to be aware of:
1. Using the Internet.
This is one of the best ways to find foreclosed properties in your local area, state, or nationwide. Use the internet to identify the house, and then hire your own broker to negotiate on your behalf.

Remember: the listing agent, by his/her fiduciary obligation, is representing the best interest of the seller, not yours. Some may offer a cut in price; assist in your closing costs or some crazy side concessions “the seller need not know” (do you really want to have someone who is unethical and unscrupulous representing you?)

2. Work with a real estate broker.
You’ll find most lenders (banks) will have their REO properties handled through a broker. Find a real estate agent who can give you a reasonably accurate market analysis and values in the neighborhood (difficult to do on internet), and who is familiar on how to negotiate REO properties.

3. Don't Buy Sight Unseen.
I strongly advise against buying a property sight unseen, that’s like driving with blindfolds on (and that’s just crazy). I’m not saying it can’t work; it is just not prudent to rely almost exclusively on digital photos, virtual tours, or marketing materials, especially on probably the most expensive investment you’ll make in your life time.

4. Get a proper property inspection done.
It may well be that you are confident about the cosmetic repairs in the property you are purchasing such as: cost of painting, re-carpeting, replacing appliances and so on. Or, you can always have the proper trade person to give you an estimate on the things that need to be done. But it's best to get a professional property inspector.

What most REO buyers fail to understand is that they are purchasing a property from a seller (in this case, a bank) who has never lived nor even set foot in the home. They may have hired a broker to market the property, but I would not rely on that listing agent’s forthrightness entirely.

This is a major investment you are making. Its well worth the cost of having a home inspector check the major components of the property: electrical, plumbing, heating, air-conditioning, and whatever else is in the house. Problems with these components may be costly. The low price you paid for the property may well turn out to be not such a good buy if you underestimate the cost of repairs. Leave the negotiation of price to your broker; be the missionary for assessing the extent and cost of repairs.

Happy REO house hunting!

New DRE Requirement

New Requirement for Real Estate Broker's License.

Effective January 1, 2013, DRE will be enforcing a more stringent education exemption to the experience requirement for applying for a real estate broker's license.

Under the current law, an applicant must, among other things, demonstrate at least two of the last five years of being actively engaged in general real estate business as a salesperson. However, an applicant may petition DRE for an exemption from this experience requirement if he or she graduated from a four-year college or university.

The new law will now require an applicant to have a degree broker’s course of study to include “a major or minor in real estate” to petition for the experience requirement exemption. The full text of this law is available at www.leginfo.ca.gov.

I am glad DRE is tightening these licensing requirements for the broker's license, as we've seen, much too often, some of those who were granted the experience exemption based solely on their having a four year degree, without having active experience in the business, are almost a disgrace to our profession. 

Apply For State Exam

How to Apply for the Real Estate Exam. 

Here are some helpful links to DRE (Department of Real Estate) to assist you in getting yourself organized and know the necessary steps to take .

 

• How to apply for the California State Exam: http://www.dre.ca.gov/Examinees/
• Required Pre-License Courses: http://secure.dre.ca.gov/publicasp/cestatutory.asp
• Exam Application Checklist: http://www.dre.ca.gov/Examinees/TakingExam.html
• DRE Examination Process and Forms: http://www.dre.ca.gov/Examinees/ComboSales.html

Prepare for Real Estate Exam.

How to Prepare for the Real Estate Exam.

Getting started in real estate often seem daunting. But like everything else, take it one step at a time.

Once you have completed the basic course/s required by the Department of Real Estate (DRE), you are ready to start preparing for the state licensing exam.

A number of books and publications on how to prepare for the exam are available in the libraries, bookstores and on the Internet. Choose one that is state specific (different states, different laws and regulations). Most importantly, choose one that has as many practice exams and mock exam questions with full explanation of the answers.

No doubt that you have heard how difficult the state exam is. It can be if you're not prepared for it. So, do the prep work and take as many practice exams as you can; do them at least a month prior to your taking the exam. As with anything else, if you are prepared, most everything comes easy.

Review and “crash” courses. Exam preparatoy schools usually offer review program for taking the licensing exam. Their registration fees vary from $175.00 to $500.00. They basically give you the materials to take home and practice, and maybe offer one or two live classes. In essence, you are studying on your own anyway.

If taking this type of a review course raises your confidence level and you can afford to spend that kind of money, then it may be advantageous to go this route. However, if you simply pick up one or two exam preparation books from the library or purchase them from the bookstore, and commit to do as many practice mock exams as you can before the real exam, many of my former students do just fine and pass it the first time.

Some of the textbooks used in live classes in the community colleges and similar institutions include a practice exam CD. The CD usually contains 500 to 1500 mock exams. This is an invaluable tool and the price is right because it is included in the textbook cost.

In California, where I live, the Department of Real Estate publishes a guide which usually has sample questions and tips on how to take the exam: http://www.dre.ca.gov/pub_referencebk.html.

Just commit to do it, and as one of the shoe company says, Just Do It!

The Right Brokerage For You.

How to Find the Right Brokerage Firm for You.

At this point, it is safe to assume you have passed the California State exam and you are waiting for your official license from the Department of Real Estate. It typically takes 6-8 weeks for DRE approval and processing of your paperwork (aargghhh!).

Spend this time to start interviewing 2-3 real estate brokers. It is important to align yourself with an office that embodies your set of values and exudes an image of respect and integrity. You want to be a part of a professional team who is dynamic and enjoy the work they do.

Brokerage firms differ in their approach to business and marketing plans, including training programs offered to new licensees. Ask questions about costs to join their office like errors and omission; desk fees, commission structures, policies and rules.

The main thing is to list these questions before meeting with the Broker or Manager. Most, if not all of them, will be more than happy to answer them - remember: they want you more than you want them. (This is a revision of my previous article last year).