As an important component of the home buying or selling process, a Realtor usually creates a comprehensive market analysis or CMA to provide their client(s). Conversely, when a borrower applies for a home loan, the lender will engage an AMC (Appraisal Management Company) so they in turn can assign the appraisal request to one of their approved licensed real estate appraisers. The real estate appraiser then creates an appraisal report to provide the lender as the client.
While neither report is an exact science, both the CMA and an appraisal report help to estimate a property’s current market worth. Having said that, the differences between the two could not be farther apart and the level of analysis and detail does not even begin to compare.
Buying your first home is a huge step – financially and emotionally. The ups and downs in the real estate market and the country’s economy haven’t helped first time home buyers. There has been a lot of uncertainty in the world of real estate since the crash of 2008 but over the past year or so, things have really been picking up and home list prices are on the rise again.
Rising house prices and a number of government initiatives designed to stabilize the country’s housing market and help get first time homebuyers onto the property ladder makes now a good time to buy your first home. As a first time home buyer what are your options when it comes to loan programs? Read on to hear my take on what’s available.
NEW REAL ESTATE LAWS
Transfer Tax Disclosure Requirement – AB 1888
Effective January 1, 2015
A new California law now in effect requires the documentary transfer tax to be included on the face of the property deed. Prior to the enactment of this new law, it was not uncommon in commercial real estate (and also in some residential sales transactions) to provide the amount of documentary transfer tax via an ‘unrecorded declaration’ all in an effort to prevent a final purchase price from being readily ascertainable. In other words, some Buyers did not want the world to know. Fast forward to January 1, 2015 the amendments enacted by AB 1888 eliminated this practice.
The Peninsula, Area 1, Long Beach, California 90802
A new construction custom-home project I was involved with in 2008 with a developer client.
This particular property was originally listed and offered for sale on the MLS as an REO, shortly after the lender foreclosed and later sold it to my client via a traditional escrow.
The subject property is located in “The Peninsula”, the very desirable “Area 1” within the City of Long Beach. During that time and to document the new construction project in the peninsula, we created a unique single-listing website to highlight the progress.
In 2007 and just after the beginning of the financial meltdown, this new 4-level custom-home project ran into financial trouble near its completion and unfortunately ultimately selling via a short sale to a local Long Beach Peninsula investor. With the many photos I snapped beginning with the acquisition, the tear-down and through the entire construction phase, I thought it would be a shame and a not a good idea to take down the single-page listing website and continue to host it.
Good News for Home Buyers
FHA Reduces Annual MIP Rates by .50 Basis Points
A good start for 2015. Just recently HUD announced a reduction to their Annual MIP rate for loans with amortization terms longer than 15 years. What this means is not only the lowering of the annual premium by 50 basis points, but also the financed total loan amount. These changes will take effect for new FHA case numbers assigned on or after January 26th, 2015.
What does this really mean for Home Buyers?
If you’re considering selling your home, especially in an area where values are on their way up, you may be tempted to first list your property at a higher than market value price just to see if you could get it. What do I recommend? Don’t do it.
“Knowledge is the Key to Success – Timing is the Key to Profits!”
Most experienced Realtors will tell you pricing your property correctly from the beginning is crucial to getting it sold quickly and at the best possible price. Historical data shows that overpricing your home and then dropping to a lower price when the property fails to sell usually only leads to selling it at a much lower price than what you originally anticipated.
Research also shows that the longer a property stays on the market, the greater the discount is likely to be off your original asking price. Buyers and investors alike will pay close attention to “DOM” (Days on Market) and “CDOM” (Combined Days on Market), both are indicators of the appeal of the property at its current price.
Should I buy or should I rent? It’s an interesting question and I can tell you right now that there’s no right or wrong answer as it depends on each individual and your circumstances. Several years ago I would have recommended that you rented a home for the time-being while the real estate market was getting back on its feet.
Financing was a lot more difficult then as the banks became very cautious as to how much they lent and who they lent it to, but now is a different time; the market is definitely picking up right across the country. So what’s my advice? Read on to find out.
Finding the perfect home is not just about what the home looks like and how many bedrooms it features; of course, these are important factors but then so too is the location. If the location isn’t right for you, the house will never feel like home, no matter what improvements you make to it. Finding the perfect location for your next home will be easy for some buyers but an uphill struggle for others – some neighborhoods will have more appeal and it comes down to personal preferences and needs.
Finding neighborhoods close to top schools will be important for families, while a semi-retired couple may be looking for easy access to the golf course. If you’re unsure where you would like to live read on for my suggestions and tips for finding top areas and neighborhoods in Los Angeles and Orange counties.