Wire Fraud Scams and Your Home Buying Process

Buying a home? Let’s talk about Wire Funds scams.

Buying a home is one of the biggest investments you will make in your lifetime. Most of the time you will use up most of your savings and there are a lot of people who would love to get a handle of those funds.

So, what are the steps you can take to protect your hard earned money?

1. Make sure you are getting a secure encrypted email from Escrow.
2. Even with a secure email I always recommend my clients to call the escrow agent number to double check. I provide them with a direct phone number.
3. If you get any email from escrow or agent telling you there was a change of plans and money should be sent to a different account DO NOT SEND ANY MONEY. Stop and contact your agent on the contact information you have originally received from escrow – Not the info provided on this email.
4. In case of doubt go to the escrow company and verify the information provided is the correct one directly with escrow agent.
5. Always ask your Realtor to use a company which is wire fraud insured.
6. Realtors do not handle client’s funds directly, so if anyone calling themselves a realtor, asks you for any money, step away, call the local DRE and have a chat.

While these steps might not protect you for all possibilities it does reduce the risk immensely. As always work with reliable realtors and escrow companies is just a common sense.

#wirefraud #protectyourdeposit #beaware #homebuyingscams

For any questions or to discuss your home buying or selling needs, call me at 714-698-9655

Noemi Cardoso DRE# 01988945

Seven Gables Real Estate

 

Posted on July 27, 2018 at 8:40 pm
Noemi Cardoso | Category: Buyer's Advice, Real Estate News, Seller's Advice | Tagged , , , , ,

Why Hire a Buyer’s Agent?

Why hire a Buyer’s Agent

why hire a buyer's agent, buying a home, 1st time home buyer, real estate professional, buyer's agent,relocation, vacation homes

Hiring an agent can make the biggest difference on your chances to buy a home. Home buying is a serious business, as a 1st time buyer or seasoned buyer, relocating or buying a vacation home, a reliable buyer’s agent will work in your favor, protecting your interests and making sure your home dreams does not become a home nightmare. If you are ready to house hunt be aware: It’s a jungle out there: Prepare for a flurry of paperwork, stampedes of buyers competing for the same digs, and other challenges before you get your hands on those house keys.

 

We won’t lie: The process can be complex and stressful—which is why having a pro by your side can make all the difference. You might have heard of buyer’s agents, seller’s agents, listing agents, and so on. You’re a buyer, so what is a buyer’s agent? True to their name, buyer’s agents assist home buyers every step of the way; they can also save you tons of time and money on the road to home ownership.

 

We will guess that since you are serious and ready to buy, you’ve probably spent the last few years of your life working hard and sacrificing so you can save up and achieve “The American Dream”.

 

Buying a home is a huge milestone in every person’s life. A home is more than just a place to find shelter and safety from the elements. It is an investment that can potentially pay out large returns in the future. Thus, it is an investment decision where you should seek out valuable advice. That is just one reason why you should hire a Buyer’s Agent to represent your interests. So why hire a Bueyr’s agent?

 

A Buyer’s Agent is a licensed real estate agent professional who represents the buyer in a real estate transaction. Whether you are a first- time home buyer or not, hiring a Buyer’s Agent will always be a smart decision when it comes to real estate property investment. A Buyer’s Agent specializes in making sure buyers find the home they’re looking for and catering contracts to legally protect home buyers’ interests. Unlike a listing agent, a buyer’s agent’s first priority is making sure that you, as the buyer, get the best deal for the best home.

It is a common belief that using the listing agent will assure the buyers a “better deal” when buying a home. A common way tho enter a dual agency situation is if you visit an open house before you’ve have decided to have an agent to represent you as a buyer, then express to the listing agent, interest in the house and are told by the agent for the sellers that writing an offer will be no problem.

 

Before entering into any of these types of dual agency agreements, however, Buyer’s need to understand the legal implications and how it might affect your ability to get the best possible deal in buying a home.

 

Generally, a seller’s goal is to get the highest possible price for a property, whereas a buyer’s goal is to pay the lowest possible price. How, then, can a dual agent properly represent the competing interests of both a buyer and a seller?

 

An agent for the seller is supposed to obtain the highest and best price for the seller. An agent for the buyer is supposed to obtain the lowest and most competitive price for the buyer. When an agent owes a duty of loyalty to two parties who have opposite, competing interests, the agent may have difficulty advancing the interests of either party, or worse, end up choosing the interests of one party over another.

 

While a Buyer’s Agent can be expected to advise you whether the listing price is reasonable, whereas the dual agent (listing agent), who originally worked with the seller to establish the listing price, will be more likely the defend the listing price.

 

Dual agents do not (or should not) share the other party’s confidential information. You might think that it’s a great idea to work with the listing agent because you may find out things like how low a seller is willing to sell for, or what would motivate the seller to accept a lower price. However, under California law, a dual agent may not disclose to the buyer that the seller will accept an offer for less than the listing price, unless the seller specifically agrees to this disclosure.

 

A dual agent who is receiving both the buyer’s and seller’s agency commission may be over-incentivized to close the deal no matter what it takes. This could create ethical (and legal) issues where an agent may be tempted to not disclose a relevant fact for fear of ruining the deal, and losing out on a large, double commission, potentially creating issues for both buyers and sellers.

 

Another point to remember is that Dual agency reduces your legal options if a problem arises. If you need to file a lawsuit, and you used a dual agent, you have only one broker’s office to sue, and thus only one broker’s insurance company that will step in and assist in paying any damages

 

So, now that have a better understanding that working with the seller or directly with the listing agent will give the buyer’s a deal might really not be such a great idea, let’s focus on what your Buyer’s Agent can do for you.

 

Here are 10 reasons why you should hire a buyer’s agent.

 

1. IT’S FREE

As the buyer, you will not have to pay your agent’s commission. It is the seller’s responsibility to pay both the listing agent and buyer’s agent a commission. This is agreed upon signature of the Listing Contract before the house becomes available for sale. Dealing directly with the listing agent, while may lead you to believe you will get a ‘discount’, only means that either the agent will be making a larger commission or the seller will pay a little smaller commission and make more money on the sale, not that you (The BUYER) will be getting a ‘deal’. Basically, you have the opportunity for free representation. Take advantage of it.

 

2. CONSULT ON THE PROPERTY MARKET

Many first- time buyers rely on the Internet for information. While there is a wealth of information available on the Internet, not all of these are reliable.Some of the information you come across could be outdated. Second, with today’s easy access to the internet, there are many cyber-scams praying and taking advantages of uninformed or inexperienced buyers and sellers. Third, while reaching out to the listing agent identified on the website sounds like a good idea, remember that you will be consulting with a person who represents the seller and the listing agent has the sellers best interests at heart, their job is bring the most possible money to their employer – “The Seller” not to you – “The Buyer”.

 

3. HELP YOU UNDERSTAND FINANCING OPTIONS

 

Finding the best mortgage for your situation is the key to being a successful homeowner. It could mean the difference between being able to afford your mortgage payments and finding yourself underwater or foreclosed. Your Buyer’s Agent will be able to help you find a great lender.

 

4. PROVIDE YOU WITH LISTINGS TO MEET YOUR NEEDS AND WANTS

One of the first things a Buyer’s Agent do is to sit down with you, listen, learn and work on identifying your wants and needs in a home or a neighborhood. Be very specific with your Buyer’s Agent. Make your Buyer Agent aware of all that you are l9ooking in a house: how many rooms you want, the size of the garage, the number baths, the availability of a garden and other details on your prospective home and neighborhood are important to you and your family. An experienced Buyer’s Agent will provide you with listings on homes and neighborhoods that meet your wants and needs. He or she will also schedule the site visits and appointments at your convenience. A Buyer’s Agent can even arrange for transportation and prepare an itinerary so you can visit as many houses as time would allow. If the houses and neighborhoods shall prove to be beyond the limit of your budget, your Buyer’s Agent will sit down with you and reassess the situation. The idea is to arrive at a compromise so you can have a home that would meet most of your wants and still stay within the budget.

 

5. KNOW WHAT TO LOOK FOR IN HOMES

Buyer’s agent regularly helps buyers find homes therefore, he or she will have an experienced eye when attending walk-throughs. Tell-tale signs of damage or modifications will stand out to buyer’s agent and he or she will pass that information to you. Armed with what the buyer’s agent’s trained eye has noticed, you’ll be able to make an informed choice.

 

6. MARKET KNOWLEDGE

A buyer’s agent will know how much the homes you are looking for should cost. They will have experiencing putting together a CMA, or comparative market analysis, so you can also know how the market is behaving. Remember, a buyer’s agent can be expected to advise you whether the listing price is reasonable, while the listing agent, who originally worked with the seller to establish the listing price, will be more likely the defend and justify their listing price.

 

7. LOCAL LISTING AGENT CONTACTS

The best way to get the best deal on a house is to know about it before it hits the market. Buyer’s agents use their network of listing agents to locate homes that match your needs. Some will also be able to draw from their company’s research tools. We have access to a properties that are not yet listed in the multiple listing service (MLS).

 

8. EMOTIONAL FILTER

Buying a home is an understandably emotional time. Having an agent who is not emotionally attached to the purchase will ensure you have a voice of reason when you fall in love with a home’s layout and don’t notice a decaying roof. Your buyer’s agent will also help you make sure you find the home you need instead of getting side tracked by wants.

 

9. ASSIST YOU IN THE BUYING PROCESS

Entering into a real estate contract is legally binding and not to be taken lightly. The buying process in real estate can be tedious and confusing at times. There are documents to be submitted, fees, payments to be discussed and dates to be honored.

 

A buyer’s agent has written and reviewed purchase agreements before. He or she will make sure that it includes contingencies in the right places to allow you to walk away from the contract to purchase if you are not satisfied. You also have to be certain that you will be getting your money’s worth on the house you intend to purchase. It may look good outside and inside and the owner could appear condescending but that doesn’t mean the house is everything that it seems to be.

 

A Buyer’s Agent has the experience and contacts to make sure you will get what you plan to pay for. He or she can arrange for the house to be inspected by a licensed inspector and other professionals as needed. The findings of the professionals including recommended repairs and improvements should be factored in the cost of buying the house. At the very least, these repairs and improvements should be negotiated with the home owner.

 

10. PROFESSIONAL NEGOTIATION

 

Regardless of your price point, negotiation is going to factor into buying a home. Since most homes are listed with a listing agent experienced in negotiating, you want to make sure your financial interests are equally represented in the negotiations. Aside from straightforward negotiations, buyer’s agents employ certain acquired skills over time like offering or receiving concessions to make sure you come out ahead or happy, depending on the current market’s behavior.

 

Negotiations in the sale of a property can be difficult. There are many parties whose respective interests are at stake. These parties include the seller, the listing agent, you and your Buyer’s Agent. He or she knows how to maneuver through the negotiations so you can be in the best position to get the best price the market allows. A reputable and trusted Buyer’s Agent will also advice you if the final offer price is worth taking or is best left at the negotiation table. A reliable and trustworthy Buyer’s Agent must be not just be willing but ready to advise you to walk away if turns out that the property you have chosen turns out not to be one that will work in your best interest.

Conclusion

While becoming a homeowner is an exciting life step, and one you should prepare for, making an oversight anywhere in the buying process could cost you more than a new car. While most homes have a listing agent (Dual Agent) that will help you through the home buying process, their first priority is the home seller. To make sure that your interests are protected, hire a buyer’s agent to represent you.

 

Protecting yourself against any unseen problems with your future home and to make sure you get the best deal on the best house is top priority for the buyer’s agent you hire. Interview a couple of them and don’t be afraid to ask questions. Don’t make the mistake of entering into a contract without a professional to guide you through the nuances.

 

Contact us to learn how we can be your personal guide or reach out and we’ll match you with a top agent in your neighborhood (Nationally and Internationally). Cell: 714-698-9655 or email Noemic@sevengables.com

Posted on February 5, 2017 at 2:53 am
Noemi Cardoso | Category: Buyer's Advice, Real Estate News | Tagged , , , , ,

Look for the Fed to hike interest rates this week and to ignore the elephant in the room

By GREGROBB – SENIOR ECONOMICS REPORTER

Getty Images

Federal Reserve Bank Chairwoman Janet Yellen will hold a news conference Wednesday.

You can expect the Federal Reserve to raise interest rates this week, but look for it to shy away from the bigger question looming for financial markets: How does the shock outcome of the presidential election change the economic landscape?

The Fed is widely expected to announce an increase in the target range for its federal funds rate to between 0.5% and 0.75% when its two-day meeting wraps up Wednesday, analysts agree. It will be the first increase of 2016, a year once expected to produce at least a couple of rate adjustments. The stock SPX, +0.65% and bond markets TMUBMUSD10Y, -0.22% have a quarter-point move baked in the cake.

At the same time, Fed officials are expected to duck questions about how the incoming Trump administration’s plans for fiscal, trade and regulatory policies will impact the economy and the central bank’s policy outlook.

“I would expect them to keep as low a profile as humanly possible,” said Vincent Reinhart, chief economist for Standish Mellon in Boston. “They don’t want to be seen as influencing policy, either as cheerleader or expressing doubts.”

The Fed has already exhibited a preference for staying out of presidential politics. It included no mention of the election in the minutes of its September or November meetings, Reinhart noted.

Fed Chairwoman Janet Yellen wants to avoid the recent experience of Bank of England Gov. Mark Carney, who came under fire from Brexit supporters for comments he made during, and after, the referendum campaign that ultimately ended with a vote for the U.K. to split with the European Union.

And the Fed doesn’t want to whip up Republicans in the House and Senate who are eager to clip the central bank’s wings, analysts said.

Fed officials are not likely to change their economic forecasts or their projections for interest rates over the next three years, economists said. At the moment, the central bank is penciling in two rate hikes in 2017, followed by three rate hikes each in 2018 and 2019. Markets scan the Fed’s “dot plot” to extract a snapshot of Fed thinking on economic and policy projections.

Any forecasts beyond mid-2017 will be basically ignored by the market, analysts say. By the middle of the year, the Trump administration could have put its initial stamp on the central bank, filling the existing two vacancies on the seven-member Fed board of governors.

At the moment, the market does not expect another rate hike until June.

But there are growing expectations that higher interest rates may be needed, perhaps sooner. Bond yields and the dollar DXY, -0.03% have risen in the wake of the election in part due to expectations of a more active Fed.

Congress is expected to press ahead with tax cuts next year, and rate hikes could be needed to keep this stimulus from becoming inflationary.

“The market reflects optimism about the future for economic growth, but the Fed is going to be overly cautious of latching on to that reality,” said Tom Simons, an economist at Jefferies in New York.

For Yellen, the end of her tenure at the Fed is only 14 months away. Republican insiders think it is highly unlikely Trump would offer Yellen another term at the helm of the central bank.

Analysts think Yellen won’t leave early and will follow her policy instincts until the end.

“She’s got a pretty stiff spine. She’ll stand up to any tweets or commentary,” said Kevin Logan, chief economist at HSBC Global Research.

With two hikes foreseen next year, the Fed is likely to space them out from June to December, Logan said. “The general plan is to gradually move the rate up as appropriate, given the data they are faced with,” he said.

 

Posted on December 14, 2016 at 1:10 am
Noemi Cardoso | Category: Buyer's Advice, Seller's Advice | Tagged , , , ,

Does Your Home Have Lead Paint? How to Find Out

By

Of all the things you have to worry about when you’re buying a home, paint really shouldn’t be one of them. The problem is, if you’re looking at an older home, the topic can shift quickly from “Why did they choose that color?” to “Welcome to the danger zone”— all due to the existence of lead paint.

Lead was a popular ingredient in house paint for years before scientists discovered that this element—if eaten or inhaled as dust in the air—could cause a wide range of health problems, from anemia to seizures to death, particularly in children.

Bottom line: This is not something you want hanging around a home once you move in. Thankfully, there are ways to check for lead paint and get rid of it.

Which homes have lead paint?

The federal government banned the sale of lead-based paint in 1978, giving many people the impression that a house built after that time is free and clear. But that is not always the case.

“Many painters loved lead-based paint,” says Welmoed Sisson, a Maryland-based home inspector with Inspections by Bob. It tends to be glossier, more lustrous, and it holds color better. “Once they learned the ban was going into effect, many of them stocked up on a cache of lead-based paint.”

And since the government made it illegal only to manufacture and buy the paint, using what you already had was a gray area that lasted for years. “I’ve talked to inspectors who’ve found lead-based paint in homes built in the ’90s,” says Sisson.

Signs of lead paint

Unfortunately, like with most things that spell disaster for a potential dream home, you can’t definitively spot lead-based paint just by looking at it. However, you can get a good idea that it is there based on one telltale sign.

“When the paint deteriorates it creates a pattern that looks like scales. It’s actually called alligatoring,” says Sisson.

Finding these series of cracks along walls can be a good indication that you’ve entered into lead territory, but most homeowners aren’t going to just leave crumbling paint on the living room walls, so you might need to put on your investigative hat.

“Look inside closets, along baseboards and basement window sashes,” says Sisson. “Anywhere were painters might overlook a spot.”

Alligatoring: a sign of lead paint
Alligatoring: a sign of lead paint

Flickr/See1,Do1,Teach1

How to test for lead paint

Walls can also be tested for surface lead using a paint testing kit available at your local hardware store. For the test, you rub a solution on the wall. If the solution turns pink, you have lead. (Though, it will also stain the wall if it turns pink, so maybe it’s not a great idea if you’re just lookingat a property.)

The problem is, the test has limits. It finds lead only on the surface. If the lead-based paint was covered up by new paint, the test won’t work. And while covering (or encasing) lead-based paint is one way to limit its danger, it isn’t the best way.

“When painters encapsulate lead-based paint, they can miss spots,” says Sisson. “Common spots like around windows can still have exposed lead, which can cause lead dust to disperse throughout your house when you touch the area.”

Lead test
You can buy a lead paint testing kit at your local hardware store.

Inspections By Bob

Should you hire a home inspector to test for lead?

To really tell if a home has lead-based paint, you’re going to need a serious test.

“When lead is suspected, inspectors use an X-ray to look through the paint layers to the base wood of the wall. X-rays can’t pass through lead, so it is easy to spot,” says Sisson.

Many home inspectors will check for lead paint, but not all—so be sure to ask. If not, you can hire a certified lead inspector by entering your address and other info on the lead abatement page of EPA.gov. If lead paint is found, a certified inspector can also remove it, although it will cost you.

According to the EPA, you’ll spend about $8 to $15 per square foot, or about $10,000 for an average-size home. In the end, walking away from the house of lead might be the better option, but if you love the place you should take heart that there are ways to make it safe.

Angela Colley lives in New Orleans, where she writes about buying, selling, and renting news for realtor.com. Her passions include animal rescue, photography, historic homes, and Southern architecture.
Posted on December 4, 2016 at 12:35 am
Noemi Cardoso | Category: Buyer's Advice | Tagged , , , , ,

How to Buy an Apartment and Ditch Renting for Good

By

Sooner or later most renters are bound to ask themselves: Shouldn’t I stop throwing my money away on rent for my apartment and see if I can buy one instead? Good question. Owning property can make a whole lot of sense, financially and otherwise. Still, the nuts and bolts of how to buy an apartment may seem daunting at first. Never fear—just check out these steps to get started.

Check where you stand in the rent vs. own equation

First things first: Whether buying or renting is cheaper depends on market conditions where you live—and how long you will stay there. One way to crunch all these numbers at once is with our rent vs. buy calculator, where you can enter your ZIP code or town and/or how much you’d anticipate paying to own or rent in your area.

Let’s say, for instance, that you pay $1,000 to rent, but buying an apartment will cost $200,000. Upfront, of course, buying will seem pricier, because you’ll have to cough up as much as $48,000 for a down payment and closing costs. But as long as you stay put for at least five years, the balance tips, making buying the cheaper option.

The reason: After five years, you’ve built equity in your home rather than tossing your money away on rent. So be sure to compare costs in your area and see what makes sense for you.

Figure out how much apartment you can afford

Another calculation you need to make is how much you can afford to pay for an apartment. Check out our home affordability calculator, where you can plug in your income, debts, and down payment savings.

Let’s say, for instance, that you have an annual income of $70,000, pay $250 a month to credit cards and other debts, and have $40,000 saved toward a down payment. That means you could afford an apartment worth about $263,000, for which you’d pay $1,575 per month. Knowing these numbers is important, because they will help you narrow your apartment hunt to your desired price range.

Educate yourself on co-ops vs. condos

If you’re looking to buy an apartment, you might likely encounter both condos and co-ops. So what’s the difference?

“A condo is similar to buying a home where you are actually getting the deed to the unit, and generally if you ever want to rent your unit out, you will be able to without any stipulations except, of course, that the new tenant must qualify through the condo board,” says real estate agent Lila Nejad of Douglas Elliman.

“A co-op is buying a share in a building, where you own the unit, but there are more board requirements to qualify for purchase and non-U.S. citizens are far less likely to get into most of these buildings. The subletting policies are also generally much stricter, often with limitations of only two years, or no third-party renting at all.”

Decide on your must-haves

When starting the hunt for your dream apartment, it’s important to narrow the playing field, so to speak.

“While we all want great space, closets, and a premier location, I always ask my first-time buyers what they love about where they currently live and what their top three must-haves are for a new apartment,” says real estate agent Elena Sarkissian of Douglas Elliman. “For example, double vanities in the master bath, floor-to-ceiling windows, higher ceilings, a washer/dryer, or morning light could be essential to some buyers.”

This is also the time to think about where you’d ideally like to live (i.e., what part of the city fits your lifestyle) and how far you’re willing to commute to work. The more specific you can be upfront, the easier it will be to isolate potential listings.

Find the right real estate agent

Buying a home is hard, but buying an apartment might be even harder. The competition is tough in densely populated areas where apartment dwellers congregate, so it’s more important than ever to have a trusted buyer’s agent fighting by your side.

“An apartment buyer today needs to have a real estate agent who has the market savvy and experience to advocate for the buyer and properly position him or her in these multiple-bid scenarios we are experiencing today,” says Sarkissian.

Not only can a knowledgeable agent help you find the right apartment, but she can also position you to lock down the deal and guide you through the process. A good agent will also know the right questions to ask, like about the building’s pet and subletting policy, so you aren’t blindsided later. So, don’t just take the first agent that comes along; contact a few and ask them questions (like how long they’ve been in business and what neighborhoods they specialize in) to know whether they’re the right agent to guide you through this tricky process.

Kimberly Dawn Neumann is a writer who lives in a tiny apartment in New York City, where she loves decorating and dreaming about gorgeous dwellings.

When you are ready to buy a home, give me a call and let’s find out what are the features and amenities which makes you feel giggling inside. Call me at 714-698-9655 or email Noemic@Sevengables.com

Posted on November 30, 2016 at 7:26 am
Noemi Cardoso | Category: Buyer's Advice | Tagged , , , , , , , ,

Buying vs Renting

Buying vs Renting

rentorbuyIf you’re thinking of buying a home, you have probably already asked yourself ‘Can I afford to buy?’ Another good questions to ask is, “Can I afford to continue renting?”

No matter what you are currently paying for rent, your total cash outlay over a period of several years, will probably add up to a much higher total than you may have realized. The following chart shows how quickly the rent payments you are making adds up. We are no counting what you would have earned if this money was invested instead just added your monthly rent for the different period of time:

With the money you are currently spending on rent, you could be building equity in your home. Keep in mind, too, that over the years your income most likely will increase faster than any increase in your mortgage payment. Rent payments, on the other hand, tend to increase, right along with your paycheck if not faster.

Other points to keep in mind when you own a home: Homeowner Tax Advantages and Home Value Appreciation.

You can make ownership a reality

Take a good look at your personal financial situation in comparison to housing price trends and mortgage plans available in your community. You will probably discover that you are closer to home ownership that you had realized. Buying a home is probably one of the biggest investments you will ever make.And when it’s your first home, it is specially important that you seek qualified assistance. Your local real estate agent or broker has the experience and expertise to guide you through the maze and help you find, and purchaser, the home of your dreams. A true professional will also have a network of reliable service provider such as credit counseling and credit repair, mortgage brokers, inspectors and everything you might need before, during and beyond the process.

For any of your real estate needs feel free to contact us for a private and confidential appointment to find out where you are, where you want to be and how we can connect the points to bring you there.

Noemi Cardoso
Seven Gables Real Estate
Cell: 714-698-9655
www.agentwithanaccent.com
Cal BRE# 01988945

Providing value to Buyers and Sellers since 2005

Posted on October 22, 2016 at 7:00 am
Noemi Cardoso | Category: Buyer's Advice | Tagged , , , , ,

What Is Fair Market Value? How Much a Home Is Really Worth

house drawn on chalkboard with dollar signs. What is fair market value?

Whether you’re buying or selling a home, one question that’s always front and center is the price: How much is a home worth? That’s a tricky question to answer, but probably the best starting point is to know a home’s fair market value, or FMV.

A home’s fair market value is the price it would sell for in a perfectly logical world—one where both buyer and seller are acting of their own free will (in other words, they aren’t desperate to strike a deal), are reasonably aware of a home’s good and bad points, and could just as easily choose a different house that suits their needs better.

In such a world, market forces reign. Buyers and sellers negotiate up or down from their various positions and agree on a home’s price. Deal done. All is good!

Fair market value vs. market value

A home’s fair market value is similar to a home’s market value—what it would fetch on the open market—but is used in specialized circumstances where the concept of fairness is important to evoke so that the home’s price carries more weight.

“FMV is typically brought into the real estate conversation whenever a sales price is being scrutinized,” says Robert Pellegrini, a real estate lawyer in Boston. Here are some circumstances where you’ll likely hear about a home’s fair market value:

  • Property tax assessments.
  • Home insurance claims—if a house suffers damage from a fire, flood, or other disaster, the insurer will look to FMV to determine compensation.
  • Refinancing a home loan—the bank will typically use a home’s fair market value as a measure of how much the home is worth to determine refinancing terms.
  • Estate sales—if the homeowner has died and a relative wants to purchase the property, the court will look at FMV to determine a price.
  • If the government wants to “buy out” a homeowner to use that land to, say, build a highway or school, the owner is typically entitled to be compensated at fair market value.
  • Short sale—this is when a home is worth less than the owners owe on their mortgage. In this case, the owners must persuade the lender to let them sell the home for some amount that is less than the balance of the home loan they still owe. “When a bank does allow this, the bank wants to make sure that the short-selling purchase price is at least FMV for the property,” says Pellegrini. Because, of course, no one likes a total loss!

 

How is fair market value determined?

“Let’s be clear about one thing: There is no exact mathematical formula that calculates fair market value,” says mortgage lender Michael Sema, CEO of Get a Rate. “Information is key, and the best way to obtain a home’s true FMV is … by hiring a professional licensed appraiser.”

To determine fair market value, a licensed appraiser gathers and measures the qualities of a home, such as its size, condition, neighborhood, and other factors. This information is used by lenders, attorneys, insurance companies, and other agencies to help determine a fair price.

All that said, no one ever proclaimed that life (or the housing market) is fair—which is why homes may often sell for an amount far different from this figure.

If, say, a family is desperate to buy a certain home because it’s in a coveted school district and their twins are entering kindergarten that fall, they might be willing to pay substantially over a home’s fair market value. Or if a home seller has fallen ill and has to sell quickly to cover medical bills, he or she might be willing to settle for less than a home’s FMV.

But in an ideal world, fair market value is the benchmark, and probably the closest number to what a home is truly worth.

At its heart, fair market value helps prevent home sellers and buyers from being taken advantage of, and is a good thing for both parties. And it’s worth knowing the term in case you feel like someone’s stance on a home’s price is off base. Just point out, “I think that’s pretty far above/below this home’s fair market value.” Who knows? If you’re right, this argument could persuade the seller or buyer to budge.

Posted on October 12, 2016 at 7:31 am
Noemi Cardoso | Category: Buyer's Advice | Tagged , ,

What Do Condo Fees Cover? A Lot More Than You Think

Condo courtyard in evening

alacatr/iStock

If you’ve ever looked into buying a condo, you’ve noted that, in addition to your monthly mortgage payment and property taxes, you’ll be required to pay monthly condo fees. So what do these fees cover?

Generally, they pay for the maintenance of any amenities outside your personal living space that you share with your neighbors—like, say, the hallways, parking lot, and yard.

“Condo fees are your percentage share of the costs to run the building as a whole,” explains Janice Pynn, president of Simerra Property Management.

This is good since odds are, you bought a condo to avoid all the maintenance and yardwork that come with owning a regular house. And in case you think your condo fees are too high, know this: No one pockets a cent of your checks or is getting rich off condo dues.

“They are not a profit source for building management; in fact, each building is registered as a nonprofit corporation,” Pynn points out. In other words, these fees go solely toward enhancing the value of your real estate, which is a good thing!

The breakdown: Condo fees and costs

Condo fees typically range from $100 to $700 per month, varying greatly based on what they cover. At one extreme, Hollywood’s hottest luxury condo building, Sierra Towers, offering an array of luxury amenities like 24-hour concierge service and valet parking, may charge residents up to $4,000 per month. (Suddenly that $250 fee you’re being charged feels a bit more reasonable, doesn’t it?)

Here are the services and amenities you can expect your condo fees to cover:

Interior maintenance: Condo owners share the cost of maintaining common building areas like parking structures, storage rooms, laundry rooms, game rooms, fitness centers, saunas, and hallways, as well as mechanical systems like heating, cooling, electric, gas, plumbing, and elevator maintenance. If a crew comes regularly to clean the common spaces, their fees are also included.

Exterior maintenance: Condo owners also share the cost of exterior common areas like fences, walls, gates, pools, landscaping, window cleaning, and seasonal expenses like snow removal, winterizing, and cleaning out rain gutters. If a gardening crew comes regularly to take care of the landscaping, their fees are also included.

Security: This could range from cameras at the entrance to full-time guards patrolling the grounds. If visitors have to be buzzed in to the building, this system will be covered by your condo fees.

Utilities: Most developments’ condo fees cover utilities such as water, sewer, and trash. Some buildings even include heat, electricity, cable, and Wi-Fi. Remember that the more utilities covered, the higher your condo fees will probably be.

Insurance: Most condo fees include a homeowners insurance policy that covers exteriors and shared common areas. Depending on where the condos are located, the insurance policies might also cover flood and/or earthquake damage. The nice thing here is that condo owners need only to purchase insurance policies that cover the interior of their home and their possessions.

Reserve fund: There are expenses that don’t come up on a monthly, or even an annual, basis that will need attending to, so a well-managed condo board will charge owners a certain amount per month that will go into a reserve fund. It would cover things like paving, reroofing, replacing water heaters, exterior painting, hallway and lobby flooring and redesign, and more.

What is an assessment?

In addition to your monthly condo fees, special assessments might arise. Every once in a while something big (e.g., a roof or an elevator) gives out, and there aren’t enough reserve funds to cover it. In that case, the condo owners will have to pay an extra fee for these additional expenses, typically tacked on to the usual monthly condo fees in small amounts until the assessment is paid off.

At times like these, it’s best to remember that, as with any type of homeownership, unforeseen expenses arise, and making the necessary repairs is in your best interest. In other words, you get out what you put in.

When buying a condo give us a call and let our expertise work in your favor. Noemi cardoso @ 714-698-6655.

Posted on October 8, 2016 at 7:04 am
Noemi Cardoso | Category: Buyer's Advice | Tagged , , , , , , , , ,

9 Home-Buying Myths You Need to Stop Believing Immediately

leprechaun on sold sign

RyanJLane/iStock; PhonlamaiPhoto/iStock

So you think you’re finally ready to make the jump from renter to homeowner? Awesome! In this exciting but admittedly scary time, you might be inclined to turn to friends and family for advice—especially if they own homes.

But beware, dear home buyer of the future: Those close to you might not be the experts you think they are. You could be heeding bad (albeit well-intentioned) advice without even knowing it.

So we’re here to bust the most common misconceptions about home buying so you can do this thing the right way. Because this is what we do.

Myth No. 1: The first step is looking for a house

lillyking

Perhaps you just want to get a feel for the area. You know, have something in mind before you sit down with a Realtor®. I mean, you’re not really looking yet, right?

Stop right there. Even if you think you’re just browsing, you run the risk of setting your heart on something, only to have it broken.

“A buyer might be viewing homes that are in a higher or lower price range than what they are qualified for,” says Connie Antoniou, a broker associate in Barrington, IL.

Browsing is always fun, but when it comes to serious home-buying work, you need to make sure your credit is in top-notch shape before you get started for real. Also, don’t forget to get pre-approved for a mortgage before you embark on your home-buying journey. This will determine what your budget is.

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Myth No. 2: A 30-year mortgage is the best option

rashida shrug

If you think that the longer you agree to invest in your home, the cheaper the mortgage payments will be, think again.

Most people opt for 30-year fixed-rate mortgages and for valid reason: Monthly payments for a 30-year fixed-rate mortgage are lower than its 15-year counterpart.

But consider this: You could end up paying more during the life of the loan if you pick the 30-year option instead of the 15-year mortgage. That’s because essentially, with a 30-year loan, you’re borrowing the same amount of money for twice as long—at a higher interest rate.

“If you have $1,000, would you rather put that toward your monthly payment for your house or is there a better place for your money?” asks Samantha DeBianchi, Realtor and founder of DeBianchi Realty in Florida. “If you’re more focused on paying down the house versus the interest, a 15-year option is great.”

No, we’re not saying the 30-year option is a bad one. But keep an open mind toward other loan plans, including an adjustable-rate mortgage. If you aren’t set on staying in your home for the long haul, this could be an ideal mortgage for you.

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Myth No. 3: Your down payment must be 20%

harrison ford

Sure, a 20% down payment is ideal if you want to avoid that pesky private mortgage insurance otherwise known as PMI. But many lenders will be glad to offer up home loans with 10% or 5% down—as long as you’re willing to foot the monthly bill for PMI. Or you can skip the conventional loan and head to the Federal Housing Administration for a government-backed loan with only 3.5% down, if you qualify.

In fact, there are thousands of options for down payment assistance. And while many programs are geared toward low-income home buyers, you don’t have to be destitute. There are lots of different ways you can qualify for help on the local or federal level.

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Myth No. 4: The only up-front cost is a down payment

mcgonagall

As if! For one thing, the seller might determine you’re responsible for closing costs, which can be anywhere from 3% to 6% of the purchase price—and those costs can change drastically depending on your state. And don’t forget the slew of fees, taxes, and other costs for inspections, credit reports, insurance, among others.

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Myth No. 5: You can’t buy with bad credit

HRC

If you’re looking to get a conventional loan, having bad credit might give you a full stop. But FHA loans require only a 3.5% down payment and borrowers with low credit scores—even under 600—can qualify. Keep in mind, though, that FHA loans may look great at first, but they definitely aren’t for everyone.

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Myth No. 6: You don’t need a home inspection

homeinspection

You might be tempted to believe this tall tale, especially if your housing market is hot and you’re worried your dream home could be sold in a split second to someone else whowaives the home inspection.

But beware: Sellers are banking on your skipping this crucial step. It means you’ll get the home as is, including any and all problems that come with it. And sometimes those problems aren’t exactly visible.

“Just spend the money for a really thorough inspection, because in the long run it can save you a lot of money and time,” DeBianchi says.

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Myth No. 7: The asking price is set in stone

kidwhat

Much like buying a car, the offer you make on a house does not need to be the asking price. If you have stellar credit, pre-approval, and a down payment ready to go, sellers might be more willing to negotiate than to wait for another, possibly less awesome, buyer to come around.

Plus, if your home inspection (you know—the one you got because you’re smart) turns up issues, you can use those to your advantage in your negotiations.

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Myth No. 8: You don’t need an agent

good property

You might think you can do this home-buying thing solo. After all, isn’t that what the internet is for?

This is where we tell you to resist the urge to DIY your first home purchase and call a Realtor instead. They’re pros who bring expertise to the table—everything from negotiating chops to turbocharged searching power (yes, they have tools to see stuff you can’t). Trust us: They know more than you do.

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Myth No. 9: Schools don’t matter if you don’t have kids

laurenconrad

We get it: You love the house, it’s in your price range, and you want to move fast. But there’s more to it than that.

The neighborhood you choose matters—both now and later when you might consider selling. Even if you don’t have children, good schools are a sign of a good neighborhood. Also, check out the area’s walkability, your commute to work, and any other features that would make the hood a good fit for your lifestyle—now and a decade from now.

For all of your real estate needs and to make sure you are working with someone who have YOUR best interest in mind call us for a personal interview at 714-698-9655

Posted on October 1, 2016 at 7:00 am
Noemi Cardoso | Category: Buyer's Advice | Tagged , , , ,

What Is a Buyer’s Agent? A Trusted Guide Who’ll Help You Find a Home

Ready to house hunt? It’s a jungle out there: Prepare for a flurry of paperwork, stampedes of buyers competing for the same digs, and other challenges before you get your hands on those house keys. We won’t lie: The process can be complex and stressful—which is why having a pro by your side can make all the difference.

You might have heard of buyer’s agents, seller’s agents, listing agents, and so on. You’re a buyer, so what is a buyer’s agent? True to their name, buyer’s agents assist home buyers every step of the way; they can also save you tons of time and money on the road to homeownership.

Read on to learn how a buyer’s agent can help, and how to find the right one for you.

Benefits of using buyer’s agents

“A buyer’s agent will guide you through the home-buying transaction and be at your disposal for any questions or concerns,” says Shane Wilcox, a Realtor® with Partners Trust. Here are some of the things a buyer’s agent can do:

  • Find the right property. After determining what clients are looking for and what they can afford, the agent will schedule appointments to tour homes that fit the bill. The agent can also explain the ins and outs of various properties and neighborhoods to help buyers decide which home is right for them by explaining the pros and cons of various options.
  • Negotiate the offer. The buyer’s agent will advise clients on an appropriate price to offer and present it to the seller’s agent. “Then they will negotiate on your behalf and write up the contracts for you,” says Matt Laricy, a Realtor with Americorp Real Estate in Chicago. This is where the agent’s experience in negotiating deals can save you money and help you avoid pitfalls like a fixer-upper that’s more trouble than it’s worth.
  • Recommend other professionals. A buyer’s agent should also be able to refer you to reliable mortgage brokers, real estate attorneys, home inspectors, movers, and more. This can also help expedite each step of the process and move you to a successful sale all the faster.
  • Help overcome setbacks. If the home inspector’s report or appraisal brings new issues to light, a buyer’s agent can advise you on how to proceed, and then act as a buffer between you and the sellers or their agent. If negotiations become heated or hostile, it’s extremely helpful to have an experienced professional keeping calm and offering productive solutions.

Buyer’s vs. listing agent: What’s the difference?

Buyer’s agents are legally bound to help buyers, whereas listing agents—the agent representing the home listing—have a fiduciary duty to the home seller. “That’s why it’s in your best interest as a buyer to get an agent who is there to represent you,” explains Alex Cortez, a Realtor with Wailea Village Properties LLC in Kihei, HI. “Think about it this way: If you were getting sued, would you hire the same attorney as the person suing you? Of course not. You need someone who will diligently fight for your interests and rights.”

Let’s say, for instance, you walked up to the listing agent at an open house and gushed about how you love the home and want to buy it, but you will need to move soon because you’re expecting your second child and need to decorate the nursery pronto, or the lease on your rental is up in a couple of months. A seller’s agent could then use this information against you by informing the seller that your clock is ticking, so they shouldn’t budge too much on their asking price—or at all.

Yet make this same confession to the buyer’s agent you’re working with, and it’s all fine—this professional would know to keep this info private from sellers (and their agents) so it can’t be used against you.

How to find a buyer’s agent

A good buyer’s agent can ease your way to homeownership—and a bad one can result in a bumpy ride. As such, don’t just take the first buyer’s agent you meet (which is what two-thirds of home buyers do), or blindly accept the recommendation from a friend (over half do this). Instead, it’s best to interview at least three agents and ask them a few questions, including the following:

  • What neighborhoods do you specialize in? Real estate requires local expertise, so you should find an agent who’s extremely familiar with the areas you’re interested in.
  • What’s your schedule and availability? Part-time agents who are committed can do a fine job, but if the house of your dreams pops up or you encounter last-minute closing snafus, you want an agent who will be readily reachable.
  • How long have you been a real estate agent? You ideally want someone with a couple of years of experience, and a proven track record of selling homes.

To find real estate agents in your area, head to realtor.com/realestateagents, where you can also read online reviews provided by past clients and learn more.

The agent/buyer contract

Once you agree to work with an agent, you will have to sign a contract called an Exclusive Buyer Agency Agreement outlining the agent’s services and compensation (more on that next). This contract also means that this agent will be your sole representative and that you won’t work with other buyer’s agents.

How much do buyer’s agents cost?

Home buyers need to worry about the expense of hiring a buyer’s agent. Why? Because the seller pays the commission for both the seller’s agent and the buyer’s agent. Typically the commission equals about 6% of the home’s sales price, which is split evenly between both agents (on a $200,000 home, that would be $6,000 apiece).

For all of your real estate needs, feel free to contact us at 714-698-9655.

Posted on September 19, 2016 at 2:25 am
Noemi Cardoso | Category: Buyer's Advice | Tagged , , , , , ,