Friday, May 29, 2009
Nearly 75 percent of economists, surveyed by the National Association for Business Economics, say that the recession will end in the third quarter. Another 19 percent think the turnaround will come in the fourth quarter. The rest are betting on the first quarter of 2010.
Americans seem to believe that things are getting better too. The Conference Board's Consumer Confidence Index rose 14.1 points in May to 54.9, the second month in a row in which there have been an increase.
Forecasters say that home sales will bottom out in the second quarter, an important stabilizing factor.
Source: The Associated Press, Jeannine Aversa (05/27/2009)
Tuesday, May 26, 2009
- You can modify or improve it as you wish
- Re-sale value is generally the highest on a single family home
- You can add on to the existing home if more room is needed
- Generally there are no property management fees as there are in condo and many townhouses
- All maintenance and repair costs are your responsibility including electricity, gas, water, sewer and trash removal
- Lack of amenities (for example, community pools, gym, playgrounds, etc.) that you may find in a condo or townhouse
- You are responsible for upkeep and landscaping
- In most areas, SFRs are more expensive
- Less exterior maintenance and repairs
- There may be amenities in the community such as pools, tennis courts, playground, etc.
- Sharing common walls with neighbors may bring a greater sense of security
- You are responsible for Home Owner's Association fees (which cover common areas and other "perks" of community living)
- Your options for changing the exterior look of your house will be limited
- Sharing common walls with your neighbors, you give up privacy as compared to SFRs
- Little or no exterior maintenance or repairs
- Many condo communities offer amenities such as pools, tennis courts, playground, etc.
- Condos are often more reasonably priced and are good entry level homes for first-time homebuyers or excellent for empty-nesters looking to downsize
- You are responsible for Home Owner's Association fees Less privacy
- Resale of a condo is harder and often takes longer to sell
You do not want to do any exterior maintenance or repairs
Monday, May 18, 2009
Although most buyers are excited about the opportunities REOs (REO stands for Real Estate Owned by the beneficiary/lender that foreclosed) present in today’s real estate market, I find that many are also concerned about purchasing a home that can have many unseen problems which may not show up until long after escrow closes. This post is dedicated to addressing some of those concerns.
How Does a Home become an REO
An REO is a foreclosed property. In California, when you buy a home, unless you pay cash for it, chances are you will have to finance the purchase. A home is financed in much the same way a car is financed - you sign legal documents called “a note” for a loan. The lender gives you the money which you agree to pay back with interest over a term of (usually) 30 years. If you default on the loan, the lender can then take the home back and sell it to someone else. The legal process of taking the home back for default on a note is called foreclosure. Although the process in California includes a trustee (a neutral third party-typically a title or escrow company) who is given the note and who is notified by the lender to begin foreclosure proceedings in the event of non-payment the basic idea remains the same: don't pay the mortgage (or property taxes or Homeowner's assessments) and lose the home.
In order to begin the foreclosure process, the lender is required by law to send a homebuyer who has defaulted on the loan a Notice of Default. The lender notifies the trustee in writing that the trustor (borrower) is in default, and instructs the trustee to initiate foreclosure proceedings. This notice is recorded at the county clerk recorder’s office in the county where the property is located and is a document of public record. This means that anyone with an interest in the property may see it. The notice states when the lender is planning on foreclosing, ie. the date of the trustee’s sale and the outstanding amount the homeowner can pay to cure the default and stop the trustee’s sale.
More often than not, the default is not cured and the trustee auctions the property to anyone who will buy it. If there are no buyers at the trustee’s sale, the house becomes a foreclosed property and is referred to as an REO - real estate owned by the lender.
What you should know about an REO as a Homebuyer
Most lenders are not in the business of real estate; they are in the business of finance. And so, the house acquired by a bank through a foreclosure is usually put back on the open market. To come up for a sales price for the property, the bank hires a Realtor® and asks for a BPO - a Broker Price Opinion. The Realtor® appraises the property based on similar properties also known as “comps” and offers to list it. Since most foreclosures are fixers, they are usually placed on the market for a substantially discounted price.
As a home buyer of a bank owned home, your concerns are justified. An REO is usually a fixer. The most obvious reason for this being the family that was foreclosed upon was low on finances. If they didn’t have enough to make their mortgage payments, chances are there are quite a few things about the house that went unrepaired. This is also called deferred maintenance. Deferred maintenance can be a small problem, like a leaky faucet, or can hide bigger problems, like a leaky faucet that rotted the bathroom sub-floor.
You should also be aware that as a purchaser of an REO, you don’t receive full disclosure about the house. The bank is not required to provide you with a Transfer Disclosure Statement, partially because the lenders have never been in the home and are unaware of what exactly is wrong with it.
Resolve your Concerns
So is purchasing a foreclosure the best bet? Sure, the price is deeply discounted, but does that make up for everything else? While that's a question only you can answer, the one thing I stress to take the pain out of any future problems: Always, always, always get a physical inspection!
Brokers recommend a variety of inspections, including pest, roof, septic system and a complete home inspection. Disregarding any of these inspections can be a big mistake on the part of a homebuyer. While most banks will not repair any items listed as potential or real problems during these inspections, you can get an idea of how much work is involved in making the home as habitable as you want it and decide if the asking price is worth the risk and work involved. The price you pay for the inspections is well worth its weight in gold.
You, The Homebuyer
With so many bargains out there in short sales, REOs and pre-foreclosures, if you are serious about buying a home at a deeply discounted price, chances are you will find what you are looking for. Do yourself a favor and get all the facts, look hard and long and don’t be scared to make an offer when you find the right one!
Friday, May 15, 2009
Meet the Team
Maurice Anderson-Broker, REALTOR, GRI
Sharing his father’s passion for helping people realize their real estate objectives Maurice Anderson obtained his Brokers license and joined the company in 1976 after graduating from the University of Oregon with a BA degree in Finance and Business Economics.
Maurice is an expert in the southern california real estate market. Always willing to share his experiences and knowledge, he has taught courses at the local community colleges helping others realize their potential in becoming real estate agents.
His professional goal is to serve the client first. Clients who are seeking to purchase a home appreciate the dedication and commitment he shows in partnering with them to view and understand what the current market offers. He takes the time needed to help clients realize their dreams, and works diligently to attain the highest price and best terms for his sellers and the best deal possible for his buyers by providing unique negotiating strategies that have proven successful on homes in every price range.
Susan Anderson- Office Manager
As an active member of the Long Beach community, Susan has a deep understanding and appreciation for the areas she serves.
After earning her BS degree in Psychology and a Masters in Public Affairs-Business Management-Curriculum and Instruction at the University of Oregon, Susan moved to the Long Beach area and raised three children here, gaining an even better insight into local communities, entertainment, services and schools.
Since 1979, Susan has been effectively representing both sellers and buyers in purchases of single-family homes and condominiums, as well as investment properties. She loves what she does and enjoys greatly the interaction and relationships with both clients and other real estate professionals. In addition, Susan works as the office manager, helping to guide other associates through their transactions.
Andrea Bolder-REALTOR, REO Buyers Agent
Andrea is the newest addition to the Anderson Realty team. A former professional track & field athlete and Olympian, Ms. Bolder has nearly eight years of professional sales experience.
Andrea holds a BS in Biochemistry from the University of California, Los Angeles where she attended on a full scholarship and was awarded multiple honors, including All-American, three-time Pac-10 Champion and NCAA National Champion. Upon graduation, she traveled the world running professionally for two years before entering the business arena.
Andrea worked as a sales account manager with a major corporation before committing full time to real estate. The same professionalism and dedication that made her successful in the athletic and corporate world she now brings to her real estate clients and customers.
Let Anderson Realty be your partner in Real Estate!