What is a CMA (Comparable Market Analysis)?

Before putting a home on the market or listing with a local real estate agent, home sellers obtain a comparative market analysis, also referred to in the industry as a CMA. Sellers use a CMA to figure out the value of their home and what to price their home for sale.

What is a Comparative Market Analysis?

Although reports can vary, from a two-page list of comparable home sales to a 50-page comprehensive guide, the length and complexity of the report depend on the agent’s business practice.

However, standard comparative market analysis reports contain the following data:

• Active Listings

Active listings are homes currently for sale. These listings matter only to the extent that they are your competition for buyers. They are not indicative of market value because sellers can ask whatever they want for their home. It doesn’t mean any of the prices are realistic. The offered sales prices do not reflect market value until they sell, and in buyers market, for example, most sell for a lot less.

• Pending Listings

Pending sale homes are formerly active listings that are under contract. They have not yet closed, so they are not yet a comparable sale. Unless the listing agent is willing to share information about the pending sale – and many are not – you will not know the actual sold price until the transaction closes. However, pending sales do indicate the direction the market is moving. If your home is priced above the list price of these pending sales, you could face longer DOM (Day On Market).

• Sold Listings

Homes that have closed within the past six months are your comparable sales. These are the sales an appraiser will use when appraising your home for the buyer, along with the pending sales (which will likely have closed by the time your home is sold). Look long and hard at the comparable sales because those are your market value.

• Off-Market / Withdrawn / Canceled

These are properties that were taken off the market for a variety of reasons. Usually, the reason homes are removed from the market is because the prices were too high. The median prices of this group will almost always be higher than the median prices of comparable sales. However,listings cancel, also for the following reasons:

1. Seller’s remorse. The sellers decided they cannot part with their home and no longer want to sell.

2. Priced too high. Nobody made an offer or the only offers received were low-ball offers, which were rejected.

3. The DOM were too long. Agents sometimes withdraw listings so they can put them back as a new listing and fool buyers.

4. Repair requests. The homes were once under contract and after the home inspection, the buyer requested repairs which the seller refused.

5. Seller fired the agent. It’s not uncommon for unhappy sellers to fire an agent and hire a newagent.

• Expired Listings

This group will reflect the highest median sales price because they did not sell and were probably unreasonably priced. Some of the expired listings could also show up as an active listing, listed by a new agent at a new price. Listings also expire because they were not aggressively marketed or because the home was in need of repairs.

Examining Comparable Sales

Comparable sales are those that most closely resemble your home. It is difficult to compare a tri-level home to a single-story home. Select the homes from this list that are mostly identical to your home in size, shape and condition, such as:

• Similar Square Footage

Appraisers compare homes based on square footage. Larger square-foot homes are worth less per square foot than smaller square-foot homes. The variance among a group of median-priced homes ideally should not exceed more than 200 to 400 square feet, plus or minus.

• Similar Age of Construction

Ideally, the age of the home – the year it was built – should be within a few years of other comparable sold homes. Mixed-age subdivisions are common. For example, in one area of Sacramento, a subdivision consists of homes built in the 1950s, and then they jump a couple decades to the 1970s. Although the homes are located next door to each other, the homes loaded with character from the 1950s sell for more than their newer Brady Bunch counterparts. If your home was built in 1980, say, and brand new homes up the street are selling for more, you cannot command the same price as a new home.

• Similar Amenities, Upgrades, and Condition

Appraisers will deduct value from your home if other homes have upgrades and yours does not. A home with a swimming pool will have a different value than a home without a pool. A completely remodeled home is worth more than a fixer. Homes with one bath are worth less than homes with two or more baths. Deferred maintenance will count against you.

• Location

Everybody knows that real estate is valued on “location, location, location,” but have you considered what that means? A home with a view of the city, for example, is worth more than a home facing a cement wall. Homes located on busy thoroughfares are worth considerably less than homes on quiet streets. Compare your home to those in similar locations. If your home sits across the street from a power plant, look for other homes with power plant exposure or those located along railroad tracks, among other undesirable locations.

For a FREE CMA of your property visit: www.ModernoRealtyHomeValue.com

Source: The Balance

 

Questions to ask when looking at homes to buy a home

 

If you bought a house with no maintenance issues big or small, let us know. That would be one for the record books. In reality, most homeowners find a problem, quirk, shortcoming, whatever, within the first couple of months.

To actively ferret out your home’s trouble spots and head off headaches, know the right questions to ask before you buy. That doesn’t mean potential problems go away, but you’ll have eyes wide open and can adjust your budget accordingly.

And if you’ve already settled in, getting answers to these key questions will help you get to work putting the shine on your castle. Ask the previous owner, your agent, and your new neighbors for helpful answers.

1. Has There Ever Been a Busted Pipe?

A broken pipe isn’t rare; in fact, water damage caused by a frozen or burst pipe is a leading cause of homeowners insurance claims, at around 22% of all home insurance losses, according to the Insurance Information Institute.

What bursts? Typically exposed water pipes in unheated basements and crawl spaces, along with exterior faucets.

Another prime suspect of water damage: old washing machine hoses.

A good inspector usually can tell if water damage has occurred, and any damage should be disclosed by the previous owner at the time of sale. Nevertheless, you should:

• Make sure exposed pipes in unheated areas are protected with pipe insulation.
• Install frost-proof spigots on all exterior faucets. The spigots let you put a shutoff valve inside your home so freezing isn’t likely.
• Check that washing machine hoses are in good condition and replace, if necessary, with braided steel hoses with brass fittings ($11 to $18 for a 5-foot hose). They’re much stronger and longer lasting than rubber hoses.

The big fallout from water damage is moisture problems you won’t see — behind drywall and trim — which can lead to mold. If you know there’s been a major leak, a mold remediation pro ($200 to $600) will tell you if mold is present and the steps required to remove it.

2. How Old is the Roof?

Knowing the approximate age will give you a good idea of how soon you’ll face — and need to budget for — repairs or replacement. A new roof is no small matter: The “2015 Remodeling Impact Report” from the NATIONAL ASSOCIATION OF REALTORS® pegs the median national cost of an asphalt roofing replacement at $7,600.

The most common type of roofing — regular asphalt shingles — needs to be replaced after 15 to 20 years. Here are estimated average life spans for other types of roofing materials:

• Top-of-the-line (architectural) asphalt shingles: 24 to 30 years
• Metal (galvalume): 30 to 45 years
• Concrete tile: 35 to 50 years
• Wood shakes: 20 to 40 years

If you don’t know the age of your asphalt roofing, use these general guidelines to determine if new shingles are in order:

1. Sand-like roofing granules accumulate in the bottoms of gutters and flow out through downspouts, but otherwise the roofing looks in good shape. Inspect for deterioration in spring and fall.

2. Bare spots begin to appear where patches of protective granules have worn away, and the edges of shingles start to curl — a strong signal that you need new roofing.

3. Shingles become brittle and begin to crack and break. You might be able to replace a few. But if roofing nail heads become exposed (that is, they’re no longer hidden by the overlapping shingles), an expensive roof leak is likely.

Tip: Know how many layers of roofing your house has. Most building codes allow two layers (because of weight concerns): the original roofing, and one re-roofing layer over that.

3. Any Infestations of Termites, Carpenter Ants, or Other Pests?

This should be disclosed by the previous owner at time of sale. But even if the owner dealt with a past infestation — and can offer proof, such as a receipt for pest control — that doesn’t mean the little buggers have been totally eliminated.

Whatever conditions made your house ripe for infestation in the first place — a slow leak under the house, soft rotting wood that attracts insects — may still be present. Plus, many infestations aren’t confined to one house. It may be a neighborhood-wide problem.

Be proactive, because the average cost of a termite extermination treatment around the perimeter of a 2,500-square-foot house is $1,700 to $3,200. Repairs to wooden framing, sheathing, and siding can run from hundreds to thousands of dollars.

You should:

• Ask neighbors about any problems they’ve had with pests.
• Seal cracks and holes around your house.
• Keep attics, basements, and crawl spaces dry and well-ventilated.
• Make sure gutters and downspouts are in good repair, and that the soil around your foundation slopes away from your house at least 6 inches over a 10-foot distance.
• Repair or replace any rotted wood.
• Keep firewood and lumber piles at least 20 feet from your home.

4. Any Pets Buried in the Backyard?

For a grieving homeowner, it can make sense to bury Bosco in his favorite spot under the old oak tree.

On one hand, we sympathize; on the other, it’s kinda creepy. If you didn’t know, you might go out to with a shovel to plant a bunch of hostas. Surprise! You’ve unearthed Bosco.

If you ask this question and the answer is yes, you can:

• Ask where the animal is buried and simply avoid gardening in that spot.
• Ask the previous owner to remove the remains.
• Remove the remains yourself.

If the previous owner refuses your request, you’re not exactly on firm legal ground. Disclosure laws are hazy on this point. Check your state’s disclosure laws.

Most states allow pets to be buried in a yard as long as they’re a prescribed distance from waterways, water sources, and nearby residences (usually 100 to 200 feet); the animal is buried 6 inches to 2 feet in depth; and there’s some sort of precaution (a kitty coffin or a covering of stones would do the trick) so the carcass can’t be dug up by animals. Major cities may not allow any type of pet burial. Aask your county’s board of health and animal control agency for local regulations.

If you find out there’s a buried pet and want it removed, write a letter to the previous owner requesting removal — and keep a copy. If you decide to go to court, you’ll want a document that proves you made the request.

Better yet, hire an attorney to draft a letter. A letter from a lawyer commands attention.

The bottom line: If you drag this all the way to court, it’s probably not worth the aggravation and bad blood. A better solution: Hire someone to dig out the remains and take them away, or do it yourself. Then plant those hostas.

5. Any Paranormal or Nefarious Activity?

Maybe for the sake of party conversation, you’re hoping the answer is yes. Regardless, ask.

Haunted houses fall into the category of what real estate pros call “stigmatized houses” — homes that have been the site of happenings like:

• Ghost sightings and other paranormal activity
• A murder or suicide
• A death due to an accident or unusual disease
• A meth lab

Again, real estate disclosures aren’t consistent. About half of all states have disclosure requirements for stigmatized houses, although most don’t include ghosts.

If the seller reveals the house to be stigmatized, you’ll have negotiating power. A stigmatized house generally sells for 10% to 25% below market value.

A meth lab carries the risk of residual toxic chemicals. If you suspect that kind of sordid history but it’s not being disclosed, you can check old news accounts or ask the local police for records of arrest.

You’ll want to ask the seller and your real estate agent directly if you’re concerned about ghosts and ghouls, and check your local real estate laws to get the local lowdown on disclosing paranormal activity.

6. What are Monthly Utility Costs?

You can’t get away from paying utilities, so know what your monthly budget is up against. Be sure to get an average cost — not the lowest monthly bill — and ask when peak months are.

While you’re at it, ask what kind of energy sources your house appliances use — gas, electric, propane, or a combination. That’ll help you understand where you might upgrade to energy-efficient appliances to save energy costs.

Remember that energy savings starts with the simplest of tasks, like sealing air leaks.

7. Has the Sewer Ever Backed Up?

As properties age and trees and other plants get bigger, roots find their way into sewer lines between a house and the street, causing clogs. It’s a mess for sure, and most homeowner insurance policies don’t cover damage from backed-up sewers.

Plan to have the sewer line cleared (about $150) every other year.

For $40 to $50 per year, you can add an endorsement to your insurance policy to cover damage from a backed-up sewer.

8. Is There Documentation on Warranties?

If the previous owners were conscientious enough to stash warranties and appliance manuals, be sure to get them.

If you get the paperwork, look for purchase dates on major appliances, so you’ll know how old they are and when they might decide to poop out. If you’re ready to upgrade, you can I.D. which appliances are least energy efficient and target those first.

Tip: Keep all warranty cards and product manuals yourself. If you decide to sell, those records show you care about your house and become a marketing asset.

9. How Much Insulation is in the Attic?

After sealing air leaks and weatherstripping around doors and windows, adding insulation is one of the best ways to gain efficiency and keep your house cozy.

Knowing how much insulation you have lets you decide if an investment in more insulation is worth the cost. In colder regions, for example, a $1,500 attic insulation upgrade from R-11 to R-49 saves about $600 per year in energy costs, and you’ll see a payback in about three years.

The U.S. Department of Energy recommends adding more insulation if the thickness of your attic insulation is less than 11 inches (R-30).

Is the previous owner unsure? Peek in the attic. If the attic floor is insulated and you can see the tops of the ceiling joists, you should budget an insulation upgrade. If insulation was installed between the roof rafters — and you can see the edges of the rafters — you can beef up the insulation by covering over the rafters with rigid insulating foam board.

10. How Big is the Water Heater?

To avoid a family rebellion, make sure your water heater is big enough to cover the needs of your household. Here’s a helpful guide from Johnson, Tenn.-based manufacturer American Water Heaters:

Most water heaters have a life expectancy of about 13 years. A new high-efficiency water heater costs $900 to $2,000, depending on the size and model you choose.

11. When Was the Last Time the Septic Tank Was Pumped?

A typical septic system should be pumped every three to five years, according to the U.S. Environmental Protection Association. But the number of people in the house can affect that recommendation. We like this chart from septic installer Van Delden in San Antonio, showing about how often (years) you should pump based on capacity. A pumping costs $200 to $300.

12. Will My SUV Fit in the Garage?

It’s a fairly common doh! moment “Many garages are too low to accommodate the height of a big, newer vehicle.”

Cabinets and workbenches can shorten overall garage space, too, making length an issue.

With full-size SUVs and trucks nearing 20 feet in length and almost 7 feet tall when equipped with a roof rack, sizing up the garage space is a good idea before you buy.

Worst case: You buy without checking and come sailing happily home for the first time to discover — too late — your Chevy Suburban is too tall to fit in the garage.

Knowing everything you can about your home gives you a leg up on surprises, lets you budget smartly, and gives you royal satisfaction with your new castle.

Source: House Logic by John Riha

Getting top dollar for your home

If you’re thinking of selling your property, here are the places in every home you should be paying attention to.

With the prime summer selling season coming, you may be wondering which areas of my property can give me the best return on my investment if i decide to renovate.

Here are the five key renovation strategies that are time-tested, require minimal effort and provide options for every budget. These improvements are designed to get you the best bang for your buck and top dollar for your property when you sell it.

1. Flooring

Every single person in a household will touch the floor every day in varying degrees, whether it’s the bedroom, living room or kitchen. It comes as no surprise that upgrading the flooring is a key feature that will go a long way to capture a buyer’s attention.

Here are some key tips:

• Remove outdated carpets (or at the very least, if that is not possible, ensure the carpets are professionally steam cleaned, looking fresh with no stains, rips or tears).
• Replace old carpets with either laminate flooring, hardwood flooring or ceramic tiles.
• It’s been proven buyers view non-carpeted flooring more positively, as it’s easier to clean and helps with family members who have allergies.

2. Fixtures and hardware

These may seem small on the surface, but can make quite a difference. Fixtures and hardware include items such as door knobs, handles on doors and closets, entrances and exits, cabinet hardware, bathroom and lighting fixtures, etc.

They are easy to replace, fairly inexpensive, come in many color and design options, and provide great options for anyone on a budget. The best part is that the seller gets a great return on investment for not a lot of money. These are simple and cheap, but definitely a worthwhile improvement to any home.

On the other hand, if fixtures and hardware have not been replaced, it can really date a property and make it appear as if it has not been maintained.

Just remember, everyone has to either touch a door or walk through it!

3. Bathrooms

Without a doubt, any money you spend on upgrading a bathroom will be worth the effort, as it’s considered the second-most-important room in the house.

Key upgrades include:

• New tile and grout (floors and shower)
• New faucet and hardware
• New coat of paint on walls or cabinets
• Upgrading or replacing cabinets (this can including swiping out new
• hardware and sanding down old cabinets and repainting them or replacing them completely)

4. Kitchen

This is the most valuable room in the house – if homeowners only have one place where they can opt to do renovations, the kitchen is a sure-fire bet to pay off.

You don’t need to spend a fortune in order to make it look spectacular.

Here are some simple add-ons or improvements:

• Add in a new deluxe faucet
• Change out cabinet door hardware with new handles or knobs
• Upgrade or purchase new appliances (fridge, range and hood, dishwasher, etc.) with a clean look that complements each piece, giving the kitchen a cohesive design
• Add new lighting
• Create a backsplash to help jazz up appearance and functionality
• Rebuild standard cabinetry at half the price (as opposed to custom cabinets or using expensive materials)

5. Add an income-suite

Depending on the city or municipality, if the neighborhood allows for income suites, sellers could potentially add 150 percent to 160 percent of equity into their home by putting in an extra suite.

This allows you the owner to also potentially receive additional income through a tenant that can help pay off the mortgage or as an additional investment. Depending on the specific market or city, demand for double unit homes can rise by more than 25 percent.

Research the market area of the home – if the city is growing, it means more people will move into that city. Also, check if the government and other institutions are planning on investing into that market; for example, are they planning to build hospitals, schools, universities, new transit system, etc.? This may signal that as the community grows, there will be a greater demand for housing, tenant opportunities and increased equity for homes who can support the upsurge.

If you have any questions please contact us, we look forward to talking with you.

Source: Pillar to Post Inspectors

 

 

 

 

 

 

Senior Citizen’s replacement home benefits

As a senior citizen and are looking to downsize your living situation, you can take advantage of certain tax breaks like proposition 60 & 90.

Here is some information that can be useful when downsizing your home.

Propositions 60 and 90

In most cases, these constitutional tax initiatives allow senior citizens to transfer the trended base value from their current home to a replacement property if certain requirements are met. This may result in substantial tax savings.

Who Qualifies?

If you or your spouse that resides with you are age 55 or older, you may buy or con-struct a new home of equal or lesser value than your existing home and transfer the trended base value to your new property.

This is a one-time only benefit. You must buy or complete construction of your re-placement home within two years of the sale of the original property. Both the original home and the new home must be your principal place of residence. A claim must be filed within three years of purchasing or completing new construction of the replacement property. If a claim is filed after the three-year period, relief will be granted beginning with the calendar year in which the claim was filed.

Once you have filed and received this tax relief, neither you nor your spouse who resides with you can ever file again.

Eligibility Requirements:

1. The replacement property must be your principal residence and must be eligible for the Homeowners’ Exemption or Disabled Veterans’ Exemption.

2. The replacement property must be of equal or lesser “current market value” than the original property. The “equal or lesser” test is applied to the entire replacement residence, even if the owner of the original property acquires only a partial interest in the replacement residence. Owners of two qualifying original residences may not combine the values of those properties in order to qualify for a Proposition 60 base-year transfer to a replacement residence of greater value than the more valua-ble of the two original residences.

3. The replacement property must be purchased or built within two years (before or after) of the sale of the original property.

4. Your original property must have been eligible for the Homeowners’ or Disabled Veterans’ Exemption.

5. You, or a spouse residing with you, must have been at least 55 years of age when the original property was sold.

GUIDE TO PROPOSITIONS 60 AND 90

Q. What is the difference between Proposition 60 and Proposition 90?

A. Proposition 60 relates to transfers within the same county (intra-county). Proposition 90 relates to transfers of base value from one county to another county in California (inter-county).

Q. If I qualify for Proposition 60/90 benefits, do I still need to file for a Homeown-ers’ Exemption on the replacement property?

A. Yes. Homeowners’ Exemptions are not granted automatically.

Q. What is the Proposition 60/90 filing deadline?

A. A claim must be filed within three years of purchasing or completing new construction of the replacement property.

If a claim is filed after the three-year period, relief will be granted beginning with the calendar year in which the claim was filed.

Q. My original home is located outside Los Angeles County, but my replacement home is in Los Angeles County. Do I qualify for relief?

A. Yes.

Q. I plan to relocate from Los Angeles County to another county. Do I qualify for relief?

A. You may qualify for relief. Other counties in California have passed ordinances enabling Proposition 90. We recommend that you contact the county to which you wish to move regarding Proposition 90 eligi-bility.

Q. Do all replacement homes qualify?

A. If you meet all other eligibility requirements, relief is granted for a single family residence, condomini-um, unit in planned development, cooperative housing, community apartment, manufactured home sub-ject to local real property tax, and living unit within a larger structure consisting of both residential and non-residential accommodations.

Q. If I make an improvement to my replacement home within two years of pur-chase, can I get additional tax relief for the new construction?

A. Yes, as long as the total amount of your purchase and the new construction does not exceed the market value of the original property at the time of the sale.

Q. What does “equal or lesser value” of a replacement property mean?

A. The meaning of “equal or lesser value” depends on when you purchase the replacement property.

In general, equal or lesser value means:

 100% or less of the market value of the original property if a replacement property was purchased or newly constructed before the sale of the original property, or

 105% or less of the market value of the original property if a replacement property was purchased or newly constructed within the first year after the sale of the original property, or

 • 110% or less of the market value of the original property if a replacement property was purchased or newly constructed within the second year after the sale of the original property.

When making the “equal or lesser value” test, it is important to understand that the market value of a property is not necessarily the same as the sale or purchase price.

The Assessor will determine the market value of each property. In some new developments, the indicated sale price does not include upgrades paid for outside of escrow. The Assessor must consider the value of these upgrades when determining the market value of the property. If the market value of your replace-ment dwelling exceeds the “equal or lesser value” test, no relief is available. It is “all or nothing” with no partial benefits granted.

Q. Can I give my original home to my son or daughter and still get Proposition 60/90 benefits when I purchase a replacement property?

A. No. An original property must be sold and subject to reappraisal at full market value.

Q. If an original property has multiple owners, can Proposition 60/90 tax relief be split?

A. No. The co-owners must determine between themselves which one will get the benefit. Only one origi-nal owner can claim Proposition 60/90 tax relief.

Q. How does the “equal or lesser value” test apply if my original property is a multi-unit dwelling?

A. The “equal or lesser value” test applies to the original single unit that the homeowner calls their principal residence. The mar-ket value of the replacement property has to be of “equal or lesser value” to the market value of the original single unit. An example would be one unit of a duplex.

For More Information:

You may also contact us for any other general property tax questions, on a 24 hours a day basis, in the follow-ing ways:

• Assessor’s Website: To research comparable sales, verify valuations, download forms, learn how appraisals are made, and more, visit: Assessors.LACounty.gov
• Assessor’s Email: Send your questions, comments, and suggestions to: HelpDesk@Assessors.LACounty.gov
• Los Angeles County Property Tax Website: General information regarding property taxes, including how to read your tax bill and where to find answers to your questions. Visit: http://www.lacountypropertytax.com
• Property Information Hotline: Minimal wait times, averaging less than a minute. Fast transfers to expert staff during normal business hours. Just call toll free 1.888.807.2111.
• Automated Interactive Voice System: Information on valuations and taxes can be obtained by entering the Assessor Identification Number from a property tax bill.
• Call 213.974.3838 or the toll free number above.

Si desea ayuda en Español, llame al numero 1.888.807.2111

Source: Los Angeles County Assessors

Moderno Realty Blog: http://www.modernorealty.com/2017/03/28/senior-citizen-s-replacement-home-benefits/

 

How to get your offer accepted

In today’s local real estate market, a “simple” purchase offer is not “just” about price. Savvy buyers know that crafting a unique offer can make the difference between getting that perfect home… or losing it to another buyer.

Our local market is changing daily. That’s why it’s critical today to take the market pulse like a heart monitor. As your local specialist, our insider information is invaluable for buyers like you to nail down the final details no matter if this is a first home – or the next of many.

Buyers looking for a home in a seller’s market need to be educated, savvy on home values, prepared to make a swift and compelling offer, plus they must know how to stay cool and not over-pay should a bidding war erupt.

From experience, here are some essential tips to craft a purchase-offer that can make you a proud and happy new homeowner.

Market

In the neighborhood where you want to buy, are you facing a seller’s market (fewer homes for sale, more buyers), buyer’s market (many homes, fewer buyers) or a balanced market (number of homes about equal to number of buyers)? Having a clear understanding where you stand in the current market can help you be aggressive or compromising in shaping an acceptable offer for a particular home.

Our specific market data will be your guide:

How many months’ supply of homes is available? Less than four months is a seller’s market, more than six months’ supply is a buyer’s market, and in between is a balanced market, as defined by the National Association of REALTORS®.

What is the current trend of home-selling prices? Knowing prices are rising or falling can help you not over-pay. Paying too much risks a low appraisal that could kill your deal.

Sales-price-to-listing-price is another key percentage. If homes are selling at listing price, buyers face a seller’s market. On the other hand, if the sales-price-to-listing-price is a wide spread, buyers may find sellers more willing to accept a lower price than no offer at all.

Motivation

Why is the seller selling? Moving up? Relocating? Downsizing? Estate sale? Is the seller underwater or does he or she have so much equity that price is not paramount? The more you know about the seller’s situation, the more you can tailor your offer details to meet the seller’s needs. Often, what is most important to the seller is revealed in counteroffers and negotiations. Buyers can respond with attractive terms while adjusting other details more important to them than to the seller.

Price

Remember: A smart offer comprises more than the bottom-line price. Sellers examine the entire contract to weigh a buyer’s “net” offer. Is the buyer asking for closing costs, special accommodations, requests for items in the home and so on? These little “extras” can cost the seller money and can make a buyer’s offer look less inviting because the offer price is ultimately being chipped down, little by little, compared to offers with no special requests.

Accommodations

Buyers who want their offer to stand out are flexible on closing dates. If you really want a particular home, whether you get it in three weeks or three months may not make a huge difference to you. Sellers have their own schedule, and if you can adapt to that schedule, your purchase offer (if all else is equal) will have an advantage. Avoid the temptation to ask to move in early, delay closing or change any normal schedule that would lessen your chances of having your offer accepted – especially if other offers are available that don’t request such accommodations.

Contingencies

In an ideal world, sellers prefer a “clean” contract: full price, all cash or pre-approved financing, few to no contingencies or inspections, flexible closing date. In short, the fewer hang-ups in the offer, the better. Financing delays can derail a contract, which is why many sellers prefer buyers with mortgage pre-approval. Offering to have various inspections (home, pest, radon, energy, etc.) done during the first days after offer acceptance also makes your offer more appealing.

Earnest Money (Deposit)

The amount of money you offer with your purchase contract also indicates how committed you are to buying that particular home. The larger the earnest money deposit, the more you look like a serious buyer. We will guide you on local practices.

Days On Market

Sellers new on the market with a price set by recent comps may firmly stand by their price and terms compared to a home that’s been on the market for some time. An offer right after a home has been listed could also be in competition with multiple offers – and today’s buyers need to know how to make their offer stand out to win.

Vacancy

If the home is vacant, you may have a little more bargaining power than on a home that’s still being lived in. If a vacant home means the owners have already moved on and are carrying the costs of the home while living elsewhere, you have a bargaining advantage. Buyers may be able to get special accommodations (including a lower price), but if the market is tight and homes are selling quickly, it’s less likely.

Conveyances

Depending on local custom, appliances may or may not be included with the sale. Specifying exactly what personal property is included or excluded with the sale is important. Smart buyers sometimes request property to convey in their offer but later sacrifice that fridge, chandelier or play set in exchange for gaining another point that bridges a last gap, such as price.

Personal

If you face stiff competition from other buyers, consider a personal appeal to the seller. Sometimes a heartfelt, handwritten letter – sharing how you’ve fallen in love with the home because it is perfect for your family and ideal for your personal circumstances – can make a difference with the right seller.

Professional

To craft the best offer, buyers benefit from working with top local real estate professionals like us. We can help you put together the perfect purchase offer – and counteroffers – to guarantee you end up with a great purchase agreement that saves you money and time.

We hope this information was helpful in your journey to purchasing your home. If you have any questions, don’t hesitate to contact us directly. Thank you, Moderno Realty

 

Thank you, Luis Martinez Gil Moderno Realty

#GetYourOfferAccepted #BuyingAHome #ModernoRealty #AgentLuis

 

How do I know if i’m ready to buy a home?

The number one question clients have asked me. How do I know if i’m ready to buy a home?
You can find out by asking yourself these questions:
* Do I have a steady source of income (usually a job)?
* Have I been employed for the last 2-3 years?
* Is my current income reliable?
* Do I have a good record of paying bills?
* Do I have long term debts, like a car loan?
* Do I have money saved for a down payment?
* Do I have the ability to pay a mortgage every month?
If you answered yes to these questions, you are probably ready to buy your own home.

Call me today to get started,

Luis Martinez, 562-248-6655

Or visit goo.gl/9LJozg  for more information.
#ModernoRealty #AgentLuis

 

Renting vs Buying

As with any major purchase, it pays to be informed prior to making any decisions. As experienced buyers already know, buying a home is a complicated process, so it’s important to start at the beginning and thoroughly understand each step. Whether you’re buying your first home or your third, make sure you have the necessary financial resources and have explored all your options before you purchase a new home.

If you’re a first-time buyer, you should weigh the pros and cons of homeownership versus renting. There are many advantages and disadvantages to consider. For example, renters have the freedom of mobility if they choose to move, but their monthly rent checks do not establish long-term equity or produce any other benefits. And while homeowners’ mortgage payments accumulate equity, these payments are generally higher than rent payments and come with the responsibility to manage the care and upkeep of the property.

Both new and experienced buyers have their own sets of financial considerations when it comes to buying a home. Move-up buyers should evaluate their financial situation to ensure they’re prepared to meet the higher mortgage payments involved with relocating. Likewise, first-time buyers should determine if monthly mortgage payments fit in their budgets. In addition, you’ll need to be prepared to cover the downpayment and closing costs. And, you should consider whether you meet the basic criteria to qualify for a mortgage; lenders prefer that applicants offer a stable job history and a good credit record.

The numbers don’t lie! Here’s a comparison chart you can use to calculate what benefits you at this point, renting or buying. Renting or Buying Chart.

 

Source: http://www.modernorealty.com/2017/01/25/renting-vs-buying/ 

 

How to lower your mortgage rate when buying a home

Mortgage rates took a big leap after the presidential election and are continuing to move higher. Demand for homes is strong, but home prices are hitting new highs and affordability is weakening.

For the average buyer who was thinking about getting into a new home last summer, but didn’t, the monthly payment on that same home is now considerably higher. There is, however, a way to lower it by buying down the rate.

“Buying your rate down, or ‘paying points,’ means you’re paying an extra fee on top of standard loan fees like appraisal, underwriting and a credit report to get a lower rate.

Of course that means you have to have more cash upfront. The math isn’t as complicated as it seems. First, a “point” is 1 percent of the amount of your loan, so if you are taking out a $200,000 mortgage, 1 point would be $2,000. Lenders will lower your rate if you pay that point at closing, or, at the start of the loan.

“If you were getting a 30-year fixed loan of $325,000, you might get two options with and without points. Today the option with zero points might show the rate as 4.25 percent, and the option with 1 percent in points – equal to $3,250 – might show the rate as 4 percent,” said Hebron. “Paying $3,250 at closing to lower your rate by .25 percent lowers your payment $42 per month, and lowers your interest cost $68 per month.”

How do you know if you should buy down the mortgage? It’s all about time – how long you expect to be in the home and have that same mortgage. What is the savings? Here comes more math – this time from Matt Weaver, vice president of sales at Finance of America Mortgage.

“We can calculate this figure by taking the dollar value of the buy down and dividing it by the monthly savings from the lower interest rate, then dividing that figure by 12 months. So as an example, let’s say a homebuyer will need to pay $2,000 in buy down to generate $30.00/month in savings. If we divide $2,000.00/$30.00, we would conclude it would take 66.7 months, or 5.5 years, to recoup the cost of the buy down – now you can ask yourself, ‘Do I reasonably foresee myself staying in this home for at least 5.5 years?’ in order to truly capture the return on your investment,” explained Weaver.

Sounds simple, if you have the cash and the time, but buying down a mortgage, as with everything else in housing, carries some risk.

“As they say, ‘A dollar in the present is worth more than a dollar in the future.’ The risk with the uncertainty in length of ownership coupled with the possible need of that same cash for any unforeseen expenses poses a risk for homebuyers considering a buy down,” said Weaver. “The buy-down strategy can be worthwhile with a longer-term view in mind, longer term being defined as seven years or greater.”

The benefits can also vary lender to lender. Shopping for the best rate is always a good plan but even more important when you’re looking to buy down.

“The break-even time on buying down varies from lender to lender and from rate to rate, generally in a range of five-10 years. Look at different combinations of rates and upfront costs side-by-side and see which makes the most sense for you,” suggested Matthew Graham, chief operating officer of Mortgage News Daily. “Heads-up: Some lenders with stricter interpretations of recent regulatory changes no longer allow this flexibility.”

If you really don’t see yourself in the home for more than seven years, or even 10, you might want to consider an adjustable-rate mortgage (ARM). These carry much lower interest rates and can be fixed for five, seven, 10, even 15 years. They were vilified during the housing crash because so many people took them out and then couldn’t afford the payments when they adjusted, but the ARMs of today are not those of years past.

One more thing to consider is the rate itself. Mortgage rates are rising, but they are still near historic lows. If you are really on the edge of homeownership, perhaps you’re a young first-time buyer, then buying down the rate is probably not for you. The odds are you’re going to want to be more mobile, and staying in the home for seven years is longer than it sounds. Bailing out of the home before you expected is a real risk.

“The other risk of buying down your rate is that rates drop after you do so,” cautioned Hebron. “For now that risk is low. The Mortgage Bankers Association is predicting that rates will rise about .375 percent from current levels during 2017.”

While rates are expected to rise, the experts have been wrong before. Rates could just as easily come down and credit availability could loosen up, depending on how the new administration tackles mortgage reform. Rates are also sensitive to global financial markets, which are always a wild card, and especially so now.

Source: Dian Olick-CNBC Real Estate Reporter

http://www.cnbc.com/2016/12/29/rising-mortgage-rates-making-you-nervous-heres-how-to-lower-yours.html

 

Five interview questions you need to ask your realtor!

If you’re a first-time homebuyer, you may be wondering how to start the process. After browsing homes online, the next step for homebuyers is often choosing a Realtor.

But how do you find the best ones out of all the available choices?

Here are the five questions to ask your real estate agent:

1. What is your experience working with first-time homebuyers?

Oftentimes, first-time homebuyers will rely on a personal referral from a family member or friend when they start the buying process. While this is a great way to be introduced to a real estate agent, you need to make sure the agent has the skill set and patience to work with a first-time buyer. A real estate agent should take the time to walk through the entire purchase process from loan pre-qualification, a needs analysis (what are you looking for, the area you want to live, commute times, price point, etc), how to look at homes objectively, reviewing the contract with you prior to writing an offer, how a contract will be written to your benefit, funds needed to close, funds needed AFTER closing, closing time lines, etc.

2. How long have you been in the real estate business?

While there are many excellent agents that are new to the business, making sure you have experience working on your side is a key to your success in finding and negotiating a great deal. Working with a new agent or even an agent who has had his/her license for years, but has not closed a lot of transaction may not be in your best interest. Don’t get me wrong, there are some exceptional agents who have not closed a ton of transactions, but you should consider experience over someone you “like.” You want to make sure your agent is knowledgeable about writing offers with the terms working in your favor.

3. Are you working for me and in my best interest throughout this transaction?

Buyers often call on a home for sale from a sign in the yard, and the listing agent wants to show you the home. The listing agent has signed a contract with the seller to work on their behalf. They cannot work for you and the seller at the same time while trying to get both sides the best deal. If you do hire a real estate agent that also works with sellers, ask them up front how this will work if you are to view a home they are selling. Buying at a discount or at terms that work in your favor are extremely important when buying a home for the first time. I like to say that you earn your equity in the purchase of the property, not necessarily when you go to sell the home, but when you buy. Equity is wealth. You will need someone working FOR you and in your best interest.

4. How will you communicate with me?

The right amount of communication from an agent should reassure you that the agent is working hard to find you the home of your dreams. Buyers should hear from their agents without prompting. Agents should communicate often about open houses, new listings, setting up showing times, and changes within the market.

With prices high and inventory low in the current market, there’s likely to be multiple offers on the home you want, and a breakdown in communication could be the difference between an accepted and a denied offer. Ask how often the agent will communicate and what’s his/her preferred method. Will he/she primarily use email or phone, and how does that lines up with what you’re looking for?

5. Are there any fees I need to pay you?

A buyer’s agent is paid by the seller in almost all transactions. However, asking this question is going to be important so you know of any fees you may be responsible for at closing. Some agencies charge a “transaction fee” which may or may not be negotiable.

Source: Kelsey Ramirez, Housing Wire

 

http://www.modernorealty.com/2016/11/16/five-interview-questions-you-need-to-ask-your-realtor/

 

 

 

How to save your credit through the holidays while buying a home.

We’re roughly one month away from the beginning of the busiest shopping season of the year. Millions of people will descend on shopping malls and retail websites to buy holiday presents. And while credit scores are not likely at the top of any gift-givers’ priority lists, you’d be surprised just how active those scores might be.

First and foremost, if you apply for a new credit card or higher spending limits on existing cards for the holiday season, the card issuers will probably request your credit score from one or more of the national credit reporting companies (CRCs), Equifax, Experian and TransUnion. The same is true if a new car is on your shopping list or if you choose to open a store credit card account. Just as they would at any other time of year, those score inquiries from lenders can cause a dip in your credit score.

The shopping-season strategy here is twofold: You want to maximize your score before applying for this holiday-related credit, and you want to avoid having these holiday loans lower your score in advance of any major borrowing you may be planning in the early months of the new year.

Since you want to get the best available borrowing terms on any new loans you seek for the holidays, you should try to get your credit score as high as possible before applying for credit. Ideally that means you’ve got your outstanding card balances as close to zero as possible and at 30 percent or less of their spending limits. Ideally, it also means you’ve allowed a few months of timely payments to pass since the last time you applied for credit, since inquiry-related score drops typically rebound within a few months, as long as you continue making your payments on time.

Conversely, if you plan to seek major loans in the spring (e.g., if you’re considering a new home or car purchase in spring or early summer), be aware that your holiday-season borrowing could keep your credit score from being in peak condition when you apply for those loans.

So, what do you do? There are several ways you can protect your scores during the holiday season to avoid any inadvertent negative score impact.

Credit scoring systems will consider and potentially penalize you if you have too much credit card debt appearing on your credit report, so the goal is to prevent holiday debt from showing up on your credit reports. Here’s how:

Any part of a new outstanding balance that you pay off before it appears on your monthly statement will never appear on your credit reports. So log in to your credit card account and make a payment before the Statement Closing Date, which is almost always exactly 21 days before your due date. If you do this routinely, you can get the convenience and safety of using credit cards for holiday shopping without hurting your credit score.

If you start using that trick before the holidays, you’ll be rewarded with a higher credit score in the new year. Think of it as an early resolution.

Source: Vantage Score

 

Link: http://www.modernorealty.com/2016/11/01/how-to-save-your-credit-through-the-holidays-when-buying-a-home/