2009-12-22T05:00:00.000Z

5 Questions to Consider Before Purchasing a Home

Interest rates on the benchmark 30-year, fixed-rate mortgage dipped to a 38-year low recently, giving consumers another reason to consider purchasing a home or refinancing their current one.

Freddie Mac recently stated the average rate on a 30-year loan was 4.71% with an average 0.7 point, the lowest rate since the agency began its weekly tracking of long-term interest rates in 1971. A point is equal to 1% of the loan amount, payable as a lump sum at closing. While the decline wasn?t overly dramatic, the dip is likely to get people wondering whether it?s time to sign on the dotted line.

The 5 following questions may help you decide if now is the time to go ahead and purchase a home or refinance your current home.

Q: Why are rates so low?
A: Since early January, the Federal Reserve has been purchasing mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae in an effort to stabilize the housing market by making homes more affordable for consumers. The Federal Reserve Bank of New York, which is managing the program, plans on purchasing $1.25 trillion of securities.

Q: Are rates expected stay this low?
A: It?s hard to tell, but don?t count on it because the lending landscape is likely to change next year. In September 2009, the Fed said it would gradually wind down the purchase program, ending it by March 30, 2010. That has some in the mortgage lending industry worried.

In a recently published mortgage survey, more than 60% of Bankrate.com?s panel of experts predicted that rates will move higher over the next 30 to 45 days. How much higher is anyone?s guess. Last year at this time, the average 30-year, fixed-rate mortgage was 5.53%.

Q: Why do different mortgage surveys come up with different average interest rates?
A: It depends on which lenders are in their sample, when the survey was taken and whether the rates quoted are the posted rate, the application rate or the commitment rate. Also, some surveys take into account the points paid to secure the rate.

But regardless of the survey, the general consensus is that rates are ultra-low right now and may be the lowest the market will see.

Q: What else does a consumer need to know?
A: The lowest rates are offered to the most credit-worthy customers who can make sizable down payments. Shop not just for the interest rate and the points involved but also for the fees involved, which can vary widely from one lender to another.

If you?re refinancing, remember the bigger the loan, the greater the payoff for finding a lower interest rate. Savvy customers put in their paperwork with a lender and set a ?strike? interest rate at which to lock in the loan, a good move considering rate volatility.

Several refinancing calculators are available online that let borrowers plug in all the required numbers and determine the monthly savings and how long it will take to recoup the expense of a refinancing.

Q: So is now the best time to buy a home?
A: It depends on personal situations. Homebuyers certainly have a lot of factors working in their favor right now?low interest rates, plenty of marked-down homes for sale and an extended and expanded federal tax credit that will expire in the spring.

On the flip side, there?s growing sentiment among analysts that housing prices, which are showing ever-so-minor improvement, may fall further. The reason? Lenders are expected to get better at determining which borrowers will qualify for loan modifications. That means lenders also will get faster at moving homes through the foreclosure process.

Mark Zandi, chief economist at Moody?s Economy.com, recently predicted that housing prices nationally will hit bottom in 2010?s third quarter. That means anyone buying a house now could see the value of their investment initially depreciate.

(c) 2009, Chicago Tribune.

2009-12-11T03:57:45.000Z

Short Sale Troubles

We have successfully completed numerous short sales. The reason why many are having trouble with them is that most agents listing them, sadly don't know what they're doing.

Depending on the lender, Short sales have been approved in 24-48 hours. New systems have been implemented with many lenders which is going to expeidte the process in 2010. My advice is to look for a trained certified distressed property expert in your area. CDPE's are trained to work with distressed properties and can help expedite the SS process.


My offices are located in La Jolla, Mission Valley and El Cajon. I have also expanded my company to Riverside, Orange, Monterey and Sacramento Counties. If you or anyone you know is in distress or looking to purchase distressed real estate, let me know I can Help.

Patrick A. Hale, CDPE
Broker/Realtor
Branch Owner/Manager
www.SDRealEstate360.com

2009-12-11T03:43:26.000Z

How Much For An Earnest Money Deposit?

Deciding how much to put down as an Earnest Money deposit really just shows how motivated you are to purchase the property.

If you are using conventional/fha/va financing to purchase a home with multiple offers and are not having any luck, try increasing your deposit amount. As you may have seen, many REO properties have multiple offer in on them and buyers are shocked to find out that the property sold for less than what they offered. In some cases with my cash buyers, the banks will take the loss and go with a cash offer if it is guaranteed to close.

Most cash buyers I work with put in offers the following way:
1) 15 Day Escrow
2) 10% Earnest Money Deposit
3) 7 Day Inspection Period
4) No Loan or Appraisal Contingency

My last cash buyer purchase a home for $525,000 when other offers were in at $590,000.

So How Do Financed Buyers Compete?
1) 0-7 day Inspection Contingencies
2) Initial Deposit to Be 3% or more. Remember sometimes cash offers put down a 10% Deposit.
3) If you are bidding over the asking price, be sure to provide a verification of funds to show that you are willing to cover any difference between the appraised value and the accepted offer amount.
4) If you are asking for a credit for closing costs, many banks will not approve anything over a 3% Credit for Closing Costs. Make sure your agent includes: "Seller to credit buyer UP TO BUT NOT TO EXCEED 3% to be used towards buyers recurring and non-recurring closing costs."

I am a certified distressed property expert (CDPE) and work throughout the county. My offices are located in La Jolla, Mission Valley and El Cajon. I have also expanded my company to Riverside, Orange, Monterey and Sacramento Counties. Let me know when I can Help.

Patrick A. Hale, CDPE
Broker/Realtor
Branch Owner/Manager
www.SDRealEstate360.com

2009-12-11T03:25:22.000Z

North Park, Hillcrest, Kensignton and University Heights Shadow Home Inventory For Sale

In the North Park, Hillcrest, Kensignton and University heights area there are currently 163 homes that are bank owned of which only 5 are currently listed on the market. Additionally there are 333 homes that have an auction/sale date within the next 180 days and an additional 395 homes have a notice of defaulf (meaning they have not made a payment for 3 or more months).

Out of the 875 distressed properties in the North Park, Hillcrest, Kensignton and University heights areas, only 22 are currently listed on the market for sale. To see the numbers for yourself, go to www.SDRealEstate360.com and view the foreclosure search.

I am a certified distressed property expert and work throughout the county. My offices are located in La Jolla, Mission Valley and El Cajon. I have also expanded my company to Riverside, Orange, Monterey and Sacramento Counties. Let me know when I can Help.

Patrick A. Hale, CDPE
Broker/Realtor
Branch Owner/Manager
www.SDRealEstate360.com

2009-12-11T03:23:25.000Z

Competing With The Cash Offer - Tips & Tricks

The sad truth is that many agents don't know as much as they should about distressed properties. Purchasing an REO asset is very different from purchasing a short sale. The job of an REO agent is to bring in offers within the first week of listing the property. After receiving the offers the asset manager (who gives the business to the listing agent) decides which buyer/offer they will work with. Most often REO's are sold to the offer which is guaranteed to close (aka cash buyers).

Options to Compete with Cash Buyers for REO properties:
1) Remove Loan Contingencies
2) Remove Inspection Contingencies
3) Initial Deposit to Be 3% or more. Sometimes banks will ask for 10% Deposit for cash offers.
4) If you are bidding over the asking price, be sure to provide a verification of funds to show that you are willing to cover any difference between the appraised value and the accepted offer amount.

A cash buyer has a competitive advantage because the cash buyer can realistically close in 7-12 days after the seller accepts the offer.

Short Sale Properties Should Not Be Overlooked, if you are working with the right agents! (Both the Buyer and Sellers Agents). In some cases you can actually get a better deal then purchasing an REO property.

When choosing an agent in this market, make sure they have sold properties within the past 6-12 months. If you are purchasing a short sale, interview the agent. If they are trained as a Certified Distressed Property Expert (CDPE) you are in good hands and almost guaranteed to close. For more information on Distressed Properties (REO, Bank Owned, Short Sale, etc.) visit www.SDRealEstate360.com


I am a certified distressed property expert and work throughout the county. My offices are located in La Jolla, Mission Valley and El Cajon. I have also expanded my company to Riverside, Orange, Monterey and Sacramento Counties. Let me know when I can Help.

Patrick A. Hale, CDPE
Broker/Realtor
Branch Owner/Manager
www.SDRealEstate360.com