Category: Home Buying Tips

How Your Real Estate Agent Should Assist You with Financing Your Home

John LaRosa 13/03/2015


first-time homebuyers feel uninformed about their loan

Have you ever heard the saying that when dealing with a serious or complex medical condition you should always have a friend or family member accompany you to the visit and see the doctor with you? The reason for this is to increase your likelihood of asking questions when you are confused. The confidence afforded by another person on your side helps create a much more open dialog about the situation. This is why real estate agents are so important for first-time homebuyers and it is one of the most important aspects of what real estate agents do.

The Mortgage Challenge infographic from the California Association of REALTORs shows that a significant portion of first-time homebuyers feel uninformed when it comes to lending. What can you and your real estate agent do to help prevent this?

Real Estate Agents and Financing

How do real estate agents assist you in the lending process? What is your real estate agent’s role in helping you obtain financing?

  • To “hook you up” with secret savings that only they know about???

OR 

  • To make sure you understand what’s going on, what your options are, and what the consequences of those options are???

When I am assisting a client who is purchasing a home with financing (a loan), it IS NOT my job to find them the best “deal” on a loan. It IS my job to make sure they understand the options they have at their disposal and what the different effects of those choices are. In doing so, we (myself, my client, and the lender) are striving to find the loan that best suits your unique situation.

Always ask questions

To return to the medical analogy, your agent should be “in the room” with you and your lender, figuratively speaking. If you are a first-time buyer and are completely new to lending you should be asking your lender (or prospective lenders) lots of questions. Your agent should be able to help you understand the situation and to interact with the lender when you aren’t getting the information or attention you need to feel informed and confident.

The lender’s responsibility goes beyond just acquiring the loan. They’re the one who knows how the lending process works, they want you to get the loan, and they should want you to get the loan that best suits your situation. It’s their job to help you understand what that means.

When a lender suggests an option it is critical that you understand the different consequences of that choice. With lending there is no universal secret that is going to save you money. There is no clandestine piece of information that no one wants to tell you about. It is better to consider the situation as a series of options with different consequences. These different options and consequences can be more or less beneficial depending on your financial situation and your long term plans.

Let’s say the lender suggests “buying down your interest rate.” This could be very beneficial to you depending on your situation. It also might not be possible in your unique situation. What’s important is that you ask the lender to explain to you (until you understand) what this choice means. Some quick questions to consider…

  • How does that change the cost of my loan, now and in the long run?
  • What is the benefit?
  • What is the consequence?

Buying down your interest rate means that you are paying an upfront fee to reduce the amount of the interest rate. You pay more money initially but save money over the life of the loan. If you aren’t planning on keeping the home long, this is not a good option. If you are trying to pay down the loan aggressively or are likely to be in the home for a significant amount of time, this could be a great option for you. You pay a couple extra thousand initially but are paying less in interest each month. If your lender can’t satisfactorily explain this to you, you shouldn’t agree to it. But you can always ask your agent for advice.

Don’t Be Afraid to Ask Your Agent

Tell the lender that you’d like to discuss the situation with your agent first. Your lender shouldn’t have any problems with that. If your agent feels like something needs to be clarified he or she should contact the lender to get clarification.

The numbers represented in the document below represent a failure on the parts of either the agents, lenders, or both. It is also YOUR responsibility to speak up when you need more information and to not stop asking questions until you understand what you are getting in to. Do that, and you will have a much more rewarding and empowering experience in financing your home purchase.

Have Any Questions? Leave Your Comments

If you have a question you’d like to ask feel free to include it in a comment or contact us directly.

And as always please share this article if you found it useful.

 
Read More

When is the Best Time of Year to Buy a Home?

John LaRosa 19/12/2014


When is the best time to buy a home? The data points to winter

What Time of Year is a Good Time to Buy a Home?

One question I hear consistently from clients and acquaintances is, “When is the Best Time to Buy a Home?”

Well the fact of the matter is that deciding when to buy has more to do with your own personal situation than it does with the time of the year. But like all types of sales there is a cycle and there is a season that favors buyers over sellers. However, the most favorable season for buyers is also the most difficult season to buy during. Have you figured it out yet? You may have already guessed Winter (based on the main graphic) and if so, you’re correct.

Cold Weather Slows the Housing Market

Winter in California might not be as bad as many (most) states but it is still cold (relatively speaking), rainy, and kicked off by the most demanding travel holidays of the year. There are less homes for sale in Winter because it is difficult to sell your home when you’re planning holiday trips, purchasing gifts, or giving back to your community. There are also less buyers on the market because people are simply less motivated to go out and shop for a home in dreary weather or while recuperating from the holidays. I know I’d rather be cozy inside than driving around in the wind and rain and holiday traffic.

Winter puts a chill on the housing market but Spring heats it right back up again

Because of these factors homes sales slow during these months and price increases tend to slow even more. This can be seen in the yearly cycle of month-to-month housing price increases. Every year price increases rise during the warm Spring and Summer months before slowing and sometimes reversing slightly in the Winter months. Click the infographic or view the full version below for a more detailed look at this seasonal trend.

If you’re in situation where you don’t have a rapidly approaching deadline to purchase, the Winter months can be a great time to buy. It may be a little more difficult to find your dream home because of the reduced inventory of homes but when you do find your new home you’re likely to have significantly less competition and, in turn, greater leverage when negotiating.

I just recently helped a client purchase a condo in Toluca Lake, CA. Initially listed at $439k, two weeks in, the Seller, motivated by a new purchase in Marin County, decided to drop the price to $424k. Based on the comparisons I found I knew they could get that price but as November approached the market was already slowing and they’d probably have to wait for a full price offer. We came in at $420k  and asked for some closing cost concessions from the seller. The offer was accepted and we closed just after Thanksgiving. Had the condo been listed in March of 2014 it may well have garnered the initial $439 asking price but my client got a great deal because we had no competition.

Get Pre-Qualified Now So You’re Ready to Buy

If you are considering buying during the Winter season then it’s time to get Pre-Qualified with a lender. There’s no obligation, no cost, and it is crucial to determining what you can accomplish now or what you need to do to accomplish your goals. Housing prices will be heating up with the weather before you know it, get started today.

We hope you enjoy our Infographic, “2015 Winter Housing Prices and Spring Growth” If you have any questions or would like to talk about any of this information we’re available to chat. Call or Email us Today!

Leave Us Your Comments

Do you disagree with what we’ve said? Have you had an experience that confirms this information? Tell us about your personal experience and leave your comments and concerns below. We’d love to hear what you think. Or feel free to share it with your family, friends, and colleagues.

 
Winter puts a chill on the housing market but Spring heats it right back up again
Read More

Perks of a Buyer’s Agent

Mary Pizzimenti 18/07/2014

Title Image | Who's Who and Who Pays for What When Buying a Home

Are you in the market to buy a home? Finding the right home at the right price can be difficult, especially if you don’t have the necessary experience or knowledge to negotiate a good deal. If you have the right professional team that knows how the process works from beginning to end, it can help make your home buying experience far more enjoyable.

Who Pays For A Real Estate Agent’s Commission?

There are many people involved in the home buying process, including the seller, buyer, listing agent, and possibly buyer’s agent. The seller almost always uses a listing agent to put the home on the market in hopes of attracting a buyer. The seller is responsible for paying the listing agent through commission out of the selling price of the home. In addition to the listing agent on the seller’s behalf, a buyer’s agent can (and should) be used by the buyer. The buyer’s agent represents the buyer’s best interest when buying a home. This agent is paid out of the same commission given to the listing agent.

If you’re the one looking to buy a new home, having a buyer’s agent on your side is always a great idea. By using a buyer’s agent, you will have a knowledgeable professional who will be able to negotiate the best deal for you, not the seller. You’d think that hiring a buyer’s agent would cost you money, but since a buyer’s agent is paid through the commission on the home, neither you nor the seller will have any additional costs. Instead, the listing agent and buyer’s agent will split the same amount of commission in half. This allows you to get the best deal at no cost to you at all.

We hope you enjoy our Info Graphic, “Who’s Who (…and Who Pays for What) When Buying a Home?” If you have any questions or would like to talk about any of this information we’re available to chat. Call or Email us Today!

Leave Us Your Comments

Did you know how real estate agent commissions were paid? Was there something you believed about the commission that isn’t true? Do you have any further questions about real estate commission? Scroll all the way to the bottom of the page to leave us your comments. We’d love to hear what you think. Or feel free to share it with your family, friends, and colleagues.

Infographic explaining why you shouldn't purchase a home without representation. In California Real Estate a Buyer's Agent doesn't 'cost' the buyer anything. Since the home costs the same price whether you have an agent or not why shouldn't you have an expert on your side?
Read More

How to find Your Dream Home or Condo in Roseville

Mary Pizzimenti 21/03/2014

In today’s housing market, homes sell incredibly fast. Whether you are looking for condos in Roseville, CA, or a single family home in Placer County, it can be overwhelming to attempt to locate your dream home if you just jump in blindly.  Our listings normally receive an offer within a week which means that if you find the home of your dreams, you must act quickly! 

The first step to finding your dream home is to determine exactly what you are looking for in a home. Do you want the advantage of a community pool or exercise room in your condo community? Is it necessary that you be in a certain school district or have a room to use as a home office? Make a list of your requirements before you begin looking. This will help narrow down your search. 

Check online realtor listings and enter some of the things you are looking for in a dream home. This will produce a list of possible homes that meet your needs. You can use online search tools to create a list of the homes you would like to see so that you can present this information to your real estate agent. Your agent will show you the homes you are interested in, and he or she may even have listings you didn’t know about that fit your criteria. You don’t just stumble across a dream home; you have to know what you want in order to find it. 

The more information you can provide to your real estate agent about what you are seeking, the better he or she will be able to find the right home for you. A real estate agent who specializes in condos can help you find your next home in this beautiful area. 

As mentioned previously lets take the links out of the body of the article and place them in the related links. Our blog module provides up to three related links to be entered per post. They should be… 

Read More

Looking Out for My Buyer: A Lesson in Purchasing Rural Property in California

Mary Pizzimenti 16/10/2013

There is a tremendous amount of rather contentious debate about the value (or lack there of) in purchasing Real Estate with a Buyer’s Agent representing you. As a California Real Estate Broker it is obvious where my opinion falls in this debate. Although I do believe there are individuals who are capable of handling the transaction on their own, most individuals DO NOT belong to this group. I’m not here to debate this matter. I’d rather tell you about an example of what it is that a Buyer’s Agent does to protect their Buyer’s best interests; about what it is that I do and what value I bring to the relationship.

A recent client of mine had entered in to a contract to purchase a home on a 3 acre parcel of land in Colfax, CA. The property was an older home and his plan was to remodel it and resell the property in a few years. Our offer was accepted and we were working our way through the Contingency Period. During this period it is the Buyer’s responsibility to do his or her due diligence to make sure they know the condition of the home they are about to purchase. This means it is my responsibility to make sure my client is informed and aware of the results of the various inspections that determine the condition of the property.

One of the last contingencies that had to be cleared was the Domestic Well Inspection. This well inspection tests the property’s well for drinkability and the volume of water it yields. Often rural properties in Placer County are not on sewage or water systems and so septic tanks and leech fields are required to address the waste and well water is required to supply water to the property. If the well doesn’t supply a large enough volume of water, measured in gallons per minute (GPM), it will be very difficult for the well to provide enough water when it is needed by the people living on the property. Generally speaking, anything less than 10 GPM is highly undesirable and would probably require the addition of a storage tank or the drilling of a deeper well.

When I received the Well Inspection Report from the Listing Agent I noticed that the first page was missing. The first page is the page that contains the results of the GPM test. So I contacted the Agent and asked for it. She told me that she had sent it. I informed her that I did not receive it and that she needed to resend it, she eventually did. When I saw the report’s results I was shocked. The inspection results measured the well’s yield at 1.6 GPM. This is well below (no pun intended) the 10 GPM needed to supply water to the Colfax property on demand. Even if the Listing Agent and Owner had no idea the GPM would measure so low, it should have been brought to our attention as soon as the report was received. Instead, they tried to sneak the report past me and my buyer.

Anyone who knows anything about buying and selling rural properties knows that 1.6 gallons per minute would create a very difficult and uncomfortable living situation for my client and his family of five. Costly and time consuming work would need to be done to the property in order to remedy the situation. And even that is shaky at best, as there’s no guarantee that drilling the well deeper would necessarily improve its performance. This meant the Placer County property was no longer as valuable as we had thought and it certainly looked like the Agent had done everything possible to prevent us from discovering this detriment. Needless to say my client and I were terribly unhappy with the deception and we canceled the contract within hours of reading the report.

Yes, it is entirely possible that Randy, my buyer, could have noticed this discrepancy himself. But it’s also possible that with all the changes going on in his life he may have been distracted and missed it. He would’ve ended up purchasing an overpriced property and still have had to spend $20,000 to $40,000 to improve the condition of the well. Or even worse yet, it may have been impossible to improve the performance of the well. The Listing Agent did go out of her way to prevent that information from being seen. That is of course if we are assuming that she didn’t “accidentally” forget to include the ONE page of information that would make the property practically unsellable. But it doesn’t matter if Randy would have noticed their ruse or not because I caught it and we immediately called them to task.

If there’s one thing I’ve learned in Real Estate, and in business in general, it’s that there is always something that can go wrong; that WILL go wrong. Staying alert and always looking out for your interests, being prepared for those problems that will arise, and knowing how to fix them; this is what I do. When I am representing you I am looking out for your best interests in your California Real Estate transaction, just like a lawyer looks out for his client’s best interests in court. And you know what they say about someone who represents themselves in a court of law.

I am very well informed concerning purchasing properties that have wells, and I was pleasantly surprised that Mary and her team were as well informed as I was. I am interested in protecting my own interest, but, in my experience, it is rare to have a team that is fighting for my rights as hard as I do. Thanks Mary and team!
~Randy Bivens, PHA Realty Client

Read More