Nevada City Virtual Tour

Wednesday, May 30, 2012

Buyers, What surprises do you most fear?

I’ve long believed that the number one source of stress experienced by home buyers is all the unpredictability that lies along the home buying timeline: the prospect of unpleasant surprises that seems to lurk around every corner. Fact is, there are some commonly arising surprises that foul up buyers’ plans and expectations, killing deals and leaving expectations dashed and emotions frayed in their wake. These days, that list includes everything from homes turning out to cost more than the buyer expected to appraisals coming in below the agreed-upon purchase price.

Here’s some good news: there are steps you can take to manage the risks of being taken by surprise while you’re in the process of buying a home. As I see it, they fall into a handful of buckets. Here are the five big categories of actions you can take right now to minimize your chances of having an unpleasant home buying surprise:

1. Study up. As a smart manager of your life and your finances, it’s your duty to get as detailed a primer on the ins and outs of home buying as you need to feel comfortable and confident as you move forward with the process: what lenders require, the nuts and bolts of a purchase transaction, that sort of thing. But when you’re specifically seeking to minimize the risk of unpleasant surprises, you’ve got to take your real estate education to the next level, and study up on some very specific subject matter: your local market, in real-time.

What I mean is that markets vary a lot from place to place, and individual real estate markets change very quickly. If you’re the sort of savvy buyer that’s been stockpiling your cash for a year or more in preparation for buying, it’s entirely possible that the market dynamics you’ll face when you get out there will be very different from those dynamics which inspired you to buy in the first place. It’s a pretty unpleasant surprise to expect to have your pick of the market, then lose out on the first few ‘dream houses’ you find to other offers.

Studying up on your local market empowers you to rejigger your search and offer strategies to be successful without having to first experience these sorts of traumas and dramas. It may also allow you to explore new alternatives for achieving the results you want, like buying via an online auction or

Neighborhoods where homes lagged for months on end a couple of years ago are starting to seem some new life this spring, as buyers like you who have been waiting and saving have begun to sense the bottom of the market might actually have passed. Anecdotally, I’m hearing many more local agents across the country reporting receiving 2 or 3 offers on homes they couldn’t sell at all 18 months ago, and many more buyers reporting that the ‘good’ homes come on and off the market much more quickly than anytime in recent years.

But, again - this stuff is hyperlocal. So ask your agent to help you understand the actual data of the housing market in the neighborhood(s) you’ll be hunting in. Specifically, look at how the number of days a home stays on the market (DOM), inventory levels and the list price to sale price ratio have been trending over the last 6 months to 1 year.

2. Team up. It never ceases to amaze me the amount of expertise and plain old help that goes untapped - and the avoidable stress and expense that are incurred - because buyers don’t even think to express certain concerns to their real estate and mortgage pros. If there are particular potential surprises or other issues that keep you up at night, you should clearly express those to your team of real estate and mortgage professionals, and enlist their help in keeping them at bay.

Obviously, not all surprises are within your agent or mortgage broker’s power to prevent; and many of the risks that you worry about are things they’re surely already making their best efforts to manage. But if your team knows that your closing cost cash is to-the-penny tight, or that your move-in timeline is hair-trigger touchy, that knowledge might inspire them to call in favors like a free rate-lock extension from their rep at your lender, or to set up a strategic solution, like negotiating your ability to move in a few days before closing.

This knowledge also gives them the signal to educate you about what factors will impact the particular surprises you most dread. And that, in turn, allows you to go from wondering in the wilderness of unknown fear factors, to being able to help them smartly spot issues before they snowball into badness.

For example, the date on which you close your transaction during the month has an impact on how much cash you’ll need to bring to the closing table. Generally, the amount of prepaid interest you have to pay if your escrow closes the fourth week of the month is much less than what you’d have to pay if it closed, say, the second week of the month. But think about that: if you’re aiming to close at month’s end to keep your closing costs low, and escrow closes even 10 days late (not at all uncommon, these days) you could end up with a big spike in the cash you’re required to bring in to close.

Letting your team know that this would break your heart - and your bank - can help them quickly act and react to either keep closing on track or, if that’s not possible, pushing it out to avoid jacking up your closing costs.

3. Keep up. Like this closing date/closing costs debacle-in-the-making, there are a number of critical dates and deadlines in a home buying transaction by which decisions and deliverables and course-corrections must be made or the seeds for a scary surprise take root. And only some of the time are you, buyer, in control of making sure those timelines stay on track; many other times, loan underwriters, appraisers, inspectors and lenders are responsible for achieving these important must-meet dates. What you can control is your own awareness of all these calendar points, so that you can make more or less urgent nudges and check-ins, as needed, in order to ensure that things either (a) stay on track, or (b) don’t take you by surprise, if they get off track.

Ask your agent and mortgage broker to help you create and stay on top of an escrow calendar containing all the major and minor deadlines and tipping points of your transaction, as well as to leverage this tool to avoid surprises throughout the transaction.

4. Fess up. It’s one thing to be surprised by something you have no control over. But imagine how you’d feel if your deal was killed by a surprise that you (and only you) could easily have avoided! I’ve personally seen this happen a number of times. One buyer I know ended up losing her dream home - and her deposit money - due to false information on her loan application. She’d apparently gotten away with it on a number of credit applications, but a mortgage is an entirely different animal.

Another nearly had the same tragic outcome as a result of telling her team that she was divorced when, in fact, the divorce was not final. (The bank then wanted to vet her soon-to-be ex-husband’s qualifications for the loan. And his credit was really, really bad. Really.)

When you are in the loan application process, keep in mind that it in the world of lending, technicalities matter - a lot. This is not just a conversation with friends; rather, it’s about as official as you get. So, the things you normally say and do to describe your life, the things that make up your aspirations and plans, the way you see things turning out in the near future - none of these things count as fodder for your loan application. What does count? The hard cold facts of your status quo situation - right now. So, be brutally honest about the state of your life and your finances, warts and all. This might creates obstacles you’ll have to workaround up front, but I assure you that is preferable to getting caught in a falsehood - intentional or otherwise - and having to scramble to try to salvage a deal days before closing.

5. Fluff up. Your cash and time cushions, that is. The reason home buying surprises are so stressful is that they threaten to do one of two things: (a) screw up our timelines for moving, or (b) force us to come up with more cash than we have at hand to close the deal. If you get just a few days away from closing, bags and boxes packed, and are told you need to bring in just an extra few thousand dollars to close the deal, it can feel like your home - actually, your life! - is being held hostage for extra cash, on the one transaction you’ve already spent years saving up for.

The least stressed-out buyers are those who have built in time and cash cushions to their home buying and moving plans. Give yourself the gift of a few weeks of planned overlap in your ability to occupy your last home and your future one; even if that means you wait to give your landlord notice until you’re well into escrow, it empowers you to avoid looking for hotel rooms and being distressed by the very predictable, very common occurrence of a late escrow closing. Similarly, if your home buying-related financial plans involve maintaining a nice, fluffy cushion of so-called emergency cash even after your planned down payment and closing costs, you’ll be less likely to go off the deep end if the lender requires you to drop $500 on repairs to get the deal closed.

Gary Tippner is Short Sale and Foreclosure Resource Certified.

Call 1-877-311-GARY
"Eight Seven Seven Three Eleven... Gary"

Sunday, May 27, 2012

5 DIY Projects to Increase Sales Value by More Than $10,000

5 DIY Projects to Increase Sales Value by More Than $10,000

 It doesn't have to cost a fortune to improve a home and make it more sellable, according to HomeGain’s 2012 National Home Improvement Survey.

HomeGain surveyed nearly 500 real estate professionals nationwide to determine the top do-it-yourself home improvement projects that offers some of the biggest bang for your buck when selling a home.

“In a buyer’s market, sellers need to dress their homes for success before putting them on the market,” says Louis Cammarosano, HomeGain’s general manager. The survey shows “that do-it-yourself home improvements like cleaning and de-cluttering and lightening and brightening your home are cost-effective ways of increasing your chances of selling faster and closing closer to the asking price than homes rushed to the market with no improvements.”

Here are the top five projects that real estate professional recommend to their clients–projects that have the potential to offer some of the highest returns on investment at resale, according to the 2012 HomeGain survey:

1. Clean and declutter

What to do: “Removing personal items; wash and clean all areas of inside and outside of house; freshen air; remove ALL clutter from furniture, counters, and all areas of the home; organize closets; polish woodwork and mirrors.”

Estimated cost: $402

Potential ROI: 403% or $2,024 to the home’s sale price

2. Lighten and brighten

What to do: “Open windows; clean windows and skylights inside and outside; replace old curtains or removing curtains; remove other obstacles from windows blocking light; repair lighting fixtures; make sure window open easily.”

Estimated cost: $424

Potential ROI: 299% or $1,690

3. Repair electrical and plumbing

What to do: “Update leaky or old faucet spouts and handles; repair leaks under bathroom or kitchen sinks; laundry room pipes; toilets should be in good working condition; remove mildew stains.

“Update electrical with new wiring for modern appliances and/or Internet and other audio/visual equipment requested in homes today; door bell should work; service sprinkler systems; fix lights and outlets that do not turn on; replace old plug points with new safety fixtures.”

Estimated cost: $808

Potential ROI: 293% or $3,175

4. Landscaping

What to do: “Front and back yards; add bark mulch; rake and remove leaves, branches and debris; plant bushes and flowers; add planters and hanging plants; mow grass; water lawn and plants; remove weeds and dead plants; manicure existing plants; any yardwork that improves the curb appeal of a home.”

Estimated cost: $564

ROI: 215% or $1,777

5. Staging

What to do: “Add fresh flowers; removing personal items; reduce clutter; rearrange furniture; add new props or furniture to enhance room/s; play soft music; hang artwork in walls.”

Estimated cost: $724

ROI: 196% or $2,145

However, the survey finds that the home improvement projects that offer the highest potential price increase to a home’s resale value continues to be updating the kitchen and bathroom. Home sellers could potentially see a $3,255 price increase to their home at resale by tackling kitchen and bathroom projects, according to the HomeGain survey. But those projects aren’t usually cheap to do.

Gary Tippner is Short Sale and Foreclosure Resource Certified.

Call 1-877-311-GARY
"Eight Seven Seven Three Eleven... Gary"

Thursday, May 24, 2012

Types of 1031 Exchanges Investor Update

I have good news for you if you are a real estate investor; rents are going up across the nation. In Philadelphia, rents are up 15% compared to last year, Chicago saw median rents rise 8.6% in the past 12 months and Minneapolis was up 10%.  In San Francisco the rental market is on a tear with crowds of potential tenants lining up to pay 15% more to rent this year versus last.  

Rising rents mean more attractive returns which is leading more  investors to the real estate market. In Southern CA, absentee buyers, investors and second home purchasers accounted for 28% of all home purchases last month.  The historical avearage is 19.2%. 

If you are a new real estate investor or a seasoned veteran, one thing for certain is that when it comes time to sell, you better have a firm understanding of how to protect your hard earned dollars from the tax man. 

  Types of 1031 Exchanges 

Real estate investors looking to 1031 Exchange have some flexibility in how they structure their transaction.  The Internal Revenue Code allows for the following four types of 1031 Exchanges:

Simultaneous Exchange
In a simultaneous exchange, the relinquished property is sold and the replacement property acquired on the same day, with concurrent closings. The simultaneous exchange is rare and investors should still use an Exchange Accommodator when doing a simultaneous exchange.

Delayed Exchange
The most common method of exchanging, the delayed exchange, allows investors to sell a property and then acquire replacement property within 180 days.

Reverse Exchange
The reverse exchange allows investors to acquire replacement property prior to selling.  The reverse exchange can be more complicated however, as investors cannot own both the new replacement property and (soon to be) relinquished property at the same time. An asset exchange company, as an Exchange Accommodating Titleholder will need to go on title to one of the two properties involved in the exchange. Investors considering a reverse exchange should contact Asset Exchange Company well in advance of closing on the replacement property.

Construction/Improvement Exchange
The construction exchange allows investors to use exchange proceeds to build on land or improve an existing property. The construction/improvement exchange is often used to acquire a 'fixer' and do improvements on the existing structure. The pitfall with a construction/improvement exchange lies in the fact that all exchange funds need to be spent on or before the 180th day of the exchange.


 1031 Exchange Language

When doing a 1031 Exchange, the law does not require that you insert specific 1031 Exchange language into the Purchase and Sale contract.  However, it is good business practice to do so. Below is a sample of the language that may be included in a sales contract:

Sale of Relinquished Property
"Buyer is aware that Seller intends to perform an IRC §1031 tax deferred exchange. Seller requests Buyer's cooperation in such an exchange and agrees to hold Buyer harmless from any and all claims, liabilities, costs, or delays in time resulting from such an exchange. Buyer agrees to an assignment of this contract to  asset exchange company  by the Seller."

Purchase of Replacement Property
"Seller is aware that Buyer intends to perform an IRC §1031 tax deferred exchange. Buyer requests Seller's cooperation in such an exchange, and agrees to hold Seller harmless from any and all claims, liabilities, costs, or delays in time resulting from such an exchange. Seller agrees to an assignment of this contract to an asset exchange company by the Buyer."

The law does require, however, that both parties to the contract must agree to an assignment of contract rights from the exchanging party to the Qualified Intermediary.  This is typically done with a written "Notice of Assignement" document signed by all parties. 

Gary Tippner is Short Sale and Foreclosure Resource Certified.

Call 1-877-311-GARY
"Eight Seven Seven Three Eleven... Gary"

Monday, May 21, 2012

New Grass Valley Short Sale Information

Did you know that nationally less than 50% of all short sales are approved? 

Did you know that despite what the government has tried to legislate, the average approval time for a short sale is 92 days and it is usually the agent / homeowner not the servicer who causes the delay with incomplete or poorly updated documentation? 

Did you know that 7 out of 10 homeowners who lost their homes to foreclosure NEVER sought advice or assistance?

In today’s market it is a fact that we have many agents involved in short sales who really should not be. 

Now, we have addressed the first two statements through training and education but the third – 70% of distressed homeowners not seeking advice – we need your help on that one.

Rather than lose their home and dignity, call us. You will be glad you did.

Gary Tippner is Short Sale and Foreclosure Resource Certified.

Call 1-877-311-GARY
"Eight Seven Seven Three Eleven... Gary"

Nevada, Placer, Sacramento,  and Olympia and Thurston Counties.

Thursday, May 17, 2012

Home Prices Rise in Half of U.S. Cities as Markets Stabilize

Home Prices Rise in Half of U.S. Cities as Markets Stabilize

Prices for single-family homes climbed in half of U.S. cities in the first quarter as real estate markets stabilized. 

The median sales price increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors said in a report today. In the fourth quarter, only 29 areas had gains. 

The U.S. housing market is showing signs of bottoming as improving employment and record-low mortgage rates boost demand while inventories of available properties tighten. At the end of March, 2.37 million previously owned homes were available for sale, 22 percent fewer than a year earlier, the Realtors said. 

The national median existing single-family home price was $158,100 in the first quarter, down 0.4 percent from the first three months of 2011, according to the Realtors group. 

The best-performing metro area was Cape Coral, Florida, where prices increased 28.1 percent from a year earlier. Prices rose 19 percent in Grand Rapids, Michigan; 16.9 percent in Palm Bay, Florida; and 16.6 percent in Erie, Pennsylvania. 

Biggest Declines 

Kingston, New York, had the biggest decline, with the median selling price tumbling 22 percent in the quarter. It was followed by Stamford, Connecticut, with an 18 percent decline; Mobile, Alabama, at 14.7 percent; and Atlanta at 12 percent. 

The median selling price is influenced by the mix of homes on the market and probably was boosted by a smaller share of transactions involving distressed properties. Those homes, which sell at discounts, accounted for 32 percent of first-quarter sales, down from 38 percent a year earlier. 

Prices are more volatile than normal because they are affected by the prevalence of distressed sales and “sudden upswings” in buyer interest in some areas, said Lawrence Yun, the group’s chief economist. 

‘Broad Shortages’ 

“We have broad shortages of lower-priced homes in much of the country, with very tight supply in Western states for homes through the middle price ranges,” Yun said in the report. “This is good news for many sellers who wish to list now, or for those waiting for prices to improve.” 

Sales of previously owned homes rose 5.3 percent in the first quarter from a year earlier, according to the report. Purchases climbed 11.7 percent in the Midwest, 6.6 percent in the Northeast, 4.1 percent in the South, and 1.4 percent in the West. 

Fannie Mae, the nation’s biggest mortgage-finance company, today reported a $2.7 billion first-quarter profit after a $6.5 billion loss a year earlier, citing smaller declines in home prices as one of the reasons for improvement. The Washington- based company said that it won’t need Treasury Department aid to balance its books for the first time since it was seized by federal regulators in 2008. 

Monday, May 14, 2012

Buying a home may never get any cheaper than this

Buying a home may never get any cheaper than this. Many housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable -- but it won't stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services, said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

"This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer," he said.

Saturday, May 12, 2012

Guides to Short Sale your Home

Chances are, among your family, friends, past clients and sphere, you know a homeowner or two who is having trouble keeping up with mortgage payments.  Current estimates are that 6.3 million homeowners in this country are currently in some stage of foreclosure.

With more than 25 percent of homeowners owing more on their mortgage than they could net for their home in today’s market, the solutions are complicated and far beyond the scope of the curriculum that we studied to obtain our real estate license. Short Sales can be complicated and are constantly changing. I invite you to contact me concerning you or anyone you care about who needs help getting out from under a burdensome mortgage.

As a  Short Sale and Foreclosure Resource Certified  Expert (SFR), I am tapped into major lenders and have the most up-to-date knowledge and know-how in negotiating short sales. You can count on me to keep you in the loop throughout the transaction  while providing the highest level of service and support every step of the way.

I look forward to the opportunity to work with you and would be happy to answer any questions that you may have. 

Gary Tippner is Short Sale and Foreclosure Resource Certified.

Call 1-877-311-GARY
"One Eight Seven Seven Three Eleven... Gary"

Friday, May 11, 2012

Homeowners Bullish on Home Prices?

Homeowners Bullish on Home Prices?

The U.S housing market had already received some good news this week, as Transunion reported that the U.S. residential home mortgage delinquency rate (defined as the number of home mortgages more than 60 days past due) fell for the first quarter of 2012 to 5.78%.

The two previous quarters had seen a rise in such delinquencies, but the good news in the first quarter leaves mortgage delinquencies at their lowest levels since the first quarter of 2009, when the U.S. economy was mired in a deep recession.

TransUnion also sees a "modest" improvement in home prices, an estimate shared by U.S. homeowners themselves these days.

In a separate study by Fannie Mae -- its most recent National Housing Survey -- homeowner sentiment on home prices, and their ability to sell their homes, are both on an upward path.

"Overall, consumer views of housing market conditions have become more supportive of home purchases, and sustained healthy hiring is required to help realize these improved expectations," he adds. "Friday's report of a second consecutive setback in job creation supports the view that the housing recovery will remain uneven this year."

Even so, Fannie Mae reports that Americans expect residential home prices to rise by 1.3% over the next year, as confidence in the economy rose to 37%, according to the survey, up from 35% in April. Consumers also reported "higher incomes" and more say that it's a "good time" to sell a home.

Some other highlights from the study include: 

12% told Fannie Mae their personal financial situation will worsen in the next 12 months, consistent with February and March as the lowest value in more than a year.

23% of respondents expect an increase in their personal income from 12 months ago, a 2% increase from March and the highest level recorded during the past year.

32% of respondents expect home prices to increase over the next 12 months.

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