Appraisals

Shima 0 comments 23.08.2016

Guest Blogger: Yann Fard

Taking the Plunge.

Shima 0 comments 17.05.2016

Often times I am asked, “Should I consider a home that is a short sale or simply walk away?"

That ultimatum often leads to buyers feeling stuck- debating whether they should take the plunge or not. In order to best understand a short sale, I want to illustrate this as simply as possible

So imagine a man named Mike. Mike purchases a home with the assistance of a loan from Sarah.

After two years, Mike realizes he cannot make payments towards his loan. This results in a lien on the property- giving Sarah a right to keep possession of the property until the debt owed by him is discharged.

Since he is financially unable to pay, Sarah agrees to accept a mortgage payoff from Mike that is LESS than what he initially owed in order to enable the sell of his home.

This is called a short sale.

A bank may or may not approve the short sale since it brings less money than owed, which results in the sale to typically have some contingencies that must be removed prior to beginning escrow.

However, when the home is sold, Mike is not ecstatic like a typical seller would be. This is because he does not walk away with any money, as it goes directly towards paying off his mortgage. 

Also, Mike’s credit is impaired for up to 4 years now and may have difficulty qualifying for another loan for that length of time. A mortgage relief can be classified as taxable as Sarah (the lender) can issue a 1099, writing off her loss.  Mike should consult his tax adviser for possibly doing the same.

Fortunately for the buyer of Mike’s home- they got his property at a reduced price.

If you or your friend need further expertise on this topic, my team and I are very adept in providing solutions. We will advise you of the advantages and disadvantages so you can avoid legal and financial issues when deciding if you should take the leap.

Benefits to owning a home.

Shima 0 comments 09.04.2016

Buying a home is the largest single investment most people ever make, and this also makes it one of the most important decisions they will face.

Below are 10 reasons why it is important for everyone to own a home.

Freedom and Privacy

When you own your own home, you are not subject to the occasional inspections of the premises by the landlord.  You can paint, decorate, or improve the property as you like.

Inflation Protection

Your rent can keep going up, as do house prices.  Once you purchase a home, you, not the landlord, reap the benefits of its appreciation in value.  Historically, home prices will maintain value even in recessionary times, and increase in normal or good economies.

Tax Benefits

Many interest deductions have been eliminated from the IRS regulations, yet mortgage interest on your home is a very healthy deduction, especially in the first years when the bulk of your payment is interest.  Other deductions are also available to homeowners for energy credits or other improvements.  Property taxes are also deductible.

Improvements

Speaking of improvements, a renter gains nothing when he improves the house he lives in.  A homeowner reaps a return on those improvements when the house is sold.

Retirement Security

Unlike rent, which goes on forever, a mortgage is paid off at some point in time.  This can provide a “rent-free” retirement dwelling for you.

Environment and Lifestyle

It is usually apparent whether a neighborhood is made up owners or renters.  Homeowners have a financial stake in their neighborhood, and consequently take better care of their property.  This, in turn, helps your property continue to increase in value.

“Trading Up”

In today’s real estate market place, not everyone can afford their ideal home as their first purchase.  By purchasing any home and gaining by its appreciation and any improvements made, many people are able to sell their first house and “trade up” to that ideal home of their dreams.

Investment or Income Property

A second home can be an excellent tax deduction and investment.  Interest on a second home is also tax deductible, and you will be able to gain profits and tax benefits from renters.

“Effective” Interest Rate

The interest you actually pay will be much less than you think, on the first impression.  Because the interest is tax-deductible, you may be able to change your withholding or receive a larger tax refund.

Curious if you're qualified to buy? Give me a call today to find out.

Searching for more than just eggs this Easter?

Shima 0 comments 25.03.2016

We’re not even half way done with the first quarter of the new year and it seems as though all the good homes are tricky to find just like the most rewarding eggs!

Experts predicted early on that the housing market in 2016 would be a seller’s market. Fast-forward to March and it is evident that home prices are increasing, inventory is low, and there are many buyers looking for the same things.

What should you know?

In a seller’s market, there are more buyers than sellers. This tends to cause discouragement in buyers as they find themselves competing amongst others for the home of their dreams.

Certainly, buyers must keep an open mind and stay prepared to move quickly. If one should find the home of their dreams- they should act now as statistics show that 85% of buyers who say they plan to buy a home in the next year, say they will wait until late spring or early summer. Luckily for buyers who begin their house hunt early on, face less competitors with just as many homes for sale.

When choosing a mortgage, it is helpful for buyers to shop around and meet with several lenders. By speaking to different parties, you will find you have multiple options to choose from and are not putting all your eggs in one basket.

As for sellers, prime home buying season usually begins in April and reaches a peak in June. When choosing to list your home during the prime months, as a seller, you are benefitting from a larger population of buyers and potential bidding wars. Surely, this brings in higher prices and quicker closings.

Frankly, by pricing a home to sell accurately, based on comparable sales, buyers will naturally be attracted to the home. It is therefore essential to price a home adequately for the market.

Undoubtedly, it is important to get the right help when buying or selling.

Remember, you surely don’t have to house ‘hunt’ alone… I’m only a ‘hop’ away from helping you and those you know during such a monumental time.

I wish you a happy Easter and spring!

Am I Qualified to Qualify?

Shima 0 comments 08.03.2016

Often times I am asked,

“Shima, how do I get qualified? What are the requirements? Is it easy?” 

In order to better assist all my friends & clients, I’ve asked lender, Pooyan Fard to share below the basics.

Hope you find it helpful and if you have any other questions, don’t hesitate to send me an email and I will gladly answer any questions you may further have.

What are the basic requirements?

 When it comes to loan applications, it really matters to know what is going to make a difference. As most of other things in this blessed country there is no limitation for who can apply for a loan but to actually get the loan it really helps to know what is needed as the basic requirements. Gone are those days that one could get a mortgage for X amount without the lender verifying his/her ability to repay and in order to make sure the are no more malpractices in mortgage lending, very strict rules and regulations are in place. Here I briefly explain the 4 basic requirements that lenders are supposed to verify when granting a loan and the term we use in mortgage industry is the 4 Cs. It stands for; Character, Credit, Capital, and Collateral. In the next section I will briefly explain the 4 Cs.

 What are the 4 Cs?

        The first C, Character refers to the character of the individual borrowing the money and it will be a very important factor in determining whether the person is going to repay the loan as the payments will fall due. The lenders will use their due diligence to make sure they are going to lend money to the borrowers who are responsible and reliable.

The second C refers to the borrower’s credit. Theoretically, according to FHA guidelines one can get a loan with a credit score as low as 500 but practically the minimum required score is generally 620.

The third C refers to capital which is the amount of liquid asset the borrower has to prove the borrower has some fair amount of savings that can be used for different purposes such as down payment, reserves or impounds and also the cost involved for the transaction. Therefore the liquid assets like the money that borrowers have in their bank accounts or stock or investment accounts play an important role in the decision made by the lenders.

The last but not least C refers to collateral. For residential loans always a collateral is required and it would be the property for which the borrowers are getting the loan. That is why there is always an appraisal needed for the residential loans. The appraisal helps the lender to verify that the property is at least worth as much as sales asked price and then according to the value the loans will be granted. This way in case the borrower defaults on the loan the lender is confident they can get the money they have invested in the property back by taking over the property.

For further questions, please contact Pooyan Fard. 

Luck doesn’t have anything to do with leasing a home

Shima 0 comments 05.03.2016

Last week during my open house, I met a family who was frustrated after submitting numerous applications to lease potential homes and were denied.  In a market as competitive as it has been and with the housing shortage in California, more people are afraid they’ve been cursed with bad luck.

Truthfully, there is no golden coin or luck that helps- it has everything to do with credibility.

When a landlord is contemplating on accepting an applicant for their property, several factors come into play. In order to be portrayed as a desirable candidate, there are some things that may increase your chances of being accepted.

Understandably, life happens and causes some shifts in our credit, loss of job, increase in our credit charges, etc. which can greatly affect our good-standing. However, when submitting an application to lease, consider what you would think as a landlord looking at your application, credit, or bank statements.

I spoke with several landlords and property manager, Tim Marshall to better understand how one could improve their chances of leasing. Upon our talk, I found that a considerable candidate is someone who can prove income.

Sometimes, based on one’s low credit score, they have to increase their chances by providing more proof of income. Such as, bank statements, tax returns, etc. This sometimes results in digging deeper than intended to.

A landlord’s greatest nightmare is offering residency to a client who cannot pay their rent. This results in unnecessary conflict for him/her. So, by providing all sources of income- you’re assuring the landlord that you’ll have no issue paying your rent.

A landlord may also value a cover letter. In a cover letter, you are telling the landlord who you are and why they should choose you. Whether you’re writing a cover letter to buy or rent, you’re allowing the person on the other end to have a better understanding of who you are, what you do and why you’re the right candidate for them.

Lastly, references are another staple that can allow a seller or landlord clarify that you’re efficient, reliable, clean, and trustworthy. These characteristics are important for a landlord or owner of a home as they want to rest assured that whoever is in their property is taking care of it and using it solely as a home.

You can gather references from prior landlords, old/current bosses, family and friends.

Finally, Tim Marshall says, “There is no other time that the laws of supply and demand have been more affected to rent. A lot of people want the same things you want and due to scarcity, it’s limiting. But don’t get discouraged and just understand that it has affected real estate as a whole.”

Although leasing can feel disheartening if denied, remember it is a competitive market and in order to better your chances- consider gathering these documents in advance.

Thank you for your trust and remember, your referrals are the pot of gold at the end of the rainbow for me!

Five ways a home is valued

Shima 0 comments 26.02.2016

The other day my client asked me, “Shima, how much money can I get for my home?”

I told him that when a potential buyer is inspecting the value of a home, several factors come into play. Although the market has a huge impact whether a home will sell quick or slow, there are some indications that are always considered.

First and foremost, LOCATION!

One of the most influential factors a buyer will consider when deciding whether to purchase a home or investment is geographical location. You’ve heard it, seen it and even said it, “Location, Location, Location!” Proximity to attractions, transportation routes, schools, demographics, ocean views, fine dining and freeways are all advantages one may take into consideration when assessing the value of a home or business’ location.

Second, PRICE!

In 1950, Pepsi used the slang, “More bang for the buck” as an advertising method to describe the New Look policy on nuclear weapons. Today, the phrase is used to mean a greater worth for the money used.

We all love a great deal, especially in one of our greatest investments we will ever make. People want to know that they’re getting more than they imagined they could ever have and that happens when they feel like the home was a steal. Well, how does this occur?

When a home is strategically priced, people line up, wanting it before it’s gone. And the way to do that is to make sure it is priced to sell!

Third, knowing who is your COMPETITION.

When pricing your home, it’s vital to look at what is currently active, what is pending, what has a backup offer, and what has closed.  The active listings are who we are competing with. The pending sales are necessary to see how many days something has been on the market until it has gotten an offer. Closed Sales will test us exactly where our comps will come from- which is typically between the lowest and highest sales.

By understanding WHO the competition is, it is easier to focus on what you have to offer that the others don’t- and that is your power.

Fourth, the CONDITION of your home.

Again, a home or business is a huge investment one makes and the condition will either influence or scare some away. What may seem like a potential fixer to some, may seem frightening to others. So, the condition of a home will influence one’s decision in determining if they will get more bang for their buck!

 Last but not least, the CURRENT MARKET.

Current market conditions are gathered from interest rates, stock market, gasoline prices, election-year distractions, global events, and other things going on around us that we basically have no control over.  These factors plus seasonal things such as income tax time, holidays, add an unpredictable element to home sales.  However, over time, the trend is always upward! As my friend and business partner Tim Marshall says, “I have a saying that the best time to buy is now and the best time to sell is now, because in the long run the trend is always upward.”

As previously mentioned, we all love a great deal. To some, a deal may be getting furniture with the home, a free TV or fridge. To others, it’s simply getting more bang for their buck- which is really just getting something better for the same price.

So when deciding what to price your home, remember these determining factors that will ultimately influence a buyer’s decision. Remember, we’re all out to get the most bang for our buck!

S.H.I.M.A

Shima 0 comments 16.02.2016

Often times I am asked, “Shima, how can I sell my home the quickest?”

My most common response is, “Well, what is fast?”

A home is not something many of us can let go of easily. It is a place where we’ve lived, made memories and held many gatherings in. It’s a part of a chapter of our lives and we tend to grow an emotional bond with our homes. In result, we also tend to idolize our homes anf view them as far more magnificent than others will see them.

Because of our perceptions, we idolize the home and overvalue it at times. The truth is, it doesn’t matter how much a seller loves the property – because it is only worth what the buyer is WILLING to pay for it.

So, I know it’s hard to let go of our homes when we’ve made so many memories, but look at it this way- You’re leaving behind the old, 1.0 version of you and starting over. This is a new start, a new life, a new opportunity, a new luxury.

So, how can you get rid of the old quickest so that you can get the new? Well, it’s all about selling your home in a marketable area.
You may be wondering, “What is a marketable area?”

MARKETABLE is defined simply as: able to be sold, wanted by buyers.

So the ultimate goal is to make YOUR home a marketable place so that it attracts buyers. Of course, your home will not be for everyone, but it may possibly be for someone they know. If you’re able to present a home where anyone can see themselves living in it, you are far closer to selling your home. In order to do so, you must present a home that allows others to paint an image of themselves in it.

Here are some ways you can do that:

 Declutter: 

Your home will be open for viewing at times and if it is filled with too many of your belongings, it may be difficult for a potential buyer to not only see themselves living in the home, but to value it. When we have furniture, boxes, etc. lying around- rooms seem smaller, more crammed.

You only have one chance to make a good impression with buyers, so you want to make sure that they’re impressed enough to write an offer.

 Just as beautiful on the inside as the out:

Before even entering the home, potential buyers will see the outside and we want to make sure the outside looks as good as the inside. There are simple ways to do so- gardening, mowing the lawn, or even adding flowers. Also, it doesn’t hurt to do a pressure wash on exterior walls so that they’re clean and free of dust and dirt.

When your home looks welcoming and presentable on the outside, buyers will want to see what it looks like on the inside.

The price is right!

You don’t show up on the day of a test without studying- you prepare. Prior to pricing your home, you will want to be guided by your Realtor of most recent sales in the area where your home is. This prevents overpricing your home, causing it to sit on the market and going stale. The goal is to price your home to sell so that an offer is received in just a few weeks.

Ultimately, whether you want to move out of your house quickly or have time to relocate- you have to be strategic when it comes to attracting buyers.

You want your home to express to others that it is what they want and what we have to offer is the best!

Here’s to Selling YOUR Home In Marketable Areas.

Don’t get it TWISTED

Shima 0 comments 09.02.2016

Does real estate confuse you? The terms, the process, the numbers?

Well, don’t get it twisted…

I want to take away the confusion a bit and help you better understand some of the frequently used real estate terms and their meanings.

Appraisal: an estimate of the value of property resulting from an analysis of facts about the property. An opinion of value.

As-Is: means that the seller is offering the home in its current condition and has generally stated that any defects known or unknown to them will not be fixed as a condition of the sale.

Backup Offer: The term backup offer refers to an offer submitted by a potential home buyer to a seller with the understanding that the seller has already accepted an offer from someone else. If the first offer doesn’t go forward for some reason, then the backup offer would be considered. If a home is especially desirable it may be that there is more than one backup offer from buyers interested in the home.

Buyer’s market: There are many sellers and few buyers, so sellers must compete for the available buyers, which usually means lowering the prices.

Closing Costs: In addition to your down payment there are a number of other costs associated with the purchase of and transfer of ownership of a property.

Deed: document that transfers title to real property.

Down Payment: The down payment is the money that you will put down from your savings or other sources towards the purchase of your new home. Minimum down payment requirements are different from lender to lender so you will want to research the options that best meet your needs and resources.

Earnest Money: A sum of money given by the buyer, and held in a trust account by the broker, as a good faith commitment to honor the contract to purchase the home. At the time of closing this money will be credited towards your down payment and other closing costs.

Foreclosure: A situation in which a homeowner is unable to make full principal and interest payments on his/her mortgage, which allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage contract.

Fixture: anything permanently attached to the land.

Mortgage: a loan to finance the purchase of your home.

Offer: Offer refers to the amount that the interested home buyer “offers” to the seller for the purchase of a property offered for sale. The offer will be written up and formally by your licensee/broker and presented to the seller’s licensee/broker for consideration.

Prequalified: Before you begin your home search in earnest you will want to meet with a lender(s) and get “prequalified” What this means is that your lender will have you fill out an application and then assess your income, credit score, and other financial information and advise you on how much of a mortgage you will be able to obtain from the bank and thus how much you will be able to pay for a home..

Seller’s market: buyers must compete among themselves for properties.

Title: Title refers to the right to ownership of a piece of property.

Townhouse: One of a row of houses usually of the same or similar design with common side walls or with a very narrow space between adjacent side walls.

Will: A written, legal declaration of a person expressing his or her desires for the disposition of that person’s property after his or her death.

Don’t see a term on here that you would like a better understanding of?  Send me a message & I will gladly give you a greater understanding.