18 Feb 08 New Homes in California – A New Dilemma for Home Buyers

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Years ago home buyers and investors were rushing at an opportunity to buy a new home; the high demand increased home prices and made it so many homes were not affordable for some families. Today, the downturn in the California real estate market is making new homes affordable once again. Unfortunately, even though homes are affordable, the rise in recent foreclosures has made owning a new home just a dream. The dilemma is that buyers are unable to qualify for a home loan because they don’t have a large enough down payment or their credit rating is sub-par; two things that would have been overlooked by lenders just two years ago.

During the recent boom, professionals throughout the real estate industry scrambled to capitalize on the huge monetary gains that the real estate market delivered. Experts and the media have pointed out that many of the problems we face today could have been avoided by maintaining responsible standards by all real estate professionals. It’s hard to fault an industry or person; much that was done was only done to meet the needs of home buyers and a robust industry. Some argue that home builders built too many homes, and investors created an unrealistic demand but the blunt of the blame has been placed on lenders and their loose lending practices.

The rise in foreclosures have left many lenders with homes and the responsibility of maintaining and reselling them. Most are losing millions and all are tightening their loan qualifications. Today, home buyers wanting to buy homes are faced with better home pricing, a greater selection and low interest rates but many of them can’t qualify for a home loan in light of the tougher requirements from lenders. Many potential California home buyers interested in buying a home are having problems qualifying or coming up with a larger down payment. These home buyers are the recipients of tough lending qualifications arising after a real estate boom in which creative lending practices and a lack of financial education have left many homeowners facing foreclosure. Now many of these creative loan packages don’t exist; lenders are leery of sub-prime loans and lending to buyers with little money to put down on their investment.

It’s unfortunate that many would-be homeowners can now afford the monthly payment on their home loan but cannot get qualified for a mortgage. This is just one more obstacle that inhibits the California real estate market from rebounding and nullifies the affordability of homes in California.

Tags: california homes, California Real Estate, home buyers, homebuilders, lending practices, new homes in california for sale, real estate investing

05 Feb 08 Arizona Homes for Sale

A recent post I read on The Phoenix Real Estate Guy got me thinking about the many Arizona homes for sale and the home sellers in Arizona - maybe all over the nation. The post basically stated that some sellers are simply not motivated to sell their homes. My take on the post was that the sellers are pricing their properties too high for the current market and for no good reason. They could be holding on to what they wanted to sell the home for a year or so ago but it’s just not possible; the market won’t pay a premium for much of today’s real estate. I guess they may just have their home listed to see what happens and if this is the case, there is no problem with turning away all potential buyers.
This post is for the motivated sellers - here are some tips to help get your home sold:
Find a professional real estate agent that knows the industry and understands what you need to do to sell your home in this market.

• Price your home right. This doesn’t mean to price your home so low that it will make you lose thousands on the deal, but if you need to sell, sell your home for a price that the market will pay. Research recent comparable sales in your surrounding neighborhoods so that you know what price your home can sell for. If you’re not comfortable selling the home at the price the market will pay for it, get it off the market.

• Keep your home spotless. If you do get a visitor to your home make sure it’s clean and presentable. Make sure all renovations have already been completed and that the buyer knows they don’t have to walk into a home and start a 6-month project. In addition, buyers want to be able to picture their family living in the home so cleaning up some of the clutter e.g. family pictures and nick naks, will make for a good presentation.

• If your home is overpriced for good reason, justify it. Tell the buyer or the agent that you spent $20,000 on remodeling the home, and those homes in your area that have sold, did not. Help the buyer understand why they should pay more. If you have a great view, or a large lot with a pool, communicate these benefits to the interested party before you lose them.

• If you get a low ball offer take a minute to consider it. Will the thousands of dollars lost be lost anyway by waiting to sell at the higher price? Can you counteroffer something that will be of interest to both parties?

It’s not impossible to sell a home in today’s market. There are thousands of capable and willing buyers but they know it is deal time and they’re not willing to pay a premium price on a home they can find right down the street for less money. There are thousands of choices for home buyers and you need to convince every potential buyer that they’d be an absolute idiot if they didn’t make your home, their new home.

Tags: Arizona Homes For Sale, Arizona Real Estate, home buyers, home buying tips, Homes for Sale, housing market, phoenix real estate guy

30 Sep 07 Little Things Add Up…

Traditionally, as home buyers, after we found the new home of our dreams, we spend hours and even days searching for the best home loan with low interest rates and low closing costs. We fight for the lowest possible monthly payment and most of the time don’t think twice about our total cost of interest or if we can pay off our home loan a little sooner. For most of us, after we sign our closing documents, we forget about it, and go through life paying the minimum payments.

Little things add up when paying down your home loan. The most popular loan program most homeowners do take advantage of is bi-weekly mortgage payments. This approach is a great way to pay down your loan faster and save money on interest payments. It basically adds up to an extra payment a year and makes a huge long and short term difference on the interest you pay. Lenders usually charge a set up fee but this is offset with the eventual savings. If you didn’t have the option to take advantage of this approach, or opted out of it, you may want to contact you lender to see what you can do to set up a bi-weekly payment option. If you are unable to make bi-weekly payments you can always pay a little more on each payment or make a large lump sum payment each year. By paying your principle down faster, you will save thousands of dollars during the life of your loan. Recently, several programs have developed that can help you pay your mortgage off in as little as 15 years.

Like everything else in life, it’s the small things that matter, and your efforts to pay your principal down now can put you in a great place in the near future. Before agreeing on a loan, ask your lender what you can do to pay your loan off faster and save money on interest. Many lenders have great programs and useful information. Taking the time to learn a little more about paying your principle down faster can significantly reduce the interest costs of your real estate investment.

Are there any loan programs you recommend?

Tags: home buyers, home loan, Homes for Sale, interest payments, lenders, mortgage, new homes