INFOGRAPHIC: How are international buyers buying?

Santa Clara County South Bay Events for November 2015

Does an FHA Loan Limit Your Home-Buying Options?

In many housing markets, there is more demand than supply, which can create intense competition. Let’s say you’re pre-approved for an FHA loan and find a home you like, but your competition comes to the table with cash—here’s what you need to know.

Stigma tied to FHA loans

FHA loans unfortunately have a stigma that they are problematic and harder to obtain, due to their credit standards and property conditions for appraisals.

If we rewind the clock a few years, many listings on the market were short sales, foreclosures, and distressed properties. Buyers working with FHA loans typically had problems, because the FHA is very particular about a property being acceptable to meet health and safety concerns. However, in general, the types of properties on the market today are far different from the homes on the market just a few years ago. In other words, today’s listings tend more to have equity and meet appraisal standards.

Still, there’s a misconception that buyers working with FHA loans are not as strong on paper, due to having only 3.5% down, and the possible likelihood of buyers falling out of escrow because they cannot qualify. This can be taken care of upfront by making sure you are properly pre-approved with the loan application, credit report and giving the lender with whom you’re working full authority to review your financials to make sure you are bulletproof.

Furthermore, a good loan officer will call the listing agent (with your buyer’s agent’s permission) to let him or her know how qualified you are and ease any concerns about your qualifying integrity.

But let’s have a look at the competition you may face, and how to improve your odds. Many of these scenarios can also apply even if you have a conventional loan, so keep reading.

All-cash offers

No matter what, there’s a chance you will lose out on a particular home you’d like to purchase, because of someone making an all-cash offer that is more attractive than yours. This type of offer is considered the cream of the crop, as there’s no financing contingency and usually no appraisal contingency, which mean a quick, easy close for the seller.

However, an all-cash buyer may also try to make a lowball offer. If your real estate agent tells you there’s interest from an all-cash buyer, don’t let that be a deterrent. I’ve seen many situations where all-cash buyers are looking to get a deal. Just remember that all-cash buyers do not necessarily get preferential treatment, especially if they’re making a lower-priced offer on a home for which the seller’s motivation is to get the highest and best offer.

Loans with big down payments

Generally, a buyer with a conventional loan with 20% down looks stronger on paper than a buyer with less than 20% down. This usually means the buyer might be able to perform more easily, which can be appealing to a seller. While this might not always be the case, the general consensus among real estate professionals is that a loan with a bigger down payment is better. If you are working with less skin in the game, a higher offer from you—if it’s within your budget—may offset an offer from a buyer who has more money down.

Big bank accounts

If you can produce a bank statement showing you have additional funds in the bank, this can go a long way when negotiating a real estate deal independent of your down payment. A large cash balance in the bank is appealing to a seller, even if you’re taking out financing to buy a home. Perhaps it’s more advantageous for you to take out financing considering the tax benefits than it is for you to pay all cash for a home. There can be many reasons for your using financing to buy a home rather than cash. Even if you do not plan to use all cash, showing proof of funds to close makes a strong statement to a seller you are serious.

Seller motivation

When sellers list their home they consider the following:

• Price
• Speed
• Flexibility

If you can match the seller’s expectations on all three of these, or even two out of the three, you increase your chances of getting your offer accepted. While price is important, speed may be more important, for example, if the seller is closing on a replacement property of his own, has a separate escrow, and is limited by a contractual timeline. Ultimately, cash and price go hand in hand. A reputable buyer’s agent and loan officer working in tandem can help convey your strength as a buyer to the listing agent and ultimately to the seller, to help get you in contract sooner rather than later.

Having good credit can also help position you as a strong buyer. If your credit isn’t all that strong, it doesn’t necessarily keep you from qualifying for a loan, but it can get you access to better interest rates, which can give you more buying power. If your timeline allows it, building your credit before you buy a home can be beneficial. If you’re just starting out, you can get an idea of where you stand by getting your credit reports and scores. You can get your free annual credit reports on AnnualCreditReport.com, and several resources offer free credit scores, including Credit.com.

Source: Realtor.com via Credit.com
http://www.realtor.com/advice/finance/does-an-fha-loan-limit-your-home-buying-options/

How to Make Sure Your Dream Home Is a Good Investment, Too

You’ve probably heard real estate can be safer than the stock market, while still yielding decent returns. This can be true, but adding real estate to your portfolio is very different from investing in stocks, bonds, and certificates of deposit. Finding success in the housing market often requires being able to find good deals and ripe opportunities. Check out some tips below to help you launch your housing market investment career.

1. Assess your goals

It’s important to check your credit and have your finances in order before you get into the housing market. (You can get a free credit report summary from Credit.com to see where you stand.) If you are struggling to make your own mortgage payments, real estate investment might not be the right move. But if you are willing to put the time in to research a good location and deal, crunch numbers to test a property’s financial potential, and can manage the maintenance needed, then it might be a good fit for you. Just be sure you know what you are looking to gain from the experience and understand what it will take to get there.

2. Know the market

It’s a good idea to spend some time learning about the process of real estate investing. Real estate rules vary by state, so it’s important to know about the state you are looking at. You can read books or ask a local real estate expert.

3. Consider multiple buying sources

You can look beyond the local multiple listing service to find homes available for purchase. With your criteria set you can check the newspaper, Craigslist, and real estate auction sites for properties that match what you are looking for. You can also find good opportunities through word of mouth.

4. Find a good real estate agent

Not all real estate agents have experience or know how to help investors find the right type of properties. Before the real estate crash, only a small percentage of real estate professionals would even work with housing investors. As the market slowed, more became open to the idea and some have even taken courses to understand the ins and outs. It’s a good idea to choose a real estate agent who has sold several investment properties and understand your goals as well as the ideal return on investment.

5. Play by the numbers

If you are investing in real estate to increase your net worth, it’s a good idea to make sure it’s part of a balanced financial plan. Whether you are trying to build up a retirement fund or eventually replace income from a traditional job, it’s important to make sure the choices you’re making continue to fit into that plan.

You may find you need to hold on to a home you intended to flip, if repair or closing costs were more than expected. In this case, you can consider renting it out until you are able to sell it for the profit you are aiming for. Likewise, if you were planning to rent out the property, but someone offers you more than expected to buy it, you may want to sell and move onto the next property. It can be a good idea to let your goals and the numbers be your guide.

Source: Realtor.com via Credit.com, AJ Smith
http://www.realtor.com/advice/finance/how-to-make-sure-your-dream-home-is-a-good-investment-too/

This is Where the Equity-Rich Live

If there was ever in doubt in the minds of some of you wondering about the robustness of the real estate market here in the silicon valley, then this new report by RealtyTrac should help drive the point home. If you you can afford to buy now, you should because you are most likely going to reap the benefits in excellent equity appreciation later on down the road. San Jose California makes the top of the list, the heart of the Silicon Valley.


This is Where the Equity-Rich Live


The following metro areas with a population of at least 500,000 are seeing the highest share of equity-rich residential properties – those with at least 50 percent equity – according to RealtyTrac’s Third Quarter 2015 U.S. Home Equity & Underwater Report:

San Jose, Calif.: 43.9%
San Francisco: 37.9%
Honolulu: 36.5%
Los Angeles: 32.1%
New York: 30.4%

Rising home prices in Seattle have prompted more owners to now be in the equity position as well.

“Given the price growth we are seeing in the Seattle housing market, it’s not surprising that equity is growing as well,” says Matthew Gardner, chief economist at Windermere Real Estate in the Seattle market. “This is a sign that many owners who were able to hold onto their homes through the housing crisis have recovered much, if not all, of their lost equity.”

But just because owners now have equity doesn’t mean they’re looking to cash in right away.

“Unfortunately, even though the number of equity rich home owners is on the rise, this isn’t translating into additional inventory in the Seattle market,” Gardner says. “As a result, we find ourselves in the proverbial ‘chicken-and-egg’ situation where there are plenty of people who want to sell, but won’t list their home until they can buy something new. But they can’t buy something new until there are more homes for sale. Unfortunately, I see no end in sight to this cycle in the near term.”

For home owners facing foreclosure, they may be able to avoid it altogether and cash out with the sale of their home.

As home prices rise, the share of in-foreclosure properties that are seeing equity is growing too. The following major markets are seeing the highest share of in-foreclosure properties with positive equity: Denver (85.9%); Austin, Texas (83.3%); Honolulu (79.5%); Scranton, Pa. (77.8%); San Jose, Calif. (77.3%); Pittsburgh (75.9%); McAllen, Texas (75.6%); Baton Rouge, La. (71.6%); and Nashville, Tenn. (71.4%).

Source: Realtor Magazine Online via RealtyTrac
http://realtormag.realtor.org/daily-news/2015/10/26/where-equity-rich-live?om_rid=AAFmZk&om_mid=_BWLng0B9G7tAJR&om_ntype=RMODaily

Don't forget to set your clocks back 1 hour tonight

For those of you here on the west coast, don't forget to set your clocks back 1 hour tomorrow night.

Don't Be a Scaredy Cat About Selling Your Home

Happy Halloween folks!

Don't Be a Scaredy Cat About Selling Your Home


Selling a home is one of the most challenging activities we undertake in life. It’s a huge transaction with financial, emotional and practical implications. Not unlike meeting with your CPA or going to the dentist, the thought of putting your home on the market may be enough to make you run for the hills.

If this is true for you, rest assured — you’re not alone. Here are five big fears many sellers face, and ways to cope with them.

My home won’t sell

The home sitting on the market is the number one fear of most sellers. Particularly if they need the money to buy another house or move on, the fear of the home not selling can be overwhelming.

It might be helpful (or incredibly stressful) to know, but for the right price, and in the right condition, any home will sell. It all depends on local market conditions.

Don’t decide to sell at the last minute. Get with a real estate agent months or even a year before you think you need to sell, and plan ahead. In some markets, it could take six to nine months to get an offer.

I’ll have to do work to my home to sell it

Many sellers are embarrassed by their home and know that it needs work in order to bring in the masses. Yet homeowners often want to go from A to Z without having to deal with prepping the home for sale.

Sellers need to understand that the ultimate sale price of their home directly correlates with its condition. The more time and money you spend prepping your home for sale, the more money you’ll get.

If you’re fine with leaving some money on the table for the next owner, do the bare minimum. But with a little time and money spent on cleaning, replacing, storing and staging, you can get your home in tip-top shape.

Lean on your real estate agent for help. Good agents double as project managers for prepping homes for sale.

My home won’t sell by my target date

If a life event such as a job transfer, death in the family or divorce has you under the gun to sell in a certain time frame, this may be your leading fear. Trying to sell a home quickly can be incredibly stressful, not to mention disruptive.

If you need to move your home, you will need to price it at or below the most recent comparable sales. Buyers today look for value and will flock to a well-priced home.

Double points if you can get your home showing in amazing condition quickly. In some markets, well-priced homes in good locations sell with multiple offers.

My agent wants to price my home too low

Your real estate agent’s pricing strategy should be transparent, and together you should come up with a plan. A price reduction should never come as a surprise, and an offer within just two days of going on the market should not be a shock.

If you don’t trust your agent’s judgment on price, or you feel you and she don’t have aligned strategies, don’t list with her.

However, if you don’t agree with her price, but you hear the same number from multiple agents, that could be a sign that you aren’t being realistic.

I feel exposed with people walking through my home

Face it: To sell your home, you have to open it up to the masses. I once had a client completely break down when she came home to 10 people mulling around 10 minutes after the end of the open house.

Take down all of your personal belongings like photos, diplomas and the like. Remove all small and expensive items and put them in a safe.

While it’s important to have your home decorated for showings, it’s sometimes easier on sellers to depersonalize the home as much as possible, prior to listing. Some people prefer to move and sell the home empty or staged because they simply can’t deal with the headache. Put a safety plan in place with your agent if you have those concerns.

The whole idea of selling a home is stressful and most people fear it — and for good reason. Moving is very disruptive, and selling a home brings up lots of concerns.

Just know that you are not alone, and your fears are well founded. So, put them out there and approach them one by one. Planning and working with the right team can help make your home sale much less scary.

Source: Zillow Blog, Brendon Desimone
http://www.zillow.com/blog/scared-about-selling-home-185874/