Buying a home (or other real property)?

Hi and Welcome!

To Search the Humboldt MLS "go to" WWW.955MLS.Com

The purchase of real estate is a unique process.  Once you have decided to consider the purchase of a home or other real estate, time will be spent contacting lenders (banks, mortgage loan brokers etc.) to obtain the best available loan rate for the type of property you are interested in.  Remember that loan rates may not be the same for all types of property.  Feel free to call me at 707-407-5150 or email me at DanPhillips@95531 if you would like suggestions of possible lenders to contact and also check out my "web links" page for suggestions.  Not only are you looking for a great loan rate, you will also be looking for a lender you will feel comfortable working with. And you need to feel comfortable, you will be spending a lot of time with the lender you choose!

At the same time you will need to start the process of looking for properties.  Vistining properties in person with an agent or reviewing properties on an internet site and asking your agent additional questions about the property if it interests you.  In the case of searching on the internet, it is best to visit the property you are considering before making an offer on it.  In any event, you will be looking at not only the property but also the neighborhood, the schools (even if you do not have children this is important for future resale), available near by services (restaurants, shopping, airport, hospital etc.)  Take notes on the properties you look at, make a list of advantages and disadvantages.  It will help in making the final choice.

Try to select several properties that meet your needs.  In the event the first property you make an offer on does not work out you can move on to another choice.  An agent will be able to provide you with information (listing price, sold price, days on the market etc.) of recent sales of similar homes in the area.  This will provide some guidance in the price you will offer on the property you choose.

Making an offer.  Once you have found the property that best meets your needs it is time to write an offer.  (If you have lived outside California, the offer process in California is different than most other states.  In California an agent will write the offer for you.  Call me at 707-407-5150 or email me at DanPhillips@95531.Net if you have any questions on California real estate transactions.)  The offer will include many items including the price you are willing to pay, the financing terms from your lender, the inspections you require to determine the current condition of the property, items of personal property you want to be included in the sale (the kitchen stove?), the day you want escrow to close, the day you will be able to move in etc.

The agent will deliver the offer you have made.  At that point the "ball is in the sellers court" so to speak.  Some negoitations may take place, be prepared to "give a little" and "take a little".  If a meeting of the minds is reached between the you and the seller, the offer will be turned over to an escrow company to proceed.  (California, unlike most other states, uses escrow companies.  Yes, both brokers and attorneys that have trust accounts may hold escrow in California but they seldom due, a California Escrow Company is much better prepared to handle the transaction and they usually have access to a title plant to develop the pre-liminary title report)  The escrow process will require your attention on many occassions.  How to hold title to the property, review of the title report, completion of the requested inspections etc.  Once again, feel free to contact me with questions about the process.

There is an old saying in the business, "do not fall in love with a property until escrow closes"!  The escrow process sometimes has it suprises!  Title problems, inspections that turn up unknown or undisclosed issues etc.

If all goes well, escrow will close and you will move into your new property, if something unforseen happens, be prepared to start the search process again. 

Good luck with your search!


Sincerely,

Dan Edward Phillips, Realtor and Broker/Owner
California Real Estate Brokers Licensee 01326283
Colorado Real Estate Brokers Licensee 40045623

The following articles are designed to assist a buyer!

ENJOY!

But do you need it? 

Various house toys weigh in.


Of course a basement waterfall and grotto is a practical and useful addition to any home. That’s pretty much the only thing standing between you and the playboy lifestyle you’ve always dreamed about, right? But who’s going to clean it?

It’s easy to fall in love with certain features of a home, but to find out that those same features, in the long run, are your least favorite. Here are a few common ‘extras’ and a quick assessment of their relative values.

1. In-floor Heating

Also referred to as radiant heat, in-floor heating is a brand new invention. Well, except that the Romans did it a couple thousand years ago by channeling hot air under the floors of their villas. And Frank Lloyd Wright did it in the thirties with hot water, but other than that . . .

For: In-floor heat comes in two primary forms: hot water heat and electric heat, and there are many advantages. The dramatic energy savings promised shouldn’t prompt you to ask for a decrease in salary just yet, since the more popular hot water radiant heat usually requires a second hot water heater and won’t shave too much off of your bill, but there are some notably appealing elements to in-floor heat in general. Radiant heat is just that – even and consistent, without the up-and-down temperature shifts associated with most conventional heating systems. It’s also silent and invisible, with no bulky radiators or even register vents ruining the feng of your shui. Radiant heat also won’t dry the air, and won’t have you hopping about looking for your slippers on a cold morning.

Against: In-floor heating systems are still considered a luxury, and can add a fair bit to the value of a home. They are new, and potential long-term issues have not been entirely worked out. A handful of people also are leery about the prospect of piping a significant amount of water throughout their cherished home for fear of potential leakage. All relatively minor concerns.

Assessment: Find someone with in-floor heating who doesn’t love it. I dare you.

2. Backyard Pool

It’s the quintessential luxury item that announces once and for all that you are a big dog, even in parts of the country like this one where it can only be used about ten minutes per year. It is the swimming pool. From pools that are little more than big pits of standing water to jewel-encrusted infinity pools that usually adjoin large bodies of water, pools were once the thing. Are they still?

For: A 2004 4-state NAR study found that having a pool increased property values from 8 to 15%. The idea of kicking back all summer with a piña colada, sitting next to the lapping water with friends can be quite attractive. And rightfully so.

Against: Safety issues have not been blown out of proportion by the media. Pool deaths happen all the time, there’s no getting around that fact. Pools are expensive to maintain, even without hiring a pool cleaner, and are a lot of work. As beautiful as a pool can be when it is maintained properly, it can be an eyesore if it is not. A pool tends to negate having any significant usable space for a backyard. Am I missing anything?

Assessment: Your home should inspire you and will, to a certain extent, dictate your lifestyle. Be rational in your decisions, however, and aim for versatility rather than rooms that are locked in to a particular use that may not be as useful in the future.

Assessment: The issues involved with owning a pool can be overcome, and many people enjoy having a pool very much. You just have to want one really badly for it to be worthwhile.

3. Dream Kitchen

Kitchens do cool things these days. Appliances paneled to look like cabinets, an extra tap above the stove for filling large pots of water, $15,000 pounded-copper range hoods, and 460 different countertop materials . . .

For: Kitchens are finally being designed with maximum utility in mind. When shopping for a home, focus on the kitchen – it is where you will likely spend a great deal of your time, and the room in which every party tends to congregate. Before you fall in love with that Kohler faucet, however, analyze the kitchen’s layout from a purely utilitarian standpoint. Is the magic triangle of sink-stove-fridge arranged conveniently? Are cabinets and other storage in logical places? Is there sufficient light? And most importantly, is this a space you will feel comfortable and happy in? Don’t underestimate the importance of a functional and attractive kitchen.

Against: Be careful not to fall in love with the impermanent fixtures in a kitchen. While those glass-front, backlit uppers may brilliantly display the seller’s Royal Daulton bone china, will your mixed collection of garage sale Melmac have the same effect? Likewise, if your idea of cooking is heating up last night’s pizza, perhaps space would be better used elsewhere. 

Assessment: The kitchen is the hub of virtually any home. Don’t underestimate its importance.

4. Activity Rooms

This is an overly broad categorization, of course, but activity rooms like workshops, games rooms, and exercise rooms tend to hold common appeal – and common drawbacks.

For: Having the right setup for a particular activity can be inspiring. Having a single power tool in each room of your house and each corner of the garage and shed is not exactly the ideal situation for building that crib you started on for your daughter and are determined to finish before the birth of you granddaughter. Likewise, if you have the latest elliptical trainer and weight set in a room next to your bedroom with a 12 foot plasma TV facing it, perhaps you will find that six-pack after all.

Against: If you can’t make a dovetail joint, all of the tools in the world will not give you that knowledge. If you haven’t lifted anything heavier than a handful of pork rinds in the last decade, a workout room will likely soon become just a TV room with uncomfortable seating. Unreasonable expectations usually develop into unreasonable decisions.
 

The Bottom Line

With all of your dream home features, try to let reason prevail (or at least get a word in edgewise). You may absolutely worship the tumbled marble rainforest shower with the heated towel rack, but it will be of little comfort every morning and night when you are cursing the home’s lack of closet space. It is often the most boring attributes of a home that will give you the most pleasure.

Now, off to luxuriate in my rainforest shower. I had to take out the bedroom to install it, but that’s okay, I don’t mind sleeping in the kitchen.
 

Avoid Common Buyer Errors

Shopping for a new home is an emotional experience. It is, however, also a business transaction, and must be treated as such. Three of the most devastating things that can go wrong are:

• Paying too much

• Losing a dream home to another buyer

• Buying the wrong home

When you have a systematic plan before you shop, you’ll be sure to avoid these costly errors. Here are some tips on making the most of your home purchase:

 

Get the information you need

What price do you offer a seller? Is the seller’s asking price too high? Is it a deal? Your own research is important, as is the assistance of a Realtor®. A professional Realtor® can offer an unbiased opinion on the value of a home, based on many factors and a great deal of information. Without knowledge of the market, your offer could be too much. Or worse, you could miss out on a great buying opportunity. Hire the right person and trust that person to represent your interests.

Buy YOUR home

What do you need and want in a home? Sounds simple, but clearly identifying your needs and bringing an objective view to home shopping leaves you in a much better position. How much space do you really need? Too small and you may feel like you live in constant clutter. Too big and maintenance may become too daunting. Outline all of your priorities, and work on finding not just a great home, but a great home for you.

Check the title

Before you sign any document, be sure the property you are considering is free of all encumbrances. As a part of his or her services, a Realtor® can supply you with a copy of the title to ensure there are no liens, debts, undisclosed owners, leases or easements against the title.

Update the survey

Before the purchase is completed, an updated survey is essential. This report will indicate boundaries and structural changes (additions to the house, a new swimming pool, neighbor’s new fence which is extending a boundary line, etc.), and will guarantee that you are indeed getting what you pay for.

Minimize the unexpected

For $300 - $500, a professional inspector will conduct a thorough inspection of the home. Their expertise can mean the difference between uncovering major flaws before or after you own a home. Make the final contract subject to the report’s findings.

Get pre-approved

It only takes a few days to get financing pre-approval. When you are shopping for a home, this gives you more power. A seller is more likely to consider an offer from a serious buyer.

Remember additional costs

Besides the funds for the purchase of a home, you’ll need funds for items such as loan fees, insurance, legal fees, surveys, inspections, etc.

Take a deep breath

Before you sign, ensure that all documentation clearly reflects your understanding and conditions of the transaction. Has anything been forgotten? Don’t rush. You could lose money, financing, or even the sale if you attempt to push things through too hastily.

The Art of the Deal:
Buying a Home in a Buyer's Market

When is the best time to buy a house? With many markets reporting an abundance of homes for sale, and interest rates remaining at near historic lows, now might be one of the best times in recent memory. While today's real estate market does offer advantages to buyers, consumers still need to be savvy in order to get the best deal they can.

Following are some valuable home buying information that the professionals at Coldwell Banker Real Estate LLC think every homebuyer should keep in mind:

Don't Try to Time the Market.

When home prices are lower, it is very tempting for potential buyers to try to wait as long as possible in the hopes that prices will decline even further. This strategy can be detrimental because when there is high inventory, smart sellers price their homes properly – not according to past sales but according to current conditions – so their homes will sell in a timely fashion. Once a home is priced to what the current market will bear, buyers will make offers. 

Shop Around. But Don't Wait Too Long.

The National Association of REALTORS reports that homes are staying on the market for several months. Recent increased inventory gives homebuyers a great opportunity to compare homes that meet their needs. However, this does not mean that homebuyers should procrastinate. If you find a house you love, put in your bid and negotiate. Don't provide an opportunity for another buyer to make an offer.

Watch Mortgage Rates.
 
As of early 2009, mortgage rates were continuing to fall to historic lows.  This presents a strong opportunity to enter the real estate market, particularly for first time homebuyers who have no need to sell another home. Simple mortgage calculators widely available online can help you determine just how much you will pay per month, based on a given rate. For example, a monthly payment on a 30-year fixed 5.875 mortgage rate on a 300,000 loan will be $1,774.61.

Negotiate on the Incentives.

 Sellers eager to move may offer you a variety of incentives such as cars, trips, furnishings and even credit card bill payment. If you accept an incentive, make sure it makes sense for you. Instead of having your bills paid, you may opt to have the seller renovate the master bathroom or install new flooring. Of course, you can always ask the seller to simply deduct the amount in question from the list price.

7 tips for buying foreclosures

There are a lot of great deals on the market, but buyers beware: Purchasing a foreclosure is rife with pitfalls.

By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Foreclosures are dominating the housing market. Right now, there are 1.5 million such homes for sale, and more are expected to be available soon. That provides both opportunities and pitfalls for bargain hunters.

Just because prices are low doesn't mean you should make snap decisions or buy something that isn't right. Here are 7 tips for making sure you don't get taken for a ride.

"Everybody and their grandmas are trying to buy foreclosures," said Glenn Kelman, CEO of Redfin, an online, discount broker. But that doesn't mean you should lose your head.

Banks put repossessed homes back on the market at cut-rate prices because quick sales help avoid the expense of upkeep, such as property taxes, insurance, heat and electricity.

Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may bid until homes are no longer bargains.

Don't get caught up in a bidding war. Instead, carefully calculate what you want to spend and do not exceed that price.

2. Contact lenders directly

Smart buyers establish relations with asset managers at banks. This may reward them with inside information or first crack at new foreclosures hitting the market.

In the case of a short sale, for example, it can give the inside edge. If a buyer is pursuing a short sale -- buying a home for less than what the current owner owes on the mortgage -- she should talk directly to the property's asset manager. That way, if the short sale falls through and the bank repossesses the house, the asset manager knows she is still interested. It could lead to a quick sale without other bidders.

3. Get pre-approved from the lender you want to buy from

Plus, you're not locked in if other lenders offer you better terms. You can always change your mind and get your mortgage from another source.

4. Consider fix-ups

That can be problematic today because so many foreclosed homes are in less-than-mint conditions. Often, the former owners were struggling to pay their bills and may have neglected routine maintenance. Or, they may have trashed the properties before leaving

In 25% of cases, homebuyers persuade lenders to fix some of the problems before the sale closes. Most of the time, banks would rather sell the house to the next available bidder -- one who doesn't ask the bank to pay for repairs.

So be willing to consider a home that needs some work -- but budget accordingly.

5. Hire a real estate attorney

Once banks agree to sales, they often want to move fast and load contracts up with legal mumbo jumbo. As a result, buyers often do not have the time or expertise to figure all the angles.

The solution is to hire a real estate attorney -- even in states where home sales are usually completed without one. Considering you're making a six-figure investment, the legal fees are cheap insurance against the risks.
 
6. Wait to make an offer

Homebuyers may be well served to wait before making an offer. Let the house sit on the market for a few days, giving others a chance to set the bidding tone. Then jump in.

"Talk to the agent selling the property," said Kelman. "The agent may tip his hand. Call up and ask, 'Should I make an offer? What should I come in at?'"

The agent may tell you he has offers at, say $300,000 and you should bid a bit higher, giving you an advantage over earlier bidders.

7. Tour properties with contractors

With so many REOs in seriously deficient shape, it's essential to go over every inch with someone who can spot problems and tell you how much it will cost to remedy them.

A foundation crack can be a minor problem or a deal breaker, and most ordinary homebuyers have no way of telling the difference. Like an attorney, a contractor can be very worthwhile insurance. 

In real estate, nesting is the new flipping

As homeowners struggle to sell their homes, many are deciding to stay put and invest in properties they already love.

By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- If flippers were the poster children of the real estate boom, then nesters are becoming the icons of the new housing market.

"We saw a nesting reaction after 9/11, but we're seeing a stronger nesting reaction now," said Bob Peterson, president of ABD Design/Build in Ft. Collins Colo. People who have the money are fixing up what they have."

A proportionally bigger share of the home construction dollar -- 20% more during the first three quarters of 2009 compared with the same period last year -- now goes to home improvements, according to the U.S. Census Bureau. In October, remodeling spending increased 8.7% compared with September to an annualized rate of $114 billion.

Jeff Hunt, vice president of Houston-based Brothers Strong remodelers, said that after a long slow period starting early last fall, his business took off. "About Aug. 1, all the stuff in our pipeline broke loose all at once, and since then we've been so busy we can't see straight."

Most of his projects are for nesters planning to stay. "Many people consider buying to get more space but when they look at all the costs they figure it makes sense to stay put," said Hunt. "They say, "I like my house, my neighbors, the schools.' Of course they do. That's why they bought the house in the first place."

All many want is more space. Like Kim and Sandy Sobieski, clients of Hunt in Cat Spring, about 50 miles west of Houston.

The semi-retired title company exec and his wife have plenty of room to expand, and they love their land. "We have 65 acres and we didn't want to give that up just to buy a bigger house," said Kim Sobieski.

Hunt's company converted Sobieski's garage to an entertainment room and finished out its second floor. He also built a new garage and updated the kitchen, doubling its size. The job, which included a new roof, cost about $300,000 and added 1,500 square feet.

"It's very upscale, very nice," said Sobieski. "It's got a whole big room just dedicated to my wife's quilting."

Signs of life

Projects like the Sobieskis are happening all around the nation, helping to push the latest National Association of Home Builders' (NAHB) Remodeling Market Index higher during the last quarter.

Perhaps even more significant, NAHB's future index also jumped, indicating that home re-modeler confidence has strengthened. "The phones are ringing more," said Rose Quint, an economist with the NAHB. "That's led to a nice increase in the future indicator."

Both indexes, however, still languish below the 50 mark, the dividing line between optimism and pessimism. Contractors are seeing things improving, but they haven't made the leap to optimism, yet, perhaps because it's been hard to convert increased inquiries into actual work.

"Some remodelers are receiving more calls for bids, but it's still extremely difficult to close a sale," said Greg Miedema, a Tucson, Ariz.-based remodeler.

The industry may be slack because most buyers remodel when they purchase their new home, and home sales are down about 30% from their peak.

And there are fewer people who can afford to upgrade their existing homes. But those who can, "They say, 'If I'm going to stay here another five or 10 years, I'm going to have it the way I want,'" said Miedema.

The long run

And, in many areas of the country, it's more cost efficient to remodel than trade up. In northern Colorado, for example, many people long ago settled into their 20- to 50-year-old houses on the kind of large lots that are hard to find these days.

"Many of these houses are just are not as reasonably available anymore," said Peterson. "Figure in land acquisition and development costs and fees and you can see the expenses are driving people to remodel."

An added incentive spurring remodeling is the $1,500 federal tax credit for home improvements that raise energy efficiency. Jobs involving replacement windows and doors, heating and air conditioning systems, new roofs and adding insulation all can qualify.

Susan Marvin, president of Marvin Windows and Doors, said that the proportion of replacement windows her company sells versus windows for new home construction has flip-flopped.

"Our replacement window line has outperformed our line meant for the new construction market," she said. "Replacement window sales are up by double digits, and the new construction windows are down by double digits the past few years."

Tight credit

Nester-remodeling might be even stronger, according to Peterson, if home improvement loans were easier to come by.

"Financing is still very tough," he said. "Nearly all my clients are paying cash."

Perhaps because of that, more people are remodeling their homes in phases. Instead of one big remodel covering the kitchen, both baths and opening up the living space all at once, for example, they opt to do just the kitchen at first. Then next year, they may finish the job.

As a result, Peterson is getting more jobs, but the average job is much smaller. "Instead of 50 projects this year, we'll do 70 or 80," he said. "But the average price is down to $40,000."

Slow progress

Most industry observers agree that remodeling activity probably bottomed this year. Kermit Baker, chief economist for the American Institute of Architects and Senior Research Fellow at Harvard University's Joint Center for Housing Studies, doesn't think the home improvement industry will show substantially higher volume until early 2010.

Falling or weak home prices, near record levels of foreclosures, and other distressed sales are discouraging households from undertaking nonessential remodeling projects, he said.

"When home prices are declining, there's not as much opportunity -- or inclination -- to do that," said Baker.

He added that for remodeling to come fully back, home sales must come back strong.

"Nothing would help the industry more than a return to 6 to 7 million home sales a year," he said.