Category: Buying a Home

Is Market Recovery Slowing Down? Great Article from SF Gate

Great article about our local Real Estate market – is recovery slowing down?  Or is supply holding back the reins?

Signs of possible slowdown in housing recovery


By: Kathleen Pender, San Francisco Chronicle & SF Gate

Bay Area home prices rose on a year-over-year basis last month, albeit at a slower pace than earlier in the year, while sales fell to their slowest pace for a December since 2007, DataQuick reported Wednesday.

It was another sign of a potential slowdown in the housing recovery.

On Tuesday, the Mortgage Bankers Association lowered its forecast for 2014 mortgage originations, citing higher interest rates and uncertainty over new mortgage rules that took effect this month.
DataQuick attributed the sales slowdown to a lack of supply, not a lack of demand.
“Demand has been impacted by a roughly one percentage point increase in rates since spring. But we think the bigger deal is the lack of inventory,” DataQuick spokesman Andrew LePage says.
In the Bay Area, 6,714 new and resale houses and condos were sold in the nine counties last month. That was up 0.8 percent from November but down 12.7 percent from December 2012.
Sales are typically higher in December than November, but the seasonal increase is normally much higher – around 8 percent.
The December sales figure was the lowest for a December since 2007, when 5,065 homes sold.
The median price paid for a Bay Area home last month was $548,500. That was down 0.3 percent from November, but 23.9 percent higher than the same time last year. From April through August last year, prices rose 30 percent or more on a year-over-year basis.
More sales in spring

LePage says there will be more homes on the market in spring and summer, when the market typically heats up. Rising home prices will leave fewer homes underwater, so more homeowners will sell because they could make enough to pay off their mortgage. Also, there has been “a little more construction,” LePage says.
“Waiting (to buy a home) will get you more choice, but all bets are off on prices,” he says.
If the current rate of appreciation holds, “the typical home would be selling for $50,000 to $60,000 more by spring.

Perhaps twice that at the upper end of the market,” DataQuick President John Walsh said in a news release.

Tight inventories are also hurting the mortgage industry.

In its forecast Tuesday, the Mortgage Bankers Association predicted that only $1.12 trillion in home loans will be originated this year, down 36 percent from $1.76 trillion in 2013. In October, it predicted that 2014 originations would drop by only 32 percent.

The forecast came out hours after mortgage heavyweights Wells Fargo and Chase announced big drops in fourth-quarter mortgage originations as part of their earnings reports.

The numbers “just kept getting worse through the end of 2013,” says Michael Fratantoni, the association’s chief economist.

The association predicts that home-purchase mortgages will rise just 3.8 percent to $677 billion this year. In October, it was expecting a 9 percent increase.

Refinance originations, it says, will hit only $440 billion, down 60 percent form last year. In October it expected a 57 percent drop.

Higher rates a drag

The main culprit is higher interest rates. Mortgage rates were around 3.5 percent at the beginning of last year but jumped by a full percentage point in May and June. They have been hovering around 4.5 percent since then.

The immediate effect was to slash refinance volume, but home-purchase originations also suffer from a low-rate “hangover,” Fratantoni says. The ultra-low rates that persisted before May “pulled forward some (purchases) that might not have occurred until six months or a year later. Now we are now we are seeing a bit of a payback in terms of lower activity.”

The association predicts that the average 30-year mortgage rate will be above 5 percent by the end of this year and above 5.5 percent at the end of next year.

It also predicts that fewer mortgages could be made this year as lenders narrow their product lineup to conform with the new mortgage rules designed to outlaw some of the abusive lending practices that led to the financial crisis.

The new rules give lenders some protection from borrower lawsuits if they make what is known as a qualified mortgage and the loan goes bad. A loan is not qualified if it has certain features, such as interest-only payments, or if the borrower’s total debt payments (including the mortgage and other debt) exceed 43 percent of gross income.
Over government limit

The new rules apply only to jumbo and other nonconforming mortgages, because all loans that could be bought or backed by Fannie Mae, Freddie Mac, the Federal Housing Administration and other government agencies are automatically deemed qualified.

Government loans account for the vast majority of the mortgages nationwide but a smaller percentage in the Bay Area, where many borrowers exceed the government limit, which tops out at $625,500 for Fannie, Freddie and FHA loans in high-cost areas.

In the Bay Area, 15.4 percent of home-purchase loans exceeded $625,500 in the fourth quarter, but this number ranged from less than 0.4 percent in Solano County to 32 percent in San Francisco, according to DataQuick.

Kathleen Pender is a San Francisco Chronicle columnist. Net Worth runs Tuesdays, Thursdays and Sundays. E-mail: kpender@sfchronicle.com Blog: http://blog.sfgate.com/pender Twitter: @kathpender

I read this article at: http://www.sfgate.com/business/networth/article/Signs-of-possible-slowdown-in-housing-recovery-5146631.php
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Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

2014 – What will the Real Estate Market be like?

It’s on my mind – maybe it’s on your mind – but I enjoyed this article about the 2014 market forecast. Enjoy!

The housing recovery hit high gear in 2013 with bigger than expected price gains and solid home sales. This year isn’t likely to be as exciting. Rising mortgage interest rates will price out some potential buyers. Instead of double-digit price gains, look for single-digit ones, economists say, while existing home sales remain at last year’s level.
Sound boring? “You want boring in the housing market,” says Svenja Gudell, Zillow director of economic research.
Here’s what’s ahead for:
• Home prices. They were the highlight of the 2013 housing market, up 12.5% in October year over year, CoreLogic says. Prices are now 20% off their 2006 peaks after falling more than 30%, shows the Standard & Poor’s Case-Shiller index.
Economist John Burns looks for a 6% gain in 2014. Many others see smaller increases ahead. Zillow forecasts just a 3% rise.
Prices will likely rise more slowly as more homes come on the market, fewer investors bid for homes and higher ownership costs — including interest rates and home prices — take a bite out of housing affordability, housing experts say.
Still, U.S. housing remains 4% undervalued when compared with other economic fundamentals, such as consumer incomes and the cost to rent, says Jed Kolko, Trulia economist. At their 2006 peak, home prices were 39% overvalued based on the same metrics, Kolko says.
•Existing home sales. They’ve started to slow. In November, they were down year over year for the first time in 29 months, National Association of Realtor data show.
The dip was driven by higher interest rates and a tight supply of homes for sale. It doesn’t mean the housing recovery has come off the rails, because home prices and housing starts continue to improve, says Capital Economics economist Paul Ashworth.
Existing home sales, which came in at a 4.9 million seasonally adjusted pace in November, are expected to be about 10% higher in 2013 than 2012 and stay about the same at 5.1 million in 2014, NAR forecasts. That’s roughly back to 2007 levels but below the inflated levels preceding the housing crash.
New-home sales, which make up a smaller part of the market, have more room to grow. They hit an annual pace of 464,000 in November, up almost 17% from a year ago but still below the 700,000-a-year pace generally considered healthy.
The new year will be different for home buyers, though.
Look for fewer bidding wars and a less frantic market, says Glenn Kelman, CEO of brokerage Redfin. Its data show bidding wars recently falling to one of two offers handled by Redfin agents, down from three of four at the peak in March.
Homes are taking longer to sell, and more sellers are also reducing prices to win sales, Kelman says. At the same time, the supply of existing homes for sale edged up to 5.1 months from 4.9 months in October, NAR says. That’s still below the six-month supply that Realtors generally consider to be a balanced market for buyers and sellers.
Supply should get closer to that level in 2014, Kelman says.
Donaee and Jeff Reeve hope he’s right. The couple sold their Seattle-area home in just 10 days amid a hot June market. They’ve been renting as they search for a new home with a few acres. Meanwhile, prices have risen. The lack of suitable homes for sale is “discouraging,” says Donaee Reeve, 36, a dental hygienist.
• Housing construction. This part of the housing recovery has been a laggard.
November’s data showed an improvement, with housing starts topping 1 million on an annual basis, the Commerce Department says. That was up almost 30% from a year earlier, but it’s still far below the norm. Starts averaged 1.5 million a year before the mid-2000s housing boom.
Construction won’t return to normal this year, but it will strengthen enough to be the main driver of the housing recovery as home price gains shrink, says investment manager Goldman Sachs Asset Management.
It sees housing starts increasing 20% a year for the next several years as household formation picks up with the strengthening economy.
More home construction means more jobs for construction workers, plumbers, civil engineers and others in the building trades, as well as related industries such as furniture manufacturing, it says.
Construction alone will add 300,000 to 500,000 jobs a year to the nation’s job base for the next three years, GSAM predicts. That’s up from about 100,000 in 2013.
“The construction revival is primarily a matter of when, not if,” says Tom Teles, GSAM head of securitized and government investments.
• Mortgage rates. Sarah and Andrew Katz know home prices are going up, and mortgage interest rates, too. But they’re still convinced it’s a good time to buy a first home. They’ve set their sights on spring.
“We’re banking on interest rates staying under 5%, but they are what they are,” says Sarah, 29, who works in public relations in Manhattan.
“
We’re banking on interest rates staying under 5%,
”
— Sarah Katz
The couple better not wait too long, economists warn.
Average rates for a fixed 30-year mortgage will rise to 5.5% by the end of 2014, says Lawrence Yun, NAR chief economist. Rates have already risen about 1 percentage point in the past year as the economy has strengthened. They’ll be pushed up further as the Federal Reserve winds down its $85 billion monthly bond-buying program.
Each percentage point increase in mortgage rates makes homes about 10% more expensive in terms of higher housing payments.
Another factor could weigh on borrowers. Starting in January, lenders must make home loans that meet new federal qualified mortgage standards or face greater liability from borrower lawsuits, should the loans go sour.
At least 5% of mortgages extended in 2013 wouldn’t meet the new standard, Yun says. More than that will likely face additional scrutiny from lenders as they implement all parts of the new rule, says Brian Koss, executive vice president of lender Mortgage Network.
He says the higher rates and tighter rules will likely drive some home buyers out of the market or into lower-priced homes than they could have afforded last year.
“People have gotten spoiled,” Koss says. Higher rates and home prices will test the strength of the housing recovery in 2014, he says.

I read this article at: http://www.usatoday.com/story/money/business/2014/01/01/home-prices-2014-housing-starts/4181021/#!

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Please enjoy my personal journey through homeownership at:
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Thanks for reading – Sabrina
The Caton Team – Susan & Sabrina – A Family of Realtors
Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

ARE DINING ROOMS DEAD? 5 BETTER WAYS TO USE THAT SPACE – by Brightnest

Have you checked out Brightnest?  Of course I have – being a home addict and a Realtor.  I’ve really enjoyed playing with the app and reading the newsletters.  When this article popped into my inbox – I was intrigued!  Be rid of the dinning room?!  What?  But then I thought about it, and how much lives have changed.  It may not work for everyone – but I was an interesting ready – enjoy!

ARE DINING ROOMS DEAD? 5 BETTER WAYS TO USE THAT SPACE

How many times did your family use your dining room last year? If you can count the meals at the table on one hand, then you may want to consider repurposing that room. It can be hard to let go of the dining-room dream, but let’s be realistic. A room that only gets used during holidays isn’t worth keeping.

If you’re willing to break out of the traditional dining-room mold, the possibilities can go a lot further than three-course meals and dress shoes. Here are five ways to get more from your dining room.

Convert it into a home office. Picture your large dining room table. Now picture that same dining room table with one chair. Boom! You now have the home office you’ve always wanted. Let your china cabinet double as office supplies storage and use this space as an office for 360 days a year. For the 5 days that you host large dinners, simply clear off your office supplies and add the extra chairs back to the table!

Keep it as the party room. If you love entertaining people but hate the idea of hosting a formal dinner, turn your dining room into hang-out central. Replace your dining room table with a pool table and install a bar along one wall for finger food and cocktails. The dining room will quickly become the most popular room in the house!

Make it a morning cafe. Instead of squandering every square inch of the room with an oak table that sits eight, place a couple small, café style tables in the room. Small tables are more inviting when you’re enjoying a cup of coffee, reading the paper or even opening the mail. Plus, smaller tables are easy to move around and join together (just in case a dinner party of eight does actually happen).

Turn it into a guest room. If your extended family treats your house as their free hotel, consider installing a Murphy bed in your dining room. Most of the time it will simply look like a shelf and you can use the room for whatever your heart desires. Then, when guests arrive, it instantly turns into an impromptu guest bedroom.

Make it playtime central. If you spend a lot of time in the kitchen and love the idea of your kids playing close by, then turn your dining room into their playroom. Ditch the fancy table and replace it with a craft table and add toy bins or book shelves. We also recommend adding a comfy rug for optimal toy enjoyment.

What do you think?  Please share your thoughts by email or comment – thank you!  -Sabrina

I read this article at: https://brightnest.com/posts/are-dining-rooms-dead-5-better-ways-to-use-that-space

Got Questions? – The Caton Team is here to help.

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Thanks for reading – Sabrina

Feng Shui and Real Estate

I have to say – Real Estate introduced me to the art of Feng Shui 10 years ago.  I was walking through a home that didn’t feel right.  My client mentioned it had bad Feng Shui as she looked out the window to the intersection that was heading straight at them home.  Before she even finished her sentence she was out the door.  I looked Feng Shui right away and have been reading about it ever since.

When we were remodeling our home, I took out my trusted Bagua to choose colors.  When I look at homes I consider the front door, the homes position etc.  I have truly enjoyed learning about Feng Shui.  Enjoy this article I read through the California Association of Realtors.

8 Staging Tips Using Feng ShuiThe ancient Chinese art of feng shui (pronounced “fung shway”) is over 3,000 years old, and has been known to help many REALTORS® sell homes when applied to their listings. This method of arranging inner and outer environments so they consistently support the possibility of all the good things in life encourages health, wealth, great relationships, career, and wisdom – just to name a few. Karen Rauch Carter, author of the bestselling book Move Your Stuff, Change Your Life, works with many REALTORS® who swear by her techniques. Here are a few easy fixes to help prepare your listings for sale the feng shui way.1. Create a happy front door. According to feng shui principles, the easier it is for people to bring opportunities to your front door, the more you’ll have.  Make the walk from the car to the front door a delightful experience. That means no thorny plants nearby, no sidewalk trippers, and no cobwebs to walk through.  Next, add details that draw people to the front door, such as a welcome mat and flowers.  You might even consider painting the front door a shade of red to attract positive energy, especially if it’s positioned in shadow or under an overhang or porch.  Make sure the doorbell and outdoor lights are in good, working order. Clean the door and stoop thoroughly — shine the metal on the knocker, wash any windows — make it the prettiest front door on the block!

2. Fix the leaks. This is, of course, basic common sense, but in feng shui leaking water is equivalent to leaking money. When a leak is fixed, the money stays, and you may just end up selling the home at a higher price.

3. For every room, a true function. When buyers see a treadmill in the bedroom, a computer on the kitchen counter, or a bike in the hallway, it may appear that the house doesn’t seem to have enough room for all the necessary functions. When staging a home, make sure every object in the room matches the room’s function.

4. Manage outdoor plants. Plants, especially dead ones, can block positive energy when physically touching the outside of the house.  When the limbs of a tree are in direct contact, they may even transfer negative energy into the home. Remove worry and excess debris, and the house may sell faster.

5. Place furniture in a commanding position. This means different things for different rooms, but the feng shui basic premise is that furniture should be arranged so the back and head are protected. Don’t have your back to a door or window when you’re on a couch, chair, or bed, and avoid directly facing a wall, especially when sitting at your desk.

6. Keep the energy flowing.  Doors and windows are the entry points for energy to enter or escape, so make sure all are in good working order to encourage positive energy flow.  All doors (including closets) should open freely with nothing blocking their way.  Windows should be easy to open – make sure none are painted or nailed shut. If they’re stuck, you might get stuck with a listing that’s hard to sell.  If possible, open curtains and blinds before a showing to invite energy into the home.

7. Let the buyer find the view. When a home is designed to give you that big WOW view upon entering the front door, consider creating a bold, dramatic design statement to compete for that attention somewhere inside the home. This may seem counter-intuitive, but if buyers are immediately drawn outside, that means nothing inside is holding their attention. The more you can keep attention INSIDE the house before the eyes slip outside, the better energy and “greater likeability” you are creating.

8. Employ the power of red. Homes lacking a fire element may be more difficult to sell. This problem can be addressed with a quick fix of adding red or hot orange colors where appropriate.  Place a vase of red flowers on the counter, or toss a few red throw pillows on the couch or bed if the décor allows. A bowl of red apples is another easy solution. Pointy, triangular shapes are also considered fire elements in feng shui, so consider filling a vase with flowers like birds of paradise. Animal prints can also provide a fire element, as can actual fire, such as candles. Try adding a few splashes of red here and there, and see what it can do for your next listing.

Remember to follow our Blog at: https://therealestatebeat.wordpress.com/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

The Caton Team – Susan & Sabrina – A Family of Realtors

Sabrina BRE# 01413526 / Susan BRE #01238225 / Team BRE#70000218/ 01499008

How to Assess the Real Cost of a Fixer-Upper House

How to Assess the Real Cost of a Fixer-Upper House

When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix.

1. Decide what you can do yourself

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house.

*  Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.

*  Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the cost of repairs and remodeling before you make an offer

*  Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.

If you’re doing the work yourself, price the supplies.

Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

3. Check permit costs

Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it’ll cause problems when you resell your home.

Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.

Factor the time and aggravation of permits into your plans.

4. Doublecheck pricing on structural work

If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems. 

Get written estimates for repairs before you commit to buying a home with structural issues.  Don’t purchase a home that needs major structural work unless:

You’re getting it at a steep discount

You’re sure you’ve uncovered the extent of the problem

You know the problem can be fixed

You have a binding written estimate for the repairs

5. Check the cost of financing

Be sure you have enough money for a down payment, closing costs, and repairs without draining your savings. 

If you’re planning to fund the repairs with a home equity or home improvement loan:

*  Get yourself pre-approved for both loans before you make an offer.

*  Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.

*  Consider the Federal Housing Administration’s Section 203(k) program, which is designed to help homeowners who are purchasing or refinancing a home that needs rehabilitation. The program wraps the purchase/refinance and rehabilitation costs into a single mortgage. To qualify for the loan, the total value of the property must fall within the FHA mortgage limit for your area, as with other FHA loans. A streamlined 203(k) program provides an additional amount for rehabilitation, up to $35,000, on top of an existing mortgage. It’s a simpler process than obtaining the standard 203(k).

6. Calculate your fair purchase offer

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement. 

Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently re-carpeted, and has a radon mitigation system in its basement.

The cost to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your bid for the house should be $160,000.

Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair.

7. Include inspection contingencies in your offer

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

*  Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.

*  Radon, mold, lead-based paint

*  Septic and well

*  Pest

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with. 

If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

My words to the wise – if you get outbid – don’t fret – start again.  Each home you take the time to break down and understand the cost of repair – the better prepared you will be when the next opportunity arises.

We bought a condo as our first purchase – and though you mainly own just the paint in – we budgeted $10,000 in repairs only to spend $17,000 in the end.  Hind sight is always 20/20 – but now when we buy our next home, we’ll have the experience under out belt and a better picture of a budget and our limitations. 

By: G. M. Filisko

I read this article at:  http://members.houselogic.com/articles/how-assess-real-cost-fixer-upper-house/preview/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Keep Your Home Purchase on Track

Keep Your Home Purchase on Track

I love finding great articles to share – I’ve added my 2 cents in itatlics – enjoy – Sabrina

You’ve found your dream home. Make sure missteps don’t prevent a successful closing.

1. Be truthful on your mortgage application

You may think fudging your income a little or omitting debts when applying for a mortgage will go unnoticed. Not true. Lenders have become more diligent in verifying information on mortgage applications. If you fib, expect to be found out and denied the loan you need to fund your home purchase. Plus, intentionally lying on a mortgage application is a crime.

You might get away with your fib when you apply for your loan, but once you find a home and have an accepted offer.  Your lenders underwriter will comb through every bit of your financial life.  One fib will open a huge can of worms and you could find yourself in hot water.  Because not only have you harmed your chances at getting a loan – you’ve held up a seller who is working in good faith with you and has pulled their home off market waiting for you to remove your contingencies and close escrow.  DON’T LIE!

2. Hold off on big purchases

Lenders double-check buyers’ credit right before the closing to be sure their financial condition hasn’t weakened. If you’ve opened new credit cards, significantly increased the balance on existing cards, taken out new loans, or depleted your savings, your credit score may have dropped enough to make your lender change its mind on funding your home loan. 

Although it’s tempting to purchase new furniture and other items for your new home, or even a new car, wait until after the closing.

The only thing you should be doing is saving your pennies until you close escrow on your new home.  People of lost their dream home because they spent money before closing.  Not my clients though – I remind them constantly about the big picture!

3. Keep your job

The lender may refuse to fund your loan if you quit or change jobs before you close the purchase. The time to take either step is after a home closing, not before.

Amen – well said!

4. Meet contingencies

If your contract requires you to do something before the sale, do it. If you’re required to secure financing, promptly provide all the information the lender requires. If you must deposit additional funds into escrow, don’t stall. If you have 10 days to get a home inspection, call the inspector immediately.

There is a clause IN the Real Estate Purchase Contract (in California) that states – Time is of The Essence!  We are not kidding.  Time is contractual – do what you said you would do.  Your mother will be proud! 

5. Consider deadlines immovable

Get your funds together a week or so before the closing, so you don’t have to ask for a delay. If you’ll need to bring a certified check to closing, get it from the bank the day before, not the day of, your closing. Treat deadlines as sacrosanct.

We take each deadline deadly serious.  Could there be delays?  Yes of course, so much of the real estate purchase process is beyond your Realtors control – so make sure you’re doing what you should be doing when you should be doing it – it will streamline an already difficult transaction. 

By: G. M. Filisko

Got questions – I am here to help – call or click – info@theCatonteam.com

I read this article at: http://members.houselogic.com/articles/keep-your-home-purchase-track/preview/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Negotiate Your Best House Buy

Negotiate Your Best House Buy

I love to share articles I find interesting – I’ve added my 2 cents in italics…

Keep your emotions in check and your eyes on the goal, and you’ll pay less when purchasing a home.

Here are six tips for negotiating the best price on a home.

1. Get prequalified for a mortgage

Getting prequalified for a mortgage proves to sellers that you’re serious about buying and capable of affording their home. That will push you to the head of the pack when sellers choose among offers; they’ll go with buyers who are a sure financial bet, not those whose financing could flop.

This is so much the first step towards home ownership – any Realtor worth their salt won’t even take a buyer out until they are pre-approved and understand their budget and constraints.  In the San Francisco Bay Area – don’t bother writing an offer until you have a pre-approval in hand – or proof of cash.

2. Ask questions

Ask your agent for information to help you understand the sellers’ financial position and motivation. Are they facing foreclosure or a short sale? Have they already purchased a home or relocated, which may make them eager to accept a lower price to avoid paying two mortgages? Has the home been on the market for a long time, or was it just listed? Have there been other offers? If so, why did they fall through? The more signs that sellers are eager to sell, the lower your offer can reasonably go.

The Caton Team also finds out the big picture so we can tailor each offer for the best fit.  When faced against multiple offers – information is key and structuring your offer is imperative. 

3. Work back from a final price to determine your initial offer

Know in advance the most you’re willing to pay, and with your agent work back from that number to determine your initial offer, which can set the tone for the entire negotiation. A too-low bid may offend sellers emotionally invested in the sales price; a too-high bid may lead you to spend more than necessary to close the sale. 

Work with your agent to evaluate the sellers’ motivation and comparable home sales to arrive at an initial offer that engages the sellers yet keeps money in your wallet.

The Caton Team will provide a buyer with a Comparative Market Analysis (CMA) when we sit down to write the offer.  We take into account the current state of the market, what homes have sold for in the recent past, what they are going for now, and the amount of competition for each home.  Try to maintain an open mind when writing your offer. 

4. Avoid contingencies

Sellers favor offers that leave little to chance. Keep your bid free of complicated contingencies, such as making the purchase conditional on the sale of your current home. Do keep contingencies for mortgage approval, home inspection, and environmental checks typical in your area, like radon.

Contingencies are what protect the buyer.  Talk closely with your Realtor on which contingencies should stay in and which you can omit to improve your offer.  Each client and offer is different.  That’s why it is so important to work with a Realtor you trust. 

5. Remain unemotional

Buying a home is a business transaction, and treating it that way helps you save money. Consider any movement by the sellers, however slight, a sign of interest, and keep negotiating. 

Each time you make a concession, ask for one in return. If the sellers ask you to boost your price, ask them to contribute to closing costs or pay for a home warranty. If sellers won’t budge, make it clear you’re willing to walk away; they may get nervous and accept your offer.

This strategy works great when you are the ONLY offer.  So much time is wasted by buyers who think they hold the reigns in negotiations.  In the San Francisco Bay Area we have low inventory right now and high demand.  Setting the stage for a Sellers Market. Each listing will entertain multiple offers.  So it is best to write your best offer up front because chances are you will NOT get a counter offer or the chance to change your offer once submitted.  It is imperative you work closely with a Realtor you trust.  Each offer opportunity is unique and will require a new strategy. 

6. Don’t let competition change your plan

Great homes and those competitively priced can draw multiple offers in any market. Don’t let competition propel you to go beyond your predetermined price or agree to concessions—such as waiving an inspection—that aren’t in your best interest.

Great advice.  The Caton Team will not push our clients to do anything they are not comfortable with.  I would rather change our purchasing strategy and shop in a different market or price point than overextend our clients reach just because the housing market is competitive.

Buyers must be aware that they cannot control the market or the volume of competition.  All a buyer can do is educate themselves on the market, understand their budget and their max and shop within their parameters.  Nobody said it would be easy – but The Caton Team does strive for a smooth overall experience. 

By: G. M. Filisko

I read this article at:  http://members.houselogic.com/articles/negotiate-best-house-buy/preview/

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

5 Inspection Problems Buyers Shouldn’t Ignore

I enjoy posting my own artciles and sharing others.  This one from the Real Estate Daily News is very share-worthy – enjoy – Sabrina

5 Inspection Problems Buyers Shouldn’t Ignore

Home buyers need to be extra vigilant about inspections in the early stages of a purchase because if problems are discovered too late in the process, it can “dash home owners’ dreams and budgets,” writes Yahoo! Finance in a recent article.

One home buyer in Long Island, N.Y., explains in the story that she didn’t discover the fixer-upper she bought needed $225,000 in repairs until after she purchased it.

Jonathan and Drew Scott, who educate viewers about transforming fixer-uppers on HGTV’s “Property Brothers,” offers up a checklist of five things buyers should look for to ensure they don’t buy a lemon.

  • Mold: Buyers should note any musty smells in the home and be on the lookout for any mold. Mold can be caused by improper air circulation as well as water leaks.
  • Pests: Termite damage can be widespread and costly to repair.
  • Outdated fixtures and wiring: Electrical problems in a home can cause fire hazards. Buyers should take note of any indication of faulty wiring, such as cable coming out of drywall.
  • Poor DIY jobs: Buyers should make sure that the previous home owner’s do-it-yourself projects were done correctly and are up to code. For example, poorly done flooring and painted-over wallpaper can be time-consuming and costly to fix.
  • Drainage problems: Sloping sod can cause flooding problems in a backyard, and a slow-draining sink could be an indication of a bigger problem. Buyers should test sinks and flush toilets to test for any potential problems.

Source: “Property Brothers: Don’t Buy a House Without Checking These 5 Things,” Yahoo! Finance (Aug. 19, 2013)

I read this article at:  http://realtormag.realtor.org/daily-news/2013/08/22/5-inspection-problems-buyers-shouldn-t-ignore?om_rid=AACmlZ&om_mid=_BSFlH2B80sQKxz&om_ntype=RMODaily

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Instagram:  http://instagram.com/sunshinesabby

Pintrest: https://pinterest.com/SabrinaCaton/

LinkedIn:  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

FHA Trims Waiting Period for Borrowers Who Experienced Foreclosure

Great news for those who experienced hardships during the economic downturn!

FHA Trims Waiting Period for Borrowers Who Experienced Foreclosure

The Federal Housing Administration (FHA) is allowing borrowers who went through a bankruptcy, foreclosure, deed-in-lieu, or short sale to reenter the market in as little as 12 months, according to a mortgage letter released Friday.

Borrowers who experienced a foreclosure must wait at least three years before getting a chance to get approved for an FHA loan, but with the new guideline, certain borrowers who lost their home as a result of an economic hardship may be considered even earlier.

For borrowers who went through a recession-related financial event, FHA stated it realizes “their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

In order to be eligible for the more lenient approval process, provided documents must show “certain credit impairments” were from loss of employment or loss of income that was beyond the borrower’s control. The lender also needs to verify the income loss was at least 20 percent for a period lasting for at least six months.

Additionally, borrowers must demonstrate they have fully recovered from the event that caused the hardship and complete housing counseling.

According to the letter, recovery from an economic event involves reestablishing “satisfactory credit” for at least 12 months. Criteria for satisfactory credit include 12 months of good payment history on payments such as a mortgage, rent, or credit account.

The new guidance is for case numbers assigned on or after August 15, 2013, and is effective through September 30, 2016.

I read this article at: http://www.dsnews.com/articles/fha-trims-waiting-period-for-borrows-who-experienced-foreclosure-2013-08-19

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call us at: 650-568-5522

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

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Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

A Cinderella Story – Michael and Two Condos

A Cinderella Story – Michael and Two Condos

With 25+ years of combined Real Estate experience, The Caton Team is blessed with working with our clients one home after the other.

When Michael bought his first condo with Susan years ago – it was only natural for him to call her again now that he was ready to buy his next home.  By now Susan & I had teamed up and I had the joy of working with Michael as well.

Such a professional and patient gentlemen, we started our journey early in 2013.  Faced with limited inventory and competition we took our time to find choice properties and enjoyed finding the right condo complexes that would fit his lifestyle.

Finally on a sunny Tuesday we found a great 2-bedroom 2-bath condo in San Mateo.  It was a short sale but we were up for the task.  Offer in, up against three other offers – we were so happy to let him know his offer was accepted.

Then the wait begins.  For a short sale, the seller has a long to-do list.  Great clients do what they need to do to get a short sale approved.  Other types of people brush their responsibility off.   We knew short sales take time to get approved.  We knew short sales are a LOT of work. Each week we checked in with the seller’s agent and received short and useless updates.  We grew suspicious and Susan hit the Internet to do some investigating.  Much to our surprise, the unit was set for foreclosure auction the following day!  Quickly The Caton Team reached out to the seller’s agent to implore the urgency of a true update.  Sadly, not all Realtors are created equal and this particular agent brushed us off again.  We did all we could do as the buyer’s Realtor and the following day, with baited breath, we watched the auction site to see if it would be postponed.  Right before our eyes the unit was sold at auction.  When we called the sellers agent to get a handle on this situation – she kindly hung up the phone.

Without missing a beat Susan called Michael and we hit the ground running looking for a new home.  It didn’t take long, another unit, very similar to the one we just lost, was for sale – but they were taking offers the following day!

Michael is a trooper; he met Susan at the home the next morning, saw it, wrote the offer and submitted by the deadline.  By that evening we had the joy of telling him is offer was accepted!  Within less than 24 hours we went from bad news to fantastic news.

It ain’t over till it’s over though – that is a fact.  As the escrow proceeded we had a hiccup – the unit did not appraise for our offer price….which was less than the last sale of an identical unit.   When interest rates went up – the market had turned from a sellers market early in the year to a different market in a matter of weeks.  The appraiser was cautious – and we can’t blame him for being prudent.  No one wants another bust!  Thankfully both the listing agent and the sellers understood the situation and we were able to re-negotiate a win/win deal that evening.

The best feeling in the world is handing over the keys.  Though it was a long and bumpy ride, The Caton Team was able to get our client a better home and in the end Michael is happy – and that makes everything worthwhile.

How can The Caton Team help you?

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

Call The Caton Team at 650-568-5522

Visit our Website at:   http://thecatonteam.com/

Visit us on Facebook:   http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Instagram: http://instagram.com/sunshinesabby

Pintrest: https://pinterest.com/SabrinaCaton/

LinkedIn:  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina