Resources for Buyers Struggling With Down Payments

First-time buyer surveys consistently show the top hurdle to homeownership is saving up for the down payment. But potential home shoppers may be misunderstanding the amount of money they really need to buy a home.

“Paying 20 percent down is, quite frankly, a myth,” Karen Hoskins, vice president at NeighborWorks, told HouseLogic. “Most buyers pay only 5 percent to 10 percent down—some even pay zero.”

Several assistance programs exist to help buyers with down payment concerns break into homeownership. For example, 69 percent of about 2,500 homebuying programs tracked by Down Payment Resource offer down payment assistance. The average amount of assistance from these programs tops $11,000.

HouseLogic offers several places where buyers can search for down payment assistance, including through national government programs. The Federal Housing Administration offers loans to first-time buyers with down payments as low as 3.5 percent. Programs like the USDA Rural Development Loans and VA Home Loans offer eligible buyers zero down payment loans.

Mortgage financing giants Fannie Mae and Freddie Mac offer eligible buyers loans where they can put down as little as 3 percent of the purchase price. When buyers put down less than 20 percent, they pay private mortgage insurance each month to protect the lender’s interest.

Many state and local homebuying programs offer assistance programs too. There are many different forms of assistance, such as forgivable loans and grants (gifts for some or all of the down payment and closing costs) to soft mortgages (down payment assistance loans that are deferred for some period of time based on the program’s requirements).

To find a program, HouseLogic recommends NeighborWorks, which provides housing counselors to discuss mortgage options for free, and the Down Payment Resource, where buyers can check their eligibility for assistance programs. Mortgage brokers should also be able to supply buyers with information about programs in their area and help determine eligibility.

Read the full scope of your buyers’ options and share the available resources for down payments—or no down payments—on HouseLogic. 

Source: 

Known Ways You Can Buy a House With No Down Payment,” HouseLogic.com (December 2018) 

I read this article at: Realtor.com

Got Questions – The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the upmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials

The Caton Team Blog – The Real Estate Beat

The Caton Team Website

The Caton Team Advantage

How to Buy While Selling Real Estate

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Visit us at:  Our Blog * TheCatonTeam.com * Facebook * Instagram * HomeSnap* Pintrest * LinkedIN Sabrina * LinkedIN Susan

Thanks for reading – Sabrina

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

House hunting for first-time homebuyers: is there a right way?

A lot of buyers, especially first-timers, worry about whether or not they’re going about their home search the right way.

On the one hand, buyers fret that if they find their “dream home” too early, they might be missing out on something better. But, on the other, if the process takes a while, they worry that they’ll never find a home that works for them. The FOMO is real.

Keep reading to find out if you’re on track with your home search and what you should do if you find that you need to go back to the drawing board.

How many homes should you see?

Honestly, that depends. While we understand the impulse to try and rely on hard-and-fast statistics, homebuying is a truly personal experience rather than a science.

Trust your intuition. You know your needs, likes, and dislikes better than anyone else. You’ll know when you’ve landed on the property that makes the most sense for you to call home.

That said, though, there are a few things you can do to help speed your search along:

If you’ve been looking for a while and haven’t really found anything that meets your needs, it might be time to redefine search criteria. Sit down and take some time to think about which features you really need to have in your new home versus which are more nice-to-have, wishlist items.

Narrowing your search

Sometimes, narrowing search criteria can get tricky. If you’re unsure of where to start, try using the following as a starting point.

Neighborhoods

Focusing in on a particular area is one of the easiest ways to refine your search. You can start by doing research into different neighborhoods by you. Think about what you commute to work will look like, if the area has amenities that you enjoy, the quality of the school district, and home values.

With that in mind, though, you getting too hung up on a particular zip code can also limit your criteria. The key is keep an ideal location in mind while still staying open to possibility.

Bedrooms & bathrooms

When searching for a house, you should have a firm idea of how many bedrooms and bathrooms you’re after. Whether you’re just looking to accommodate yourself and the occasional guest, are thinking about starting a family in the near future, or want the option to convert a spare bedroom into an office, this information will surely help narrow your search.

We advise against compromising on this feature because, while it is possible to put an addition on later, doing so takes a substantial amount of time and effort. More often than not, homeowners find that they would rather put their home on the market than go through the hassle of trying to renovate it to fit their changing needs.

Sale price

This is the big one. Once you have the above two details settled, it’s time to narrow your search results further to only those homes that you can truly afford. If you’ve already applied for a pre-approval, that number can be a good place to start. However, remember that a pre-approval shows the maximum amount that you can ask for in a loan. You may not want to borrow up to that amount once you factor in the rest of your monthly expenses.

To find a more comfortable sale price, we recommend using a mortgage calculator to get a sense of what your monthly payment could look like at various loan amounts and interest rates. Then, once you’ve landed on a number that works for you, try plugging that into your monthly budget to get a sense of how the payment will feel in addition to your other costs.

Now what?

The good news is that once you’ve narrowed your search down, your pool of available properties will likely be much smaller than it was before – and much more targeted to meet your needs. From here, your search will be about zeroing in on your perfect match on the basis of which property was the best fit for your personal tates.

You’ll know when a property feels like it could become home versus when you’d be trying to make the best of an imperfect situation. Keep hunting until you find the former.

 

This article originally appeared on OpenListings.

 

Got Questions – The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the upmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials

The Caton Team Blog – The Real Estate Beat

The Caton Team Website

The Caton Team Advantage

How to Buy While Selling Real Estate

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Visit us at:  Our Blog * TheCatonTeam.com * Facebook * Instagram * HomeSnap* Pintrest * LinkedIN Sabrina * LinkedIN Susan

Thanks for reading – Sabrina

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

Study: Delayed Homeownership to Hamper Millennials’ Retirement

Financial experts are growing concerned by how millennials’ lack of homeownership will impact them financially when they retire.

“Homeownership is one of the touchstones of being prepared for retirement,” Tamera Sims, research scientist at the Stanford Center on Longevity, told CNBC. “Buying a home at age 50 or 60 isn’t going to do you much good in funding a 30-year retirement.”
But young adults are “not able to hit the [housing] market at the same age as their parents,” Sims says. Researchers found homeownership is falling the most among people under the age of 30 compared to previous generations.
The homeownership rate among early millennials (those born between 1980 and 1984) at age 30 is 35.8 percent, according to the Stanford Center on Longevity. The rate of nonowners, however, is 64.2 percent. For comparison, the rate of homeownership among baby boomers at age 30 was 48.3 percent, and nonowners were 51.7 percent.
Young adults are delaying marriage and having children and loaded with student debt, all factors for their slow start at homeownership compared to previous generations. In 1960, the average age for men and women to get married was in their early 20s. The median age nowadays has slid closer to 30.
Young adults when they graduate face an average of about $30,000 in student debt, up from an inflation-adjusted $16,000 in the early 1990s. Young adults who are still repaying their student loans at age 30 are 32 percentage points less likely to own a home than those who never borrowed for their education, according to research from the Stanford Center on Longevity.
A study in 2013 from the Urban Institute found that if a person delays buying a home to age 40 instead of age 30, that alone could result in a $42,000 loss in home equity by the time that person reaches age 60.

 

I read this article at: magazine.realtor

Got Questions – The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the upmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials

The Caton Team Blog – The Real Estate Beat

The Caton Team Website

The Caton Team Advantage

How to Buy While Selling Real Estate

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Visit us at:  Our Blog * TheCatonTeam.com * Facebook * Instagram * HomeSnap* Pintrest * LinkedIN Sabrina * LinkedIN Susan

Thanks for reading – Sabrina

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

How to figure out the best time to buy a home, according to a mortgage analyst

Timing your home purchase correctly — like during the winter or before you get married — can save you money.

  • Buying a home is likely to be one of the biggest investments of your life.
  • For many, life events such as marriage or the birth of a child are often the catalyst to buying a home.
  • It’s important to buy a home when you’re able to afford one, though waiting until the winter to put down an offer could save you a bit.
  • Here’s how to know when it’s the best time to buy a home.

Buying your first home is one of the biggest investments you will make in your lifetime.

With housing prices on the rise in many US markets, it can be difficult to find a home that fits your family’s needs without mortgage payments that will break your budget.

According to Holden Lewis, a mortgage analyst at Nerdwallet, timing your home purchase correctly — like during the winter or before you get married— can save you money.

Lewis has followed the mortgage market since 2001 — through the first housing boom, the 2008 crash and its aftermath, and the recovery. Here are his practical tips to help you figure out the right time to buy a home.

Buy when you’re ready

You’re ready to buy a home when you can afford one.

The right time to buy a house is when you have enough money saved up for a down payment and an income that allows you to comfortably afford the mortgage payment. According to Consumer Reports, many financial planners recommend limiting the amount you spend on housing to 25% of your monthly budget.

If you’re not sure whether you can afford a home in your area, Lewis suggests using an online calculator, such as this one from Nerdwallet.

Major life events can also be an impetus for making the leap into home ownership. “I think there’s a lot of personal triggers for homebuying,” Lewis said. “The most common one is adding children to your family.”

Lewis transitioned from being a renter to a homeowner shortly after his son was born. “It was really nice that his first steps were taken in a home of our own,” he said.

Don’t wait until you get married

You don’t have to hold off until marriage to buy a home.

According to Lewis, many people think they need to wait until they get married before buying a home. “I think being single is not a reason to hold off,” he said. “When you buy a home sooner, you’re building equity sooner.”

The Washington Post reported in that 18% of the home purchases made in 2017 were made by single women. That figure includes older women who are widowed or divorced, as well as younger women ready to invest in real estate and put down roots.

Buy in the winter

You may find cheaper listings in the winter.

In 2012-2017, the number of starter homes on the market reached its peak between October and December in 70 of the 100 largest US metros, according to a 2017 report by Trulia. This means that there are more options for those looking to buy their first homes in the fall.

But it may be worth waiting until winter to make an offer, as Trulia also reported a decline in the prices of starter homes between January and March 2017. Additionally, Lewis said that prices tend to be highest in June and July and take a tumble by January or February.

While the number of houses for sale goes down in the winter, the number of buyers declines even more, so you’ll face less competition for the homes that are on the market, Lewis said. And sellers with homes on the market in the winter may be more likely to negotiate, according to a US News report.

Lewis said that this trend holds true even in the places that snowbirds flock to in the winter months. “There’s even a difference in prices in places like Orlando and Phoenix,” he said. “That really surprised me.”

“Each city and even different neighborhoods might be different,” Lewis added. “The best thing to do is ask an experienced local real estate agent.”

Avoid waiting for mortgage rates to go up or down

Don’t let mortgage rates impact your timing of buying a home.

Lewis said mortgage rates have remained low for the past 15 years, despite predicting that they would rise.

“I’ve been following mortgage rates now for 17 years and I can’t tell you how many Januarys I’ve predicted, ‘This is the year when mortgage rates are going to rise substantially,’ and every year it hasn’t happened,” Lewis said.

Lewis recommends resisting the pressure to either rush or delay buying a home based on mortgage rate predictions. “You have at least a 50% chance of being wrong,” he said, so don’t let this affect your timing of when you want to buy a home.

Look for creative financing

There are home-buying programs that you may find helpful

You might have more options for home financing than you realize. Some states, such as Pennsylvania and California, offer homebuyers help with financing, including down payment assistance. Even if your state doesn’t offer any special programs, you might be eligible for an FHA loan, which may only require a down payment of 3.5%.

The VA offers home-buying programs to active-duty military, veterans, and some surviving spouses of servicemembers. “If you are a veteran or in the military, really look into VA loans,” Lewis said. “They are a great deal.”

There is also first-time homebuyers’ assistance at the local level. San Francisco has a special program to help local teachers, and New York City’s HomeFirst program provides up to $40,000 in down payment or closing cost assistance to homebuyers.

In expensive markets like these, assistance programs can make a big difference, Lewis said. Invest a bit of your time to research what support is available where you live.

SEE ALSO: The 10 smartest things I did before I bought my first house

I read this: Business Insider

Got Questions – The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the upmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials

The Caton Team Blog – The Real Estate Beat

The Caton Team Website

The Caton Team Advantage

How to Buy While Selling Real Estate

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Visit us at:  Our Blog * TheCatonTeam.com * Facebook *Yelp Us * My Yelp * Instagram * HomeSnap* Pintrest * LinkedIN Sabrina * LinkedIN Susan

Thanks for reading – Sabrina

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

How Important Is The Lender in a Real Estate Purchase?

How Important Is The Lender in a Real Estate Purchase?

More important than you think….

Hi!  Sabrina Caton here, Realtor with Berkshire Hathaway HomeServices in Redwood City.  I wanted to write my own article today – to shed some light about the importance of the Lender you are working with when purchasing Real Estate in the Bay Area.

If you are a Buyer in the Silicon Valley – then you already know how competitive this market is.  If a Buyer wants to be the winning bidder on a home – they pretty much have to write their best offer – Non Contingent.  Meaning they’re locked into that contract no matter what.  Interest rates rise and they can’t afford their loan?  Doesn’t matter if their offer is Non-Contingent.  House doesn’t appraise for their offer price?  The Buyer better pony up the money or risk possibly losing their good faith deposit – because the offer was Non-Contingent.

As scary as Non-Contingent sounds – it is doable – as long as a Buyer has their ducks in a row – and what I mean by ducks is the Buyer is working with a terrific Realtor and a fantastic Lender, who has already run their credit, taken their application and had the Underwriter  review it all before drafting the Pre-Approval Letter.

Often times, at this stage in the process – a Buyer is looking for the best “deal”.  Meaning – they will follow the path that gets them the “most money” – or so it is perceived.  People may shop a Lender based on their closing costs, the interest rate quoted or because they know them.  All fine and well – but we need more!  The worst is when a buyer uses any Online Lending Score – that is a horror story for another blog post.  (Just take my advice and use a local Lender when buying in the Bay Area.)

When a Buyer is writing a Non-Contingent offer – they are heavily relying on what their Lender has told them.  What some Buyers overlook is the followthrough.  Did the Lender have the Underwriter  (The Bank God as I call them) review the application to ensure they fit into the box?  Did the Lender verify employment?  Does the Lender know one income earner is on leave?  Will their income still be used to qualify for the loan?  What happens if their income is not used?  What happens in a Buyer takes on new debt?  What is a Buyer pays down debt?  So many issues can up at any time, it is best to start off with their best foot forward.

The last thing a Buyer needs once they get an offer accepted is surprises in their loan.  Like – they don’t have a loan!  Large purchases that change their debt to income ratio can turn a Buyer from Pre-Approved to Not Approved.  To make things worse – what if a Buyer found this out AFTER their Non-Contingent offer is ACCEPTED?!  Well – the Buyer could risk losing their Good Faith Deposit and around here that’s 3% of the purchase price and our purchase prices are at least $1 – $1.5 million dollars.  So we’re taking $50,000 here!  

Unless a Buyer is buying a home in cash – the home loan is the most critical part of the transaction.  Any Sellers Realtor worth their salt will call each Lender on each offer they receive – to ensure the strength and validity of the loan.  Because without the loan – there is no sale and NO SELLER is going to risk the most important sale of their lives on “what if’s.”

I could go on and on about the horrors of bad lending.  So instead let me leave you with this.  When you are starting the journey towards homeownership – the true first step is to apply for a home loan and determine your budget.  That entails sitting down and making your own personal home budget.  Itemizing what you spend your money on and how much you have left towards the mortgage.  Once you’ve applied for a home loan, find a Reatlor your can talk to and trust and sit down and do just that – talk.  Each client is a unique situation and therefore requires a different plan.  The Caton Team is comprised of myself Sabrina and my partner/mother in law – Susan.  Together we have 35 years combined, local real estate experience.  Chances are we’ve worked through similar situations as you are in now.  Our time is free, our advice is free – put us to work for you.

If you’ve got Real Estate questions – we’ve got answers.  Contact the Caton Team when you are considering a purchase or sale of Real Estate.

I wrote this…

Got Questions – The Caton Team is here to help.

The Caton Team strives to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here. Contact us at your convenience – we are but a call, text or click away!

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials

The Caton Team Blog – The Real Estate Beat

The Caton Team Website

The Caton Team Advantage

How to Buy While Selling Real Estate

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Visit us at:  Our Blog * TheCatonTeam.com * Facebook *Yelp Us * My Yelp * Instagram * HomeSnap* Pintrest * LinkedIN Sabrina * LinkedIN Susan

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

How to Sell and Buy Real Estate in Today’s Market

Are you a Move Up Buyer in Silicon Valley?   Then you know how hard it is to take that goal and realize it.  It is much harder to sell and buy today than ever before!

If you’re a Buyer in the Silicon Valley – then you are well aware of how competitive it is to get a house in this market.  A Buyer may have started off with big dreams, the want list, the wish list and then quickly condensed the list to one thing – I want a house – any house in the Bay Area.

It’s that nuts.

Why?

The Bay Area has limited space to build.  Land is the gold of Real Estate, without land you cannot build more homes.  So if you want to own a home around here – get ready for the bidding wars.

But if you’re a Buyer with a home to Sell first – then you’re really up for a challenge.  

Seller EXPECTATIONS

If you’re a Seller these days – you have some expectations.  With multiple Buyers for each home – a Buyer pretty much has to do the following to be a candidate:

  • OFFER OVER LIST PRICE – sometimes even more than the Comparative Market Analysis (CMA) warrants.  This can be frightening and can setup a Buyer for some surprises*.  The Caton Team always prepares a CMA and gauges market activity to help a Buyer determine their right price.
  • WAIVE ALL CONTINGENCIES – These days a Buyer cannot ask for repairs, or request time to sell their current home .  If a Buyer wants to be a contender – they must come in Non-Contingent and ready to close.  Let me re-phrase that.  A Buyer must write THIER best offer and if that includes a contingency – the Buyer must do what is best for them.  Just know – if there is a contingency – generally that offer goes to the bottom of the stack because in this market, the Seller has plenty of offers to choose from and does NOT have to accept a Contingent Offer – no matter how cute the letter is.  (Note, in cooler markets Buyers have more leverage and will have the opportunity for Sellers to accept contingencies.  It’s just not that market today.)
  • PROOF OF FUNDS – A Buyer MUST HAVE ALL their down payment, closing costs and reserve monies ready from DAY 1!  Not only for their bank loan approval – Buyers need proof of funds just to write a contending offer!  To be frank, sometimes a great offer is beat out by an offer with “better” proof of funds – IE – money in the bank.
    • Each Seller and their Realtor will REQUIRE Proof of Funds to be submitted WITH the Offer.  Meaning your Realtor needs recent copies of all your bank statements to be provided in your Offer Package to show money for the downpayment, closing costs and reserves.  You would too if you were in the Seller seat.  Our job as Realtors is to protect OUR Clients best interests.  Meaning, while reviewing offers, not only does The Caton Team call each lender to verify loan strength – we also want to see Proof of Funds totaling at minimum the monies for said deal AND reserve funds which are healthy and liquid to ensure –  if things go awry – there are funds to close on time.  In other words, the strongest reserves has an impact on what is considered the “Best” offer.  It is not always price that equates as “Best”.  (Curious why?  – Ask us anytime – it is another blog post.)
      • An example of a Buyer surprise* is when the appraised value is lower than the offer price.  The Buyer may need to pay the difference between the appraised value and offer price because there are NO Contingencies – a Buyer must perform or quit.  Quitting on a Non-Contingent Offer means the Buyer could forge all or a portion of their good faith deposit – which is 3% of the total purchase price.  Note – each case is different and this is just an example.  Bottom line – selling Real Estate is serious business and being prepared is the first step.

There are several more items that make the perfect Offer Package – so if you’re curious – contact The Caton Team.

Ok, so now you have an idea of what it takes to buy a home around here.  Now what do you do if you have a home to sell first?  Bear with me on this – it is the hottest topic in Real Estate today.

HOW TO SELL THEN BUY

If you’re lucky enough to already be a Silicon Valley homeowner – congratulations!  You’re ahead of the game.  Right?  Unless you need more space and want to move up.  The Caton Team has met many clients who opted to add onto their existing homes.  Great!  Unless that is not an option.  Then we are back to square one – How does a Buyer sell then buy in this market?  

As I stated above in Seller Expectations, the “requirements” for contention can feel like a tall order.  If your down payment funds are tied up in the equity of your home – you have several options but only a few are viable in this market.  

DREAM OPTION

Rich Aunt Sally gifts you the money you need for the purchase of the home.  Thank you Aunt Sally.  But what if we don’t have rich relatives?

SELL FIRST OPTION

This is the cut and dry option.  Sell the home.  Close Escrow.  Move out and into a short term rental or with relatives.  Bank the  proceeds of the sale – aka: the downpayment and enjoy the Home Buying Experience at your own pace knowing you can A) Prove your Funds and B) Go in Non Contingent. 

Oh – Did I mention this option is also terrifying?  A Seller feels as if they are loosing their only piece of California – the “what if we don’t get the next one” can be frightening.  That’s why this option that is often chosen last.  Next up…

SELL FIRST WITH RENT-BACK OPTION

Similar to the first scenario – except instead of moving out at Close of Escrow – the Seller is granted Rent Back to live in the home for an agreed timeframe and cost, then move out – whether or not the Seller has acquired their next purchase.  The advantage to this is the Closing – the Seller has the proceeds in the bank and can write a non-contingent offer on their next home.  The down side – it is a short term solution – if the Seller doesn’t find their next home within the time frame – they will have to move out when the tenancy is over no matter what.  

OBTAIN AN OFFER TO PURCHASE

This option is often the first step – the proverbial toe in the water.  We, as your Realtors will try to find a Buyer willing to do the following:

  • Offer to Purchase the home with an Extended Close of Escrow, giving the Seller time to acquire their next property then quickly close on one then the other – a Domino closing effect.  The downside, their proceeds are not in the bank; therefore the Proof of Funds will be short AND even if the Seller writes a Non-Contingent Offer – we as Realtors know – it isn’t over until it’s over.  In other words, when comparing offers – the one with less strings attached wins.  Even Non-Contingent Offers in this scenario are not as strong as Buyers ready, willing and able to close on time.  IE:  Don’t have to close one house before they can close on the other.  Confusing right?  

That’s why inevitably, if a Client truly needs more space and cannot add on – they often are forced to sell first, rent then buy because this market is too competitive to request contingencies from the seller.  – Please don’t shoot the messenger – 

THE LONG ROAD

Now here’s my idea – but it takes a few years and you truly need to ask your CPA.  The idea is – the Seller moves out into.  (Where?  That is not part of my scenario.)  The Seller then converts their personal residence into a rental – renting it out for a minimum of 2 years.  (I cannot give tax advice, so please verify with your CPA).  After those two years, the Seller sells their home as a 1031 exchange, then buys their next home – as another investment.  The caveat – the Seller cannot move into their new home until it’s been rented for at least 2 years. Again run this by your CPA as tax laws change and I am not a CPA.  Anyway, this is the long term approach.  The good news, especially if you’re buying in the same community, even if prices rise – hopefully so will the value of your current investment.  Anyway, can you tell I have several clients in the same boat?  This blog post was really just me organizing my thoughts then I figured – why don’t I just share this – if I can help someone make a better decision for their future – then I did my job today.  

THINGS TO CONSIDER

Right now – the forecast is Interest Rates will rise.  This can diminish a Buyer’s buying power.  As the interest rates rise the amount of the loan reduces.  To remedy this – a Buyer will need to bring in more monies towards the downpayment.  Easy, if we have Aunt Sally on speed dial.

The Caton Team cannot forecast the future but we have endured all sorts of markets.  We always worry about our Buyers waiting themselves out of the market and in this still inclining market – that can happen faster than you think.  Ask us anytime – we’re in the trenches, we know what homes are selling for before the internet gets wind.  It’s wild out there but we’ve got you covered.  Susan and I have over 35 years combined, local real estate experience.  We represent our clients with integrity.  Our offer packages stand out and often times just the edge a Buyer needs in this market.  Our Seller Package is successful, our negotiating is skilled, kind and focused.  We pride ourselves in being effective, efficient and responsive.

Real Estate is multi faceted and this blog is just the tip of the iceberg.  Each family has a unique set of needs.  We value the sit down time to get to know what you need whether buying or selling a home in the Bay Area. 

What Can The Caton Team Do For You?

Thank you for reading and forgiving my typos,

Sabrina

 

I wrote this…

Got Questions – The Caton Team is here to help.

The Caton Team strives to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here. Contact us at your convenience – we are but a call, text or click away!

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

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Thanks for reading – Sabrina

 

Berkshire Hathaway HomeServices – Drysdale Properties

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

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Help Clients Avoid House-Hunting Drama

Help Clients Avoid House-Hunting Drama

The Caton Team’s two cents is added in italics.

“Moving is one of the most stressful situations that a person can go through,” says Frank Schofield, an associate broker with Summit REALTORS® in Northern Virginia. “It’s one of the most rewarding, but also one of the most stressful.”

To make the house-hunt a little less stressful, real estate pros offer the following tips:

  1. Determine what you want upfront, and stick to that criteria.

What are your non-negotiables? What location do you desire? What educational opportunities are important? What do you want your daily commute to be? And what price are you willing to pay? “The first step to avoid house hunting drama is to really sit back and think about what is most important to you,” advises Jason Mitchell, founder and president of Jason Mitchell Real Estate. “This will narrow down your scope so you are not looking at hundreds of homes, just the ones that fit in your criteria. … Looking in an area that’s not going to provide the home type that you want is going to cause frustration.”

Being focused is most important. It is also easier said than done, especially if this is your first purchase. The Caton Team suggests you start with a broad scope when you first start off. We like to cover as many options for the start and work our way down quickly to a manageable list.

  1. Get preapproved for a mortgage.

Avoid delays once you do find a home by getting your loan preapproved. “If there is any issue, it is identified early on in the process and not the moment that you’re trying to submit a contract on the property,” says Schofield. Also, you’ll know your numbers and how much to expect on a monthly payment to make sure you’re house-shopping within your price range.

THIS IS THE MOST IMPORTANT STEP. So important – The Caton Team suggests you get pre-approved even before we meet. Knowing how much mortgage you qualify for, knowing any defects on the credit report before the hunt even starts ensures a smooth experience. And it helps us bring into focus what is most important, where that is and what it looks like in a home. 

  1. Communicate.

Share with your real estate agent the biggest stressors and fears you have in the home-buying process. “The more open the client is with the agent, the less drama is going to present itself in the transaction,” says Schofield. “You have to trust your agent and relate to them as a confidant, as an ally.”

We couldn’t agree more. Being comfortable with your Realtors takes some of the stress off the situation. It helps us too! If we feel we have open communication and trust – truly we (The Caton Team and you) can move mountains.

  1. Don’t linger too long.

“Believe me, procrastination causes drama,” Schofield says. For home buyers on a deadline, Schofield recommends beginning four to six months ahead of time to start learning more about the market. Plus, with mortgage rates forecasted to move higher this year, buyers who wait too long may find what they can afford lessen. “Have the right expectations, or else you’re setting yourself up for frustration,” Schofield says.

I always tell my clients – we are shopping now – with today’s rates, prices and market AND IT WILL CHANGE. Therefore together we plan accordingly.

 The Caton Team knows how much patience and work it takes for our clients to buy a home. We are happy to sit down, answer you questions and prepare a plan to turn your dreams into reality. How can The Caton Team help you?

I read this article at: http://realtormag.realtor.org/daily-news/2017/01/03/help-clients-avoid-house-hunting-drama?om_rid=AACmlZ&om_mid=_BYa-g2B9W3LGkZ&om_ntype=RMODaily

Remember to follow our Blog for the local real estate beat, a pulse on the San Francisco Peninsula 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 Office: 650-365-9200

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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

Effective. Efficient. Responsive.  What Can The Caton Team Do For You?

 

Berkshire Hathaway HomeServices – Drysdale Properties

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