The Importance of Working with a Good Lender

The Importance of Working with a Good Lender – by Sabrina

Buying a home is serious business; especially on the San Francisco Peninsula where even a one bedroom condo can run about half a million bucks.

And in an industry where time is money and money talks, from time to time I will encounter a lender – that offers great rates and low fees – upfront.  And no customer service when you really need it.

Much too often a buyer is tempted to get the best rate – without really considering the whole picture.

Unless you are paying cash – the home loan is the most important aspect of buying a home – aside from the home itself.

So when taking into account that a home is generally the largest purchase of a person’s life – shouldn’t we work with a bank that treats it with the same respect?  YES!

There are hundreds of steps from finding the home to getting the keys.  The loan is probably the largest hurdle aside from home inspections.

Once a buyer’s contract is accepted by the seller – it’s rush time.  Most offers have a time frame – called a contingency period – to have the bank do their appraisal and have the loan/purchase terms reviewed and approved by underwriting.  It can be as long as 17 days in a buyers market – or as short as 5 days in a sellers market.  And this is where we separate the men from the boys.  Some of these out of state or on-line lenders are not located here – where one is buying – and it can be extremely difficult to get information and approvals done when they close shop at 5pm and it’s only 2pm here!

That friendly voice that quoted a buyer a fantastic rate isn’t calling us back anymore…..and when they do it’s often not what we were hoping to hear.  For example, they need more time to review the file – therefore we need to push back the close of escrow date – which seems easy – but again – time is money.   The seller is expecting the buyer to perform to the terms of the contract and it’s not worth losing a home due to a lackluster lender…..and changing lenders mid way is generally not an option.

So – what can a buyer do to be competitive?  Work with a local lender.  Once your credit is pulled the first time – a consumer has 30 days to loan shop without hurting their credit score.  So do it!  Loan shop the whole month and find the best rate, the best fees and make sure the lender is attentive, local and can move at the pace the current market is dictating.

The Caton Team has a list of Client Approved Lenders – so please reach out to us and we’ll introduce you to the team.

Got Questions? – The Caton Team is here to help.  What can we do for you?

Email Sabrina & Susan at:  Info@TheCatonTeam.com

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

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

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Please enjoy my personal journey through home ownership at:

http://ajourneythroughhomeownership.wordpress.com/

Thanks for reading – Sabrina

1st-Time Buyers Losing to Investors – tell me something I don’t know….

If you are a home buyer in todays real estate market on the SF Peninsula – then you already know!  Cash buyers have come out in force and it feels like they are scooping up every house on the market.

Below is an article I read in the SF Chronicle.  It hit home hard.  The Caton Team has been writing offers, sometimes multiple offers for one client on several properties praying one will be accepted.  This market is nuts.  And before I hear anyone say – you must love it!  NO!  Realtors do not like this type of market.  We are human.  We may perform some superhuman stunts from time to time –  but we are human.  Realtors like stable markets with consistent growth.  Not manic markets – with ” one open house and offers are due on Monday” – markets.  If I am feeling the rush – I know my clients are – and for them – this is a new experience.  For the Caton Team – with over 25 years combined experience, this is just another day on the job.

So as you venture and read this article – I must add my two cents.  DO NOT GIVE UP!  Giving up and not getting an offer accepted has the same results – not keys to your new home.  But dusting yourself off and getting back on the horse to meet your Realtor at lunch to see the next new listing – now that’s tackling this market like a pro!  In our experience, buyers who are dedicated to becoming owners will get a house.  It may not be the house they dreamt about.  It may not have all the bedrooms they wanted or the yard they liked – but you can make all those things happen – once you get your house.  Curious what the Caton Team does differently for our clients – come on and and let’s talk!  Questions – email me at Info@TheCatonTeam.com

Enjoy!

1st-time buyers losing to investors

Many outbid by absentee owners in a rapidly rising market

By  Carolyn Said 

Hunter Mack and Nyree Bekarian are eager to buy a home for their growing family. They started looking when their son Emmett was a year old. Now he’s 2 1/2, and they have a second child due any day. And they’re still looking.

After seven years of marriage, Carlos and Robin Mariona felt the time was right to buy their own place and looked forward to leveraging his past Navy service with a Veterans Affairs loan. But their search stretched on for months, despite the loan guarantee. While their price ranges and target areas varied, these Bay Area families confronted the same reality once they started house hunting. They were consistently outbid, often by investors who paid all cash. Sometimes, even if they had the highest bid – especially in the case of the Mariona family and their VA loan – they were still rejected in favor of an all-cash offer.

“We’re people who want to commit to a place where we can live and grow together, but it hasn’t been possible,” said Mack, who teaches mechanical engineering at UC Berkeley. “We’re two mid-30s professionals who want to spend over half a million dollars on a home, but we can’t find anything, which is ridiculous. We’ve probably made 10 offers. At this point, with many homes, we’re not making offers anymore because we know we’ll be slaughtered.”

Eager to get their piece of the American dream while interest rates are low, many first-time home buyers instead are finding that they’re priced out of a rapidly rising market where they must compete with deep-pocketed investors.

Absentee home buyers now account for about 27 percent of Bay Area home sales, according to real estate research firm DataQuick. All-cash buyers (who overlap with absentee buyers) represent almost a third of sales. Historically, cash buyers were about 13 percent of sales.

First-time home buyers bought 36 percent of California homes sold in 2012, according to the California Association of Realtors. In 2009 and 2010 they represented 47 percent and 44 percent of the market, respectively. Over the past eight years, first-time buyers averaged 39 percent of the market.

Government-backed Federal Housing Administration loans, which are popular with first-time buyers because they allow for smaller down payments, accounted for 12.3 percent of Bay Area home purchases in March, according to research firm DataQuick. That was down from 20.9 percent in March 2012.

“In recent months the FHA level (in the Bay Area) has been the lowest since summer 2008, reflecting both tougher qualifying standards and the difficulties first-time buyers have competing with investors and other cash buyers,” DataQuick said in a statement.

Neighborhood impact

The strong investor presence brings up questions about the long-term impact on neighborhoods.

“I think it’s a shame that all these properties are going to investors and not to people who actually want to live there and be part of the community,” said Rachel Beth Egenhoefer, who along with Kyle Jennings set out to find a new home before their baby was born. She’s now 5 months old, and they’re still looking. “It’s easy for sellers to take the cash and run, but what about having people who actually care about the neighborhood and want to be there and invest in it?”

Maria Benjamin, executive director of the Community Housing Development Corp. of North Richmond, had similar thoughts. The preponderance of investor buyers, most of whom rent out homes, “creates a lot of absentee landlords and a high turnover in neighborhoods,” she said. “All that causes neighborhood instability.”

Then there’s the impact on the families that spend months looking for a home to buy while staying put – in sometimes less than ideal conditions.

Many prospective buyers “are being forced to just stay where they are renting and make do,” said Jennifer Ames, an agent with Red Oak Realty. “Most of my buyers are young families who have outgrown their spaces. They’re all just hanging in, trying to do the best they can with their circumstances.”

People seeking starter homes do have some things working in their favor. Besides the historically low interest rates, home prices in many areas are still far from their peaks. The Bay Area March median of $436,000, for instance, is about a third lower than the region’s $665,000 peak in summer 2007, DataQuick said.

Still, that window of affordability seems to be closing. The California Association of Realtors on Friday said the state’s “affordability index” (the percentage of home buyers who could afford to purchase a median-priced existing single family home in the state) dropped to 44 percent in the first quarter, down from 56 percent a year earlier.

“Higher home prices put a dent in California’s housing affordability,” the Realtors association said in a statement.

Location counts

The three couples seeking homes all have solid employment and can afford to spend from about $350,000 to $550,000 – typical prices for starter homes in this region. All are looking in the East Bay, which is more affordable than San Francisco and the Peninsula. Alameda County’s current median is $416,000; Contra Costa County’s is $346,000.

Still, prices continue to rise rapidly in most of the region, making the search more difficult. “The bottom line in the decent neighborhoods keeps getting raised,” said Patrick Leaper, an agent with Red Oak Realty. “Entry-level buyers are looking at prices going up 2 or 3 percent a month sometimes. That’s critical for somebody whose finances are (tight). They end up being priced out of the market or forced to go to areas or neighborhoods that they weren’t interested in before.”

Looking around

Sometimes expanding the geographic search is what it takes to land a house. That was the case for the Marionas, who started off looking around Albany, where Robin Mariona works for the Department of Parks and Recreation.

“For the amount of money we could spend, in Albany or North Berkeley we would have gotten a smaller place than our rental,” said Carlos Mariona, an IT director for a catering company. “We were at the cusp where everyone was moving a little more north as they got priced out – El Cerrito, then San Pablo, Richmond, El Sobrante. It seemed you had more bang for the buck there.”

After more than six months of house hunting and countless rejected offers, they found a house in the Richmond View area near Wildcat Canyon Park listed at $324,000. They offered $350,000, and Leaper, their agent, negotiated with the seller to accommodate their VA loan’s tight requirements of completing all termite work before the sale closed.

“We’re very happy,” Carlos Mariona said.

More-affordable areas

Despite rapidly rising prices, more-affordable pockets remain scattered around the Bay Area. For each county, here’s the town with the lowest median price in the first quarter of this year – and how much it’s changed since the same time last year.

County City Median price Q1 2013 YOY change
Alameda Oakland $310,000 48%
Contra Costa Bay Point $153,000 4%
Marin Novato $565,000 39%
Napa American Canyon $360,000 19%
San Francisco Ingleside Heights (S.F.) $410,250 58%
San Mateo East Palo Alto $356,000 27%
Santa Clara East Valley (San Jose) $377,500 28%
Solano Vallejo $175,500 28%
Sonoma Forestville $261,450 -3%

Source: ZipRealty

Read more: http://www.sfchronicle.com/realestate/article/1st-time-buyers-losing-to-investors-4512891.php#ixzz2TJ56qE00

I read this article at:  http://www.sfchronicle.com/realestate/article/1st-time-buyers-losing-to-investors-4512891.php

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

Email Sabrina & Susan at:  Info@TheCatonTeam.com

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

A Cinderella Story – Fredric and Heather

When it came time to sell their first home Fredric and Heather called the Realtor who helped them their first go around – Susan Caton. By then, Susan and I (Sabrina) had partnered up and became The Caton Team.  It was an exciting meeting, sitting around the dinning room table planing for the sale of their home and discussing the hopes, dreams and reality of their next home.
In the competitive Bay Area real estate market a buyer needs to be ready to make a fantastic offer the moment a home pops on the market.  If a buyer has to sell their current home – writing an offer contingent on the sale of a home is not as attractive to the seller as a non-contingent offer.  Therefore, we agreed that the best course of action was to sell their current home to be prepared to pounce when their next home came on the market.
This can be a scary moment – where will the family live if we don’t find the next home.  Nonetheless, the hunt for their next home began way before the for sale sign showed up in their front yard.
So Heather and Fredric did a fantastic job getting their home ready for sale.  Before our first open house The Caton Team had wind of interested parties.  Within a week their home was in contract.  Oh my!
So the serious house hunting hits.  We’re out day and night checking out everything on the market, new and old…and we start writing offers.  Good offers, solid offers.  But we keep getting out bid, sometimes by all cash, sometimes just larger down payments or out of the the ballpark offers.  Regardless, the sweat starts beading.  Now we’re talking short term rentals as the close of escrow on their current home slowly approaches….and we are very thankful for the 30-days of rent back we negotiated to give us a little more time.  That was extremely helpful, but not enough.  So, a short term rental was located.  More offers.  Out bid.
Suddenly there is buzz around a certain Silicon Valley IPO.  The weeks leading up caused a mini boom on the peninsula.  Offer dates, multiple offers, no contingencies, all cash – you name it – things were a bit nuts.  Then the dust settled, and as a boom of new listings flooded the market a week old listing was suddenly overlooked.  We wrote an offer.  Out of the blue, another offer comes in.  This house was awesome.  We couldn’t let it get away.  Proud to say our reputation preceded us and the Selling Agents knew we’d get the job done – when it came down the the nitty gritty, we helped our friends and clients prepare a terrific offer package and in the end their offer was accepted.
The phone call to your clients when you get to share the good news that they got the home of their dreams – well, it’s one of the best phone calls around.
Thank you Fredric and Heather for trusting The Caton Team with all your real estate needs.  Here’s to many happy years in your new home.
Got Questions? – The Caton Team is here to help.
Email Sabrina & Susan at:  Info@TheCatonTeam.com
Visit our Website at:   http://thecatonteam.com/
Please enjoy my personal journey through homeownership at:
Thanks for reading – Sabrina

A Cinderella Story – Michael and Tatjana… A Picture is Worth a Thousand Words

When Michael and Tatjana reached out to The Caton Team – we were very excited to be their Realtors for their first home purchase.  We got them preapproved with Melanie Flynn of First Priority Financial and hit the ground running.  They were so excited, started checking out properties and sooner than later, we began to write some offers.

With fingers crossed and prayers whispered we waited on pins and needles to hear back on their first offer… they didn’t get it.  The first time you lose a house – it’s the pits.  The second and third time it doesn’t get any easier.  Tatjana and Michael started to lose hope.  Who wouldn’t?

But The Caton Team wouldn’t let them lose out on their dream.  As full time Realtors, we’ve spent countless sleepless nights hoping and praying our client’s dreams come true.  We knew – you have to get back on the horse, try, try again….there are other fish in the sea.

And they did – but they had one request.  They no longer wanted to write a letter to the seller that included their adorable family photo.  In shock, I asked why.  They were adamant – ‘what’s the point?  The seller is looking for the most money and highest offer.’  I smiled.  We could hear the disappointment in their voice.  But we had faith.  We couldn’t change what we were doing.  The offer package The Caton Team prepares for each offer is thorough and it is successful.  Sometimes money talks.  But sometimes, it’s the other items in the offer package that get the recognition.

As we waited to hear back on their offer I was looking at the copy of the photo we sent of their family.  I’ve known Tatjana since the 6th grade and here she was, with her husband and two beautiful sons…  The phone rang, couldn’t get to it fast enough.  It was the seller’s agent.  I could hear the happiness in her hello.  They got the house.  Quickly she interjected – it wasn’t about being the highest price, they weren’t.  It was about the letter and the picture.  (It still brings tears to my eyes.)  Turns out the owner was deceased and had charged her best friend with handling her estate.  Her wish was for her home to be sold to a nice family – not an investor.  She had built that home from the ground up, raised her family there, and she wanted her best friend to pick the sweetest family for her home.  And boy they couldn’t have found a better family.

Sometimes it really isn’t just about the money.

Congratulations to Michael and Tatjana – to many happy years and memories in your new home!

 

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

Email Sabrina & Susan at:  Info@TheCatonTeam.com

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-cityå

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

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Popcorn Ceilings – No Night At The Movies…

Please enjoy my candid journey through homeownership at http://ajourneythroughhomeownership.wordpress.com where I share my personal stories of being a young homeowner.  My newest blog is about Pop Corn Ceilings… Enjoy!

Thanks for reading – Sabrina

A Cinderella Story… Jake and Sophia

It was 2008.  Jake and Sophia had been working hard and saving their money to buy their first place.  The market had fallen enough to make a home a reasonable dream.  Armed with their pre-approval from Melanie Flynn, we took a look at homes in San Carlos and Redwood City.  It didn’t take long for us to find a darling place in Redwood City.  It was a short sale.  Two loans on the property with two different banks.  We knew it would be a tricky deal, but the home was well worth the work.

We wrote an offer and the sellers accepted right away.  The offer was sent to both banks and together we waited on pins and needles to hear back. Weeks passed.  Each Wednesday I’d call the Listing Agent to get the scoop.  And each week she told me she hadn’t heard back.  Months passed.  Six – I think – could have been more.  Finally I get some answers.  The two banks were at a stand still.  Neither would budge.

Now during these six months when everyone was in the dark – Jake wanted to propose to Sophia and wanted to do so in their future home.  At the time – The Caton Team didn’t know the shenanigans going on with the bank – so we arranged to show them the home again and hang out in the car so Jake could properly propose.  It was super cute and of course, Sophia said yes.  (They are high-school sweethearts.)

We all went home with hearts and stars in our eyes – that lasted until I got the phone call.  You see,  a short sale with one home loan is easy compared to a home with two loans.  One loan, means one bank decides their bottom line.  Two loan, and now we have a fight.  Technically, the 1st loan has precedence over the 2nd loan, so much so, the 1st loan could foreclose on the home and own it – wiping the 2nd loan off the face of the earth – the 2nd loan would have no recourse and just take the loss.  But since the 1st loan was trying to work with the sellers to avoid foreclosures – the fight is over how much the 2nd loan would accept in the short sale and walk away.  Typically, the 1st loan gives about $1000 – $3000 to the 2nd loan as a courtesy since the 1st loan is not foreclosing.  Generally the 2nd loan is happy to get anything – and accepts what the 1st loan gives them.  Well not this time.  The 2nd loan was demanding more money – the 1st loan wasn’t going to give it to them.  Both Realtors tried every which way to put the deal together, but in the end, nobody had enough money to satisfy this 2nd loan.

After a long talk with Jake and Sophia we knew it was time to walk away.

Thankfully, since we saw the writing on the wall – we started looking for other homes.  Seems like everything that would work was already pending or sold.  Except for one.

The trick to being a great Realtor is also being a great detective.  Combing through the pending listings, Susan saw a cute home which was pending but in the agent comment section – it was begging for a back-up offer – it appears the current buyer was threatening to walk away since they were tired of waiting for the short sale bank to respond.  The Listing Agent knew she was so close to a short sale approval – but the buyer had enough.

We called right away and showed the home that night.  Jake and Sophia loved it.  Sadly, the home was priced about $50,000 over their budget.  That didn’t stop the Caton Team.  We knew the buyer was going to walk, the bank was ready to sell and we knew to strike when the iron was hot.  We wrote the offer right away.  The seller accepted the offer and sent it to the bank.  In the mean time, the other buyer rescinded their offer and suddenly we were the only offer on the table.  It was the banks call – wait another 356569546 days or sell it now…

With bated breath we waited.  Two offers on two short sales – it was like roulette.

Before we knew it, the bank accepted our $50,000 below price offer and we were in the home stretch.  We rescinded our offer on the 1st house and about 25 days later handed the keys to Sophia & Jake.  They couldn’t be happier.

Just so you know – the original house – the two banks fought for over 1 year and in the end the 1st foreclosed on the 2nd.  It wasn’t the best solution for the seller, but thankfully they were finally able to move forward.

In the end – Jake & Sophia got a home that was far better than the first place.  It’s why I tell each buyer upfront – we’re going to see a lot of homes, we’re going to write a bunch of offers, some will be accepted or rejected, some homes will move faster than other – but in the end – what’s meant to be is meant to be.

Got Questions? – The Caton Team is here to help.  Email us at:

Info@TheCatonTeam.com

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

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

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

Please enjoy my personal journey through homeownership at:  http://ajourneythroughhomeownership.wordpress.com/

What does Bank Owned or REO property mean?

A REO stands for Real Estate Owned which really means the home is Bank Owned.  A Bank Owned home is a home post-foreclosure.  Meaning the bank has already foreclosed on the seller and now the bank owns the home.

The Pro’s

Buying a bank owned home is as close to a normal sale as a buyer can get when working with distressed properties.  The pro – quick response time.  When submitting an offer on a bank owned property the buyer can expect to get a response within a week – and once the offer is accepted the escrow period is like any normal transaction.  A buyer is granted their contingency periods that start the day after the offer is accepted.  It’s a breath of fresh air for a buyer since short sales are slow and painful.  Because bank owned homes are smooth transactions for the most part – we do see them move off the market much quicker than the dreaded short sale.

The Con’s

Buying a bank owned home means one thing – no real disclosures.  Sometimes it even means the home is in various forms of neglect.  The bank, having never lived in the home, does not provide the buyer with the disclosures a normal seller would provide.  The two most interesting reads not provided by the bank, aside from inspection reports, are the Transfer Disclosure Statement (TDS) and the Seller Supplemental Checklist (SSC).  These two standardized forms ask the seller a myriad of questions covering neighborhood nuisances and issues with the home.   The bank does however need to provide the buyer with the California State Mandatory Disclosures, one of which is the Natural Hazards Report which covers natural hazards around that particular property.

How This Affects the Buyer

Banks require an As-Is sale.  This is typical of many sales.  As-Is means as disclosed.  However, since the bank has no personal knowledge of the home – it is hard to disclose the potential issues.  Since the disclosures are weak, the burden is placed on the buyer to investigate.  As Realtors we cannot attest to the condition of the property or neighborhood – but we do encourage the buyer to seek professional opinions.  Some buyers visit the local police department and ask candid questions, I’ve even had buyers door knock the surrounding homes to speak to their potential neighbors.

As for the condition of the home – that’s the easy part.  As in any buying transaction, the buyer will have contingency periods to do all their inspections at which point we’ll get the home, pest and roof inspector out to check out the home and provide the buyer with a written report.  The buyer can do any inspections they want, from lead to asbestos, to truly anything that is of concern to them and for their plans for the property – pretty much just like any other buying transaction.  The only downfall – if issues arise – often times the bank does no repairs.

How We Go About All This

Since these transaction are so cut and dry, before we sit down to write the offer with our buyers, all parties take a good hard look at the property to determine the buyers offer price.  A buyer does not perform their inspections prior to writing the offer because a home, pest and roof inspection costs upwards of $500.  After the offer is accepted, the buyer will pay for their inspections and we proceed from there.

Generally, the buyer knows what they are getting into.  Often times these homes are in states of neglect and may be missing key fixtures or appliances.  In the end, both the buyer and their Realtor take all of this into account and write their best offer.

For more tips on writing an offer on a bank owned home – stay tuned!

Got Questions?  Email us at Info@TheCatonTeam.com or visit our website at http://thecatonteam.com/

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

Please enjoy my personal journey through homeownership at http://ajourneythroughhomeownership.wordpress.com/