The market can be tough for first-time buyers so with the spring home-buying season now in full swing (March through June are the year’s four busiest months), here are some tips for first-time homebuyers.
With two daughters and a baby on the way, Carlos and Cinthya Jijon decided last year to buy a house for about the same monthly cost as a bigger apartment. But they couldn’t find a home.
Supply was tight. And investors armed with fistfuls of cash outbid them every time.
This month, however, the Jijons are unpacking, settling into a one-story house in Buena Park, Calif. The auto-parts deliveryman and the nurse made the transition from renters to first-time homebuyers.
The market is tough for first-time buyers such as the Jijons, and statistics show the number of first-timers is falling.
But the Jijons persevered, taking an eight-hour home-buying course, learning about cash-assistance programs, and getting loads of practical advice. They beat the odds.
With the spring homebuying season now in full swing (March through June are the year’s four busiest months), here are some tips for first-time homebuyers.
Determine what you can afford. The first step is to meet with a lender, review your finances and find out how much you can afford to spend on a home and how much you have for your down payment.
“If they qualify for a $300,000 house, they shouldn’t be wasting their time looking at a $500,000 house,” says Maritza Reyna, an education manager at Consumer Credit Counseling Service.
Experts also warn not to shop for the most expensive home you qualify for, unless you truly can live with the payment that comes with it.
Shop for a mortgage. Don’t use whatever lender your agent recommends without doing some independent shopping, says former loan processor and author Carolyn Warren.
Another classic mistake: calling 10 lenders and asking for their interest rates. A lender can’t be held to those quotes, so “it’s just going to lead you to the smoothest-talking liar,” says Warren, author of “Homebuyer Beware” and another book on mortgage rip-offs.
She says it’s better to look up mortgage rates online, then call three or four lenders and mortgage brokers and ask them for a written list showing their fees.
“The lowest rate is no good if you’re paying too much in fees,” Warren says.
Check for down-payment assistance. Before you shop, check to see if you qualify for one of the down-payment assistance programs.
“Don’t assume your income is too high,” says Karla Lopez del Rio of NeighborWorks Orange County, a housing assistance agency. “These special programs, no one’s going to tell you about it if you don’t seek it out.”
Get preapproved. Getting a lender to preapprove a loan before you shop can make your offers more attractive, while avoiding deals falling apart because loans don’t get approved during escrow.
Get all the documentation you’ll need for the loan process — W2s, tax returns, pay stubs, bank account statements. Find out from your lender exactly what you’ll need.
And go to AnnualCreditReport.com to get your free credit reports from all three major credit agencies. If necessary, follow the steps for correcting errors or repairing your credit.
Pick an agent who’s right for you. Get referrals for agents from friends and family, then talk to each one. Look for someone with whom you can communicate.
“Interview them a few times,” says Robert Ortola, an agent with Keller Williams Newport Estates in Orange County, Calif. “You have to see how they communicate and how knowledgeable they are.”
“Keep in mind that they work for you,” adds Reyna. “If you’re not happy with that Realtor, you can fire them.”
Find a home you can afford. Make a wish list of where you want to live and what you want to have in your home. But don’t fall so in love with a particular home that you don’t see its flaws, experts say.
Move on if the asking price is unrealistic or the bidding rises beyond your budget.
Make a realistic offer. When you find the right home, Ortola advises first-time buyers to find out what comparable homes sold for, learn the true value of the property and make a realistic offer. A good agent will be diplomatic but honest if your offer is too low.
“In a seller’s market, the buyer doesn’t have negotiating power,” he says. “There still are cash offers out there. You might have to make 10 offers before you buy a house.”
If the home is priced right, bid the asking price — or a little over, Ortola says.
You might, however, run into trouble getting a loan if your offer is higher than the lender’s appraised value of the home. Lenders won’t approve the loan if the appraisal is less than the loan amount.
Find a good home inspector. Talk to two or three inspectors rather than blindly accepting one that your agent recommends.
Get referrals from family and trusted friends to make sure you find someone working for your best interest and who isn’t trying to help his or her friend, the agent, close the deal.
“A bad inspector can turn into a $15,000 plumbing problem,” Lopez del Rio says.
Looking east along King St. West from Peter St. in downtown Toronto from an upper floor at 375 King St. West on Sept 9 2013. The Hyatt Regency Toronto hotel is at left with bank towers located centre of photo. (Fred Lum/The Globe and Mail)
First, it was Canada’s housing sector. Now, it’s the country’s commercial real estate market.
Pundits around the world are still immersed in a vigorous debate about just how overheated the residential real estate market here is, and whether it’s destined for a crash. Now some are also training their sights on Canada’s commercial real estate market – the wide array of office towers, shopping malls, and factories that have become hot commodities in recent years.
The key players in this sector – including Canadian pension funds, real estate investment trusts and insurers – have been saying for at least a year that the market, which has always been cyclical, appears to be near its peak.
But questions are being raised about whether they’ve done enough to prepare for a potential softening.
Richard Johnson, a Zurich-based managing director of UBS Global Asset Management, held a meeting with pension funds in Toronto last month and told them that UBS is concerned about their level of exposure to Canadian real estate.
“With most Canadian institutional real estate investment focused on domestic real estate, pension funds could be seriously overexposed in the event of a downdraft in the market,” he says.
Canadian commercial real estate boasts a 10-year annualized total return of 11.9 per cent, according to Investment Property Databank Ltd. That’s the highest of all countries covered by IPD, except for South Africa.
It compares with a return of about 8 per cent on equities and 5.6 per cent on bonds.
A number of factors have driven Canada’s commercial real estate market to outperform expectations over the past five years. Local landlords, such as pension funds and REITs, have had a lot of capital to invest, leading to stiff competition for prized assets. And Canada’s status as a safe haven in the wake of the financial crisis caused foreign players to look for places to park their money here.
UBS expects the total return on Canadian commercial real estate in the next three years or so will be in the neighbourhood of 6 per cent. But William Hughes, head of UBS’s global asset management real estate research and strategy group, says that the market’s performance will be impacted more by perception than any fundamental changes. And he says that if investors decide they’re ready to take on more risk to seek higher yields, then some of those who were attracted to Canada by its safe-haven status could look to invest their money elsewhere, hurting real estate values here.
“Pricing is a concern,” says Leo de Bever, the CEO of the Alberta Investment Management Corp., or AIMCo. “Real estate has been the best-performing asset class since 2000. I’m not sure that will be the case going forward. That said, all asset classes are fully priced, or in the case of bonds, riskier than they have been since the 1950-1980 period.”
Most of the major pension funds have been diversifying their portfolios, and increasingly looking for investment opportunities abroad. A number of pension funds and other institutional players are also shifting toward building new office towers and other commercial real estate developments in Canada, rather than paying top prices for existing ones.
“The development cycle is working well right now for sure, a lot of us are finding it easier to manufacture profits than to buy them,” says Blake Hutcheson, CEO of Oxford Properties, the real estate arm of the Ontario Municipal Employees Retirement System (OMERS).
But he adds that he believes supply and demand are in check, and “I don’t think in any way Canada is overpriced. The real estate fundamentals in Canada have remained as strong as any in the world.”
There is some concern that too many new office towers are being developed. More than 15 million square feet of new office space is scheduled to be built across Canada in the next four years, with the country in the midst of the most active downtown development cycle in 20 years, according to brokerage Cushman & Wakefield.
But Cushman CEO Scott Chandler noted that the pension funds are developing much of the new supply – and the new towers are likely to do well, at the expense of the older ones.
Similarly, market players note that in a softening market the best assets will still hold their value, and many of those – such as landmark shopping malls – are owned by the pension funds.
Amy Erixon, a managing director in Avison Young’s investments business, said that pension funds in Canada tend to have a large allocation to real estate as a means of diversifying, in part because the stock market is so concentrated.
Lorenz Reibling, chairman of Boston-based Taurus Investment Holdings, says that the real estate investment firm has sold more than $150-million in Canadian real estate lately, including shopping centres and office space.
“The best time to sell is when everyone else wants to buy, so that’s what we have done,” he says.
Taurus still owns some shopping centres in Canada, and Mr. Reibling says it’s looking for more Canadian assets to buy. But they will be “riskier” assets – i.e., fixer-uppers – because the rest, he says, are fully priced.
Flipping houses in the Temecula/Murrieta Valley and across the Inland Empire has been a lucrative venture for investors for many years. Many think it is a quick way to a fast buck. Many have tried and many have failed. Flipping houses is serious business and should not be taken lightly by the novice real estate investor. Before you begin down this path, prepare yourself. Here are five quick tips to help you understand what you’re in for, before you actually start investing your money.
1. You need to know that it’s work.
You need to work with a good local REALTOR® who understands the local market. A local REALTOR® can not only help locate profitable homes through the Multiple Listing Service (MLS) but will be able to lead you to other lesser known resources as well. When it’s time to sell the home your REALTOR® will know the market and help you achieve the greatest price for your fix and flip home for sale.
2. If you are buying low, you’ll need to spend more.
The whole concept of discounted homes for sale is that they need repairs and upgrades. There is no reason for someone to sell a turnkey, state-of-the-art home for a discounted price. It takes time and money to get a home ready to flip and generate the largest possible profit.
Contractors are an important part of your team, so start lining them up now. Yes, you should be able to do some work yourself, but understand that time is money – how much time do you have to invest in the project? The quicker it sells, the quicker you get paid and the money you have tied up is free again.
3. The kitchen makes the sale.
The one room that swings more sales is the kitchen. Here in the Temecula/Murrieta Valley, kitchens should have recessed lighting, solid surface countertops and high-end matching appliances if you want to capture the ‘wow’ factor. Upgraded cabinets, a full backsplash, under-the-counter lights and tile/hardwood floors all do their part in closing a deal.
4. Garage doors are part of curb appeal.
There’s nothing worse than selling an upgraded home, beautifully landscaped with a nasty old wooden garage door (just as bad is a dented, metal roll-up). People do judge books by their covers and houses by their curb appeal. The garage door is the first thing anyone sees, so make sure it’s memorable. First impressions count.
5. In landscaping, less is more.
When a potential buyer is considering purchasing a new Temecula/Murrieta home, they want it to look nice. What they don’t want is a lot of high-maintenance landscape, no matter how stunning. Remember your audience, most home buyers in our Valley are working families who don’t have all week to tend to the grounds nor do they want to spend all weekend doing it either. Keep your landscape clean and simple and don’t forget the back and side yards, too.
If you are considering getting into the real estate investment business, either as a part-time venture or your life’s work, know what you are getting yourself into. Follow these simple suggestions and you’ll be making your first trip to the bank from escrow in no time.
Call us today and get the information you need to make the right decision. The info is free, call now! (951) 296-8887.
Questions regarding available inventory and/or other real estate matters please contact me, Mike@GoTakeAction.com. Mike Mason, Broker/Owner of MASON Real Estate Cal. BRE: 01483044, Board of Director of your Southwest Riverside County Association of Realtors® (SRCAR), Traveling State Director, California Association of Realtors® (C.A.R.).
Sales of existing homes, both condominiums and single-family houses, rose to record highs in 2013 in Tokyo and three surrounding prefectures on the back of the improving national economy, a real estate information firm said Saturday.
The number of used condominiums sold in Tokyo and Chiba, Kanagawa and Saitama prefectures jumped 16.0 percent from the year before to 36,432, the most since the Real Estate Information Network for East Japan began collecting data in 1990.
Sales of existing single-family homes in that area increased 6.9 percent to 12,245, also a record.
"Consumer resistance to used houses is becoming less" as remodeling has grown popular in Japan, an official of the company said, adding the uptrend is expected to continue this year despite the consumption tax hike in April, thanks to housing loan tax breaks.
The growth in existing home sales is also attributable to the rising cost of new condominiums.
The Sixth Arrondissement has become the most expensive address in the City of Light, luring a new generation of home buyers with a rustic vibe that still conjures up the feel of an 18th-century neighborhood.
Paris's Sixth Arrondissement, in the heart of the city's Left Bank, has been the stomping ground of Europe's intellectual and artistic elite for most of the past 100 years. Gertrude Stein, Ernest Hemingway, Jean-Luc Godard and Jean-Paul Sartre all lived there. Now, drawn to the area's 18th-century architecture and 21st-century amenities, a new kind of elite led by wealthy Americans and Europeans has helped give the Sixth the highest median prices for residential real estate in Paris.
The current average price for an apartment in the Sixth is $1,589 per square foot, according to figures released in late November by the Chambre des Notaires de Paris, the city's organization of notaries who supervise all real-estate transactions. That is more than $93 per square foot above prices in second-place Seventh Arrondissement, long associated with France's titled families, and ahead of the Fourth, which includes the most desirable areas of Le Marais, home to even older buildings than in the Sixth and transformed by gentrification over the past several years.
That price is also $443 per square foot higher than in the Right Bank's 16th Arrondissement, which boasts a high proportion of luxury buildings from the Belle Époque and Art Deco periods.
French buyers still have a presence in some high-end Paris deals, says Marie-Hélène Lundgreen, director of Belles demeures de France, the Paris-based agency affiliated with Christie's International Real Estate, but "when you go over $5 million, 80% aren't French residents."
"Foreign buyers have made the new benchmark in prices," adds Jules Caris, managing director of La Galerie de l'Immobilier, a Left Bank real-estate agency that handles high-end properties throughout Paris.
He says desirable apartments can cost much more than the median figures suggest. A three-bedroom, 1,076-square-foot apartment "on a good street but not the best, with not too much noise" and in need of some renovation, could cost about $1.9 million, or $1,772 per square foot, he estimates. High-end apartment’s right on the Luxembourg Gardens or in prime buildings in Saint-Germain-des-Prés can reach $2,530 per square foot.
The general rise in prices over the past decade has closely followed a move by upmarket stores into the area that has made it a major shopping destination.
The chief appeal of the Sixth, however, is its central location, across the Seine from the area between the Louvre and Notre Dame. In addition to the Luxembourg Gardens, it is home to the city's legendary art school, the École nationale supérieure des Beaux-Arts, and famous Left Bank watering hole, Café de Flore. Its narrow, winding streets give it a rustic charm. And unlike much of central Paris, which was remade in the middle of the 19th century under the radical guidance of prefect Georges-Eugène Haussmann, the Sixth was crisscrossed by only a few new boulevards, leaving intact many of its historic buildings and inner courtyards.
Pre-Haussmann-era architecture is a higher form of luxury, says Jean-Louis Deniot, an interior designer based on the Left Bank, when asked to compare the Sixth with more conspicuous high-end homes in the 16th Arrondissement and Avenue Montaigne.
No matter how fancy, buildings from the Haussmann period are "like the IKEA of their time," he says. "Once you have seen one, you have seen them all—the same fireplace, same molding."
The buildings of the Sixth, by contrast, "feel more personal," he says. "Your fireplace is your fireplace. You have almost no chance of seeing it somewhere else."
Paris brokers identify three prime areas of the Sixth: Saint-Germain-des-Prés, between the Seine and Rue de Four and once the center of Paris intellectual life; Saint-Sulpice, the area around a church of the same name dating back to the 17th century and home to the district's most impressive square; and the streets around the Luxembourg Gardens, one of Paris's largest parks.
Helen Lee, a 34-year-old director of a New York real-estate private-equity fund, recently bought a small apartment in the Saint-Sulpice area. She plans to share it with a London-based friend and spend time in Paris after she has a family. She was drawn to the ghosts of the past as well as to the conveniences of the present, she says. She recently paid about $1,895 per square foot for a one bedroom. Already familiar with Paris, she started the search in October by looking at flats in Le Marais, "but it really didn't feel the same" as the Sixth, she says.
Miranda Bothe, founder of Paris Property Group, a Left Bank real-estate agency that offers clients English-language services, says the village-like appeal of the Sixth turns off some foreign buyers.
Many Asian and Middle Eastern buyers are drawn to the Right Bank, which includes the prime area of Avenue Montaigne in the Eighth Arrondissement. "What you see there are very clean streets and very wide sidewalks—everything looks good and shiny," she says.
By contrast, many of the streets of the Sixth still retain the same urban clutter that has marked the neighborhood for decades. Behind that clutter, however, you can find multimillion-dollar homes.
Belles demeures de France is offering a grand duplex apartment for $15 million on Rue Cassette, a short walk from Place Saint-Sulpice. The 10-room, 5,000-square-foot home, in a building from around 1700, surrounds a courtyard, but is invisible from its quaint but otherwise anonymous side street.
Paris property prices have doubled over the past decade, but high-end homes have come down, says Charles-Marie Jottras, president of Daniel Féau, the Paris real-estate firm and parent company of Belles demeures de France.
Paris prices peaked at the beginning of 2012, after sharply recovering from the drop during the world-wide recession, but they then declined in response to increases in French capital gains and other taxes, and a perceived flight in wealth following the election of Socialist President François Hollande in May 2012. Prices continued to come down in 2013, with high-end properties registering declines of 10% or more, says Mr. Jottras.
While prices for top apartments are relatively stable, properties are taking longer to sell in the current market. Mr. Caris cites an apartment on Rue de Guynemer, overlooking the Luxembourg Gardens. Mr. Caris sold it two years ago, when the market was red hot, for $11.5 million; now, it has been on the market at $12.1 million for three months.
Rue de Guynemer has a special allure because of the views it offers, say Mr. Caris and Ms. Lundgreen. Other prime streets include Place de Furstenberg, a secluded square in Saint-Germain-des-Prés and Rue de Tournon, connecting the Luxembourg Gardens with Boulevard Saint-Germain and thick with historic mansions.
"Before you had book shops and cafés. Now you have Louis Vuitton and Dior," says Ms. Lundgreen, who currently has a three-bedroom, 2,000-square-foot apartment for $5.7 million on Rue de l'Odeon.
These days, a Saint-Germain-des-Prés address suggests a luxury lifestyle. A pair of British clients asked about Le Marais, recalls Ms. Lundgreen. She showed them something on Place des Vosges, a sedate 17th-century square with some of Paris's most expensive real estate, but surrounded by the rollicking night life once associated with the Left Bank. They were impressed—until a walk around the neighborhood on a lively Friday evening. They asked her how they could put on jewelry and a fur coat there. She recalls: "They told me, 'Please find us something in the Sixth.' "
To give your home the best exposure and positioning, Dorota will work with you when selling it; and will guide you every step of the way in purchasing a home - from mortgage financing to selecting a mover. Meanwhile, you can read the following topics below:
Upset with the rise in property crimes, and concerned about desperate home-owners--especially seniors--being victimized by scams, officials from the Santa Clara County District Attorney's Office said last week that they are taking a more active approach to real estate fraud and now have the resources to fight these crimes.
Deputy district attorneys Kim Connors and Mike Fitzsimmons asked real estate agents for their help in fighting real estate fraud.
Realtors are in the trenches and know what is happening to homeowners. "You are our eyes and ears," said Connors.
Real estate fraud has been on the rise since the mortgage meltdown. "Desperate homeowners are ripe to be victims of loan modification and other scams," said Fitzsimmons.
The good news is the district attorney's office now has more funds to fight property crime issues. Fitzsimmons explained financing to fight real estate fraud comes from recording fees. Before this year, $3 from each recording fee went to the unit; this year, $10 will go to toward real estate fraud prosecution.
The increased funding has allowed the office to beef up its real estate fraud unit with four prosecutors, three full-time paralegals and seven investigators. One paralegal is solely engaged in reviewing changes in titles, sending out letters to homeowners verifying authenticity, and letters to homeowners who have received notices of default, with information on what they can do and victim prevention tips.
"We have a lot more money to work with and will be hiring more attorneys and investigators. If you see suspicious activity, report it to us. With new funding, we now have the ability and higher capacity to deal with these crimes," said Fitzsimmons.
Connors, who is a Department of Aging and Adult Services financial abuse specialist, said elder fraud is high on the list of crimes that are occurring more frequently and it is very important that crimes, or suspicions of crimes being committed, be reported immediately. She explained that once homeowners are victimized and a new buyer is involved, "it is very hard to put someone back to where they were because the law protects innocent third party buyers."
The office is seeing many cases involving rental scams, including rental of rooms in a property, and Ponzi schemes involving the financing, sale and transfer of property. Crimes involving sovereign citizens are also on the rise.
Sovereign citizens do not believe the law applies to them. Some have been caught usurping the role of agents and other officials. They file liens and notices seeking to wipe out mortgages and cancel foreclosures, then charge homeowners for their services, but the documents are fake.
They name themselves as trustees, convince financially strapped homeowners to deed the property and make payments to them, with the promise that after a few years they would deed the property back. In the meantime, these criminals strip the property of all its equity, or sell the property to someone else. Some 574 homeowners have been contacted by these criminals and crimes have resulted in a loss of as much as $94 million.
Fitzsimmons said, fortunately, real estate is ready-made for creating a case because documents create a paper trail for good evidence, but Connors noted an investigation can take time, and while the district attorney's office can prosecute, it does not have the authority to correct title or evict residents. This is why reporting suspicious activity immediately is critical.
"Don't hesitate to contact us. Do not be the easy house. If you think something it not right, report it," said Connors.
For questions, or to report a crime or suspicious activity, contact the Real Estate Fraud Unit at 408.792.2818.
Dorota Dyman & Associates Real Estate
WASHINGTON — Why have many of the local housing markets that were hit hardest during the bust — especially in California — bounced back so vigorously and quickly, with prices close to or exceeding where they were in 2005 and 2006?
And why have many others along the East Coast and in the Midwest had a slower move toward recovery, with sluggish sales and gradual increases in values?
Though multiple economic factors are at work, appraisal-industry experts believe they have isolated a crucial and perhaps surprising answer: Real-estate markets rebound much faster in areas where state law permits foreclosures to proceed quickly, moving homes with defaulted loans into new owners’ hands expeditiously, rather than allowing them to sit and deteriorate, tied up in court procedures for years.
Prices of foreclosed homes in such areas typically are depressed and negatively affect values of neighboring properties, but they don’t remain so for lengthy periods because investors and other buyers swoop in and return them to residential use rapidly.
By contrast, in states where laws allow large numbers of homes in the process of foreclosure to remain in legal limbo, often empty and unsold, home-price recoveries are hindered because lenders are prevented from recovering and reselling the units to buyers who’ll fix them up and add value.
Pro Teck Valuation Services, a national appraisal firm based in Waltham, Mass., recently completed research in 30 major metropolitan areas that dramatically illustrates the point.
All the fastest-rebounding markets in October — those with strong sales, price increases and low inventories of unsold houses — were located in so-called nonjudicial states, where foreclosures can proceed without the intervention of courts.
All the worst-performing markets — where prices and sales have been less robust and there are excessive numbers of houses available but unsold — were located in judicial states, where post-default proceedings can stall foreclosure completions for two to three years or even more in some cases.
Among the best-performing areas were California markets such as Los Angeles and San Diego. California is a nonjudicial state. So is Washington state.
Among the worst performers were Florida markets such as Tampa and Fort Myers, as well as parts of Illinois and Wisconsin. All of these are judicial states. Continue reading