Real Estate Plus +

11/11/2023

Despite the end of summer, the real estate market remains dynamic, but with diverse expectations and strategies. The previous season had the lowest sales in a decade due to the lack of clear incentives. High prices and rising mortgage rates continue to challenge buyers and sellers. The housing market has become less affordable for many buyers due to the high rates. Moreover, many recent homeowners who secured 3%-5% interest rates are unlikely to sell or refinance in the current situation and will stay satisfied. However, a large group of homeowners who purchased properties before 2013 have substantial equity and may consider their options. The following are some examples.

-Some of these homeowners are known as empty nesters or people whose children are grown and out of the house forging their own families.

-Also, there are people who need a larger space and want to upgrade or downgrade to a smaller place.

-There are those who want to move out of California to settle somewhere else.

-There are also the elderly who can no longer take care of the house or themselves and need managed care housing.

-Not to forget people who die without a will and the asset needs to be probated by the courts.

-Here are trustee sellers or trusts, for the ones who died and left a living trust with a well devised distribution of assets among the surviving heirs who likely just want the cash.

Many sellers are facing a choice between borrowing or selling based on their immediate needs. This means that prices will likely depend on the credit market and match what is called real values. Real values are not established quickly, but they do emerge over time. However, any sales market can be hurt by unemployment, and if it rises, then the situation will change. That is why smart sellers will lower their price expectations before things get worse. As we bid farewell to this summer and look forward to the New Year, we hope that it brings positive outcomes for everyone. Please share this information with others and let us know if you have any questions. We are always ready to assist you.

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08/19/2023

Serving the Southern California Communities.

08/19/2023

A tropical storm is heading towards California and may affect the Los Angeles area this weekend. The storm, named Hilary, will bring heavy rain that could damage your home. Here are some tips to prepare and protect your property:

- Clean your roof gutters and check for loose tiles or shingles. Make sure the chimney cap is secure to prevent water from leaking into your home.
- Check your electrical panel and cover any gaps or openings. If the power goes out, use a flashlight with fresh batteries. Do not touch any wet or exposed wires.
- Disconnect any hoses from outside faucets to prevent backflow.
- Have a battery-powered radio with fresh batteries to listen to news updates. You may also lose internet access if the storm affects the cell towers.
- Stay indoors and away from windows during the storm. Lightning and strong winds can be dangerous. Have enough water and food.

We hope you stay safe and sound during this rare event. For more information, tune in to a local area radio station. Remember, the sun will shine again after the storm. We wish you and your family all the best.

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Photo by Ksenia Balandina on Unsplash

Serving the Southern California Communities.

08/15/2023

In owning real estate or when real estate is to be purchased, how the title will be vested, or how title will be held is important for many reasons. There are 3 popular vesting types used including tenants in common, joint tenants and as community property with right of survivorship. But there are some differences.

The differences of how to hold title are mainly related to the rights and obligations of the co-owners and the distribution of the property after death.

1. Tenants in common can own unequal shares of the property, have no right of survivorship and can transfer their interest to anyone.

2. Joint tenants must own equal shares of the property, have a right of survivorship but cannot transfer their interest without breaking the joint tenancy.

3. Community property with right of survivorship is a special form of joint tenancy that applies only to married couples or registered domestic partners in some states. It combines the benefits of joint tenancy and community property, allowing the surviving spouse or partner to inherit the entire property without probate.

Owning real estate is easy but how title is held is an important part of the process. Please share this information with others. Visit our website for more resources. We look forward to assisting you with your real estate matters in the near future.

Realestateplusplus.com

Serving the Southern California Communities.

07/26/2023

It is important to know the basics of title ownership when dealing in real estate to avoid problems down the road. The following are the most common forms of holding title in California real estate.

•Single - people who never been married
•Unmarried - people who were married
•Joint Tenants - 2 or more people together in ownership - married or not
•Community property with right of survivorship - exclusively for married people (couples)
•Tenants in Common - 2 or more people together in ownership - married or not with a determined percentage of ownership

Here are the things to know and how someone may end up in a probate matter. A Single person enjoys the freedom to have title alone, but it doesn't protect in case of death as title cannot be transferred to surviving family. The same applies to an Unmarried person. Assuming 2 people are on title together and holding title as Joint Tenants is good in one sense, in case one title holder dies title passes to the surviving title holder by the right of survivorship and recording an Affidavit of Death of Joint Tenant; it is fine if the surviving title holder is on title with someone else afterwards. Community Property with Right of Survivorship is perfect for married people and similar to joint tenants in that the surviving title holder better be on title with someone else afterwards. Tenants in Common is somewhat similar to joint tenants, but title will not pass automatically to the surviving title holder because each title holder has an undivided percentage of ownership. What all this points to is potential problems if one does not plan well with any form of holding title. At the very minimum, it is always a good idea to be on title with someone else in case of an unexpected death because if not, the probate court is the next stop; it is expensive and not a good thing.

This writing is not intended to dissect any legal or tax consequences, but it is to bring out awareness if someone dies while holding title alone to real property because the surviving family will have problems acquiring title. In our next writing, alternatives on this subject will be shared for more information. Please pass this post to others. Visit our website for more real estate resources. We look forward to being of service.

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07/21/2023

It is known that summer is the most popular time of the year when buyers and sellers come to real estate market to a make deal regardless of economic conditions including high or low rates. Here are 3 essential tips for both participants.

Buyers

Buying a home for the first time can be a daunting process, but it doesn't have to be. Here are three good tips to help you navigate the market and find your dream home.

1. Know your budget and stick to it. Before you start looking for homes, you need to have a clear idea of how much you can afford to spend. This will help you narrow down your options and avoid getting into debt. You can use online calculators or consult a mortgage broker to determine your borrowing capacity and monthly payments.

2. Do your research and compare different options. Don't settle for the first home you see or the first offer you get. You need to shop around and compare different properties, locations, prices, and features. You can use online tools or hire a real estate agent to help you find and evaluate potential homes.

3. Be prepared and flexible. The home buying process can be unpredictable and stressful, so you need to be ready for any challenges or opportunities that may arise. You should have all your documents, finances, and inspections in order before you make an offer or sign a contract. You should also be flexible and willing to compromise on some aspects of your home, such as the size, style, or location.

Sellers

Here are three good tips for selling the house:

1. Make sure the house is clean and decluttered. A tidy and spacious house will appeal to more buyers and make a good impression.

2. Highlight the best features of the house, such as the location, the view, the amenities, or the upgrades. Use descriptive and positive language to showcase the value of the house.

3. Hire a real estate agent and make sure the agent takes good photos of the property’s interior and exterior but exclude personal valuables. This can help you market the house effectively and reach more potential buyers. The agent can also advise you on the best price and negotiation strategies.

Buying and selling is not complicated, but it is a task that will require a bit of everything to make a good decision. Please share this information with others. Questions, reach to us. We are happy to help.

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Photo by R ARCHITECTURE on Unsplash

Serving the Southern California Communities.

06/16/2023

A lot is being said about the current condition of the real estate industry, at least in Los Angeles California. While is true interest rates increased from the all-time low, it is also true rates are not as high they were in 1991 and in 2007.

The trend of increasing real estate prices started in the late 1980s when rates decreased from 13% and ended at 10.25% in 1992. From 1993 to about 2003 rates ran at about 9% and home prices were under $300,000. But things changed after 911. Rates were reduced, traditional income qualification guidelines changed and the 80/20 home loan ruled the industry. The end effect was home prices skyrocketed. But after the good times ended, the meltdown made presence and real estate prices adjusted to 2002-2003 levels. From 2013 to early 2022, rates remained under 4% and housing prices returned to 2007 levels and higher. But here is what to consider, wait for the “alleged” housing collapse or buy, sell or maybe refinance and consolidate expensive consumer debt like personal loans, credit cards and car loans. Not forgetting consolidating 2nd trust deed loans including lines of credit.

Facts

1. Rates are under 8.00% compared to the meltdown of 2008.
2. Demand for housing is better compared to the meltdown of 2008.
3. Housing prices are stabilizing compared to the meltdown of 2008.
4. Loan programs are expanding into down payment assistance compared to the meltdown of 2008.
5. Loan limits have increased significantly compared to the meltdown of 2008.
6. Appraisal waivers are common now compared to the meltdown of 2008.
7. Unemployment remains under 5% compared to the meltdown of 2008.
8. Foreclosures are a lot lower than compared to the meltdown of 2008.
9. The pandemic created the work from home trend compared to the meltdown of 2008.
10. There is more cash & access to credit compared to the meltdown of 2008.

There is no doubt the real estate scene is changing, however, the only thing to consider is what you would like to do, the consumer of goods and services available in the current economy. You have various options and opportunities to explore depending on your goals and preferences. Please share this information with others. Visit our website for more real estate resources. We look forward to being of service.

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Photo by Roman Kraft on unsplash

Serving the Southern California Communities.

02/23/2023

Great news for the real estate industry, including buyers, agents and lenders. HUD announced via Mortgagee Letter 2023-05, the reduction of the long awaited mortgage insurance premium (MIP). The annual MIP rates for FHA Title II forward mortgages of $726,200 or less will be .55% for all loans with an LTV of greater than 95%. This is a significant savings from the existing .85%. While the upfront premium will remain at 1.75%, the revised premium will make it feasible for those buyers that can’t qualify for a conventional mortgage. Now real estate agents and lenders can help more buyers become homeowners plus making housing a bit more affordable. The effective date for the new premium will apply to all loan files that fund on or after 3/20/2023. Open the link below for all details. Let’s go forward together and contact us for any questions.

https://www.hud.gov/press/press_releases_media_advisories/HUD_No_23_041

01/15/2023

The universal question is what home loan is better when financing a purchase or refinancing a real estate asset, Conventional or FHA? The answer depends on the transaction at hand.

Many people, who are in the process to buy a first house, look for a first-time home buyer program. Homeowners refinancing for any reason look for the most flexible option to rearrange household finances. However, Conventional and FHA loan programs can be used for purchase and refinance and both have low down payment options including down payment assistance. In a purchase both loan programs allow seller contribution to lower closing costs and the entire down payment can be a gift with very little paper trail. But here are some fundamental differences.

FHA Loans

FHA has an upfront mortgage insurance premium that adds 1.75% to the loan amount plus a .85% monthly premium added to the total housing payment. The mortgage insurance remains for the life of the loan independent of the outstanding equity position aka loan-to value whether it is 80% or better.

FHA is more flexible for borrowers with credit scores under 620 which means more options to qualify for home lending.

FHA standard down payment is 3.50% of the purchase price when buying a property, however, a larger down payment can be arranged if desired.

Conventional Loans

Conventional requires mortgage insurance if the down payment is less than 20% or the equity position is greater than 80%, but it is tailored according to the loan amount, the percentage of down payment or loan-to-value and the credit score. It is not required to finance any of it, but if wanted it can be paid upfront in full to avoid a monthly premium, however, a monthly premium similar or better than FHA is added to the monthly housing payment; it stops automatically when the loan balance is equal or less than 78% of the original appraisal or purchase price whichever is less. There’s another way mortgage insurance is eliminated, when the current loan balance equals to 80% or less of a current appraisal report. The appraisal report is paid by the homeowner upon request to have the insurance cancelled.

Conventional finances borrowers with a 620 credit score or higher, however, it is not to be confused with non-qualified mortgages known in the past as “sub-prime” loans which can entertain lower credit scores.

Conventional has programs with 3% down payment but the higher the down payment, the interest rate improves.

At the end, both loan types are great for refinancing and first-time buyers depending on the borrowers’ financial position. Please share this information with others. Look forward to being of service.