Good News for FHA Buyers

The Federal Housing Administration (FHA) has extended the 90 day anti flipping waiver through 2014.  This is good news for buyers who are using an FHA backed loan to purchase a property.  FHA loans only required a 3.5% down payment.  The extension of this waiver allows buyers to purchase a home that has been sold previously in the last 90 days.

If this waiver had not been extended, FHA buyers would not be able to buy a home that had been sold in the last 90 days.  This would have seriously limited the number of properties they could purchase.  FHA buyers are already limited by FHA standards as to the properties they can buy.  You add the low inventory we have today and a FHA buyer would have had an even harder time finding a suitable property.  I am so glad the waiver was extended.

A Hoarder House?

Yesterday I showed a house in El Cajon to some clients and while it wouldn't be featured on the TV show "Hoarders" it was close!  There was stuff everywhere.  Every horizontal surface was covered with stacks of items.  Only the center of the floor was visible.  The furniture was large and I do not think I have seen so many bookshelves in one place outside of the library!  Closet doors would not close and I was seriously afraid to open any cabinet for fear of what would tumble out at us.  Every room was like this.  As you can imagine with all this stuff the place did not smell airy.  It smelled of dust, dirty clothes and random old food.  This my friends is not the way to get your home sold!

I have heard the rants and justifications from sellers before.  "Well, the buyer will just need to look past it".  Um how?  You can't see any walls, floor or counters!  "My home has the lived in feel, I don't like a prim and stuffy feel."  The air is so stuffy I can't breathe!  "I don't have time to organize."  How are you going to move it all when we close escrow?  "The carpet is new and will clean up nice".  It is thread bare along the only accessible path.  "We never use the fireplace so the bookcase in front is better"  How will a buyer know the house has a fireplace?

If you are trying to sell your home you have to be realistic!  The buyers who come to view a home want to be able to visualize themselves in the space.  They cannot do this if there is hardly space for them in the room.  The existing items are a distraction and become overwhelming to the buyers.  When they see a messy and cluttered home you are NOT creating excitement or something that makes the buyers feel this is a move up to a better life.  On the contrary it is depressing and who wants to live in a place that makes you feel like that?

When a buyer sees a dirty and cluttered space it tells them that the seller doesn't take care of their things and doesn't care.  The buyer often thinks that this applies to the house as well.  If someone can't sort through the years worth of mail or clean the dishes why would they assume that leaks are fixed quickly and regular maintenance done?  By having a cluttered, messy home you are putting negative thoughts into the buyer's mind about the property.  This is not a good thing.

One of the big things buyers want is space, usually the more the better.  By having a cluttered mess the buyers see that the place is too small.  Having closets over stuffed they assume there is not enough storage in the home.  It is imperative that you get rid of items to open up the home and give a positive impression rather than a negative one.  Get rid of the items in front of the windows, open the drapes, let the light shine in and allow the buyers to see that the house has windows and light!

I know it can be hard and overwhelming to pack up a home that you have lived in for a long time.  I know, I just did it a couple of years ago.  But if you are selling your home you are going to have to move so why not get a jump on the process and get better offers to negotiate?  Not to mention if you start clearing out the junk you will have less to move in the end and if you are paying a mover the less you move the less it will cost you!  You do not have to do it all in one day, start with one room or even one closet.  Decide what you are taking with you, what you will donate and what is trash.  Yes, I said it trash!  Another hint would be to start using your reserves and not buying more.  Really, do you want to move 49 cans of green beans and 14 cases of toilet paper?  No more Costco runs! 

Start before you put the home on the market and have a neat, organized home for the buyers to view.  Continue the process as the home sells.  You will be helping your home sell quicker and for more money and when it finally does sell your moving day will be much smoother.  Good luck and happy sorting!

Top 5 Questions for Your Home Inspector Plus one Bonus

I work a lot with buyers and I always recommend that they have a "Physical Inspection" of the property done.  Buying a home is probably the biggest investment of your life and you need to know what you are buying.  I know it is scary because you have been looking at tons of homes and finally got your offer accepted on your dream home.  But you need to know as much about your dream home as possible to truly know if this is your dream home or a nightmare waiting to happen.

The first step is finding a reliable home inspector.  You want one who is going to be affordable and thorough.  You want a knowledgeable professional who will give you the honest truth.  Here are some questions you should be asking when selecting a home inspector.

1.  What is your experience and/or training?

2.  Can you provide a sample report?  You want to see how detailed the report is and what to expect.

3.  What is covered and what is not.  Some inspectors will not inspect pools, roofs, or appliances.  You need to know this upfront.

4.  What is the reinspection policy.  If there are errors or omissions that come to light later will they come out an reinspect?  If repairs are made will they verify the workmanship?

5.  Will they provide references?

6.  Do they have insurance?

You should try and be at the property when the inspection is done so that you can see exactly what the inspector is noting.  Take some time to review the report.  Make an informed decision to continue with the escrow and purchase the property or cancel and continue your home search.  It can be a difficult decision but in the end you need to be confident you are purchasing a home that is right for you and that you know what you are purchasing.

FHA Condos - Do They Really Exist?

With all the media coverage on the historically low interst rates and lower home prices, it is no wonder that there are many first time home buyers looking to make a purchase.  A FHA loan is often the way to go for these buyers since the down payment can be as little as 3.5%.  For many, this can be a double edged sword.  I have numerous buyers right now who qualify for $150,000 using a FHA loan.  They are interested in buying their first condo and are very excited and ready to go.  They quickly realize that it is not going to be as easy as they thought.  See when using a FHA loan there are some special criteria that must be met in order to qualify for the loan.  Not only do the individuals need to qualify in terms of income, debt and credit but the condo unit and condo complex also need to qualify.

The condo unit has to be habitable.  The condo systems such as electricity, plumbing and heat all need to be in good working order.  There needs to be flooring, no peeling paint or holes, and a working stove.  With a $150,000 purchase price limit, in San Diego this is the very bottom of the home price range.  Many of the condos are in very rough condition and will not meet the FHA requirements.  Let's say we do find one in decent condition, that is only the first hurdle.  Now we need to take a look at the complex.  The complex needs to have minimum of 51% owner occupied units.  As more investors snap up the units that are in rough shape and rent them out the lower this percentage becomes.  Leaving fewer and fewer complexes that meet this requirement.  The third hurdle is that in order to go FHA the complex must not have a high delinquency rate of the HOA fees.  With so many homeowners losing their condo many times the HOA fees are not paid for months at a time and if the property is a short sale many banks will NOT agree to pay the back HOA fees.  The HOAs need to be in good shape in order for FHA to be possible.  The complexes that have the higher owner occupied percentages and lower delinquency rates tend to be the more expensive complexes, which are out of the buyer's budget.  I tell you this to keep you informed so that you go into your home search with your eyes wide open.  For example in zip code 92019 there are only 11 complexes on the FHA approval list and most do not have condos listed for under $150,000. 

So where does that leave you?  It is not impossible to find a FHA condo for under $150,000 but you need to understand that not every condo you see on a listing website will work for you.  You will need to have patience and understand the rules you are playing by.  This will allow you to make informed decisions and be less likely to be disappointed when you find a condo you love but doesn't qualify for FHA.  You will understand that there is stiff competition for properties of this type and be able to write competitive offers when you do find one that suits your needs.  So go into the house hunt with knowledge and understanding.  Understand what you are up against and don't give up.  Keep looking and pushing and you will find what you need but give yourself plenty of time to do it.

Mortgage Calculator

How much home can you afford?  Try this mortgage calculator to find out.  When you are ready to start the home buying process, give me a call.

Home Value: $ Loan amount: $ Interest rate: % Loan term: years Start date: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Property tax: % PMI: % Output parameters » Draw charts Monthly vs bi-weekly payments Show annual amortization table Show monthly amortization table Mortgage Calculator Script

Buyer Closing Costs Explained

One of the biggest questions I get from people buying their first home is "What are closing costs and how much will we have to pay?"  Closing costs are the costs that are associated with buying a home.  They are paid at the close of escrow.  The most common closing costs are the fees related to obtaining the loan, appraisal fees, title fees, escrow fees, and prepaid items such as taxes and insurance.  Many times the exact amount of the closing costs is not know until right before the day of closing because they are prorated through the day escrow closes.  You will however have a good idea of what they will be by taking a look at the settlement statement provided by escrow.  The settlement statement or HUD1 lists all the financial details of the transaction.  It is important to review this document and understand the charges.

Closing costs are negotiable between the buyer and the seller at the time you are submitting the offer.  You can ask the seller to cover all or part of the closing costs you will need to pay.  This is why it is a good idea to have an estimate of what your closing costs will be before you submit an offer so you know how much to ask for.  Make sure you are prequalified with a lender in advance and have an idea of how much your closing costs will be.  If you are fortunate enough to get the seller to agree to pay some or all of your closing costs you may need to only bring in your down payment and pay for the out of pocket costs such as the home inspections.

The majority of closing costs are associated with the loan.  These costs will vary from lender to lender.  The loan origination fee is the lender's commission.  It is how much the originator receives for getting you qualified for your loan.  It is typically about 3%.  The appraisal fee is about $450+ and usually needs to be paid prior to closing (out of pocket).  Courier fees cover the costs of send paperwork back and forth between escrow, title and the lender.  Notary fees are charged for notarizing the loan docs/deeds.  Escrow fees pay for the escrow services.  Title fees cover the costs to check on and insure a clear title.

Pre-paid items could include insurance and taxes.  Buyers usually have to have a valid insurance policy/binder showing they have paid the insurance for the first year, hence the term pre-paid.  Property taxes are prorated to the day escrow closes.  The seller pays for the amount of time they owned the property so a charge or credit will be applied depending on what has been paid.  The lender may require the buyer pay a number of months of taxes and insurance into an "escrow" or "impound" account.  Taxes and insurance charges are then added and included in the monthly mortgage payment and a portion is deposited into this account.  The mortgage company will then pay the taxes and insurance out of this account. 

And finally you should make sure you have the money to do any and all home inspections that you want.  These will not show up on the HUD and will need to be paid out of pocket at the time of the inspection.  They typically run between $300-$500 for a general inspection depending on size and type of home.  If there is septic or well on the property those can run about $400 a piece.  These are just a few of the inspections you may want to have done.  The costs of doing inspections can add up but knowing what you are buying and having the home checked by a qualified professional is priceless.

What Does "Contingent Status" Mean?

One of the most commonly asked questions I get from people just starting the home buying process is "What does contingent in the status of a listing mean?"  What buyers need to understand is that there is a difference between the active and contingent statuses.  When a listing is active the seller is actively looking for offers.  There are no accepted offers on the property and the property is still available. 

The contingent status is a relatively new status that was created in response to the increase in the number of short sales.  Short sales have an additional step in the negotiation process.  They require the short sale lender to approve the sale and the offer in order to move forward.  There is a period of time when the buyer and seller have agreed to terms and the file is sent to the short sale lender for their approval.  During this time the property moves into contingent status.  When you see contingent it means the seller has accepted an offer on the property and they are waiting for the bank to approve, counter or reject the offer.

The contingent status is meant to alert agents and buyers that there are offers on the property and one offer has been has been accepted by the seller and submitted to the short sale lender for review.  Before there was a contingent status, buyers and their agents were viewing and submitting offers on these short sales not knowing that there was already an accepted offer.  This was very frustrating. The property will stay in the contingent status until the short sale lender makes a decision.  If the lender accepts the offer, the property will then move into a pending status (in escrow).  If the short sale lender does not accept the offer or through negotiations an agreement can not be reached, the property will move back into the active status. 

I hope this helps.  Do you have any other questions?  Feel free to let me know if you do.  I am here to help.

Home Buying Reality

I recently worked with a buyer and it reminded me of a pattern that I so often see.  When people first decide to buy a home they are very excited and sometimes have unrealistic expectations.  I start them off by helping them get pre-approved with a lender.  This is very important since the lending requirements have changed so much in recent years.  It is important that they know how much they can afford and what their payments will be.  The buyers in this scenario are prequalified for up to $300,000 and they were comfortable with the associated payment.  We are good to go. 

I start to send them some active listings that are within their price range and meet their other requirements.  Pretty soon, they find a couple of properties they want to take a look at.  They are so excited to be on the hunt for their home and they are oozing with anticipation, dreaming of the great properties that await them.  They have heard how the rices have dropped so significantly and are ready to snatch up their gem.  I try to keep them in reality but at the same time not douse their excitement.  I schedule the appointments and off we go.

We are scheduled to see 5 properties and the buyer's know their dream home will be one of them. I have explained to them that the houses in their price range are going to need work.  They say they understand and do not mind a fixer but the area and square footage are the most important.  When we pull up to the first property the curb appeal is less than ideal but the buyers look past it thinking it would not be difficult to bring it back to all it's glory.  We go into the property and are hit with a musty, dirty carpet smell which is quickly written off to being closed up.  As we tour through the property their hopes are dashed as they find not only does the carpet need to go but the floors in the kitchen and bathrooms are vinyl not tile, the cabinets are knotty pine not sleek dark wood, the counters are tile with missing grout not granite, and there is a small wall heater not central heat and air.  You can see the disappointment on their faces.  They try and remain perky and assume the next properties will be better.  I remind them that homes in their price range in this area will all need work.  But they think I am crazy.  They have heard in the news how desperate people are to sell, how much prices have come down.

This story continues as we view the remaining homes.  All of the properties are in need of work and updating.  The chipper mood of the buyers has faded and they have decided the sellers of these properties are unrealistic and out of their minds.  They do not think the houses they saw would sell at the list price.  They consider putting in what they would consider a fair offer on one of the homes.  Because of the amount of work that they feel needs to be done to put it in the condition they want they want to submit an offer for $120,000 under the list price.  What the buyers do not understand is that these homes are priced for their condition and pretty much at market value.  Unfortunately market value is not determined by how much they can afford.

The end of the story is that the buyer's did submit a low offer on the property even after seeing the comps and what they were selling for.  They did not get the property because multiple offers came in at or above the list price.  It took the buyers awhile to get over the sting that their offer was unacceptable but eventually they did.  They became more realistic with what they would get for their $300,000 and made some changes to their search requirements.  It took awhile but we found it and they just closed on their new home.  It may not have been their dream home but it was a home that they could afford and would love.  It was their reality.

I Want To Buy A Home - Where Do I Start?

So you have been listening to the news and have heard all about the affordability of homes and the incredibly low interest rates.  You are thinking that the housing market is beginning to recover and you are beginning to realize there may not be a better time to buy a home than now.  If you are like 85 - 90 percent of home buyers, you have even started to search for and look at properties on the Internet.  You have used a mortgage calculator and you like the payments you are being shown and see that buying a home is a good financial move.  Now you are wondering how to start the process of actually finding and purchasing a home.

This is a scary point for many.  The idea of buying a home can be scary in and of itself.  The idea of the paperwork and process of buying a home can be downright terrifying.  You are not alone.  Many feel overwhelmed at this point.  Just remember, tons of people buy homes everyday and you can too!  Luckily for you there are professionals here to assist you through the entire process.

To start contact a real estate agent, (preferably Me!), to discuss what you are looking for in a home.  I will want to know what areas you are considering, how many bedrooms, bathrooms, approximate square footage and lot size, etc that you would like.  I also want to find out other specifics that appeal to you.  This will assist me in better understanding what you are looking for and help me tailor a search for you.  I will set up an automatic search that will email you as soon as new properties that meet your criteria come on the market.  Let's face it, the good ones go quickly!  This does not cost you anything!  You do not pay me out of your pocket.  See, when a homeowner decides to sell their home they will contact an agent (preferably me!) and "list" the home for sale.  At that time a contract is done and the seller agrees to pay a commission.  Typically half of the commission goes to the list agent and the other half goes to the buyer's agent (Me, your agent!) You do not pay me.

The second thing you need to do after calling me is to contact a lender.  I have a list of some I have worked with in the past, to help get you started.  You need to contact a lender and get prequalified.  The lender will take your information and run your credit.  They will then show you some different loan possibilities and tell you how much you qualify for.  This is imperative.  You need to know how much you can comfortably afford before you go out shopping for a home.  There is nothing worse than falling in love with a house that you can not afford.  Also, home sellers will not consider an offer without a pre-qualification from a lender.  They want to know you can afford the home.  You need to get this done before you start shopping otherwise you run the risk of finding you dream home and not being able to put an offer in on it and someone else getting the home.

Once we have the search parameters set and you have your pre-qualification letter then the fun begins.  You look at the listings I send you.  When you see one that interests you, you let me.  I will find out more information about the property and I schedule a time for you to see it.  We look at properties until we find one that you want to put an offer on.  See, not so hard, with my help you can do it.  I will answer all your questions and help you through the entire process of writing an offer and going through escrow.  You are not alone.  So, what are you waiting for?  Give me a call to get started!

FHA Anti-flipping Waiver Extended Through 2012

The Federal Housing Administration is extending the anti-flipping waiver through the end of 2012, which allows buyers to purchase homes that have been previously sold within the last 90 days.

The waiver, which was set to expire soon, was "intended to accelerate the resale of foreclosed properties in neighborhoods strggling to overcome the possible effects of abandonment and blight," Carol J. Galante, the acting Federal Housing Administration commissioner, said in a statement.  "FHA remains a critical source of mortgage financing and stability and we must make every effort to promote recovery in every responsible way we can," 
Souce:  Realtor.com

This is good news for FHA buyers.  If the waiver had not been extended they would have been prohibited from purchasing homes that had changed hands within the last 90 days.  This would have made it impossible for the FHA buyer to purchase the majority of bank owned homes and properties that investors had purchased, fixed up and put back on the market.

Bank Insanity #3

When I usually write about bank insanity, it usually involves the short sale lender or the REO owner.  Today I am going to let you know about a buyer's lender who is driving me up the wall.  The buyers are using Navy Federal for their loan.  The only item missing from the file before they would order the loan docs was the termite clearance.  We submitted the clearance yesterday and this morning I received a call that the processor saying it is inadequate, that they require the Section 2 item to be repaired.  What?  Really?  Since when are section 2 items required?

When you have a termite inspection done the report is broken down into 2 sections.  Section 1 is evidence of active infestation and lists the work necessary to provide a clearance.  This work is done in order for the termite company to provide a clearance stating that the property is free of pests.  The second section of the report is the Section 2 items.  These are recommendations or findings of items that could lead to infestation in the future.  Items such as moving dirt away from walls, stucco damage from sprinklers, grading issues.  These are things that a homeowner might want to remedy to prevent damage in the future.  I have never had a transaction where the buyer's lender required section 2 items to be done in order to get the loan.

I have sent numerous emails and left messages for clarification.  All the loan officer would say is that all repairs have to be made.  The section 2 item on this particular report is "Stucco deterioration".  The recommendation is to get it checked out by an "appropriate tradesman".  The report is not even recommending a repair.  All the loan officer will say is that "the processors is requiring it to be fixed".  What repairs?  Do they want the buyer to pay a stucco company $100 to say "Yup, the stucco is chipping"?  If so, this is going to be required for 99% of the sales in California since most homes are stucco and most homes have had a sprinkler hit the wall!  Or are they suggesting that we should re stucco the house?  Good luck with that one since it is owned by Bank of America.

So, here I sit, waiting for a call from either the processor or the supervisor to hopefully get them to listen to reason and understand this is a section 2 item and no repair is being recommended.  If in fact they did change all their requirements and now need section 2 inspections and repairs completed, why did they wait until now to let everyone know?  The buyers (their clients) now risk losing the house, their deposit, the appraisal fee and inspection fee.  All because either a processor does not understand the requirements or Navy Federal has changed theirs.

Gift Ideas For New Home Owners

With the lower home prices and crazy low interest rates, many of the people buying homes are first time buyers.  They are moving from condos, apartments and even their parents homes.  Once the excitement of getting the keys and moving in has passed, they are sometimes faced with another reality of home ownership...repairs.  This opens up a whole new area when it comes to gift purchasing.  Do you know someone who recently bought their first home?  If so, here are some great gift ideas I wanted to share.

Tool Belt:  to carry all the new tools
Tool Box:  for convenient tool storage
Hammer:  If I had a hammer, I'd hammer in the morning...
Tape Measure:  funiture placement and finding midpoint
Level:  make those pictures straight
Handsaw and miter box:  for baseboards and crown molding
Chalk box and string:  for marking and measuring, great for floor installation
Pliers:  to pull all the pesky nails out of walls
Wrenches:  fix that leaky pipe
Screw Drivers:  all sizes and shapes will do the trick
Utility Knife:  scoring drywall
Drill  and drill bits: 
Voltage tester:  Safety First

These are some of my ideas but I am always looking for more.  Please feel free to add to my list and help others find the perfect gift.

Home Inspections when Buying a Home

With the number of bank owned properties on the market today, getting a home inspection is even more important. Banks are exempt from providing buyers with the typical disclosures a seller would provide. They will not provide the Transfer Disclosure Statement which a seller fills outs and answers questions about the property, among others. The banks must disclose anything they know about the property but in many instances they do not know any of the homes history. Even in a transaction where there is a "regular" seller who has lived in the home, you need to consider the source of the disclosures. You need to keep in mind that the seller is trying to put the property in the best possible light to a potential buyer. It is imperative that you have the property inspected by a qualified inspector so you are aware of any defects before they purchase the home.

There are steps to this process, the first being the offer to purchase itself. Your offer should include an inspection contingency that allows you to inspect whatever you would like. Some inspections you may want to consider are a pest inspection, general home inspection, well inspection, septic inspection. It really depends on what is important to you. If boundaries are important, get the property surveyed. Does there appear to be drainage issue?  Get it checked out. If you are considered about permits go to the county and pull the permits. If the general inspector says the roof is questionable get a roofer out there to check it out and give you a bid. I have a list of well over 20 inspections that you may or may not want to have performed. Do whatever it take so that you feel comfortable moving forward with the purchase.

This being said you also need to understand that the inspections must not harm the property or you must pay to put the property back into the original condition. For example, if there is evidence of water damage on the ceiling of a room below a bathroom, it may be necessary to remove drywall to see if there is an active leak. You would need the homeowner’s permission before you go tearing into walls and you would need to put it back into the same condition or work something out with the seller in advance. So when you write your offer make sure there is a broad inspection contingency.

You will also need to establish in the offer the amount of time you will need to get the inspections done. The standard time allowed is 17 days. This may seem quick but for the most part the inspectors are aware of the time constraints and will get things done very quickly. It is important that you understand that once your offer is accepted and escrow is opened things will move quickly. You will be very busy the first couple weeks of escrow. Your lender will be asking for items to complete the loan. You will be scheduling and attending inspections. I will be going over disclosures and escrow paperwork with you. You must remember that there are deadlines built into the contract that you must adhere to. Make getting all the necessary inspections done a priority.

One of the biggest objections I hear to doing an inspection is that it will cost the buyer money. This is very true. The buyer is responsible for paying for their inspections. However some inspections may be negotiable. You can request in the offer that the seller pay for some inspections for example the termite, septic or well inspections. But you need to remember you might be competing against other offers and the more you ask for the less likely the seller is to accept. I also like to remind my buyers that spending $400 or so for a home inspection is money well spent, especially if a fatal defect is discovered. This is probably the biggest investment you will make and a home inspection could save you a lot of money. It is best to know what you are buying.

The purpose of the home inspection is for the buyer to know the condition of the property so you can make an informed decision as to whether or not you want to continue with the purchase. The home inspection is not meant to create a shopping list of repairs you expect the seller to perform. While you can submit a request for repairs to the seller before doing so you need to limit your requests to "deal breakers". These are items that must be done in order to feel comfortable with moving forward. I have seen buyers use the inspection report to come up with a laundry list of repairs and upgrades they wanted. The seller's response was "tell them to go buy a brand new house or raise their price by $100,000". The seller is under no obligation to even respond to your request for repairs. The inspection is meant to help you decide if you want to purchase the property or walk away.

You may have been searching for a year and this is your dream home. You may have written numerous offers and been outbid or waited around for short sale approval that never came but no matter what, do not let your emotions cause you to cut corners. Yes it is nerve wracking and I understand you really want the home to check out. I have seen buyers devastated after doing a home inspection and discovering the well was bad and they could not purchase the property. It took a little bit for the sting to go away but in the end they were very happy they found out before they moved in and yes, they found another home and are perfectly happy. Do the home inspections so you know what you are buying and you can have some peace of mind.

Buyer's Agent

I was talking recently to a young couple who are considering buying a home.  They seemed a little nervous but that is to be expected.  I love working with first time buyers, while some agents shy away from them because they can be demanding and indecisive, I love it.  First time buyers are fun to work with and I guess the Mom in me comes out.   I shared with this couple some of the great opportunities out there including the low interest rates and showed them some great property deals.  I knew they were first time buyers so I explained to them the importance of getting preapproved for a loan and gave them some contact numbers.  I also told them the escrow and home buying process. 

I was very careful to keep things simple but after we had talked for awhile I got the feeling that they were uncomfortable about something.  I asked some questions to see if I could determine what was going on.  I could not figure out what was bothering them so I finally just asked.  Come to find out they were eager to start the process of buying a home but they did not think they could afford to pay me and have the needed money for a downpayment.  They knew they needed and wanted me to assist them but they were embarrassed because they did not thing they could pay me!

You should have seen the relief on their faces when I explained to them how agent commissions are charged.  I told them that when a home go on the market the seller agrees to pay the commission  to the agents, both the buyer's agent and the sellers agent.  They were so happy when they realized they did not have to pay me upfront for my services.  They are now working on getting their preapproval and starting the process of buying a home in El Cajon.  I am so excited to be working with them. I can't wait to help them find their new home, help them through the process and the best part...hand over the keys!

Are Bigger Homes Better?

I recently read a article about America's most expensive homes that are for sale. I marveled and was amazed at the pictures of huge rooms, high ceilings, beautiful landscaping, and huge numbers of rooms. But then I started to think about it and realized that I would not want to own one of those huge houses. The cost of owning such a home would be astronomical! I am sure it is easy to see this on such a grand scale but what about on a smaller scale?

As a Realtor in Rancho San Diego I work with people buying homes everyday and we are always striving to find homes for sale that best meets their needs, wants, desires and budget. As you know, the price of homes has declined drastically over the last few years. Homes are more affordable than ever. As result you can now afford a larger home and larger lot than previously. Combine the price reduction along with historically low interest rates and you now have more buying power than ever. Whereas before you may have been only able to purchase a 2000square foot home, you may now be able to buy a 3000+ square foot home. Or maybe rather than a 10,000 square foot lot you can afford an acre.

The question becomes, how big is too big? Of course, much will depend on the size of your family and your own individual needs and tastes. But I do not want you to fall into the trap of believing that bigger is always better. The costs of owning a home is going to go up with the size, whether it is the size of the house or the size of the lot. Do not stretch your budget to the limit to gain additional square feet or acreage unless you factor in the additional costs.

The larger home is going to cost you more to heat and cool. There will be more windows to replace, more rooms to furnish and decorate, more faucets that leak, outlets that go out, a larger roof to replace, more walls to paint, higher flooring costs and so on and so on. The larger lot is going to cost more to landscape and irrigate. Those water bills can go up very quickly. Will you need to hire a landscaper? Will you hire someone to clean? These are all things to consider.

So is a larger home better than a smaller home? Is a large lot better than a smaller lot? I do not think there is a right or wrong answer. It depends on the individual and the circumstances. What are your thoughts?

Broaden your Home Search - Avocado Village

When searching for a home, many buyers will limit their search to a specific zip code. You may have a specific area in mind and use the zip that covers most of that neighborhood. While this may be effective most of the time, sometimes this cannot benefit you. Here is an example. If you are looking for a home in Rancho San Diego you may be searching the 92019 zip code. But have you included the 91978 Spring Valley zip? This zip code covers the area by Steele Canyon high school and “Old Rancho”, up on the hill. Another zip code to search would be 91941. I know this is a La Mesa zip code but the area by Dixieline, the 24 hour gym and Vons, up on the hill is in the 91941 Zip code. If you are considering buying a condo in Rancho San Diego you should include these zip codes as well.


Avocado Village condo complex in La Mesa, is located just east of the Dixieline and Von’s shopping center at the end of the 94 and Via Mercado. This is a good complex to consider if you want to buy a home in Rancho San Diego. The complex consists of 1 and 2 bedroom units with 678-1068 square feet. Some units have mountain views and either attached or detached garages. The complex was built in 1985 and some units have been updated. When last checked the owner occupancy rate was 61%, which means it is eligible for FHA financing. (Please check current rate when you are ready to buy.) The current HOA fees are approximately $200-$230 per month. This fee covers common area maintenance, building exterior, sewer and trash. There is a pool and a spa.

The complex is stable. In the last 18 months 12 units have sold. There are currently 2 in escrow and there is only one active listing. It has 2 bedrooms, 2 bathrooms, and is 1068 square feet. It is listed for $170,000. Call me if you would like more information about this condo or if you would like me to help you purchase a new home.