Beltran Properties

Real Estate Industry News
July 2008 Vol 8 issue 7
Beltran Properties 408-842-8734 * 800-543-1075
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Great news, my book "Welcome to the Country" will be available soon, also on e-book format.

Some tips on setting the right price to attract buyers
The San Francisco Chronicle had some wise advice last month. My comments are in ( )

What is it worth? Some do's and don'ts on how to arrive at your best price:

Don't base your price on what you paid or your neighbor a few years ago. Do compare current homes in your neighborhood that have sold or are on the market within a 3 to 6 month window. (Also keep in mind the Bank owned and short sale $ could be unrealistically priced) Don't pick an agent just because he/she suggested the highest price. Do pick one who offers a thoughtful explanation for the price he/she is suggesting. (Also remember you must feel trust for the agent. They could be new to the industry, or seasoned. If you do not feel you can thrust him/her, keep looking) Don't go overboard with remodeling. Rarely can you recoup the cost. (Bathroom and kitchen updating do help sell, but do not be too extreme) Do make minor improvements so your home is in as good a shape or better than the competition. Don't set your price based on emotional attachments and cherished memories. Do ask your agent to reassess the competitive landscape (listings and sales) every few weeks to be sure your price is sync with the market. Don't be stubborn. If weeks go by without any offers, the price probably does not reflect the true value of the home. It is time to consider cutting (adjusting) the price. Do be patient. You might have to wait longer for buyers to pull their money together now that lenders have toughened their standards.

Short Sales, NOD, Trustee Sales

It seems that most homes on the current market are either short sales, notices of default or trustee/bank owned. What is more, if the home is still owned by the seller, the asking price is above comparable "short sale" homes. The reality is that the lending frenzy left us all in a mess, and who is paying for it? Not the banks or lenders. If you venture into one of these transactions, be ready to wait, and wait, unless the home is already bank owned. This is because there are so much of these properties, the banks, and a lot of the real estate industry, do not have any set rules or rulings, for procedures. Plus there are no controls over the banks from the consumer end. We cannot demand. We cannot push. We can wait. So, if the home you have put an offer on is taking a long time for real answers, be patient, hopefully it does not mess up any other transaction time table. If you feel you are being stalled, keep looking there are many other homes out there, but they may also have the same problem. Good luck, this too will pass.

Foreclosures, REO's and you

For The first few months of this year we have seen many advertisements for bulk tours of foreclosures and REO's (real estate owned by banks) and auctions. These programs or marketing campaigns offer bulk properties direct to the buyer. Please remember you are being shown the properties by the Seller's agent. That means you have no representation in the purchase, and you must rely on their agent to help you. According to real estate law the agent has the fiduciary to the seller, not you, and the duty to get the best deal for his client. This can be risky for you. Remember, you have the right to be represented by an agent, no matter what they say, and generally the seller pays all commission fees. Your best tool is to ask questions, and if you feel any doubt, walk away. If the deal is too good to be true, it generally is.

Tips to Help Sell Your Home

Make a good first impression. Your entry way sets the mood for the rest of your home, so clean up the front porch, polish the door knobs and glass, and put out a new welcome mat. Be sure your windows are clean. Sparkling windows tell Buyers that your house is well maintained. Keep your home warm during fall and winter showings. A fire in the fireplace says HOME. Decorate for the seasons. Warm throws and flower arrangements show care for details. Give your home a nice aroma. Cinnamon candles, or fresh cookies are nice, but don't overdo, like you are trying to cover-up something. Keep some music in the background, classic or soft jazz, but low volume. Keep the walkways and gutters clear, and if possible throw a little paint at least on the trim.
Now if you decide to sell, be sure to get a realistic value of your property. A CMA is helpful, and a qualified realtor can research the proper value, but an appraisal can give the most realistic value, and can stand up in any litigation.
So do not be depressed. Many factors affect the real estate market, but there is still the need for consumers to relocate, and any time it the right time.

Foreclosure-Related Transactions

Short sale, foreclosure, home equity sale: These were words rarely used by real estate professionals in the not so distant past. But because of sub-prime loans adjusting higher, homeowners are struggling to make their mortgage payments, and making foreclosure-related transactions more prominent. Why get into one of these? It is a good opportunity to purchase, if the equity is there. If not, steer clear. If a bank or lender is involved, there is an opportunity of purchasing on a short sale. That means the lender will accept a price lower than the current loan on the property. Be aware though, the decision could take a while for the lender to make, and you could pass up an opportunity on a better deal, or worse, find interest rates have climbed during the wait. Whatever you decide be sure to use a knowledgeable professional, who has had experience.

Home Staging, tips to sell

You are ready to sell your home, or are you? Has your home put its best foot forward? Here are a few tips to sway buyers your way. 1) Clean. (De-clutter. Wash the windows. Paint if possible. )2) Pack all unnecessaries, remove excess furniture, knick-knacks, photos, collections. You want the home to look as open and large as possible... How can a buyer see their furniture in the house if they can't see the house? 3) Outside should look as good as the inside. Weed, water, and plant a few flowers. Remember the outside reflects the inside, and is the buyers’ first impression. At today’s' prices, there are fewer buyers that can afford to "fix-up" a purchase. Do it for them, and gain a higher purchase price for the effort.

Credit Matters

Learn your FICO score; clean it up, before buying a home. The key to attracting interest rate is your FICO score. A FICO score is a measurement of credit worthiness, ranking between 300 and 850. Remember, the higher the number, the lower the interest rate. There are five factors that calculate your score: Payment history (35%), amounts owed (35%), length of credit history (15%), new credit (10%), and types of credit used (10%). To repair or improve your score you need to check your report for inaccuracy. There can be mistakes regarding a late or missed payment, too many credit cards, even if they are closed or never used. Also check for credit not yours. Names can be similar, or even a relative, and need to be addressed. These need to be reported to the credit agencies, and if there is identity fraud, contact the police department for instructions to clear that. You will find information about these issues at www.myfico.com.

Flipping Houses, is that possible???

Flipping through channels on the TV we find a lot of programs about home improvement. Some are just reality TV and some are informative. "Flip this house" is one of the interesting ones. This is where a buyer acquires a home and fixes it up to resell. In California, if an agent does this to artificially increase the prices of homes, this is illegal. But if an investor "flips" a home it is ok. There are tax issues to be dwelt with, though, and only through a qualified tax attorney or CPA can you truly be sure. The general idea is if you buy and sell before one year, the capital gains can be over 35%. If after two years, the tax will be back to normal, 15%. There is however another way to defer (and we mean only defer) the tax), and that is by a 1031 exchange. "Flip this House" appears to utilize this concept. They show "Investors buying and fixing and flipping these homes in months and weeks. The program does not address the tax issues, and one investor claims after flipping for about 8 to 10 years, he will have a fully paid off property. This can possibly happen, and is truly something to look into, with help from you Realtor and tax advisor.

Avoiding Foreclosure

A pending foreclosure is stressful and confusing. We encourage our clients to contact their lenders to see whether a loan workout option is available. If the problem is temporary, one option is forbearance. The lender may allow you to reduce or suspend payments for a short period of time, and then you will need to agree to bring the loan current in a specific time. If the problem is long term, you could approach the lender to modify the mortgage. If you can pay some of the loan, the lender might permanently change the terms of the original loan. If keeping the home is not an option the lender will usually agree to a specific amount of time to sell the home. There are more ways to approach preventing foreclosure, but the most important is to talk with your lender and real estate professional.

Anytime is the right Time to Buy

When you approach your home buying decision solely based upon "the right time" you cripple your ability to buy wisely. At this "slower or normal market", you can play a guessing game at what is right, and when. Wise buyers decide with a different set of reasoning. 1) Is my credit in place, and is the loan affordable. You can wait until you think the home market has hit bottom, but will your loan costs be affordable? 2) I like the home, the price seems a little high. A wise buyer will offer what he thinks he will pay, and negotiate from there. There is more to the purchase than just price. Will the seller give any allotments for carpet? roof? How about the seller helping with the loan? 3) As a buyer your time is valuable, you should depend upon a professional to help in the transaction.

6 Things You Must Know Before You Buy

Mortgage regulations have changed significantly over the last few years, making your options wider than ever. Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can cost or save you thousands of dollars and years of expense.

1) Get prepared for your mortgage before you go looking for a home. It is easy, and can give you a complete picture of your projected expenses for a purchase. You can get a verbal "pre-qual", or better, a written. The written is as good as money in the bank when you put an offer in, and can be done simply over the phone.

2) Know what dollar amount you feel comfortable committing to. By working back and forth with your lender to determine what that number is, you won't waste time looking at homes that are beyond your comfortable number.

3) You should be thinking of long term goals, and expected situation, to determine the type of mortgage that will best suit your needs. How long you want to be in this home, what direction is interest rates going, is your income expected to change in the future? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.

4) Make sure you understand what prepayment and payment frequency options are available to you. The more frequent payment schedules can literally shave years off your mortgage. For the same reason, authorized prepayment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay. Be sure to ask the proper questions, or work with a professional you can trust.

5) Some mortgages are assumable, if available. This can save you money if you refi or sell. The lender can waive fees.

6) You should seriously consider dealing with a mortgage expert. If you use an expert who only works in lending you can rely on their knowledge of a constantly changing industry, and what is truly available, and what can hurt you, typically at no cost to you. The TV deals may seem great, but too many people have gotten into loans they wish they hadn't.
proposition 60, A Senior's Best Friend

Ready To Retire? Want to Downsize? New Property Tax Puts You Out of Budget?

There is a wonderful property tax law allowing 55+ers to relocate and downsize. Prop 60 allows you to carry your current property tax valuation to your next property. There are a few criteria to comply with. 1) need to be at least 55 years. 2) can only be used once 3) property must be within the same county, or a few reciprocating ones (they change and disappear rapidly) 4) you can pay up to 105% more than you sell if you sell first 6) if you buy first, you need to sell your home for more than you bought. A more in depth study can be found on your county's web site.

Don't pay another Cent in Rent to your Landlord!

If you're like most renters, you feel trapped paying for a home that isn't yours. How could you when you're not even permitted to bang in a nail without a hassle. You feel trapped in the renter's rut, with no way of rising up and owning your own home. Don't feel trapped anymore. A new free report "How to Stop Paying Rent and Own Your Own Home" has already helped dozens of local renters get out from under their landlord's finger, and move into their own home. You can make this move too by discovering the important steps in this free Special Report. It doesn't matter how long you have been renting, or how impossible your financial situation might seem. With the help of this report it will suddenly become clear how you really can stop wasting thousands of dollars on rent. Remember this is a free no obligation report. Call, write or e-mail your request, and it will be sent to you that same day. Or call1-866-747-7655 #1001

You Can Buy a home For Zero Down

If you are looking to purchase a home but find that you either do not have enough saved for a down payment or that you do not want to liquidate financial assets to use as a down payment, this report reveals how you can purchase a home with no money down. This special insider, industry report has been prepared to outline what you need to know in order to take advantage of this innovative program which allows you to get into the housing market immediately, with Zero Down. Remember this is a free no obligation report. Call, write or e-mail your request, and it will be sent to you that same day. or call 1-866-747-7655 #1025

Understanding Closing Costs

Sticker shock is the term best used to describe the feeling right before closing when you learn that your mortgage payment and closing costs are higher than anticipated. Where did you go wrong? If you are like many homebuyers, you have discovered that an online mortgage calculator did not give you the full picture. there are many variables in calculating your closing costs and mortgage payment, including the day of the month that you close escrow and the amount of your down payment. Here is a primer to help: Your Mortgage Payment, factors include 30, 40 or 15 year term, 5,10, 20 % down and for the lesser downs PMI (privet mortgage insurance), homeowners and flood insurance, and property tax (an impound account for these can be required by your lender)Considering all this, it is far better to have a tax professional or CPA guide you through these. Your Settlement Costs: 1) charges for establishing and transferring ownership (escrow fees) 2) amount paid to state and local governments (transfer taxes etc)3) Costs of getting a mortgage (loan fees, commissions to lender broker, application fees, appraisal fees, survey fees if required, homeowners insurance and property inspections can also be conditions required by the lender. Changing market conditions affect prices also. So just knowing to expect the unexpected can keep you prepared for sticker shock.

Buy At The Optimum Time

To buy or not to buy, that is the question. Or better stated, when to buy and when not to buy are the question for any homebuyer in the market today. the reality is no person knows with certainty when the market is at a peak or valley. Every purchase involves an element of risk. Here are some factors to consider in determining the acceptable risk for you.

Family needs, If you need more or less space, it is a good time move. The market is stabilizing, good time to become entry level, if you fit into this category.

Investors, if you are looking to buy, the market favors you. A seller is more likely to consider your offer and be happy to have the sale.

Upper end purchaser, great time to buy or sell. top level homes tend to be immune to the ups and downs of the market. Loan rates are not at an all time low, but are still affordable, plus lenders are offering better rates on a fixed 30 year loan than on an adjustable.

The bottom line is that every time a person makes a purchase, there will be stress about it just like every other buyer experiences. Given a few months, however, they will be able to muse about those concerns while the purchase matures. Will Rodgers was certainly correct when he noted that real estate is a sound investment since they don't make it anymore.

Home Warranties

Although it is not mandatory, like homeowner's insurance, more than 90% of resold homes are sold with home warranties. Basic coverage means the warranty company will repair or replace an existing home's covered mechanical system or major built in appliance that have broken due to normal wear and tear. The typical contract lasts for one year, but is renewable. The home owner must go through the warranty company for repairs. So at your close be sure to get the information of the warranty company as most repairs are needed in the first 45 days.

Appreciate Your Appreciation

The obvious benefit of homeownership is a place for you and your family to live. But as you prepare to make what could be the most significant purchase of your life, consider the fringe benefits of owning a home :appreciation and tax advantages.
Imagine if you bought five years ago. Values have increased 117% on a median value home.
If you decide to sell your home this year, $250,000 of that equity gain is tax free if you are single, and doubles to $500,000 if you file a joint return.
You also have the advantage of interest and property tax deductions. for property tax you are looking at about 1% of the property value for the deduction, and as long as you complete a Schedule A on your tax returns, the IRS allows you to deduct your interest expense.
The final obvious advantage many home owners are using is the home equity loan. They consolidate debt, and improve their financial situation. This could mean better credit scores, and better interest rates.
Make sure you squeeze the most out of your homeownership as you can, in terms of the enjoyment you derive both from living in your home, and from the financial advantages it offers.