Friday, November 17, 2006

Buying or Selling a Hemet Home During the Holiday? Please consider these points . . .

Buying of Selling a Hemet Home During the Holiday?
Please consider these points . . .

By John Occhi

There is no doubt about it, the number of homes that sell during the holiday season takes a dramatic dive over any other time of year.

Does this mean you should not try and sell your home? Absolutely not, read my article about why this is such a great time to sell your home!

Does this mean you should put off buying a home until after the holidays? NO…NO. . .NO! This is the absolute BEST time of year to be a buyer.

The real question is do you have the ‘right stuff’ to buy or sell a Hemet home during the traditional holiday period, which begins some where around Thanksgiving and extends into the new year. After all, the holidays are traditionally a very stressful time, regardless if you enjoy them or not (believe it or not, not everyone looks forward to this time of year).

So, if you want to SELL your HEMET home during the holidays, what should you consider? How about…

1) Don’t think that everyone believes as you do. What may be appropriate and traditional in your home during this time of year may actually be offensive to some. So as you decorate, please consider scaling back on the religious artifacts. Don’t skip them, just scale back to moderation – but do please remember the ‘reason for the season’.

2) Decorations in general should be scaled back. Tastefully decorated rooms often only employ minimum touches to bring the flavor of the holidays into a home. Please don’t do a “Griswalds” (if you don’t know who I am talking about, rent the Christmas classic – “Christmas Vacation” with Chevy Chase).

3) Don’t get an oversized Christmas tree this year. Now is not the time to get a tree that reaches to the ceiling and occupies valuable space or landscape that will now appear to be much smaller than what it actually is.

4) Don’t be the first with the decorations – up or down. Traditionally Christmas decorations start to go up the day after Thanksgiving and don’t come down until New Years Day. You’ll do yourself major justice if you can wait and put them up no more than two weeks before Christmas and no more than2 weeks after (but New Years is even better).

5) If you are planning on having guests stay with you for any period during the holidays, please inform your REALTOR and have him restrict showings until after the guests are long gone and their space fully restored to it’s original condition.

6) Remember to showcase the home highlighting the great features of the home year round. If you have photos from the spring and summer, please display them – this is a great way to showcase your garden in full color.

7) Keep up with seasonal chores. In Hemet, we do not have to worry about shoveling snow, but we do have the Santa Ana’s come through and blow up a mess. So please keep the yard raked and the sidewalks swept and free of all debris.

Take this advise into consideration and you should have a great chance of showing your Hemet home for sale as long as it is properly priced, because we all know the buyers who are shopping now, are motivated.

So if you want to BUY a HEMET home during the winter holiday season you will find yourself in a position of power.

Not only is the current market a true buyers market, with approximately a 6 month inventory of homes for sale in most market segments in Hemet, but there a lot less buyers spending their holiday time shopping for a home, when the mall is open.

So, as a buyer of a Hemet home during the 2006 Christmas holiday season there are a few pointers I would like you to consider maximizing the time you will spend, making sure you find the absolute best Hemet Home for sale.

1) Yes there are some real bargains right now, and as a buyer you are definitely in control. Please don’t get too cocky though. Do your homework to present any offer. Make sure you look only at the comps in the neighborhood you are considering and be selective in the comps, only considering the homes that have sold in the same neighborhood in the last 3 months. Anything older really is not relevant to today’s market.

2) Now is a great time to negotiate. Price is not the only negotiable in many cases but many times other valuable concessions can also be had for the asking. You might ask for the appliances or even certain items of furniture that just ‘go’ with the home. Other common concessions include having the seller pay all or a portion of closing costs such as pro-rated property and transfer taxes; escrow and title fees, inspection costs or anything else that you would like to negotiate. One last thought is asking the seller to pay load costs.

3) Often times in the winter certain systems of the home are shut down and not operable. Well, when you are inspecting your home, make sure everything is working the way it should. If we had snow in Hemet, you might be able to ask for an extension to inspect a roof perhaps – but we don’t have those problems – so do it right the first time. However, if we get into0 a wet spell, put off your inspection until the rains stop. It is very important to check the home thoroughly and you don’t want anyone taking any shortcuts because they might get wet.

4) Please be patient. At this time everyone is very busy. Presumably you have your own holiday schedule to adhere to and so does the seller and so do the real estate agents on both sides of the transaction. Sometimes it may take an extra day or two to view a particular property or schedule an inspection. Remember, ‘the reason for the season” and don’t stress anymore than you already are.

So, you see there are many things we can all do to improve our chances at a successful offer and escrow during the holidays, if we just all take a deep breath and do what has to be done.

I’d like to leave you with this parting thought, believing you will find yourself celebrating the holidays knowing you have a moving date set. Plan f0r the close. Make sure your Hemet Real Estate Agent is going to be around when escrow closes and that your Escrow officer will too. Although delegation of responsibilities is common, you really don’t want to be in a position where someone from the office is ‘covering’ for your agent while they are off having a good time. Your agent should be on top of the situation, like any other escrow at any other time of the year. Your agent should KNOW that both escrow and title have all of their documents and that the lender is on top of the situation.

Have a wonderful time and Merry Christmas to you and yours…

Real Estate Mortgage Fraud - Bonnie & Clyde Behind Bars

The "Bonie & Clyde" of Real Estate Fraud
Caught andBehind Bars
by John Occhi

I was reading through my morning industry newsletters when I got a special alert on a story that I have been following. On the surface, it might be a strange story for a Hemet real estate agent to follow, but what can I say…I have the same law and order fascination that the rest of the country has. After all, why else would there be 3 different CSI programs and 3 different Law & Order shows eating up our television airwaves night after night.

This story is about a modern day ‘Bonnie & Clyde’, as they have been called by both the media and law enforcement. Call it coincidence if you want, but I find the humor in the fact that the day ‘Bonnie’ is sentenced to a mere 6 years for her part in the multi million dollar scam, Clyde gets picked up in Nashville, TN. While Bonnie got off with a light sentence for her cooperation Clyde is on the hot seat facing charges that carry a potential 400 year sentence for his mastermind work in the real estate fraud crime ring.

If you want to learn more about the activities of this particular criminal, then you might want to check out the archives at RealEstateFrauBlog.Com.

If you would like to educate yourself and learn about three types of mortgage fraud, please read this article, published at the Money website.

Wednesday, November 15, 2006

How to Sell Your Home in Today’s Buyer Market

How to Sell Your Home in Today’s Buyer Market
by John Occhi

It should be pretty obvious to anyone who has any interest in the real estate market. You should know by now that the ‘sellers’ market we had in Hemet during the first half of this decade has all but evaporated and transformed itself into a bona fide ‘buyers’ market. What this means is that Hemet, like the rest of Southern California and most of the rest of the country has more homes for sale in the MLS than there are qualified buyers in the market looking for a home.

There are a couple of ways to determine that the market has shifted, if you have access to statistical data. If you know haw many days’ homes are sitting on the market, this is a good indicator. An average of 60 days or more tip the scales in favor of buyers. If you look at the article I published earlier this month, I examined statistics for the market at the east end of Hemet, in zip code 92455 and found that the average home that was listed in the MLS in October 2006 was listed for sale for an average of 84.67 days – definitely a good sign for buyers!

Determining the available ‘inventory’ is also very effective. Inventory is simply determining how many homes sold in a month into the number of available homes. Read my article, “Active, Sold & Expired A closer look for October, 2006 of the Hemet Real Estate Market” Last month, there were 40 sales in the 92544 zip code with 291 available homes for sale. Do the math and you’ll figure out that November started with at 7.275 month supply of homes for sale. This will definitely put the buyer in the driver’s seat.

Clean-Up: The First Step in Preparing for a Successful Hemet Home Sale

If you want to sell your home and you are serious, then you need to make your home model ready. I’m not talking about ‘testing’ the market to see what might happen. Testing will only frustrate you and eat up valuable exposure time.

No, if you even think you are a serious seller, then commit to the process and that means work. Now is the time to do ALL of the deferred maintenance. That “honey-do” list we all have needs to get done now. Literally, the most profitable steps a Hemet seller can make is with a cleaning brush, a paint brush or a hammer.

Go ahead and modernize your home with stylish new light and plumbing fixtures. Don’t be wasteful with your money, but if you need new flooring or wallpaper there is never a better time to install them. Don’t go overboard with major renovations that you won’t have the time to enjoy and your buyers may not appreciate – but do brings things up to date.

Perhaps the toughest obstacle I face with sellers is ‘de-junking’ their homes. Yes, I know one mans junk is another mans treasure but now is not the time to show off your collections. I always say, if you are going to list your home, start packing. If you do not have adequate space in your garage to store packed boxes, then rent a self-storage unit, off your property. This will make moving so much easier and your home will look less cluttered and easier for the buyer to imagine taking possession of the space without all of your personal belongings.

One more comment on this theme – de-personalize your space. Eliminate religious artifacts, eliminate any ethnic pride and even family photos. Live without as much as you can. Remember, you are moving and this is no longer your ‘home’, but the house you called home.

Team-Work: Who You Hire Can Make or Break Your Sale

There are a lot of Hemet Real Estate Agents who would love to list your home on the MLS and you have to pick the one that is best for you.

Do you want a discount broker? Maybe, if how much you spend is more important than how much you will net at the end of the sale. Remember, a discount broker can afford to list you home for a low commission because she wants her phone to ring with potential buyer clients. So, the longer her sign is in your yard, the more calls she stands on receiving. If she sold your home in a week, she would lose money.

Do you want a hybrid – mortgage/real estate agent? I don’t know why. It may seem convenient to have one individual do the roll of several professionals. Is that what you want? Or do you want a professional handling each aspect of your real estate transaction – working in harmony with one another. Then I would select a Hemet Realtor who has a strong working relationship with a reputable lender to help pre-qualify your offers when they come in.

Do you want a Hemet Real Estate Agent who will promise you the highest price for your home? Only if you like to hear sweet little nothings in your ear as you are being raked across the coals. Don’t ever listen to an agent who promises more than what your house is worth. Especially in today’s market. You are being set up for a prompt price reduction. Guaranteed!

Do you want a Full Time Hemet Real Estate Agent? I hope so, unless you think you will get better exposure while your part time agent is passing out business cards while working at Sears, or whatever they still call their ‘day’ job, that they have not yet been able to quit, for one reason or another. Work with an individual that has made a full time commitment to their chosen profession and not a part time wanna-be.

Are you really concerned with how much commission you will pay or how much you will walk away with at the end of the sale? If your thoughts lead you to believe that you can save money by working with an agent who will cut their commissions, chances are you are working with an agent that cannot successfully negotiate on their own behalf, so why would you rely on them to negotiate the sale of your most prized and valuable possession – your Hemet home for sale! You must realize that a 3% commissions is a 17% difference in earnings for a Realtor over a 2 ½% commission. Does it not make sense that more REALTORS would be motivated with a 3% or better commission than a 2 ½% or less commission? Yes, you may save a few dollars off of the line item of commissions paid out, but how much longer did it take you to receive a closing statement and for how much less than if it sold quickly when it was first listed.

Does your Hemet Real Estate Agent have a written documented marketing plan that holds him accountable? If not, you may be working with a magician for an agent – someone always ready to pull the next trick out of their sleeve to impress you when you need impressing. You will find that the professionals all have a plan they customize to your unique home and circumstances and then stick with the plan, holding them accountable for each step and each given task on a daily basis.

Does your Hemet Realtor offer any type or realistic guarantee? Will your Hemet real estate agent offer you an easy exit strategy from your listing, if you are not pleased for any reason? Will your Realtor offer to reduce their commission if they do not sell your home with in a specified time period – say 60 days in today’s market?

Consider these questions and others you may have when selecting the right Realtor to sell your Hemet home.

Third Party Inspections: The Key to Setting Yourself Apart from the Pack

Every bona-fide real estate transaction in California is required to have disclosures completed and inspections of the property integrated into the terms and conditions of the purchase agreement. Some of these are state laws while many are lender requirements. It really doesn’t matter who says to do it, if it needs to be done, it needs to be done.

A disclosure is simply letting the buyer know what you know about the property. There are more law suits filed for non-disclosure issues. More often than not, they are innocent oversights, forgetting about the little inconveniences and nuances of our Hemet home. Typically, we all learn to live with something and never give it a second thought once we become accustomed to it. Please spend the necessary time considering every aspect of your home and read through the questionnaires on the disclosure forms very carefully.

A very powerful tool when selling a Hemet home is to have the inspections done prior to placing it on the market. This may cost you several hundred dollars up front, but promises to comeback to you many times over at the close of the sale.

At a minimum, your home should be inspected by a member of the “American Society of Home Inspectors” (ASHI). Your Hemet Realtor undoubtedly has several choices of local professionals that works well with your Realtor. This inspection will avoid surprises when it comes time to close escrow. By having a trained professional put his reputation on the line, a prospective buyer will feel much more comfortable placing an offer on the table, knowing the condition of the home for sale. Coming from an independent 3rd party, some buyers will accept this report at face value, while others will want to go ahead and hire their own inspector. Either way, you have identified each potential problem and how you choose to handle it is your business.

Small repairs are often completed, prior to marketing the home, while others are merely disclosed to the buyer and allowing the buyer to make the repairs.

Another common inspection made prior to the actual marketing of the Hemet home for sale is the termite or pest control inspection. This will eliminate any question about the soundness of the structure of your home and identify any potential termite problems. Again, if there are issues, you have the opportunity to get it right before the buyers ever come to your home or wait and fix it before the close of escrow. Typically, a lender will never fund a loan until the property has been certified by a pest control inspector.

It is also recommended that you have the home appraised prior to marketing. Not only will this solidify your asking price, in your own mind but in the mind of every REALTOR who previews the property and shows it to their buyer clients.

Both the Home Inspection and Appraisal are costs that the buyer typically pays. By completing these in advance, it helps the buyer with closing costs that they don’t have to pay.

Other inspections that may or may not be relevant to your Hemet property could be a well certification, a septic tank certification, a roof certification or anything else that relates to unique characteristics of your property. Remember, the more that is disclosed to the potential buyer about the condition and soundness of your property the more questions are being eliminated and thus the value increases.

ASKING PRICE: Be Real – Remember, this is a Buyers Market

This is such an important topic that I just recently wrote a whole article with extensive discussion to the many principals of pricing a home so it will sell. Please read my article here, so that you will have a clear understanding of the concept.

NEGOTIATE – Never Be the Party to Reject an Offer, Always Counter-Offer

You’d be surprised how many times an offer comes in that may appear to be ridiculous to every one involved, including the buyer’s agent. Please don’t be insulted and don’t say something like, “I’m not playing that game”.

Every offer is an opportunity to negotiate. You now have the opportunity to counter-offer and negotiate on all of the terms of the contract. Remember, money is not the only issue on the table. Perhaps, you lower the price in exchange for additional time at the close of escrow, if it’s needed. Maybe, in exchange for a price concession, the buyer will waive a contingency or two.

Of course price is critical to the process. Negotiations can last w\for a week or two between the parties. With each counter offer, the other side will typically have 3 days to respond; so each full round can take up to 6 days. Remember, every time you counter an offer, you are rejecting the offer on the table and if it is not responded to in a reasonable time frame (3 days) the entire process typically breaks down. My advice is to always counter offer while you continue to look for a new buyer. An open house in the midst of negotiating is a great way to gauge a buyer’s true interest.

Once the deal has been negotiated and the ink on the contracts is dry does not mean the sale is over. Up to now, everything has been fun. It’s all been about sales and marketing and if your Realtor does not find these two activities fun, then find one who does.

Now we have to close escrow. We have to keep an eye on the buyer and make sure they don’t suffer from ‘buyer’s remorse’. Your Hemet agent has to keep on top of the situation and make sure that all of the money is put into escrow as soon as the contract calls. You want to see the buyer conducting inspections and getting involved in the buying process. The buyer will have to perform certain tasks by certain dates and it is your Realtors responsibility to track these events and coordinate with the buyer’s real estate agent and make sure they happen, as agreed so the sale will successfully close escrow on schedule

Monday, November 13, 2006

A Comment fro an Industry News Leader

Inman News Blog - Here is a short article I found that reveals how many sellers DO NOT understand how their agent is paid

Sunday, November 12, 2006

The ABC’s of why You Should use a REALTOR

The ABC’s of why You Should use a REALTOR
by John Occhi, REALTOR

I came across this generic marketing piece on my computer about why a Hemet home seller should want to choose to sell with the assistance of a REALTOR instead of on their own as a FSBO (For Sale By Owner).

Typically the single most common reason quoted for a FSBO trying to sell their home themselves is because they want to save the commission even though the National Association of REALTORS (NAR) reports that homes sold with a REALTOR typically sell for 17% more that FSBO’s. This is the subject for a future discussion, for now, let’s examine why91% of all FSBO’s eventually end up listing their home with a REALTOR. . .
I have taken the poetic license that comes with being your own blog publisher and made a few revisions.

In any event, please enjoy…

A is for Advertising - It is the Hemet Real Estate Agent that foots all of the bill of advertising the home – until it sells.

B is for Bargain – Published research shows that 77% of all sellers feel as if their commission dollars were well spent.

C is for Contract - A Hemet REALTOR supplies standard California Association of REALTORS (CAR) contracts that are constantly being reviewed and revised up to twice a year by top Real Estate attorneys in the state – protecting the seller – unlike the version sold at the office supply store.

D is for Details – There are so many details that a REALTOR takes care of that most FSBO’s never even think about in selling their home. A good REALTOR has a check list to make sure everything is done, as it should be – Attention to Details!

E is for both Experience and Expertise – Experience comes from selling more than one home every several years and Expertise is developed in marketing, financing, negotiations and so many more areas of importance to a smooth transaction.

F is for Financial Know How – As a Hemet Realtor, I know of many different financial options to assist buyers purchase their dream home. More importantly I have a network of trained professionals to step in where my expertise ends.

G is for Glossary – There are so many terms that you may think have a common meaning but actually can mean something completely different when it comes to Real Estate, such as ‘Close’. Then there are all of the unique industry terms that you have no business even wanting to know what they mean, until they affect you – and your Realtor knows what they are and how they apply to your situation.

H is for Homework – Much preparation must go into the research of pricing a home and keeping it priced properly. Homework is don on keeping up with the latest marketing trends and techniques. A professional REALTOR is always studying and improving their professional skills.

I is for Information - When you have a question about Real Estate – ask your REALTOR. He either knows or knows where to get that answer for you!

J is for Juggling Act – Selling a home is often a juggling act. Your Hemet Real Estate Agent will juggle and handle all of the showings and inspections.

K is for Keeping Your Back Covered – Your Hemet REALTOR has a fiduciary responsibility and an ethical obligation to look out for your best interests throughout the entire transaction.

L is for the Law – Professionals from all fields must keep up with the laws and changes to the law, as they affect their occupation and a Professional Hemet REALTOR is no different than all of the other professionals you come in contact with.

M is for MLS – MLS or Multiple Listing Service is the most effective marketing tool to expose your property to buyers across the country.

N is for Negotiations – A REALTOR handles price and term negotiations without being emotionally involved or attached to the outcome.

O is for Open House – Your Hemet Realtor will not only hold your home open for a weekend, but arrange a special open hose for all of the local Real Estate Agents who may have a buyer for your home.

P is for Prospect – Every successful Hemet Real Estate Agent has his own network of contacts that can produce potential buyers for your Hemet home for sale.

Q is for Qualified Buyers – A Hemet Real Estate Agent does not bring unqualified buyers through you home.

S is for Security – You never have to worry about loved ones being home alone with a total stranger that wants to preview your home.

T is for Time – The time it takes to sell your Hemet home can be very consuming and one of the best reasons to use a resource like a REALTOR – Time is their business.

U is for Unbiased – A Hemet REALTOR will have an unbiased opinion, being removed from the emotional outcome.

V is for the VIP Treatment – when You have a Hemet Real Estate Agent working for you, you will be treated like a VIP throughout the entire grueling process.

W is for Wisdom – A knowledgeable Hemet Realtor can offer the wisdom that comes with experience.

X Marks the Spot – A Hemet Realtor is right there through the signing of the final documents.

Y is for Yard Signs – A REALTOR will provide custom professional signage to market your home and promote Open Houses.

Z is for Zero Hour – Selling a Hemet home is more often than not a very emotional and stressful experience that can take it’s toll on the strongest of individuals and families. Your REALTOR is there to help and be there for you when you need him.

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The Loan Process

The Loan Process
by John Occhi, REALTOR

As a Hemet, CA Realtor, I thought I would write today about a topic that I am not an expert in nor do I ever want to be referred to as an expert. It is the real estate loan process. The reason I am spending some time on this topic is because it is so critical to buying real estate, and what I am an expert in is helping buyers buy Hemet real estate.

So, let’s take a look at the process, from the eyes of a Realtor.

First, let me get this out of the way and make some people VERY MAD at me. I can not say that everyone who falls into this category is the same, but I can tell you from my personal experience that this is a universal truth. Yes, I know there are good guys and gals out there, I just have never been fortunate to do business with one, though.

I am talking about the Hybrid – The individual who does both Real Estate and loans. In theory, it sounds great, an opportunity to pick up a 2nd commission on a transaction. Seems like there is nothing wrong with that!

My problem is that both the Real Estate and Mortgage industry are so complex and so specialized that I find it nearly impossible to comprehend how someone can do both jobs well. I guess I think too highly of myself as a Realtor and the professionalism that I spend my time perfecting my skills that I could never imagine taking on so much more work and responsibility and expect that I could continue to do as good a job as I do and hold myself to the same high standards. I know a mortgage professional’s job is complex and very specialized.

It seems that every transaction I have had significant problems with there has been a hybrid on the other side of the deal.

So, let’s talk about the loan process.

When a buyer comes tome first, after asking some preliminary questions to figure out if I can help or not, I need to know how much home they can afford. This breaks down to how much down payment do they have and how much money can they borrow.

Yes, I know how to go through the steps to come up with some preliminary information on my own, but the buyer needs to know there are other professionals involved, so the sooner I can get someone else doing their job, the les responsibility (liability) I have to assume.

As a Hemet Real Estate agent, I find it important to have an association with a lender that I can pick up the phone at any reasonable time and have him speak with my buyer. I believe by developing a good working relationship with a lender then I will know and trust the information he gives me, each and every time. Unlike some in my field, I do not want to have a lot of smoke blown at me, from a lender who will try some sort of kinky deal. (Kinky in this case is not sexual; it is off beat – bizarre, different, a stretch or sometimes called ‘creative financing’.) There is a time and place for creative financing – but in today’s market of higher interest rates and an over supply of houses, I believe it is asking for trouble and best to be avoided by novices in real estate.

I might as well make a plug here, I have such a go to guy. Joey Aszterbaum of Altura Credit Union/Patrion Mortgage is the mortgage lender that I count on. He is a straight shooter and tells it like it is. If anything, Joey will err on the conservative side, not over-extending someone which more often than not puts a kink in a deal and builds up false hope. Joey has a great website, and he can be reached at 951.571.5751.

A common fallacy in the market today is that working with more than one lender will negatively affect your credit. This is not true. Although I do not have the specific details at my fingertips right now, I can tell you that the law was changed in the last few years. The new change protects the consumer when shopping for a car loan and a mortgage. Consumers could not properly shop for a loan if every time their credit was run, they lost points off of their credit score. So, it was agreed that the consumer could have as many inquiries as they want from as many car dealers in a certain time period (I think it is 45 days) and it only counts as one inquiry. The same rule applies to mortgage loans.

Now that I have given an endorsement, let me also say that I believe when you are shopping for money that you should do just that – shop. Like the TV commercial recommends, let lenders compete for your business (please don’t ever go to a website and start the process – talk to your rep long before you give up one bit of personal information). So, even if a Hemet Real Estate buyer comes to me with a pre-approved loan, I always highly recommend that they let Joey see what kind of magic he can perform.

Pre-Qualified vs. Pre-Approved

Pre-Qualified is the simple process of the mortgage broker spending about 10 to20 minutes (typically over the phone) and based on the information that the Hemet Real Estate buyer provides, the lender will make a decision to move forward, or not.

If the lender feels the buyer has been honest and forthcoming, the lender will generate a “Pre-Qual” letter which is really not worth much more than the paper it is written on. Typically the lender has not even run a credit report. F I get the information from a lender that I trust and work with on a regular basis, (Joey) than I feel comfortable in pursuing the house hunting process.

If the letter is to vague, or goes against my ‘gut feeling’ I will often defer working with the buyer until either my lender has a shot at the process or they become ‘pre-approved’.

Pre-approval is not done by the commissioned loan broker but by the underwriter. The underwriter is the one responsible for ensuring that all of the criteria of or the loan are met and applied to the deal. The under writer verifies all of the information submitted, such as employment, bank accounts, etc.

When a buyer goes through this process, there is typically no question about them being able to get the money they need as they have been pre-approved. This is like the lender telling the home buyer to go pick out a house for XXX,XXX dollars and the lender will fill in the numbers and sign the check when it is needed.

Buy a House

Now, it is time to go shop for a house in Hemet, You and your Realtor both know how much you can afford and how to structure a deal, taking into account the closing costs, down payment and monthly loan payments.

By arming your Realtor with a strong commitment form a lender, the Realtor will not waste your time or his looking at homes that you may want, but are not qualified to buy.

Once you have shopped and found the Hemet Home for sale that you want to buy, your Realtor will draw up the offer and present it to the seller. The seller may either accept your offer, reject it or may counter-offer with something between what you originally offered and what they had asked in the MLS. Counter offers can go back and forth for several rounds until an agreement is made.

Beware though, sometimes the agreement is that we disagree and negotiations can stop abruptly with any offer that is rejected and then countered. Don’t put yourself in a position of stepping over a dime to pick up a penny.

Once both parties have agreed on the price and terms of the agreement it is known as a “Ratified Contract”. It is based on this ratified contract that the lender will lend the money. A new rule in real estate, starting in 2006 is that the appraiser must now receive a copy of the ratified contract so that the value of the terms can be included in the appraisal.

Select Your Type of Mortgage

This is one of the reasons why it is important for Realtors to do Real estate and lenders to do loans. There are literally hundreds of different loan programs available today. How can someone know all of those loans and know all of the properties in Hemet at the same time. My brain is not that big.

So, discuss your options with your lender. Run the numbers. Know what it will cost in out of pocket funds. How much of the costs will or can be added to the loan? Know if there are pre-payment options. Find out if interest can be paid down by prepaying points. There is a lot of stuff to know here. This article can’t ask every question, what I am trying to do here is explain the process and how it affects everything.

Select a Lender

Now, if you have been working with two (or more) lenders in the preliminary shopping stage, now is the time to call Joey and make your decision. OK, even if it’s not Joey, let who you are working with know they have made the grade. Also please call the one that you are not going to work with and let them know of your decision.

Time to Apply for a Mortgage

Now that you have done all of your due diligence, it is time to put the hard work to the test and apply for the perfect loan for your new Hemet Real Estate.

Depending on the loan you have chosen, you will be generating lots of paperwork. Tax returns, pay stubs, bank statements, letters from employers, and so much more. It seems like every time you meet their requirements, your documents have opened up a new can of worms, raising new questions that must be answered with documents to prove beyond all reasonable doubt that the answer you are providing is true and accurate.

Let me through in a word of caution here. Don’t lie and Don’t cheat. Just about every loan is connected in some way to the federal Government and if your loan ever defaults because you bought more than you were truly qualified for and they find that one altered document, you leave yourself wide open to federal prison time for mortgage fraud. I read industry newsletters in my email everyday where there is always an article or two about someone going to prison for something they did wrong in obtaining a mortgage. You can check out for yourself.

Once you have submitted your application and all of the supporting documentation you will participate in a loan interview with the underwriter or their assistant. This is typically done over the phone or in the lenders office.

Once the loan package is complete, you will receive a ‘good faith estimate’ which will spell out all of the terms of the loan. This is typically over night delivered (FedEx) to your residence. Familiarize yourself now and avoid problems at signing. You want to make sure you understand all of the terms and conditions and how they affect you. Now is the time to ask questions.

In addition to the good faith estimate, there is a “Truth in Lending Disclosure”, which again summarizes your loan and gives you all of the legalese about the loan and your rights as an American consumer.

While you are reading through these documents, your loan is being submitted for a final review. Now, this may sound silly, and believe me, I do not want to insinuate that you are stupid, but I have got to tell you people do stupid things about now. Whatever is happening in your life – let it be until your loan closes. Do not go out and buy a new car. Don’t decide that now is the time to quit your job to start your new business. Do not file for divorce. Don’t do anything different from what you represented you were doing when you completed the loan paperwork. Just don’t.

Time to Close

The process of buying a home ends with what is commonly referred to a ‘the close of escrow’. In Hemet, California the close is pretty much a non-ceremonious event unlike other parts of the country where ‘the close’ is at the’ closing table and both parties are present, with their attorneys and real estate agents, and money exchanges hands for the keys.

In Hemet, like the rest of Southern California, the close is waiting for a phone call that the loan and deed have ‘recorded’ with the Riverside County Recorder.

Once escrow determines that all of the pieces are complete and ready to go, escrow contacts the lender and “orders doc’s”. these are the actual loan documents and disclosures that the buyer will sign in front of a notary. Typically, once the lender gets this request, they do their final verification of the material facts – employment is verified and credit is often re-ran. Then the lender prepares the actual documents and emails them to escrow. Escrow then prints out enough copies for each party and an appointment is made with the notary to sign the docs. Once signed, escrow will have to ‘package’ the loan papers and return them to the lender.

Now, the lender has to ‘fund’ the loan. This process can take 2 or 3 days typically – sometimes longer, depending on work load and cash flow. Sometimes the lender is using the signed documents to raise the capital to loan, which can take even longer. This is a very tense time for all parties. Both the buyer and seller are looking to move. The seller and the real estate agents are looking to get paid and there are often other parties looking for a payout from escrow. Sometimes bills are paid and other times money is transferred into yet another escrow for the purchase of another piece of property, which in turn creates a domino effect with tensions running high with all of the parties of each domino escrow. I have seen as many as 5 escrows deep stacked up – all depending on one transaction and have heard tales of many more than that.

In the mean time, while everyone is walking on egg shells, there is still more to do. The buyer must conduct a final walk-thru to determine that the home is in basically the same condition as when they purchased it and that any agreed upon repairs have been made. Now is NOT the time to start further negotiations.

Once the loan funds, money is wired into the escrow holders trust account. Then escrow will direct the Title Company to record the deed. Once Escrow has confirmation that the deed has recorded, escrow will disperse funds – typically the next business day.

If all goes well, an escrow will close on time – typically 30 days from the date the purchase contract is ratified. There are times when everything falls into place and an escrow can close early – this is especially true if a buyer has become ‘pre approved’- early in the process and not just ‘pre-qualified’. Often a seller will need the full 30 days and may even require an additional time to get things moved, once they have their money. 3 days is typically granted as a courtesy to the seller, if required – any more time than that and the seller is expected to pay rent based on the buyers costs of a mortgage, insurance, taxes and utilities.

With the right preparation and a calm attitude purchasing your home can be a very enjoyable experience. Just know that there has never been a loan that has gone from beginning to end without at least a minimal amount of stress – so prepare yourself to deal with it. When someone needs something form you – deliver it now, because every day you delay early in the process can have a ripple effect at the close – oftentimes compounding the time – a day delay in producing a document can cause a week delay in the close – don’t ask me why, it just happens and is completely out of my control as your Hemet Real Estate professional.

Now maybe you can see why I leave the loans to the loan professionals and I stick with finding my buyer clients with the best house for their family that they can afford.