Archives for December 2016

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The new year is quickly approaching and, if you’ve read our last few blogs, we know that 2017 is going to be the year for many potential homebuyers. If you’re one of them, you should begin planning for the home buying process now…even if you are months away from making a purchase.

1. Automate your savings for a down payment. The 20 percent required for a down payment is a huge chunk of cash. If you’re buying in Orange County where the median home price is over $600K, you’re going to need upwards of $100K down. Saving regularly can be difficult because you have to hold yourself accountable, even when other expenses arise that you could put your money towards. If you’re serious about buying a home, the simplest and most effective way to do this is to automate your checking account to set aside a portion of your monthly payments.
2. Clean-up your credit. Your credit is the single most important factor in determining how much a creditor is willing to lend you and how high your interest rate will be. If you have a credit score below 620 (an A grade), the more difficult it will be for you to qualify and/or receive approval for loan. Build your credit by paying off your credit cards and making consistent and timely payments on other loans.
3. Live on a budget. Since you’re looking to buy in 2017, now is the time to start being conservative. Compare buying vs. renting in the area. Weigh your options so you can determine what makes the most sense for you financially. Anything you can cut back on now can go towards a down payment, moving, and closing costs.
4. Get your handy on. If you were renting, you were probably used to a landlord doing all of the maintenance repairs for you. Becoming a homeowner means that you are now responsible for any and all needed repairs like leaky faucets or electrical shorts. Brush up on your handyman skills and save money by fixing it yourself.
5. Prepare yourself to make an offer. Keep abreast of what’s on the market in the area and price range that you’re looking. Educate yourself on what you can afford and what would be a fair asking price. You don’t want to go into the home buying process with unrealistic expectations.
You can never start preparing too soon. Begin developing and practicing these habits now. When it comes time to buy, you’ll be happy you did.
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Selling a house is a time consuming process. There are many factors to be considered and each requires a good amount of time. Transactions don’t just happen overnight so, before you jump in, take a minute to prepare yourself accordingly. Having an idea of the average amount of time it takes to close a sale will better prepare you for what’s to come.

Listing your home: 3-5 days
Your listing agent will need to gather all necessary information regarding the property, create an MLS listing for it, and generate syndicated marketing materials to reach as many potential buyers as possible.
Getting an offer: 65 days
While this isn’t always the case, the current average of properties on the market is 65 days. Depending on location, this can vary drastically. Homes in Orange County, Los Angeles, or San Francisco may sell much quicker than other areas.
Closing escrow: 50 days
It takes an average of 50 days from the time the buyer submits an offer to the time they can close on a home. This is standard considering all that goes into closing escrow. Mortgage companies need to do their due diligence in getting a buyer approved and, if there are any contingencies, those too can take a while.
Getting paid: 0 days
After the all the time and effort put into selling your home, the good news is you get paid the minute you sign to close escrow. The escrow company will generally wire transfer you the cash that day.
Moving out: 0 days
On closing day, you’re expected to be completely moved out. This is why escrow is so important and generally takes up to 2 months. During this time you’ll be packing up, moving out, and making necessary repairs. Once escrow closes and title is transferred, you no longer have possession of the house. In some cases, special exceptions like a rent-back agreement may be arranged to allow the seller more time to find a new home and move out.
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Tis the season for Christmas lights, cozy fires, and, in Southern California, the one time of year that we may need to use our heaters. If all the holiday spending wasn’t enough, our energy bill is yet another addition to the lengthy list of expenses.

When the holidays come around we tend to be a bit wasteful in our energy use. In fact, the power companies of Southern California have issued energy conservation alerts urging people to use less. So how can you do your part and save some money while you’re at it? Here are some tips…
1. Most of us put our holiday lights on a timer, but what about your electronics? Unplug your devices when you’re not using them or set them on timers. Leaving items like your blowdryer, toaster, or Keurig plugged in takes up energy. So unplug.
2. Switch to LEDs and turn off unneeded lights. If you don’t already use LEDs, it’s time to make the switch. LED lights now come in all shades and colors so you don’t have to worry about having white light illuminating your house. You should also get in the habit of turning off the lights when you leave a room. Many of us tend to leave lights on throughout the house unnecessarily. Next time, switch it off.
3. Check to make sure vents are open and clean in order to circulate air well. A dirty vent blocks air from being pushed out taking more time and, therefore, more energy to heat your home.
4. Double check your thermostat. Make sure it is set to a schedule that’s running as needed.
Following these tips not only helps with energy conservation – something we all should be cognizant of – but it can also help reduce the cost of your heating bill saving you some extra cash.
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There are a multitude of reasons why renters have kept from buying: raises in interest rates, acceleration in home prices, rigid lending standards, and student loan debt…to name a few. However, a recent study shows renters are now in a position to take on more financial obligations and, with rent prices rising, 2017 might be the time to buy.

According to a report done by TransUnion, “many renters are exhibiting more credit active behaviors, such as opening a credit card, and approximately 40 percent have a prime or better credit score” (RIS Media). In addition to their creditworthiness, renters also have more aggregate excess payment (AEP). In other words, they can afford more payments with money left over. This not only means that they can take on more finances, but they can handle larger financial obligations like a down payment and mortgage.
Freddie Mac conducted another study that showed that renters are not as concerned with their rent payments as they are with other costs. Therefore, considering how expensive rent has become (often the equivalent of a mortgage payment), 2017 could be a very appealing year for renters to buy.
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We now know that interest rates are rising, but what about home prices? With 2017 quickly approaching, we’re left wondering if the acceleration we’ve been seeing in home prices and sales will continue into the new year?

A strong market means that competition and tough bidding (sometimes above the asking price) won’t be changing soon. However, the latest survey conducted by the National Association of Realtors of 2,800 U.S. households from October to December, tells us that there won’t be as much of an increase. The rapid growth we’ve seen in the market throughout 2016 with sales prices rising 5% will likely be taking a minor dip to a 4% increase in 2017.
Nonetheless, with interest rates up another .25% many potential homebuyers, especially first-timers, may be rethinking their plans to buy. With current mortgage rates making it more difficult to qualify for a loan and fewer homeowners refinancing, lenders are beginning to make more loans to individuals with lower credit and higher debt-to-income ratios.
Still, a vast majority of the U.S. believes it is a good time to buy a home. As we mentioned in our last blog, rates are still relatively favorable despite recent increases and the market is still in full swing. Change is inevitable and we’re going to be seeing it in 2017, but this optimism proves that any deceleration will be gradual.
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