OC Realty Blog

You’ve found your Orange County dream home, the seller has accepted your offer, your loan has been approved and you’re eager to move into your new home. But before you get the key, there’s one more step—the closing.

Also called the settlement, the closing is the process of passing ownership of property from seller to buyer. And it can be bewildering. As a buyer, you will sign what seems like endless piles of documents and will have to present a sizeable check for the down payment and various closing costs. It’s the fees associated with the closing that many times remains a mystery to many buyers who may simply hand over thousands of dollars without really knowing what they are paying for.

As a responsible buyer, you should be familiar with these costs that are both mortgage-related and government imposed.  Although many of the fees may vary by locality, here are some common fees:

• Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the beginning of your loan application process.
• Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.
• Loan Origination Fee: This fee covers the lender’s loan-processing costs. The fee is typically one percent of the total mortgage.
• Loan Discount: You will pay this one-time charge if you have chosen to pay points to lower your interest rate. Each point you purchase equals one percent of the total loan.
• Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.
• PMI Premium: If you buy a home with a low down payment, a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can normally apply to eliminate this insurance.
• Prepaid Interest Fee: This fee covers the interest payment from the date you purchases the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.
• Escrow Accounts: In locations where escrow accounts are common, a mortgage lender will usually start an account that holds funds for future annual property taxes and home insurance. At least one year advance plus two months worth of homeowner’s insurance premium will be collected. In addition, taxes equal approximately to two months in excess of the number of months that have elapsed in the year are paid at closing. (If 6 months have passed, 8 months of taxes will be collected.)
• Recording Fees and Transfer Taxes: This expense is charged by most states for recording the purchase documents and transferring ownership of the property.

Contact me to find out which fees—and how much—you will be expected to pay during the closing of you prospective home. Keep in mind that you can negotiate these costs with the seller during the offering stage. In some instances, the seller might even agree to pay all of the settlement costs.

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

When you purchase a new home, you want to personalize or imprint it with your own style. This usually takes the form of decorating, such as painting, wallpapering, and installing new window treatments.

You may want to remodel your new home as well as decorate it. Many home improvements may enhance your lifestyle, but they may not necessarily add resale value.

Although this may not seem important right now, it will certainly make a difference when the time comes to sell. You won’t get your money back with some improvements, yet others can help make you money.

The return on investment differs from region to region, but here are the best ideas to receive a return on that investment:

• Enhancing a home’s “curb appeal” will help sell it for top dollar. Painting the exterior is a relatively inexpensive way to add curb appeal.
• Remodeling the kitchen and/or baths is one of the best ways to add value.
• Adding a room or garage is an expensive improvement, but it can pay off if it is carefully designed.
• Decks and patios can add value in some parts of the country. 
• Landscaping often adds appeal, but not necessarily value.

I’d be happy to stop by and discuss any improvement projects you might be considering. Please feel free to call or email me with any questions.

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

The California Real Estate Inspector Association warns buyers that having a foreclosure home inspected diligently is as important as inspecting a home where the occupant homeowner is available – maybe more so. Sellers are required to disclose all known significant defects. But, if a foreclosure home is owned by a bank, the bank has never lived in the property, so it is not likely there will be very much information on any disclosure statements. In this situation, it is especially important to take the necessary steps to know the true condition of the property.

Homes usually go into foreclosure because the owner can no longer afford the mortgage payments. As a result, maintenance and repairs get neglected as well. It is critical that buyers know the condition of the structure and all the major systems. A C.R.E.I.A. Certified Home Inspector will provide that information.

Even if the bank is unwilling to negotiate over any discovered defects, the information the buyer receives from a thorough home inspection is invaluable in making an informed decision. And even if there are plans to do significant remodeling, why risk discovering problems with the furnace, foundation or structure after you close escrow and begin work? Better to eliminate any big surprises and know up front by getting a detailed home inspection following recognized standards of practice.

If you’re looking for a reputable home inspection company in Laguna Niguel or the surrounding South Orange County area, please contact me for my list of service providers.

(C.R.E.I.A. Press Release November 14, 2007)

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

There is a State tax initiative that is being worked on for property owners of California.  The initiative, if successful, would raise the Homeowner’s Exemption from $7000 to a maximum of $100,000. 

HomeTaxBreak.org is launching a statewide, grassroots campaign to get this initiative on the November 2008 ballot to lower taxes by up to $1,000/year for qualified Homeowners and Renters.  They are proposing a long overdue increase to the Homeowner’s Exemption and Renter’s Credit. 

The initiative will increase the exemption to 25% of the home’s assessed value to a maximum of $100,000.  It will also increase the renter’s credit threefold.

How does the exemption reduce taxes?

• Homeowners must file a form with their local assessor to claim the exemption on their primary residence.
• If the home has an assessed value of $200,000, 25% is $50,000 so the homeowner will pay property tax on $150,000. A $500/year savings
• If the home has an assessed value of $500,000, 25% is $125,000.  The maximum exemption is $100,000 so the homeowner will pay property tax on $400,000. A $1000/year savings.

For more information about this initiative, go to http://HomeTaxBreak.org.  Please also take time to complete the short survey to show your support.  You can also volunteer to help get signature on the petition.

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

Buying a home is a major achievement in most everyone’s life. Pride of ownership, tax breaks, equity and the ability to increase your wealth and net worth are just a few of the many benefits you’ll enjoy with your new home. Your home purchase may also be one of the largest you will ever make.

During the emotional excitement of buying a home, you may encounter terms with which you are unfamiliar. For some, it can be a bit embarrassing to ask what they consider too many questions. Others may make a note of their questions but simply forget to revisit them. To ensure that you have
complete confidence during your home loan process, invest a moment to read this report and become familiar with the concepts and terms you’ll encounter. Knowledge is power and the more you know, the more successful your decisions will be, and the more soundly you will sleep at night having made them.

1. Adjustable Rate Mortgage (ARM) - Also referred to as a Variable Rate Mortgage - a mortgage in which the interest rate is adjusted periodically based on a pre-selected index.

2. Annual Percentage Rate (APR) - An interest rate that reflects the cost of a mortgage as a yearly rate. This rate takes into account any points and fees (closing costs) and is based on the loan going to its full-term. APR can often be manipulated by lenders and it is often inaccurate with Adjustable Rate Mortgages. See your CMPS professionals for details.

3. Appraisal - A written report containing an estimate of property value and the data on which the estimate is based. Appraisals are prepared by a licensed appraiser who is independent of the seller, buyer, lender and real estate agent. The appraiser inspects the subject property and compares it with other similar properties that have sold in the area to determine the fair market value. The mortgage lender bases the loan-to-value ratio on the appraised value of a property and not its sales price.

4. Assumption - An agreement between buyer and seller in which the buyer assumes responsibility for the seller’s existing mortgage. This agreement could potentially save the buyer money because closing costs and the current interest rates, possibly higher, do not apply. In most residential mortgage transactions, this is not an option because the seller’s existing mortgage normally has a “due on sale clause that requires the seller to pay off the mortgage if the house is sold or if the ownership is transferred.

5. Buy-down - A method of lowering the buyer’s monthly payment
for a short period of time. The lender or homebuilder subsidizes the
mortgage by lowering the interest rate for the first few years of a
loan. This strategy can be very effective in today’s market. See your
CMPS professional for details.

6. Closing - Also referred to as settlement. The meeting at the
conclusion of a real estate sale in which the property and funds are
exchanged between the parties involved.

7. Closing Costs - the total points and fees that are associated with
completing a mortgage transaction or a house purchase or sale.
Often, a good negotiation strategy for both the buyer and seller is
for the seller to pay closing costs on behalf of the buyer. See your
CMPS professional for details.

8. Debt-to-Income Ratio - The ratio, expressed as a percentage,
which results from dividing a borrower’s monthly payment obligation
on long-term debts by the borrower’s gross monthly income.

9. Down Payment - Cash paid by the buyer at closing that makes
up the difference between purchase price and the mortgage
amount.

10. Earnest Money - Money given by a buyer to a seller as a
deposit to commit the buyer to the future transaction. Earnest
money is subtracted from closing costs.

11. Equity - The value an owner has in real estate over and above
the obligation against the property. Equity is fair market value minus
the current mortgage and other liens. Real estate equity should be
managed just like any other investment. See your CMPS
professional for details.

12. Escrow - Funds given to a third party which will be held to cover
payments such as tax or insurance payments and earnest money
deposits.

13. Fixed Rate Mortgage - A mortgage in which the interest rate
remains constant and fixed throughout the life of the loan.

14. Loan-to-Value Ratio - The ratio between the amount of the
mortgage loan and the appraised value of the property.

15. Market Value - The price that a property could possibly bring in
the marketplace.

16. Origination Fee - A fee charged by a lender for processing a
loan application. This is usually computed as a percentage of the
loan and is used by some lenders as another name for “Points”.

17. PITI - Refers to Principal, Interest, Taxes, and Insurance.

18. Points - Prepaid interest charged by the lender. One point is
equal to 1 percent of the loan amount (on a $200,000 mortgage, 1
point = $2,000).

19. Private Mortgage Insurance (PMI) - Insurance that protects
lenders against loss if a borrower defaults. This is required when the
loan-to-value ratio is greater than 80 percent. The PMI payment is
not tax deductible and is usually added to the monthly mortgage
payment. .

20. Underwriting - The decision-making process of granting a loan
to a potential homebuyer.

If you’re ready to get prequalified for a loan, you can contact me or my  mortgage broker by clicking the following link at OCLoanTeam.com then go to Loan Applicaiton.

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

There’s a lot of talk about the real estate market these days, but it’s important to understand that despite slowdowns, millions of homes will be bought and sold. One might even say that it’s during rough times that home
inspection jobs become even more important.

And how does a home inspection help buyers during a
slump in the market? The results of a home inspection
report will help buyers negotiate for a better price or, if
the deficiencies are extensive, to move on to another
property.

On the seller’s side, a slowdown presents obvious
challenges. As houses sit on the market longer, there is
a glut of properties and too few buyers. Sellers often
feel a tremendous amount of pressure to lower their
asking prices. This is where the overlooked pre-sale
home inspection comes into play.

Home sellers who have their home inspected before
they put it on the market, will gain great insight into the
true value of their property. If there are significant
deficiencies, they can address them before buyers see
the property, plus they can also sell the house as-is, by
disclosing what the licensed home inspector discovered.

The bottom line is that in a sluggish market, both home
buyers and sellers want to know that they’ve made the
best possible deal all things considered. A licensed
home inspector provides an objective evaluation about
the property, which normally leads to more informed
decisions. And information is the key when people are
making one of the most important investments of their lives.

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

How can you guarantee your home loan will get funded in today’s upside down mortgage market? With mortgage companies closing left and right, a very important part of buying real estate is finding the right lender.

Our in house lender is First Capital. They are the preferred lender for Prudential California Realty. Both companies are owned by Home Services of America, part of the Berkshire Hathaway family of companies owned by Warren Buffet. Yes, Warren Buffet, who is one of the richest and most respected investors in the world!  Click here to watch a recent Home Services of America interview on CNBC.

Why is this of any benefit to Prudential, First Capital and our clients. Well, here’s a recent example - A couple of weeks ago, Countrywide was going to back out on 5 of our clients loans (First Capital had sourced the loans out to them). The president of Prudential called Warren Buffet’s CEO who knows the president of Countywide. More phone calls were made and the loans got taken care of for our clients. If Countrywide hadn’t taken care of this matter, then through the strength of Prudential, First Capital and Home Services we would have stepped in and funded the loans for our clients.

I encourage all my clients in Laguna Niguel and all of South Orange County to get pre-qualified with First Capital to ensure their loan will get funded. To find out more about them, click the following link for OC Loan Team……….or give me a call today!

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

Stock market volatility is causing people to examine different investment options, and real estate is emerging as a leading choice.

It’s easy to tell yourself that you’ll be okay in retirement, especially when it’s still years away. But you get only one chance to save for retirement. If you arrive at retirement’s door without adequate resources, you may have limited options.

“Longevity risk” refers to a potential problem many seniors face: outliving their assets. Statistics show that a 65-year-old man has a 34% chance of living to age 90 and a 17% chance of making it to 95. A 65-year-old woman has a slightly higher longevity risk, with a 44% chance of living to age 90 and a 23% chance of reaching 95.  This means that at least one out of every five baby boomers could have a retirement that spans three decades. How will you spend your retirement years if they number in the thirties? Will your retirement savings be able to support your desired lifestyle?

Property ownership can create a comfortable retirement income.  There are some great investment/rental properties in today’s Orange County market.  I have access to all the great buys and foreclosures from Newport Beach to Laguna Niguel to San Clemente.

Learn how to create a fulfilling, predictable, and prosperous nest egg by calling me today.  I can show you various options to finance your purchase, including borrowing from your 401K!

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

Here are the steps to close the sale once the purchase and sale agreement has been signed by both parties. Please know I will walk you through this step by step to make sure this is a smooth and enjoyable process.

Step 1 - Removing contingencies: The most common contingencies are financing, the home inspection and the sale of your current home. These conditions must be removed or waived before the sale on your new home can close.

Step 2 - Appraising the property: Your lender requires a formal appraisal to confirm the value of the home you’re buying, to be used as collateral to secure the loan.

Step 3 - Preparing closing documents: Most often real estate attorneys or escrow officers prepare documents that confirm the transaction, pro-rate funds, and so on.

Step 4 - Signing closing documents: Even after both parties have signed closing documents and deposited funds, the sale may take a few more days to close.

Step 5 - Recording the deed and disbursing funds.  If you live in Orange County, California, you and fund and record in the same day.  Funds are usually disbursed the next day.

Step 6 - Welcoming the moving van.  Make sure you have set the moving date as early as possible to get the date you want.  I have a great moving company that gives $35 off on local moves 5 hours or more.  Just call or email me for their contact information.

Step 7 - Receiving the keys from the seller.  This is always an exciting time.  Make sure to coordinate with your real estate agent how and when you will receive the keys to your new home.

There are many opportunities for surprises or delays in the transaction. Part of my expertise is troubleshooting problems that may arise. Please email or call me if you have any questions or you would like more information.

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.

Want to know the latest information on the Arts & Culture of Orange County, California?  Just click the link below to find out this month’s schedule for:

• Music
• Dance/Performing Arts
• Theatre/Literature
• Visual Arts/Film
• For Kids & Family

To find out what is happening in Orange County, click here to view the Orange County Art Source website.  There is something for everyone!

Bookmark to:

Please call me at (949) 244-0719 or email me if you have any questions or for further information.