Why Do I Need to Get PreQualified?

The answer to this question is simple.  No seller is going to consider your offer  without a pre-qualification or pre-approval letter unless your plan is to pay cash for the property.  If your plan is to pay all cash, the seller will require documentation that you have the funds available in your account.  A common response from a potential buyer when asked if they have been pre-qualified  is "I will get the pre-qualification letter if I find something I  like".

The problem with this attitude is that if the perfect house comes up, you probably won't get it.   Most listings that are priced right and show well in a desirable neighborhood are not only selling quickly but are also receiving multiple offers.  No rational seller is going to make an already pre-qualified buyer wait while you go out and get your loan approval. 

Most good Realtors will actually require that a buyer get pre-qualified before taking them out and showing them houses.  That is only fair since Realtors only get paid if they sell something.  Why should a Realtor spend countless hours with a buyer unless they are willing to show that they are able to perform? If you do manage to convince a good Realtor to take you out anyway, they probably won't call you first about the best deals that come up.  They will naturally call the other buyers they are working with who have taken this important first step.

With loans as complicated as they are these days, I see the most problems with the high income earners who think they are just fine.  Trust me, an hour spent with a lender, will save you countless hours of hassle and sometimes thousands of dollars as you move forward toward a purchase!

Nancy Puder is the broker and owner of SignatureProperties, a prestigious real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 Your calls are always welcome!

Time to Buy or Rent?

With interest rates and prices at their lowest levels in years, deciding whether to buy now or continue to rent is a popular discussion.  While today's scenario is attractive,  potential buyers should be cautious about getting in over their heads by asking themselves the following questions:

1. How much can I afford to put down? Can I afford the monthly payment?

A mortgage down payment of 5 to 20 percent of the selling price is typical, but can vary depending on the situation. The size of the down payment will impact the monthly cost. Assess your financial health, determine how large of a down payment you can afford and consider if you can then afford the monthly cost.

2. What other debt do I have? Consider all of your current and expected financial obligations and ensure you are able to make all the payments. Aim to keep total rent or mortgage payments plus other credit obligations fewer than 35 to 40 percent of your monthly income. If you can’t keep payments below that, you may be better off renting for a while or searching for a more affordable home.

3. What is my credit score? Can I qualify for a good interest rate?

If your credit score is low, you may want to delay buying a home and take steps to raise your score.

4. How much will taxes, monthly maintenance or other fees cost? Owning a home means you will have to pay real estate taxes and other costs like insurance and maintenance. However, owning a home can bring tax savings at the end of the year. Remember to factor in these costs and incentives.

5. How many years will I stay here? Generally, the longer you plan to live in the home, the more it makes sense to buy. Over time, you can build equity and eventually even  pay off the mortgage and own it outright!

Nancy Puder is the broker and owner of SignatureProperties, a prestigious real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415 Your calls are always welcome!

Sellers Pay Buyers Closing Costs

Why should the seller pay a buyer's closing costs?  Sellers who already feel they have sacrificed enough equity due to current market conditions, are sometimes indignant that the buyer would also ask for help getting their loan.

The fact is that these days, the most popular loans are either USDA or VA with 100% financing or FHA requiring only a 3.5% down payment.  Many of these buyers simply do not have the additional funds necessary to pay the loan costs.

I suppose one could argue that Grandpa never paid anyone's closing costs and he had to put 20% down.  Perhaps one could also argue that the buyers of today need to have more skin in the game if we are ever going to have a robust housing economy again.  One may be correct in his opinion , but the current reality is that there may still be a "for sale"  sign on the front lawn a few months from now if you refuse to work with the buyer.

Something else to consider is that when  a seller agrees to pay the buyer's closing costs,  they are probably helping to turn a buyer who "wants" to buy a home into a buyer who is then "able" to buy a home.  Buyer closing costs are just one more item on a seller net sheet.  My advice is to examine the buyer's entire offer.  If the number at the bottom is attractive, ask your agent to mark your listing sold!

Nancy Puder is the broker and owner of SignatureProperties, a prestigious real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415

Short Sale Scams Still Going Up

In the midst of a recovering real estate market, homeowners are advised to consult only with a trusted professional.  The number of mortgage fraud situations concerning short sales and loan modifications is still on the rise and shows no signs of slowing down. 

If you are an owner who needs to sell and owes more on the property than it is is worth, this can be a very stressful situation.  Trying to negotiate a loan modification can also be tough, especially, if you really need one and the bank is not cooperating.  Scammers are preying on the vulnerability and emotional stress that these homeowners are experiencing and  are continuing to get away with it

The best tip that I can give you to avoid short sale or loan modification scams is to ask yourself if it sounds too good to be true.  Unfortunately, in most cases it probably is.  The good news is that there are legitimate and helpful resources to go to if you need help. 

If you would like a list of government agencies to report a suspected scam, visit my website at NancyPuder.com.  There you will also find related articles and more information about how to obtain a legitimate loan modification or short sale.  You may also call me directly at (805)710-2415 for a private consultation.

Nancy Puder is the broker and owner of SignatureProperties, a prestigious real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415

What Every Seller Should Know in Today's Market!

When you decide to sell your home and invite an agent to come by to list the property, a good part of the appointment is centered around the Comparative Market Analysis (CMA).  If you are not familiar with this term, here’s a brief overview of how a CMA works…It’s all about your home versus every other comparable property in the immediate or surrounding area.  This is how agents help their sellers establish a realistic asking price.  Recently sold listings, listings that have expired and active listings all need to be taken into account while establishing an acceptable price range.

Active Listings are your competition.  A good move is to attempt to out-price your competitors as you address subtle differences in value between your home and the rest.

Expired listings should be considered since those are the ones that were in many cases overpriced and therefore, did not sell.  Recently sold or closed listings are the homes that made it to closing and obviously the successful ones.  It’s important to use these homes as an indicator as to how well your home will do in the current market.

I can’t stress enough how important it is to price your property correctly in the beginning.  One of the most frequent questions that I receive from prospective buyers is: How long has it been on the market?  If the buyer perceives that it’s been on the market for too long. They will often “low ball” their offer, assuming that you are either desperate or that there is something wrong or undesirable about the property.

When you are ready to discuss the CMA with your agent, be sure not to place much emphasis on anything that sold prior to three months ago.  If you sell your home, the majority of buyers will be obtaining a home and when the bank sends out an appraiser, he or she will only consider properties within that time frame.

I hope this information is helpful to you and just so you know, I’m never too busy for your referrals!

Nancy Puder is the broker and owner of SignatureProperties, a prestigious real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415