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5 Secrets to Buying the Best House for Your Money

1. Get “Pre-Approved” – Not “Pre-Qualified!”

Do you want to get the best property you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one element in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller.

In years past, I always recommended that buyers get “pre-qualified” by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you “pre-qualified” and issues a certificate that you can show to a seller. Sellers are aware that such certificates are WORTHLESS, and here’s why! None of the information has been verified!

Many times unknown problems can come to the surface! Some of the problems I’ve seen include recorded judgments, alimony payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the clients’ bank account long enough, etc.

So the way to make the strongest offer today is to get “pre-approved”.

This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It’s VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.

2. Sell Your Property First, Then Buy the House

If you have a house to sell, sell it before selecting a house to buy!

Contingency sales aren’t nearly as strong as one that comes in with a ready, willing and able buyer. Consider this scenario: You’ve found the perfect house – now you have to go make an offer to the seller.

You want the seller to reduce the price and wait until you sell your house. The seller figures that this is a risky deal, since he might pass up a buyer who DOESN’T have to sell a house while he’s waiting for you. So he says OK, he’ll do the contingency but it has to be a full price offer! You have now paid more for the house than you could have because of the contingency, and you have to sell your existing house in a hurry! Otherwise you lose the house! So to sell quickly you might take an offer that’s lower than if you had more time. The bottom line is that buying before selling might cost you THOUSANDS of dollars.

If you’re concerned that there is not a house on the market for you, then go on a window-shopping trip. You can identify possible houses and locations without falling in love with a specific house.

If you feel confident after that then put your house on the market.

Another tactic is to make the sale “subject to seller finding suitable housing”. Adding this phrase to the listing means that WHEN YOU DO FIND A BUYER, you will have some time to find the new place. If you don’t find anything to your liking, you don’t have to sell your present home.

3. Play the Game of Nines

Before house hunting, make a list of things you want in the new place.

Then make a list of the things you don’t want. You can use this list as a guide to rate each property that you see. The one with the biggest score wins! This helps avoid confusion and keeps things in perspective when you’re comparing dozens of homes.

When house hunting, keep in mind the difference between “STYLE AND SUBSTANCE”. The SUBSTANCE is the set of things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan. The STYLE represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good SUBSTANCE, because the STYLE can always be changed to match your tastes. I always recommend that you imagine each house as if it were vacant.

Consider each house on its underlying merits, not the seller’s decorating skills.

4. Don’t Be Pushed Into Any House

Your agent should show you everything available that meets your requirements. Don’t make a decision on a house until you feel that you’ve seen enough to pick the best one.

A decade ago, homes were selling quickly, usually a few days after listing. In that kind of market, agents advised their clients to make an offer ON THE SPOT if they liked the house. That was good advice at the time. Today there isn’t always this urgency, unless a home is drastically under priced, and you’ll know if it is.

Don’t forget to check into the SCHOOL DISTRICTS of the area you’re considering. Information is available on every school; such as class sizes, % of students that go on to college, SAT scores, etc. You can get this information from this web site.

5. Stop Calling Ads!

Please note – ads are sometimes created to make the phone ring! Many of the homes have some drawback that’s not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What’s not mentioned in the ad is usually more important than what is.

For this reason, I want you to be very careful when reading ads.

Remember that the person writing the ad is representing the seller and not you! The most important thing you can do is have someone on your side looking out for your best interests. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer’s broker. Then you become a client with all the rights, benefits, and privileges created by this agency relationship, and you’re no longer just a shopper.

Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER? These “great deals” go to those people who are committed to working with one agent. When an agent hears of a great buy, who do you think he’s going to call? His client, who he has a legal obligation to work hard for you, or someone who just called on the phone and said “keep your eyes open”?

So to get the best buy on a property, I always recommend that you hire your own agent and stick with him or her.

12 Questions to Ask When Choosing Your REALTOR

Make sure you choose a REALTOR who will provide top-notch service and meet your unique needs.

1. How long have you been in residential real estate sales Is it your full-time job While experience is no guarantee of skill, real estate  like many other professions  is mostly learned on the job.

2. What designations do you hold Designations such as GRI and CRS , which require that agents take additional, specialized real estate training, are held only by about one-quarter of real estate practitioners.

3. How many homes did you and your real estate brokerage sell last year By asking this question, you ll get a good idea of how much experience the practitioner has.

4. How many days did it take you to sell the average home How did that compare to the overall market The REALTOR you interview should have these facts on hand, and be able to present market statistics from the local MLS to provide a comparison.

5. How close to the initial asking prices of the homes you sold were the final sale prices This is one indication of how skilled the REALTOR is at pricing homes and marketing to suitable buyers. Of course, other factors also may be at play, including an exceptionally hot or cool real estate market.

6. What types of specific marketing systems and approaches will you use to sell my home You don t want someone who s going to put a For Sale sign in the yard and hope for the best. Look for someone who has aggressive and innovative approaches, and knows how to market your property competitively on the Internet. Buyers today want information fast, so it s important that your REALTOR is responsive.

7. Will you represent me exclusively, or will you represent both the buyer and the seller in the transaction While it s usually legal to represent both parties in a transaction, it s important to understand where the practitioner s obligations lie. Your REALTOR should explain his or her agency relationship to you and describe the rights of each party.

8. Can you recommend service providers who can help me obtain a mortgage, make home repairs, and help with other things I need done Because REALTORS are immersed in the industry, they re wonderful resources as you seek lenders, home improvement companies, and other home service providers. Practitioners should generally recommend more than one provider and let you know if they have any special relationship with or receive compensation from any of the providers.

9. What type of support and supervision does your brokerage office provide to you Having resources such as in-house support staff, access to a real estate attorney, and assistance with technology can help an agent sell your home.

10. What s your business philosophy While there s no right answer to this question, the response will help you assess what s important to the agent and determine how closely the agent s goals and business emphasis mesh with your own.

11. How will you keep me informed about the progress of my transaction How frequently Again, this is not a question with a correct answer, but how you judge the response will reflect your own desires. Do you want updates twice a week or do you prefer not to be bothered unless there s a hot prospect Do you prefer phone, e-mail, or a personal visit

12. Could you please give me the names and phone numbers of your three most recent clients Ask recent clients if they would work with this REALTOR again. Find out whether they were pleased with the communication style, follow-up, and work ethic of the REALTOR .

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Why You Should Work With a REALTOR

Not all real estate practitioners are REALTORS . The term REALTOR is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS and subscribes to its strict Code of Ethics. Here are five reasons why it pays to work with a REALTOR .

1. You ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Get objective information and opinions. REALTORS can provide local community information on utilities, zoning, schools, and more. They ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment Second, will the property have resale value when I am ready to sell

3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR to find all available properties.

4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Property marketing power. Real estate doesn t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR , you do not have to allow strangers into your home. Your REALTOR will generally prescreen and accompany qualified prospects through your property.

6. Real estate has its own language. If you don t know a CMA from a PUD, you can understand why it s important to work with a professional who is immersed in the industry and knows the real estate language.

7. REALTORS have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you ve done it before, laws and regulations change. REALTORS , on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Buying and selling is emotional. A home often symbolizes family, rest, and security  it s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

9. Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a REALTOR , you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for REALTORS to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Short sales routinely show up in credit reports as foreclosures

Large numbers of homeowners who have negotiated short sales are at risk because of a startling omission in the credit system. Their credit reports and scores indicate that they were foreclosed upon, rather than having negotiated a mutually agreeable resolution with their lender, and the Federal Trade Commission and the Consumer Financial Protection Bureau are investigating why and how this happened.

Making sense of the story

  • The credit reporting system now in place does not have a separate code that distinguishes a short sale from a foreclosure, yet there are crucial differences between the two.
  • In a short sale, the bank approves the sale of the house to a new buyer at a mutually acceptable price. Any unpaid remaining loan balance not covered by the sale proceeds may then be either partially or fully forgiven. The bank is an active participant throughout the process, negotiating for a higher price and higher repayment of principal from the original borrower.
  • In a foreclosure, the bank is essentially left holding the bag. The owners walk away at some point or live in the property rent-free until they’re evicted. Frequently there is damage to the house left by the departing owners, sometimes extensive. There is little or no cooperation between the homeowners and the bank.
  • Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) all recognize the differences between short sales and foreclosures in their underwriting policies regarding new mortgages.
  • Fannie Mae generally won’t approve a new mortgage application by borrowers with a foreclosure on their credit report for up to seven years, but will consider lending to people who were involved in short sales, and who otherwise qualify in terms of recent credit behavior and available down payment, in as little as two years.
  • If short sales routinely show up in credit reports coded as foreclosures, borrowers who might be able to qualify for a new mortgage two or three years after a short sale may find themselves shut out of the market

Read the full story

Source: Los Angeles Times

Talking Points

  • If you’re short on time and need to move out of your house in a hurry, here are some tips to assist you.
  • If you’re willing to sell some of your household belongings, you may consider turning to sites like eBay, which have the widest audience and bring the best prices.  However, you’ll waste valuable time packing and shipping goods. Instead, use your city’s Craiglist or your local newspaper classified, and specify “cash and carry.” Since potential buyers will be coming to your house, for security’s sake, have someone with you when you arrange a pick up.
  • Don’t overprice what you own. Unless your furnishings are fashionable and in great condition, they may bring as little as a tenth of what you paid for them.
  • Ask your real estate agent for assistance. He or she may know someone in the market for some lawn furniture or may be willing to help you move furniture into the moving truck. You never know if you don’t ask.
  • To keep moving costs to a minimum, carefully sort through and sell, donate, or give away everything that you don’t need. Otherwise you’ll end up paying extra for movers to pack and ship items that you didn’t want or need in the first place.

The HUD Home Process – From Offer to Closing Day

Purchasing a HUD home or a home where the mortgage was insured by the FHA and has gone into foreclosure is not as hard of a process as you may think. Whether you are looking at a hudhome as part of the Good Neighbor Next Door (GNND) program or looking to purchase the home as an investor, there are some guidelines these homes have and you should know about them and adhere to them to ensure your purchase. Here we will go through the process of purchasing government homes from offer to closing day.

Who Can Buy a HUD Home?

Anyone can purchase a hudhome and the foreclosed homes may be purchased as an owner-occupied home or investors. Buyers who are seeking a foreclosed home on an owner-occupied basis have a priority bid period over investors of ten days.

How Are they Priced?

They are sold at market value price or what is called the appraised market value. A buyer can make any offer, but usually, they will accept only those offers close to the market value price, unless they offer a price reduction on a hudhome that isn’t selling.

All these homes are sold “as is,” meaning there are no warranties nor do they guarantee the home’s condition. Home inspections are recommended and required prior to buying a hudhome to ensure any needed repairs will fall within your budget or if you can roll them into your new mortgage. Home inspections are ordered and paid for by the buyer and you should only hire a licensed inspector.

What Are Offer Timelines/Deadlines?

Unlike a conventional home purchase where you and the seller may negotiate for as long as you wish, there are certain deadlines. To be fair to every buyer, the timelines that you must meet in your bid otherwise the bid you make on the hudhome will face cancellation. For example, once your real estate broker sends your bid in to be considered and it is accepted as the highest bid, your real estate broker must send your signed sales contract within 48 hours of the bid or your bid will be canceled-also preference is given to closings within 45 days of bid.

How Are Bids or Offers Submitted?

You must have your bid or offer submitted through a real estate broker who is licensed to sell a HUD home. Offers are submitted through an electronic bidding process by your broker. Each bid is stored within a computer and after the set time period, the computer calculates the highest bidder automatically. Your broker is then notified if you are the winning bidder and asked to submit a signed sales contract within 48 hours of your bid. Failure to abide by the 48-hour period will cancel your bid.

How Are Homes Listed?

All new listings are released weekly each Friday morning. During the first ten days of any new listing on each Friday morning, they only accepts bids from owner-occupied bidders. It doesn’t matter if you submit a bid on day one, day five, or day ten, as long as the bid has been received electronically, all owner-occupied bids to be submitted simultaneously. On the 10th day, all owner-occupied bids will be reviewed and winning bids are posted daily at 1:00 pm. This initial 10-day period is called the Exclusive Listing Priority Period.

After the 10-day period has passed and no winning bids are confirmed, HUD will open up the bidding to the general public. These general public bids are reviewed and in the event the property still remains unsold after general public bids, all daily bids received by 11:59 pm will be reviewed and winning bid results are posted the next day by 1:00 pm. All Bids are reviewed after 1:00 pm on Friday afternoon or on Saturday or Sunday on the Monday following.

What is the Closing Process?

Once your signed sales contract has been submitted through your real estate broker within the 48 hour time period, they will acknowledge your sales contract and provide your real estate agent a letter letting you know that you now have 45 days to close. A closing agent is assigned to you and will work with your broker to ensure you close on time with all the required documents. It is important to note that if your real estate agent uses a recommended closing agent, as they will pays the closer’s fees. If you use your own closing agent, you are responsible for paying all closing cost fees.

What Else Should I Know?

If you are buying a HUD foreclosed home, they will pay up to 5% commission to the selling broker, or your real estate agent. They will also pay up to 3% of standard closing costs if you use one of their closing agents. They may reimburse loan origination fees of up to one percent on your new mortgage. You can also ask your real estate agent to explain how earnest money can be returned and what requirements must be met. Be sure to ask about how earnest money is refunded because if this happens to you, certain guidelines must be followed to receive all or half of your earnest money if you fail to close on the home.

What If I Need More Time?

If for any reason, you feel you and your real estate agent or financial institution can’t complete the closing process within 45 days, your real estate agent must notify the closing agent at least two weeks prior to your 45 day deadline and submit the required form “Request For Extension of Closing Date,” and you may get to extend your timeframe for another 15 days. Your real estate agent must provide appropriate documentation on why you need an extension in additional to certain monies required.

For example, with every approved extension request, they must also receive a cashier’s check, money order or other certified funds made payable to HUD that are considered extension fees. The extension fees are based on the contract sales price. For example, if the hudhome you are purchasing is less than $25,000, you pay $10 per day or $150, homes sold at $25,001 to $50,000 have a $15 per day fee or $225. Homes that sell for over $50,000 and require the 15-day extension will pay a fee of $25 per day or $375. Whether you need to pay $150, $225, or $375, these fees must be submitted to in certified funds or money order as described above.

Purchasing one of these types of foreclosure homes requires you to keep in close contact with your real estate agent, especially if you require an extension. All 15-day extensions applied for owner-occupied buyers will have no fees if your real estate agent provides the documentation indicating a timely loan and loan application was made and that your mortgage approval is very close. Further, if you are charged an extension fee, all fees are retained whether you close on time or not and then used as part of your closing costs.

Summing It All Up

Purchasing HUD homes for sale is an easy process if you utilize a real estate broker who is licensed to sell these homes and understands the government regulated buying process. When going through any approved real estate broker, ask them how knowledgeable they are about the entire process of buying a home from offer day to closing day.

HUD Homes in MN are explained in more detail at http://www.MinnesotaHUDhomes.org John Mazzara is involved with financial services in the Twin Cities, MN. Officing out of Edina, Minnesota-John is centrally located within the 7 county MN metropolitan area. John owns three separate businesses-a licensed real estate broker associate selling Minnesota real estate since 1986-affiliated with RE/MAX Associates Plus http://www.MinneapolisStPaulHomes.com , an independent CFP-certified financial planner since 1989 with an independent Minnesota financial planning firm-Financial Planning Associates and the owner of a Minnesota mortgage broker firm-Venture Development Inc-specializing in residential, commercial and investment mortgages for purchases of single family homes, investment properties and commercial property. Venture brokers FHA, VA, Conventional loans and lines of credit. If you are looking for someone to help you in the areas of real estate sales/purchase, mortgages, or and/or financial planning and insurance you should call John for a free 1 hour consultation to see if he can meet your needs. 952-929-2577. RE/MAX Associates Plus and Venture Development are located at 7300 France Ave S, Suite 410, Edina, MN 55435

Author: John Mazzara
Article Source: EzineArticles.com
Excise Tax

California home prices near 4-year high

California home sale prices came close to a 4-year high in July, with the pace of sales year-over-year growing for the fourth month in a row, the CALIFORNIA ASSOCIATION OF REALTORS® reported.

Making sense of the story

  • The median home price in July for an existing single-family home was $333,860 last month, up 4.2 percent from $320,540 in June and nearly 13 percent from a year ago, when the median home price in California was $296,160.
  • July’s median home price was the highest since August 2008, when it was $352,730.  July also marked the fifth consecutive month that the median price increased month-over-month and year-over-year.
  • Sales in July rose to an annualized pace of 529,230 homes, an increase of 15.3 percent compared with last July.
  • California’s housing inventory was nearly flat in July, with the index of existing, single-family homes at 3.4 months compared with 3.5 months in June.  However, July’s inventory was down from a revised 5.6-month supply in July 2011.  The index indicates the number of months needed to sell the supply of homes on the market at the current sales rate.  A 7-month inventory is considered normal.

Read the full story

Tips for Buying in a Tight Market

Increase your chances of getting your dream house in a competitive housing market, and lower your chances of losing out to another buyer.

1. Get pre-qualified for a mortgage. You ll be able to make a firm commitment to buy and your offer will be more desirable to the seller.

2. Stay in close contact with your real estate agent to find out about the newest listings. Be ready to see a house as soon as it goes on the market  if it s a great home, it will go fast.

3. Scout out new listings yourself. Look at Web sites such as REALTOR.com, browse your local newspaper s real estate section, and drive through the neighborhood to spot For Sale signs. If you see a home you like, write down the address and the name of the listing agent. Your real estate agent will schedule a showing.

4. Be ready to make a decision. Spend a lot of time in advance deciding what you must have in a home so you won t be unsure when you have the chance to make an offer.

5. Bid competitively. You may not want to start out offering the absolute highest price you can afford, but don t go too low to get a deal. In a tight market, you ll lose out.

6. Keep contingencies to a minimum. Restrictions such as needing to sell your home before you move or wanting to delay the closing until a certain date can make your offer unappealing. In a tight market, you ll probably be able to sell your house rapidly. Or talk to your lender about getting a bridge loan to cover both mortgages for a short period.

7. Don t get caught in a buying frenzy. Just because there s competition doesn t mean you should just buy it. And even though you want to make your offer attractive, don t neglect inspections that help ensure that your house is sound.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Making an Offer on a Short Sale What You Need to Know

Are you looking to buy a new home Are you thinking that now’s a great time to find bargains Before you make an offer, it pays to know a little about the seller’s situation.

If a home is being sold for below what the current seller owes on the property and the seller does not have other funds to make up the difference at closing the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.

A short sale is different from a foreclosure, which is when the seller’s lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.

You’re a good candidate for a short-sale purchase if:

* You’re very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.

* Your financing is in order. Lenders like cash offers. But even if you can t pay all cash for a short-sale property, it s important to show you are well qualified and your financing is set. If you’re preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer whose financing is less secure.

* You don t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property or you need to be in your new home by a certain time a short sale may not be for you. Lenders like no-contingency offers and flexible closing terms.

If you’re serious about purchasing a short-sale property, it’s important for you to have expert assistance. Here are some people you want to work with:

* Experienced real estate attorney. Only about two out of five short sales are approved by lenders. But a good real estate attorney who’s knowledgeable about the short-sale process will increase your chances getting an approved contract. Also, if you want any provisions or very specialized language written into the purchase contract, a real estate attorney is essential throughout the negotiation.

* A qualified real estate professional. You may have a close friend or relative in real estate, but if that person doesn t know anything about short sales, working with him or her may hurt your chances of a successful closing. Interview a few practitioners and ask them how many buyers they’ve represented in a short sale and, of those, how many have successfully closed. A qualified real estate professional will be able to show you short-sale homes, help negotiate the purchase when you find the property you want to buy, and smooth communications with the lender. (All MLSs permit, and some now require, special notations to indicate that a listing is a short sale. There also are certain phrases you can watch for, such as  lender approval required. )

* Title officer. It s a good idea to have a title officer do an initial title search on a short-sale property to see all the liens attached to the property. If there are multiple lien holders (e.g., second or third mortgage or lines of credit, real estate tax lien, mechanic s lien, homeowners association lien, etc.), it’s much tougher to get that short sale contract to the closing table. Any of the lien holders could put a kink in the process even after you ve waited for months for lender approval. If you don t know a title officer, your real estate attorney or real estate professional should be able to recommend a few.

Some of the other risks faced by buyers of short-sale properties include:

* Potential for rejection. Lenders want to minimize their losses as much as possible. If you make an offer tremendously lower than the fair market value of the home, chances are that your offer will be rejected and you ll have wasted months. Or the lender could make a counteroffer, which will lengthen the process.

* Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you ve already negotiated, which may not be agreeable to you.

* No repairs or repair credits. You will most likely be asked to take the property  as is. Lenders are already taking a loss on the property and may not agree to requests for repair credits.

The risks of a short sale are considerable. But if you have the time, patience, and iron will to see it through, a short sale can be a win-win for you and the sellers.

* Not all real estate practitioners are REALTORS . A REALTOR is a member of the NATIONAL ASSOCIATION OF REALTORS and is bound by NAR s strict code of ethics.

Note: This article provides general information only. Information is not provided as advice for a specific matter. Laws vary from state to state. For advice on a specific matter, consult your attorney or CPA.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

Housing and Community Development (HCD) Programs

The mission of the Department of Housing and Community Development (HCD) is to provide leadership, policies and programs aimed to the preservation and expansion of safe and affordable housing opportunities and to promote strong communities for all Californians.

In accordance with its mission statement, HCD s main responsibilities are to:

  • Advocate and support housing development for all Californians. HCD develops the Statewide Housing Plan and assists cities and counties with the housing element of their General Plans. It also monitors the use of housing funds by local Redevelopment Agencies as well as provides technical assistance and statistical data to the Governor, members of the Legislature and the public. Although many parts of the department assist, the division of Housing Policy Development primarily carries out these tasks.
  • Develop, administer and enforce building codes, manufactured housing standards and mobile-home park regulations. HCD registers and issues titles on mobilehomes, oversees the construction of manufactured housing, licenses the professionals who sell manufactured housing and regulates mobilehome parks. The Department also works with industry and other governmental agencies to develop building codes for both conventional and manufactured housing. These functions are primarily handled by the Division of Codes and Standards.
  • Administer State and federal housing, community development and childcare facilities finance programs. HCD administers a number of loan and grant programs for these purposes. These loans and grants are awarded to local governments, non-profit and for-profit developers of rental and ownership housing, community infrastructure and childcare buildings. The Division of Community Affairs handles these programs.

To fulfill its housing administrative financing responsibilities, HCD has in place several programs that help the development and preservation of affordable housing. The programs offer loans, grants or both to localities, developers, non-profits and individuals that engage in the construction, development or rehabilitation of housing units. The overarching goal of this help is to produce more affordable housing and to increase the rates of homeownership of low- and median-income households.

HCD programs sometimes are multi-folded and thus, have funds available for more than one housing activity. For instance, a program like CalHome funds new construction, acquisition and rehabilitation of single-family and multifamily housing projects, and tenant-based assistance.

HCD works directly with local governments, counties, non-profits, for-profits, and in some instances, income eligible families and individuals, in order to allocate the financing resources needed toward specific housing uses. The best way to find the right program for a determined activity (and all of its requirements) is to consult the Loan and Grant Program Directory of HCD.

This directory lists all of the housing programs available for California by: purpose, assistance type, terms, eligible activities, eligible applicants, application procedures, and contact information for all the programs offered.

In addition to the links mentioned above, it is also important to visit HCD s website to become familiar with the housing resources the agency has developed:

  • Affordable Housing Preservation: Information on the preservation of government-assisted projects at-risk of conversion to market rate, state preservation notice requirements and charts, and status reports.
  • Building Codes and Standards: Information on the nine programs the Division of Codes and Standards administers which address manufactured and factory built housing issues; and employee housing, code enforcement and state housing law issues.
  • Financial Clearinghouse: A source of information on over 200 housing programs, government, private lenders and foundation grants, all of which are non-HCD funding sources.
  • HCD Loans and Grants: Contains a calendar of funding and links to recent developments in rental housing, guidelines for homebuyer programs, monitoring and management of HCD programs, proposition 46 and publications.
  • Housing Planning and Statistics: Information on housing topics technical assistance (i.e. NIMBY resources), state housing planning (i.e. housing element), state plans and reports (i.e. redevelopment agencies report), and links to federal plans and reports.
  • Income Limits: State income limits and income limits for California-administered CDBG and HOME programs.
  • Redevelopment Agency Data: Reports, activities, and technical assistance for form-completion
  • Registration and Titling: Laws, regulations, program activities, contacts, and investor links against fraud.

Other important HCD links:
Notices of Funding Availability: (NOFAs) Information on funding availability for HCD s programs.
Proposition 46 Programs List: Information on programs funded by the  Housing and Emergency Shelter Trust Fund Act of 2002 $2.1 billion dollar bond measure .

HOUSING PRIMER

Tips for Finding the Perfect Neighborhood

Your neighborhood has a big impact on your lifestyle. Follow these steps to find the perfect community to call home.

Is it close to your favorite spots Make a list of the activities  movies, health club, church, etc.  you engage in regularly and stores you visit frequently. See how far you would have to travel from each neighborhood you re considering to engage in your most common activities.

Check out the school district. This is especially important if you have children, but it also can affect resale value. The Department of Education in your town can probably provide information on test scores, class size, percentage of students who attend college, and special enrichment programs. If you have school-age children, visit schools in the neighborhoods you re considering. Also, check out www.schoolmatters.com.

Find out if the neighborhood is safe. Ask the police department for neighborhood crime statistics. Consider not only the number of crimes but also the type  such as burglaries or armed robberies  and the trend of increasing or decreasing crime. Also, is crime centered in only one part of the neighborhood, such as near a retail area

Determine if the neighborhood is economically stable. Check with your local city economic development office to see if income and property values in the neighborhood are stable or rising. What is the percentage of homes to apartments Apartments don t necessarily diminish value, but do mean a more transient population. Do you see vacant businesses or homes that have been for sale for months

See if you ll make money. Ask a local REALTOR or call the local REALTOR association to get information about price appreciation in the neighborhood. Although past performance is no guarantee of future results, this information may give you a sense of how good of an investment your home will be. A REALTOR or the government planning agency also may be able to tell you about planned developments or other changes in the neighborhood  like a new school or highway  that might affect value.

Make personal observations. Once you ve narrowed your focus to two or three neighborhoods, go there and walk around. Are homes tidy and well maintained Are streets quiet How does it feel Pick a warm day if you can and chat with people working or playing outside.

Reprinted from REALTOR magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS .
Copyright 2008. All rights reserved.

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Daniel Andrade, REALTOR® DRE #: 01849983
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