What a First Time Home Buyer Needs to Make An Offer

So you have spent some time looking at houses online, have visited some open houses and maybe have seen a few houses with your agent if you have one - you have a pretty good idea of what you are looking for. But when you find the house that you love, will you be ready to make an offer? What exactly will you need? To make the process a little clearer for first time home buyers, below are some of the main items that you should have


1. Speak to a mortgage agent or lender to get pre-approved for a loan, and obtain a loan pre-approval letter. This is really something you should do before you even START looking for a property. A mortgage broker or lender will be able to tell you exactly the type and amount of loan you would qualify for, based on your credit, income, etc., which will tell you the exact price range you should be looking. They will also be able to provide you with a written confirmation of your loan approval (called a pre-approval letter), which will be required by just about all sellers to be submitted with your offer.

2. Have a good buyers agent representing you. A good agent will be able to not only help you locate all of the available properties within a given area and price range, and tailor the search to fit the exact features you like and dislike in a property, but their true value is proven once you have found the home you would like to buy. A good agent will research all of the comparable sales in the area to help determine the fair market value of the property, and help you acquire the property at the best possible price through negotiations on your behalf with the listing agent and seller. Your agent will also prepare and explain to you all of the intricacies of the paperwork compromising the offer, and well as make sure the myriad of additional forms and disclosures are completed as required by law in each transaction. The agent will also coordinate and guide you through the additional steps in the closing process, such as the inspections, appraisal, possibly negotiating a credit from the seller, etc.. Agents who represent buyers in the purchase of property are customarily paid by the SELLER, so having a good agent on your side is not only essential to a buyer, it is also FREE!

3. Be prepared to provide proof of funds for the cash down payment amount, and a copy of the deposit check with your offer. These days more than ever, it is customary for sellers to require that potential buyers submit a "proof of funds" with their offer, demonstrating that they have enough available liquid cash on hand sufficient to cover the amount of the purchase price that is not being financed. Generally, a copy of the bank statement reflecting a sufficient balance would be acceptable. Most sellers will also want to see a photocopy of the check from the buyer for the opening deposit with the offer, which is customarily equal to 3% of the total purchase price. Only when the offer is accepted by the seller will the deposit be required to be actually submitted to escrow, so you will not have to put forward any money until you have an accepted offer in place.

4. Be ready to schedule your inspection immediately upon acceptance of your offer. The time periods on each transaction are negotiable, but the standard time frame for the inspection contingency is 17 days in a California Association of Realtors Residential Purchase Agreement. The contingency period means that during this time, the buyer has a right to back out of the transaction and cancel escrow for any reason relating to the physical inspection of the property, and have the right to request the opening deposit returned to them and not be at risk of losing that deposit to the seller. It is strongly recommended that all buyers obtain a physical inspection, which generally runs approximately $300-$400, and is paid for out of pocket by the buyer. The inspection report will show you the detailed condition of the property and any potential problems, and could be a basis for asking for a price reduction or credit from the seller for problems diagnosed in the report. In order to stay within the time contingency periods and protect the buyers deposit, the inspection, review of the report, and negotiations with the seller should be done all within the time contingency period. Therefore it is critical to have your inspection scheduled and performed as soon as possible upon having your offer accepted.

Hopefully by this time you will be well on your way to becoming a homeowner!

Tree Sitters Plagued by Low Appraisal; FHA Repairs

Mark Thompson just wanted to get a fair deal for his tree house. After three and a half years of treetop living, soaking up the sun every day without a care in the word, the troubled economy finally found its way and left its mark all the way to the top of this lonely Northern California pine. Mr. Thompson's troubles began when he agreed to sell the treetop dwelling to an undisclosed buyer, after the two struck up a conversation at the local 7-11 while Mr. Thompson was re-stocking his weekly supplies of Kentucky cheroot cigars, moon pies, and grape flavored Cisco. After agreeing to the price of $375 and two 18-packs of Strohs, the two inked the deal on the back of a chili-dog takeout box & things couldn't have been better. But thats when the troubles started...

"I knew I shouldn't have taken an FHA loan!", complained Mr. Thompson a mere week and a half later. Things were going just as smooth as can be, until the FHA appraiser came over to take a look at the property. Even though the tree was the tallest and most beautiful in the forest, the appraiser reduced the value because there were not enough nice trees around to compare it with. Also, most of the nicer trees had been cut down along time ago, so they couldn't use those for comparison anyway because they were too old. The appraiser also reduced the value because there was only a ropeladder to get up, and what if someone had a hard time climbing? So when all was said and done, the appraiser put the value of the treetop dwelling at $170.00, WITHOUT the Strohs. To add insult to injury, if he wants to sell, he is also required to repair the leaky roof, patch the holes in the tarpolin on the side, bolt the foundation of the structure to the trunk and secure with 1/2" metal guards, and remove all of the peeling bark from the tree, as that could present a safety hazard to small children who might decide to snack on it.

"I don't know what else to do, the wood, nails and tarp cost me at least $200 bucks, not to mention the ropeladder. If I don't get a little help from the buyer on this one, I might end up having to do a short sale or just walk!!"

Unfortunately, this story has been told over and over again.... We wish the best of luck to Mr. Thompson in his unfortunate situation!

5 COMMON MYTHS REGARDING SALES OF REO PROPERTIES

The abundance of foreclosure (otherwise known as "REO" or "Real Estate Owned") properties in today's market means that many first time buyers are finding themselves purchasing a home from an REO seller. There are certain things that differ between a "regular" standard sale of a property, and one purchased from an REO seller, but many people are not clear on what is and is not required of the seller in such transactions.

The Southland Regional Association of Realtors has published a great informative article in their September 16-29, 2009 Realtor Report, pointing out and explaining 5 common myths regarding the sale of REO properties. Following is the full text of the article:

5 Common Myths Concerning REO Sales

Myth #1- Sellers of REO properties are exempt from all disclosures.

While many Sellers and Brokers who list REO properties stamp all the contracts and disclosures with the statement "Seller Exempt from all Disclosures," this is simply not the case. CAR puts out an excellent chart that indicates which disclosures are required and which are not for REO properties. REO sellers are exempt from providing the Transfer Disclosure Statement and the Residential Earthquake Hazard Report. REO sellers are NOT, however, exempt from disclosing any material facts that they are aware of, concerning the property.

While they do not have to use a TDS to disclose any material facts, they are required to disclose these facts in writing to the Buyer. Further, while REO Sellers are exempt from providing a Buyer with a Natural Hazard Disclosure Statement, the law does not exempt them from disclosing many of the zones that are contained in such reports. While this law makes little sense, it is highly suggested that the Natural Hazard Disclosure Report be provided to all Buyers since the REO Seller has affirmative duties to disclose such zones and there is really no way to properly do so without the use of such a report.

Next, REO Sellers are not exempt from the lead-based paint disclosure on properties built prior to 1978. While the REO Seller is not required to pay for Smoke Detector, Water Heater Bracing and other local mandatory government retrofit requirements, they are not exempt from filling out the appropriate CAR Smoke Detector and Water Heater Disclosure forms. LA city also requires the Certificate of Compliance form to be completed regardless of who actually pays for the retrofit work. Providing these forms without Seller signature is not in compliance. Someone with authority to sign on behalf of the Seller should be signing these disclosure forms. Also, remember that both the listing and selling agent are required to perform a visual inspection of the accessible areas of all residential 1-4 unit properties and disclose the results of that inspection to the Buyer. There is no exception to this rule for REO properties.

Myth #2- Buyers should simply sign the REO Addenda provided to them without reviewing these documents.

This can be a very dangerous practice, both from a liability and expense perspective. Many of these addenda provided by REO Sellers are heavily weighted in favor of the Sellers. While the Buyer may have little choice in signing these addenda since the REO Seller may refuse to sell to them unless they are signed, that doesn’t mean that the Buyer should not carefully review them first to see how they impact the Buyer’s legal positions and expenses that they may incur. While it is traditional for the average Seller in Southern California to pay for the mandatory retrofit items and the Country and City Transfer taxes, these addenda often pass this responsibility on to the Buyer. These are negotiable items between a Buyer and Seller, but it is important for a Buyer to be aware of exactly what they are going to be responsible for since this could add up to thousands of dollars.

Myth #3- All Sellers provide Buyers with the Same Type of Title Insurance Policy.

While the CAR Residential Purchase Agreement calls for the Seller to provide the Buyer with an ALTA/CLTA Homeowner’s Policy, the REO addenda may change this to a Standard Policy of Title Insurance which provides less coverage than the above mentioned policy. Once again this is a negotiable item, but in such event, it would be wise for the Real Estate agent to counsel the Buyer on the possibility of the Buyer paying the difference between the Standard Policy and the ALTA/CLTA Homeowner’s policy. The cost is relatively low and it could prevent a major problem in the future.

Myth #4- REO properties are sold AS IS and the Buyer cannot ask the Seller to make any repairs after completing the home inspection.

While it is true that REO properties are sold as is, and while you will undoubtedly see quite a bit of language in the REO addenda indicating that the Seller will not make any repairs whatsoever, nothing prevents a Buyer from asking the Seller to make repairs as a result of the home inspection. The Seller can certainly say no, but often times the Seller will agree to certain repairs or to a credit or reduction in the sales price. You should certainly prepare your Buyers for the possibility that the Seller will say no, but, as they say, it never hurts to ask.

Myth #5- It is Illegal or Unethical for an REO Seller to require a Buyer to get prequalified or preapproved though a specific lender of Seller’s choice.

While this might be inconvenient for a Buyer, there is a good business reason for requiring such a prequalification or preapproval. Unfortunately, there are many lenders out in the field issuing prequalification letters that turn out to be worthless. In such cases, the property may be tied up for weeks only to find that the Buyer really isn’t qualified for the loan in question. The Seller has the right to have the Buyer evaluated by a Lender whom the Seller has confidence in to determine up front whether the Buyer appears to be capable of obtaining the loan in question. The Seller cannot, however, require the Buyer to obtain the loan through that particular lender.

As a final comment, it is always wise to prepare your Buyer ahead of time when dealing with an REO property. There may be time delays in getting an offer presented and accepted. There may be additional delays in getting documentation from the lender and there may even be delays in closing the escrow caused by the Sellers. Making the Buyers aware of these issues up front may help smooth the way a bit down the road. And don’t forget to use the CAR form entitled REO Advisory. This form is designed to provide the Buyer and Seller with important disclosures and information regarding the REO process.

Thanks to the Southland Regional Association of Realtors for the above article. The full text can be found HERE.

Real Estate and Wildfires - What You Need to Know...

Hats off to the thousands of firefighters who braved INCREDIBLY hot and humid weather when fighting the gigantic Southern California wildfire now known as "The Station Fire". The firefighters did an AMAZING job of keeping the fire at bay from dozens of communities throughout the foothills of the Angeles National Forest. They worked so so hard, night and day, working 16 hour shifts with no days off, in order to do everything possible to save the homes of countless residents. They really are heroes & do an awesome job!

When disasters such as this one strike, after the initial danger of personal safety has passed, many may be left with unanswered questions regarding the legal ramifications of properties affected by fire. The staff of the Legal Department of the California Association of Realtors (C.A.R.) has come up with a comprehensive list of questions and answers which may be helpful to those affected, and important for all homeowners to be aware of. Following is a copy of the article in full, which is reprinted with permission...

Introduction

The seasonal firestorms we experience in California raise several legal questions for REALTORS® and their clients. The following questions and answers may be helpful for property owners and residents who have suffered a loss, or for buyers who are in escrow to purchase property involved in the disaster.

Q 1. What are the general rules concerning who bears the risk of loss in a real estate transaction where an "Act of God" or other disaster, such as fire, affects the property?

A If the purchase contract between the parties does not specify who is to bear the risk of damage or loss to the premises during the time between the execution of the contract and the transfer of title, the liability of the parties is governed by the California Uniform Vendor and Purchaser Risk Act (Cal. Civ. Code § 1662). Under the provisions of this statute (assuming no fault on the part of the buyer), the risk of loss or damage to the premisesis carried by the seller until the buyer receives either title or possession. (Note: C.A.R.'s Residential Purchase Agreement and Joint Escrow Instructions, Standard Form RPA-CA, revised 10/02, does not dictate how risk of loss is allocated between a buyer and a seller.)

If all or a material part of the premises are damaged before title or possession is given to the buyer, the buyer can cancel the contract and recover any portion of the purchase price paid. It is not clear whetherthe buyer can alternatively elect to enforce the contract with a reduction in the purchase price equal to the loss of value or cost of repair. (Cal. Civ. Code § 1662.)

After the buyer has taken possession or has received title,the buyer bears the risk of loss or damage to the premises (assuming no fault on the part of the seller). Therefore, if the premises are damaged, the buyer must still complete the contract and pay the balance of the purchase price. (Cal. Civ. Code § 1662.)

If the purchase contract does contain a risk of loss provision, that provision will govern to the extent it is different from or more specific than the Uniform Vendor and Purchaser Risk Act (Uniform Act) (Cal. Civ. Code § 1662).

Q 2. May a buyer get out of a purchase contract under the Uniform Act if the damage or loss caused by fires to the property is minor?

A Probably not. The Uniform Act implies that the seller may still enforce the contract if the damage is not material. However, a purchase agreement may require the seller to repair such damage. For example, Paragraph 7A of C.A.R.'s Residential Purchase Agreement requires the property to be maintained in substantially the same condition it was in on the date of acceptance. Under this language, a seller could be obligated to repair fire-related damage to his or her property.

Q 3. May a buyer get out of a purchase contract under the Uniform Act if the damage or loss caused by fires to the property is major?

A Yes. To repeat, if (1) neither legal title nor possession has transferred from the seller to the buyer, and all or a material part of the real property is destroyed by fire, and (2) no express contract provision to the contrary exists, then, under the Uniform Act the seller cannot enforce the purchase contract and the buyer may cancel and recover any portion of the purchase price already paid. (Cal. Civ. Code § 1662.)

Q 4. If the damage is not severe, does the timing of the fires (whether they occur before or after an inspection) affect the right to cancel?

A Yes. If the damage occurs before the buyer has removed an inspection contingency in his or her purchase contract, the buyer can, of course, exercise any inspection, disapproval, and cancellation rights provided by the contract.

If the damage occurs after the buyer has removed his or her inspection contingency, the buyer generally does not have an automatic right to reinspect the property and approve or disapprove of its condition under most purchase contracts (including C.A.R.'s Residential Purchase Agreement). However, the seller may be obligated to repair the property. See Question 2.

A purchase agreement may, however, require a seller to disclose fire-related information, which in turn may give a buyer a right to cancel a transaction, even if he or she has already removed contingencies. For example, Paragraphs 5A(3) and (4) of C.A.R.'s Residential Purchase Agreement provide that if,prior to the close of escrow, the seller becomes aware of adverse conditions materially affecting the property, the seller must provide a subsequent or amended disclosure or notice, which then gives the buyer a right to cancel the agreement.

Q 5. Must a seller disclose major fire damage that has not been repaired when attempting to sell the property?

A Yes. For sales of residential one-to-four unit properties, the Real Estate Transfer Disclosure Statement (TDS), Section II (Seller's Information), paragraph C.9, asks:

"C. Are you (Seller) aware of any of the following: . . . 9. Major damage to the property or any of the structures from fire, earthquake, floods, or landslides.
______ Yes ______ No." (Cal. Civ. Code § 1102.6 (emphasis added).)

In addition, for both residential one-to-four unit and other properties, the seller is required to inform a buyer whether the property is located in a "very high fire hazard severity zone" (which has certain maintenance requirements) or a "state responsibility area" (which may contain substantial forest fire risks and for which the state has primary financial responsibility for fire prevention and suppression). (Cal. Civ. Code §§ 1103.2 et seq.) The disclosure of these and other natural hazard zones is discussed more fully in C.A.R.'s legal article, Natural Hazard Disclosure Statement.

For all types of property, the general requirement of disclosing known material facts affecting the value or desirability of property applies.

Q 6. Must a seller disclose the fact of a fire when there was no major damage to the property?

A Yes, if it is a material fact affecting the value or desirability of the property to the buyer. Even though the property may not have suffered major fire damage, the seller may be aware of other facts related to the fire that the buyer might not be aware of. Of course, a buyer must also exercise reasonable care to protect himself or herself in a real estate transaction, and is not excused from discovering problems that are within his or her diligent attention and observation.

Q 7. Must a seller disclose the fact of a fire when there was major damage to the property but it has been repaired?

A California law does not clearly answer whether a seller must disclose past property defects and repairs. At the present time, the law does not appear to require disclosure of past defects and repairs unless the problems may be persistent. In other words, a defect which has been fully repaired and no longer threatens the value or desirability of the property probably need not be disclosed. On the other hand, defects which are difficult to remedy and which may continue to plague the property may have to be disclosed. Given some uncertainty in this area of the law, many sellers may prefer to resolve doubts infavor of disclosure to minimize the risk of liability.

Q 8. What are the tax effects of destruction of a property?

A Federal income tax law provides for the deduction of "casualty losses," which include destruction of property by "Acts of God" including fire, theft, and certain other types of losses. (See 26 U.S.C. §165.)

The following is a brief summary of the rules:

1. (1) For business property, the casualty loss is fully deductible. (26 U.S.C. §165(a).)
2. (2) For non-business property of individuals, losses from "casualties," including floods, earthquake, fire, storm, or other natural occurrences, are generally deductible only to the extent that the total of such losses exceeds 10 percent of the taxpayer's adjusted gross income for the year of loss. Any loss is deductibleonly by a taxpayer who itemizes deductions. Each loss is subject to a $100 floor. The amount of a casualty loss is the lesser of, (a) the difference between the value of the property immediately before and after the loss, or (b) the adjusted basis of the property immediately before the loss. (26 U.S.C. §165(c)(3) and (h).)
3. (3) If the loss results from a disaster that the President determines to be eligible for federal assistance, the taxpayer has the choice of deducting the disaster losses on his or her return either, (a) for the year in which the loss occurred, or (b) for the preceding tax year. (26 U.S.C. §165(i).)

See the Internal Revenue Service's website for more information. For a copy of the IRC code, go to U.S. Code Online and enter 26 for the title and 165 for the section and click on search.

Please contact an accountant or tax attorney for further details about the tax effects of fire losses on a particular transaction.

Q 9. Can a landlord or tenant terminate a lease or a rental agreement if all or parts of the premises are destroyed by fire?

A Yes. Under California Civil Code Section 1933(4), the agreement is terminated automatically if the entire premises are destroyed, unless the parties have agreed to something different. In the event the premises are only partially destroyed, the tenant can terminate the lease by notice to the landlord if the landlord had reason to believe at commencement of the lease or rental agreement that the portion destroyed was a "material inducement" to the tenant to enter into the lease (Cal. Civ. Code §1932(2)).

Again, any contrary agreement between the parties will govern.

Q 10. Can a landlord collect further rent after the lease or rental agreement is terminated due to destruction of the premises?

A No. The obligation to pay future rent is extinguished when the rental agreement is terminated. However, a tenant maystill owe back rent.

Q 11. Where can I obtain additional information?

A Additional information is available on the Real Estate Resources page on C.A.R. Online. Look for the category, "Fire Disaster Assistance." This legal article is just one of the many legal publications and services offered by C.A.R. to its members. For a complete listing of C.A.R.'s legal products and services, please visit C.A.R. Online at www.car.org. For a list of important contact numbers, please see Appendix A below**.
**(see link to article on C.A.R. website for Appendix A with list of contact numbers)

Readers who require specific advice should consult an attorney. C.A.R. members requiring legal assistance may contact C.A.R.'s Member Legal Hotline at 213.739.8282. C.A.R. members who are broker-owners, office managers, or Designated REALTORS® may contact the Member Legal Hotline at 213.739.8350 to receive expedited service. The access times are Monday through Friday, 9:00 A.M. to 6:00 P.M. Members may also fax or e-mail inquiries to the Member Legal Hotline at 213.480.7724 or legal_hotline@car.org. Written correspondence should be addressed to:

California Association of REALTORS®
Member Legal Services
525 South Virgil Avenue
Los Angeles, California 90020

The information contained herein is believed accurate as of September 2, 2009. It is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney.

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The following article was prepared by and is courtesy of the California Association of Realtors (C.A.R.) Legal Department - reprinted with permission. The entire text of the article can be found HERE. Source: http://www.car.org/legal/2009-qa/firestorms/

Nine Steps to Buying a Home

Buying a new home can seem like an overwhelming experience for many first time (as well as seasoned) homebuyers. It may seem like there are so many things to remember and so many things to do, and can seem daunting for some. It helps to to have a great agent to help you through the process, and it certainly helps to be able to break it down step by step and just concentrate on each individual portion at a time, as you march down the path on your journey toward home ownership!

Here is how the Dept. Of Housing and Urban Development (HUD) breaks down the home buying process in nine steps. The link to the source of the info can be found at the bottom of the post.

Step 1: Figure out How Much You Can Afford

Talk to a lender or a good mortgage broker, and they can run your credit score and see how much of a loan you would qualify for, based on your income, credit score, employment, etc.. It is definitely a good idea to do this up front, so that you know your exact purchasing power and the price range in which you should be seriously concentrating your house hunting efforts. Also, most all seller’s entertaining offers on property they are selling these days will require that a pre-approval letter be included with any offer coming in to them. Best to start here, and possibly save yourself wasted time and effort in the future.


Step 2: Be Aware of your Rights!

Familiarize yourself with the Fair Housing Act

http://www.hud.gov/offices/fheo/FHLaws/FairHousingJan2002.pdf

and the Real Estate Settlement Procedures Act (RESPA):

http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm

Both are designed to protect borrowers and buyers in the homebuying process – it is highly recommended for all borrowers to familiarize themselves with the provisions, so you KNOW YOUR RIGHTS!


Step 3: Shop for a Loan

Now that you know you are pre-qualified and are ready to do some serious looking, devote some of your serious attention to shopping for a good loan in addition to the time spent looking for your new home. If you do your homework, comparing costs with several lenders and looking at the different costs and interest rates may save you serious dollars over the life of the loan.


Step 4: Learn About Homebuying Programs

Downpayment assistance is available if you qualify! – you can find information on some of California’s programs here: http://www.hud.gov/local/ca/homeownership/buyingprgms.cfm .

Contact me at john.barry@coldwellbanker.com for more information about specific programs available in your area.


Step 5: Shop for a Home

This is the fun part!! (Or it can be the most frustrating part!) Remember that it is not easy to find a home with EXACTLY 100% of what you are looking for. If you find a property with 80% of the features you are looking for in a home, it might be the one for you & you seriously consider making an offer, especially if the amenities or features it is missing is something that can be added later on. Choose an agent you like and trust who can help you and guide you through the process from searching for the home to moving day!


Step 6: Make an Offer

This is where your real estate agents expertise and knowledge of the market conditions will help them advise you of what would be a fair price to offer on a property, to help give you the highest possibility of getting your offer accepted. Sellers do not necessarily look at the highest dollar offer as the strongest offer. When buyers are in a multiple offer situation for the same property, there are other things that sellers look for in an offer besides the final price, when deciding which to accept. A good agent can assist you in presenting the strongest offer possible which would give you the greatest chance as a buyer of having it accepted.


Step 7: Get a Home Inspection

Now that you have found a home you love and have an accepted offer (lucky you!), you are ready to schedule a home inspection. This should be done as soon as possible as soon as you have an accepted deal. Any property you purchase should be contingent upon the buyer being able to obtain and approve of a physical inspection of the property. By spending a few hundred dollars up front, a potential buyer can find out about the condition of the home, and discover any minor or major repairs needed on the home before committing to the purchase. If the potential buyer discovers any serious issues with the condition of the property at this point, they can then go back to the seller and ask for a credit at the close of escrow based upon the estimated cost of the repairs, or decide to cancel their purchase of the property based upon the inspection contingency. Again, a good agent will be able to help you & guide you through this process. Contact me at john.barry@coldwellbanker.com for personal assistance, or if you would like a referral to a qualified agent in your local area.


Step 8: Shop for Homeowners Insurance

All lenders will require homeowners insurance, so be sure to shop around for the best deal possible. Not all insurance companies may offer you the same rate.

The US Govt.’s Insurance Information Institute (iii) has some great information on 12 ways to lower your home insurance costs, which can be found here: http://www.pueblo.gsa.gov/cic_text/housing/12ways/12ways.htm


Step 9: Sign Loan Documents

You’re almost there!! One of the final steps before closing is to sign loan documents – be sure to read everything before you sign! Some helpful information on settlement costs and other as[pects of the loan process can be found here: http://www.hud.gov/offices/hsg/ramh/res/stcosts.pdf

Usually you will be required to go into the escrow office to sign the loan documents where a notary will notarize the applicable ones. Sometimes it is possible for the escrow company to arrange a mobile notary to meet the borrowers and have them signed outside of the escrow office (although this is not always allowed by the lender and the borrower will also usually pay several hundred dollars extra for this service). Once the loan documents have been signed and returned to the lender, and once everything else is in place and the buyer has deposited their final down payment, the lender funds the loan, and the escrow officer sets up the file for closing.

The next biggest decision you will have to make is what to serve your guests at the housewarming party!!!


Source of information: US Department of Housing and Urban Development (HUD) - http://www.hud.gov/buying/index.cfm

Hew Help for Homeowners as Obama Signs New Law...

President Obama has signed into law the "Helping Families Save Their Homes" Act, designed to help homeowners who are having difficulty making their monthly mortgage payments refinance to an affordable rate, and help homeowners increase the affordability of their mortgages, and avoid preventable foreclosures.

"These landmark pieces of legislation will protect hardworking Americans, crack down on those who seek to take advantage of them, and ensure that the problems that led us into this crisis never happen again," said President Obama.

The new act strengthens provisions in the existing Hope for Homeowners program, requiring principal writedowns by lenders to help homeowners increase the value of equity in their homes. The eligibility requirements of refinancing underwater mortgages will also be eased, allowing refinancing for a greater number of borrowers.

In addition, the Act also has provisions to help restore the credit flow in the US economy, including an extension of the temporary increase in the Federal Deposit Insurance Corporation's (FDIC) deposit insurance limits providing added confidence to borrowers, but also increases the borrowing authority of the FDIC to $100 billion. The Act also increases the borrowing authority of the National Credit Union Association (NCUA) to $6 billion.


A press release on the new law from The White House in Washington, D.C. can be found HERE.

California Association of Realtors Fighting for Buyer's Rights....

The California Association of Realtors has recently achieved a compromise in State Assembly Bill 957 (AB 957), working with the author of the bill, Democrat Assemblymember Cathleen Galgiani, to protect buyers rights when dealing with lenders selling foreclosed properties. The new language in the bill will protect buyers in the selection of escrow and title services, allowing them to negotiate with the sellers of REO properties, instead of allowing them to direct the service providers as they are accustomed to doing. Now they will have to pay for the privilege...

A press release on the bill from Assemblymember Galgiani's office can be found HERE.

One more example of how the California Association of Realtors is looking out for YOUR rights...

Finally Closing the Deal.....

Congratulations to the Snyders, and congratulations to the new buyers and new owners of the home at 5162 Windermere Avenue!! Escrow successfully closed on April 23, 2009... A great experience from start to finish, a very smooth closing, and absolutely wonderful buyers, sellers and agents to work with - a top notch transaction all around!! Congratulations and a big thank you to everyone who helped make it happen!!



Less than 45 days from listing in the MLS to the close of escrow and the sellers receiving 5% ABOVE the asking price - I have been blessed with an incredibly smooth deal and my clients couldn't be happier... (Unless of course, they have their offer accepted on their new home!!!!).

Now its time to push on and go forward... Plenty of houses out there for everyone!!!

And with the $8,000.00 first time homebuyers tax credit, along with low home prices and historically low interest rates, it is a fantastic time for buyers to realize their dream of owning a home for the first time. Home ownership is now within reach and an actual reality for people to whom just a few years ago, it was only a dream....

Found a Great Little Gem in the Valley...

I saw a great little place in the San Fernando Valley today that I am trying to get my good friend into.. I have been searching for a new home for sale for my buddy for a little while - he is a first time homebuyer looking to stop renting, and become a homeowner for the first time..

Now, let me tell you, it is not the easiest thing in the world to find a place for sale in the San Fernando Valley for UNDER $300,000.00, AND with a swimming pool! One of the first places we looked at was a real winner - gang graffiti on the backyard wall of the house, and a pool with about three feet of stagnant water that looked like the Creature From the Black Lagoon may climb out at any moment... (If he could get through the layer of sludge on the top!)


But then I found this little gem...



With 2 bedrooms and 2 baths, a little over 1,2o0 square feet, on a 5,890 square foot lot, this house has a lot of potential and a lot to offer. The surrounding neighborhood is full of well kept homes, and with a little TLC this one would fit right in...


Imagine yourself jumping into the crystal clear water of this beautiful swimming pool on a 110 degree day...


This place seems a steal at the price - less than $300,000.00. Right now my friend is trying to get his pre-approval letter together from his lender. As of today, the property is still available, although I don't think it will last... Hopefully my buddy will be the one having the housewarming party!

Stay tuned for more details....

A Little Bit About Me...

Prior to joining Coldwell Banker Residential Brokerage, John Barry spent over a decade in the escrow industry, expanding and refining his real estate experience and expertise as an Escrow Officer, coordinating and closing hundreds of real estate transactions for his clients.

The escrow period is a time when many problems can and often do arise which could make or break a transaction. Having an agent to represent your best interests who is highly skilled in their knowledge of the legal documents, disclosures, and other intricacies of the closing process could mean the difference between an unforeseen problem that could jeopardize your entire deal, or arriving smoothly to the successful and happy closing of your transaction. With John’s proficiency in the closing process and years of experience working to resolve countless real-life closing problems, there is no better agent to have on your team to represent you.

John strives to consistently fight for and protect the best interests of his clients, ALWAYS putting their needs before his own, conducting himself with the highest possible ethical standards and providing extraordinary, professional and courteous service at all times. John’s commitment to excellence equals that of Coldwell Banker, whose foundation is their dedication to professionalism and customer satisfaction.

Please Contact me for all your real estate needs, and be represented by the best of the best.

$8,000.00 TAX CREDIT FOR FIRST TIME BUYERS AS STIMULUS BILL BECOMES LAW!!!!

With the signing into law on Tuesday by President Obama of the American Recovery and Reinvestment Act of 2009, the rumors swirling regarding the details of tax credit for first-time home buyers, and the differences int he amounts and terms between the House and Senate versions, can finally be put to rest - a compromise has been made, and the credit has now become the law.

Here are the main details regarding the credit:

• Amount of the credit is $8,000.00 (or 10% of home value, whichever is less) ;
• Available to first-time home buyers only;
• Home must be purchased (close escrow) between January 1, 2009 and November 30, 2009.
• Income restrictions: $75,000.00 for single filers and $150,000.00 for married couples;
• Credit DOES NOT have to be paid back, as long as buyer occupies home as primary residence for at least three (3) years (otherwise, buyer obligated to repay amount).
  

Of course, it is highly recommended and strongly suggested that you discuss with and seek the advice and guidance of your tax advisor regarding this credit or any other tax related questions or issues...

With low interest rates, incredible value in the Los Angeles housing market, and now EIGHT THOUSAND MORE DOLLARS in your pocket, the time may never have been better for first time home buyers to realize their dream of owning a home...

DON'T MISS OUT ON THE INCREDIBLE OPPORTUNITIES AVAILABLE IN THIS BUYER'S MARKET!!!!!

Call me at (323) 810-7976, or EMAIL ME for a no obligation chat to see if I can help you FIND YOUR DREAM HOME!!!!!

Could Be the Opportunity of a Lifetime for First-Time Buyers!!!

For first-time buyers who are debating whether or not now is a good time to buy, recently enacted Federal legislation may now offer the needed incentive, providing up to a $7,500.00 tax credit for first-time home buyers, for homes purchased on or after April 9, 2008 and before July 1, 2009. Note that for purposes of the credit, "purchased" means that the actual CLOSING must occur by July 1st. Assuming a typical 45-day escrow, it is in any first-time home buyers best interest to act as quickly as possible, in order to have an ACCEPTED OFFER and be ready to go into escrow by mid-May at the latest, so as not to possibly lose out on this INCREDIBLE OPPORTUNITY!!

Currently it is established as a zero-interest loan, which must be repaid to the government over a 15-year period, but I understand that there are provisions in the current economic stimulus package to make this credit PERMANENT, and one that NEVER HAS TO BE PAID BACK! Now that's what I call a TRUE tax credit!!! We will follow this stimulus bill very closely.

Please see this site for more information regarding the credit: **

Federal Tax Credit

Feel free to call me at (323) 810-7976, or email me at: jb@jbknowsthevalley.com if you are interested in finding out any more information on available properties in the Eagle Rock/Glendale/San Fernando Valley areas, and if you would like my assistance in making an offer in order to take advantage of this great opportunity.

** For specific questions regarding the tax credit and how it would apply to your particular tax situation, I strongly recommend you consult with your tax advisor or accountant.

Southern California Buyers Cashing In on Today's Market...

Check out the article at the bottom of this post, which I came across while browsing the online edition of the San Diego Union Tribune...

With 30-year fixed-rate interest rates AVERAGING under 5% (4.96% according to the most recent Freddie Mac survey), and tremendous value to be had as a home buyer in today's market, its obvious that buyers are indeed cashing in on what is being seen by many as a FANTASTIC opportunity!! With interest rates at historic lows, and incredible value and great opportunities to be found in today's SoCal housing market, there may NEVER have been a better time to realize the dream of owning your own home...

Check out this article:

Lower SoCal home prices lead to sales spike

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Don't Worry, Escrow Will Take Care of Everything....

Some people believe escrow officers must be miracle workers. And honestly, there may be some truth to that... I mean, who else in your typical real estate transaction has to deal with not only ALL of the parties involved, (buyers, sellers, lenders, attorneys, mortgage brokers, real estate agents, title officers, insurance agents, and the list goes on and on..), but their emotions as well, trying to walk a tightrope between them all, at the same time wearing the hats of a psychologist, therapist, and referee? (Ever heard the saying "Too many chiefs & not enough indians..." ??) And typically, without fail, no matter how hard the escrow officer works to avoid it, the grant deed will be delivered two day before the scheduled closing, signed in PENCIL, and with NO notary acknowledgement. (Reason being, of course, that everyone knows the effect of Murphy's Law is three times as prevalent in Real Estate than any other profession...)

"Oh, and by the way..", the seller's agent will say with a straight face, "My seller just left for a two week safari in Africa, and he will be spending most of the time traveling from village to village in a dugout canoe through the jungles of Botswana, where he of course won't be reachable by fax or phone, and the nearest Fed-Ex office or internet connection is at least two thousand miles away..."

"...but this deal HAS TO CLOSE ON FRIDAY!!!!!!"

To most people, escrow is a mysterious process, something that you have to go through if you are buying or selling property but don't really want to, and something that doesn't really sound all that appealing, anyhow. But an escrow officer is there to keep the communication going and the documents flowing between the parties, so everyone is aware of what is going on and there are no suprises approaching closing time... A good escrow officer will be able to use their experience and knowledge to help anticipate and identify any potential problems that COULD arise in a transaction, potentially jeopardizing the closing, and will work to keep everything on track for a smooth and painless transfer of the property (that is, until your seller decides to jet off to Africa to photograph a few zebras and giraffes at the most inopportune time...).

I have been in the escrow industry in the Greater Los Angeles Area for over a decade, much of that time as an Escrow Officer. And believe me, the safari story is not even CLOSE to being the craziest thing to befall a closing in my time...