www.mountainupdate.com

Stop Renting Now! Calling all first time buyers....

Bad news in the real estate markets brings forth some of the most compelling reasons for buyers.... first time buyers in particular to get off the fence and become a home owner.  In most markets the cost of buying and owning a home has dipped below what it would cost to rent. 

Renting isn't such a great deal.  Its all about economics 101: demand for rentals the past few years has increased dramatically.  Primarily due to foreclosures and distressed sales, number of renters is outpacing the number of available rental properties.  I spent several weeks searching high and low for a rental property for a friend.... it is extremely challenging to find rentals in this market.  This increased demand is pushing up rental prices.  It is expected with the continued demand that rental prices will continue to increase over the next few years. 

The worst of the price declines is likely over....
The future will bring higher prices on homes.  Buyers thinking about buying need to take advantage now before the prices start to increase.

Mortgage Rates are at historic lows.
Never before could someone buy so much house for so little payment... First time buyers in particular are often shocked at how affordable their dream home is at the current low interest rates.

There are multiple programs designed to help new homeowners.
FHA and downpayment assistance programs make purchasing a home in this market possible for many who previously had no idea that they could qualify to buy.  The first step to homeownership is making contact with a loan professional who specializes in first time buyer programs.  Mountain West Financial has made its reputation as a home loan provider who assists first time buyers.  Contact Marty or Tom at 909.336.1793 and they will start you down the path to owning your own home.  Even if you think you won't qualify, make the call.... more often than not, someone will qualify when they thought they wouldn't.

Will "Low Balling" work in Lake Arrowhead?

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.744.7690

The following matrix shows all single family home sales in Lake Arrowhead reported as sold to the Rim Association of Realtors for the calendar year 2011, it breaks down by price range the 3 types of sales.... Standard sales, Short Sales and REO sales or bank owned properties.  What it reveals is that 65% of the properties in Lake Arrowhead last year were standard, non-distressed sales.  16% of the sales the seller negotiated a settlement on the mortgage (short sale) and, 19% of the sales came as a result of foreclosure.  Lake Arrowhead has a lower percentage of distressed sales than any other community from Crestline to Green Valley Lake.

	Standard	Short	Bank Owned
Price Range	Sales	Sales	Sales
0- $299k	81	24	54
$300k-$499k	64	21	7
$500k-$999k	39	5	1
$1Mil+	28	1	0
Total Sales	212	51	62
% of Market	65%	16%	19%

The next matrix shows at what percentage of asking to sales price the homes sold for in each price range and for each type of sale.  Homes in Lake Arrowhead over the last 12 months sold for on average of 94% to 96% of asking price.  What this means is that for the homes that sold, buyers were able to negotiate between 4% and 6% off of the asking price.  Buyers often think that it is normal that they will be able to come in and cut a "fat hog."  What the data demonstrates is that in fact when a seller has it priced correctly, a discount of very little off the asking price is necessary to make a deal. 

Standard Sales
	List Price to
Price Range	Sale Price Ratio
0- $299k	94%
$300k-$499k	96%
$500k-$999k	95%
$1Mil+	92%
Standard Sale Average	95%
Short Sales
	List Price to
Price Range	Sale Price Ratio
0- $299k	98%
$300k-$499k	95%
$500k-$999k	88%
$1Mil+	84%
Short Sale Average	96%
Bank Owned Sales
	List Price to
Price Range	Sale Price  Ratio
0- $299k	94%
$300k-$499k	92%
$500k-$999k	99%
$1Mil+
Bank Owned Average	94%

For sellers the key is making sure that you are value priced, or you are not going to even get offers.  In the past, a seller could hold his price knowing that they would take a much lower offer and it would work.  In the current market, this strategy doesn't work.  The data shows that only the homes that are priced 4% to 5% above what they will actually sell for are the ones that will get offers and sell. 

I hear sellers say all the time.  I don't want to reduce my price.... someone will make me an offer.... the fact is Mr. Seller they won't.

Serious sellers list their property with a company that gets results.  That company is Coldwell Banker Sky Ridge Realty.  If you are a homeowner needing the assistance of a professional nationally recognized firm don't hesitate to contact me at the office..

Coldwell Banker Sky Ridge Realty sells more homes than anyone on the mountain.  In these tough economic times sellers need every advantage possible to obtain the best results.  Coldwell Banker Sky Ridge Realty offers those advantages.

Now is the Time to Buy!

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Those who wait for housing prices to fall further will miss out on the best deal and the best rate.

 18 months from now, people are going to be saying, “Darn it, if I had just bought in 2011!”  Prices will continue to bump along the bottom for a bit, and interest rates will stay low near term, but later this year both are going to go up.  When you have the “perfect storm” that currently exists homebuyers need to pull the trigger.  If you wait for the media to tell you now is the time, you will be 6 months behind the curve, and will have lost the opportunity.

 Even if there are some isolated situations where a seller may become more desperate later this year, if the buyer waits they will likely miss out on the lowest rates.  What people don’t realize is that interest rate can be just as important to the cost of a deal as price can be.  A buyer might think they can grind a seller down further by waiting, maybe making a $550,000 deal look like a $500,000 deal in 6 months, but if rates rise 1% during that time the buyer made a bad deal. 

 Lets say the buyer finances $450,000 and the difference in rate because they waited is 1.5%, the mortgage will cost them over a 10 year period would cost them $48,840.  Over a 30 year period the cost difference would be $146,520.  So grinding an additional $50,000 out of the “desperate” seller actually cost him over the long haul nearly $100,000.

 No one knows where the bottom is until prices start to go up.  In our market we are not yet seeing a measurable increase in values, but we are not seeing a measurable decline as well which indicates stability in the market.  In some parts of the country, it is being reported that values are increasing, and market dynamics lead me to believe that the market has bottomed.  If my assessment is correct, the only way a buyer loses is by not buying now.

 Best strategy to secure the best deal on a home is call a local Realtor.  One who is immersed in the market, one that knows the pulse and can guide you to the best opportunities.  Be choosy, do some research, don’t just pick anybody.  Getting the best deal means working through a lot issues, some agents are not equipped to deal with some of the things that come up in transactions these days.  Make sure you are working with someone who knows what they are doing.  If you choose poorly, you will lose out.

 Also get yourself pre-approved if you are not paying cash.  Your selection of mortgage lender is also critical to the process.  Ask around, ask your Realtor, and when they tell you who is good, take their advice.  I see a lot of deals, the number one reason I see them not go together is a result of a buyer going to a “previous relationship”, or someone who is not familiar with lending in this market.  Who you pick matters, again if you pick the wrong one, you will be sorry.  If you are unsure where to go, call me and ask me, I will tell you.

 I have been in the business for 22 Years, and never have I seen a better opportunity to buy the home of your dreams.  Don’t wait, or you will be the one looking back and saying, “Darn it, I should have bought in 2011.”

Move Up Buyer... Creating Wealth Through Real Estate

 
Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 

www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

 

Who would have 'Thunk" it, but people are actually making money selling in a down market and buying a larger home....I am not an investment guy, I am a real estate broker who has watched time and time again his customers make a ton of money and created significant wealth utilizing real estate as one of the vehicles. 

The opportunity to create wealth using real estate is there for everyone, not just first time buyers.  What we see often is that family's that already own a home are looking at the fact that they can not get the same price for their house today that they could have a few years ago.  Because values are down, family's sometimes believe that they can't or shouldn't move up to the home of their dreams.  Actually the opposite is true.  Right now is the best chance a family has to buy up into the home that makes sense to them right now.

Homebuyers must realize that whatever percentage of value they lost was also probably lost on their dream home.  Look at this table below to better understand the dynamics.  The prices may be different, but consider the concept, because it rings true in our current market.

Here is how somebody realized a $46,000 gain...
	Current Home	Move-Up Home
2006 Current Price	$200,000	$400,000
Current Price (-20%)	$160,000	$320,000
Savings for Purchaser	$40,000	$80,000
Net Gain for Move-Up Buyer		$40,000
Tax Credit (If Eligible)		$6,500
Total Gain		$46,500
Plus Savings on current interest Rate

The family actually saves $46,500 making the move today despite the loss they may feel they have taken on their existing home.  In addition with current rates at all time lows, the new mortgage will likely save them additional dollars. 

But that is not all, if we project into the future when prices will again rise and homeowners will receive the benefits of appreciation, we can see an additional inpact on a family's net worth.  The following table gives you this scenario.

This family just gained $78,500...
	Current Home	Move-Up Home
Current Price	$160,000	$320,000
Future Price (+20%)	$192,000	$384,000
Future Gain for Owner	$32,000	$64,000
Future Difference for Move-Up Buyer		$32,000
Current Gain for Move-Up Buyer		$46,500
Total Gain		$78,500
Plus Savings on current interest Rate

With the additional equity increase the larger home provides, the family net worth total increases by over $78,000.  We can plug in the numbers that apply to your house and your dream home and see what the bottom line return you will for you.

Wealth in this country is built by purchasing real estate at the right time at the right price for the right terms.  Go out and find your family's dream house and buy it!  10 years from now, you will be glad you did.

Do you want the best deal or do you want the best home?

Steven Keefe, Broker/Owner 
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

In real estate, the best deal and the best house are two different things.  The first decision a buyer has to make is which they want…. The best deal, or the best house.  There is a misconception held by many buyers… Many think that the market is slow and that they don’t have to act.  Some feel like the longer they wait, the better the deals will be.

The best deals come and go… meaning that if something is a good deal it won’t be a better deal later, because it won’t be available later it will have been sold to some other proud owner that just made a great deal.  Nearly every one of the best deals isn’t the best house.  Rarely, will a great property sell under value.  It happens, but when it does, it has less to do with someone waiting, and more to do with the sellers circumstances.  Most often the best houses sell over market value, because the buyer of that home is focused on what they want which is the best house that fits their needs.

Location, amenities, and condition are the three major factors that differentiate between the best properties and the also rans.  A few buyers I have talked with lately have tried to justify the position that they should be able to “steal” one of the best homes in the market by using comparisons to the less desirable properties with inferior locations, amenities, and condition.  I have pointed out in those conversations that they are free to purchase one of those lower priced properties.  Their answer is we don’t want to purchase those properties, we want to purchase the best property and the seller should understand that it is a buyers market.  I understand… but let me try it this way.

Lets call the best property “Cadillac”.  Lets call the best deal “Ford”.  Bill walks into the shop where the guy who sells the Cadillac and says, I know you want $65,000, but I am going to give you $32,000 and you should take it because Ford will.  What do you think Cadillac says….. your right Ford ain’t no Cadillac.  Buyers in this market shopping for homes are comparing in some instances and making decisions using inappropriate comparisons. 

To the buyer who wants the best deal…. They are out there and we are happy to help you find them.

To those who want the best house, we are also happy to help you not only find them, but to also negotiate the best price possible on that home, but don’t expect to buy it for the price of the wrong home in the wrong location.

In either case, buyers today need to realize that they need to be prepared to act quickly, the best houses and the best deals are both selling… if you find one don’t wait because next weekend it will likely be gone.  

 

Banks Aren't Getting it Done!

Steven Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty 
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Click on the following link to go to video I have done on challenges facing buyers looking to secure a home loan in todays market.

The video can be viewed at:  http://www.viddler.com/explore/lakearrowhead/videos/1/

Thanks for viewing.... Steve Keefe

What is a Good Offer?

Steven Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty
Arrowhead Home Loans, Inc.
www.mountainmoves.com
steve@mountainupdate.com
909.336.2131

Buyers always ask "what would be a good offer?"  Every buyer wants the best deal.  When a buyer finds a property the would like to buy, the first thing out of their mouth generally has to do with price.

Lets say the buyer has found a home he likes and it is listed for $459,000.  The buyer may ask me if it can be bought for $359,000.  My answer to that question is no.  Here is why:  In our market, homes that are perceived to be the best values in the market are selling for about 95% of asking price.  That equated to a $413,000 sales price at 95%.  Homes that are overpriced, generally sit on the market and don't get shown by agents, subsequently an overpriced home won't see an offer. 

Our market is not in a place where you can expect to buy a home much over the 5% off of asking price figure.  It is not to say that it doesn't happen, but 9 times out of 10, the seller will get pretty close to his number if it is listed correctly.

If you are looking for a value, they are out there, but we aren't seeing "Fire Sales" in our market.

Common Closing Costs for Buyers

Marty Sievers, Senior Loan Officer
Arrowhead Home Loans, Inc.
marty@arrowheadhomeloans.com

909-709-7318

Your lender must disclose a good faith estimate of all settlement costs. The check you bring to escrow to cover your closing costs will probably have to be a cashier’s check. The escrow company conducting the closing will tell you the required amount for:

• Downpayment.
• Loan origination fees.
• Points, or loan discount fees you pay to receive a lower interest rate.
• Appraisal fee.
• Credit report.
• Private mortgage insurance premium if any.
• Insurance escrow for homeowners insurance, if being paid as part of the mortgage.
• Property tax escrow, if being paid as part of the mortgage. In some cases lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
• Deed recording fees.
• Title insurance policy premiums.
• Survey.
• Inspection fees—building inspection, termites, etc.
• Notary fees.
• Prorations for your share of costs such as utility bills and property taxes.

A Note About Prorations. Because such costs are usually paid on either a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. Proration is a way for the sellers to pay you back or for you to pay them for bills they may have paid in advance. For example, the gas company usually sends a bill each month for the gas used during the previous month. But assume you buy the home on the 6th of the month. You would owe the gas company for only the days from the 6th to the end for the month. The seller would owe for the first 5 days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.


What to Keep After Closing

• The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need for income tax purposes and when you sell the home.
• The Truth in Lending Statement summarizes the terms of your mortgage loan.
• The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
• The deed transfers ownership of the property to you.
• Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
• Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association’s rules and restrictions.
• Insurance policies provide a record and proof of your coverage.

10 Things to Take the Heartburn Out of Home Buying

Steven R. Keefe, Broker/Owner
Coldwell Banker Sky Ridge Realty
www.mountainmoves.com

steve@mountainupdate.com

1. Find the right real estate agent.. Homebuying is not only a big financial commitment, but also an emotional one. It’s critical that the agent you chose is both skilled and a good fit with your personality.

2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long.

3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.

4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go.

5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love.

6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.

7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.

8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.

9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.

10. Choose a home first because you love it; then think about appreciation. While

U.S.

homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home’s most important role is as a comfortable, safe place to live.

The Art of the Deal-Tips for Buying a Home in a Buyers Market

By Steven Keefe, Broker/Owner Coldwell Banker Sky Ridge Realty
www.mountainmoves.com
steve@cbskyridge.com

When is the best time to buy a house? With many markets reporting an abundance of homes for sale, and interest rates remaining at near 45-year historic lows, now might be one of the best times in recent history to buy. While today’s real estate market does offer advantages to buyers, consumers still need to be savvy in order to get the best deal they can.

Following are some things that we at Coldwell Banker Sky Ridge Realty think every homebuyer should keep in mind:

·         Don’t Try to Time the Market: When home prices are lower, it is very tempting for potential buyers to try to wait as long as possible in the hopes that prices will decline even further.  This strategy can be detrimental.  Once a home is priced to what the current market will bear, buyers will make offers.  It is best to work with your sales associate to make an offer based upon the prices at which similar homes in the market are selling for.  In a buyer’s market, there are more opportunities for negotiations, but making an offer is an important step.  If you find a house you love, put your bid in and negotiate. Don’t let it sit for another buyer to make an offer.

·         Take Your Time…To A Degree: Although each local market is unique, the National Association of REALTORS® reports that the national home inventory is at 6.8 months.  The increased supply of homes on the market gives homebuyers a great opportunity to evaluate a variety of properties. However, this does not mean that homebuyers should procrastinate. Gauge the time you may have to choose a home by asking your sales associate how long properly priced homes are staying on the market before going into the contract stage. You may find the change in days on the market from last year is just a few days longer.

·         Homes Are Selling:  Don’t think you are the only one looking for a new home.  Properly priced homes are selling.  The National Association of REALTORS predicts there will be more than six million home sales in 2007, expected to be the third-best year in history.  Studies such as the recent Coldwell Banker^® Homeownership in America Index revealed that that majority of people move based on lifestyle changes, such as new job / promotion, marriage, divorce or family expansion.

·         Watch the Mortgage Rates:  While it is true that mortgage rates have indeed risen over the past two years, the increase has not been so dramatic as to significantly impact a monthly mortgage payment. Consider the following example: about two years ago, mortgage rates were at approximately 5.85 percent, which translates into a monthly payment of $1,769.82 on a $300,000 loan. The current mortgage rate of 6.32 converts to a monthly payment of $1,860.32 on the same loan, a difference of $90.50. Be sure to watch the rates and do your math carefully, because changes in mortgage rates are not necessarily cost prohibitive.

Negotiate on the Incentives: Sellers eager to move their homes may offer you a variety of incentives such as cars, trips, clearing credit card bills for you and other deal sweeteners. If you accept an incentive, make sure it makes sense for you. Instead of having your bills paid, you may opt to have the seller renovate the master bathroom or install new flooring.  Of course, you can always ask the seller to just deduct that amount from the list price.