San Mateo-Foster City Real Estate News

Today I'd like to introduce you to one of the lender's I have added to our team.  Lilyette Uriarte with Bankers Preferred. 

While the mortgage market continues to generate a lot of chatter in both the media and in Washington, interest rates are currently near or at all-time lows. If you or anyone you know are looking to take advantage of these low rates, let me explain why now is the time to act.

Lately there has been talk about the 4.5% 30-year fixed rate mortgage. Will it become a reality though? Right now, no one really knows. Homeowners who could benefit from a lower interest rate need to know that even if 4.5% becomes a reality from Washington's actions, it would only be available to home buyers, not homeowners seeking to better their rate. If you need to refinance, you will be left out.

You also may have heard about Hope for Homeowners, which is a program approved by legislators to help distressed homeowners. However, regardless of its best intentions, the program has not been embraced by investors, and it is not available to many it could help.

The bottom line is, the Fed announced recently that they are going to buy up to $600 billion in mortgage-backed securities. This has already driven rates to historical lows. In January, the SEC is meeting and information may be released that could have a significant bearing on rates, potentially for the worse.

Waiting to obtain the best rate is only possible for those with loan applications already in process. Interest rates are incredibly volatile and fluctuations that used to take months are now occurring in just days or even hours. If you don't have an application in process, you could lose out.

We are already seeing lender backlog due to low interest rates. In 2003, with rates at these same low levels, we saw some lenders taking up to 90 days to close a loan.

Home loan rates are currently in the mid- to low-5% range. Home values are currently at 2003-2004 levels, coming down significantly from their high point. If youor friends and family members you knoware contemplating seeking financing, now is the time to act.

With a first time home buyer tax credit of up to $7,500 and low or no money down programs available for many people today, now is a great time to buy a home.   You can talk with Lilyette directly at 650-303-9779 or email her at lilyette@bankerspref.com.

Lilyette seconds what I have been saying to you.  If you know you have a secure job and have been waiting for interest rates to drop further, don't.  We have some great buys on the market today.  Generally we don't have a huge inventory of homes on the market this time of the year, and this really is no exception but we do anticipate see more come on the market in January.  If you are thinking about buying, get your self Pre-Approved now so you will be ready to go once we see new homes for sale next month.

It's been all over the news recently, Interest Rates to drop to 4.5%!  You're thinking about buying a house but now you've decided to wait since rates will be coming down.  Is that a good idea?  Will they really come down?  Will you really save money?  Let me get out the trusty crystal ball and wop my magic wand on it.  "Oh wise one, will that be a good idea?, I ask."  As you can see, my crystal ball is glowing but not really giving me the answer you might want to hear.  

My answer, as a Realtor, is not to wait.  Let's say that rates do come down one point.  How will that impact you?  If you are looking at the bottom of our market and will qualify for a conforming loan of $650,000 then look out for the stampede of buyers just like you, who have been sitting on the fence being certain that prices will go down further so that you can grab a great deal.  All of you will be bidding on the same house and guess what?  Deja vu.  Multiple offers and prices go up. Who wins then?  Any rate break will be off set by a higher priced house.  

We currently have 1096 properties for sale in San Mateo County under $800,000.  That includes houses, condos, and townhouses and all of them fall into the conforming loan rate.  Why wait for something that likely will never happen?  This is a great time to invest in real estate for your own home, or for income property.  While the selection of homes isn't huge, it's broad enough for some good choices.  Why don't you take a look online and see what's there.  We're here to help you once you've seen something online that you'd like to see in person.  Call us at 650-696-2820.

Oh, by the way... there are 173 homes, condos or townhouses for sale in San Mateo.  In Foster City there are 32.  In Burlingame there are 12 condos and 1 house, and in Hillsborough, none, yada, forget it.  Houses start at $1.58 million.  What are you waiting for?

When you first think about buying your own home you may think that you already know how much you can afford each month for a mortgage, but there is only one way to really know of how much house you can afford and this is driven by how much a lender calculates you can afford. So before you begin to search for your perfect house, it is critical that you begin the home buying process by getting pre-approved. Getting pre-approved for a home mortgage loan will provide you with a preliminary statement on the size of loan for which you can qualify. Knowing this, you can then focus on your home search.

• How much down payment youll need
• Your closing costs
• Your monthly payment (including PITI: principal, interest, taxes and insurance)
• The type of loan for which you qualify and which best suits your needs; and,
• Special programs for which you may be qualified, including those for veterans, first-time buyers, teachers, etc.

• Your employment and income history (including recent pay stubs)
• Your monthly debts
• The amount and source of cash available for the down payment and closing costs
• Possibly up to 2 years of tax returns
  

10 Things Not to Do When Buying a Home

There are Ten Things a future Home Buyers Should Avoid Doing Before Closing on a Home.  If you do any one of them, it could cause a huge delay in your closing.  Lenders today do not play loose and they check and double check your credit and work history prior to lending.

Okay, your home buying process is well underway. You've made an offer and the sellers have accepted your offer and escrow has opened up. You're counting the days until you get the keys and start to make the house your home. Your lender pre-approved you, so buying the house is a sure thing, right?

Not quite. Nothing is certain until the keys are in your hand and the deed is recorded. There are still hurdles to get past before it's yours, and your actions between now and closing can create headaches, slowdowns and even stop the transaction. Yes, stop the transaction cold.

1. Don't Make a Major Purchase of ANYTHING without talking to your lender first

You've just found out your credit is A+. That's great news, because a new car would look fantastic in the driveway of your new home. But hang on--if you are depending on a mortgage to move in, you'd better wait until after closing to buy that car.

An increase in your debt to income ratio reduces the amount of monthly income available for your mortgage payment.

If you tack on a higher car payment, the bank might decide you can't afford the home.

Using cash to purchase the car could also create a problem, since banks consider cash reserves when approving your mortgage. If you must make a major purchase before closing, talk to your loan officer before you do it.

2. Don't Change Jobs Unless It's Necessary 

Lenders like to see a consistent job history. They didn't used to be nervous if you changed jobs within the same field, but it's better to stay put until the house is yours. If you do need to change your job, your escrow will slow down while the lender waits to see four (4) pay stubs to make sure your new income will allow you to still purchase that home.  That slow down could effect not only your seller but others if the seller is buying a new home, too.  The seller could ask you for additional funds because of the delay.  Don't do it unless it's absolutely necessary.

3. Don't Give an Earnest Money Deposit Directly to a For-Sale-By-Owner Seller

Your good faith deposit should go into a trust account. Some for sale by owner sellers don't understand that funds are not their's to spend until closing. The only place a trust account should sit is with a Title & Escrow Company.  Escrow Companies are neutral third parties to a purchase and they take their instructions from the buyer and the seller.  They are impartial and if you buy that For-Sale-By-Owner home write your deposit check out in an escrow company's name only.

I've heard many stories about sellers who spent the deposit money prior to closing. When the transactions didn't take place for valid reasons--such as financing or repair issues, the buyers had to fight for a refund.  That can't happen when the funds sit in an escrow account.

Find an attorney or escrow company who will hold the deposit for you until closing day and make sure your contract dictates what happens to the funds if the transaction doesn't close.

4. Don't Let Your Emotions Take Over

Keep a cool head during the entire home buying process, especially during and after a home inspection. Be realistic. No home is perfect, especially older homes. It's not unusual for new owners to take care of some repairs themselves. Don't let the seller's refusal to do a small repair kill the deal on a home you truly love.  Realors are able to negotiate for things you might not be able to do so ask your agent if some things are possible and let them work on it.

On the other hand, don't fall so much in love with the house that you'll buy it no matter what needs to be done--unless you're sure you can handle it emotionally and financially. Decide what type of repairs you can realistically tackle, then stick with the decision.

5. Don't Forget to Switch Utilities

That sounds simple, but you'd be surprised how many people forget to apply for utility service at their new home. Call the utility companies as soon as you have a contract. Find out how many days lead time they need to switch the service, then get back with them when you have a firm closing date.

Don't forget to discontinue services at your old home.  That doesn't mean to shut off utilities it means to make sure the new owner's have their name on the bill from the day of closing forward.  If they haven't done this call your Agent to help.

6. Don't Forget to Line Up Your Fire & Hazard Insurance

A no-brainer, right? But it's another often-forgotten task that buyers scramble to take care of at the last minute. Before closing, your lender will want to see an insurance binder showing you have coverage for the new home. Get it as early as possible so that closing isn't delayed.  Your Escrow Officer will need the name of your Insurance Agent for her files, too.

In some locations, additional types of insurance coverage might be necessary. Talk to your lender about insurance requirements well before the closing date.

7. Don't Become Best Friends with the Seller

I'll get some flack on this one. It's great to be friendly, but don't get into too many long discussions with the sellers, because personality conflicts often cloud judgments.

Remember, this is their home. You're excited about moving in, and if you didn't like the house you wouldn't have offered to buy it. But you'll make changes--everyone does. A casual statement about "ripping up that ugly carpet" might be hurtful enough to keep the seller from negotiating with you about repairs or other issues that crop up.

8. Don't Panic if the Appraisal Comes in Low

At least not at first. There are some things you (and your agent) can do to correct the problem. Study your options and talk with your agent about the best things to do. Today it's very difficult for an Appraiser to do his/her job with prices dropping significantly in some areas.  If you appraisal comes in really low, you can ask for a second appraisal from a second person.  Appraising is not done with computers so everyone doing it does it a little differently.  Lenders are also asking for sales comparisons closer to your purchase date and that isn't always easy to provide today.

9. Don't Go It Alone

If you're working with an agent, it's the agent's duty to track many of the day to day details that involve the lender, the seller, or the seller's agent. Be sure your agent schedules a final walk-through just before closing. At this final walk-through make sure everything is the same as it was when you made your offer.  It is the Seller's responsibility to keep their home the same all during the escrow period.  If it isn't this is the time to find out, not after you own it.

Make sure you have ordered a new fire insurance policy.  Your lender must have that information prior to funding the loan so make sure it is done well before your closing.

10. Don't Ignore Lender Requirements

Know what is expected of you and take care of it. For instance, a Certificate of Eligibility is required to move forward on a VA loan. That's something you must handle yourself. Answer your lender questions and make sure that you provide required paperwork as quickly as possible--moving into your new home depends on it. 

Your lender will call your employer to verify your employment.  They are likely to do this several times so don't be surprised.  The lender talks with HR if you work in a large company or with your boss if it's a small company.  The lenders do this to make sure you are still employed before giving you your loan.  They expect you to be able to pay them back and being employed is a large part of this.

If you follow these 10 things during your escrow period, you'll get those keys and own your new home without any hiccups.

I'm asked a lot about what needs to be done financially before buying a house.  That's usually pretty easy to answer, make sure you have at least 3% of the offer price in cash in your checking account; be pre-approved by your lender; have any additional funds for the down payment ready to make liquid and then find the house.  But did you realize that there are ten things that you should never do before buying a house?  Let me elaborate now.  If you're in the middle of a home search don't ever do any of these things.

1.  Don't Make Any Purchases Until You Close Escrow

Yes, I know you will need furniture or appliances for your new home, but don't buy it until you've closed escrow, now matter how enticing the offer is.  Your lender will run your credit multiple times during the escrow process and any major credit hits or even inquiries from a new credit company will be bad and could increase your monthly payment.

Even using some cash could cause questions by your lender because they look at all of your financial picture when determining whether to give you a loan, and then what the interest rate will be.

If something happens unforeseen, such as your car is totaled and you must buy a new one, talk to your lender before doing anything.  They will advise you on the best way to accomplish this is.  Follow their advice to the letter.

2. Don't Make a Job Change Unless It's a Big One

Your job history, and salary history are all key to the decision making process of your lender.  Don't make job changes unless you've been transferred or are taking a new job in a new community with an equal or higher salary and can show your offer letter to the lender.

3. Buying a For Sale By Owner?  Don't Give Your Deposit Directly to the Seller.  Open Up an Escrow Account.

The purpose of an Escrow Account is to hold funds for the purchase of a property with a neutral third party to the transaction.  This is something you want to do whether you have found your dream house with me, as your Realtor, or by yourself with someone selling their home directly to you.  Protect your money.  You have no way of knowing if the seller is honest and really owns that house until a Preliminary Title Report is run for you.  If you are representing yourself to a private seller, only show a photocopy of your good faith deposit to them with your offer.  Once they have accepted your offer, go to a local Title Company and open up your escrow account. 

4. Don't Get Emotional.  This is a Business Transaction.

I have been known to place my hands on the face of my clients and gently reminded them to keep their emotions out of the process.  Sure, it's hard, but this is likely the biggest financial purchase you will have made in your lifetime.  This is a business transaction not an emotional purchase. 

Houses cost hundreds of thousands of dollars, if not millions of dollars, and you must think clearly.  Once your heart tells you "this is the one", stop and think clearly.  I like to tell my clients to find everything wrong with the house after they've fallen in love with it.  It is so important to know what it is you are buying so stop, look and listen.

5. Don't Forget to Order Your Utility Services

This may sound too simple, but you need to get all of the utilities into your name and ready to go for transfer to you on the day you close escrow.  This includes PG&E, telephone, cable, water, and garbage.  If you're buying a condo, some of this doesn't apply, but your trusty agent can tell you who your utility vendor is and how to do it, just in case you don't know.

6. Don't Forget to Order Fire Insurance

It's a good idea to have your insurance agent selected before entering into an escrow because your lender requires this information.  The only exception is if you're buying a condo and then it's not a requirement.  But, if you're smart, you will take out a policy to integrate into the master fire insurance policy of the condo association, so you will be covered, just in case.

7. Don't Become Friends with the Seller

I don't care if they have things to sell you, keep everything neutral and professional between the two of you.  Getting too cozy with the seller could be trouble.  Sure you need to know the little qwerks of the new house, and a walk-through with them showing you how to work things is always encouraged, but if you are using an agent, have them go along with you.  Keep everything business like.  You won't regret it.

8. Don't Panic if the Appraisal Comes in Low

In today's market, it's getting harder for an appraiser to really appraise property at market price.  If you are buying a house that is in a neighborhood with a lot of Short Sales, it is possible to have the appraisal come in lower than your contracted offer.  Don't panic.  Let your agent talk to the seller's agent and see if you can renegotiate your contract.  If the seller is unwilling to do this, and you have an appraisial clause in your contract, you can walk away and keep all of your good faith money.  If you don't have that clause checked in your contract, you will either have to come up with cash to make up the difference, or hope the seller will renegotiate.  If they won't your contract binds you to complete the sale and if you decide to walk away, you can forfeit up to 3% of the offer price. 

Keep a cool head.  You can always request a second appraisal by a different appraiser. Appriasals are done by human beings and vary because of that.  It's easier to pay for a second opinion than to try and come up with the additional cash or to walk away.  Try that first before doing anything else.

9. Don't Do it By Yourself!

Everyone thinks it's easy to buy real estate.  They have little knowledge of the laws, the contracts, or the conditions that must be met during real estate transaction.  There really is a value to what we do as Realtors.  In today's tough market, lenders come and go, title companies are closing, and the rules are changing almost weekly.  Don't try to do this by yourself.  Your agent's job is to protect you from making mistakes and helping to make sure all conditions of your contract are met on time. 

If you want to buy a For Sale By Owner (FISBO), hire an attorney to take care of your transaction.  It might be the smartest investment you make in protecting yourself from a law suit.  But, be aware, not all attorney's are able to do a real estate deal because they aren't doing it day in and day out, so they aren't aware of the latest requirements.  Caveat emptor.

10. Don't Ignore Any Lender Requirements

In today's lending environment lender's are asking for more and more.  Buying a home is an intimate process for you financially so understand that they may come back and ask for additional proof of funds, job, credit or who knows what else.  If your parents are helping you, they will ask for a letter from them.   It is critical that you meet every requirement and meet it on time. 

If you follow the rules you'll win the game.  The prize?  Your new house.