Despite the difficulties in obtaining financing for a home purchase, there are great rewards for those who dare step into home ownership. You will need a couple of qualified people to help you navigate through this obstacle course: A Lender and a Professional Realtor. Open your eyes to today's opportunities! Here are 7 proven strategies to help you navigate to a successful home purchase.

• Begin by gathering all your financial documents first. You will need among others: current pay stubs, copies of tax records from the last two years, recent bank statements for all your accounts, copies of Divorce decrees if applicable. If you have funds in CD's or 401Ks or other income, you will need to bring copies of those documents too. 

• The next step is to talk to a lender about your finances. Find out what you qualify for, how much money you need to have for a down payment plus closing costs. You can do this by simply asking your lender to do a pre-qualification for a loan. After this meeting you should know what your price range is and how much your monthly payments will be.

• Make a list of what is important to you and your family when is comes to housing. Do you really need to have 4 bedrooms?  is a pool an absolute necessity? Keep in mind that the First Home is not exactly your Dream Home. Buy below your maximum qualifications if you can, that will leave you room to save money by applying a small amount each month to the mortgage payments to reduce the principal amount borrowed.

• Meet and interview a local, Professional Realtor. Choose a person that specializes in the area that your are interested in. You can do a lot of research on your own online, but a professional Realtor's help is absolutely necessary. Remember this: Realtor's commissions are paid for by the home seller. There is no cost to you when you buy a home. Use his/her knowledge and expertise... for Free!

• There will be other professional trades people that will get involved in a typical real estate transaction. your Realtor will assist you here and on your behalf, he/she will contact home, roof, termite and other inspectors. The lender will take care of having the house appraisal done for you.

• Once you have made an offer on a house, you will make a cash deposit into a title insurance company. This neutral company will not only run an escrow for you, it will also ensure the title of the house in your name after escrow closes and you become the new owner of the house.

• Read and understand all documents handed to you and the time elements involved during the transaction. The more you know the better it will be for you. if you take these steps in order, once you have picked the right house and made and offer that has been accepted, you will have about 30 to 40 days before you can get the house. If the house, however, is in a short sale, it might take months before you can close the escrow and call that home your own.

There are plenty of reasons to buy your first house. Beginning with pride of ownership, appreciation, mortgage interest deductions, property tax deductions, capital gains exclusion and build up of equity just to name a few. The cycle of real estate will continue, just as when prices went up and then come down, we will see in the near future this trend reversed. Buying a house in the long run is far better than renting.

The CA Residential Purchase Agreement is the the only document that a lender will accept as the basics for granting a home loan. Home buyers, specially first time home buyers, are reluctant to sign such document on the spot, after all, with the required Buyers Inspection Advisory and the Disclosure Regarding Real Estate Relationships, those are 14 pages of gibberish mambo jumbo stuff that is not easy to understand when read for the first time.

At the height of the market, we lost a great home because the first time buyer took 2 days to read the contract and another 3 hours for me to clarify the questions he had when he read it. By the time we presented the offer, another buyer's offer had been accepted. I could not blame the buyer for not signing on the spot. For this type of purchase, as a consumer, I probably would have done the same.

That is when I decided to actually write the offer earlier and even before I show the first house to buyer looking to buy a home. Once we tour the houses for the first time, I give the buyer the entire 14 pages of an offer written on the best house we saw. By previewing first, I would know which house to write the contract for. Since I do not show houses unless the buyer is pre-approved, I also know the finances, I write down the exact numbers for a down payment and even calculate an estimated buyer's closing costs.

Having the buyers have the contract on the first tour of houses, with real numbers, and sending them home to read those documents is a huge time saver for both of us. I tell them to assume that we just bought this house, and that these are exactly the documents that we will use when presenting an offer. I ask them to read those pages, and make notes on them to ask me when we see each other again. By reading the contract without any pressure for time, they will be ready when the time comes to sign an offer. I do make a point on subsequent meetings to ask about the contract.

Yes, this might sound like putting the cart in front of the horse. But we accomplish so much, the buyer's confidence on the process is key for the entire transaction to start and finish on time. A well informed and educated consumer is also a very happy Home Buyer. This type of home buyer makes the lender, the seller, their Realtors and the other 30+ people who somehow get involved in a typical real estate transaction very happy too!

Taking the steps in this order takes the fear out of actually purchasing a home, the knowledge, understanding and familiarity might avoid the infamous "Buyers Remorse" for which I also have a prepared medicine. After the offer is accepted, I give the buyers colorful M&M's in a prescription bottle. I tell them to take 2 pills when they feel scared or uneasy about their purchase, if the feeling is too intense to double the dose, that the color of the M&M's does not matter.

But if they feel real bad about what they bought, to call me immediately. If the buyer is not 100% into it, I want them out of the transaction as early as possible. If you are looking to buy a house right now, ask your Realtor for those documents and familiarize yourself with them.

Dear Mr. and Mrs. kaiser. Is has been a pleasure working with you. Now that the house has been sold, and you have settled in your new home, I have one last request for you before I close this file once and for all.

In my business, I depend on a good reputation, but no matter how hard I work, nobody will know it until somebody else points that out. Most of my work unfortunately is done behind the scenes, because of that, a good letter of recommendation from a recent client is a very valuable tool, that I can provide to people considering hiring me for their real estate needs.

I would like to ask you, if you would consider giving me such a letter. After all, there has been 3 different transactions within your family in which I have been involved as the listing Realtor. If you think I have done a good job for you and your family, would you mind writing me such a letter?

Of course, I am assuming you were happy with my overall services. But there is that possibility, albeit a remote one in my opinion, that I did not measured up to your expectations. It would be even far more valuable to me to know that. If that is the case, I will ask you to please share that with me, and give me your opinion as to why I do not deserve such a letter.

Customer satisfaction is my goal 100% of the time. Your opinion of my work is of the outmost importance to me. I will be forever grateful, if you would take a few  minutes of your time to share your thoughts about my work in writing with me.

Sincerely Yours

Antonio

In our last closing, our colleague, the listing agent went for a minor surgery and... did not come back! As the selling agents, we were left wondering for days who would take over and finish the transaction. We had sent signed documents via email that could not be retrieved for days. We understand the broker of record is actually the responsible party, but I wonder, what would happen when the broker is the listing agent... and he dies in the middle of the transaction, who would take over then?

The fact is that we all will go sometime, and even though, we do not like to think about it, we must have a system in place that could allow somebody else to step in and take over, at least on the business part. An assistant is good, but when dealing with clients, (like in our case) there apparently were conversations between the seller and her Realtor that altered the transaction. Seller implied a promise from his dead Realtor to her, that his broker had to actually pay for. A promise of free rent for 15 days! no, there was nothing in writing about that. But there was no way to verify that.

   Stop and think for a minute... If you die right now... could someone sit on your desk and know what were you doing? What were you thinking? Do you have your passwords written somewhere where a trusted person can have access to them if needed? If there is a deadline (no point intended,) that will go unnoticed and because of that your client could be harmed?

As I write this post, I can think of the myriad of passwords that I use for almost everything, my computer actually reminds me of some of them, which could be helpful for someone taking over my desk. They will need a passord to get into my computer! But the fact is, it will take weeks for another person to know where and where things are in my little desk. and that is only for my business life! Yikes, I now remember that I do have a personal life that includes bank accounts, social security numbers and of course more passwords.

If you have a system that could help in a situation like this one, I really would like to know, you would think that a husband and wife team would have an advantage, yes we do, but I think it needs to be more organized, and maybe one day, do something similar to a fire drill: Honey, I just died! what would you do? Show me!

I believe that when we are born, we are given a secret number that is tattooed somewhere in each one of us, and the almighty plays a big Bingo Machine up there, that when it spits our number out! we just drop dead. Period, no request, no permission granted, nothing. By the way, how is your business today?

In my 26+ years in real estate, I thought I had seen it all... well, not exactly all, here is a new one for me. I have been very adamant about NOT taking a listing that is not priced properly. Overpriced listings are bad for everybody, for the seller, the home buyer, the appraiser, the Realtors, even the neighborhood! Why is it that sellers want yesterday's prices? haven't they read the real estate news? The market has dropped... a lot!

About 3 months ago, I was called to put a house on the market, I did my usual research, took a good look at the house, reviewed the comparable sales with the owners and help them secure a stagger, and even a carpet outfit to replace a worn out carpet in the hallway. My suggestion, based on comparable sales, and my knowledge of the neighborhood, (I live 4 blocks away from this home) was to price this home at about $650,000. The sellers were not happy at all. They wanted to list it at $775,000! what a big difference!

I looked at my research again, and could not find a justification for their price. I knew that I will never have comparable sales for the appraisal. I offered to list it at $675,000 with a proviso that we reduce the price after 3 open houses, the difference was too big for them to overcome, my standard speech for a situation like this one was given: "... I am sorry, I rather turn you down, than let you down..." I cannot work with your price. They told me, they will think about it...

  The very next day, I received a beautiful plant delivered to my house with a note of thanks. They informed me that they were going to go with another Realtor, and thank me for my efforts. 3 days later, the house was listed on the MLS at $775,000. The other Realtor had open houses almost every weekend, after 30 days the price went down to $750,000, another 3 weeks later to $725,000 5 weeks later the price dropped again to $699,950 and then again to $675,000, then it went pending. Last week it closed escrow at $640,000!

Who dropped the ball in this scenario? the other Realtor did get paid. I upheld my high values and did not get paid, the other guy spent time and money, but got the job done. Then, I realized, that the seller does have the right to try and get the best possible price for his home... Even if it is an unrealistic price to begin with.! Sellers, are at a disadvantage when playing real estate, if the seller does not get the best price, he cannot go back and fix it. The buyer can realized he is overpaying and pull out of escrow before is too late, the seller cannot accept a higher offer once is in escrow.

If this would have been an isolated incident, I would have not even writen this post. But earlier this year, I had a similar situation where I was called to sell a house and my price based on comparables told me the house was worth $630,000 tops, I always look at how I will provide the right 3 comparable sales to the appraiser. I did not have them here either, I also refused to list it at their high price. The seller had another agent list it for $675,000 and it sold in ONE day! The kicker? an all cash buyer come and close escrow in 7 days... yes, this seller was lucky, because there are not too many all cash buyers ready to overpay for a house anymore.

As Realtors, we are paid for our knowledge and experience, but overpriced listings and no comparable sales are a bad and very expensive proposition. Appraisers are on the firing line, and we have lost weeks of previewing, showing houses, writing contracts and then after being in escrow for weeks, the appraisal comes and shuts down the entire transaction and sends everyone back to square one. Does anyone out there have the magic formula? I would like to know.

When preparing the house for sale, homeowners have a clear choice: A) Keep a low budget and do it yourself (DIY) or B) Go Pro and make some money. The difference is actually like day and night. On the DIY project with a low budget, the house most likely will take time to sell and the offering price will reflect the quality of the materials used and the level of workmanship.

Getting professional help is the way to go, it will impress would be home buyers, it will show well, it will sell faster and will bring in more money because it will give the impression that the house has been well taken care of, home buyers usually pay more for quality.

Home buyers look at a lot of homes for sale before making an offer, and usually can spot those that have been poorly dressed for sale. There is the presumption that there might be even more problems resulting from neglect and hence will not even consider making a decent offer, the fear of discovering something more serious that require expensive repairs is well founded.

Preparing the house for sale is a very important step, not only does the house has to show well, if you can prove that it has been well taken care of, and is in move-in condition, you will have an easier sale. The following steps ought to help you:

• Pack before you put the house on the market, keep just essentials pieces needed for a comfortable living,  put the rest on storage. Less is more when showing the house

• Have a home and pest control inspections done well in advance, make sure you call a local, reputable company that can stand scrutiny.

• Address any and all issues from the reports, have the work done professionally and with the necessary permits. Not only would you be protected from liabilities by their warranties, home buyers and appraisers will give more value to the house because of its condition.

• Nothing is more inviting than a fresh coat of paint and some new flooring, special attention should be given to the front of the house, the famous "curb appeal" is very important. Fresh flowers ad color and life to a dull yard.

• When it comes to paint, do not just go "hospital like" white paint, ad some warm, earth tone colors, and here is a trick, empty a small bottle of vanilla into the can of paint, it will give the house a nice "home like" kind of smell. This is a must if you have pets, or if there are smokers in the house.

• Get some high wattage light bulbs and flood every room with light, and do not forget to have all windows cleaned. Speciall attention should be given to bathrooms and the kitchen. They should be well lit and spotless!
  

Remember and double check this: the IRS sometimes considers any work done to the house up to 6 months prior to listing it as an expense of sale. Capital gain taxes could be reduced by the cost of fixing the house. There is another benefit to this approach of using professinal help: use all those invoices, warranties and bids as part of your real estate disclosures, make sure the buyers sign and acknowledge receipt of those documents.

Sometimes I take my seller clients out of their house and walk them across the street, I ask them to turn around and look at their house with home buyers eyes... If they like what they see, we are fine, if they don't then we have some work to do. Happy selling!

If a future home seller would take the time to check the credentials of potential listing agents, they could very easily weed out those who are not fitted for the job. After all, a listing agreement presently will tie up the seller to his Realtor of choice for about 4 to 6 months. If you, as a home seller, have the wrong representation, it's your fault. You, Mr. Seller did not do your homework, as simple as that.

 A quick look at my MLS, here in Alameda County, on the East shores of the San Francisco Bay, shows an incredible array of listings of all types. The ones that stand a good chance of attracting a home buyer, are those that simply have the basic information, i.e. a few photograhs, a good description of the property on the remark section, and an easy to find listing agent with an office with a person who actually answers the phone during normal working hours. A few Realtors even have the audacity to write on the comment section for other Realtors: "NO calls, only emails."

The person who is going to be selling a property, should call on one of the listings of the Realtor he is thinking of giving the listing to and pose as a home buyer. Many things could come out of that conversation that could help decide whether this individual is the right person for the job. Here is a short list of the items to look for.

1. How quickly does this Realtor responds to calls?
2. Make a tentative appointment to see the house. How flexible is this person?
3. Is this Realtor eager and available to show the house within hours?
4. Ask where on the Internet you can find more information about the house
5. Compare the Realtor's web site with others. How do the listings show?
6. Is the site easy to navigate? Is information clearly presented?
7. How well does this Realtor know your neighborhood? How does he sells it?

In my area, I know there are a couple of listings that will probably never sell! One has a Realtor that works about 3 hours away. I can just imagine, how he reacts when someone calls and ask to see the house. Obviously, he just expects that putting the house on the Realtors MLS, another Realtor will sell it for him. Another moved out of state but still comes every now and then and lists homes for sale and his co-workers sort of take care of his business. If these sellers would have just made a couple of phone calls, and pretend they were home buyers, they would have seen how bad these houses were represented. Mistakes like these can costs home sellers thousands of dollars.

Do not allow YOUR HOUSE to be what I call an "Orphan Listing" Similar to REO's and some Short Sales, those are listings where it appears nobody is in charge! banks sometimes assign listings at random with agents who are not familiar with the area, and do not seem to spend any time advertising those listings. Their great marketing ploy is only to post the listing on the local MLS.

Finally, if you already have your home on the market, go find it on the Internet! Find out how it shows, is it missing important information? use the list above and see what happens. On almost any real estate site on the Internet you can simply put your zip code and a price range, your house should show in all it's glory... or not! If your Realtor have done his/her job properly and professionally, and your house has not sold... REDUCE THE PRICE! 

If you are selling a house in San Leandro, CA. You should hire a Realtor who knows San Leandro, CA. If you hire a Realtor whose office is too far from the property, you might be shooting yourself on the foot. A local Realtor will have far more flexibility and an expanded knowledge of your neighborhood than one whose office is miles away. Smart home sellers who choose a local Realtor to sell their home will be ahead when making their move. Via the Internet, Realtors advertise far and wide, and they flaunt knowledge of the entire county and even nearby counties, but can they really service all areas?

The personal knowledge that the local Realtors have about their area and their city is very important because this information when provided to a potential home buyer can help him/her choose this particular community versus another. There are communities that have very specific local point of sale ordinances that can become a serious legal problem for the seller, if not disclosed properly to the home buyer by his Realtor.

If you are selling a house in the city of San Leandro, a community right across the bay from San Francisco, your Realtor should know everything about the city of San Leandro that a potential home buyer wants to know when considering moving to the area. Realtors are often asked about schools, demographics, crime statistics, distances to major airports, public transportation and local amenities among others. A professional Realtor not only needs to know this information, often times, uses it to attract potential home buyers.

If a home buyer wants to see the house, and the Realtor is even 20 miles away, it will take him about half an hour to get to the house, spend about 15 minutes showing the property and then another 30 minutes to return to his office, without traffic, it will take about 1.5 hours to show one house, this is not something this Realtor will want do too often. A Realtor that is a within the city could get there within minutes, and that is the kind of service that benefits the seller the most.

After all, the most important part of the job of the listing agent is to market the property in such a way, that it attracts a lot of attention and therefore generates a lot of showings of the property. A local Realtor will be far more efficient by being close by than one that works too far away. And Realtors most likely won't advertise a lot in an area where they do not work all the time.

I have been selling real estate exclusively in San Leandro, CA. since I become a Realtor in 1985. 98% of my listings are within the city, mostly in the neighborhoods of Bay-O-Vista, Estudillo Estates (where we live and work)  and Assumption Parish. When I receive a phone call on one of my listings, I often times surprise the caller by saying "... If you are in front of the house, I can meet you there in 10 minutes or less." It helps that my wife is also a Realtor and we work together, so one of us is always ready to go show a listing. We have been able to sell a few of our listings almost on the spot because of our ability to respond quickly.

I highly recommend that home sellers hire local Realtors. If you need help choosing the right local Realtor, drop me a note, of give me a call, via my association with several groups of professional Realtors, I can find you within hours not only the 3 closest but the 3 most professional Realtors in your town. This is a FREE service! If you are thinking about selling, go ahead give me a call, I'll back my words.

Setting the correct asking price for a house from the beginning, is by far one of the most important steps in selling the home. But how does the homeowner know what is the right price? Who sets the asking price? the seller? his Realtor? the home buyer? the appraiser.? How do they come up with the asking price?

Smart home sellers should interview at least 3 local Realtors. In a typical listing presentation, the Realtor will bring a copy of the tax records for the subject home, plus real estate data from the neighborhood. This data includes homes offered for sale, pending sales (those that have already accepted an offer but have not close escrow yet) and a list of all homes that have sold in the area within the last 3-6 months similar to the one the owner wants to sell. Realtors call this a CMA (Comparable Market Analysis).

To set the correct asking price for the house, the first comparison will be to look at the number of bedrooms, bathrooms and square footage. Chances are that the builder who built the neighborhood used the same floor plans and many homes in the area are very similar in sizes of lots, garages, fireplaces etc. The second part of the evaluation will include the upgrades or deferred maintenance that the subject property has incurred, adjustments can go up or down depending on condition. Home sellers who understand this data are actually doing an appraisal of their property, because that is the exact information that the buyer's lender will use to determine the value of the property for purposes of granting a purchase loan to the buyer.

Even though not all homes are built equal, or maintained the same, the median price for the home should stand out pretty clear. Appraisers must prove the selling price with at least 3 recent homes sold in the area similar to the one they are appraising. Most appraisers will be far more conservative than the homeowner when it comes to assigning value to improvements. If you put a $20,000 kitchen, you cannot simply add $20,000 to the value of the house, remember that there used to be a kitchen there, and the value of the old kitchen must be reduced from the $20,000.

The difference between a Realtor CMA (Comparable Market Analysis), and an appraisal are the forms in which the values are shown, other than that, they should both come up to the same price range, since the data available from the neighborhood is the same for both parties. Home sellers who want their property sold should pay attention to these numbers because it is here where the correct asking price should be set, leave a little bit of room to grant the buyer a small discount and make sure that the appraiser will have no problem coming up with the correct value of the house.

Most home sellers will want the highest possible price for their homes and often times go way above the median price for the area and put themselves out of the market. Unfortunately their Realtors will go along with a higher price in order to represent the seller and take a listing thinking that down the road they will adjust the price to the correct level. Everybody loses in this scenario.

If you are a seller, and your Realtor tells you a price, your next question should be: "Now, suppose I am the appraiser, can you show me 3 homes that justify that price?" If your Realtor cannot deliver, move on to the next one. Because if you do not, then you are going to be sitting on that house for a very long time. Even if your buyer comes along and wants to pay your inflated price, if the appraisal does not match the selling price, the bank will not lend and the buyer cannot buy, and you will not be moving any time soon, as simple as that.

If you ever find yourself thinking about selling a property, email me a note, I can help you find the 3 top local Realtors that will come and give you a professional evaluation and help you sell your home for the highest amount of money possible, in the shortest period of time and with the least inconvenience to you and your family, and the best part of all: This service is FREE of charge to you.

One of my best friends is seriously thinking about walking away from his mortage via a strategic default. But his guilt and sense of moral obligation and ethical responsibiliies are killing him. He wants my opinion... he bought his home in 2007 for about $850,000 and it is now worth only $550,000. His payments are going to almost tripled the amount he currently pays in about a year.  A strategic default occurs when a homeowner stops paying their mortgage even though they are still financially able to do so.

I told him the standard Realtor talk: I could not tell him what to do, he needed to talk to a his bank about possible options for a loan modification, also to talk to his CPA to understand potential tax liabilities, and to a lawyer for potential legal ramifications, and to consider the hit on his credit scores.

  Then we went off record, and as friends we discussed the issue in an open manner. I do not understand why is the homeowner the one that is supposed to be the only responsible party and to pay up and not go back on his promise to hold his own. A loan after all, is a business transaction between an investor and his partner, the borrower. The Investor puts up the money and expects a return in his investment, the borrower agrees to make payments until the loan has been paid off completely. Investor makes his money back plus some helfty profits and the borrower will end up with the property free and clear, hopefully worth a small fortune.

There is no investment of any kind that has no risk at all. Lenders have always reaped good returns on those investments, and traditionally have had good  safeguards against losing. They even have Private Mortgage Insurance (PMI) that they ask the borrowers to pay for, and the government has a golden parachute to bail them out. How come they do not have moral or ethical obligations to make them feel guilty? They have scared people into staying in their homes and continue to make payments even though, those houses will remain underwaterl for many years.

Home owners traditionally have paid their mortage, and their house was one of the major debts that they wanted to pay off first. The investors greed helped create the economic collapse, the no-money, interest only loans they sold to unqualified borrowers were irresponsible, they deserve to lose. Home borrowers already lost their downpayment, and their closing costs, along with their dreams, sometimes compiled with the loss of a job and their own self steem. Why should they feel guilty about losing the house? why should they be the only ones asked to be moraly and ethically correct? The lenders have recovered quickly and will go on making money. Homeowners, however, will take years to recover, if ever.

We concluded that as equal partners in this transactions with the banks, homeowners should be able to call it quits, accept the loses and go forward and not feel guilty about a strategic default. Making high payments on a house that has no chance of providing a return for years to come is not in the homeowners best economic interest.

My friend will let the house go, and start the recovery period, knowing that nobody will loan him money for at least 3-7 years. He will rent for a while, save money and be prepared to invest in homeownership again... sometime down the road. He realized that he has nothing to be ashamed off, or guilty of, he will lose his down payment or initial investment, it was a risk he took, the lender took a risk too, it is after all, a simple business transaction that did not pay off  for either party. If you make a bad investment, you have the right to walk away from it.