The new year and the second decade of the 21st century is only a few days away. Doesn't seem that long ago that we were all panicked at the Y2K bug possibilities and the unknown of the 21st Century. Certainly with the events of 9/11 and the wars in the Middle East, it has not been Utopia.
Life does go on, and here we are near the bottom of one of the worst economic cycles this great nation has ever experienced - and we still are not clear if the real estate market in the Hemet - San Jacinto Valley, CA will take another dip as a shadow inventory or bank owned foreclosure homes are released for sale.
I guess the short answer is no one really knows what the future holds - my own crystal ball is in the shop, waiting for parts to be shipped on a slow boat from China.
What can be said about the current price point is that it is a GREAT time to buy - and I don't want to sound cliché here...but this will be one of the best opportunities in anyone's life to buy real estate - whether it be for a first time buyer moving into their first home, a repeat buyer who still has some equity in their existing home or an investor looking to pad their portfolio. The opportunities we have today in the Hemet - San Jacinto Valley, CA are unprecedented.
I can justify this statement two simple ways.
FIRST in the big picture I believe we can all agree that within the next 5 years the economy should have rebounded and be strong again.
This next statement is not intended for anyone who purchases his or her real estate prior to the popping of the bubble...lets say post 2008. In the next 5 years, we should have a reasonable expectation that our purchase near the bottom of the real estate market should increase dramatically in value - perhaps even doubling in value within 5 years.
Based on this assumption it really won't make a big difference if you pay $10,000 more or $10,000 less for a Hemet or San Jacinto, CA home in 2010. The fact is, you should be sitting pretty by then considering many of the newer homes sold today are being sold for 1/3 of their original price. Many are predicting that it may take 10 years for these homes just to regain their pre-bubble value. If this is the case, buying now for one third the value will allow you to triple your money in 10 years - now that is a good investment in anyone's book.
SECOND point to justify the fact that 2010 will be a great time to buy a home in the Hemet - San Jacinto valley is the fact that many homes are still being sold for $50 to $60 a square foot.
Hello, take a trip to Home Depot or Loews and check out the cost of new construction materials. You would be building a very cheep house if it came in anywhere near $100 a square foot in raw materials. Add labor to that and the price goes up substantially...oh, and what about the land the home sits on - does that have any value? You bet it does. So, you would be very hard pressed to be able to build a home for less that $150 a square foot and could very easily spend well over $200 a sq ft with some upgrades.
So how can you get hurt? Another good question and the answers are much simpler - not be prepared. Have you ever heard of the 6P's?
PROPER PRIOR PLANNING PREVENTS P*SS POOR PERFORMANCE
NOW IS THE TIME TO PREPARE
So, if you have read this far, I am guessing you are seriously considering what it takes to empower yourself to buy your Hemet - San Jacinto, CA real estate. What comes next is written to the lowest common denominator of all real estate buyers - the first time homebuyer, but is very applicable to the repeat buyer and the real estate investor as well.
Understand The Local Market: Take the time to talk to a local, full time REALTOR who lives and works in the area you want to live in. A brother-in-law in the next county or a soccer mom that considers real estate an opportunity to earn some extra money are probably not your best choice. Remember, this is going to be the biggest purchase of your life and will have serious implications on your life for years to come.
The key here is 1) local - lives and works in your desired area, 2) full time, and 3) REALTOR® and not Real Estate Agent.
Search Yourself: This is a big bullet - but homeownership is not for everyone. Take the time to weigh the advantages and disadvantages of owning a home. Talk to your tax advisor (REALTORS are not licensed to give tax or legal advice).
You need to make certain that you have a solid job and will have the funds necessary for the down payment, repairs, maintenance and even customization with remodels.
It is never too early to talk with a lender, Like Hillary Wilkinson of Patrion Mortgage, the mortgage branch of Altura Credit Union, with two brick and mortar branches in the Hemet - San Jacinto Valley. You have the opportunity to look at loan costs, interest rates and evaluate the service you will receive.
Another early step is to use different calculators to help determine what is right for you. Several are found on my website, including a Rent vs. Own Calculator that many find useful.
Your Credit: If you have never had any credit, now is the time to start. Establish a secured credit card with Altura Credit Union and other financial institutions as well. Use the credit and pay it off every month. If you have credit, then know your score and figure out what you can do to improve it. A 620 is pretty much the minimum you want to be at, 680 is preferred and if you can reach 720 you should be able to qualify for the best rates.
If you need to improve your credit score then start by making sure all of your bills are paid on time, every month. If you owe late fees - pay them. If you have charge offs or collection accounts, make arrangements to pay them - just try and negotiate the removal of the derogatory information. Of course, if you have any disputes - then now is the time to get them resolved. One of the newer issues with credit repair these days is Identity Theft - if you have any of these issues, they also need your attention.
Homeowners Insurance: This is an area of importance that is often overlooked. Most companies that provide auto insurance will also have homeowners insurance available to you with a discount on both policies if you keep your coverage with the same company. In some cases, a good auto company may not supply the best homeowners coverage. Do your diligence and find the policy that will work best for you. If you do this ahead of time, it will be one less stress factor that you will have to consider when trying to close escrow. This takes time for all parties and is not typically anything that an insurance agent can just whip up for you the day before you are scheduled to close escrow.
I work closely with Nathan Giddings of Allstate Insurance Company. The Giddings Insurance Company has been serving the local Hemet - San Jacinto Valley for 33 years.
Prepare to Apply for Your Mortgage: If you have been working with Hillary she will be able to provide you with a letter indicating that the underwriter has reviewed your application and documents and you are ready to buy a home. This is a huge difference in service between different Loan Officers. Many will only do a cursory review of your documents and wait to send your application to underwriting only when a contract for a home has been fully executed by the buyer and seller of the house for sale. This is powerful strength that your REALTOR will be able to skillfully leverage during the negotiating process.
There will be many documents you will need to gather and provide any loan officer - so get them together now. Here is most of what you will need:
-
-
- Tax Documents - 2 Years of tax documentation to include Returns, W2s, 1099s and anything else to support your claims of income
- Proof of Employment - bring in at least 2 months of pay stubs from all sources of income
- Bank Statements - 2 months from all accounts and be prepared to explain any unusual expenses or deposits. If possible, it is always best to ‘season' down payment money for 6 months, especially if any of this is a gift. This is not always necessary, so check with your mortgage broker.
- Retirement Accounts - If you have a 401K or any other retirement account make this information available to your loan officer.
- Credit Repair - If you have been working on cleaning up your credit bring copies of what you have been working on. It has been known to happen more than once or twice that a removed item goes back on your credit history rather quickly, for any number of legitimate or mischievous reasons.
- Alternative Credit: In some instances when a borrower does not have any established mainstream credit ‘alternative credit' in the form of cell phone bills, cable TV bills, utilities, rent and the such can be used to create an acceptable credit profile. Bring proof of all payments made over the last year to prove you make your payments on time and are responsible enough to own and manage your own home in the Hemet - San Jacinto Valley.
- Residency - If necessary provide proof that you are legally entitled to purchase real estate in this country.
-
Review All of Your Paperwork: Never let anyone say ‘just sign' that the volumes of paperwork you will be signing and being responsible for are never standard - no matter how many times they have been used in the past.
After applying for a loan your mortgage broker will provide you with a "Good Faith Estimate" or GFE. Make certain that these numbers correspond with the loan you receive - in particular pay attention to the interest rates, loan costs and other closing costs.
You will also receive a "Truth in Lending Disclosure" (TIL) from your loan officer that has very important information that you need to understand.
The same goes for your real estate purchase agreement. Make certain that your offer is ONLY on a California approved form and that your REALTOR® explains it in as much detail as necessary for you to fully understand the document. This goes the same with all of the other disclosures you will receive throughout the transaction.
To sum this up, I cannot emphasize how important it is to review all of your mortgage and transaction paperwork that you receive before you apply for a loan or write an offer, during the purchase and loan process as well as at closing.
The Home Search: Remember that this is going to be YOUR HOME - so get the right one. Know what your needs are - if you are currently paying a storage fee for a boat or RV, it might be important to have RV parking at your new home. The point is identify your NEEDS and don't settle on any home that does not meet your needs..
Then there are the WANTS which should not be overlooked. Wants are important too and as many as possible should be factored into your buying decision - but the lack of a particular ‘want' should not be a deal killer. For example, you may want a separate soaking tub and a glass enclosed shower in your master bath. However, you find the perfect home that meets all of your needs, for a price you are comfortable with and it also has many of your wants included but the master simply has a shower stall and the only bath tub is a bath - shower combo in the hall bathroom. This should not be a deal killer.
When learning the local market you should have learned the high property tax areas and the low ones so that you will have a clear idea of what costs are associated with a particular home. This goes for Homeowner Associations (HOA) as well. The key is to eliminate surprises after a offer has been negotiated and accepted. You will also want to have an idea of what operating and maintenance costs are associated with a particular type of home.
Depend on your REALTOR® to help narrow the search filed for you as a true professional REALTOR® keeps up to date with the market. A good REALTOR® will be able to provide you with tools to do your own searches of current active MLS listings and notify you as soon as something new comes on the market or a price drops a home into your search criteria.
A word of caution about the Internet tools that are easily available for free with little or no commitment on your part - stay away. Realize this business model is in business to earn a profit and what appears to be free is actually full of advertising and income opportunities for these sites to earn from you - sometimes without even realizing it - as many advertisers pay on impression -meaning how many times you view an ad... it doesn't matter if you buy anything or even click through. Because of the incentives to keep you on their site, the data they provide is often outdated and incomplete. The reality is that REALTORS® are still and always will be your best source of local market information.
I hope that this will provide any homebuyer - first time; repeat; and investor with an insight to the advantages and the process of buying real estate in the Hemet - San Jacinto Valley, CA during the year 2010 - an opportunity that likely will not be repeated in our lifetime.
At the Excellence in Real Estate Team we have the services and local knowledge to assist any buyer in the local Hemet - San Jacinto CA real estate market to achieve your goals. At the Excellence in Real Estate Team we know this is YOUR home and YOUR decision - we are only here to serve.
Comments (0)Subscribe to CommentsComment