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Greg & Lorena Giambo's Blog

By Lorena Giambo | Agent in Bakersfield, CA
  • Homebuyer Series-3 Getting Started

    Posted Under: General Area in Bakersfield, Home Buying in Bakersfield, In My Neighborhood in Bakersfield  |  November 28, 2010 8:28 AM  |  739 views  |  No comments


    Getting Started with "The Offer Phase," sometimes it's "Part of the Process"


    Buying a home is a process, an emotion filled process, sometimes a bit like a Roller Coaster;

    you fall in love with a House, you make an Offer, you keep checking your phone, your email,

    waiting to hear something.  You need an update, you get an update, it's going to be Monday or

    Tuesday until there's a decision.  This runs a couple of days longer than anticipated and

    sometimes in the end, you find that you have to start the process all over, again! 


    One nice trend in the market now is the Priority Purchase Period for Owner Occupant Buyers. 

    These priority periods place an emphasis on neighborhood stabilization, attempting to bring

    families longterm into a neighborhood.  Sometimes you may find yourself competing with other

    offers on these homes too, but you're not competing with investors who generally have better

    financial resources.


    Priority periods are offered by a few banks (REO/Foreclosure/Bank-Owned) and Fannie Mae &

    Freddie Mac homes, usually giving the first 2 weeks of a new listing to buyers that plan on living

    in the house they buy.  Also, HUD (Housing and Urban Development) homes, sometimes

    referred to as "Government Foreclosures," are once again part of the local inventory and many of

    these homes give a priority period of the first 30 days to owner occupant buyers. 


    You might get an Accepted Offer with the first Offer you make, but if you don't, keep going

    and you'll be on your way to getting an Accepted Offer, or Counter Offer and maybe a

    "Highest and Best" that leads to an Addendum and Acceptance of an Offer.  Sometimes, it's

    "Part of the Process."

  • Homebuyer Series-2 Getting Started

    Posted Under: General Area in Bakersfield, Home Buying in Bakersfield, In My Neighborhood in Bakersfield  |  November 1, 2010 5:56 PM  |  826 views  |  No comments

    Getting Started with "The Price is Not The Price" and "Everyone Wants the Cherry"



    It's True!  Even when our local housing inventories are balanced or leaning towards Oversupply,

    the nicest homes that are correctly priced, will usually get an Offer or Multiple Offers within the

    first few days of the Listing.  Underpricing can also create strong competition among Offers,

    with "Highest and Best" (highest price and best terms) Counter Offer scenarios and in the end,

    "The Price is Not The Price" and if the house is a Cherry that's underpriced, it can be a little like

    a feeding frenzy, because "Everyone Wants the Cherry." 


    All homes have a "value range" and sometimes the Cherry is priced at low value or below the value

    range, yes sometimes a property will be intentionally under priced to increase showings and offers. 

    There was one Bank (Z) during a period when our inventory levels were very low, that would price

    their Listings about 10% below neighborhood comparable sales and they would get the expected

    Multiple Offers, and respond with a "Highest and Best", or Counter Offer the price or terms, or both

    and sometimes ask to remove appraisal contingencies. 


    I started working with some new clients during a low inventory period, they called one afternoon to

    say, a new bank-owned listing had just come up on their MLS scan and they went on to described

    a Cherry that was underpriced.  I told them I'd set an appointment to see the house and give them a

    call back, but it sounded like a Bank-Z listing and if it was, they'd need a Pre-approval from Bank-Z

    to make an Offer, it was part of a screening process. 


    Sure enough, I pulled up the listing, Bank-Z.  I set an appointment and called my clients.  They

    were impressed that I was right about the listing being Bank-Z and they were fine with getting the

    second Pre-approval if they liked the house enough to make an offer, which they did.  The only

    problem was, this was the first Offer they were making and it was part of a Multiple Offer situation

    because "Everyone Wants the Cherry".  I explained why "The Price is Not The Price" and provided

    comparable sales to support the "True Value" range; List Price, Sale Price, Concessions when

    Paid by the Seller.  In the end, my clients embraced the List Price with their Offer and asked for

    Concessions.


    There's a learning curve for clients and after seeing enough homes and making Offers that don't get

    accepted, they end up getting more of a feel for the value range.  Some or many of the Offers in a

    Multiple Offer situation have already gone through the same learning curve and are making Offers in

    the "True Value" range.  Adding to the confusion of just starting out, there are times when a

    property is Overpriced!  Ahh Grasshopper, you have learned much, but still have much to learn.


    It's important to know the values and the trends in a market at any given time.  There are some

    really good deals in the market now, but remember, there are times when "The Price is Not The

    Price" and "Everyone Wants the Cherry."

  • Homebuyer Series-1 Getting Started

    Posted Under: General Area in Bakersfield, Home Buying in Bakersfield, In My Neighborhood in Bakersfield  |  November 1, 2010 1:13 PM  |  782 views  |  No comments

    Getting Started with Loan Pre-Approval. "No Ticket, No Laundry!"


    The new era of home ownership from a lending perspective is all about "Sustainable

    Home Ownership" and sustainability is initially determined during the Pre-Approval

    process.  Here's a simplified version of the Pre-Approval process and how it works. 


    First, you meet with a lender to determine the maximum amount they will loan you

    to purchase a home.  The lender looks at your monthly income and financial obligations you

    have, the amount you pay monthly on currently outstanding debts, along with other cost of living

    expenses and derives a "debt to income ratio".  These combined with your credit history or "your

    willingness to repay debt obligations", are the basic elements that make up your "FICO" credit

    scores.  Together, these help a lender determine up to how much they will loan and the interest

    rate that the loan will be based on.  The loan amount also takes into consideration the additional

    expenses of maintaining your new home including- property taxes, special assessment taxes

    and possibly Homeowner Association dues. 


    Next, the lender will tell you the minimum down payment you will need to purchase your new

    home and verify the source of funds you will be using.  The Down Payment can come from your

    savings, or your down payment may be "gifted", a gift from a relative or friend.  Sometimes there

    are neighborhood stabilization program (NSP) funds available for down payment assistance on

    qualifying properties and income eligibility.  Bakersfield currently does not have NSP funds available

    and the Economic and Community Development Department is recommending that anyone

    interested check back in January 2011.   Additionally, you will need "Closing Costs", the fees you

    pay to close the transaction, including Loan, Escrow, Title and Impound Account Fees.  You can

    also ask for the seller to pay all or part, depending on the amount, of your Closing Costs. 


    Ask your lender to give you a couple of payment scenarios for different loan amounts, the amount

    of your monthly mortgage payment including property taxes, at the interest rate you qualify for,

    along with down payment and closing costs figures.  This will help you decide what range you'd like

    your payments to be in, regardless of the maximum loan amount you've been approved for. 

    Aside from determining the price range for the homes that you'd like to set appointments to see,

    once you find a home that you'd like to make an offer on, you will need to include your Pre-approval

    Letter along with your offer.  Without a Pre-Approval Letter you have an incomplete offer and your

    offer will be rejected or at best put on hold until you are able to provide one.  "No Ticket, No Laundry!"

 
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