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Successful Real Estate Solutions

Welcome to Joan Weisman, Broker's Blog

By Joan Weisman | Broker in West Los Angeles, CA
  • Should I sell my house?

    Posted Under: Home Selling in Mission Viejo  |  February 1, 2012 7:01 PM  |  302 views  |  No comments

    As the dust settles on the real estate market of the past few years, many homeowners find themselves asking: should I sell my house?

    The answer depends on your plans and needs. If real estate were only an investment, the answer would be: "Buy low and sell high." In other words, don't sell now because prices are not high. From a purely investment standpoint, now is a time to buy more than to sell.

    However, our homes are not only investments. Our lives take surprising turns and our needs can change quickly. Children, job changes, family obligations and even marriage can make change necessary. Below are a few scenarios to help answer the question: should I sell my house?

    Selling is a good idea if you need to move and:

    1. You would lose money renting it because the mortgage plus expenses are greater than market rent.
    2. You are going out of area where managing a rental would be difficult or impossible.
    3. You have equity in your home, and you want to put that towards a new home right away.
    4. You are choosing a short sale or other foreclosure alternative, and refinance or the HAFA, HARP or other homeowner assistance programs are not available to you.
    5. You need a clean break.

    Selling is NOT a good idea if:

    1. You don't really need to move right now.
    2. You can easily rent your place out and cover expenses. By holding the property and allowing a renter to pay down your mortgage you create the possibility of selling in a better market.
    3. You don't need the equity from your current house to buy a new one.
    4. You are upside-down in the value of your home, but can manage the payments.

    The answer for you depends on your wants and needs. If you need more information than I provided, like how to determine market rents and how much your property would get in today's market, discuss your situation with a qualified Realtor.

  • Tips for Selling Your Home

    Posted Under: Home Selling in Dana Point  |  January 4, 2012 4:32 PM  |  322 views  |  No comments

    The home we live in day after day becomes familiar and comfortable to us, and even when we are leaving for a good reason, selling a home can be both emotional and a lot of work. Here are a few tips to make the process more manageable.

    1. Start packing early. We all have books, clothes, blankets, and things that are either out of season or we use very rarely. Get some boxes and start with these easy items. By storing the full boxes out of sight and out-of-the-way, you get a head start on the move while also making your home more clutter-free and attractive to prospective buyers.

    2. Fix anything you know is broken that you can easily afford to fix. Buyers of older homes don't expect a perfect home, but neglect or disrepair may scare them away or cause them to demand discounts.

     3. Give it a good scrub (if it hasn't had one recently). Wipe away fingerprints and wall markings. Clear and  clean floors and counters. You've got to let the buyers see what they'd be buying.

    4. Once you sign with a Realtor and begin to market your property, make it easily for buyers to see. They may be dealing with two jobs and children and have limited time as well.

    5. Be honest about today's market value. Be careful not to price too high or too low. If you're not seeing any interest, you're probably priced too high. Several properties I've worked with have received more than one or two offers before choosing a buyer, however only after we had found the right list price. When a seller sees that the offers do not vary a great deal, he can be satisfied that he's getting market price and choose the best one.

    Best of Luck in all your property transactions!

  • How to Know the Value of a House

    Posted Under: Home Buying in Laguna Niguel  |  December 20, 2011 4:37 PM  |  308 views  |  1 comment

    When getting ready to purchase real estate, two questions that slow many buyers down are:
    How do I know the value of a house and
    How do I know I'm getting a good deal?

    Below are a few simple steps to ensure that you get the best deal possible on your new home.

    1. Use Sold Comparables
    Not every property on the market sells, and a house may list for a price that is tens or even hundreds of thousands of dollars different from the final sales price. Market price is what buyers are paying and lenders are lending on right now. Have your realtor provide all similar properties SOLD (Closed Sale) in the past 120 days (4 months). If possible, keep your radius within 1 mile of your desired property.

    2. Add or subtract for important factors.
    Common differences that need to be adjusted for include: square footage, interior upgrades, view, size of garage, and size of lot. Have your Realtor help you with the adjustments if you don't feel confident.

    3. Move forward with market price.
    Many buyers in today's market miss great deals because they try to undercut market price by 5 -15%. If a good property in a good location is priced well, there may be more than one or two offers on that property before it sells. Offer fair market value, as supported by recently sold comparable properties, and you will increase your chances of being the offer that is accepted and goes to escrow.

    Between reduced property values and amazingly low interest rates, right now is a very good time to buy real estate. Don't wait until values start to rise again or interest rates go up; jump in with the New Year. If you buy a great property at today's market rates, chances are you'll be happy with your purchase for many years to come.

  • Rent or Buy?

    Posted Under: Home Buying in Laguna Niguel, Rent vs Buy in Laguna Niguel  |  November 2, 2011 4:07 PM  |  447 views  |  No comments

    Many websites offer a Rent vs. Buy Calculator. At first glance, most people think that comparing the cost of renting vs. buying is as simple as looking at your monthly payment.

    Having a monthly payment within your budget is important. When you buy you not only pay mortgage, insurance and taxes, you also will need a budget or reserve for repairs, maintenance and upgrades.

    Below is an example comparing the long-term cost and financial benefits of buying vs. renting:

    Scenario #1: Monthly rent is $1600. Rent increases 1/2% per year.

    Scenario #2: Home value $399,000. Annual maintenance $1200. Annual appreciation after 7 years (a conservative) 3%. Selling cost after 7 years 7%. To purchase the house, you borrow 80% ($319,200) at a 4.75% interest rate for 30 years fixed with one point paid to the lender at close of escrow.

    RENT: Your monthly payment is $1600. Over 7 years your savings (minus tax credit for purchase) would be $38,000 less paid in rent.

    BUY: Your monthly payment is $2140, $540 more than if you rented. HOWEVER, after 7 years of only an AVERAGE appreciation of 3% per year YOUR PROCEEDS at the sale of your home would be $177,000.

    This puts the financial benefits of buying in this scenario at $138,000.

    What will you be doing in 7 years?

  • What is Owner Financing?

    Posted Under: Home Buying in Mission Viejo, Home Selling in Mission Viejo, Financing in Mission Viejo  |  September 21, 2011 3:38 PM  |  456 views  |  1 comment

    Owner financing, also called seller financing, puts the seller in the position of lender during the sale of a property.

    Example: Suzy is selling a home she has owned for 17 years. The current market value is 400,000, and she owes the bank only $92,000. Harold & Carrie are purchasing the home. They are bringing $100,000 down payment plus closing costs.

    Instead of getting the 300,000 mortgage from a bank, Suzy can create a promissory note which both she and the buyers sign. Suzy then records a mortgage on the property title with the County, which creates a lien on the title, so that Harold & Carrie cannot sell the house without paying her in full. This is how banks protect their mortgages as well.

    Instead of getting $300,000 -transaction fees at the close of escrow, Suzy begins receiving mortgage payments from Harold & Carrie according to the terms on the promissory note.

    If Suzy needed a big down-payment to buy a new house, this plan would not work for her. However, because she doesn't need to get cash right away for the equity in her home, she actually makes more money over time. In addition to repaying her equity, Harold & Carrie will pay interest and possibly origination points and/or late fees. Over 30 years, interest payments can exceed the original amount borrowed. Suzy also retains the right to foreclose and take back the home if Harold & Carrie don't meet their agreement to pay the mortgage.

    Owner financing also helps sellers avoid big tax payments because instead of receiving a big lump sum this year, Suzy is receiving smaller sums each year. She will only pay taxes on the money she takes in, which can reduce her tax load.

    Owner financing helps buyers who are good credit risks but do not have good credit. Business owners who have no W2's to prove income, or people recovering from a financial setback might not qualify for a traditional mortgage these days. Buyers may have to pay a little more for seller financing, but they avoid the trials and tribulations of qualifying for institutional lending.

    Owner financing does not have to cover the entire amount being mortgaged. Some sellers lend on part of their equity as a second lender, with a traditional lender in first position.

    Also, owner financing does not have to be a 15 year or a 30 year amortized loan. Perhaps Suzy wants regular, amortized payments for five years with a balloon payment (buyers refinance) after 5 years.

    In summary, owner financing is possible when a seller has equity and does not need to cash out immediately. To sellers, owner financing offers tax benefits, increased income and a greater pool of qualified buyers. To buyers, owner financing is an opportunity to buy right now even if traditional loans are not an option.

  • Selling a House Quickly

    Posted Under: Home Selling in Irvine, Financing in Irvine, How To... in Irvine  |  September 13, 2011 4:10 PM  |  546 views  |  3 comments

    Some tips on selling a house quickly in 2011. Market conditions vary. I am familiar with the Southern California (South Orange County) real estate market and each local real estate market has its quirks.

    Selling Your House Quickly:

    1. Start the move. Clear out storage areas. Box up unused items and place the boxes neatly out of the way or even better in an off-site storage space. Most buyers feel more comfortable in less cluttered and clean environments. The more a buyer can see the house, the more she can see her stuff in the space which means a higher probability of a successful sale for you.

    2. Think about whom your house is right for. Will it be a first time buyer or a family moving up? Will it be a single business person? If your house needs work perhaps the right buyer is an investor who will remodel and resell the house. Many times sellers dwell on the loss of the house the are leaving. By focusing on where you're going, and who will be right for the house you're selling you create a better atmosphere in which to market the property.

    3. Price it honestly for this market. A successful deal in this market is either a cash deal or has the approval of a lender. It is much easier to get lender approval where the appraisal supports the contract price. So, by using SOLD comparables for houses sold in the past 4-6 months within 1 mile (or so) of your property to construct your initial offer price, you not only attract a buyer to you faster, you also increase the buyer's chances of getting loan approval. By pricing your home at market value you sell faster and more often get a buyer who can actually close the deal and get a loan.

  • Short Sale or Foreclosure

    Posted Under: Home Buying in Dana Point, Home Selling in Dana Point, Foreclosure in Dana Point  |  September 1, 2011 11:26 AM  |  365 views  |  No comments

    Many buyers and sellers are confused about the difference between a Short Sale and a foreclosure or REO (Real Estate Owned). Both a Short Sale and a foreclosure/REO refer to selling a property with the cooperation of the bank.

    A short sale is a home or property that is still owned by a person or family, but where the owners owe more on the property than the current market can bear. For example, if the loan is for $400,000 and the current market value of the home is $325,000, the owners would either have to pay the difference of $75,000 plus fees to sell their home, or they have to negotiate a short sale with their lender. Short sales make up from 30% to 70% of most home sales markets right now.

    Short sales require signatures from both the seller and the bank. Short sales may still be occupied by the current owner who is trying to sell. If you're a buyer in this market, short sales require incredible patience as you can sometimes wait 30 - 60 days for a response to your offer. However, if you are consistent and patient you may also get a good buy through a short sale.

    Foreclosures or REO's are properties that are now owned entirely by the bank. REO's are usually vacant. The bank is the only signature required for the sale. By the time the bank owns the property, they are often eager to sell for a fair price. Cash offers are highly valued. The downside is that since the property is vacant and the previous owners went through a foreclosure, the property may not be in the best condition. REO's make up a much smaller percentage of the current real estate marketplace.

    In summary, a Short Sale is a property for sale by the owner, but with a loan higher than the current property value. A foreclosure or REO is a property that is owned by the bank.

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