How do I know if I'm ready to buy a house?

Kinda funny really. It reminds me of "How do I know if I'm ready to have a baby?"  Simply put, you'll never truly "know." But you can take steps to ensure that you're prepared as best as possible to own a home...or...if it's best to wait.

Recently, (perhaps because at the time of this post it's tax time) I've had a sea of prospective clients asking me two questions: 1) How do I know if I'm ready to buy a home? and 2) Is now a good time to buy a home?

Truth be told, after 10+ years in the industry, I have learned that those aren't actually the questions these prospective clients are really asking.
 What most are really asking is: 1) Do I qualify to buy a house right now? and 2) Will I make a profit (build equity) if I buy now, or should I wait until it's a better time?

Let me give you my very tongue-in-cheek "I'm exhausted, so let's cut to the chase!" answers, then I'll go more deeply into the "There are a number of key factors that influence the answer to those questions." answers after that.

Now, with my tongue firmly place in my cheek...here are the "I'm exhausted, so let's cut to the chase!" answers to those questions!

Q1: Do I qualify to buy a house right now?  

A1: How could I possibly know? I don't have access to any of your financial information. If I did, I wouldn't know what to do with it.  I'm a real estate expert. I, by choice, don't "do" loans. I search for homes, negotiate terms on contracts, and protect my clients throughout real estate transactions. That's a full time job, in itself. Talk to a lender. Better than that, make your lender your new best friend! He or she is the ONLY person with the power to get you into a home, today...in three months...or next year. Your lender can accurately answer questions such as; "Should we wait until after we pay our taxes?" "Should I pay off all of my credit cards?" '"We need a new car. Is it OK to buy one now, or do we have to wait until we close escrow on our home before we buy another car?" Let the experts be experts. Find a lender that you trust, then trust them to provide you with the answers and service that you deserve. 

Q2: Will I make a profit if I buy now?

A2: (See A1:) How could I possibly know? I don't have a crystal ball. Nobody does.  Even the very best agents in the country don't influence the market, they respond to it. Yes, there are market trends; both macro and micro markets, but they are only indicators, not a means to see into the future. If I find a crystal ball, I'd be happy to share it with you. That said, if I really had one, I'd probably be surfing with my boys in Costa Rica while my wife tans herself on the beach. 

OK. Now with that out of the way, let's lift the hood and see what's really inside.

Q1: Do I qualify to buy a house right now?  

A1: The very honest answer is often the hardest to hear, but you've got to sit down with a lender, or two or three, and let them run the numbers. This can, and often does, ramp up anxiety levels, but please know this. The lender's I have the pleasure of working with are not just phenomenal and ethical in what they do, but they are true professionals.  They've heard and seen it all. 

• "But my divorce isn't even final and I have two credit cards that I just walked away from!" Seriously, they don't care...at all.  Their job is not unlike mine in a way.  Their job is to determine what the fact area, create a realistic plan of action, then execute. 
• "I just want to pay off all of my credit cards before I talk to a lender." STOP!  Take a breath.  Often times, paying OFF credit cards can be detrimental to your credit scores.  "Should I pay them down?"  Perhaps. "How much should I pay off?" Ask the lender!  They are on your team! They deal with this ALL THE TIME.
• "But we just bought a boat, and I don't think we'll qualify." I've seen boats, RVs, Student Loans, Back Taxes, etc. paid off as a condition of the terms of a loan.  In short, let the experts be the experts.  Remember, they don't get paid until or unless you secure a loan...through them!  What better motivation could they have to work efficiently and effectively on your behalf?  It's perfect, really. They have to perform...or they don't get paid! So, don't wonder if you qualify to buy a home right now.  Ask.  Just call 'em and ask 'em!  Like jumpin' off the high-dive! It's really easy.  It just feels hard before you do it. Once you do it, it's a piece of cake!

Q2: Will I make a profit if I buy now?

A2: The market will always fluctuate. A homes values is the function of several dynamic and critical factors. In business 101 they call it Supply & Demand. Just like football tickets! When supply goes up, price goes down. When Demand goes up, price goes up. How does that basic law of business influence real estate values?

• Supply: How many comparable homes are for sale right now?
• Are new homes being built?
• Is your area one with quick turn over, or is it a more mature area where homeowners tend to keep their homes, or even 'will' their homes to their children?
• Over the last year; three years; five years, have the number of active listings increased or decreased?

• Demand: How many buyers are not just looking (ie, clicking on similar homes on Zillow) but are both willing and able to purchase a comparable home?
• Is your local metropolitan area thriving or retracting?
• Are more people moving to your area or away from your area?
• Are mortgage interest rates (how much it costs to borrow money) low enough to create a sea of buyers? (As interest rates decrease, demand for your home increases, and vice-versa.) or are the Feds threatening a rate hike, scaring prospective buyers out of the market?
• Are their grants and down-payment assistance programs available?
• Is your home ready for an FHA or VA buyer?

• Costs of Buying: 
• How important is it that you rest at night knowing that your landlord isn't going to sell the home your living in, or worse, default on it without telling you.
• Tax benefits. Yes, there are tax deductions for home owners, and there are often deductions for the closing costs involved in making that purchase. But, are those deductions worthwhile?  Do the costs (both financial and emotional) of purchasing and owning a home outweigh the costs of renting? 

OK, from a practical, Little League and Girl Scout Cookies standpoint, what does all of this mean?  It means this:

1. Don't wonder if you qualify. Ask a lender...today.  
2. Unless you're buying for investment purposes only, buy a home to live in, not with plans of cashing out big-time in the next 2 or 3 years.

Until next time.

 

Andy Blasquez  Cell ~ 909.539.3292
BRE#01826135
E-mail me on Andy.Blasquez@gmail.com

Who is the biggest influence in the home buying process?

This seems like a pretty cut and dry question, but the answer might surprise you.

You may think it's the bread winner.  "I make the bucks! I make the call!" You may say "It's the Mrs., of course.  Happy wife...happy life!"  You may think...it's you!  You'd be surprised just how often that's not the case.  More often than not, the buyers' real estate agent is the most influential person involved in the home buying process.  They are, after all, the resident expert with the experience and expertise to confidently guide home buyers toward the right home and away from the probable money-pit.

Like many of my posts, I'm pretty certain that this will annoy a few agents.  No disrespect or judgement intended, but it is what it is; the truth as I see it. I write what I practice, and I practice what allows me to sleep peacefully, knowing that I've given my clients the very best representation possible. To say that sales commission doesn't motivate sales agents is naive.  Sales commissions were designed to motivate sales people.  It's that simple.

Here's a bit of background on sales commissions as they apply to real estate transactions.  In the areas I have served over the past 9 years, which include most are of the state of California, 6% is the standard sales commission paid buy the sellers at the close of escrow.  This commission is typically split equally between the cooperating brokers, with 3% going to each side of the transaction.  Listing Agents and Buyer's Agents both have their fair share of responsibilities, tasks, hurdles, and headaches that they encounter throughout the days, weeks, and months.  Some transactions are simple.  Some are complex.  It's my belief that, at the end of the day, it all comes out in the wash.  "But I worked so hard to get this one to close!  I deserve more!"  Yea?   No!  Maybe you made bad choices when screening your client.  Maybe the property you wrote on was a money pit.  Maybe you had a cash buyer with low expectations who's buying everything in site and all those transactions are simple!  It all evens out in the end.

So looking at the question posed at the beginning of this blog, what does it matter who the biggest influence is in the home buying process?  Because, and here comes the part that can make folks uncomfortable, it's very easy to see how (with a Realtor's personal income as a direct function of the sales price of the house and percentage commission to be received at closed) agents might encourage their buyers to write on one home over another, based solely on the commission being paid by the seller.

Of the 57 homes sold in Redlands, California in November of 2015, 22 had the buyer's agents' commission at 3%.  The rest were 2.5% or lower with a few as low as 1%.

As someone looking to sell your home, don't you want the market (meaning willing and able buyers and their agents) to be highly motivated to see your house as often as possible, with as much enthusiasm as possible?

Here's a guiding question.  If an agent is looking at what we call "Like" or similar properties; one is paying her 2% and another paying her 3%, which one is she likely to encourage her buyer to write an offer on?  "But aren't agents supposed to have their clients best interest in mind?" Absolutely!  Many, many agents do!  Some, however, don't.  After all, although sometimes we're not treated as such, we are actually human.

There are exceptions to this rule, as there are to most.  But it's a safe bet that a relevant percentage of homes closing with a cooperating broker commission split that is out of balance likely closed at a price lower than they might have if the buyer's agents had been sufficiently (or equally) motivated. That was a mouthful. In short.  Lower commission means fewer showings means less demand means lower sales price.

If you're meeting with a Realtor to discuss a possible listing, please discuss this topic. Don't be shy.  Don't let a real estate agent try to convince you that he or she needs $X to successfully market your property.  Unless you're selling true luxury real estate, it's just not the case.  If you are selling luxury real estate, the hefty commission you're paying will cover your agent's marketing efforts.  So ask the question, "How much of the sales commission that we are paying your firm goes toward the incentive for our buyers?" If your Realtor addresses this topic in a manner that leaves you with a comfortable understanding...game on!  If they hem and haw around the issue, press on until you have an answer that satisfies you.  If they give you a load of crap about advertising budgets...fire them before their hired.

My business thrives by word of mouth.  If you appreciate the information provided on my blog, please share this post on your favorite social media sites, and with anyone you feel could use my service.

Until next time.

 

Andy Blasquez  Cell ~ 909.539.3292
BRE#01826135
E-mail me on Andy.Blasquez@gmail.com

Happy Home Shopping in Yucaipa, Calimesa, Cherry Valley, Beaumont, & Redlands, CA as of 02.06.2015

 Homes For Sale in Yucaipa, Calimesa, Cherry Valley, Beaumont, & Redlands, CA + Tends over the prior weeks numbers.

Update for Friday, February 6th, 2015

We never tire of the views from Chapman Heights 

• Click here to see Homes for Sale in Yucaipa, CA:
• 152 Active Homes in Yucaipa compared to 142 Last Week
• 18 New Listings in Yucaipa this week compared to 11 Last Week
• Home Prices in Yucaipa range from $119,000 to $1,900,000
• Median Home Prices in Yucaipa: $339,000
• There are only 5 Homes For Sale in Chapman Heights

• Click here to see Homes for Sale in Calimesa, CA:
• 18 Active Homes in Calimesa compared to 16 Last Week
• 0 New Listings in Calimesa this week compared to 1 Last Week
• Home Prices in Calimesa range from $136,000 to $789,000
• Median Home Prices in Calimesa: $329,900

• Click here to see Homes for Sale in Cherry Valley, CA:
• 24 Active Homes in Cherry Valley compared to 21 Last Week
• 0 New Listings in Cherry Valley compared to 1 Last Week
• Home Prices in Cherry Valley range from $120,000 to $2,400,000
• Median Home Price in Cherry Valley: $518,900

• Click here to see Homes for Sale in Beaumont, CA:
• 174 Active Homes in Beaumont; the same number as Last Week
• 24 New Listings in Beaumont compared to 13 Last Week
• Home Prices in Beaumont range from $75,000 to $1,390,000
• Median Home Price in Beaumont: $279,700

• Click here to see Homes for Sale in Redlands, CA:
• 174 Active Homes in Redlands compared to 166 Last Week
• 27 New Listings in Redlands compared to 21 Last Week
• Home Prices in Redlands range from $80,000 to $3,200,000
• Median Home Price in Redlands, CA: $389,000

Once you click on a link above, you can change the way you view your listings. If you prefer viewing these homes as a "List" or on a map, you can view in various ways simply by click the "Display" button (as shown below). As a list, you can sort by price, year built, days on market, square footage, etc.

Also, don't forget the Map/Search feature (shown below) which gives you real-time access to the ACTUAL MLS, not the dated information that most real estate websites and apps provide.

Thanks in advance for remembering my name when the topic of Real Estate comes up in conversation.  If you're local , just remember Andy@LoisLauer.Com I'm always here to help.  

My business thrives by word of mouth.  If you appreciate the information provided on my blog, please share this post on your favorite social media sites, and with anyone you feel could use my service.

Until next time.

Andy Blasquez - The Last Realtor You'll Ever Need To Look For

Cell ~ 909.539.3292
BRE#01826135
Please follow and share YucaipaRealEstateTrends on Facebook
AndyBlasquez.Com
Andy.Blasquez@gmail.com

Andy Blasquez - The Last Realtor You'll Ever Need To Look For
Cell ~ 909.539.3292
BRE#01826135
Please follow and share YucaipaRealEstateTrends on Facebook
AndyBlasquez.Com
Andy.Blasquez@gmail.com

Homes For Sale in Yucaipa, Calimesa, Cherry Valley, Beaumont, & Redlands as of 01.29.15

So where are you watching the big game?

A better question might be...Where do you want to watch it next year?

This post provides up to date links to Homes For Sale in Yucaipa, Calimesa, Cherry Valley, Beaumont, and Redlands, CA

• Click here to see Homes for Sale in Yucaipa, CA: 
• 142 Active Homes in Yucaipa
• 11 New Listings this week
• 5 fewer listings than last week
• Ranging from $119,000 to $1,900,000
• Median Home Price in Yucaipa: $285,000
• Homes For Sale in Chapman Heights

• Click here to see Homes for Sale in Calimesa, CA: 
• 16 Active Homes in Calimesa
• 0 New Listings this week
• 6 Fewer listings than last week
• From $199,999 to $789,000
• Median Home Price in Calimesa: $230,000

• Click here to see Homes for Sale in Cherry Valley, CA: 
• 21 Active Homes in Cherry Valley
• 1 New Listing
• 4 More than last week
• From $139,900 to $2,400,000
• Median Home Price in Cherry Valley: $168,500

• Click here to see Homes for Sale in Beaumont, CA: 
• 174 Active Homes in Beaumont
• 13 New Listings this week
• 6 Fewer than last week
• From $85,000 to $1,390,000
• Median Home Price in Beaumont: $260,000

• Click here to see Homes for Sale in Redlands, CA: 
• 166 Active Homes in Redlands
• 21 New Listings this week
• 2 More than last week
• From $92,900 to $3,200,000
• Median Home Price in Redlands, CA: $328,000

Once you click on a link above, you can change the way you view your listings. 
If you prefer viewing these homes as a "List" or on a map, you can view in various ways simply by click the "Display" button (as shown below). 
As a list, you can sort by price, year built, days on market, square footage, etc.  

Also, don't forget the Map/Search feature (shown below) which gives you real-time access to the ACTUAL MLS, not the dated information that most real estate websites and apps provide.

• Are FHA loans a good idea?  Link to a .pdf 7 Reasons to Love FHA Loans via GoogleDocs

Thanks in advance for remembering my name when the topic of Real Estate comes up in conversation.  If you're local , just remember Andy@LoisLauer.Com I'm always here to help.  

My business thrives by word of mouth.  If you appreciate the information provided on my blog, please share this post on your favorite social media sites, and with anyone you feel could use my service.

Until next time.

Andy Blasquez - The Last Realtor You'll Ever Need To Look For

Cell ~ 909.539.3292
BRE#01826135
Please follow and share YucaipaRealEstateTrends on Facebook
AndyBlasquez.Com
Andy.Blasquez@gmail.com