Is renting to buy still an option?

Sometimes the desire to own a home is so great that renters just can’t wait, even if they don’t have a down payment to buy a home. How do they do it? Through a contract with a seller called a lease-to-own agreement.

While it’s rare to see in a seller’s market when inventory is low, there are times when sellers will offer this arrangement. Basically, this is a delayed agreement to purchase the home in the future at a price that is fixed today.

How it works:

  • The amount of the rent is above the going-market rate.
  • Extra funds above the market rate will count towards the renter’s down payment in the future when the home is purchased.
  • Lenders typically still allow those above-market funds collected to count towards a down payment as long as everything is documented.
By |2018-10-10T09:40:01+00:00October 12th, 2018|

Do better schools mean higher home values?

Fallbrook News

The data is clear: Homes in the best school districts sell for higher prices than similar homes in less-popular school districts. Research also tells us that one of the most important factors that buyers consider when buying a home are schools. One study shows buyers are willing to pay as much as $50 a square foot extra for a home in a better school district.

A 2013 realtor.com® survey of buyers found that 91 percent said school boundaries were important in their search. Buyers are even willing to give up things to buy near a good school district. One in every five buyers would give up a garage or bedroom. One in three would settle for a smaller home to get access to a good school. Over half would sacrifice nearby shopping options for a better school.

Is being near a top school district important to you?

By |2018-09-11T08:13:24+00:00October 5th, 2018|

Is it harder to get a home loan if you are self-employed?

Fallbrook News

When you’re self-employed, getting a home loan is going to be a little more involved than if you were a salaried employee. There’s more paperwork, tighter qualifying rules, and you’ll need to show a stable income.
The good news is it’s getting easier for you and 14 million other Americans who are self-employed to get approved. Recently, Fannie Mae released new guidelines that are a big plus for self-employed borrowers:

  • In certain cases, income documentation is being reduced from two years of federal income tax returns to one.
  • A new income calculation is being introduced for business owners with little or no history of distributions.
  • The new guidelines are more flexible in dealing with “moonlighting” or extra part-time jobs.

If you’re self-employed, talk to a local lender and learn more.

By |2018-09-11T08:10:50+00:00September 22nd, 2018|

Are second homes a good investment?

Fallbrook News

For decades, buying a second home was pretty much a single-dimensional experience. You bought a place where you would either vacation, or live for several months of the year (often to enjoy a nicer climate).

But with the emergence of home-sharing services like Airbnb, HomeAway and VRBO, second homes are offering you a whole new dimension. Now you can have a place for part-time living, and when you’re not using it, the home can provide you with a regular revenue stream.

Purchasing a second home has become a true investment opportunity, not simply a lifestyle choice. So much so that even major hotel chains like Hyatt are jumping in. The key, as always with real estate, is location, location, location.

By |2018-09-11T08:08:15+00:00September 11th, 2018|

Will a new Starbucks nearby increase the value of your home?

Fallbrook News

Does the value of your home depend on how close you live to a Starbucks? Believe it or not, research shows there is a “Starbucks effect” on property values. A study of property values between 1997 and 2014 looked at homes within walking distance – one quarter of a mile – of a Starbucks and found they appreciated at a rate of 96. That compares to the national appreciation average of 65 percent for the same period.

But not all coffee places are created equal. The study by Zillow also found that homes near Dunkin’ Donuts appreciated just 80 percent during the same period. Another study by RealtyTrac shows that a home sharing a zip code with a Trader Joe’s location grew 40 percent since it was purchased, versus the national average of 34 percent.

By |2018-08-08T08:13:31+00:00August 28th, 2018|

Make a great impression with sellers

When it’s a seller’s market, you can’t always compete against an all-cash offer from a buyer wiling to close quickly. But there are some things you can do to make a great impression with sellers:

  • Making a higher down payment – 25 percent or more. Sellers will worry less that you won’t qualify for a mortgage and know you are a serious buyer.
  • Offering to make a larger earnest money deposit can impress: it signals you won’t easily back out of the deal.
  • Shortening the contingency period and not asking for large seller concessions shows you’re committed to moving quickly.
  • For the right seller, a heartfelt “buyer’s love letter” may tip the scale in your favor.

Sometimes it’s not the highest-priced offer that wins the day, but a buyer willing to go the extra mile.

By |2018-08-08T08:12:27+00:00August 19th, 2018|

Why homeownership is important to Americans

Fallbrook News

Nearly every survey over the last 50 years shows that the vast majority of Americans consider homeownership to be part of the American Dream. It’s still true today. A recent National Association of REALTORS® (NAR) survey found 87% of consumers said homeownership is part of their American Dream.

Homeownership remains the greatest source of wealth among Americans. Economists tell us that for every two homes sold, one job is created in the U.S. Every home purchased generates as much as $60,000 in economic activity over time.

Also, Fannie Mae research shows that:

  • Homeownership creates safer, more stable neighborhoods.
  • Homeowners vote more often than renters, and they are happier and more satisfied then renters.
  • Children of homeowners do better in school, with higher test scores and lower anti-social behaviors.

The bottom line: in America, homeownership matters.

By |2018-08-08T08:11:12+00:00August 8th, 2018|

Why robots will never replace real estate agents

Fallbrook News

Renowned scientist Stephen Hawking may worry about robots advancing beyond humans, but real estate is one industry where you won’t see robots replacing workers.

The real estate industry remains a relationship-driven business, involving the biggest purchase decision in most people’s lives. Human involvement, empathy, and intuition are incredibly important components in delivering a good experience for those searching for their first, second—or even fifth—home.

That’s not to say technology isn’t valuable. Technology is making agents even smarter, allowing them to gather information, communicate, and deliver answers faster for their clients.

By |2018-07-11T08:19:11+00:00July 29th, 2018|

How you can help your kids buy a home

Fallbrook News

Have you ever wondered if there’s a straightforward way to help your kids buy a home? Well, there is, and it’s one of the oldest programs available: An FHA loan.

Your best bet is to work with a local mortgage lender to walk you through the specifics, but here’s how it generally works:

A parent and child can be co-borrowers on a FHA loan, even though the parent won’t live in the home. Normally, FHA would require a 25% down payment for what is called a “non-occupying co-borrower” loan. Together, co-borrowers who are related by blood, law, or marriage are eligible for 100% of the maximum FHA loan they qualify for with the low-down payment features of the FHA loan.

By |2018-07-11T08:19:04+00:00July 20th, 2018|

The biggest disadvantage to renting

Fallbrook News

If you’re a Millennial—or have a son or daughter who is a Millennial—you’ve probably had a discussion about renting or buying a home. It can be a hard question to answer, especially with the steadily-rising prices of houses.

However, there are clear disadvantages to renting:

  • Someone else controls all the rules, not you (such as whether you can have a pet).
  • You’ll see a steady increase in rent over time.
  • Zero tax advantages.
  • You have no say if your landlord wants to move into your place or sell to someone else.

The biggest disadvantage: You give away your money. Renting means you never will have the chance to build equity in a home. Instead, you give that opportunity to your landlord.

By |2018-07-11T08:18:56+00:00July 11th, 2018|