Real Estate Auction Purchases, Foreclosure Auctions (Trustee's Sales) and REO Sales

Top 10 Title Insurance Complications with Auction Purchases, Foreclosure Auctions (Trustee's Sales) and REO Sales

Is the Price Worth the Risk??    Foreclosures and Auctions are situations where real property is auctioned off to the highest bidder without a title policy being issued.  REO (Real Estate Owned) is the sale of real property that a bank has acquired, most often as a result of a foreclosure, and are selling pursuant to a purchase contract which may include only a basic title policy.

For more information, visit www.RealtorLisaWu.com 

Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, they are subject to change. Please note that individual situations can vary, therefore, please consult a professional for specific advice.  (Source: CornerStone Title Company)

Home Warranty Policy & Coverage Pre- During and/or After Close of Escrow

Source: CALIFORNIA ASSOCIATION OF REALTORS(R)

• Some sellers wonder whether it is necessary to offer a home warranty, especially when inventory is low like it is currently.

• The biggest advantage of a home warranty – which covers breakdowns in major systems – is that it is an incentive many buyers value, particularly if they are stretching to buy and don’t have a lot of money left over for repairs.

• A home warranty is a relatively expensive form of insurance, and will set back the purchaser several hundred dollars, depending on the coverage selected. Also, there is a service fee for each call, which can be more than $100.

• Home warranties have limitations. They don’t cover static elements like the roof or siding, but do cover operating systems that often fail, like major appliances including garbage disposals, electrical wiring, plumbing, and heating and air conditioning. Some companies allow the homeowner to add riders to cover extras like the mechanical elements of a pool system or hot tub.

• Costs and exclusions vary widely, as do caps on what the warranty company will pay. Some companies also offer less coverage for systems that are near the end of their useful life. As in medical insurance, pre-existing conditions are usually exempted from coverage – and the warranty company makes the call as to whether the condition was pre-existing, as well as to whether the particular system should be replaced or just patched up.     

How To Be The Most Attractive Home Buyer

Source: Fox Business News

As home prices continue to recover and interest rates remain at near-record lows, many houses are receiving multiple offers and to win the bid, buyers need to stand out from the crowd. According to the CALIFORNIA ASSOCIATION OF REALTORS®’ most-recent housing report, the median number of days it took to sell a single-family home decreased to 29.4 days in March.

Making sense of the story

• Since markets are moving fast, housing experts recommend buyers have their loan pre-approved and their down payment ready before starting their search. With low inventory and demand high, buyers need to know their parameters.

• Multiple offers are become the norm, so buyers need to be ready to compete and do their homework to seal the deal. The longer the negotiations, the bigger the chance a buyer could lose out to someone else who made a better offer.

• Buyers also must be reasonable without being difficult because until an offer is signed, sealed, and delivered, other buyers can make offers on the property.

• Even though it’s a competitive market, buyers should maintain their budget and not pay more for a house than it’s worth. Experts also warn that buyers should not cut corners like skipping the home inspection.

• To be an attractive home buyer, consumers should plan ahead by checking their credit for accuracy and avoiding making any big purchases or taking on any big debt while house hunting.

• Buyers who spot a good deal on a house should not wait days to make an offer. Since time is not on the buyer’s side, learning how to spot a great deal by researching an area’s home prices is pertinent.

• In this market, cash is king. The more cash a buyer has, the more appealing they are as a buyer. Putting down 20 percent or more also makes a buyer look more financially stable and gives sellers comfort that they’ll qualify for a mortgage.                                                                    
• Having as few contingencies as possible to be an alluring buyer. “Don’t overcomplicate your offer to the seller.”  Certain contingencies based on your ability to get a mortgage, the appraisal and home inspection are standard, but piling on more could make the seller less inclined to work with your offer.
  
• Getting prequalified for a mortgage gives a ballpark for what you can afford to buy and will streamline your search process.  If you’re financing your house with a mortgage, have a pre-approval letter with you and if you’re paying cash, have proof of funds that shows you’re good for it.
  
  
  
  
  
  

10 Questions to Ask Home Inspectors

• Whether purchasing a new home or an existing one, most real estate experts recommend buyers get a home inspection.

• The inspector plays a critical role in the home-buying process, and to the extent you can, it is imperative that buyers verify that person’s credentials are up-to-date and that all of the important details are covered during the inspection.

• The NATIONAL ASSOCIATION OF REALTORS® has compiled a 10-point checklist to help buyers verify that an inspector meets industry standards. Among the recommendations, the association encourages buyers to ask direct questions about how the inspector maintains his or her credentials.

10 Questions to Ask Home Inspectors

Before you make your final buying or selling decision, you should have the home inspected by a professional. An inspection can alert you to potential problems with a property and allow you to make an informed decision. Ask these questions to prospective home inspectors:

1. Will your inspection meet recognized standards? Ask whether the inspection and the inspection report will meet all state requirements and comply with a well-recognized standard of practice and code of ethics, such as the one adopted by the American Society of Home Inspectors or the National Association of Home Inspectors. Customers can view each group’s standards of practice and code of ethics online at www.ashi.org or www.nahi.org. ASHI’s Web site also provides a database of state regulations.

2. Do you belong to a professional home inspector association? There are many state and national associations for home inspectors, including the two groups mentioned in No. 1. Unfortunately, some groups confer questionable credentials or certifications in return for nothing more than a fee. Insist on members of reputable, nonprofit trade organizations; request to see a membership ID.

3. How experienced are you? Ask how long inspectors have been in the profession and how many inspections they’ve completed. They should provide customer referrals on request. New inspectors also may be highly qualified, but they should describe their training and let you know whether they plan to work with a more experienced partner.

4. How do you keep your expertise up to date? Inspectors’ commitment to continuing education is a good measure of their professionalism and service. Advanced knowledge is especially important in cases in which a home is older or includes unique elements requiring additional or updated training.

5. Do you focus on residential inspection? Make sure the inspector has training and experience in the unique discipline of home inspection, which is very different from inspecting commercial buildings or a construction site. If your customers are buying a unique property, such as a historic home, they may want to ask whether the inspector has experience with that type of property in particular.

6. Will you offer to do repairs or improvements? Some state laws and trade associations allow the inspector to provide repair work on problems uncovered during the inspection. However, other states and associations forbid it as a conflict of interest. Contact your local ASHI chapter to learn about the rules in your state.

7. How long will the inspection take? On average, an inspector working alone inspects a typical single-family house in two to three hours; anything significantly less may not be thorough. If your customers are purchasing an especially large property, they may want to ask whether additional inspectors will be brought in.

8. What’s the cost? Costs can vary dramatically, depending on your region, the size and age of the house, and the scope of services. The national average for single-family homes is about $320, but customers with large homes can expect to pay more. Customers should be wary of deals that seem too good to be true.

9. What type of inspection report do you provide? Ask to see samples to determine whether you will understand the inspector's reporting style. Also, most inspectors provide their full report within 24 hours of the inspection.

10. Will I be able to attend the inspection? The answer should be yes. A home inspection is a valuable educational opportunity for the buyer. An inspector's refusal to let the buyer attend should raise a red flag.

Source: Rob Paterkiewicz, executive director, American Society of Home Inspectors, Des Plaines, Ill., www.ashi.org.

www.RealtorLisaWu.com

Heatwave or Up-Hill - Seller Market is Now to Sell

SF April Article

How to Compete in a Bidding War for this Seller Market?

Talking Points

• Bidding wars are back, and while not every local real estate market is experiencing bidding wars, some home buyers find themselves competing for houses because there aren’t many for sale in their neighborhood.

• To compete in a bidding war, buyers need to prepare financially for the home purchase. They have to familiarize themselves with property values in their target neighborhoods, and they must know what they want.

• While offering the most money might seem the best way to win a bidding war, sellers don’t always choose the highest offer. Instead, some sellers prefer offers that are the most likely to go through and that meet certain conditions.

• One way to be competitive in today’s real estate market is to select a lender and loan product, complete everything the lender requires, and have a pre-approval letter in-hand before beginning the house hunt.

More can afford a home, but lenders remain tight-fisted

Nearly half of all California households can now afford the median-priced home in the state – but that’s no help if they can’t get mortgages.

Making sense of the story

• Six years after the subprime mortgage meltdown, banks remain tight-fisted, even with solid borrowers – a fact they attribute to shifts in government regulation and demands that they buy back bad loans.

• Mortgage credit has not eased much since 2007, according to Federal Reserve surveys of loan officers, even while low rates and the housing recovery have borrowers lined up seeking financing.

• First-time buyers and self-employed borrowers must jump through especially complex hoops. Even gold-plated applicants must justify the smallest quirks in their finances in excruciating detail. And, processing applications can take months.

• Lenders say their cautions stems in part from uncertainty over a tougher new regulatory environment, along with unrelenting demands from government-sponsored mortgage buyers that the banks repurchase soured loans.

• Salaried professionals with credit scores in the high 700s have the best shot at being approved for a mortgage loan in this environment, along with borrowers who have never missed a payment and want to refinance.

• However, even these borrowers may face stiff documentation demands, including having to explain any bank deposit other than a regular paycheck.

Source: L.A. Times March 2013