BUYING

* Buyer's Guide
* Buy now? - Current Market Conditions
* How to choose an Agent
* Mortgage Center

Buyer's Guide

A home is probably the biggest financial investment you'll make in your life. Before you get started, do some homework.This handy Buyer's Guide will show you some things to keep in mind as you're hunting for that home of your dreams.

1. Determine how much you can afford
2. Find A Real Estate Professional
3. Shop for a home
4. Research different mortgages
5. Make an offer
6. Begin contingency period
7. Buy homeowner's insurance
8. Complete settlement or closing

  
1. Determine How Much You Can Afford

How much house you can afford is largely dependent on how large a mortgage - basically, a home loan -- you can handle. If you have an idea of what type of loan you want, start your research by using a simple mortgage calculator to see weather you can afford to pay the monthly mortgage on the kinds of houses you have in mind.

You should definitely pre-qualify with a lender before you start looking for a home. There are so many types of loans out there. A great lender will help determine what loan types are best for you.

But, remember that owning a home involves more than a monthly mortgage. You'll also have to consider money you'll need to have at hand when you make an offer, when you close on a home and on monthly basis after the home is yours.

Payments you may have to make when you submit an offer and at closing include:

• Earnest money, usually 1% to 3% of the cost of the house, which you pay as a deposit on the house when you submit your offer. It's your proof that you're a serious buyer
• Down payment, usually 10% to 20% of the cost of the house, which you must pay at closing
• Closing costs, usually 1% to 2% of the cost of the house, to pay for loan, escrow, title, and recording fees.

Don't forget the day-to-day expenses you may incur once you own that home. This includes:

* Utilities
* Homeowner or condo association dues
* Property taxes
* City or County taxes

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2. Find a Real Estate Professional

While you're certainly not required to use a real estate professional, it is a really good idea. A professional has access to a network of contacts and can draw from extensive market knowledge to help pinpoint the right house for you quickly and will save you tons of time and money.

A professional also can help you structure your deal to save money, explain the advantages and disadvantages of different types of mortgages and guide you through the paperwork.

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3. Shop for a Home

House hunting can be both exciting and frustrating. Most home-buyers see roughly 15 houses before buying one. To make the search easier and faster, nearly half of all house hunters today begin by browsing for properties on the Internet, using web sites like this one.

The Internet is a quick way to see whether the houses that are currently available meet the following critical criteria: in the right location, with the right features and the right price. If you find after your Internet search that few properties meet with your expectations, you may want to readjust your criteria - change the location, features, price - to increase your chances of finding a house that works for you. If you have any difficulties in the initial search, feel free to contact me for assistance. Homes can become available instantly and your agent is always the most current resource for literally up to the minute new home listing information.

Once you know what you want, where you want it and what you can afford, it's time to see the houses in person. To help stay focused, bring with you a checklist of things that you've decided ahead of time are important qualities of your future home.

This might include:

* Is there enough room for you to grow in?
* Is the house structurally sound?
* Is the house in move-in condition or will it need work?
* Is it close enough to everyday needs, such as grocery stores, schools, work?
* Will you feel safe here?
* Do the appliances that are part of the sale work?
* Is the yard right for your needs?
* Do you like the floor plan?
* Is there enough storage?
* Will you be happy in this house in winter, summer, spring, fall?

You may also want to take some exterior and interior photos of each house you visit so that you can keep track of its pros and cons.

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4. Research Different Mortgages

There are a variety of mortgage types available today, each with advantages and disadvantages depending on how long you plan to live in the home, the financial marketplace and your income potential, among other things.

A fixed-rate mortgage is the traditional loan. In a fixed-rate mortgage, your interest rate and payment stay the same for the life of the loan and you pay interest & some principal each month.

An adjustable-rate mortgage usually starts out at a lower interest rates and lower monthly payments than fixed-rate mortgages, but your rate and monthly payments may rise and fall based on a financial index.

An Interest-Only mortgage is just like it sounds, each month you only pay interest (No Principal) therefore your monthly payment is lower.

There are also several government mortgage programs available, including FHA mortgages, which are designed to help people who might not otherwise qualify for a loan.

You may also have a choice in loan terms. The term of your loan can be 15, 30 or 40 years long. It's best to talk to a trusted mortgage broker about your best mortgage option.

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5. Make an Offer

When you've found a house you really want, it's time to make the offer. How much you offer may depend on a number of factors:

* Is the asking price fair? Here's where your agent's knowledge + your legwork pays off. Decide whether 
   this house is priced right or out of line in the current marketplace.
* Is the house in good condition? Is this house in move-in condition or will it need a lot of work? Take 
   any costs of improvement into consideration when deciding your offer price.
* Has it been on the market long? Usually the longer a house has been on the market, the more likely it 
   is the owner would accept a lower offer. Or maybe it's just overpriced for the market.
* Is it a seller's or buyer's market? If the houses you're interested in are being bought as soon as they're
   listed, that means you've got a lot of competition from other buyers; offer accordingly. If houses        
   aren't selling fast, you may have more leverage in negotiating a lower price.
* Once you've determined how much you'd like to offer, work with your real estate professional to 
   submit the proper information. This includes:
* A complete, legal description of the house
* The amount of earnest money you're paying
* The down payment and financing details
* A proposed move-in date
* The price you're offering
* A proposed closing date
* The length of time your offer is valid
* Details of the deal

This can be just the beginning of the negotiation process. The seller has three options: accept your offer, counter your offer, or reject your offer. Let your real estate professional advise you on the best way to present your offer for a good outcome.

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6. Begin Contingency Period

When your offer has been accepted, the contingency period begins. This is time that allows you to obtain financing, perform inspections and satisfy any other contingencies to your purchase agreement.

Obtaining financing might include loan approval, which will include an appraisal of the property. Also be prepared to make your down payment, which is usually due several days before the close of escrow.

Now is the time to schedule a professional inspection of the property; it is one of the best safeguards you can take before buying. A home inspector should check (and may give you a rough price for repairs on) the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, water source quality, pests, foundation, doors, windows, ceilings, walls, floors and roof.

Keep in mind that the inspector isn't there to tell you whether you're getting a good deal. He or she is there to give you an educated opinion on whether the house is structurally and mechanically sound and fill you in on any repairs that are needed.

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7. Buy Homeowner's Insurance

A paid homeowner's insurance policy is required at closing. Often a real estate professional will help make sure your insurance company and your title officer are working together to put your policy in effect by the close of escrow. But, if you get your insurance agent involved early in your home- buying process, he or she may also help point out ways to help keep your insurance premiums lower.

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8. Get Ready to Close

When the property you're buying has been inspected and you've had your final walk-through of the property to see that all contingency conditions - such as final repairs made by the seller -- have been met, it's time to face more paperwork. You will be signing loan documents and closing papers, paying the balance of your down payment and closing costs. The day it records at the city, is the day you get the keys to you new home. Congratulations!

Have a question? Ask me anything...

Closing Costs May Include:

* Lender fees include charges for loan processing, underwriting, preparation and establishing an escrow 
   account.
* Third-party fees include charges for insurance, title search, and other inspections such as termites.
* Government fees include deed recording and state & local mortgage taxes.
* Escrow and interest fees include homeowner's insurance, loan interest, real estate taxes, and 
   occasionally private mortgage insurance. 

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Is now the time to Buy?

It is actually a fabulous time to buy inSan Diego. There are many areas that have an abundance of homes on the market. Like anything, prices of homes depends on Supply and Demand. If you are interested in an area where the supply is still high, you can negotiate a better price than in the areas where there aren't many homes for sale (assuming it is also a desirable area).

Certain areas have better "buys" right now than others. So feel free to contact me about the area you are thinking about and I will happily give you a no-obligation opinion on what I see going on there. Should you wait? Most experts say emphatically "No!" Interest rates are still low, which means your buying power goes much further than when interest rates rise in the future. Most analysts expect interest rates to rise this year. If you are one of the people I meet who says "I think they will fall this year by 5%" ... then consider this ... At today's low interest rates, your monthly payment will be lower than if the market dropped down, 6.5% a 30-year fixed interest rate (principal + interest) on a $7000,000 purchase, your monthly payment for your mortgage, property taxes and insurance would be $4,476. Prices would need to drop 10% (the home would have to sell for $630,00) for your payment to be the same as it would at today's prices with today's low interest rates. None of the slightly this year (most predict a 5-8% increase by years end).

What is the market predicted to do in 2007? I closely watch what the pundits say about our San Diego market (at a National, State, and local level). There is lots of talk about whether we are at a bubble or not. Most economic analysts say that we are in for a "soft landing" in 2007. They expect prices to be relativly flat and a small reduction in the number of homes sold. The media, as always, has been painting a picture of doom and gloom. There are four main factors that lead to changes in price:

(1) Demand - Year after year, we have more people moving to San Diego than moving out of our beautiful city. Each year, we have a net increase in folks who need to buy a house.

(2) Supply (Inventory) - Once you have demand, the single most imprtant factor is inventory. Lots of talk is bustling that low interest rates have fueled the recent growth. While that has been a very important element, it pales in comparison to the inventory factor. We have had a low amount of inventory for the last several years. Each fall, we see the natural decrease in demand (buyer are focused on the holidays, not on buying a house) and therefore the Inventory ratio shoots up and it becomes more of a buyer's market. As the winter ends, buyers come back out again.

(3) Interest Rates - Rates started out the year lower than expected. We'll see how that evolves here over the first quarter.

(4) Jobs - Net Jobs are due to increase by 15,000 in 2007.

What are the long-term projections for housing prices? Let me look into a crystal ball ... Forecast is "Sunny Days Ahead in America's Finest City". If you really want to know the nuts & bolts numbers contact me but, in short, we are projected to continue to have more buyers than sellers for the next 20 years (i.e. more demand than supply). At its most basic level, our local economy is very healthy, our unemployment is very low, and we simply have more people moving to San Diego each year than we have enough resale or new construction housing for. I know it seems like everywhere you turn, there is new construction underway, but even with all that, it simply isn't enough. If you want to see the growth and economy prediction data, contact me. Otherwise, rest easy, we are all in for a terrific long-term gains.

To learn more about the better "buys" call me at 858.682.3522 or fill out the form below and I will get in touch with you as soon as possible!

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How to choose an Agent:

There are nearly 20,000 real estate agents in San Diego county ... whew! Aren't they all basically the same? Absolutely not!! There is a vast variety in experience, work ethic, level of service, negotiating skills, communication and personality styles, and market knowledge. You need someone you can trust, but how on earth do you pick which agents to interview? Good question! The very best way, of course, is to be personally referred by a friend or colleague that their judgment you greatly respect. If one of those folks has had an outstanding experience with an agent, that should be your first interview. Don't settle for our agent, was just ok or my brother in law just go into the business. We're talking about too much money and effort in buying or selling real estate in San Diego to settle. Set your sights on finding the VERY BEST match for what YOU need. Here are some things to look for in an agent:

1. How long have they been in the business? There is no perfect answer but some things to consider are that new agents have a lot to learn and you may not want your time and negotiating you new home to be their learning ground. On the other end of the spectrum, some agents that have been in the business for decades have been doing business the same way for some time and are not be up on the latest resources available. The only thing that is constant is change, and you need an agent who is proficient in their buyer representation skills. Again, there isn't a perfect answer, you just need to know their background and see how that feels to you.

2. How successful are they? How many buyers did they represent in the last year? What is the average purchase price vs. listing price they negotiated? You might feel you want a high volume agent, or you might feel more comfortable with an agent who only takes on a limited number of sellers at any given time so those homes get more personalized and focused attention.

3. What is their mix of buyer's and sellers? I would be leery of anyone whose business is slanted more than 75% of either Buyers or Sellers. A relatively even mix between the two ensures that the agent has a personal pulse for where sellers are today (and won't negotiate either too bearishly or too timidly on your behalf).

4. How long have they lived in San Diego? How well do they know the area you are looking in?

5. Is real estate their full-time Career? or do they just dabble in it? Those who just dabble can cost you a ton of money ... they don't know what the "pulse" of the market is and how to navigate within that. In terms of negotiating, they can't possibly know when to push or pull in a negotiation given the current market environment, what to ask for, what not to, etc. Let me assure you, in order to serve your clients highest needs, it takes full time focus (more than, actually).

6. What is their negotiating track record?

7. How, specifically, will they help you find the house of your dreams?

8. If you are just getting started, are they willing to be patient and work with you at your pace as you go through the step-by-step process. Every buyer moves at different speeds and some agents are only interested in working with buyers who want to be in escrow in the next 30-45 days. If your plan is longer, make sure you aren't working with someone that will be impatient with your needs.

9. Lastly, and MOST IMPORTANTLY:

* Are they a good personality match for you?
* Can you work well with this person?
* Do they communicate well?
* Do you think they will tell you the truth (even when it is not what you want to hear)?
* Do you get a strong gut feeling that you have found an awesome agent?

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