Buyers, Finance/Lending

Understanding the closing escrow process. It can be a fire drill!

Understanding the closing escrow process...... It's a fire drill!Understanding the closing escrow process. It’s a fire drill!

Understanding the closing escrow process is going to help you be prepared for what can be either a very smooth few days or a fire drill.

Why? Continue reading “Understanding the closing escrow process. It can be a fire drill!”

Finance/Lending, Lifestyle

How To Assess The Real Cost Of A Palm Springs Fixer Upper

Concierge Services in Palm SpringsHow To Assess The Cost Of A Palm Springs Fixer Upper

When You Want To Renovate A Home, what things should be considered?

When you buy a Palm Springs fixer upper, you can save a ton of money or get yourself in a financial fix. This is only a guide so please be sure to consult a pro!

Trying to decide whether to buy a fixer-upper house?  Follow these seven steps and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.

1. Decide What Is DYI and What Is For A Pro

It may not be as easy as the TV shows make it look.  yes they take it step-by-step but there are many hazards and pitfalls along the way.  Its happened to all of us.  A simple task or project can take a day instead of an hour. So ask yourself:

  • Do I have the skills?
  • Is there time in my life?
  • What is the completion date?
  • Do I have the tools?
  • Can I get through the permit process?
    • Don’t even THINK about skipping this step
  • Am I ready to live in the home while all this is going on?

2. Price the cost of repairs and remodeling before you make an offer

Get an estimate for the work as though a contractor were going to do it.  If you are going to do the work yourself, this is a good cost basis to follow because the labor is free yet it will allow for cost over runs and buying or renting tools.  If you do the pricing on your own, add 10 to 20 percent as a cushion.

3. Check permit costs

Go to your local planning department and ask if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it’ll cause problems when you resell your home.

Factor the time and processing of permits into your plans. And remember, the local official may want to do inspections which may slow things up a bit at times.

4. Double-check pricing on structural work

You will need a structural engineer if any walls are coming down or any major demo is taking place.  Its 500 bucks well spent.  And be sure to take all points of the pre-sale home inspection into account.  Just because you’re doing a Reno does not mean that you can forget this all important item.

5. Check the cost of financing

OK, so you have enough money for a down-payment, closing costs, and repairs without draining your savings.  Now factor in the costs of the work, tools, permits and inspections.  Does it add up?

If you’re planning to fund the repairs with a home equity or home improvement loan: Get yourself pre-approved for both loans before you make an offer.  Then make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.

Consider the Federal Housing Administration’s Section 203(k) program, which lets qualified purchasers wrap up to $35,000 into their mortgages to upgrade their home before they move in.

6. Calculate your fair purchase offer

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.  Now also subtract your closing costs pn the purchase then also add in the closing costs were you to sell.  Does that add up to a profit? Even if you plan to stay in this home for a long time, sometimes life happens and you may have to move sooner.  Don’t over-build for the neighborhood

7. Make sure you have inspection, loan, appraisal contingencies in your offer

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs.Even if a total Reno is planned, the home should be livable going in.  Even an REO (foreclosure) is made livable these days.

The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with. If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

Loan and appraisal contingencies are a no brainer.  The appraisal will be a key tool for you to know the true value of the home.  And your Realtor will be a key player to help you determine the resale value after the renovations.

Buyers, Finance/Lending

How To Present A Solid Mortgage Application & What To Expect From The Process

The FICO ScoreToday we attended a Realtor’s meeting in Palm Springs, CA and learned what is happening with mortgages and underwriting in today’s lending environment.  In reality, the loan process is all about the underwriting and quality control departments.  Your loan must pass through certain stages and its closely scrutinized especially before funding which is the final step.  

Here is a summary of what we took away from that meeting.

  1. Sourcing deposits is important. Money used for your down payment must show a source.  That means it has come from an allowed source such as savings,  payroll, etc.  If it just appears in your account and they can’t trace it, it is not allowed.  This stops buyers from borrowing the down-payment thus incurring 2 loans and not being able to pay.
  2. Have income documents going back 2 years especially if self-employed.  Be ready  to explain anything unusual up front.  They look at every detail so if you think you can hide it from the underwriters, think again!
  3. Be able to explain any large deposits. Again, they look at the source of all monies.
  4. Make no major purchases just before or during the process especially a car.  Its better to wait.
  5. FICO Scores and Clean Credit.  The two links in this line to the left are articles we’ve written on the subject.  You can not get a mortgage without a good FICO score and good credit.  For help on those and to learn more, read the articles and of course, call us with any questions. 
  6. Income and self employment issues.  What you show on your tax return is what gets used as your income.  If you’ve hidden some income, it is not used for your loan qualification so keep it all above-board
  7. Advise your lender of any job changes including the fact that you are about to retire.  It really does matter
  8. If using rental income on a property you own, be ready to go back 2 years or the mortgage on that rental property will work against your approval amount.
  9. Appraised value vs repair costs. Repair costs of a property will offset the appraised value and decrease the amount you can borrow so be ready.
  10. Showing you have the required assets to close.  You will not get a loan if you can’t show you have the required closing costs up front.  For more information, ask your lender or give us a call.
  11. FHA will lend if your FICO score is under 600 but 5% down is necessary and a gifting of the  deposit is not allowed.
  12. When buying a Condo, they check the HOA solvency and must have underwriting approval.  A bank will not want to lend you money for a Condo if the HOA is in deep trouble financially or has lawsuits pending.  Ask your Realtor for information.
  13. Stated income loans are back but with proof via your bank statements.  In the past, no proof was required.
  14. Buy all furniture outside of contract.  Banks do not allow an Appraiser to up the value of a property based on the fact it’s furnished.  
  15. Pest work must be done if reported.  They will deny the loan if you decide the recommended work from the pest inspection can wait.

How to prepare a borrower for the process.

  • Be Patient!  Know that this is a 4-6 week ordeal and that you will feel like your privacy is violated when it done.  It’s just the facts of life in this new lending environment
  • Respond to your lender’s request right away.  If you delay, the loan gets delayed
  • Don’t blame us or your lender for the process or any challenges. It will be a bit tough. Guidelines set by Fannie Mae and Freddie Mack and unless you are borrowing from a private lender, everyone gets the same treatment.
    • One note: If the lender you have is tough to get hold of or does not return calls, I’d think twice about using that lender or officer. you want someone who will be responsive to your needs and requests just as they need you to be there 100%
  • Have more than the standard pre-approval letter. Ask for one based on Desktop Underwriting using good back-end scores and solid ratios.  What’s involved is your loan officer can run a program that will produce similar results to what an Underwriter sees.  This way, there are fewer surprises at the end of the loan underwriting process.
So the take-away here is be ready and get your financial house in order.  By working with your Realtor and loan officer together, your dream of buying a home will become reality.

Buying or Selling Palm Springs Real Estate?

Buyers: Are you searching for your primary residence? We have a variety of Palm Springs homes for sale and have what it takes to get you settled in the neighborhood of your choice.

Selling your home? Your home selling experience will be one that is easy, friendly and professional. Our mission is to offer outstanding service while utilizing the best practices and Internet technology available. We are totally connected to the Internet and will market your home on every venue available! Results is what you expect and results is what you will get.

If you are planning to buy Palm Springs investment property, or property in the surrounding area, we have the staff partners who will help with any project or property management tasks while you are away. We have helped with the small properties all the way up to the multi-million dollar projects.

We’re not here just to sell you a home. We’re here to help you find the dream home you’ll love then make it yours!

For more information on how we can best serve your Palm Springs Real Estate and surrounding area needs, please fill out the online contact form or give us a call at 760-413-2871.

Finance/Lending

Improving Your Credit Score- These Steps Will Help You Buy A Palm Springs Home

Palm Springs Real Estate

Which is harder to accomplish? Scaling Half Dome or improving your credit score?

Sounds like an easy question but credit is always one of the biggest challenges you face when you decide to become Palm Springs home buyer.  There are many pitfalls that can sink your chances of obtaining a mortgage so please read this guide before you begin your home search to find the perfect Palm Springs dream home.

We will include a few links at the bottom on this post to a few other good articles about credit and mortgages.

  • Pay your bills on time

What a no brainer!  If you can’t pay your bills on time, then maybe it’s not the right time for you be buying a home.  Your life must in order both financially and personally before you take on the responsibility of a new home.

  • Don’t open new credit accounts and don’t close any either!

Work on paying some of your balances down to improve your debt ratio and raise your credit score and do not make any major purchases before you plan on taking on a mortgage.  And closing accounts can actually hurt your FICO score because it will raise your debt ratio.  If you feel tempted, pay off cards and bury them deep so you can’t use them easily.

  • Spread your credit evenly over your existing accounts

If you have two accounts each with credit limits of $5,000 apiece, it’s better to carry $2,500 on each than $5,000 on one. Maxed out accounts will harm your overall credit score.

  • Fix all significant errors

Your credit report is available for free at FreeCreditReport.com may include misinformation about late payments, charge-offs, and credit limits lower than they are. Write to the reporting agency and correct the record. Negative items more than seven years old should automatically fall off your report.

  • Marry a millionaire…..

Nobody said this would be easy but wouldn’t this option be a dream?

  • Get professional help

There are many free resources for consumer credit counseling and you can find an agency through the National Foundation for Credit Counseling.  Search on-line for help but be sure to go with someone you trust and who can offer great references.

  • Call your creditors

If you’re having a tough time with your payments or if your interest rates are high, call your creditors.  Tell them your situation. Many of them have temporary hardship programs that will cut your payments until you can get back on your feet.  Also possible (and I have done this myself), negotiate a lower rate of interest.  You’d be surprised how many banks will listen to your story and agree to a lower rate of interest.

  • Be patient

If you have two accounts each with credit limits of $5,000 apiece, it’s better to carry $2,500 on each than $5,000 on one. Write to the reporting agency and correct the record. Negative items more than seven years old should automatically fall off your report.

  • And the number 1 tip for improving your credit and your life in general

Is there a way to grow your income? No?  How about shrinking your budget?  There are so many ways to increase your income and asset base through some targeted training and creative thinking.  As far as budget, when is the last time you made a list of all the things in your budget that were truly discretionary?  It may surprise you to see how much you could pare down and then apply that money to your outstanding balances.

Real estate investing, for one, has created more millionaires than any other single path to wealth. We live in a land of opportunity. You can’t scrimp and save your way to affluence. Get out there and get educated to get rich.

Want more information about the Desert Cities ?

Buying or Selling Palm Springs Real Estate?

Buying or Selling in today’s real estate market is a challenge and a process that is easily accomplished with the help of a Palm Springs real estate agent focusing on the neighboring desert cities. You will need an expert who has lived in the area, knows the lifestyle and the unique housing market.

The market for Palm Springs real estate is alive and the values are exceptional especially for those who are looking for an ideal investment or a vacation/retirement property. We have many Palm Springs real estate properties available for every need, budget and amenity list.

Are you searching for your primary residence? We have a variety of Palm Springs homes for sale and have what it takes to get you settled in the neighborhood of your choice.

Selling your home in Palm Springs? Your home buying or selling experience will be one that is easy, friendly and professional. Our mission is to offer outstanding service while utilizing the best practices and Internet technology available.

If you are planning to buy Palm Springs investment property, or property in the surrounding area, we have the staff partners who will help with any project or property management tasks while you are away.

For more information on how we can best serve your Palm Springs Real Estate and surrounding area needs, please fill out the online contact form or give us a call at 760-413-2871.

We won’t just sell you a house but We WILL help you find the home you will LOVE!

Ron is a Palm Springs Realtor® who specializes in the surrounding desert cities, including Palm Springs vacation homes, investment properties in Palm Springs and primary single-family Homes for Sale in Palm Springs.

He has the long-term knowledge necessary to make buying and selling Palm Springs real estate a smooth and enjoyable process. Ron has extensive experience in Coachella Valley real estate, having lived and worked in the desert area since 1998.

WHY DOES RON JESSER LOVE THE GREATER PALM SPRINGS AREA?

Why Does Ron Jesser Love Palm Springs

Buyers, Finance/Lending

10 Ways to Prepare for Home Ownership In Palm Springs, CA

The time to buy a Palm Springs Area home is right NOW….. interest rates are at their all time low and the values are amazing.

Here’s what you need to know:

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross family income.  To be sure, consult your lender or check out our lending partner listed on the Home page.

2. Develop your home wish list then, prioritize the features on your list so that when you go out with your Realtor to view homes, you and he will both know what is important to you.

3. Select a neighborhood(s)where you want to live. Your realtor can help with that or read about it HERE;  Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, proximity to downtown and safety.

4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment?  Ideally, you should have 20 percent of the purchase price saved as a down payment.  Also, don’t forget to factor in closing costs including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report to make sure it is correct and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.  And don’t make a major buying decision just before you want to apply for a mortgage or after you’ve applied for one.  It will surely mess up the process.

6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.

7. Get pre-approved.  Organize all the documentation a lender will need to pre-approve you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.

8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.

9. Calculate the costs of home ownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.

10.Finally,  Contact a REALTOR®.  As an experienced REALTOR® me and my team can help guide you through the process and make the home buying experience an enjoyable one.  Call us today!

Information About Buying or Selling Palm Springs Area Real Estate

 

Buying or Selling in today’s real estate market is a challenge and a process that is easily accomplished with the help of a Real Estate professional. You will need an expert who has lived in the desert and knows the lifestyle and the unique housing market.

The market in the Greater Palm Springs Area is alive and the values are exceptional for those who are looking for an ideal investment or a vacation/retirement property. We have many choices for every need, budget and amenity list.

Is this to be your primary residence? We have what it takes to get you settled into a great family home in the neighborhood of your choice.

Selling your home in the Greater Palm Springs Area? I will make sure the experience easy, friendly and professional. Our mission is to offer outstanding service while utilizing the best practices and Internet technology available.

If you are plan to rent your new home, we have the staff partners who will help with any project or property management while you are away from the property.

For more information on how I can best serve your Greater Palm Springs area needs, please fill out the online contact form give us a call at 760-413-2871.

I won’t just sell you a house but I WILL help you find the home you will LOVE!

 

Ron is a Greater Palm Springs Area Realtor® specializing in Palm Springs vacation homes, investment properties in Palm Springs and primary single-family Palm Springs Homes for Sale. He has the long-term knowledge necessary to make the buying and selling of Greater Palm Springs Area real estate a smooth enjoyable process.

WHY DOES RON JESSER LOVE PALM SPRINGS?

Why Does Ron Jesser Love Palm Springs