Duarte/Downey Real Estate Agency, Inc



Posted by Duarte/Downey Real Estate Agency, Inc on 7/29/2012

Have you noticed the number of new construction homes going up lately? A recent report by The U.S. Census Bureau and US Department of Housing and Urban Development (HUD) showed single-family home building permits up almost 5%. The process of building a new home can be stressful; there are lots of decisions to be made and obstacles to overcome. Here are some useful tips to keep stress at bay when building a new home. 1. Get pre-approved for a loan. Make sure that you do all the steps necessary to put the proper loan in place. You will need to fill out a mortgage application and provide the necessary documentation to check your financial background and credit rating. This process will let you know exactly how much you can afford to spend. You will also need to make sure your lender knows you are planning on purchasing new construction. 2. Do your homework. Check the reputation of your builder. You can search for information online, contact the better business bureau or ask your friends for recommendations. If you are building in a subdivision you may want to ask some neighbors who have already moved in about their experience. 3. Watch you budget. The advertised price of a new home is rarely the final price. The price can escalate quickly when you start upgrading the standard flooring, cabinetry or lighting. Plan on how much you can afford to spend before you start upgrading and budget accordingly. 4. Don't forget about resale. You may love the upgraded plumbing and light fixtures but know that those things rarely bring in a good return. You will not be the last owner of your home. Be mindful not to add so many upgrades that you overprice your home for the neighborhood. 5. Keep the lines of communication open. Communicate with your builder, ask questions and make sure you know where your money is going. You may want to keep a running list of quotes for extras and upgrades. Be comfortable asking even the simplest questions. 6. Be prepared for delays. Building a home can be a long process. Depending on the size of your home it can take anywhere from three months to a year or more. Get an estimate of when the building of your new home will be completed and plan accordingly.





Posted by Duarte/Downey Real Estate Agency, Inc on 6/10/2012

When a homeowner first buys their home foreclosure is probably the furthest thing from their mind. Today’s economy has forced millions of homeowners into a potential foreclosure situation. There are many reasons why people go into foreclosure. Some of those reasons include:

  • Job loss
  • Unexpected death, illness or medical emergency
  • Adjustable rate mortgage increase
  • Unexpected home maintenance expense
There are ways to avoid foreclosure. The best way to avoid foreclosure is to prevent the filing of a Notice of Default. If a home owner knows they are unable to pay their mortgage they should immediately call their lender. Lenders do not want to foreclose. They may be willing to work with the home owner but it is important that the home owner doesn’t ignore contact from the lender. The lender may propose several options:
  • Forbearance
    • Lenders may agree to a repayment plan before taking legal action
  • Debt Forgiveness
    • Very rarely the lender might give you a break and waive your obligation.
  • Repayment plan
    • The lender may agree to spread the payments out over a longer loan term.
  • Modification
    • In some cases, the lender may agree to freeze the interest rate of an adjustable rate loan or extend the amortization period.
  • Refinance
    • Adding payments to an existing loan balance may be an option if the homeowner has sufficient equity and meet the lender’s guidelines for refinance.
  • Partial Claim
    • Certain government loans may contain provisions that allow the homeowner to apply for another loan to pay back missed payments.
Preventing the Notice of Default filing is the best way to prevent foreclosure. If none of the above options have worked there are still some options a homeowner can leverage. Once the Notice of Default is filed, the homeowner only has a small time frame to reinstate the loan by bringing the payments current and pay the costs of filing the foreclosure. If you are unable to make up the payments you still have a few options:
  • Sell your home
    • If you have equity in your home a quick sale is probably the best option at this point. Your home will need the best exposure and marketing to achieve the quickest sale possible.  A full marketing plan and the proper price positioning should get your home sold in time to avoid foreclosure.
  • Attempt a short sale
    • If your home is worth less than the amount you owe, you might be a candidate for a short sale. A short sale is when you sell your home for less than what the amount owed.  A short sale will affect your credit rating but not as bad as a foreclosure. A short sale is negotiated with the lender.
  • Deed in lieu
    • The homeowner deeds the property back to the lender by giving the lender a properly prepared and notarized deed, and the lender forgives the mortgage.
For more information on how to prevent foreclosure visit the U.S. Department of Housing and Urban Development site to Avoiding Foreclosure. http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure  





Posted by Duarte/Downey Real Estate Agency, Inc on 5/27/2012

It is a great time to be a real-estate investor. If you are looking to jump in the investor market low home prices and low interest rates make this a great time. According to Zillow.com. the real-estate market is starting to recover: U.S. houses lost $489 billion in value during the first 11 months of 2009, but that was significantly lower than the $3.6 trillion lost during 2008 and things only continue to look up. While the timing may be right, you will need to have all your ducks in a row. An investment purchase is different than your typical purchase. Consider your options. Have a strategy and know what kind of investor you would like to be. Ask yourself if you want to be a landlord, or are you planning on flipping or restoring and reselling properties. What types of properties are you interested in? There are many choices from land, to apartment buildings, residential housing and other commercial real estate. Partner with experience. Real estate agents experienced in investment property deals know what to look for in a deal. You may also want to consider asking a more experienced real-estate investor for advice. If you plan on becoming a landlord make sure to familiarize yourself with the local laws regarding being a landlord. Location, location, location. If you buy a property with hopes of renting it out, location is key. Homes in high-rent or highly populated areas are ideal; stay away from rural areas where there are fewer people and a small pool of potential renters. Also, look for homes with multiple bedrooms and bathrooms in neighborhoods that have a low crime rate. Also think about potential selling points for your property. If it's near public transportation, shopping malls or other amenities, it will attract renters, as well as potential buyers if you decide to sell later. The more you have to offer, the more likely you are to please potential renters. Have capital lined up. Speak to potential lenders or a financial planner about what you will need for assets and cash flow. You will need to have enough assets to handle the ups and downs that could come with investing. Most experts suggest a fallback of about six months of mortgage payments for landlords. You will need this in case or vacancy or repairs. If you're planning to fix up a home and sell it, you will need reserves to cover the costs to maintain the home while it is on the market. Becoming a real-estate investor is much different than being a residential homebuyer. A buying decision is a business decision not one based on emotions.





Posted by Duarte/Downey Real Estate Agency, Inc on 4/29/2012

Do you owe more than your house is worth? You are not alone. Many homeowners are finding themselves in with a house that they owe more than its current market value. So what should you do? Here are some options for homeowners with “underwater” mortgages: Stay and Pay Compare the monthly mortgage payment, plus carrying costs like repairs, homeowner dues and taxes, to the cost of renting. If you decide to stay and pay, you may be able to get financial help to catch up with payments if you run into a financial hardship. For example, the Emergency Homeowners Loan Program (EHLP) provides interest-free loans to homeowners who have fallen behind on their mortgages. Make sure to check with a HUD-approved housing counseling agency in your area to find out which programs may be available to you. Refinance The Home Affordable Refinance Program (HARP) helps homeowners who qualify refinance into a low, fixed-rate loan. The program has been extended through June 2012. For those who qualify, the terms are similar to those of any other conventional loan, but without the steep mortgage insurance that is typically required when there is less than 20% equity in the home. Loan Modification A loan modification means lenders lower the interest rate and payment, either temporarily or permanently. Lenders will also typically extend the term of the loan or to allow borrowers to make up missed payments by tacking them onto the end of the loan or spreading them out over the remainder. The most well-known modification program is the government-initiated Home Affordable Modification Program. The Treasury Department reports that homeowners who were successful in getting permanent modifications on their loans through this program saw a median reduction in their monthly payment of 40 percent—more than $520 each month—amounting to a program-wide savings for homeowners of an estimated $4.5 billion. Short Sale A short sale is when you sell your home for less than you owe. For the homeowner/seller, the goal is to get the lender to approve a short sale and forgive any remaining debt. Lenders do not always accept a short sale. It seems to make sense rather than allowing a home to go into foreclosure, but the red tape involved in a short sale can sometimes be overwhelming. The Home Affordable Foreclosure Alternative program (HAFA) is a government-initiated short sale program. Foreclosure According to RealtyTrac, one in every 605 homes received a foreclosure filing notice in May 2011. Foreclosure can have financial, legal and tax implications. For many homeowners, this is their last alternative. Bankruptcy If you need to stop a pending foreclosure, bankruptcy may halt a foreclosure long enough to get a loan modification considered. Filing Chapter 13 can help you catch up on payments over five years without interest. You may be able to reduce or eliminate other debts, freeing up more money to pay toward the home mortgage so you can get back to positive equity more quickly. This can be a very serious decision so it is imperative that you talk with a bankruptcy attorney before the foreclosure or short sale is completed.





Posted by Duarte/Downey Real Estate Agency, Inc on 1/29/2012

There are many ways that you can invest in real estate. One way is by purchasing land. This option can be a very lucrative choice, as long as you keep the few important points in mind. The reason why purchasing land could be a viable option is because you get to pick your location, and build a home to your specs. This will allow you to find your own contractors to construct your building for you. By having full control over who you choose and what you pay, it becomes easier for you to save on costs. Keep in mind that while you do have full control over who you choose to build on your property, it also means that there will be more responsibility hanging over your shoulders. For example, you would need to make sure that you have all the right permits to construct your building, and you also have to make sure that you choose the right contractors; otherwise the whole project can turn into a big catastrophe. Therefore, before deciding to purchase a piece of property that is completely void of any buildings, take some time to do some research, as this will save you a lot of headache in the long run. Buying land in a down market can also be a great investment. Land is becoming harder to come by, which is creating a higher demand for land and in turn bringing the price up. Buying land now and holding onto to it could bring some great return. Think about it in 10 years from now there will be a lot less land and your lot could be worth a pot of gold. Invest now and reap the rewards down the road. Think of it like a savings account, you deposit money into a piece of land and watch your money grow!