Help!!!! First time home buyer in Cali

[fxpose]

Originally Posted by bvilchez

I see houses being sold at $250k and people make offers of up to $310k on houses (or so the listing agent says).

Don't believe what they tell you. Never offer more than the asking price. In fact, offer less and they will counter.
Of course, this all depends on the region and market conditions.

[MikeyC]

Originally Posted by yourchoice

Well good for you guys! In these parts, I've seen (and received) offers 10, 20 even as much as 50K less than asking (on a 350K +/- home). Firsthand, I don't remember seeing anything above asking for a long while. I'm not a realtor, but in the real estate business (new home builder).

Good luck in finding the home you want...there should be plenty from which to choose.

It really does vary quite a bit from state to state and even town to town. In the area I work there are still multiple offer situations on occassion. Most of the towns I work in are the most desired towns in the state. Many people would sell their 1st born so to speak to live in some of these locations. So, they've held their value quite well. Some of these towns until quite recently were experiencing increases in value while values in the rest of the country were declining steadily.

Always remember the top 3 rules in real estate:

1. Location
2. LOCATION
3. LOCATION!!!!

Always buy in the most desirable town you can afford (buy a smaller home if you have to). Never buy near power lines, on a busy street, near a highway, or generally in what would be considered a "bad" location. As I mentioned, real estate should be considered an investment and if you buy in a "good" location your home will sell faster and retain more value in a down market and appreciate faster in an up market.

[MikeyC]

Originally Posted by fxpose

Don't believe what they tell you. Never offer more than the asking price. In fact, offer less and they will counter.
Of course, this all depends on the region and market conditions.

The part that I bolded is a HUGE caveat. Listen to your realtor. They know the actual market conditions better than your local newspaper, TV news broadcaster, next door neighbor, uncle Fred, or whoever else you may poll. Your realtor will guide you as to the value of the property you are interested in and what the current market conditions are so that you can come up with an appropriate amount to offer that will give you the best chance not only to get the house but also for the least amount of money.

While there is a lot of good advice on here take it all with a grain of salt. Your local market conditions will likely be different than many of the people who offered advice. Also, keep in mind that many of the people who responded in this thread are not real estate professionals. People will learn a lot during the process of buying/selling real estate during their lives. But doing one transaction every 3, 5, or even 10 years does not make you as expert as a professional who goes through 10 or maybe 20 transactions every year.

The best advice I personally can offer you is to find yourself a trustworthy (not all are unfortunately), hard working, and intelligent realtor. While an agent of this type is not always easy to find (and is often NOT the guy who does the most business ironically) if you can find one their services will be invaluable. Plus, if CA is anything like MA, the seller pays all the agents commissions and so it will cost you nothing. Many people will say to you "don't get your own realtor. Go direct and get the listing agent to reduce his commission. This will reduce your expenses." In my experience 9 out of 10 times those people end up overpaying for the property. So, getting the commission reduced in the end saved no money.

Originally Posted by MikeyC

Always remember the top 3 rules in real estate:

1. Location
2. LOCATION
3. LOCATION!!!!

Seems obvious but don't be fooled by that 'great deal' beside the railroad tracks.

[pnoon]

Originally Posted by MikeyC

The part that I bolded is a HUGE caveat. Listen to your realtor. They know the actual market conditions better than your local newspaper, TV news broadcaster, next door neighbor, uncle Fred, or whoever else you may poll. Your realtor will guide you as to the value of the property you are interested in and what the current market conditions are so that you can come up with an appropriate amount to offer that will give you the best chance not only to get the house but also for the least amount of money.

While there is a lot of good advice on here take it all with a grain of salt. Your local market conditions will likely be different than many of the people who offered advice. Also, keep in mind that many of the people who responded in this thread are not real estate professionals. People will learn a lot during the process of buying/selling real estate during their lives. But doing one transaction every 3, 5, or even 10 years does not make you as expert as a professional who goes through 10 or maybe 20 transactions every year.

The best advice I personally can offer you is to find yourself a trustworthy (not all are unfortunately), hard working, and intelligent realtor. While an agent of this type is not always easy to find (and is often NOT the guy who does the most business ironically) if you can find one their services will be invaluable. Plus, if CA is anything like MA, the seller pays all the agents commissions and so it will cost you nothing. Many people will say to you "don't get your own realtor. Go direct and get the listing agent to reduce his commission. This will reduce your expenses." In my experience 9 out of 10 times those people end up overpaying for the property. So, getting the commission reduced in the end saved no money.

By far, the best post in the whole thread.

[RGD.]

Originally Posted by MikeyC

Home Inspectors can only point problems. They're kind of "jack of all trades master of none" kind of guys. I don't know how it works in CA, but here in MA after you have your initial inspection you're allowed to have follow up inspections as long as it is within the inspection period designated in the offer. This is a good time to bring in contractors who are experts in these areas and will give you a much more accurate idea of how much it will cost to fix an issue found during the initial inspection. In fact, here in MA most home inspectors will not even risk venturing a guess as to repair costs as they are not experts in the matter and are afraid of a lawsuit.

Also, as a realtor, I never advise my clients to allow the homeowner to fix any issues from the inspection unless it's something as simple as a squeaky door. Call in a contractor during the inspection period, get an accurate estimate of how much it will be to fix, and negotiate a credit for closing costs equal to the repair cost. Mainly I tell people this because the homeowner will have the problem fixed in the absolute cheapest, shoddy manner possible. So, it's better to get the money and fix it yourself after.

Don't mean to harp on this subject - and I will stop after this - it's just that I see this constantly in my line of work. Make sure the home inspector is certified with "The American Society of Home Inspectors (ASHI)". In most any area all a person has to do is print up a business card and call themselves a home inspector. And once they identify there is a problem - as suggested above - call a contractor. In my line of foundation and structural repairs - most inspectors can say there is a problem but they don't normally know how to fix or the cause or the cost.

Anyway -

Ron

[MikeyC]

Originally Posted by RGD.

Don't mean to harp on this subject - and I will stop after this - it's just that I see this constantly in my line of work. Make sure the home inspector is certified with "The American Society of Home Inspectors (ASHI)". In most any area all a person has to do is print up a business card and call themselves a home inspector. And once they identify there is a problem - as suggested above - call a contractor. In my line of foundation and structural repairs - most inspectors can say there is a problem but they don't normally know how to fix or the cause or the cost.

Anyway -

Ron

That will differ from state-to-state as well. In MA you have to be licensed by the state. I don't know what the licensing requirement is, but I know they have to be licensed. Extra designations like the ASHI certification never hurts either.

Originally Posted by pnoon

By far, the best post in the whole thread.

Thanks! That's why I'm a real estate professional.

[cbsmokin]

Since this is your first house don't forget the importance of sweat equity. The place you buy (epically your first) does not have to be perfect and actually you can save a lot of money if you are willing to do some simple jobs yourself.

Be wary of the Realtors, a good one is very hard to find. With out having worked with one before it will be more difficult. They should prepare a file for you. It will educate you about area trends (with actual figures of sales in the area), schools, property taxes, grocery stores, emergency services, etc. Also, don't be afraid to overwork them. Make them show you 100 homes if needed.

FWIW FHA rates on a 30yr fixed are about 5% right now so your VA should be the same.

One last thing ... make sure the house has a place for you to smoke your cigars!

[MikeyC]

Originally Posted by cbsmokin

Be wary of the Realtors, a good one is very hard to find. With out having worked with one before it will be more difficult. They should prepare a file for you. It will educate you about area trends (with actual figures of sales in the area), schools, property taxes, grocery stores, emergency services, etc. Also, don't be afraid to overwork them. Make them show you 100 homes if needed.

On behalf of all Realtors . . . THANKS A LOT!



On a serious note, if your Realtor ever gives you the impression that they don't want your business or that you are inconveniencing them with your desire to find a house then you're probably not working with a good Realor. So, find a new one.

[livwire68]

Originally Posted by MikeyC

Every market is a little different. Some have suffered much more of a collapse than others and this will even vary from town to town in the same state. Buying a foreclosed property can certainly save you some money, but the buyer takes on additional risk that they don't during a "normal" transaction. Also, DEFINITELY stay away from short sales. With a short sale, you'll be lucky if you can close on the home a year after you make the offer. Also, like in a foreclosure situation you take on additional risk.

Typically "AS IS, WHERE IS!" you can still get a home inspection to make a determination. Ours was 2 years old and I am in the construction business, so I was confindant in our decision. We did not get a home inspection, I did it myself and in the contract I also added an insurance for any home problems for the next year, which they agreed to being their cost. The best thing to do is get to know a relator (if not satisfied, get another) and they will be your guidiance through it all. And yea I worked 2 realtors, its not about their happiness its about yours!!!!!!!!!!!!