Thank you Single Women!

The Queen of Your Own Castle seminar in May had a great turnout and I think (and hope!) those who attended left with a good idea of what they need to do next in order to buy real estate in the Bay Area. I thought it was fun but too short. So the next one will be two hours with a break in between so we're not cramming everything in under an hour and a half.

I wanted to follow up with one section of the seminar: Active Buyers. Like many books out there on Best Practices of Successful Businesses I covered Characteristics of Successful Buyers. Anyone starting out in real estate should have the following characteristics and if you don't, please use this list a to-do list. Aspiring to be a successful ACTIVE buyer will make buying a home in the Bay Area a tangible goal instead of a dream.

ACTIVE BUYER CHARACTERISTICS

1.  You met with a mortgage broker who has evaluated your financial standing.
2.  You know exactly how much you can afford
3.  You know exactly how much you could put down
4.  You know about how much your interest rate will be
5.  You have an agent, preferably me! ;)
6.  You’ve outlined a few neighborhoods of interest
7.  You are on an automatic email alert that tells you when a property matching your criteria comes on the market through MLS
8.  You sometimes join your agent on Tuesday Broker Tours
9.  You know who Andy Sirkin is now
10. You understand the concept of a TIC

After you've crossed off everything on this list you move into what I call the Seasoned Buyer. In two weeks I'll post the Successful Characteristics of Seasoned Buyers so you have plenty of time to work on your Active buyer status.

Again, thank you for attending my real estate seminar for single women and stay tuned for the next event date!

Free Real Estate Seminar for Single Women!

I'm so happy to announce that my favorite mortgage broker Bobbi Clemens and I have teamed up to create a really great series of seminars called Queen of Your Own Castle for single women looking to buy their very own home.

Hey Single Women! Our goal is to help you feel more informed and confident so that buying without a partner doesn't feel scary, overwhelming or impossible. My hope is that you leave the seminar with a plan to either get you started or off the fence. No matter where you are in the process, I promise you will leave this seminar with a to-do list tailored to your specific needs, resources and inspiration to make this very smart dream of homeownership come true.

You can do this! (And it will be fun.)

Queen of Your Own Castle
Real Estate Seminars for Single Women

Wednesday, May 14th
6:30 - 8:00pm

Opera Plaza HOA Room
601 Van Ness Ave, Mezzanine Level
San Francisco, CA

Email nikki.gunn@pacunion.com or call 415-518-7543 to RSVP. Limited space is available so sign up quick!

First-time Homebuying From a Position of Strength

I was thinking about what Bobbi wrote (3.5.08 post) and I wanted to get on my soapbox for a minute.

I have seen so many first-time home buyers wait until they find the house they really want before discussing real numbers with a mortgage broker. Can you guess what happens next? They find out that their credit isn't up to par or they have to put more money down and then the depression kicks in along with frustration and sometimes anger.

In my experience, the waiting comes from fear. It's fun to look at houses, check out what's going on in a neighborhood you like or figure out where to put the couch---that's the easy part, HG TV thrives on it.  But, when reality sets in you are forced to deal with the numbers.  Numbers make it real...and for some real scary. They are scared of seeing themselves as too grown up or scared of not being able to understand the math, or scared of the right time to buy, etc, etc. I've met people at open houses who have never pulled their credit score, ever, mostly afraid of what they will see. Yet, they continue to ask me about remodeling ideas and options for a garage. To lessen stress on yourself and your agent, meet with a mortgage broker first. She/he will assess what's going on with your finances and determine what you need to do in order to get the best loan.

Don't make it harder for yourself. Instead of being stuck in a REACTIVE situation, be PROACTIVE. Enter your real estate transaction from a position of strength by knowing where you stand financially. Do you go to the grocery store without looking at your bank balance? Do you buy a $400 dress without considering your budget? Most likely not because most of us are smart, thoughtful people who manage our daily lives with financial consideration. For so many people, buying real estate throws their rationality out of whack.

Take a deep breath and try to keep the emotions out of this very emotional purchase. Find out where you stand financially, then take the steps to get where you really want to be. THEN look for the house, put in an offer, negotiate, and work your way through the disclosure packet--which is another beast altogether. When you do things one at a time, instead of overwhelming yourself with learning the whole process at once, you'll be a happier and wealthier home buyer. I promise!

Don't let paperwork issues slow down your loan application

Buyers, want to speed up the loan process so that you close escrow on time? Be sure to use these 5 helpful hints from Union Trust Mortgage Broker, Bobbi Clemens to complete your loan application.

1. "Seasoned" Down Payment: Keep your down payment and closing costs in an account with your name on it for at least two statement periods.  If a parent is giving a gift - give it NOW and then let it sit in the account until you are ready to buy.

2. Complete Financial Statements: Two months of statements from all bank or stock or investment accounts - all pages, every single page - even if the last page is blank.

3. Rental History: If you pay rent to a private individual, instead of a property management company, then make copies of canceled checks for the past 12 months. If you don't keep them at home be sure to order them early from the bank.

4.  Verification of Self-employment: If you are self-employed, include a letter from your CPA that says you have been a client for the past two years and have filed taxes as self-employed.

5. Verification of Employment - In many companies, verbal verification is not permitted. A form needs to be faxed in and it takes a few days to verify current employment. Find out NOW the indvidual (and their fax number) who can provide a verification of employment (usually HR).

Who doesn't love a map?

When buyers first start looking at houses, I tell them not to bother with open houses yet.  Check out the neighborhoods first!  Ask your friends, co-workers, etc where they live and why they like their neighborhood (hopefully they like their neighborhood!), then go check it out.  And I'm not talking about a drive through.  Get out of your car and walk around.  That's right, take at least an hour walk. Or make it an half hour walk in the day and then an half hour at night (especially at night...everything looks a little different in the moonlight.) Shop, have dinner, watch a movie, take in a cocktail...act like you live in that neighborhood.

AND TAKE A MAP.  I always give my buyer clients this lovely orange fold-out map from SFAR (your real estate friends who bring you MLS) because this city map is broken down into the official real estate districts, for example Pacific Heights is 7B.  That district corresponds to what you see in the MLS listing.  It's a handy map to have because when you go on your walk, you might stumble across a cool street that you thought was in Pacific Heights, but actually falls in Cow Hollow, 7D---and you didn't have 7D on your list!

So, check out the neighborhoods first, then start looking for houses. It will help you stay focused and enjoy your new home inside and out. If you are not currently working with an agent, send me an email and I'll send you a map free-o-charge!  Otherwise ask your agent for one.  What if your agent don't have one? Well, besides being SUPER lame, he/she can order one for you.

Watch the video then see it in person!

One True Media is rocking my world. Check out this video montage of my listing at 314 Union Street. Which by the way I'm holding open this Thursday evening from 5-7...you should come by! #312 is also for sale and will be open. More details check out www.314UnionStreet.com

(video has sound)

Create your own video at One True Media

Fast Track Credit Score Improvement

At Bankrate.com there was an interesting article on the subject of credit score repair.  When looking to improve ones score, most buyers hear the same advice: remove mistakes and pay on time for about a year.

But this article talks about bumping up your credit score when you are on the border of getting a good rate or a high rate.  Most banks give the good rate to borrowers with a 700 FICO score or higher, while a 698 score could cost you 1.2 percent.  If you are at 720, don't worry about improving your score to 740--you are already in the sweet spot.

So for the rest of us, these tips should put us on the fast track to credit repair:

• Repair errors first: payments that you know were not late, paid off debt that is still showing up, and negative debt that is over 7 years old should all be removed.
• Pay down some of the debt: You really should only use  about 20-30% of your available credit.  If your cards are hovering at the max, pay them down.  "After 60 days", says David Herpers of Amerisave Mortgage Group, "it is possible to increase your score 20 points by paying down your credit lines."
• Forget about grace periods: Make payment from now until you buy the house on time, before the grace period.  Banks like early payments and low balances.
• Don't close your accounts: keep old accounts open, in fact if it has been a while since you used an account, go buy something on it, then pay it off the following month.  Closing accounts can affect what is called the utilization ratio, which is the amount of debt divided by your total available credit.  The utilization ratio should be below 50%.  If you do need to close an account, don't close the old one.  A long credit history goes a long way and if you only have new cards, then you look like a new borrower.

Mortgages for Muslims

I thought this was facinating!

Subsidiary of Bank to Follow Islamic Law (January 3, 2006) -- University Bank in Ann Arbor, Mich., has established a subsidiary devoted exclusively to providing home financing and other banking services to Muslims in compliance with the laws of Shariah, which prohibits paying or receiving interest.

As an alternative to a traditional mortgage, University Islamic Financial Corp. will offer a redeemable lease arrangement under which the bank will hold the property in trust as the buyer makes monthly payments. A set amount of savings is included in each rent payment to build equity in the residence, and the buyer owns the home once the savings reach the amount of the purchase price of the house.

University Bank has provided Muslims with special services over the past two years and has offered such mortgages to 57 families in the Detroit area. Source: Myrtle Beach Sun News (SC) (01/03/06)

Pre-New Year's Resolution: Buy Real Estate

For many buyers, winter may be a time to take a break from house hunting and enjoy the holidays with friends and family.  But savvy investors know a seasonal slow down in the market can give buyers an advantage.

Last year, according to the National Association of Realtors, existing home sales fell 31 percent in January, reflecting that few buyers were out looking in late November and early December.  In March, however, sales shot up 41 percent, indicating that buyers rushed back to the market in late January and early February.

What does that mean for buyers hoping to take advantage of the seasonal slowdown? Now is the time to buy! 

It’s a great time for buyers because there are loads of properties on the market with less competition.  For the first time in years we’re actually seeing price reductions. Sellers may be getting anxious because their property has been on the market 40, 50 days or more.  This summer, that was not the case.

Multiple Listing Service data shows that in August, 406 of the 980 homes on the market were sold, verses October when only 249 of the 1,324 homes on the market sold.

The summer buying frenzy has taken a toll on buyers and many more are simply burned out.  “We competed among multiple offers for more than three months in a row.  It was exhausting,” recalls new homeowner Tom Kidman.  “I have friends who are waiting until Spring to start up again—they just need a break.”  But if buyers can muster the strength to continue, at least they won’t have to compete with as many buyers and just might find a deal.

To prepare buyers for the possibility of a market swing in their favor try following strategies for shopping during the Holidays:

·         Talk to your Realtor: Make sure your realtor is not going on vacation.  Many agents take advantage of the slow period and plan vacations during the holidays.  Good agents will always have an experienced agent covering their clients, so be sure to ask before you put in the offer.

·         Look for high DOM: The higher the Days on Market, the more likely Sellers are to negotiate.  One indicator of high DOM is a higher than market price.  When the price is right, buyers buy.  So, if the DOM is high, check comparables—the price might be too.

·         “As they come” offers: This means the seller’s agent will accept offers anytime, as opposed to a set date.  Offer dates, popular this summer, allowed sellers to review all offers at once, therefore driving up competition among buyers.  Now, many agents with offer dates are finding themselves empty handed.  So, be sure to ask if the offers are “as they come” and apply a short timeframe for the seller to review the offer.  This allows you get in quick with less opportunity for other offers to compete with yours.

·         Under asking, but no low ball: Sellers who put their home on the market during the seasonal low usually have a good reason.  I like to call these “life happens” reasons like a job transfer or a new baby.  Because these sellers are highly motivated, buyers might win with a under asking offer.  Be prepared for a counter offer from the seller to raise the asking price or shorten the escrow time period.  Being open to negotiation will help your chances.  But, don’t low ball or you might find insulting the seller just knocked you out of the running.

With New Year’s resolutions stacking up, home ownership should be one to mark off your list early!

Below Market Rate Condos

There was an interesting article in the Washington Post last month about Below Market Rate Condos.  In an effort to help first home buyers with actually purchasing something in the city, the Mayor's Office requires that new buildings include a certain percentage of Below Market Rate Condos or BMRs. 

"There's no question that the demand far outstrips the supply of these programs. I'd be reluctant to even put a number on by how much," said Matt Franklin, director of the Mayor's Office of Housing, which administers the city's various first-time homebuyer programs.We have a very severe affordability challenge in this town," he said. "Currently, about 12 percent of households in San Francisco can afford an average-priced home."That 12 percent figure assumes buyers put 30 percent of income toward annual housing costs, he noted. In some markets these days, homeowners are paying up to 50 percent of income toward housing.

So, the city has created a lottery system for these BMRs.  First time home owners can not only qualify for downpayment assistance, but also get a condo in a nice building for less than what everyone else pays--sometimes hundreds of thousands less.  The income restrictions are not that outrageously low either: up to $66,500 - $76,000 for one owner or $79,800 - $91,000 for a couple.  So, as you can imagine, the competition is fierce.  The article explains BMRs much better than our city's web site on the subject, so here is an example of how BMRs work.

Winning the lottery will get you into a home, but it doesn't come without its own limitations. San Francisco's below-market-rate homeowners must live in the home rather than rent it out, and when they decide to sell, the price is dictated by a city formula, aimed at keeping the home affordable for moderate-income people.

The sales price formula is based on what a moderate-income buyer can afford, so prices move upward with changes in the median income for the metro area, released by the U.S. Housing and Urban Development Department each year.

Thus, any sellers of below-market-rate units in recent years would have missed the astronomical price gains enjoyed by other San Francisco homeowners. By the second quarter this year, the median price in the Bay area was up more than 40 percent from the median in 2002, while incomes rose incrementally in that time.

But that doesn't mean you don't make gains, particularly if you stay in the home for a number of years, noted Lori Bamberger, deputy director of San Francisco's Mayor's Office of Housing.

She offered a theoretical example: A family of three could have earned up to about $58,000 in annual income in 1997 -- that was the median income then for this metro area as determined by HUD -- so the city would have sold a two-bedroom, below-market-rate unit for $186,771, because that's what the city determined that household could afford.

Today, that same two-bedroom below-market-rate condo is priced at $325,488, based on what the city determines a family of three earning the area median income now -- $85,500 -- can afford.

Thus, if a family bought that condo in 1997 and sold this year, they would have enjoyed a rise in value of 74 percent over those nine years, or about $139,000. Perhaps not as much as someone in a market-based house, but still something. And the gains ensue no matter which direction home values head in the broader market.

Still, that doesn't mean gains are guaranteed: While median income levels usually go up each year, they didn't between 2004 and 2005 for the San Francisco metro area, Bamberger said.