Real Estate

By the Bakersfield Association of REALTORS

» WHY RENT WHEN YOU CAN BUY! Now is a great time to purchase a home. Take advantage of the lower interest rates and all the special opportunities for first-time buyers. If you’re not familiar with what it takes to purchase a home, here is a simple checklist to help you make that decision. 1. KNOW YOUR FINANCES: Are there any bills you could eliminate or payoff that would give you extra money to put aside and save for a down payment? Down payments can run 0 percent for certain types of mortgages or 5 percent to 20 percent depending on the loan. The more money you put down for a down payment, the less added fees to the mortgage, which equates to a lower monthly mortgage payment. 2. CHECK YOUR CREDIT SCORE: Know what your number is. Lenders use this information to decide if they will approve your loan and what interest rate they will offer you. Late payment or other harmful items can lower your odds of getting a loan. So, check that score! And by the way, start a wish list of what you want and need in a home.

OK, get out your list. Finances – check. Credit score – check. Now we move on to the pre-approval process.

3. PRE-APPROVAL: Paperwork, paperwork, paperwork and more paperwork. Getting pre-approved is a process where the lender scrutinizes your finances, your credit history, and so much more. They look at your income, assets, debt-to-income ratio, and all of this helps them determine if they will loan you the money to purchase the home. They also determine what your monthly payment will be and what you can afford.

Pre-approval — check, check, check. 4. NOW, FIND A REALTOR: REALTORS are members of the National and California Association of REALTORS and pledge to follow its strict code of ethics. They are obligated to you, the client. They are the expert guides that will help you get through the stack of forms, reports, disclosures and other documents. They offer objective information about each property. They have expanded search power and knowledge about the area that you won’t find elsewhere. They can find opportunities not listed on home search sites and avoid any out-of-date information, not to mention they can negotiate for you. They have experience and will be your rock through the challenging and emotional times.

Get out your wish list and share it with your REALTOR. Now let’s go house hunting. Remember, you probably won’t find a home with everything on your wish list, so know your needs vs. your wants.

You found the perfect home; now you can have your REALTOR make an offer. Once your offer is accepted, they will open escrow, order a home inspection, and appraise the home you want to purchase. Don’t fret; REALTORS are with you every step of the way. Everything is verified and complete; you checked all of the boxes. You are now officially a homeowner. What’s next — moving day!

Congratulations!

Short sale versus foreclosure

Shopping for real estate may require prospective buyers to learn a whole new language. Buyers may come across certain terms they don't understand. Among the more common terms that first-time buyers may not fully understand are "short sale" and "foreclosure." According to Realtor.com, short sales and foreclosure auctions are situations that occur when homeowners fall behind on payments and can no longer afford to live in a home. A short sale happens when a homeowner owes more on the mortgage balance than the market value of the property when the owner needs to sell. The homeowner can ask the mortgage lender to accept a lesser amount than the total mortgage owed - making the homeowner/seller "short" on paying the lender back. A foreclosure is a legal process that occurs when a borrower cannot make mortgage loan payments for a significant period of time. If the debt is not recouped, lenders will step in and take ownership of the property, putting it up for sale in a foreclosure auction. While these situations can be troublesome for the homeowner facing financial peril, distressed properties can be advantageous for buyers who oftentimes can buy homes at steep discounts. However, short sales and foreclosures are not without challenges. The real estate experts at Zillow say that foreclosures and short sales involve more layers than traditional transactions. Zillow offers that bank lenders historically can be slow at giving approval for mortgages to purchase short sale properties or even agreeing on an amount for the sale. As a result, buyers may miss out on other opportunities while waiting for short sales to move along. Foreclosures carry their own hurdles. Buyers may not get a chance to even see a foreclosure property, nor be eligible to have it inspected, as foreclosed homes are typically sold "as-is" and at auction. The real estate agency Re/Max says buying a foreclosure typically is faster than buying a short sale, and an investor can buy a foreclosed home for below market value. But foreclosures cannot be contingent on the sale of another home, so a buyer must have funds in place and be ready to move quickly. Short sales are often initiated by homeowners looking to avoid foreclosure. As a result, short sale properties may be in decent condition. This may not be the case with a foreclosure. The American Society of Home Inspectors says foreclosed homes may have been neglected by having utilities turned off and no maintenance done on the home. Other homes may have been purposefully vandalized by the former owner or by squatters.

— Metro Creative Connection