South Orange County Blog from Bob Phillips

Dos And Donts Of Buying Fixer-Upper Real Estate

fixer-upper-3A fixer-upper is real estate in need of serious repairs. These properties are often called “handyman specials.” If you have the skill or the money to complete the repairs, you can often find great deals. Here are some dos and don’ts of buying fixer-upper real estate.

DO Get A Home Inspection

Fixer-upper homes need repairs. Some of these repairs, like broken floor tile, are easy to see. Others, like water  damage in the attic, can be easily hidden. The only way to know for sure what you’re buying is to have the property inspected by a professional home inspector.

DO Pay Attention To The Home’s Market Value

You don’t want to buy a house and spend your hard-earned money for repairs only to find out the home is worth less than what you paid for it. Have your agent complete a comparative market analysis so you know what the fixed up home will probably be worth.

DO Have An Estimate For Repairs

There’s no point buying a fixer if you can’t afford both the cost of the home and the repairs. Get an estimate from at least three contractors before you buy. Knowing the cost of repairs beforehand will help you make the best decision.

DON’T Think About Potential Profit

You’ve probably heard countless stories about people who bought fixers and sold them for outrageous profits. However, the reality is that most distressed homes are sold for a small profit or no profit.

DON’T Buy A Home Just Because The Price Is Low

When you buy a fixer-upper, you have to consider more than just the asking price. Add together the cost of repairs, insurance, and what you can realistically expect to make from the sale. This will tell you if the home really is a good investment for you.

DON’T Buy If You Don’t Have The Money

No matter how good a deal you find on a fixer, they aren’t worth it if they will stretch your budget too far. The last thing you want to deal with is damage to your credit score and the risk of foreclosure in the event you can’t pay for the home.

Not ALL fixed up houses are going to be flipped or resold

Many fixed up houses become the eventual home of the owner, and were purchased with that in mind, while a large number of them become rental properties, for the owner, so, as you can see there are plenty of options, or reasons for buying a fixer.

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4 Tips To Lower Homeowners Insurance For Your Home

4 Tips To Lower Homeowners Insurance For Your HomeWith the prices for everything skyrocketing these days, every penny counts. This includes your homeowner’s insurance costs. If you’re thinking of buying a home and need homeowner’s insurance, here are a few tips on getting quality insurance for a fair price:

Tip #1: Shop Around

Ask family and friends about their homeowner’s insurance. Check the Yellow Pages, the National Association of Insurance Commissioners (NAIC) and the state insurance department.

Other places to shop for insurance include consumer guides, insurance agents and online insurance quote services. Don’t just look for lower prices, however. You need a fair price for the services you need.

Tip #2: Raise Your Deductible

The deductible is how much you have to pay before the insurance company starts to pay a claim on your home. The higher the deductible, the lower the premiums. If you live in a disaster-prone area, your policy may have a separate deductible for specific types of damages.

Make sure, when reading the policy, you carefully go over damage-specific information.

Tip #3: Use The Same Insurer

Some companies will take five to fifteen percent off your premium if you buy more than one policy from them. If the insurer offers homeowner’s, auto and liability coverage, you stand a chance of having a lower premium than if they only offer one or the other.

The key is to make sure that the combined price is lower than if you bought them separately.

Tip #4: Improve Home Security

By installing a sophisticated fire sprinkler system and a fire/burglar alarm that rings the monitoring stations, some companies will cut your premium as much as fifteen or twenty percent.

For a smoke detector, burglar alarm or deadbolt locks, you can usually get at least a five percent discount. Check with your insurer to make sure that the system you’re installing will lower your premiums, though; the systems aren’t cheap and not all of them qualify for a discount.

Read everything carefully before you sign, to make sure the policy covers your insurance needs without adding on hidden fees. Even a little money saved can go a long way toward making it easier to live within your budget.

Ready to buy a home? Let me help you find the perfect home and get it at the best terms and price.

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The Magic Number: Does Your Credit Score Need To Be Above 720 To Apply For A Mortgage?

The Magic Number: Does Your Credit Score Need to Be Above 800 to Apply for a Mortgage?Over the course of a lifetime, financial development can lead to some wonderful opportunities. A person’s financial development and state of affairs is something that is particularly important when it comes to taking out a bank loan to further progress in life, and the largest loan most people will require is a mortgage for a home purchase.

Since the process of getting approved for a mortgage is heavily dependent on credit history and that three-digit credit score that reflects reliability as a borrower, you should always put forth practices to keep that number healthy and growing.

However, how much importance does a credit score hold? Does that magic, three-digit number need to be above 720 in order to get approved for a mortgage?

The FICO Score: The Magic Number That Counts

When you apply for a mortgage, you will have to provide certain information to your financial institution or mortgage broker. The mortgage specialist at your bank or mortgage broker will then pull your credit score and your credit report.

Fair, Isaac and Company is the scorekeeper of your FICO score, which ranges from 300 to 850, 850 being the highest of all scores, and 300 being the lowest.

Every person in the United States has three FICO scores from the three different credit-reporting bureaus. Up to 80 percent of financial lenders will use a borrower’s FICO score in order to approve a mortgage application and determine a suitable interest rate on the loan.

The 600 Range: Fair And Good Credit Mortgage Options

If your credit score isn’t perfect (ie. above the 800 mark), you need not worry too much. There are many options available for those with credit scores around 600, and, with many different financial lenders to consider, having a mortgage approved sometimes means persisting with an application to several different lenders before receiving a “yes.”

With a “fair” and “good” credit rating falling between 620 and 719, there are options available to get approved for a mortgage well under the perfect 800 mark.  An FHA loan is a type of mortgage loan that is insured by the US Federal Housing Administration, offering an option with more flexible qualification measures. For homebuyers with a credit score above 620, this is a viable and common option.

720 To Perfect: Under 800 And Still In Great Shape

The median credit score in the United States is 723, and anything above 720 is placed with the marker of “excellent credit.” Therefore, just because you may range just slightly above 720, which may feel miles away from a perfect 800, you’re likely in just as good of shape when it comes to getting approved for a mortgage. You can expect a mortgage approval with good interest rates if you have a credit score higher than 720.

Keeping an eye on your credit rating and understanding the measures that are used in determining your credit score will certainly help you maintain a good score. Of course, speaking with a professional and receiving expert advice is always recommended. I have a few lender reps I trust, who I would be happy to recommend.

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What’s A Home’s Real Value?

Posted in Home Buyer Tips, Home buying, Home Values, Homeowner Tips, Housing Analysis, Real Estate Tips by southorangecounty on January 29, 2014

What's Your Home's Real Value?As a society, it seems like we’ve gotten away from appreciating our homes for their emotional and sentimental worth. Instead, we focus solely on their monetary value.

An Appraiser Can Estimate A Home’s Monetary Value, But To Gain A True Concept Of A Home’s Worth, You Must Also Take Into Consideration:

  1. Pride Of Ownership. You don’t buy a pair of Prada shoes because you’re going to be able to resell them and make a profit. You buy them because they make you look good and feel good.
  2. Security And Stability.  Your home provides a roof over your head that’s in your control. You can decorate it how you want. You don’t have to worry about a landlord selling the property or asking you to move out. In the “olden days” (or should I say “golden days”), we called our homes our castles because, as owners, we felt like the kings and queens of our homes. You can still feel that way! Claim your castle and crown yourself king or queen today.
  3. A Safe Haven.  After a tough day at work or a day of disappointments, where’s the first place you think of going? Home! As Dorothy says, “There’s no place like home.”
  4. A Place To Make Memories.  Your son’s tree house and daughter’s playhouse.  The markings on the wall that tracked your children’s growth. The porch swing where you start and end every anniversary celebration.
  5. A Neighborhood Full Of Friends.  In the event of an emergency, your neighbors are your first line of defense. They’re also the simplest, best and least expensive form of security. Additionally, they may have the exact tool you need for a project; the extra pair of hands you need to complete a project or children to become playmates with yours. Neighbors also give you that much needed in-person, up-close social network.

Even if a home’s economic value has dropped, the owner continues to benefit from its emotional values of community, stability, security and success.

Thinking of buying a home? I can help you evaluate the emotional and monetary worth of homes and find a home that fits your values and lifestyle.

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5 Great Questions To Ask At An Open House For Real Estate

Posted in Home buying, Real Estate Tips by southorangecounty on April 18, 2013

5 Great Questions To Ask At An Open House For Real EstateAn open house gives you a great opportunity to look more closely at South Orange County real estate you might be interested in buying.

It also affords you the chance to chat with the owner or real estate agent so you can bring up any issues or hesitations you have with the home.

Knowing what to ask can be difficult, so below are examples of questions to ask at the next open house you attend.

Why has the seller decided to sell now?

If you ask why the seller is moving, you could learn valuable information to help determine your offer — or possibly whether or not you want to buy the home.

Knowing whether the owners are about to go into foreclosure, have experienced trouble in the neighborhood, or if they’ve retired and completely paid off the home can help you understand how urgently they need to sell their property.

Has the seller had any other offers?

Don’t forget that you are not only negotiating with the seller for a price, you are also competing with other potential buyers.

It really helps to know what you are up against.

It is important to understand that you might not get a 100% straight answer to this question as most sellers know that competition – or perceived competition – can cause a potential buyer to move forward more quickly and at a higher price.

If you’re comfortable in this discussion, you might want to try and see if you can find out the details of any other offers.

Does the property have special ownership costs?

Ask the agent or owner about the other costs associated with owning the property, such as Home Owners Association fees within a condo complex or a gated community.

It’s important to know about these extra expenses in advance so you can make an informed offer.

You may also want to ask about any pending litigation concerning the property.  Litigation is not always a deal killer, but it’s better to know the details before you sign closing documents.

What furniture and appliances are being sold with the house?

In most cases all built-in appliances, such as ovens, microwaves, dishwashers, and refrigerators are included in the sale. Occasionally, a seller will also include free-standing items like a washer & dryer in the laundry, along with a refrigerator that matches other appliances.

If you don’t already have these items, it’s important to know whether they are included, or could be negotiated into the purchase price.

Is there anything else that you want the seller to leave with the home?

This is an important question to ask.  Especially if there are specific things in the home that you have a strong interest in.

Perhaps there is custom art work or a pool table that fits perfectly in the game room.

The seller may be eager to part with those items and include them in the sale of the home or sell them at a large discount.

The open house is a great opportunity to learn more about a home before making the decision to buy it, so be sure you ask the right questions.

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