Take a look at the second page – look towards the bottom of the page.  Months supply of homes in Alta Loma, Rancho Cucamonga and Upland for the months of February, March and April.  We have 2 months supply of homes for the anxious buyers who are ready to buy!  If you have been on the sidelines waiting to put your house on the market, this summer might be the right time.

I introduced myself and as I expected, he is the owner and builder of this building with six apartments.  He’s retired and likes to meet the people who will eventually rent from him. He showed me the apartment and we had a great talk about real estate.

Very refreshing!  This is the way real estate used to be done – face to face.  When I received my real estate license 15 years ago, real estate agents would “present” offers to the Sellers in person.  Of course there were no cell phones and email was just becoming popular.  Now days offers are emailed, scanned or faxed back and forth with buyers, sellers and agents never meeting.  Ok, I admit the world works faster now but sometimes I wish I could present my offer to the Seller so that my Buyer would have their offer looked at in a better light.  Investors are snapping up properties that in my opinion should be going to first time buyers.  The investors have cash and “cash is King” so they say.  My buyers want a piece of the action!

Is this the year to sell your Home?  Have you been “waiting out the market” hoping for better prices?  Five years have come and gone since the “good old days” of high prices.  Reality has set in and we now know that a house is a Home first and foremost.  Everyone needs a place to call Home.

So if you are thinking about selling in 2012, here are 5 things to do to get ready:

1.  Clean up – no one likes a dirty house.

2.  Fix anything that is broken.

3.  Figure out what is your next step – will you down-size, move up, rent?  Get your plans together

4.  Hire a Real Estate Agent that you like and that understands Your needs.

5.  Price your Home at Market Value – don’t be tempted to go higher – it does not work anymore.

Congratulations!  Escrow has closed!

You’ve been waiting for your Realtor to say this for the last 30 days!  Your lender has “funded the loan” for your new home and escrow has reported to your Realtor that the grant deed has been recorded at the county recorder’s office.  That event signals that Escrow has closed!

It seems that this time period has lasted forever but soon it will be a story that you will be sharing with your friends and family for years to come – you survived buying a Home!  You have accomplished the All American Dream of Home Ownership!

Hope you have been packing because tomorrow is moving day!

So at this time you are about 3 weeks in to the escrow process. The home inspection has been completed and any repairs needed to the home have been agreed upon by the you and the Seller. The lender has ordered an appraisal and it has come in at the agreed upon price and the conditions of the loan are being taken care of by the lender. You have approved the disclosures and signed all escrow documents. You have scheduled your tentative move date.

Escrow will call you approximately 5 days before the close of escrow date to schedule an appointment to sign the loan documents. It is always nice to have your Buyer’s agent present for this appointment so don’t hesitate to ask. Many agents will try to coincide the “walk thru” on the same day as you sign loan docs. That way you know that you are about 5 days away from closing your escrow.

You hear the word Escrow over and over when talking about buying a house but what is it anyway?

I like to describe escrow as a neutral third party that is in charge of gathering and dispensing information about the home purchase. They work for you so if you have any questions, please call the escrow officer. They will be happy to answer questions.

Most escrows last 30 days, “Time is of the essence” is the rule of thumb. Gone are the days of 60-90 day escrows. The sooner escrow can close, the better. Escrows on bank owned homes are also as short as possible. Now of course if your escrow involves a short sale – who knows when that escrow will close!

Escrow will gather title information about the property, insurance information, homeowner’s association information (if it applies), lender and loan information. Escrow will check on the progress of the loan and report on it to the agents. Escrow will also gather all funds – from the EMD (Earnest Money Deposit) to the down payment and loan funding money. Escrow instructions are given to both Buyer and Seller to be signed and returned. There is a lot going on at Escrow!

Escrow also can change terms of the contract for the Buyer and Seller however the change will have to be in writing and agreed upon by both parties. One party cannot make a change without the other one knowing about it. For example, if the Sellers need to change the date of the close of escrow, they will need to write a letter to escrow asking for the date change. If the Buyers agree and sign the change of date form, then it happens.

What act signifies the “Close of Escrow”? The recording of the Grant Deed with the County Recorder with the new owner’s name on it! And the best part – Escrow will be the one to call your agent with the good news – Escrow has closed!

As soon as you have acceptance of your offer, your lender needs to be notified so that he can order an appraisal.

The appraisal process has changed in the last couple of years. Let’s suffice it to say that the appraiser is randomly picked from a pool of appraisers.

The appraiser will meet with the listing agent at the property. They measure the dwelling and inspect the neighborhood and recent sales. The buyer will be given a copy of the appraisal.

Once the appraisal is back at the lender’s, the lender will put in motion the final “conditions” of the loan process.

Should the appraisal not come in at the agreed upon price, then that opens up negotiation again. Both Seller and Buyer will have to agree to go with the appraised value or escrow “falls out”.

Buyers are encouraged to hire a licensed home inspector to do a general inspection of the home they want to buy. Ask your Realtor for at least 3 or more names of inspectors that they recommend. The general home inspection can lead to other inspections. For example, if the home inspector finds the air conditioner to not be working to its fullest potential, they will recommend further inspection by a qualified HVAC technician.

Yes, it can get pricy but it is the best way to evaluate the condition of your future home. In my opinion, it is better to spend $300-700 on inspections to determine if the house is worth buying than to find out 6 months after you move in that you have bought a “money pit”.

Buyers on average see 10 to 12 houses for sale before finding one that suits enough of their needs that they feel good about making an offer. So many of my Buyers watch House Hunters on HGTV and think that I will show them only 3 homes and they will have to decide from those 3.

When you feel right about a house, it is time to write an offer! This is scary but remember, it is an initial offer to purchase. There are many variables that play in to you actually purchasing the home so moving forward with an offer is nerve wracking but worthwhile if you have done your homework. I have seen many Buyers think it over for a couple days only to find out that their dream house has been sold.

So how do you make an offer? You will need to know what price to offer. By reviewing the recent sales in the neighborhood, you will know what the right price is. It is recommended that if you want to purchase the house, then offer your best. Negotiating can be an interesting and fun part of the purchase process. If the recent sales show that the Seller is asking too much, then offer less than full price and hope that when the Seller comes back with a counter offer it will be somewhere in the “middle”. But if the house is priced “right”, then offer the right price. Offering less can cause you to lose the house to a more savvy Buyer. Hopefully you have saved up and have your down payment and closing costs in the bank. In today’s competitive market (I’m talking the Inland Empire), your best offer will include you paying all your own fees. I can tell you from my experience that in the last year or more, every time I make an offer for a Buyer there are multiple offers. The house that you think is perfect is probably perfect for other Buyers.

Next blog: It’s not all about price

I would like to discuss bank owned homes with you. At this time about 13% of the homes on the market are bank owned. You’ve seen REO (real estate owned) on many homes in the last couple of years. These homes have been repossessed from the owner by the bank. Sometimes these homes were on the market previously as a short sale but didn’t sell for whatever reason. So now the bank owns the home.

Many banks will go thru an extensive renovation of a home before putting it on the market. Because of either bad treatment by the previous owners or vandalism while the home sits vacant for months, the bank needs to “fix it up”. Please remember, no one from the bank has ever lived in this home. The bank is relying most times on the REO listing agent to be in charge of the rehab work. Tip #1 – always hire the best home inspector you can find to inspect this home. Sometimes you will need to hire other service providers to inspect things like the roof, plumbing and air conditioner. This can be very costly. Once you are in escrow and you are conducting these inspections, you must understand these inspections are for your knowledge only. The bank has already done all the improvements they intend to do. You are buying the house “as-is” so unless there is something majorly wrong with the house – the bank won’t take care of it. In fact, many times you won’t even get a termite report from the bank. Oh and by the way, some of these REO homes do not have stoves, dishwashers and other appliances – that’s for you to buy.

Another thing to keep in mind, and I’m focusing on the Inland Empire when I say this. In almost all cases of bank owned homes, the bank has lost money, somewhere in the range of 50-60% of the amount of the loan. Well I’m sure you don’t feel sorry for them but it does affect you if you want to buy a bank owned home. Let’s say a 3 bedroom home is foreclosed on in Rancho Cucamonga. The loan on it was $450,000. In today’s market the house is now worth $250,000. That’s a $200,000 loss for the bank. And for this case we aren’t going to figure how much money it takes to fix up the house for sale. So one night you can’t sleep and you stay up watching TV. There is a show on how to buy bank foreclosures at 20% off the list price. Can it be true? No. Maybe you can do this in Barstow but not in Rancho Cucamonga. There are way too many Buyers in today’s market and many are cash buyers. This bank owned home will sell for market value.

I can’t finish this post until I talk about my all time favorite Buyer, the Flipper. Lately busloads of “Flippers” have been roaming the streets of the IE looking at REO and foreclosed homes to buy, fix up and sell – Flip! The only people making money here are the ones conducting the tours and the bus drivers. If you want to “flip” a house, go buy one for all cash on the courthouse steps and rehab it, then sell it. If you buy a bank owned home at market value and expect to fix it up and sell it, well my advice is forget about it…. It sounds like a fun way to make money but in the long run this is not an amateur sport. There are large corporations out there buying up homes in bulk on the court house steps and flipping them, this is their business not a weekend project.