Fred Sed's Blog

In this week's Friday with Fred we discuss what to expect in a home inspection. What you need and when to expect it to be completed.

• Offer package coversheet : On this cover sheet will be all the major details of the offer and what is included in this package. This will help a seller and their agent review the important aspects of the offer.

• Personal Letter : When putting in an offer on a standard or equity sale, you are dealing directly with an owner. For the most part an owner has some sort of emotional attachment to their home and they want to make certain that the person they accept to buy their home will take great care of it. The personal letter is for a buyer to directly connect with that owner, and to express their interest and how they will treat and take care of the home.

• Pre-approval letter (if getting a mortgage) : A pre-approval or pre-qualification letter has become pretty much mandatory when offering on any property. With today’s mortgage market being the way it is, every seller wants to make absolute sure that you, as a buyer, are fully qualified for your loan and that there will be no hiccups during the transaction

• Proof of funds for the down payment : This simply is a bank statement that shows proof that you as the buyer, have the full down payment amount and the funds necessary to close the transaction.

• Purchase agreement (offer): In California this is called the Residential Purchase Agreement or RPA-CA. This 8 page document has every detail regarding the offer terms, agreements between buyer and seller, and all of the timelines and guidelines. This is a very important document that is review by both parties, escrow, and the lender (if a mortgage is needed)Here is a sample copy of the Residential Purchase Agreement:

• Agency Disclosure: This is a disclosure that states which broker and agent will be representing you, the buyer, on a specific transaction. It also goes over and states exactly what there fiduciary responsibilities are towards you.Here is a sample copy of the Agency Disclosure:

• Copy of Deposit Check : This is a copy of the earnest money deposit check. The amount of this check is written on the first page of the RPA-CA. Typically it is anywhere from 1%-3% of the purchase price.

• Comparative Market Analysis : As a buyer you will be provided with comparables or comps, of the property you wish to place an offer on. With this information you and your buyer’s agent will determine an offer price. So that the seller of the home is on the same page as you, make sure and send them a copy of the comps that you used to determine the offer price. This will make the negotiation process easier and smoother.

What are your thoughts? Would you add anything else to an offer package, we would love your feedback and comments below

Today’s Orange County Real Estate Market is Highly Competitive, so as a serious home buyer, you have to make sure you put yourself in the very best position to succeed! I went over the importance of a Home Buyer Consolation in a previous blog and today I want to review what a home buyer should do before jumping into a Realtor’s car and looking at homes. Here are the first 3 steps you, as a home buyer, should take:

1. 1. Hire an Agent

The internet is providing home buyers with access to property listings but it can be tricky to navigate the actual home buying process when it comes time to purchase. The best way to safeguard your investment and ensure that your best interests are protected is to hire a buyer agent. Purchasing a property is a big responsibility on your shoulders. We all know that buying a home is a difficult and accountable job. Making the wrong choice while purchasing a real estate property can land you up in serious financial trouble.

The benefits of using a buyer agent include the following but are not limited to:

• 24/7 up to the date access to the Realtor’s MLS
• Leverage, as the buyer agent will be doing the majority of the research
• A professional skilled negotiator on your side
• Access to all of their vendors (inspectors, contractors, lenders, etc..)
• Professional comparative market analysis on every property
• A person that will preview the properties for you, so no time is wasted
• You don’t have to manage any paperwork, the buyer agent does!
• It’s completely FREE to use a buyer agent!
• Much, Much, More!

A study by the National Association of Realtors revealed that home buyers who used a buyer agent examined three more properties and found a home one week faster than unrepresented buyers.

1. 2. Pre-qualify for a mortgage

Each mortgage program has its own set of requirements and rules. As a result, the simple question "How much can I afford?" can be difficult to answer without a careful analysis of your personal financial situation. Mortgage originators and real estate agents frequently call this analysis "qualifying" (or "pre-qualifying" if you do this before you shop for a home).

It is to your advantage to pre-qualify for a mortgage. By pre-qualifying for a given loan amount, you can comfortably shop for a home within your price range. In addition, prior credit approvals can expedite the closing of your loan, and your pre-authorization letter provides the agents and sellers with whom you work the confidence that you are determined and qualified buyer.

1. 3. Determine your criteria

So you are pre-approved and ready to begin your search. But how or where do you begin? There are a lot of homes out there and diving in without a guide can become overwhelming and confusing. A great agent will help you more accurately pinpoint homes that fit your criteria. The right home will meet all your important needs, and as many of your additional wants as possible. Some questions you might ask yourself include:

• What do I want my home to be close to?
• How much space do I need and why?
• Which is more critical: location or size?
• Would I be interested in a fixer-upper?
• How important is home value appreciation?
• Is neighborhood stability a priority?
• Would I be interested in a condo?
• What features and amenities do I want? Which do I really need?

You'll learn as you look at homes, your priorities will probably adjust along the way.

What are your thoughts on the first 3 steps? Do you agree completely or would you do it a bit differently? Steps 4 – 10 are coming soon!

Do you want your own copy of the Home Buyers Handbook? Then like this blog post below and request it in the comment box below:

1. Goals & Intention: A discussion regarding the homebuyer’s goal with this purchase. For example, are they buying this property for them to live in or for investment purposes? Are they planning to keep this property long term or short term? What’s there time frame for purchasing this property, within 30 days, 60 days, 6 months, 1 year?
2. Approval Process for a Mortgage: Does the homebuyer need a loan for this purchase? If so, then putting the homebuyer in contact with a Direct Lender, Bank, or Broker to get pre-approved for a mortgage. I can’t stress how incredibly important this is in today’s market.
3. Home Criteria: What cities are they open to? How many bedrooms & bathrooms are required? What is the minimum square footage they would like to have? Any other special requirements needed?
4. Custom Home Search: An automated property search will be set up during the consultation which notifies the buyer of any new listings that enter the market with in their Home Criteria. There is a lot of competition amongst homebuyers and amongst Realtors, so both parties want to make sure that they are one of the first people to see a new listing as soon as it hits the open market.
5. Set 1^st Showing Appointment: Right before the consultation is finished the next appointment, in which the homebuyer will be able to physically view their properties of interest, will be made.

We would love your feedback on this topic! 

• Behind on your Irvine Real Estate Mortgage Payments?

• Taken A Reduction in your Income?

• Have you been denied a Loan Modification for your Irvine Real Estate?

• Are you upside down on your property Irvine Real Estate values?

• Any financial hardship what so ever?

If So, We Can Help You With Our FREE:

Irvine Short Sale Service

!! DON'T LET THE BANK WIN !!

Contact Our Office Today For Your Free & Confidential Consultation

(949) 272-0125

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Orange County Real Estate Market Review for 2011

This year’s Orange County Real Estate Market was filled with Foreclosure Sales, Short Sales, Investor Flips Sales, Standard Sales, Probate Sales, and I can go on and on! If I were to compare this year’s market to a Meat Deli, I would say that we had every sort of meat available for sale! Relax, don’t judge me on my comedy…remember I’m a Realtor!

Now on to the facts, there were 26,214 properties that sold in 2011 which is 4.3% less than 2010 and 7.9% less than 2009. My initial reaction to these numbers was definitely negative, but then I stopped and said to myself, “Why would sales be down when there should be a huge demand for OC Real Estate?”

Over the past 24 months we have heard almost every negative theory out there regarding the “Doom & Gloom” of our precious Orange County and National Real Estate Market. Which obviously creates hesitation with the majority of people thinking about buying a home? Then I thought about how the government and the banking industry have really tightened the guidelines on qualifying for a mortgage over the past 24 months. Don’t get me wrong, these stricter guide lines have become absolutely necessary to protect homeownership for the future. Since the MLS began tracking data via their database in 1997 the highest number of sales took place in 2003 with 44,610 properties sold. That’s over 70% more than what was sold this past year, are you kidding me?!

Wait a minute, that’s when they allowed stated income, meaning that all a person had to do was to state what their income was on their application, and verify it by having there CPA type up a letter with that amount. There were other details involved, but NOTHING compared to what it takes to qualify for a loan in today’s market. No wonder there were so many properties sold before the market crashed and as a result of the loose guidelines in the early 2000’s we have had so many distressed homeowners over the past few years and will continue to for the next few years. So, these strict guidelines are in place for a reason and have limited the number of sales in our market.

As a result of the negative theories, restrictions in qualifying for a mortgage, and other important factors, we have seen a consistent and demanding increase in the Orange County Rental Market. Here is breakdown of the privately owned condo’s and houses that have been leased over the last 10 years:

Depending on what happens over the next few years, in regards to the overall economics in our Local & National Market, will determine if a lot of these tenants will buy a home? This is a subject that I will expand on in future blogs & videos.

Back to the facts, here is the breakdown of the sales types for 2011:

*17.2% (4,518) were Foreclosure Sales

*25.1% (6,573) were Short Sales

*57.7% (15,123) were Standard Sales

Over half of the sales that took place were Standard Sales, not distressed sales, which tells me that there are still a lot of traditional Real Estate transactions taking place in our market.

When I compared these numbers to 2010 here is what I found:

*15.1% (4,139) were Foreclosure Sales

*25.7% (7,009) were Short Sales

*59.2% (16,178) were Standard Sales

So in 2011 we had a slight increase in Foreclosures Sales, a slight decrease in Short Sales, and a slight increase in Standard Sales.

Here is the number of sales for each month in 2011:

All in all 2011 was a very active year for Orange County Real Estate where we saw: laws being passed by the state to assist distressed homeowners, record low interest rates, a record number of privately owned condo’s & houses rented out, and so much more! Could it have been a lot worse…yes, am I glad it wasn’t…yes!

I am extremely excited to see what the Orange County Real Estate Market has in store for us in 2012! We have the national elections, the fate of Fannie Mae & Freddie Mac, and so many more critical moments and decisions that will take place over the next 12 months.

What do you predict will happen in 2012 with the Orange County Real Estate Market? We would love to hear from you.

The data used in this article is from the California Regional Multiple Listing Service. The accuracy of all information, regardless of source, including but not limited to square footages and lot sizes, is deemed reliable but not guaranteed and should be personally verified through personal inspection by and/or with the appropriate professionals.

Today's blog post is the first in a series we will be bringing you from our guest experts. Today's expert is Manny Moumdjian. He is the CEO of EZ Choice Financial Corp. and has helped many people build their credit in order to assist them with the purchase of a home.  If you want to contact Manny to see how he can help you, the website is http://ezchoicefinancial.com/ or call (888) 349-6690 for a FREE consultation.

1. DO NOT APPLY FOR NEW CREDIT OF ANY KIND:  Especially those preapproved credit card invitations you receive in the mail. Every time that you have your credit pulled by a potential creditor or lender, you will lose points from your credit score immediately. Depending on the items in your current credit report, you could lose anywhere from 1-25 points for one hard inquiry. Also the realtor or lender that sent you wanted to make sure you didn’t keep running your credit and lowering your score even more (which could stop you from qualifying). The lower your credit scores the tougher it is for you to qualify.
2. DO NOT PAY OFF COLLECTIONS OR CHARGE OFFS DURING THE LOAN  PROCESS: Paying for collections or charge offs will lower your credit score’s immediately due to renewing the date of last activity. (Basically bringing and old account back to life and allowing it to fall off 7 more years from the date the account was paid. If you want to pay off old accounts, make sure you go through our credit management process first, so we can determine the legitimacy of those accounts and also save you lots of money in negotiations and providing letters of satisfaction in full or deletions when complete.
3. DO NOT CLOSE YOUR CREDIT CARD ACCOUNTS:  The reason for this is: Credit card accounts are revolving accounts and they raise the revolving availability on your credit reports. The higher the limits available, the higher your credit score potential. There are other factors that also help increase your credit scores such as the length of the credit card history and the balances on the accounts. If you close the accounts, you will lose the revolving available credit as well as the length of credit card history on that account. That would really affect your credit profile and lower your scores.
4.  DO NOT MAX OUT OR OVER CHARGE ON YOUR CREDIT CARD  ACCOUNTS: Maxing out your credit cards or going over the limit triggers the credit bureaus to drop your credit scores anywhere from 25 - 100 points immediately. Some credit card companies will increase the interest rate on the credit cards if this happens. Always read the fine print on the Credit card agreements before you apply. I write this because some credit card companies will charge a penalty for reaching the limit or going over the limit. 2 very important things to remember on credit cards are: 1. Try to keep your credit card balances below 30% of their available limit at all times during or before any loan process. This will ensure that you maximize your scoring potential and possibly qualify for the lowest available interest rates. 2. You never want to be late on your credit cards because you will trigger a drop in your credit scores anywhere from 25 – 50 points and also trigger the universal default clause that might be in the credit card agreement you didn’t see, that allows credit card companies to increase your interest rates to the max allowed if you are late with any other company. If you decide to bring down the credit card balances, call the creditors first and ask for a credit line increase based on your payment history only, this way they might not have to run your credit. Therefore you won’t affect your credit rating with another inquiry. Also by calling the creditors, you might be able to increase your credit limits and bring down the debt to limit ratio getting you closer to the 30% mark.
5. DO NOT ATTEMPT TO CLEAR UP CREDIT ISSUES ON YOUR OWN: We say this because it seems like it would be the smart thing to do to save money and not get taken advantage of by some credit repair company that wasn’t reliable! However, if you were recommended or referred to a company to help you with your credit situation, you can definitely be assured that they trust who they’re sending you to, especially because the person that sent you has already used the service before. When you attempt to fix your own credit and you don’t have a clue of what you’re doing, you might have created a bigger problem for yourself then you already had. Disputing is one thing but understanding what you’re disputing is another thing. What I mean by this is, knowing what you’re looking for versus just saying anything off the top of your head on your dispute is really the key. Saying things that aren’t true won’t fly with the credit bureaus. To ensure that all your questions are answered, as a professional we will give you or your clients a free consultation and let you know what you’re up against before you make a decision

Are you fully aware of what your Short Sale Option entails? In today's distressed Orange County Real Estate Market, many homeowners

who are in some sort of distress, need to know what options are available. Luckily here at Fred Sed & Associates, we are Professionals who

are dedicated to assisting homeowners who are:

• Behind on there mortgage

• Upside down on there property value

• Recently lost a job or have taken a reduction in income

• Have any sort of Financial or Health Hardship that holds them back from making there mortgage payments

Our Short Sale Service is completely FREE, from the first confidential consultation, to the moment the Short Sale Process is complete.

Contact our office 7 days per week via phone at (949) 272-0125 or via text at (949) 274-3733

Fred Sed & Associates

Orange County Short Sale Specialists

DRE # 01423187