Home Buyers Blog

The Price of the Home Across the Street and Its Long Shadow

We were looking at a Silicon Valley estate sale which was “priced to sell” according to the listing, and when you’re searching for tangible information, words like that (along with vague adjectives like “quaint” and “charming”) eventually lose all their meaning!

Image of Shadow

Instead, they become signals of things to look out for: little tooltips that say, “Pay a little more attention to me,” sometimes with an exclamation point.

In this case, it was a subtle alert to look very closely at comparable properties.  And the important data wasn’t in the house were were about to look at — it was in the house across the street which just went into contract…

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Loan Rates Based on Mind-Boggling Number of Criteria

[ed.  Hello!  My friend David Marx joins us for this week's edition of Mortgage Monday.  He is principal of Dacor Financial and brings us his multiple decades of expertise as a mortgage broker.  Please join me in welcoming him!]

Image of BoggleHow is your rate determined?  The process is based on a myriad of criteria, with that criteria varying from lender to lender. For example, the pricing for a 30-year fixed-rate loan from just one lender can come in at some 80 different prices, depending on such factors as the lock period and cost of rebates!

And lenders may offer as many as 10 different interest rates ranging in increments as small as 0.125 percent (1/8%).  Each interest rate will earn a different price in terms of the number of points you have to pay.

On top of that, different lenders offer better programs for certain scenarios than others.  For example, if you're financing a non-owner-occupied property, you'll incur an additional fee.  And some lenders fees will be higher than others.  The mortgage broker's job is to sift through the lender lists of surcharges and price adjustments, and then determine which lender offers the best rate relative to your specific transaction.

Here are some of the factors that alone or in combination may affect the interest rate and the price of your loan.

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Buying a Home in the Bay Area With or Without a Six Figure Income

Image of House in Bay Area :-)Now that the bloom is off the predatory lending rose for this real estate cycle, it seems impossible for people in the Bay Area without a six-figure income (and challenging even for those with) to purchase their own home. 

After all with a February 2007 median sale price for single-family homes of $790K in Santa Clara County (and $870K in San Mateo County), the amount of the mortgage and its monthly payments seem insurmountable, particularly in the face of all the 1% interest subterfuge that's been going on.

I ran across an article on My Money Blog that outlines the steps Bay Area woman took to buy her own home and discusses the trade-offs she made.  She not only made sure she was in a good position to buy a house, she was also willing to make some hard decisions.

Some of the hardest decisions she had to make were in terms of her goals and financial attitude.  Here are some of the things she did right and some of the questions you should ask yourself, whether you earn six-figures or not.

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What NFL Free Agency and Buying a Home Have in Common

Denny Green, where are you?  The NFL season may have crowned the Indianapolis Colts instead of the Chicago Bears, but there's still a lot of football to come as teams prep for the upcoming draft and bolster their rosters with free agents. 

Image of Pro Bowl

Looking past the TV commentators, salary cap, and beer commercials, there are actually a lot of similarities between what goes on during free agency and buying a home, particularly in Silicon Valley.  And what they have in common can help turn the real estate process into something you already know like the back of your hand. 

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Games Real Estate Agents Play With Home Buyers

The New York Times gives Silicon Valley real estate agents reason for a brimming sense of professional pride with their article Agents of Angst.  It leads off with a set of horror stories about agents then goes into a Harris poll ranking the prestige of real estate brokers at the bottom of 23 professions.

Image of Hand Buzzer TrickImage of Peanut Brittle Trick

These horror stories aren’t surprising for people in the industry but they can have very serious financial consequences for consumers.  Educated consumers can look out for many of the common games real estate agents play with home buyers and ask pertinent questions when interviewing agents and keep from being “played.”

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Oak Trees and Surprising Closing Costs

Image of Peace SignJust when you thought Berkeley was becoming a gentrified shell of its former self, with the surprisingly large population of young Republicans there, KGO updates a fantastic story about local activists who are opposing the construction of a Cal gymnasium, which threatens a local oak grove.

It started off in December like any other stereotypical tree protest with demonstrators climbing the trees and making temporary residences out of their arboreal friends — stereotypical until today…

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Carnival of Real Estate for Consumers and Carnival of Improvement

Image of Circus TentMany thanks to Teresa Boardman at the St. Paul Real Estate Blog who hosts the Carnival of Real Estate for Consumers this week!  Hosting blog carnivals isn't always easy and she chose the Silicon Valley Real Estate Blog article, How Home Buyers and Sellers Get Caught in Straw Scams for "a win" this week.

A lot of other bloggers put in great content for this carnival and instead of highlighting the "winning" articles, I'm going to shout three pieces from their sites which may also be helpful to you.

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Is Your Real Estate Agent a Double Agent?

Let’s say you walk into an open house and you’re approached by the friendly and knowledgeable real estate agent sitting at the dining room table.  You’re very interested in the house and she says that she can represent you in the transaction.

Image of Caution SignIf you agree, you could be giving up your right to an advocate who solely represents your interests by signing up with a double agent — in real estate parlance, a dual agent.

This exact situation also occurs when you see a property on the internet and call the listing agent directly.  She then offers to represent you in the purchase or refers you to someone else in the office.  You may have given up your right to someone who only represents you.

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BloodhoundBlog and Dual Agency

Image of BloodhoundMany thanks to Greg Swann at the BloodhoundBlog, the go-to site for real estate agents across the country. 

I've read their articles for a long time and believe me when I say that when he shouted out my article Why You Need Real Estate Agents and Why You Don't Trust Them for their Odysseus Medal this week, it was a great compliment. 

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Why You Need Real Estate Agents and Why You Don’t Trust Them

Have a look at A and B in this picture.  They’re obviously different colors: B is lighter than A, right?  How people react to that statement is the essence of why people need real estate agents, but it’s also why they don’t trust them.

Image of Illusion

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Real Estate Myths Home Buyers Fall in Love With

Home buying is a very personal decision and people who are looking for a home often fall prey to conventional wisdom.

Image of Dicovery Channel's Mythbusters

But I'm going to challenge the reasoning behind some widely-held real estate notions because it's paramount that you treat your personal requirements as the key to the real estate decision process.  I believe that it's important that you be able to make choices suited to your own needs and wants, not what the crowd thinks you should do.

Here are some common myths about real estate that home buyers have fallen in love with. 

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How Home Buyers and Sellers Get Trapped in Straw Scams

Let's say that you've just gotten engaged and that you and your fiancee find your dream house.  But since you're just getting started on the rest life, you can't get a reasonably-priced mortgage

Your parents have a pretty good credit score and a strong income, so you ask them to buy the house for you and then transfer ownership to you using a trust deed.  You promise to pay them on the mortgage that you couldn't qualify for yourselves.

Image of Drinking Straws

Your parents are acting as a "straw" through which you are getting ownership of a house.  This scenario seems relatively innocent, but it's illegal and leaves your parents on the hook for mortgage payment responsibilities on the house you now own.  You are now a straw scammer.

There's another class of straw scammers that causes real estate bubbles all over the country and you can stop them dead in their tracks.

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