Realty Daily

Real Estate Advisor asked:


San Diego County is home to one of the largest concentrations of military bases in the United States. In fact, the San Diego area contains 12 major Marine Corps and Navy bases and facilities. If you’re in the military and moving to San Diego, one of your biggest decisions is whether to buy a property, live on base housing (if this option is available to you), or rent a home or apartment. If you choose to buy a property, there are many issues to consider before taking this step.

BUY OR RENT?

The decision to buy or rent is more complicated for military personnel because you may be assigned to San Diego only for a limited period of time. If you plan to purchase while in San Diego and then sell when you transfer, the condition of the real estate market at the time you sell will make this either an easy or difficult process. In a seller’s market (when demand exceeds supply), properties tend to sell quickly and at or above asking price. In a buyer’s market (when supply exceeds demand), properties usually take much longer to sell and may sell below asking price. Individuals in the military should consider this issue in determining whether to buy or rent real estate in the San Diego area.

For those who choose to buy, the major other consideration is the likely appreciation rate of your property during your tenure in San Diego. If you plan to sell your property before you depart to your next assignment, you should remember that there are expenses (e.g. realtor fees, taxes, etc.) associated with selling your house, and any price appreciation you realize by owing the property for a few years, may or may not be offset by these fees.

Some individuals choose to keep their property even after they transfer to a new assignment outside of San Diego. In these cases, you can rent out the property, leave it empty, or find another acceptable use of the dwelling. If you choose to hire a Property Manager to oversee the renting and maintenance of your property, keep in mind that the fess for this service will cut into any monthly profit you realize on the property.

GETTING A HOME LOAN?

If you decide to purchase a property, obtaining a home loan is one of the tasks you must undertake. Many active-day members, retirees and other service veterans are eligible for special loan programs guaranteed by the Veterans Administration (VA).

To be eligible for a VA guaranteed loan, you must have served on activity duty and have a discharge status of other than dishonorable after a minimum of 90 days of service during wartime, or a minimum of 181 continuous days during peacetime. There is a minimum 2-year service requirement for veterans who enlisted after September 7, 1980. The 2-year requirement also applies to Officers who began service after October 16, 1981. There is a minimum 6-year service requirement for National Guard members and Reservists, and surviving spouses are also eligible under some conditions. There are other special conditions in which a person may be eligible, so contact your local VA office to get more information.

WHAT IS VA GUARANTEED LOAN?

The VA loan is a federal guarantee of a maximum of 25% of a home loan amount but not to exceed $104,250. This formula allows eligible members to obtain a maximum loan amount of $417,000 (as of 2006). However, service members must meet other eligibility requirements. Individuals borrowing using this type of loan must intend to be occupants of the purchased property.

Private lenders are the source of funds for VA guaranteed loans. The guarantee provides these private lenders assurance that the federal government will reimburse the lender up to the maximum allowable amount if the borrower fails to repay the loan. Because of this guarantee, lenders are more favorable to offering loans without a requirement for a down payment.

VA CERTIFICATE OF ELIGIBILITY

Individuals desiring a VA guaranteed loan must first obtain a Certificate of Eligibility from the Veterans Administration (VA Form 26-1880). Contact your local VA office to obtain this form by calling 1-888-244-6711. You will need a copy of your military discharge document (DD-214) to submit with your application. Once you have the Eligibility Certificate, you can then select a lender or mortgage broker to work with on getting the loan.

CLOSING COSTS

In addition to the purchase price of your property, there are closing costs that must be paid to process your home loan. These closing costs are fees that are charged by different service providers to help complete the loan process. For example, your lender will require an appraisal of the property to make sure that its value is at or above your purchase price. Other charges commonly included in closing costs are: recording fees, credit report fee, prorated taxes and assessments, hazard insurance, flood insurance (if required), survey, title examination, title insurance, postage and shipping fees, and the VA Funding fee.

WHAT IS THE VA FUNDING FEE?

The VA charges a fee to individuals utilizing the VA guaranteed loan. This fee is a percentage of the loan amount and is linked to the size of your down payment on the home you plan to purchase.

For active-duty personnel or veterans who put no money down, the funding fee is 2.15% of the loan amount. This rate increases to 2.4% for National Guard/Reserve.

For active duty personnel or veterans who put a down payment greater than zero but less than 10% of the loan amount, the fee is 1.5% of the loan. This rate increases to 1.75% for National Guard/Reserve.

For active duty personnel or veterans who put a down payment of 10% or more of the loan amount, the fee is 1.25% of the loan. This rate increases to 1. 5% for National Guard/Reserve.

The rates listed above are for first time users of the VA loan guarantee program. Individuals who have used the VA guaranteed loan program before pay higher rates than first time users. The rates above are subject to change. In some limited cases, individuals are exempt from paying the funding fee. You should contact your local VA center for current information.

CHOOSING A VA LOAN VS. A CONVENTIONAL LOAN

You must carefully evaluate the terms of the VA guaranteed loan vs. the terms of a conventional loan. One advantage of a VA guaranteed loan is that many lenders will not require you to put a down payment on the purchase of the property, assuming you meet their other lending criteria (e.g. credit scores, sufficient income, adequate debt to income ratio, etc.). There are also many zero down payment conventional loan programs. In some cases, the VA guaranteed loan will offer a lower interest rate and better terms, and in other cases, you can obtain a better deal through conventional financing. A good loan officer can help you evaluate the advantages of either loan, given your particular situation.

FINDING THE RIGHT HOME

If you are familiar with the San Diego area, then you probably already know where you want to live. If you are less familiar with the communities in San Diego, your Realtor can serve as an excellent resource to answer your questions. There are many steps to take during the home search process, which include:

1. Work with your loan officer to identify how much you can afford.

2. Determine what type of property you want to buy (single-family home, townhouse, condominium, other). Your Realtor can advise you about the differences between these types of properties.

3. Determine how many bedrooms, bathrooms, square footage, etc. you need.

4. Determine what areas of San Diego you would consider living in.

5. Calculate the drive time (with and without traffic) to your job.

6. Identify the quality of schools in the neighborhoods that you are considering.

7. Locate the crime statistics for the neighborhood that you are considering.

8. Identify the location of local community resources such as libraries, shopping centers, athletic centers, etc.

9. Ask your Realtor to advise you about the resale potential of the home you are considering.

Although there are many other factors to consider, the above is a good starting point. Your Realtor should be able help you get answers to the questions above as well as provide you many other resources. Keep in mind that most Realtor’s who assist homebuyers and paid by the home seller, but make sure to ask your Realtor about this.

HOW MUCH SHOUD I PAY FOR A HOUSE?

Your Realtor should be an excellent source of information to help you understand a fair offer price. The Realtor should provide you information about what other similar properties in the same community have sold for recently, current pricing trends for the community, as well provide you a recommendation based on their experience in the local market.

DO I NEED A HOME INSPECTION?

There are many other issues besides the offer price to consider when making an offer. For example, many buyers find it advantageous to get an inspection of the property by a qualified inspector. The inspection typically covers the major systems of a property. Check out the National Association of Home Inspectors web site for more information about what is covered in a typical home inspection. Getting a home inspection is generally a good idea.

HOW LONG WILL THIS TAKE?

If you want to use the VA guarantee, then make sure you have obtained the Certificate of Eligibility far in advance of your relocation to San Diego. Whether or not you are using the VA loan program, be sure to obtain a loan pre-approval (sometimes called loan prequalification) from a lender or mortgage broker. This lets home sellers know that you are a serious buyer and are ready to act quickly if needed.

Prior to moving to San Diego, get a sense of the local real estate market. Your Realtor can set up an automatic email notification system that will send you descriptions and pictures of properties that meet your criteria. Doing this type of research should save you a lot of time when you arrive.

Once you have your loan pre-approval, the next step is to locate a property that meets your needs. Your Realtor should show you a variety of available properties that meet your criteria. Once you find a house you an interested in, your Realtor will prepare the purchase offer documents, and guide you through the loan and closing process.

In summary, it’s simply a process of getting a loan, finding a house that you like, making an offer that is accepted, and going through the closing process, which can occur in less than 30 days.

CONTACT A SAN DIEGO REALTOR

If you are moving to San Diego, contact a Real Estate agent who is familiar with VA guaranteed loans and has experience working with military buyers. Many agents have prior military service themselves, and are very familiar with your situation and needs.



Brittany

Real Estate Advisor asked:


When you start the process of buying a home or any type of real estate, you’ll no doubt hear the term “earnest money deposit” (EMD). So what exactly is an EMD?

An EMD becomes relevant when you are ready to make an offer on a property. In most states, your Real Estate Agent prepares the offer on your behalf. The offer usually takes the form of a written contract that is submitted to the seller by way of their agent.

In addition to the offer document, sellers typically expect an EMD. An EMD is a monetary deposit submitted via check to demonstrate to the seller that you are a serious buyer. In some regions of the country, only a photocopy of the check is submitted with the offer, and the original check is delivered to the appropriate entity if the offer is accepted. Ask your Real Estate Agent to clarify how deposits are handled in your region of the country.

The check is usually made out to an independent third- party such as a Title Company, Escrow Company, Real Estate Attorney or your Real Estate Broker. Ask your Real Estate Agent to clarify who will hold the EMD.

The amount of the EMD sellers expect varies by region. The EMD amount is based on the customs and practices for a region, but is generally from 1% to 2% of the purchase price. In a competitive market place where demand exceeds the supply of homes, some buyers may offer a higher EMD than expected to impress the seller of their intent. In determining the amount of your EMD, consult your Real Estate Agent and balance the need to demonstrate your serious intent, against the good business practice of minimizing the deposit amount.

The amount of the EMD is usually applied to reduce the purchase price of the property or to cover closing costs, as you dictate. For example, if you are purchasing a $300,000 property and you give an EMD of $3000, then the remaining balance owned at closing is $297,000 (plus closing costs). Alternatively, you may direct that the EMD be applied toward the closing costs.

Once a valid contract for purchase is created, an independent third-party usually holds the EMD until the purchase is either completed or cancelled. At this point, the money belongs jointly to both the seller and the buyer.

In cases where you make an offer that is accepted but later decide to cancel the offer, the terms specified in the contract (or state law) will dictate if, and under what circumstances, the EMD is returned to you. Be aware that you could loose your deposit if you do not not comply with the terms of your contract. Your Real Estate Agent can provide you information about how EMDs are dealt with if a contract is cancelled.

Since state law varies by region and practices can differ even within the same state, be sure to consult your Real Estate agent about the rules that apply to EMDs in your region of the country. You should also be aware that the EMD is not related to any down payment that you make toward your home loan.



Shannon

Real Estate Advisor asked:


COMMUNITY INFORMATION

Carlsbad is situated in the northern coastal part of San Diego County within the state of California. There are approximately 87,540 residents in this community and 34,052 households. The median age of residents is 38.89 years.

TEMPERATURE

The temperature in Carlsbad is relatively moderate. The warmest time of year occurs in July during which temperatures reach an average high of 69. The coldest time of year occurs in December with average temperatures falling to 55F.

HOME AND REAL ESTATE PRICES

The housing options in Carlsbad include single-family homes and properties, condominiums, townhouses, and apartments. The price of housing is as follows:

·One bedroom townhouse/condominium start in the mid $200,000s.

·Two bedroom townhouse/condominium start in the high $200,000s.

·Three bedroom townhouse/condominium start in the high $300,000s.

·Two bedroom single-family homes start in the mid $300,000s.

·Three bedroom single-family homes start in the high $300,000s.

·Four bedroom single-family homes start in the mid $500,000s.

REAL ESTATE MARKET TRENDS

As with most products and services in the United States, price shifts in the real estate industry are subject to the forces of supply and demand. Whether it’s a buyers market or a seller’s market, it is useful to evaluate home sales data for the most recent month available (June 2006), compared against the same period in the previous year (June 2005).

The median price of single-family homes dropped from $783,900 in June 2005 to $749,900 in June 2006, which represents a 4.3% decline. Fewer more homes sold in June 2006 (49 homes) than in June 2005 (95 homes). The average time to sell a home increased from 39 days in June 2005 to 58 days in June 2006.

The median price of condominiums and townhomes decreased from $481,000 in June 2005 to $434,500 in June 2006, which represents a 9.7% decline. Fewer units sold in June 2006 (36 units) than in June 2005 (84 units). The average time to sell a unit increased from 43 days in June 2005 to 58 days in June 2006.

Homebuyers and home sellers should keep in mind that the data above is simply a snapshot in time. Therefore, the data must be evaluated over a longer duration to understand enduring market trends.



Tom

Joe Cline - Austin Real Estate Broker asked:


How do HomeGain, Realtor.com, Service Magic and other companies like this make money? These companies are called lead generation companies. They spend vast amounts of money advertising on TV, the Internet, radio, and in print so that you’ll go to their website to find information about real estate. When you click on a property and request information the company then either sells the lead at a fee ranging from $20-$50 for an unqualified lead or up to a 35% referral fee for leads that are more valuable.

What does the company do for the fee charged? The answer might be pretty surprising. They don’t do anything, but forward the lead to a service provider. Yep, that’s right. You can search the MLS on any number of free websites so the website they provide is little more than a mechanism to get your information. Some people think agents, contractors, or other service providers are overpaid for what they do. Take a look at these companies and ask yourself if forwarding an email is worth $1500 (That’s the commission split they would receive on the sale of a $150,000 home.).

Who pays the fees that these companies charge? For the most part, the Realtor, mortgage broker or other service provider pays for these leads. The laws of business provide that you can’t get something for nothing. This is very true. So by adding no value to the transaction and taking up to 35% of the payment for service, the middle-man is taking value from both the consumer and the service provider.

Why is this bad for consumers? In real estate like many other service industries, the best Realtors obtain their business through referrals. The weaker, newer, less experienced agents typically buy leads from sources such as these. The next time you visit a site like these lead generators, think twice about giving them your information and go directly to the source. You’ll cut out the middle-man and get a better agent for your hard earned dollar.



Keith

Real Estate Advisor asked:


Despite a recent slowdown, the U.S. real estate market continues to be a popular investment destination for foreign investors. Attracted by a desirable return on investment, many foreign nations continue to invest heavily in the U.S. residential and commercial real estate markets. In fact, in 2005, foreign investment in U.S. real estate reached 1.83 trillion.

To evaluate the impact of foreign investment on the U.S. real estate market, the National Association of Realtors (NAR) produced a 2006 report entitled ‘Foreign Investment in U.S. Real Estate: Current Trends and Historical Perspective.’ The report provides insights into the trends in foreign real estate investment, its impact on the U.S. economy, and the major countries that participate in U.S. real estate investment. Below are some highlights from the NAR report.

According to the U.S. Department of Commerce, the top seven countries that had significant holdings in U.S. real estate as of 2005 were:

Germany - 13 %

Latin America - 13 %

Australia - 11 %

Japan -10 %

United Kingdom - 10 %

Canada - 6 %

Netherlands - 6 %

The U.S. economy is wide open to foreign investors. Both investors and Americans significantly benefit from all this foreign investment. The NAR study estimates that without foreign investments in the securities market, the long-term lending rates would be four percentage points higher than the current rate, which would adversely impact the U.S. real estate market.

Foreign direct investment into the U.S. not only creates more jobs but also contributes to the demand for U.S. real estate. In fact, foreign investment may be responsible for creating two million U.S. jobs by the end of 2006, which further bolsters the demand for U.S. real estate.

Permanent and temporary immigration of foreign-born workers into the U.S. further bolsters the demand for real estate. According to the Joint Center for Housing Studies at Harvard University, 1.2 million net immigrants are expected to arrive in the United States annually. This immigration pattern is expected to offset the decrease in housing demand by post baby-boomer generations.

In summary, the impact of foreign investment and immigration into the U.S. will continue to play a major role in the U.S. real estate market.



Stephanie

Real Estate Advisor asked:


On August 15, 2006, the US Census Bureau released its annual statistics for various communities. The data for San Diego County revealed some significant shifts from 2000 to 2005 in terms of the total population in San Diego, the percentage of males to females, percentage of people at various ages, and the racial composition of the County.

POPULATION SHIFTS

Total Population = 2,813,833 (CY 2000) vs. 2,824,259 (CY 2005) = 0.4% increase

Of the total population, there were shifts in the percentage of males to females.

Males = 1,415,097 (CY 2000) vs. 1,400,199 (CY 2005) = 1.1% decline.

Females = 1,398,736 (CY 2000) vs. 1,424,060 (CY 2005) = 1.8% increase.

AGE CHANGES

The percentage of people at various age also changed during this time period.

Median Age = 33.2 years (CY 2000) vs. 34.4 years (CY 2005) = 3.6% increase.

Population Under 5 Years of Age = 198,621 (CY 2000) vs. 221,575 (CY 2005) = 11.6% increase.

Population Under 18 Years of Age = 2,090,172 (CY 2000) vs. 2,067,282 (CY 2005) = 1.1% decline.

Population 65 or Older = 313,750 (CY 2000) vs. 310,836 (CY 2005) = 0.9% decline.

RACIAL COMPOSITION

Of individuals who defined themselves as belonging to one-race, the following statistics were provided:

Total Number of “One-Race” Individuals = 2,681,866 (CY 2000) vs. 2,730,721 (CY 2005) = 1.8% increase.

Individuals who defined themselves as belonging to one-race, were further categorized as follows:

White = 1,871,839 (CY 2000) vs. 1,927,166 (CY 2005) = 3% increase.

Black or African American = 161,480 (CY 2000) vs. 140,181 (CY 2005) = 13.2% decrease.

American Indian and Alaska Native = 24,337 (CY 2000) vs. 19,902 (CY 2005) = 18.2% decrease

Asian = 249,802 (CY 2000) vs. 295,926 (CY 2005) = 18.5% increase

Native Hawaiian and Other Pacific Islander = 13,561 (CY 2000) vs. 12,704 (CY 2005) = 6.3% decline.

Other Race = 360,847 (CY 2000) vs. 334,842 (CY 2005) = 7.2% decline.

Of those individuals who defined themselves as belonging to “two-races”, the following statistics were provided:

Total, Two -Race Individuals = 131,967 (CY 2000) vs. 93,538 (CY 2005) = 29.1% decline.

Hispanic or Latino (of any race) = 750,965 (CY 2000) vs. 843,901 (CY 2005) = 12.4% increase.

SHIFTS IN HOUSEHOLD CHARACTERISTICS

Total Household Population = 2,716,820 (CY 2000) vs. 2,824,259 (CY 2005) = 4% increase.

Average Household Size = 2.73 (CY 2000) vs. 2.71 (CY 2005) = 0.7% decrease.

Average family size = 3.29 (CY 2000) vs. 3.33 (CY 2005) = 1.2% increase.

IMPLICATIONS FOR SAN DIEGO REAL ESTATE

If you are interested in buying San Diego real estate, homes, condos or townhouses for sale, then the above information may be useful to you. The information above can help you understand demographic and population shifts that impact supply, demand, and price of real estate and homes for sale in San Diego.

San Diego is one of the most popular areas in the Country because of its moderate climate. In fact, the year-around average weather in San Diego is around 70 degrees Fahrenheit.

San Diego real estate is also popular because of its proximity to the Pacific Ocean, mountains and the US-Mexico border. Bordered by Orange County and Riverside County to the north, and the Mexico to the south, San Diego real estate has hundreds of beachfront properties for sale.

San Diego is the sixth most populated County in the Nation. With this many people, buying real estate in San Diego can be a competitive process depending on the supply and demand of real estate and homes for sale at a particular time.

While interest rates are still relatively low and supply relatively high, buyers at this time may find San Diego real estate a good value.

Those who purchase San Diego real estate enjoy year-around perfect weather, easy access to the Mexico border, a thriving job market, and the pleasures of living close to an ocean.

Whether you are interested in boating, fishing, golfing, tennis or other hobbies, residents and visitors who own San Diego real estate have access to all these activities and more.

Please visit the Census Bureau’s web site for detailed demographic information about San Diego County. The Census Bureau provides key statistics for various communities in its annual American Community Survey (ACS) report.



Brian

gradin_2007 asked:


Im a senior in high school and plan on going to a community college for 2 yrs.and then 2yrs. at a university and major in bussiness administraion. I think while Im doing that I should intern for a big real estate place like Remax or something because I would like to learn the different areas of real estate like being an agent or flipping houses.I don’t know if I should go to Real Estate school after college or what.Any suggestions on what I should do?

Brad