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Thorough Home Inspections Will Prevent You From Buying A Lemon

home inspection orange countyLast Christmas, I bought an appliance for a family member. I did my research, read the reviews, and thought I was buying the best toaster possible. Three days later, despite my best efforts, it broke.

With an appliance, receipts and warranties make it pretty easy to take back and replace. But with a house, there are no receipts. Once the house is yours, its problems are yours as well. That’s why its incredibly important to conduct multiple, thorough inspections before the sale closes to ensure you aren’t buying a lemon.

The Consumer Inspection

During this first inspection, the buyer uses their eyesight and common sense to identify any obvious problems that would deter them from making an offer. This is often conducted during an open house or private showing. Here are some things to look at:

  • Floors. Are there holes, dents, scratches or stains
  • Ceilings and walls. Is the paint chipped? Are there holes or dents? Is there visible mold?
  • Roof. Are the tiles faded or chipped? Are any of them missing?
  • The everyday little things. Flip light switches on and off, open and close doors and windows, check for creaking steps, turn on fans, flush toilets and check sinks.

Its at this point that you will have to make a decision as to which repairs you are willing to fix and which are going to be deal breakers. If the carpet is old, it’s pretty easy to replace it. However, if the roof is falling apart it will cost quite a bit of money and time to replace and some buyers may just prefer to walk away.

Initial Professional Inspection

If your consumer inspection doesn’t turn up any major flaws, and if you love the house, then it’s time to make an offer. Once an offer is accepted and escrow begins, it’s time to hire a professional home inspector. Some lenders require an inspection before they approve a mortgage, but even if they don’t its always in the buyers best interest to have one conducted. The inspection will show you all the things wrong with the house and give you a chance to negotiate a fix with the seller.

The inspector will come in and check every inch of the house. They’ll check for termites, mold, structural damage, plumbing issues, electrical problems, condition of the roof, etc. They will report any issues that need to be addressed. At this time, you the buyer can decide if you want to buy the house as is, ask the seller to make repairs (or pay for you to make them) or walk away from the house and find another.

Final Inspection

Too many buyers forego this inspection, but it’s just as important as the first two. The final inspection, or final walk through, is your last chance to make sure the home is in the proper condition before you make the final decision to buy. It’s best if its done by a professional, but doing it yourself is better than not at all.

The final inspection is usually done anywhere between 5 days or 5 hours before closing. Often the sellers have already moved out by this point, but if they haven’t it’s a good idea for buyers and sellers to do the final walk through together. That way sellers can tell buyers about any little quirks with the house, and they can discuss fixes for any repairs that are still left.

When conducting the final walk through, it’s important to make sure all the repairs that were noted in the initial professional inspection have been taken care of. You’ll also want to make sure that there are no new issues. Here are some things to look at during the final inspection

  • Check all electric outlets and light switches.
  • Turn on all faucets, flush all toilets, and check for leaks.
  • Test appliances
  • Test smoke and carbon monoxide detectors.
  • Open and close all windows and doors, checking for squeaky hinges or busted door jams.
  • Check walls, floors and ceilings for scuffs, holes and chipped paint.
  • Run AC and heater to make sure they work properly.

If you find issues during the final inspection, contact your real estate agent, lawyer and the sellers immediately. Those issues need to be fixed before the deal closes. Once it closes, the house is yours and it will be very difficult to get the seller to pay for any repairs. If you find these issues before closing, and the seller won’t fix them, you can still choose to walk away.

Are you looking to buy a house in Orange, CA? Sue LaPeter can help you find the perfect house to fit your needs and your budget. Email Sue@suelapeter.com to schedule an appointment.

Listed and Sold in One Day: 23 White Sands in Trabuco Canyon

I had the privilege of listing this 2 bedroom condo in Trabuco Canyon. The light and bright floor plan, custom paint, crown moulding, stainless steel appliances, community pool and brand new water heater made it an irresistible listing and it sold in just one day. If you have a Trabuco Canyon home or condo that you need sold, call Sue LaPeter at 714-728-9018

Could You Save Money By Buying a House in 2012?

March 28, 2012 by Sue Lapeter in Blog, Real Estate News with 0 Comments

buy house orange countyYES! Rental rates are increasing across the country and in many areas, its cheaper to buy a house than rent a comparable one. Combine that with low house prices, historically low interest rates, and lenders loosening credit requirements, and you’ve got a real estate market that is begging people to buy houses. Buy while the market is at the bottom and it a few years you’ll be able to sell for profit.

Rental rates are increasing.

Over the past five years, the U.S. has seen a drastic increase in renters. Some people where forced to rent after short selling or foreclosing on a home. Others choose to rent because of the instability of the housing market. The increased demand for rental properties continues to drive up rental prices all across the country, including Orange County. Trulia released a report last week that said in 98 out of the top 100 US metropolitan areas, including Orange County, Los Angeles and San Diego, it is cheaper to buy than to rent. Even when you take into account all the costs associated with owning a home, such as property taxes, buying is cheaper.

Banks are making it easier to get mortgages.

A huge factor in the housing bubble burst in 2009 was the fact that banks gave mortgages to people who couldn’t afford them. In reaction to the crash, lenders went to the other extreme and made requirements so strict that many people could not get mortgages. Now, lenders are starting to find the balance.

An article published by DSNews.com in January said that banks are loosening loan to value ratios. This means that banks are willing to loan a higher percentage of what the house is worth. If you bought a house that was $150,000, and you paid a $20,000 down payment, then you would be getting a loan for $130,000. Divide $130,000 by $150,000 and you get .87. That means the loan to value ratio is 87%. Currently, many lenders are giving mortgages at 82%, which is a huge improvement from 74% in mid 2010.

Another sign that its getting easier to get a mortgage is the fact that banks are no longer raising the necessary credit score. Necessary credit score rose every year from about 2008-2011. Before the recession people could get a mortgage with a credit score as low as 550. Now it must be 700 for most lenders, although a few will lend to someone with a score as low as 620. While this number is still a little high, it hasn’t risen in the past year which means banks are stabilizing rather than make restrictions worse.

Prices AND interest rates are the lowest they’ve ever been.

You hear it from your real estate agent, on the news and at the bank. Interest rates are at historic lows. They are below 4% today, and the Fed has promised to keep them low until 2013. Prices are also at all time lows, and this historic combination of low prices and low interest rates makes it a perfect time to invest in a home or rental property. This is especially true if you can keep the property for at least 5 years, giving it a chance to accrue value.

What are you going to do about it?

For most people, the biggest obstacle for buying a home is the down payment. If you have money saved for a down payment, start shopping around for mortgages. Talk to real estate professionals, like Sue LaPeter, and lenders to find out what type of mortgage will work best for you and how much you can afford. Make sure your credit score is in good condition (at least 620) and start applying for loans and shopping for houses.

If you don’t have money saved for a down payment, start saving now! It can be very difficult to save when you have to pay for rising rent costs, so consider downsizing to save money. If your renting a house, rent a cheaper condo. If your renting a condo, downsize to an apartment. If your renting an apartment, stick your furniture in storage and rent a room, or find roommates. Do whatever you can to cut back on monthly costs and save for a down payment on an Orange County home. It may be uncomfortable and cramped for a while, but it will be worth it when you step foot in YOUR home, instead of somebody elses. I encourage you to downsize now, as it may take a year or more to save and housing costs are expected to increase in 2013.

Every market is different. If you’re wondering whether or not its cheaper to buy than rent in your Orange County neighborhood, give me a call at 714-728-9018 or email sue@lapeterteam.com. I can compare rent vs buying costs on houses and condos with similar attributes and tell you if buying is a smarter move for you and your family.

photo taken from phanlop88 / freedigitalphotos.com

Should You Short Sell Your Home or Send It To Foreclosure?

short sale orange county2012 is off to a great start for my clients! I’m happy to report that I’ve already sold 15 homes since January 1st. These homes are flying off the market. I list them and 1-3 days later offers have been placed and accepted. It’s incredible!

Obviously, I’ve been meeting with a lot of sellers lately. The questions I get asked most frequently have to do with foreclosures. People want to know if I’m an experienced foreclosure agent and if foreclosing is a good option for them. While I do have a lot of experience with foreclosure, I also have experience with Orange County short sales and I almost always tell people that short sales are a much better option than foreclosure. Here’s why:

  • Short sales are being streamlined. In the past, short sales were notorious for being long and complicated processes. However, over the years, banks have gotten much better at processing short sales. They have streamlined the approval process and now it is so much faster and easier to sell a short sale. I’ve been selling them since the beginning of the recession and I can a huge difference in this years short sales versus previous years.
  • Many banks are offering money to short sale sellers. I recently sold a short sale property and the seller received $30,000 from Chase after the house was sold. The seller hadn’t been able to make a house payment in months and was still abel to walk away with money. Chase, as well as other banks including, supposedly, Bank of America and Wells Fargo, are giving homeowners money to motivate them to short sale. It costs these lenders quite a bit of money if the house goes into foreclosure so they want to avoid that. Paying the seller saves them the expense and hassle of a foreclosure.
  • Short sales give complete debt forgiveness. A new law has been put in place that releases short sellers from all debt obligations. You may have heard that short sellers are only released from a primary mortgage or loan. However, last year California Governor Jerry Brown signed Bill 458, which states that once a short sale has been approved, ALL MORTGAGE DEBT IS FORGIVEN. This includes mortgages on primary residences, investment properties, second or third liens, etc. Once you get approval for a short sale, and once the short sale is complete, lenders can no longer pursue you for money that you previously owed them.
  • Short sales have less negative impact on your credit. This result varies for every person. Some people experience very few credit points lost, while some experience the same amount of points lost as with a foreclosure. However, most people who do a short sale qualify for a new mortgage in shorter time than those who foreclose. Doing a short sale shows some effort. You didn’t just give up and walk away from your house, you made an honest effort to do the right thing and sell it to someone who could afford it. Lenders respect this.

As you can see, short sales offer far more benefits to homeowners then foreclosures. If you have questions about Orange County short sales, please give me a call at 714-728-9018. If you are thinking of short selling your Orange County home, call me for a confidential consultation. Free yourself from the burden of unpaid mortgage bills by putting your house up for short sale.

photo taken from renjith krishnan/ FreeDigitalPhotos.net

Looking for a Home in Belmont Estates?

homes for sale orange california

2730 N Springfield St

The best price in Belmont Estates is 2730 North Springfield St! This marvelous Belmont Estates home in Orange, California has 5 bedrooms and 3 baths, with one bedroom and full bath downstairs. Beautiful maple flooring through the house and wood blinds adorn the windows.

Step into the kitchen and admire the custom cabinets with pull out drawers, center island and built in refrigerator. This Belmont Estates house has an open floor plan with inviting family room that has built in fireplace and built in entertainment center with wet bar. Enjoy the large living room with marble fireplace that opens up formal dining room with French Doors that overlook an absolutely stunning backyard that is beautifully landscaped.

The master suite has a fireplace and sitting area with 2 walk-in closets. The master bathroom has dual sinks and a Jacuzzi tub. There is an extra large bonus room with 2 additional bedrooms upstairs, which have a full bath. All this plus much more. Located near award winning Villa Park Schools.

This home has the best price of all homes currently listed in Belmont Estates. Do not miss this opportunity. Contact Sue LaPeter today at 714-728-9018 or email sue@lapeterteam.com.

We're sorry, but we couldn't find MLS # P814291 in our database. This property may be a new listing or possibly taken off the market. Please check back again.

Update On Changes To FHA Mortgage Insurance

March 16, 2012 by Sue Lapeter in Blog, Real Estate News with 0 Comments

UPDATE ON CHANGES TO FHA MORTGAGE INSURANCE PREMIUMS FROM YOUR FRIENDS AT PRIME LENDING. Call us for more info. Uly Kim 949.533.4911 and Ana Zendejas 949.573.1561.

HUD has issued Mortgagee Letter 12-4 announcing changes to the FHA Single Family Annual Mortgage Insurance Premium (Annual MIP) and Up-front Mortgage Insurance Premium (UFMIP).  These changes apply to all FHA Single Family (SF) Forward Mortgage programs offered at PrimeLending.

Highlights include:

  • Annual MIP increasing by 10 bps

o    All loan amounts

o    Mortgages with terms ≤15 years and LTV ≤78% remain exempt from the Annual MIP (ML 11-35)

o    Effective date:  Case number assignment date April 9, 2012

  • Annual MIP increasing by an additional 25 bps – High Balance Loan Amounts

o    Loan amounts > $625,500

o    Mortgages with terms ≤15 years and LTV ≤78% remain exempt from the Annual MIP (ML 11-35)

o    Effective date:  Case number assignment date June 11, 2012

  • Annual MIP decreasing to 55 bps – Streamline Refinances

o    Streamlined Refinances endorsed on or before May 31, 2009

§  Endorsement date (Insurance Date) is on the Case Query screen in FHA Connection

o    Effective date:  Case number assignment date June 11, 2012

  • UFMIP increasing to 1.75% of base loan amount

o    Regardless of loan amount, term or LTV

o    FHA will continue to permit financing of this charge into the mortgage and will continue to calculate actual premium changes against the base loan amount before adding any financed UFMIP

o    Effective date:  Case number assignment date April 9, 2012

  • UFMIP decreasing to 0.01% –  Streamline Refinances

o    Streamlined Refinances endorsed on or before May 31, 2009

§  Endorsement date (Insurance Date) is on the Case Query screen in FHA Connection

o    Effective Date:  Case number assignment date June 11, 2012