Buying a Home Archive

Since September, mortgage rates have been on quite a ride. They dipped briefly into the low 6% range, only to surge past 7% by the end of October.

Feeling a little dizzy? It’s no surprise. Watching rates jump around can make the home-buying process feel like a game of chance. But here’s some good news: you don’t need to hold out for that “perfect” rate to make your homeownership dreams a reality.

In a competitive market like San Diego, buyers have a range of opportunities, even with fluctuating rates. By understanding the key factors that cause mortgage rates to rise and fall, you can feel more informed and prepared to lock in a rate that fits your financial goals.

Let’s break down what’s driving these shifts and how you can move forward confidently in San Diego or any real estate market. Whether rates go up or down, there are always strategies to keep you on track toward owning a home.

What’s Behind Mortgage Rate Fluctuations?

While it might feel like mortgage rates are changing on a whim, there’s a method to the madness. These rates are shaped by a blend of economic factors that respond to inflation, Federal Reserve policies, and broader economic conditions.

Here’s a quick look at some of the key drivers that move mortgage rates up and down:

Federal Reserve Influence

Although the Fed doesn’t set mortgage rates directly, its actions heavily impact them. By adjusting the federal funds rate, the Fed influences borrowing costs across the board. When inflation rises, the Fed often raises its rates to cool down spending, which can push mortgage rates higher.

Economic Growth and Employment Rates

When the economy is booming and unemployment is low, demand for loans tends to rise, often leading to higher mortgage rates. On the flip side, if economic growth slows or unemployment rises, mortgage rates may drop to encourage borrowing and keep the economy moving.

Financial Markets

Mortgage rates are closely tied to the performance of the Treasury bond and mortgage-backed securities (MBS) markets. Typically, mortgage rates are priced slightly above the 10-year Treasury yield, with an added “spread” to account for investor risk when buying MBS. When these financial instruments fluctuate, mortgage rates tend to follow.

Government Policies

Policies aimed at promoting homeownership, like down payment assistance programs or tax incentives, can drive up mortgage demand. When more people are looking to buy homes, this increase in demand can sometimes lead to higher rates.

Global and Political Events

Major world events—whether an election, a pandemic, or international conflicts—can disrupt the U.S. stock and bond markets, impacting mortgage rates as investors react to uncertainty.

Understanding these factors not only helps you make sense of the fluctuations but also empowers you to plan strategically. Remember, in a city like San Diego, where the market moves fast, knowing what drives these rate changes can help you make informed decisions on the path to homeownership.

How to Plan for Monthly Mortgage Costs

When mortgage rates seem to be all over the place, planning monthly payments can feel like a big challenge. But even in a high-rate market, you can create a budget that’s both realistic and flexible. Here are some practical steps to help you stay on track:

Use an Online Mortgage Rate Calculator

Start by running the numbers with a mortgage calculator, trying different interest rates and down payment amounts. This tool gives you a quick look at how varying scenarios will affect your monthly payments, helping you settle on a monthly amount that fits comfortably within your budget.

Factor in Additional Expenses

Keep in mind that your monthly mortgage payment often includes more than just the principal and interest. Depending on your loan and area, you may also be paying property taxes, homeowner’s insurance, and possibly PMI (private mortgage insurance) if your down payment is below 20%. Make sure you account for these costs when estimating your total monthly payment to avoid surprises.

Account for Mortgage Rate Fluctuations

Since rates can shift between when you apply and when you close, consider budgeting for a slightly higher rate. This creates a financial cushion, so if rates increase before you lock in, you’ll still be within a manageable payment range.

By planning ahead and factoring in these elements, you can approach homeownership with confidence. Even if rates change, having a solid budgeting plan can help you move forward without overextending your finances.

Tips for Securing a Low Mortgage Rate

In today’s market, buyers are finding creative ways to get better deals. According to Zillow, nearly 45% of recent homebuyers managed to secure mortgage rates below 5%—a major win in a high-rate environment.

So, how are they doing it? Many buyers are using builder incentives (35%), seller financing (26%), refinancing (25%), and even financial support from family or friends (23%). If you’re looking to lower your rate, here are some strategies that can help:

1. Boost Your Credit Score

You’ve probably heard it before: a higher credit score can help you qualify for a lower mortgage rate. Here’s how to keep your credit score strong when preparing to buy a home:

• Pay Down Existing Debts: Reducing outstanding debt not only improves your credit score but also lowers your debt-to-income ratio, a factor lenders look at closely.
• Avoid Opening New Lines of Credit: Right before you buy a home is not the best time to take on new credit. New accounts can temporarily lower your score, so hold off on any big purchases or credit card applications until after closing.
• Consider Rent Reporting Services: Some services allow your on-time rent payments to be reported to credit bureaus, giving your score a helpful boost. It’s a small step that can make a big difference.

Lenders view a high credit score as a sign of reliability, so these efforts can pay off with lower interest rates, potentially saving you thousands over the life of your loan.

The housing market is shifting this season, creating an exciting opportunity for homebuyers. If you’ve been holding off on your search, now might be the best time to buy a home and to dive back in. In fact, the ideal window to buy a home in 2024 is right around the corner, and San Diego is no exception. The sweet spot for buyers is fast approaching.

Why Late September Is the Best Time to Buy

According to experts at Realtor.com, studying seasonal trends reveals the best week for homebuyers:

“Nationally, the best time to buy in 2024 is the week of Sept. 29–Oct. 5. This week historically has shown the best balance of market conditions that favor buyers. Inventory tends to be high, prices are below peak levels, demand is waning, and the pace of the market slows to a more manageable speed.” 

For San Diego buyers, this means more options on the market, slightly lower prices than the summer peak, and less competition. The fall season often brings a calmer pace, making it easier to find your dream home in San Diego’s diverse neighborhoods.

Mortgage Rates at Their Lowest in 19 Months

In addition to the typical seasonality and historical trends Realtor.com analyzes, current market data also suggests that buying conditions right now are more favorable than they have been in recent years  and how now is the best time to buy a home. San Diego buyers, in particular, can benefit from these changing conditions.

Recently, mortgage rates dropped to their lowest level in the past 19 months, significantly improving affordability and boosting your purchasing power. Andy Walden from Intercontinental Exchange Inc. (ICE) highlights this shift, saying:

“Recent easing in mortgage rates brought some much-sought relief to prospective homebuyers. Along with a general cooling in home price growth, rates falling below 6.5 percent made August the most affordable month for housing since February.”

San Diego’s market, known for its competitive edge, is now offering a unique window of opportunity for buyers to take advantage of these improved conditions.

Increased Inventory Equals More Options in San Diego

Ralph McLaughlin, a Senior Economist at Realtor.com, points out that it’s not only mortgage rates that have seen positive changes but also the number of homes available. He mentions,

“The number of homes actively for sale continues to be elevated compared with last year, growing by 35.8%, a 10th straight month of growth, and now sits at the highest since May 2020.”

In San Diego, this increase in inventory gives buyers more options, especially in neighborhoods like North Park and South Park, where homes have been in high demand. This improved market condition could be a great opportunity for those looking to find their dream home in San Diego.

This time of year opens up more opportunities for you as a buyer. Right now, sellers are actively competing for your interest, making them more willing to negotiate on price and terms. They understand that if they don’t make their homes attractive to buyers, their properties may sit on the market longer than they would like. In San Diego, where the market can be competitive year-round, this shift gives buyers a better opportunity than in the past few years.

According to Zillow:

“Buyers waiting on the sidelines could find that early fall presents a ‘sweet spot,’ where there’s less competition from other buyers, more motivated sellers and lower interest rates to finance their purchases.”

Final Thoughts on the Best Time to Buy a Home in San Diego This Year

If you’re looking to make the most of this prime opportunity, now is the time to start preparing. Connect with the McT Real Estate Group so we can get everything in order and put you in the best position to buy in San Diego’s competitive market. It might just be the perfect moment to step off the sidelines and dive into the exciting world of San Diego real estate.

Credit Score to Buy a Home in San Diego

In the past several years, buyers have faced challenges trying to buy a home. Spring has traditionally been considered the best season for homebuying during pre-covid years. This is when most homeowners put their homes up for sale, leading to a wider selection for buyers.  For buyers in the fall, however, marketing conditions are aligning in favor of homebuyers in many markets, creating a unique window that hasn’t happened in recent years. Realtor.com even named September 29 – October 5 the best week to buy a home in 2024. 

This year, buyers looking for that optimum mix of ample options and the potential to save on list price will find some of the best market dynamics in years during the first week of October,” said Danielle Hale, chief economist, Realtor.com®. So, what makes this season stand out?  Let’s break down the data below. 

#1 Lower Mortgage Rates for Buyers In the Fall

Mortgage rates have been steadily rising for months. They recently dropped to their lowest point since February 2023, at 6.11% as of September 11th. This decline offers buyers a chance to lock in more favorable rates and save substantially on their monthly payments. For instance, the monthly payment on a typical home purchase has decreased by over $100 since peaking in May, according to Zillow. 

#2 Peak Inventory Levels

If you’ve been waiting for more choices to come your way, your patience has finally been rewarded. In August, the inventory of homes for sale rose by 22. 1 % compared to the year at this time. Additionally, Realtor.com predicts that the initial week of October is expected to showcase a 37 % increase in listings since the beginning of this year, giving buyers an array of options to choose from. 

“Unlike the past few years, we are seeing ample for-sale inventory which could soak up any late-season demand in many markets, making the fall a great time to buy even if falling mortgage rates amp up more demand than is typical”

said Hale.

More inventory means buyers in the fall have more choices, and along with that, they have more opportunities to find the perfect home. It also means less pressure to make a snap decision, allowing you the time to thoroughly consider your options without worrying about losing out to another buyer.

Having a variety of houses to choose from allows you to explore options and improves your chances of discovering the home for you while also taking away the pressure to make a quick decision, giving you the flexibility to thoroughly assess your options without worrying about missing out on a property, to another buyer. In August of 2024, San Diego’s housing market inventory trends were somewhat in line with national trends but showed unique characteristics specific to the region. Nationally, inventory increased, and the same was observed in San Diego. San Diego County’s active listings saw a slight decrease of 1.2% year-over-year, reflecting a market still grappling with limited supply.

San Diego Market Slows: Inventory Up and Demand Down, Creating Opportunities for Buyers

Here in San Diego, homes spent an average of seven days longer on the market compared to the previous year, indicating a slower market. However, the median listing prices in the West remained flat year-over-year, suggesting that sellers are still holding on to higher price points despite the slower sales pace. As of today, Sept.13,  the inventory in San Diego County is up 2% week-over-week, and demand is down 1%. Expected Market Time increased from 82 to 84 days. 

For San Diego buyers in the fall, this means a slightly more favorable environment with more homes available and potentially less competition. However, since prices have not dropped significantly, it remains a market where careful negotiation and strategy are crucial to securing a good deal. SDC inventory up 2% week-over-week, demand down 1%. Expected Market Time increased from 82 to 84 days. 

#3 Less Competition Means More Negotiating Power

Spring and summer are traditionally hot buying seasons, with a typical cooling in fall and winter. Buyer demand will likely drop by nearly 30% from the spring peak.. This reduction in competition could give you a leg up in negotiations, whether that means offering below the asking price or asking the seller to cover some of your closing costs.

#4 Price Reductions are More Common for Buyers In the Fall

In a market with a surplus of goods and less competition, sellers are typically more eager to negotiate and close deals. In August, 25.9 % of listings saw price reductions across the country versus 23.4 % twelve months ago. If you’ve been feeling discouraged by prices, you might come across opportunities to negotiate for a better deal or grab a bargain on a property that’s been sitting on the market for quite some time unsold.

According to Redfins, data analysis findings show a decrease in the percentage of homes being sold above their listed price from 33%% year to 27%% in the four weeks ending September 8th. In terms of this indicates that sellers are now more open to bargaining, which could present you with the chance to purchase a home at a price than anticipated. 

Seasonal Trends for Homebuyers

Fall is typically quieter for real estate transactions, but it actually offers buyers an opportunity as eager sellers aim to finalize deals before the holiday season. They tend to be more open to negotiating terms‌ ‌and prices ‌quickly‌. ‌Realtor.com even pinpointed the week of September 29th to October 5th as the prime time to make a home purchase this year (among other compelling factors!) 

If you’re thinking about buying a home, waiting until spring could mean higher rates, fewer options, and stiffer competition. This fall is offering a rare combination of lower mortgage rates, more inventory, reduced competition, and increased negotiating power. If you want to learn more about your options, feel free to call us any time.

San Diego’s Housing Market-How The Presidential Elections Affects It

If you’re considering buying or selling a home in San Diego, mortgage rate changes are likely at the forefront of your mind. It’s no surprise—mortgage rates play a significant role in determining how much house you can afford, as they directly affect your monthly payments. Whether you’re eyeing a charming bungalow in North Park or a modern condo in South Park, understanding how these rates impact your budget is crucial. As you begin planning your next steps, keep in mind that fluctuating mortgage rates can either expand or limit your buying power. Here’s a closer look at what you should know.

What’s Happening with Mortgage Rate Changes in San Diego?

Mortgage rates have been on a downward trend lately, which is promising news for potential homebuyers in San Diego. However, it’s essential to understand that mortgage rates can be unpredictable and fluctuate due to various factors. The economy, job market, inflation levels, and decisions made by the Federal Reserve all play significant roles in influencing rates.

Even though rates are showing signs of decreasing, they may still experience some ups and downs as new economic data emerges. For those looking to buy a home in San Diego, staying informed and ready to act when conditions are favorable can make a big difference. As Odeta Kushi, Deputy Chief Economist at First American, explains:

“The ongoing deceleration in inflation, coupled with the Federal Reserve’s recent indication of potential rate cuts [in 2024], suggests an environment supportive of modest declines in mortgage rates. Barring any unforeseen circumstances and resurgence in inflation, lower mortgage rates could be on the horizon, but the journey towards them might be slow and bumpy.”

San Diego’s real estate market, known for its desirable location and competitive nature, can particularly benefit from these rate changes. Lower rates may increase your purchasing power, allowing you to secure a property in this beautiful city at more favorable terms. However, with the market’s dynamic nature, it’s wise to keep an eye on both national and local trends

How Do These Mortgage Rate Changes Impact You?

When mortgage rates fluctuate, they directly influence your monthly mortgage payments. Even a slight shift in rates can significantly affect the amount you’ll pay each month. For homebuyers in San Diego, where real estate prices are often higher than the national average, understanding these changes is even more crucial.

Take a moment to review the chart below, which illustrates how varying mortgage rates can impact your monthly payments based on different loan amounts. For instance, if your budget allows for a monthly mortgage payment of $2,600, the blue sections in the chart highlight the payments that fall within or below that range, depending on the rate you secure.

By grasping the connection between mortgage rates and your monthly payment, you can make more informed and confident decisions in your homebuying journey in San Diego’s competitive market.

How to Stay Informed About Mortgage Rates in San Diego

Keeping up with the latest mortgage rates can feel overwhelming, especially in a dynamic market like San Diego. Fortunately, you don’t have to navigate this on your own. A knowledgeable real estate agent can be an invaluable resource in helping you understand how these rate shifts affect your homebuying power. They provide more than just numbers; they offer insights, tools, and visuals that make complex information easier to digest.

Instead of trying to become a mortgage expert, focus on finding the right professional to guide you. An experienced agent will not only explain what’s happening in the market but also offer tailored advice for your specific situation. Whether you’re looking to buy or sell a home in San Diego, having an expert by your side ensures that you’re making informed decisions every step of the way.

By staying connected with a local real estate professional, you’ll be better equipped to handle the ever-changing landscape of mortgage rates, turning what could be a daunting task into a smoother, more manageable process.

Bottom Line

If you’re feeling uncertain about the housing market, especially in the dynamic San Diego area, let’s connect. By having a conversation, you’ll gain a clearer understanding of the current trends and how they may affect your plans. With the ever-changing landscape of real estate, it’s essential to stay informed, so you can make confident decisions whether you’re buying or selling in San Diego. Reach out to a trusted local realtor here in San Diego like the McT Real Estate Group today, and let’s navigate the market together with ease and clarity.

Finding the Perfect Home in San Diego

A recent Bankrate survey confirms this enduring aspiration: homeownership remains a key component of the American Dream. The survey results reveal that 78% of respondents place owning a home at the top of their list of significant milestones, outpacing other goals such as retirement and career success.

Why is buying a home such a significant milestone for many people today? First and foremost, homeownership offers both financial and physical security. For many, owning a home in beautiful San Diego provides a sense of stability and peace of mind. With a fixed-rate mortgage, homeowners can stabilize what is often their largest monthly expense, reducing financial stress and allowing for better budgeting.

Additionally, the American dream of owning a home is a powerful way to build wealth over time. As homeowners make mortgage payments and as property values in desirable locations like San Diego appreciate, they gain equity. This growing equity contributes to long-term financial stability, making homeownership a smart investment.

Of course, owning and maintaining a home comes with its responsibilities. However, a survey by Entrata reveals that only 23% of renters feel that homeownership is too much work. This indicates that most are willing to embrace the commitments and rewards of owning a home. In San Diego, where the weather is fantastic and the community vibrant, the benefits of homeownership are even more compelling. The city’s diverse neighborhoods, excellent schools, and proximity to stunning beaches make it an ideal place to put down roots and build a future.

What Does This Mean for You?

Buying a home in today’s market might feel challenging with higher mortgage rates and rising home prices. However, the long-term benefits can make it all worthwhile. If you’re thinking about homeownership, it’s essential to remember that it’s more than just a financial investment — it’s a step toward fulfilling the American dream, securing your future, and building stability.

So, while the initial process might seem tough, the rewards of homeownership in San Diego can be significant. With the right approach and a clear understanding of your long-term goals, you can turn the dream of owning a home into a reality. Remember, it’s not just about buying a property; it’s about creating a foundation for your future.

If you live in San Diego or own a home here, you’ve likely noticed a significant increase in your net worth over the past year. With the surge in home prices, your home equity gain is growing faster than you might realize. Here’s a closer look at why this is happening.

Home Equity Gains are simply the current market value of your home minus the remaining balance on your mortgage. Over the past year, the San Diego housing market has seen a high demand from buyers, while the number of available homes for sale has remained relatively low. This imbalance has driven home prices up, directly contributing to a substantial increase in equity for homeowners.

This trend has been especially pronounced in San Diego’s vibrant and competitive real estate market, offering homeowners a lucrative opportunity to boost their financial standing. As prices continue to climb, the equity in your home grows, enhancing your overall wealth and providing more financial flexibility.

How Much Equity Have San Diego Homeowners Earned Over the Past Year?

Curious about how much equity you’ve earned over the past 12 months? According to the latest Homeowner Equity Insights from CoreLogic, the average homeowner’s equity has increased by an impressive $28,000 nationwide in the past year alone.

But what does this mean if you own a home in San Diego? To understand how local markets compare, check out the map below. It highlights state-specific data from CoreLogic, revealing the equity growth in each region over the past year. Notably, every state with available data saw a rise in equity, demonstrating a positive trend across the board.

In San Diego, this trend is particularly evident. The city’s booming real estate market and rising property values have contributed significantly to homeowner equity. Whether you’re considering selling or just curious about your investment’s growth, this information is crucial. Stay informed and make educated decisions about your home’s equity in this thriving market.

What If You Bought Your House Before the Pandemic?

If you bought your house before the pandemic, the news about your home equity is even more exciting. Realtor.com reports that home prices surged by 37.5% from May 2019 to May 2024. This significant rise means your home’s value has likely seen a substantial boost. Ralph McLaughlin, Senior Economist at Realtor.com, highlights this by stating:

“Homeowners have seen extraordinary gains in home equity over the past five years.”

This trend is particularly noteworthy in San Diego. The local real estate market has been thriving, with many neighborhoods experiencing impressive appreciation in property values. If you own a home in areas like North Park or South Park, your home equity gains are likely even higher, thanks to the strong demand and desirable location.

To understand how much equity can grow over time, let’s look at some expert insights. Selma Hepp, Chief Economist at CoreLogic, sheds light on the current equity situation for the average homeowner.

“With home prices continuing to reach new highs, owners are also seeing their equity approach the historic peaks of 2023, close to a total of $305,000 per owner

San Diego, known for its vibrant real estate market, exemplifies this trend. With its desirable neighborhoods and strong demand, homeowners in San Diego are particularly benefiting from these rising property values. The city’s unique blend of coastal beauty, cultural richness, and economic opportunities makes it an attractive place to live and invest, further driving up home equity.

By understanding these trends, San Diego homeowners can better appreciate the value of their investments and make more informed decisions about their properties.

How Rising Home Equity Benefits San Diego Homeowners

San Diego’s real estate market has experienced significant price increases over the past few years, and this upward trend continues today. As a result, homeowners in San Diego have built up substantial equity in their properties, which offers several notable advantages.

This equity can be leveraged in various ways. For instance, you can use it to launch a new business, invest in education, or even make the down payment on your next home. When you decide to sell your current home, the equity you’ve accumulated can return to you, potentially covering a large portion—or even the entirety—of your next home’s down payment. This financial flexibility can make a significant difference in achieving your future goals.

San Diego’s vibrant housing market continues to benefit local homeowners, making it an opportune time to explore how your rising home equity can work for you.

Bottom Line on Homeowner Equity Gains in One Year in San Diego

If you’re planning to move, the equity you’ve gained can be a significant asset. In San Diego, home values have been on the rise, offering homeowners like you an excellent opportunity to leverage that increased equity. Wondering how much equity you’ve built up and how it can assist in purchasing your next home? Connect with a trusted local realtor like the McT Real Estate Group and let’s explore your options.

More Homes on the Market in San Diego: What You Need to Know!

Is Now a Good Time to Buy?

With headlines about rising home prices and fluctuating mortgage rates, you might be wondering if now is still a good time to buy a home or if renting is a smarter choice. Here’s some information to help ease your mind and demonstrate why investing in a home remains a wise decision.

Why Real Estate is the Best Long-Term Investment

Experts at Gallup have named real estate the top long-term investment for 12 consecutive years, consistently outperforming gold, stocks, and bonds. In San Diego, where the real estate market is dynamic and offers great potential for growth, this trend holds true. Just take a look at the graph below – it clearly illustrates the enduring value of real estate as an investment.

But why does real estate continue to stand out as the best long-term investment? The answer is simple: buying a home remains a powerful way to build wealth over time. Unlike other investments that fluctuate wildly with market conditions, real estate offers a more stable and predictable growth pattern. This stability makes it an attractive option for those looking to secure their financial future.

San Diego, known for its desirable climate and vibrant community, is a prime example of a market where home values typically rise. Over the years, properties in this area have consistently appreciated, significantly boosting homeowners’ net worth. As highlighted by Realtor.com:

“Homeownership has long been tied to building wealth—and for good reason. Instead of throwing rent money out the window each month, owning a home allows you to build home equity. And over time, equity can turn your mortgage debt into a sizeable asset.”

If you’re debating whether to rent or buy, consider this: real estate has consistently been voted the best long-term investment. If you’re ready and able, now might be the perfect time to invest in a home and start building your financial future.

If you’re hesitant to buy a home in San Diego because you’re worried about the upkeep, let’s put your mind at ease with some helpful information. In San Diego, both new home construction and existing homes have their own unique benefits when it comes to maintenance. New homes often come with the latest materials and technology, which can mean fewer repairs and lower maintenance costs. On the other hand, existing homes in established neighborhoods offer the charm and character of mature landscapes and unique architectural features. By understanding the differences between new and existing homes, you can make a more informed decision that suits your lifestyle and budget.

New Homes in San Diego: A Smart Choice for Lower Maintenance Costs

Opting for a newly built home in San Diego can significantly reduce your maintenance worries. Imagine stepping into a house where everything is brand new, free from the wear and tear commonly found in older homes. This freshness translates to fewer repairs and less money spent on upkeep.

According to LendingTree:

“Since the systems, appliances, roof and foundation are new, you’re less likely to pay for major or minor repairs within the first few years of homeownership. That can make a big difference for first-time homebuyers who are adjusting to owning rather than renting.”

Additionally, many builders offer warranties that cover significant expenses. As First American highlights:

“The new systems in your home, like plumbing, electrical, and HVAC, are typically covered for one to two years by your builder’s warranty. When something happens to these systems, you contact the builder or their warranty company.”

Choosing a new home in San Diego provides peace of mind and aligns with the city’s modern and innovative vibe, ensuring your living experience is both comfortable and cost-effective. However, if you are thinking of buying a new home, you will have to be open to a wider range of neighborhoods because there are not many areas in the metro neighborhood of San Diego that have new construction.

Perks of the Maintenance Costs on Existing Homes: San Diego’s Hidden Gems

When considering the perks of homeownership, it’s important to note that warranties aren’t exclusive to newly built homes. Existing homes in San Diego can also come with warranties, offering you peace of mind.

Your real estate agent can help negotiate with the seller to include a home warranty as a concession in your contract. However, it’s important to understand that not all sellers will be open to this. If the seller isn’t willing to provide a warranty, you always have the option to purchase one yourself. Forbes highlights this flexibility:

“During a real estate transaction, a home warranty policy can be purchased by the buyer or the seller.”

Home warranties offer advantages for both parties involved. MarketWatch explains:

“A buyer’s home warranty benefits both buyers and sellers, as it helps the seller close the deal while providing the future homeowner with peace of mind that they’ll be covered if a system or appliance breaks down . . . Sometimes, a seller will pay for the first year of the home buyer’s warranty to sweeten the deal, but it depends on the real estate market.”

If peace of mind through a home warranty interests you, rely on your agent to negotiate on your behalf. They will assess the market conditions in San Diego and determine if a seller might be willing to cover the cost of a home warranty. Remember, the likelihood of securing a seller-funded warranty often depends on the competitiveness of the local market.

Should I Buy New Home or an Existing Home?

Deciding between a new construction home and an existing one can be tough. While a newly built home might need less immediate maintenance, there are several benefits to buying an existing home that shouldn’t be overlooked, especially in vibrant areas like San Diego.

For one, existing homes often have a lot of character and charm that new builds can’t replicate. The unique quirks of an older home can make it feel more inviting and homey, especially the Spanish-style and Craftsman Homes found throughout the San Diego metro neighborhoods. Additionally, many existing homes in San Diego have beautifully developed landscaping, adding to their appeal. These homes are often situated in well-established neighborhoods such as North Park and South Park, which have a strong sense of community, which new developments may lack.

Another factor to consider is the timeline. With new construction, you might face a significant wait before your home is ready, depending on the stage of construction. On the other hand, an existing home is move-in ready, offering convenience and immediacy.

Ultimately, the decision comes down to what you value most in your new home. Whether it’s the historical charm and established setting of an older home or the modern amenities and low maintenance of a new build, San Diego offers a diverse range of options to suit your preferences.

Bottom Line

When deciding between a newly built home or an existing one, consider easing your maintenance worries with a home warranty. A home warranty can provide peace of mind by covering unexpected repairs. Talk to local professionals who understand the San Diego housing market to make the best decision for your needs. They can help you weigh your options and determine what’s most important for your situation.

By consulting experts familiar with San Diego’s unique real estate landscape, you’ll get personalized advice tailored to the specific needs of homes in this area. Whether you’re concerned about the age of the home or potential repair costs, here at the McT Real Estate Group we will guide you through the process and help you prioritize what matters most

Property Tax in California: Stability Through Proposition 13

Planning to buy a home in San Diego? Understanding your credit score is key to securing a successful mortgage. Lenders scrutinize your credit history to gauge your payment habits and debt management skills. This crucial number not only influences your eligibility for a mortgage but also impacts the interest rate you’ll receive. According to a resource from US Bank, your credit score serves as a financial snapshot that lenders use to assess your borrowing reliability.

“A credit score isn’t the only deciding factor on your mortgage application, but it’s a significant one. So, when you’re house shopping, it’s important to know where your credit stands and how to use it to get the best mortgage rate possible.”

Your credit score holds significant weight in your quest to buy a home, especially in San Diego, where mortgage rates heavily influence affordability. The Federal Reserve Bank of New York reports a median credit score of 770 for U.S. homebuyers. However, perfection isn’t a prerequisite. As outlined by US Bank in the same article, your credit score doesn’t need to be flawless. This insight underscores the importance of understanding credit scores in the San Diego real estate market.

“Your credit score (commonly called a FICO Score) can range from 300 at the low end to 850 at the high end. A score of 740 or above is generally considered very good, but you don’t need that score or above to buy a home.”

When it comes to navigating the complexities of home buying in San Diego, teaming up with a reliable local lender is your golden ticket to understanding the ins and outs of your credit score and its impact on your mortgage options. As FICO aptly puts it, collaborating with a trusted lender opens the door to invaluable insights into how your credit score influences not just your loan approval but also the interest rates you qualify for. By partnering with a reputable lender in San Diego, you’ll gain clarity and confidence in securing the best possible mortgage deal tailored to your financial circumstances.

“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single “cutoff score” used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”

Boosting Your Credit Score

If you’re eager to boost your credit score, Experian offers valuable insights into key areas worth your attention. Here are some actionable tips to consider:

Firstly, prioritize timely bill payments. Consistently paying bills on time is fundamental to building a positive credit history. Additionally, aim to keep your credit card balances low, ideally below 30% of your available credit limit. This demonstrates responsible credit utilization and can positively impact your score.

Furthermore, avoid opening multiple new accounts within a short period. Each new account application typically triggers a hard inquiry, which can temporarily lower your score. Instead, focus on managing your existing accounts responsibly and consider negotiating with creditors to lower interest rates or payment terms if needed.

Regularly monitoring your credit report is another essential practice. This allows you to spot any errors or fraudulent activity promptly, ensuring the accuracy of your credit profile. Finally, be patient and persistent in your efforts to improve your credit score. Positive changes may take time, but consistent habits can lead to significant improvements over

Wrapping All Things Up

In conclusion, enhancing your credit score can pave the way for securing a more favorable mortgage rate, ultimately saving you money in the long run. To delve deeper into this topic and explore tailored solutions, it’s advisable to engage in a conversation with a reputable lender. By seeking guidance from a trusted professional, you can gain invaluable insights into optimizing your financial profile for the San Diego housing market. Let’s start your journey toward homeownership with informed decisions and strategic planning.

San Diego First Home Buying Guide: Strategic Tips & Insights

Last year a handful of housing gurus and experts hinted that 2023 might see a dip in home prices. Naturally, the media took that tidbit opportunity and splashed it across their headlines about a possible looming real estate apocalypse. This is totally not the case in the real estate market today if you have been keeping up with our recent blog posts. This kind of buzz can easily shake one’s confidence, causing many to second-guess the robustness of the San Diego residential real estate scene.

If all this chatter made you wonder whether to hit the pause button on your moving plans for now, here’s the real scoop we really need to talk about and spill the tea on.

Why San Diego Home Prices Aren’t Taking a Dive: Beyond the Headlines

Don’t let those flashy headlines fool you. Delving into the real numbers and data, it’s clear that San Diego’s home values have held strong and steady. And guess what? We’ve got a graph below that tells the whole story better than words can.

This chart pulls data from three reputable sources, showcasing that even though there was a minor dip in prices on a national scale before due to possible seasonal trends, they’ve definitely since bounced back. Far from the major crash that some headlines predicted, right? The small drops we did see (highlighted in red) were brief and not too deep. As Nicole Friedman from the Wall Street Journal (WSJ) puts it…

“Home prices aren’t falling anymore. . . The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected . . .”

While some news outlets have made headlines about a dip in home prices, that brief hiccup is now behind us. To put it simply, the latest figures confirm that home values in San Diego aren’t on a decline anymore — in fact, they’re gradually on the rise again.

Where Are San Diego Home Prices Headed Next?

From what the experts are saying, we can expect home values in San Diego to keep on rising. However, it’s probably going to be at a steadier, more typical pace than we’ve seen in recent years. And honestly, that stability is kind of refreshing and a breath of fresh air for everyone.

Now, there might be some news outlets out there that’ll twist this steady growth into a narrative of declining prices. Just a quick heads up – these sensationalist headlines have started to make some potential homebuyers a bit more jittery. To get a clearer picture, check out the Consumer Confidence Survey by Fannie Mae – We’ve included a graph below for you to see.

Interestingly, even though the data shows that fewer Americans believe home prices will drop as we progress through the year, the most recent Consumer Confidence figures (highlighted in red) reveal a slight uptick in this sentiment. It’s a bit of a head-scratcher, especially when all the signs and data indicate home prices are on the rise. It goes to show the powerful influence the media continues to have on shaping perceptions of the masses.

Let’s not get too swayed by the doom and gloom headlines of the real estate market, shall we? Keep in mind that a wealth of information from various credible sources confirms that home prices are holding steady and probably will not be dropping any time soon. So if you’re planning to make a move and the recent news has stopped you out of your tracks for some time, This just might be the sign that you were waiting for.

Final Thoughts

While the headlines in the media might paint a different picture of what’s really going on in the real estate market, the actual numbers reveal that San Diego home prices have more or less stabilized already. Don’t let the sensational and over-exaggerated news stories put your dreams on hold.

“If you don’t like where you are, move. You are not a tree.” – Jim Rohn

Reach out to the Mct Real Estate Group; we’re here to give you the real scoop and be the guiding voice amidst all the chatter about our local market.

2023 Home Price Forecasts: What the Experts Are Now Saying

Are you pondering the thought or idea of diving into the housing market quite soon? Well, It’s true that with escalating mortgage rates, surging home values, and the ever-present affordability questions to consider, one might hesitate the idea of homeownership and just put the idea on the back of their head entirely. Yet there’s totally more to the picture and more than what meets the eye. It’s just the tip of the iceberg, you might call it, as the enduring perks of owning a home are pivotal, and it has its fair share of advantages over just renting your space in the long run.

Let’s reflect on this, shall we? – if you chat with some folks who took the plunge and secured their homes maybe around 5, 10, or even three decades ago, it’s rare to find someone who regrets their dive into homeownership back then. What’s the homeowner’s secret? It’s the magic of how property values are gradually maturing over time and, as a result, bolstering their personal financial standing while enjoying the perks of owning their own home. In fact, according to a recent survey conducted by Fannie Mae, a whopping 76% of new homeowners attest that purchasing their home feels like a solid ground for their money. Talk about getting the most bang for your buck when you’re purchasing real estate.

Let’s go ahead and delve into how the mere appreciation of property prices can have a snowball effect on your assets over time.

Tracking Homeownership or Residential Value Increases

The chart or map below showcases significant home price elevations in the past half-decade, drawing from authoritative sources at the Federal Housing Finance Agency (FHFA). To paint a clearer picture of localized market movements, we’ve categorized the data by their respective regions accordingly.

When you go ahead and examine the percentage shift in property values, it’s evident that, nationally, homes appreciated in their value by a tad above 57% over half a decade.

While some areas hover a bit above or beneath this social norm, it’s undeniable that the real estate market has proven its worth in this brief time span. Stretch that lens a little bit further, and the tangible rewards of owning a home over the years stand out more vividly (refer to the accompanying map below).

The updated map reveals that across the country, the value of homes has surged by nearly 297% over the past three decades.

For a better perspective, this means that a homeowner who probably invested in a property 30 years ago or so would now see their home’s worth nearly tripling its normal value. This remarkable growth is one of the key reasons why many long-term homeowners feel content with their choices. It’s the waiting game but definitely a bang for your buck in the end; Just think of it as a long-term investment and how purchasing a home now can increase its value overtime.

Despite some chitter chatter this year hinting at a dip in home values you probably have heard from the media, the real estate market remains resilient in its tracks. Leading industry analysts and experts in the field anticipate that property prices will keep ascending in the foreseeable future.

Final Thoughts

Are you still pondering the idea of purchasing a home in today’s market? Just try to remember to weigh the enduring benefits of being a homeowner than being a renter. While there’s nothing wrong with just renting right now, real estate and finding a place you can call home is still one of the greatest investments you can try to push through to date. As you have noticed in the article, home values really do compound in the long run.

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

So whenever you feel ready to embark on this journey and take these first few steps to home ownership,  Just know that the McT Real Estate Group is here to guide you with your real estate journey every step of the way.

Owning a Home Beyond Finances, Its Advantages

In today’s real estate market, people looking for a new home frequently wonder whether to rent or buy. It’s a difficult question to answer. Real estate prices in San Diego are relatively high, whereas rents are lower in comparison when it comes to a monthly payment. However, just because the cost of something is lower doesn’t mean it has more value. Today we will be looking into renting vs. owning in San Diego and deciding what’s smarter in 2022.

If you haven’t decided whether you want to buy or just rent, look around and see what’s available in San Diego. If you’re going to make the best decision possible, you must first understand what is available.

Before We Begin

Before deciding whether to rent or own in San Diego, you should always learn everything you can about the location you’re moving to. People are easily swayed by the idea of moving to a new location without looking deeper than the surface level. Before you relocate, consider the following:

• The cost of living
• The economic growth potential
•  What the weather and climate are like
• What the traffic is like
• How the public transportation works

These are just some things you should know about San Diego prior to making it your home permanently. Of course, bear in mind that these are only the key aspects to look into before moving to this area, as life in an area is much more than just the traffic and the cost of living.

The Benefits of Renting in San Diego

Renting may not seem like progress, but that doesn’t mean it’s not the best option for you right now. The truth is that there are several significant advantages to renting, including the fact that you are not tied down to a house or how your local real estate market performs.

Flexibility

Flexibility mostly comes down to the type of person you are. For people who like to travel and discover new areas and places, renting is the best option. If you don’t want to be tied down to just one place, renting is the way to go. Renting is also a better option if you change careers or jobs often. Purchasing a property in San Diego may restrict your ability to pack up and relocate in the near future.

Avoiding the Costs of Homeownership

Every homeowner is well aware of the possibility of unexpected bills on top of the monthly mortgage payment. According to HOA estimates in San Diego, monthly HOA dues could range between $400 and $800. Approximately $6,000 per year is spent on average on property taxes in San Diego. Take into consideration the costs of furnishing and decorating your home as well as the costs of fixing problems with the property, plumbing, landscaping, and general upkeep. The benefits of owning a home are available to you as a renter, but you are not responsible for the financial obligations of home maintenance.

Liquidity

In general, you can’t transform a property into cash instantly. Many individuals place their entire life savings into a property, placing the majority of their net worth into an illiquid asset. There is a danger in investing a significant amount of your capital in such an asset. Renting provides you with freedom as well as other investing opportunities.

Increasing Your Credit Score by Renting vs. Owning in San Diego

Everyone needs a good credit score for almost everything we do. No matter if you want to get a big 4K TV or you need a new car. While renting may not improve your credit as much as buying a house, building a history of on-time rental payments can help you qualify for a mortgage in the future. However, you need to have your landlord send your payment information to a credit bureau to make this work. There are also third-party services that may assist you in reporting this information on your behalf.

The Benefits of Buying a Home in San Diego

Renting may have its benefits, but there are also a lot of benefits to owning a house in San Diego in 2022. The obvious advantage is that you can have something of your own. When you own a home, you are not at the mercy of a landlord who can change the terms of your lease or, worse, sell the property without warning. The flexibility that renting offers comes with a lot of risk and uncertainty.

Less Fluctuating Costs

Your landlord decides how much the rent will cost. They don’t have to warn you or justify themselves when they increase the rent. However, if you take out a mortgage, you can be sure that it will not increase over time if you are making the payments on time. This is in stark contrast with rent, which increases following the property’s market value plus inflation.

Benefits from Taxation

In your capacity as a homeowner, you may be able to deduct a variety of associated expenses from your taxable income. Aside from that, all interest paid on a mortgage is tax-deductible up to $750,000. Additionally, deducting expenses such as mortgage interest may help you avoid IRMAA surcharges while also lowering your overall tax liability.

Diversification

In the same way that you can invest in stocks and other similar assets through brokerage and retirement accounts, you can also use real estate as another asset class to diversify your portfolio. Apart from that, because it is a physical asset, real estate appeals to many other people willing to invest or buy the property.

You Can Sell or Rent Your House In The Future

It is possible to build equity in your home by paying down your mortgage over time. If you own the house, you can invest in it, remodel it, and increase its value. After that, you can sell it for more than you paid for it. You can do whatever you want with it when you own the house outright. So, if you ever decide to relocate, you can make money from it. And when deciding whether renting vs. owning in San Diego is the better choice, one ought to think about the future.

Conclusion

So, renting vs. owning in San Diego – what’s smarter in 2022? As you can see, the answer is not so simple. Depending on the type of person you are, your goals, and your preferred lifestyle, you may need different things. However, in our opinion, it is always a better idea to buy if you have the means. If you don’t have that option, you should try to save so that you can make it happen in the future.

If you are thinking that buying or selling your home in San Diego, contact the McT Real Estate Group. We are here to help with the process.

Buying a home in San Diego can be very exciting but can also feel scary. If you think about it too long and listen to too many people who don’t own a home or even some who do, you may become paralyzed with fear and never jump in. It is okay to be careful and do your homework. However, overanalyzing for too long can hurt you in the long run. Constantly ask yourself, “Should I buy a home now or wait until next year?”

I remember meeting people who would go through our Open Houses during 2012- 2016. These people wanted to buy a home but kept saying they would wait for the bubble to burst. I still see a few of these people around who still haven’t bought anything. They are kicking themselves for not buying back then.

We also helped many people buy homes during that period, and then, at some point, they decided to move out of San Diego. We then sold their homes, and they left with a lot more money than they had when they initially bought their house. They were sure happy!  That said, yes, you do have to put much thought into it. It is a big financial decision. But no matter what time it is, it always seems like mortgages are high, and one wonders how they will pay their mortgage.

How Will I Pay The Mortgage?

So, you’re either going to pay your mortgage or you are going to help your landlord pay theirs. Either way, you are paying a mortgage. Why not it be your own.

My parents bought houses back in the 1970s and 1980s. There were times when interest rates were way up at 18%. Sure, the purchase prices were much lower. However, with interest rates as high as they were, so was their mortgage. They, too, asked themselves, “How are we going to pay this mortgage.” Today, they are sure happy they took those risks. This allowed them to have a large safety net to retire with and not have to work in their golden years. 

Should I Buy a Home Now?

So, are you asking yourself, “Should I buy now or wait until next year”?

At the time of this blog,  a home today at $700,000 with interest rates at 4.3%, your mortgage will be approximately $3223.00. With projected interest rates for next year at 5.10% and the price going up to $735,000, your mortgage payment will be approximately $3,629.00. That is a difference of $406.00 a month.

If you are thinking of buying a home and would like to discuss a plan of action, contact the McT Real Estate Group at 619-736-7003. Together, we will examine your long-term goals and determine whether buying a house is the best option for you today.

You have decided to buy your first home in San Diego. This is great news! The first thing that comes to mind is, should you buy a Single Family Home, a Condo, or a Townhouse? These are all great options but let’s not forget about another great option. What about buying a Duplex or a Triplex? These are great investment strategies to think of.

There are a lot of advantages in homeownership with buying a Duplex for Sale in San Diego. Having someone else help pay for your mortgage is one of these advantages that owning a Single-Family Home does not have.

Below are some of the reasons and advantages and why you should consider buying a Duplex instead of a Condo, Townhouse or even a Single-Family Home:

Mortgage Relief

When you apply for a mortgage, banks will have lower interest rates if you will be occupying the home as opposed to someone who is buying a home to rent out. Also known as a non-occupied loan. When you apply for a loan to buy a Duplex or a Triplex, they still consider this an owner-occupied loan since you will live in one of the units. You will also qualify for a larger loan because the other units will be helping you pay the mortgage loan.

Tax Write-Off

One of the beauties of homeownership is writing off the mortgage interest when having an owner-occupied property. However, if you own a Duplex or a Triplex, you cannot write that off on the units that you don’t live in. Still, you can write off other things such as the cost of any repair done to the other units, the cost of managing the other units and the costs that it takes to get those units rented out. Other costs would include if you share the electric, cable/internet, and water.

Short Term Rental Vacation Rental

You may not want to be a long-term lease landlord. Being a landlord is not for everyone. You may not want to live in such close quarters with a tenant. Another option is to use the other unit/units as Vacation Rentals. This side business can bring in a lot more money than a regular long lease tenant would. It would also give you the flexibility of not having the same tenant for such a long period. You can even open it up to family and friends who would like to visit town and visit on occasions. You may also want to keep it as a  home office. This, of course, takes you back to tax savings and something to discuss with your accountant.

Duplex Investment Strategy

Ok, so you’ve lived in your home for 2 years, and you feel good about being a landlord. You can now go out and buy another duplex or triplex home and use the rental income from the other units to qualify for the loan. As long as you will move into the new property, you can get another owner-occupied loan and benefit from the lower interest rates. This is a great way of creating and building wealth for your future with residual income.

Buying a Duplex with 3.5% Down Payment

You can buy a Duplex Home with as little as a 3.5% down payment. As long as you are going to live in the home, you can apply for an FHA loan, which is a great way of getting into the market. Yes, they have MI (mortgage insurance)that you have to pay, but this is the cost of doing business. Once you can prove that you have 80% equity in the property, you can speak to your lender and re-fi out of the FHA and eliminate the MI insurance.

For more information on how to get started with buying your first Duplex or Triplex home in North Park, South Park or any other neighborhood in San Diego, contact the McT Real Estate Group right now.

Search For Duplex Homes In San Diego

You just bought a home in San Diego and are super excited and nervous at the same time. There is a lot of responsibility that comes with owning a home. There is also a lot of satisfaction and freedom that comes with doing so as well.

First, you can remodel the home however way you would like to. Meaning, if you want red walls, purple, blue or any color walls for that matter; guess what, you can paint them any color you want and not have to ask the landlord permission. If you are planning on living there for a while, then doing whatever makes you happy is great. However, if at some point you are planning on selling, I would recommend losing the personal colors and toning it down a bit.

If your home needs some remodeling, be smart about it. Don’t just start ripping things out with not have a plan about what you are going to do. Sit down and think about it. If you have a significant other, make sure that you are both on the same page. Go to Houzz.com or sites like Pinterest to get some ideas. Once you figured out what you would like to do, figure out if you will be doing the work yourself or you will be hiring it out. A good source of referrals is your Realtor. She or he should know several different tradespeople that you can get estimates from. As for referrals from friends and co-workers as well. Just from this group of people, you will have a gold mine of great tradespeople.

Once you figure out what you are going to do and who you are going to use, I would recommend creating a budget for your projects. Be realistic about the numbers and whatever that number you think it will be, add another 20% to it. Believe me, you will reach it and you don’t want to feel strapped and have to cut corners. With this being said, avoid being too cheap. This can cost you big bucks in the long. You may think that by doing something yourself you may be able to save money but then once you figure out that you are not able to, you will have to hire a professional to come to fix what you started, hence, costing you more than had you just hired that person from the beginning.

Another pointer is to not overspend on materials needed for the projects. If you plan things out properly, you will be able to find certain things that go on sale, or you may be able to shop around and compare, and not have to buy last minute which will save a good amount of money. If you plan out your projects, you will avoid last-minute changes and add on’s which can be very costly.

If you just bought a home in San Diego and are doing all of the things mentioned above, remember to save all receipts for work completed on your home. You will be able to write off certain home improvements so make sure to be very organized so that you can share this with your accountant when it is time to do your taxes. Other tax write-offs include such things as mortgage interest, points that were paid when taking out a loan, Real Estate Taxes, Energy Credits, Home Equity Loans and several other things that your accountant can go over with you. These are write-offs that homeowners can benefit from when tax time comes around.

If you would like a second opinion before you start your project, contact the McT Real Estate Group. We will be able to share with you what types of things will be a great return on your investment when it is time to sell your home.

Add Value To Your Home

You just got your offer accepted on your favorite house in North Park. Now you have a certain amount of time to remove all of your contingencies. The California Real Estate purchase agreement notes up to 21 days to remove all contingencies. However, in today’s competitive market, if your buyer’s agent does not shorten the contingency dates when writing an offer, you will most likely get beat out by your competition. Contingency periods are tied to timelines and dates. The buyer is expected to have completed all investigations within the time indicated in the purchase agreement and signed off on that contingency. Below is a list of all contingencies when buying a house in San Diego.

Inspection Contingency-

You will have your timeframe agreed upon in the agreement to do your general inspection as well as any other specific inspection, such as electrical, plumbing, foundation, roofing, etc. This does not mean that you wait until the end of that time period to do these inspections. What it means is that by the end of when your timeframe comes, you should already have completed these inspections. Your Realtor should have put together what is known as your “request for repair” if you are going to be submitting one prior to this date and inspection contingencies should be removed by this time.

Request for Repair-

Once all of your inspections have been completed, your Realtor will sit down with you and go over the inspections in detail. A good Realtor will know how to structure a “Request for Repair” based on what comes up in the inspection. Knowing that a request for repair is simply that, “a request”. The seller does not have to do anything that you have requested. However, if you are reasonable with your request, a reasonable seller will consider fixing or renegotiating based on the items requested. On the other hand, if you submit a laundry list of items that were on the home inspection, know that you will most likely turn the seller off and they will either say “No” to everything or decide that they prefer to move on to a buyer that is more reasonable. We have seen this happen many times.

Appraisal Contingency-

The appraisal will typically take place within the first 7-10 days of having an accepted offer. You will know pretty soon if the home appraises at the purchase price or not. Appraisals are performed by a 3rd party who will walk through the home, take pictures and come up with their valuation report. They then send it to the bank that is lending you the money to buy your home. A title company, typically hired by the seller will do a title search to make sure that there aren’t any clouds or liens attached to the home. This report is sent to the lender who wants to make sure that there aren’t any issues with the home. Appraisal contingencies typically get removed at the same time as loan contingencies, although it can be removed sooner.

Loan Contingency-

Prior to going out and searching for homes for sale with your Realtor, you should already have been pre-approved with a lender. This means that you should have filled out an application, given them your last 2 years of tax returns, current pay stubs, bank statements they should know what your credit score is. This way, you are way ahead of the game once your offer gets accepted and you get into escrow and are not late with removing all of your contingencies when you are supposed to. If you are working with an experienced local lender, they should be able to have full loan approval within 12-17 days. Remember, you will most likely only have 17 days to remove all of your contingencies and the loan is the last one to remove. The appraisal will typically take place within the first 7-10 days so you will know pretty soon if the home appraises at the purchase price.

Disclosures-

The sellers have several disclosures that they must fill out and give to the buyer during the Escrow period. These documents will provide information on previous improvements, renovations or upgrades completed, as well as whether work was done with or without permits.

Buyers should cross-check the seller’s disclosures with the city building permit and zoning reports. Work completed without a permit, or approval by the municipality, may not have been performed to code, which could result in a fire or health hazard. This is not always the case but should be investigated properly.

Disclosures are supposed to be provided to the buyer within the first 7-10 days. However, in San Diego, you will want to have this within the first 0-3 days.

Your Realtor most likely suggested you write a 10 day inspection contingency period in order to compete with other offers so you must move quickly.

Having these disclosures prior to you doing your home inspection is very helpful and informative. The home inspector looks at certain areas of the home pertaining to what he or she finds on the disclosures. Listing agents will sometimes have them upfront and will upload them into the MLS, which is very helpful. This way, your buyer’s agent can download them and go over them with you prior to submitting your offer.

Staying on track with your contingency periods is crucial, especially in a busy seller’s market. You would not want to receive a notice to perform from the seller for not sticking to the contract. If so, the seller can technically cancel the agreement if you are not able to perform the specific contingencies agreed upon in the purchase agreement.

Close of escrow is typically 30-45 days in San Diego, although many times we close in less than 21 days.

If you are thinking about buying a home in the North Park, South Park or any metro neighborhoods in San Diego, contact the McT Real Estate Group. We are located in North Park and would love to help you with finding your dream home for the best price.

The San Diego Real Estate Market is very competitive right now. We are in what is known as a Seller’s Market, not a Buyers’ Market. A typical Seller’s Market is when there is less than six months’ inventory. A Buyer’s Market is when more than seven months’ inventory is waiting to be sold. There is currently 1.5 worth of inventory in the San Diego Metro communities such as North Park, South Park, and several surrounding neighborhoods. This means the inventory is very low, and many buyers are competing for the same home. How to write an offer to buy a home is crucial. Homes that are priced well receive multiple offers, and only the best offers will be considered.

What do I mean by best offers? The purchase price has to be competitive, but sellers are also looking at different things when reviewing offers.

Here are 6 tips on How to Write An Offer to Buy a House in a Sellers’ Market

 Tip#-1- Must have a pre-approval- Before going out and searching for homes with your Realtor, you should have already spoken with a few mortgage lenders/brokers and picked the one you feel most comfortable with. Your Realtor should have a few great lenders that they will be able to recommend if you don’t already have one. They will let you know exactly what documentation they will need to be able to give you a loan approval right away. This is different than a pre-qualification. Having the pre-approval will let the Seller know that you have already submitted your application and documents to the lender/bank, and the Lender will approve your loan for the home. This tip alone will get you in front of the pack. Pre-qualification only means that the buyer spoke with a lender and gave verbal information regarding their income.

Your bank statement should be included in your offer, showing the Seller where your down payment is coming from. This is what we call “Proof of Funds.”

Tip#-2-Find Out What Is Important to the Seller?

I have never met a seller who does not want the highest dollar amount for their home. However, there may also be other things that are important to them. Your Real Estate Agent should ask the Listing Agent about the following. Does the Seller need a longer or shorter close of escrow? Do they need a rent-back from the buyer? What this means is, do the sellers need to close on the current home and then rent the house back from the buyers for 2-3 weeks? If so, typically, the Seller pays the buyer for that time frame. You may offer to pay for this. This will be something of interest if they need extra time.

Tip#-3- Termite Clearance is not always a must

In a regular market with less competition, the buyer will typically ask the Seller to give them Termite Clearance.  When competing with other offers, this may be something that you do not ask the Seller to pay for. It will make your offer look better.

Tip#-4-Include a higher earnest deposit

The earnest deposit is also known as a good faith deposit- We typically see offers where buyers will offer anywhere from 1%-3% of the purchase price as a good faith deposit. If your offer is accepted, you will deposit that amount into the Escrow Company, which is being used for the transaction of the sale of the home. They are a 3^rd party company that holds all deposits and finalizes the transfer of funds from the bank. If for whatever reason, you were to cancel within your contingency time period, the escrow company would return your deposit. With this being said, if you have completed your inspections and removed all contingencies, including the loan contingencies, you would risk losing a large portion of those funds if you then decide to cancel.

Tip#-5- Submit shorter contingency periods–

Typically the buyer has 21 days to do their home inspection and get full loan approval. This is something that a good Realtor and Mortgage Lender can cut down significantly. Home Inspection contingencies can be reduced to 10 days. This will depend on the loan and Lender. We work with lenders that can have a fully approved loan in 12-17 days. By working with an experienced Realtor and Lender, you would be able to cut these contingencies down, making you appear as a stronger offer.

Tip#- 6-Your Realtor should have your Lender reach out to the Listing Agent

As top real estate agents in San Diego, I can tell you that when we receive these calls from the buyer’s lenders, it shows us that the buyer’s agent and their Lender are working together very closely. We can ask the lender questions regarding what type of loan the buyers are applying for and their ability to qualify for the loan.

If you would like to speak to an experienced and dedicated Real Estate Agent at the McT Real Estate Group, please email, text, or give us a call. We would love to help you find a home and get the best deal in the San Diego area.

Buying a house in San Diego

San Diego’s Real Estate Market is extremely hot. The seller accepts the buyer’s offer, and the buyer is happy. Once this happens, their buyer’s agent schedules a home inspection. Once the inspection is completed, depending on what it reveals, negotiating repairs comes into play.

Below are tips for negotiating repairs after your home inspection has been completed

1-Look at The Bigger Items When Negotiating Repairs

Don’t worry about every single item that the home inspector pointed out. Remember, it is the home inspector’s job to find things that are not perfect with the home. However, if you ask the seller to fix every item in the inspection report, you will overwhelm them, and they will probably shut down and move on to the next buyer. Remember, our market is super competitive right now, and buyers are waiting on the sidelines to scoop up homes that fall out of escrow. I would suggest being fair and realistic with your requests or you may lose out on a great home.

2-Ask for Credit Instead of Asking To Repair the Items

Sellers are not eager to do repairs in the middle of a transaction. They are busy figuring out their next step. They want to start packing their belongings and figuring out where and when to move on to their next house. If they were to do the repairs, they probably would not be as meticulous as if you had them done since they are on their way out.

Ask for credit instead. This way, you will be able to pick the handyman/contractor of your choosing and have them do the work to your liking. The credit that the seller gives the buyer is not cash. Instead, other negotiations are to take place. Instead of the buyer receiving cashback, they would not have to come out of pocket with as much cash for their closing fees.

3-Do Not Say Much About Renovation

You may be thinking that you will be doing major renovations instead of minor ones. If this is the case, it is best not to let the listing agent know this. If so, they will not take you too seriously when you ask the seller to credit you for certain items. They will know that you plan on tearing walls down or completely remodeling the kitchen and bathrooms. Thus, they will not give much credit since they know it is really for upgrading purposes.

4-Be Upfront and Honest

Never make an offer that is well over your comfort zone, intending to get your money back after your home inspection. This is the wrong road to go down as the seller will become irate and non-negotiable. At this point, the seller may want to move on to the next buyer. We have seen this happen many times. There are times when our sellers have canceled with the demanding buyers and moved on to the next buyer who was extremely eager. The new eager buyer did not ask the seller to credit much and sometimes nothing at all. In turn, the difficult buyers lost out on a great house and then had a hard time finding another home in the same neighborhood. My advice is, to be honest, and do not play games.

If you are thinking of buying or selling a home in San Diego, contact the McT Real Estate Group. We are expert negotiators in the area. Our goal is to ensure that every client receives the utmost one-to-one attention and is extremely happy with the end result.

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