Buying a Home Archives

Buying a House in San Diego

You have reached a point in your life where you know that now is the right time to buy a house but are not sure exactly where to start. There is so much information out there you would think making a decision would be easy. But in fact, it sometimes is more confusing. This holds even if you have bought a home in San Diego in the past.

The first thing you should consider is how much money you can afford to put out every month to pay for this house. This means that just because you spoke to a Bank/Mortgage Broker/Lender and they told you that you could afford” X” amount does not mean that you will feel comfortable doing so once it is said and done. You are the only one that knows what you will feel comfortable with.

A good rule of thumb to determine how much of a mortgage you can afford determines what 30 percent or less of your income is. This is what should go into paying your mortgage. I know it is not easy based on the purchase price of what San Diego homes sell for, but this is a general guideline. This is not to say that Banks will not lend you their money if you go over this number.

You can start to figure this out by finding out what your new utility bills will look like based on the house’s square footage and the home area. Contacting the utility departments in that area and asking them would be a good idea. Other new bills would include new home insurance and property taxes. You can contact the San Diego accessors office and speak to someone in the Realty Division. As for home insurance quotes, ask your Realtor for a few referrals. They should have a few people who can recommend and who would help you figure out the numbers.

What Kind Of Down Payment Do You Need?

You have most of the numbers for buying a house in place. Now you must determine how much of a down payment you can afford to put down or are willing to put down. Remember to keep in mind that you have to set aside money for closing costs, appraisals, and home inspections. In some cases, it behooves you to do several specific inspections, and they do come with a price. You are better safe than sorry, so listen to your Realtor when they recommend such inspections. Another cost to consider is the cost of moving and the cost of gas to go to and from work (if further away); we must not forget this one.

Having 20% down to buy a house in San Diego is great and more attractive to lenders lending you the rest of the money. However, there are other loan programs that you can use with 0% down (VA loan), 3.5% (FHA), 5% Conventional, and several others.

These other loan options come at a higher price, but it is the cost of doing business with the banks willing to loan their money to you. You will have to pay private mortgage insurance with loans below 20% down.

What Is Private Mortgage Insurance?

PMI, aka private mortgage insurance, is the fee that the bank charges you for the risk they take to lend their money to you. If someone puts down less than 20% to buy a home, they should know all about PMI. With FHA loans, you will have this payment for the life of the loan. With other loan programs, you will cancel the PMI once you have 20% equity in the home. Speak to your lender about this. Make sure that you understand this thoroughly before choosing a loan option.

How Much Difference Do Interest Rates Make?

With the prices of homes for sale in San Diego, this can be the difference in costing thousands of dollars more over the loan period. Even a slightly higher increase in interest rate can cause the lender not to lend you the funds because it will increase your monthly payment to the point that your debt-to-income ratio is out of balance.

Tips for Buying Your First House

First, figure out what neighborhood you would like to live in. Then, have all of the numbers in front of you; this is the time to have a serious conversation with your Realtor. Based on the numbers that you and your lender have come up with, your lender should be able to provide you with a DU approval instead of just a pre-qualification. Once you are confirmed with the price of the home that you can buy, you will then start touring homes with your Realtor.

What is a DU approval?

Having a DU approval from your lender will make you a stronger buyer, especially if you are in a multiple-offer situation. If a typical buyer provides a pre-qualification letter with their offer, they still have not filled out a loan application, and the lender does not know if they truly qualify for the loan. If you have a DU approval, this means that you have already provided the lender with your employment history, assets and income, and debts and they become “Approve Eligible.” You will most likely receive final approval unless something with the title or appraisal comes back with something negative.

What to know when buying a for Sale by Owner in San Diego

As you search for homes for sale in San Diego’s hot market, you may come across a “For Sale by Owner”. You may be tempted to knock on the door or call the number advertised. You may think that going directly to the seller, may save you a lot of money. Well, the complete opposite may be true.

Most Home Sellers Will Work With Your Agent

Just because the seller has put their home up for sale by owner does not mean that they will not work with your Realtor. They are well aware that most homebuyers are working with agents so they will agree to pay the buyer’s agent a commission, so do get your agent involved. This will only help you in the long run. A great buyer’s agent is priceless and will not cost you a thing. The seller is the one that will pay for this service that will save you thousands of dollars and aggravation in the long run.

Once you do your inspections, a lot of things will most likely come up that you will want to take a second look at, and may want to renegotiate because of certain repairs needed. Your agent will serve as a buffer and be able to know exactly how to get this negotiated where it makes more sense to your financial pocket. The buying process is an emotional one for both the buyer and seller. Having your agent as your buffer will give you an advantage; you can discuss things over with them before making a decision on certain things the seller is asking for.

Is The Home Priced Right?

Many times a seller who has decided to put their home on the market as a “For Sale by Owner” is doing so because they feel the Real Estate market is so good for sellers right now that they may not need a Realtor. They may have spoken to a few Realtors but have not liked the price that was recommended for their home so they figured they would be able to go at it themselves at a higher price and save the commission.

Your Agent will be able to show you the comps and help you determine what price you should offer if you decide to put an offer on this home. An experienced Realtor will be actively visiting properties in the area and will be well versed with the comps in the neighborhood.

What questions to ask when buying a for sale by owner?

With this being said, when selling a home in San Diego, there are certain disclosures that a seller is supposed to provide to a buyer with the sale of a home. Because the seller of a For Sale by Owner is typically not experienced with these documents, they will not have filled them out and ultimately not realize that they are supposed to disclose certain things about the property.

Your agent will know exactly what questions to ask so that the seller will have to disclose everything they possibly know about the property (the good, the bad and the ugly) without leaving anything out.

If you were to buy this house and all of a sudden you run into a problem with it, you can then re-examine the seller’s disclosures. You may discover that the problem was ongoing and the seller did not disclose it. At this point, you will be able to go back and address the issue and most likely get compensated because the seller did not disclose a “material fact.”

If you are in need of an expert buyer’s agent in San Diego, contact the McT Real Estate Group right now. We will go over the process of buying a home and together come up with a game plan to get you the right home that you desire.

Just Bought the Home- Now What?

Just Bought a Home in San Diego, Now What?

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.

Handyman repairing stucco repairs — Negotiating Repairs

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.

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What Are Contingencies When Buying a House in San Diego?

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.

Buying a Home in San Diego from Across the Country

Know What You Want in a House

Knowing what you want in a house will enable your Realtor to help you find a neighborhood that suits your lifestyle. Buying a home in San Diego from across the country can be scary. But, if you are teamed up with a great Realtor and have created a list of what’s important to you, it is possible. Do you like yoga? You might want to live near a park or in a neighborhood with a few yoga studios. If you work remotely from your computer, a place with plenty of coffee shops gives you plenty of options to operate your business. If nightlife is your thing, a place like North Park will be right up your alley with tons of restaurants and bars. Whether or not you have children, the proximity to good schools will affect the resale value of homes in some neighborhoods. So, when buying a home in San Diego, make sure that you have a sharp agent aware of this.

snow in the winter — road covered in white snow and bare trees

The Lifestyle in San Diego is different than in other parts of the country. Have you experienced year-round outdoor living before? If you’re moving from New England, as an example, the house prices will seem high, based on the value and square footage that you are accustomed to. That’s because in Connecticut, for example, you have to be inside your house for the whole winter.

Here in San Diego, you can sit in the sun and relax in your garden on a January morning. “But I Love the Skiing,” you say. Not to worry! Bear Mountain is less than a three-hour drive from San Diego, and there are several more nearby. Wouldn’t you love to be able to have fun in the snow and have a short drive back to the year-round sunshine? You don’t have to worry about digging your car out of the snow before work the next morning.

With a lot of cash buyers present, the San Diego market is quite rapid and competitive. If you are buying a home in San Diego, you’ll have to be comfortable with making an offer on a property the first day you see it. That might seem extreme, but it’s the nature of the current market. You’ll see homes for sale that come and go off the market quickly. If you take too long to think about it, you’ll miss out on many great properties. Knowing what you want will give you the confidence you need to move with the fast-paced market that we are experiencing. This leads us to our next key aspect of buying a home in San Diego from across the Country.

Find the Right Real Estate Agent

If you are buying a home in San Diego, you’ll want a local Realtor who’s an expert in the neighborhoods you’re looking at. If you don’t know what neighborhood you want, a good Real Estate Agent will help you with this based on your interests. With this being said, good communication is key.

Depending on whether you are buying a property to invest in or to move for work or retirement, your search for a house will be very different. You’ll want a Realtor that has experience with the type of property you are searching for. If you’re looking at an investment property, find a Realtor that owns investment properties themselves. They will have better insight than a Real Estate Agent that has never purchased an investment property before, or any house at all. They will be able to point out important things to look for and consider and things to be aware of.

Is Your Realtor Tech Savvy?

Today’s technology makes it easy for a tech-savvy Real Estate Agent to use several tools to convey a property accurately from wherever you are. Video walkthroughs, 3D rotating cameras, and video calls can accurately convey much more than still photos.

Video Tour — cartoon of a person videotaping

Make sure your Realtor is familiar with these tools. Also, make sure that you’ll feel confident buying a house that you’ve never physically been inside of. Even though you will see walking video tours, it is still slightly different from being at the property in person. If you are comfortable with this, then you’ll be swinging in your hammock on your back porch in no time. You will be thinking about all those times you were jumping over puddles of ice water on your way to work.

Get Your Ducks in a Row and Pre-Approved

As previously mentioned, it’s a high-speed Real Estate market that we are experiencing. Have patience; you could lose out on a property you like if you’re not 100% ready to go. Have your ducks in a row before you start your home search. One thing to keep in mind is to make sure no obstacles are holding you back.

You’ll need to be pre-approved for a loan, and not just with any lender. An experienced Realtor will have many great referrals for you if you don’t already have someone you are working with. You may have a local Lender where you currently live. Speak to your Realtor about this. We find that working with a local lender near the home you are trying to buy typically works best. They know the timeframes and things to look out for that are not always the same in other parts of the Country. If you think of buying an investment property and not planning to live in it, you will need to get approved for a loan as a non-occupied-owner-investor. Typically, this type of loan requires that you put down at least twenty-five percent when buying a home. On the other hand, if it is not an investment property that you are looking for, but instead, you are planning on moving into the home, you’ll be able to look into an FHA loan. With this type of government loan, you only have to put as low as 3.5 percent, whether it’s a single-family house or a duplex/multi-unit house.

Buying And Selling A Home

You may currently own a home you would need to sell before buying a home in San Diego. Before a homeowner considers accepting your offer and taking their home off the market, they would want to see that your present home is under contract. This can all be very stressful. You may not feel 100% comfortable buying a home without seeing it in person. If so, another option will be to plan on moving to San Diego first. Renting an apartment or home for a couple of months or even a year might make you feel more at ease. There are a lot of short-term rentals available if you decide that this would work better for you. Yearly rentals are available, but they are also competitive. If you find one that you think you want, you will have to move quickly.

For more information on buying a home in San Diego, contact the McT Real Estate Group We would love to help you with the buying process.

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6 Tips On How To Write An Offer To Buy A Home In A Sellers Market

The San Diego Real Estate Market is a very competitive one 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’ worth of 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. The pre-qualification only means that the buyer spoke with a lender and verbally gave 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 that 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 good faith deposit. If your offer is accepted, you will deposit that amount into the Escrow Company that 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 included 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 on the McT Real Estate Group, please shoot us an email, text, or give us a call. We would love to help you find a home in the San Diego area.

Buying a house in San Diego

Negotiating Repairs After Your Home Inspection Has Been Completed

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.

Negotiating Repairs- Stucco Patching — Negotiating Repairs

Below are a few 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 where 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, 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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What Does “In Escrow” or “Sale Pending” Mean?

You notice that a home is for sale on your favorite street in your favorite neighborhood in San Diego. However, there is a sign on it that says “In Escrow.” A little further down, another home for sale has a sign on it that says “Sale Pending.” What does Escrow or Sale Pending actually mean?

In San Diego, once we receive an accepted offer, the buyer will have a certain amount of days to do their home inspections. This will typically be 10-17 days. It all depends on how competitive the market is. Right now, at this current time, it is very competitive. We then negotiate repairs, and while this is going on, we are all waiting on the buyers’ loan approval. This typically takes place within the first 17-21 days. At this point, the buyers must remove all contingencies. That is when the listing agent will put the “In Escrow” or “Sale Pending” sign up. Now the buyers’ are committed and moving forward with the purchase of this home. The chances of them canceling are extremely slim. Although things do happen in life, at this point, if the buyer cancels, their deposit would be at risk.

Search for a house for sale whether in escrow or sale pending — Search for a house to buy, whether in Escrow or Sale Pending

A Home In Escrow May Still Be Available for Sale

As a buyer in San Diego’s hot Sellers Market, thinking out of the box will help you find a home you would normally not know about. You can still put an offer on one of these homes. This is especially the case if the home just went pending or in escrow. If you really love that house, have your Realtor contact the listing agent to find out the details and see if they will accept backup offers. If so, be the first one in. There may be times when the current buyer gets cold feet or may have a hard time getting a loan. If you have a backup offer in place and the current buyer cancels, you will be able to go under contract without competing with other buyers.

With this being said, you want your agent to determine why the current buyer canceled. It may have been because of something on the inspection. The listing agent is required to provide you with the current inspection, and you will be able to see for yourself. Often, a first-time homebuyer may be scared by what they see on an inspection when it is not scary at all. There may be lots of little things that may seem to be too much for them to handle. In reality, a handyman would be able to go through the punch list and repair all of these small items in no time at all.

Search For Your Home

Even though you put in a backup offer, don’t stop searching for a home in San Diego. The chances of the current buyer backing out of the transaction in this current market are very slim. However, it can happen, and we have had it happen with our listings. However, the buyer knows there is a shortage of homes coming on the market in many cases. If they are working with an experienced Realtor in the area, that Realtor will be able to walk them through the process and get a handyman/contractor to give them a quote and an idea of what it would take to fix the necessary items. At this point, the buyer will usually be at ease and follow through with the sale. If they don’t, you will be in the right place at the right time.

For help finding a home in the San Diego area, contact the McT Real Estate Group at 619-736-7003. We would be honored to help you through the process of buying a home and negotiating on your behalf. Please check our client references. You will be able to read up on the experience.

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Dealing With a Sellers that Will Not Budge on Selling Price

It’s been several months of going on appointments with your Realtor. You have attended every open house on the weekends.You have had your Realtor write up offers that either get rejected or get no response from the seller. It seems that every offer you write, you are dealing with sellers that will not budge on selling price.

This is starting to wear you down now, but you still keep tugging along. Your Realtor continues to send you email alerts every time a new listing hits the market. You find the home that you absolutely must have. When you have your Realtor write up an offer, you tell them all of the reasons that you want to offer less than list price. Your Realtor shows you the comps in the area that justify the list price. However, you believe you should at least start with a lower offer. This has happened many times now and seems to have become a routine.

Sellers Market

At this point, you should probably step back and take a look at what is happening here. It is obvious that it is a seller’s market right now. But you are still stuck on the fact that you should never write an offer at list price. This may work in a buyers market, but right now, in San Diego’s Metro communities (North Park, South Park, University Heights, Normal Heights, and several others), we are definitely in a seller’s market. We are receiving multiple offers on our listings within the first 5-7 days.

Offers are coming in at or above list price. If you happen to be an offer that comes in below list price, most likely your will not receive a counter offer. You will not have an opportunity to compete with the other offers that came in much higher than yours. Sellers want to just go ahead and accept the offer of the buyer that stepped up to the plate, leaving you with another unanswered response to another offer that you have made.

Not Ready To Buy Yet

With this being said, if you simply don’t feel comfortable writing an offer that is list price or above, it may be time to have a conversation with your Realtor. Deep down inside you may not be ready to make this huge financial commitment of being a homeowner right now. This is normal and ok. Try to figure this out early on so it can save you a lot of time and aggravation. It is ok not to buy a home. It may be better for you to rent right now. Just make sure that you sit down with your lender/mortgage broker and or accountant and do the numbers. If it makes more sense for you to rent for the next few years, then sit tight and take a breather.

Wait until you are financially and mentally ready. Contact the McT Real Estate Group. We will sit down with you and come up with a strategic plan to help you with your Real Estate goals. Finding a home will become less stressful and make more sense to you at that time. You will be in a different mindset. You will then notice your offers getting accepted or at least countered.

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Not buying a home is the single biggest millennial mistake

Not Buying A Home?

While some people that are not buying a home think that claim it’s “the American nightmare,” self-made millionaire David Bach is doubling down on his faith in real estate. He thinks that not prioritizing homeownership is “the single biggest mistake millennials are making.”

Being in the Real Estate Business in San Diego for over 13 years, I too feel the same way. Over the years I have seen the benefits of people who bought homes many years ago, even when they thought that it was going to be a challenge and costly; however, fast forward, selling that property now, these people walk away and have moved somewhere else where the cost of living is a lot less, and now they have a lovely next egg. If these same people had decided to rent instead of buying a home back then, they would be leaving with nothing but memories.

Buying a home is “an escalator to wealth,” Bach tells CNBC.

Young adults, in particular, aren’t hopping on this escalator, and it’s a costly mistake, Bach warns: “If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

The self-made millionaire is quick to say that the smartest investments he’s ever made have been the three homes he’s purchased. He tells CNBC: “I first bought a home in San Francisco. It skyrocketed in price. I moved to New York and bought another home. It skyrocketed in price. My net worth has gone up millions and millions of dollars, simply because I’ve lived.”

Bach argues that you have to live somewhere for the rest of your life, so you might as well invest in a home that you could own permanently.

Why Not Pay Your Own Mortgage?

I have always said, “As a renter, you are still paying a mortgage; it is just someone else’s. Why not make it your own?

As Bach writes in “The Automatic Millionaire,” “As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end, wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end, wind up owning your own home free and clear!”

If you want to get in the game of homeownership, start by crunching the numbers, Bach says: “Actually do the math. Look and see what things cost, starting with the smallest options. This way, you’re really clear on your goals, and you won’t just say to yourself, ‘I’ll never afford this.'”

A good rule of thumb is to make sure your total monthly housing payment doesn’t consume more than 30 percent of your take-home pay. He also recommends having a down payment of at least 10 percent, though more is always better. Finally, recognize that “oftentimes, buying your first home means you’re not buying your dream home,” Bach tells CNBC. “You’re just getting into the market.”

A lucrative market, that is. “The fact is, you aren’t really in the game of building wealth until you own some real estate,” Bach writes.

Building Wealth

As for someone who has helped many first-time homebuyers and experienced homebuyers that have bought many homes in San Diego, I have seen first hand the benefits of owning real estate and also the benefits of keeping it long term. Not only are you building wealth, but you are also helping families live in a nice environment they can feel safe in and call home.

If you are thinking a buying or selling a home in San Diego, contact the McT Real Estate Group at 619-818-8122. We would love the opportunity to discuss a plan of action that will help you achieve your goals.

This article was found at CNBC and written by Kathleen Elkins