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Monday, October 27, 2014

10 Things You Shouldn't Do When You're Buying A Home

Your home buying process is well underway. The sellers accepted your offer to purchase. The home is officially under contract and you're counting down the days to closing. The lender pre-approved you, so buying the house is a sure thing, right?

Not quite. Nothing is certain until the keys are in your hands. There are still major hurdles to get past before you close, and your actions between now and closing can create headaches, slowdowns, and even stop the transaction.
 
1. Don't Make a Major Purchase
You've just found out your credit is A+. That's great news, because a new car would look fantastic in the driveway of your new home. But hang on--if you are depending on a mortgage to move in, you'd best wait until after closing to buy the car.

An increase in your debt to income ratio reduces the amount of monthly income available for your mortgage payment.

If you tack on a higher car payment, the bank might decide you cannot afford the home.
Using cash to purchase the car could also create a problem, since banks consider cash reserves when approving your mortgage. If you must make a major purchase before closing, talk to your loan officer before you do it.

2. Don't Change Jobs Unless It's Necessary
Lenders like to see a consistent job history. They aren't usually as nervous if you change jobs within the same field, but it's better to stay put until the keys to the house are in your hand.

3. Don't Give an Earnest Money Deposit Directly to a 'For Sale By Owner' Seller
Your good faith deposit should go into a trust account. Some for sale by owner sellers don't understand that funds are to be applied to your expenses at closing.

I've heard many stories about sellers who spent the deposit money prior to closing. When the transactions didn't take place for valid reasons--such as financing or repair issues, the buyers had to fight for a refund.

Find an attorney or other neutral party who will hold the deposit for you until closing day and make sure your contract dictates what happens to the funds if the transaction doesn't close.

4. Don't Let Your Emotions Take Over

Keep a cool head during the entire home buying process, especially during and after an inspection. Be realistic. No home is perfect, especially older homes. It's not unusual for new owners to take care of some repairs themselves. Don't let the seller's refusal to do a small repair kill the deal on a home you truly love.

On the other hand, don't fall so much in love with the house that you'll buy it no matter what needs to be done--unless you're absolutely sure you can handle it emotionally and financially. Decide what type of repairs you can realistically tackle, and then stick with the decision.

5. Don't Forget to Switch Utilities

That sounds simple, but you'd be surprised how many people forget to apply for utility service at their new home. Call the utility companies as soon as you have a contract. Find out how many days lead time they need to switch the service, and then get back with them when you have a firm closing date. Don't forget to discontinue services at your old home.

6. Don't Wait to Line Up Your Hazard Insurance

A no-brainer, right? But it's another often-forgotten task that buyers scramble to take care of at the last minute. Before closing, your lender will want to see an insurance binder showing you have coverage for the new home. Get it as early as possible so that closing isn't delayed.

In some locations, additional types of insurance coverage might be necessary. Talk to your lender about insurance requirements well before the closing date.

7. Don't Become Best Friends with the Seller
I'll get some flack on this one. It's great to be friendly, but don't get into too many long discussions with the sellers, because personality conflicts often cloud judgments.

Remember, this is their home. You're no doubt excited about moving in, and if you didn't like the house you wouldn't have offered to buy it. But you'll make changes--everyone does. A casual statement about "ripping up that ugly carpet" might be hurtful enough to keep the seller from negotiating with you about repairs or other issues that crop up.

8. Don't Panic if the Appraisal Comes in Low
At least not at first. There are some things you (and your agent) can do to correct the problem. Study your options.

9. Don't Go It Alone
If you're working with an agent, it's the agent's duty to track many of the day to day details that involve the lender, the seller, or the seller's agent.

10. Don't Ignore Lender Requirements
Know what is expected of you and take care of it. For instance, a Certificate of Eligibility is required to move forward on a VA loan. That's something you must handle yourself. Answer lender questions and provide required paperwork as quickly as possible--your closing depends on it.


If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


www.JulieWyss.com   |  Julie@JulieWyss.com   |   408.687.2026

Monday, October 13, 2014

The Wyss Report: Evaluating Property

Evaluating Property

In the real estate industry, the concept of value is vague. The value of a house (or condo, or co-op, or townhouse) fluctuates often, based on many situations, such as an ever-changing market conditions, the condition of the home, and the costs associated with owning it.

For that reason, it's difficult to answer the question, "How much is it worth?" There is one certainty, however. The answer to true value does not lie in how much the seller wants for his or her home (though that is what the seller and the listing broker want you to believe). In fact, the listing price of a home sometimes has nothing to do with its market value.

Figuring out how much a home is actually worth is a tricky process. You'll have to do your homework, pull out your calculator, and spend some time learning to recognize certain "value markers." Once you've figured out what a property is worth relative to others that are similar in the area, you can begin to compare various homes. Where a home is located (within a city, within a neighborhood, on a particular street, within a single building) is crucial to determining its value. When you begin to compare homes, it's important to factor location into your house valuation formula. First, think about where the house is located in relation to the entire neighborhood. Are shops and various services within walking distance? Is the house close to major forms of transportation and to the schools your children will be attending? Is it too close to any of these amenities?

A good Realtor has access to CMA (Comparative Market Analysis) tools and can help you determine the right value depending on the area and home prices in the last 30-60 days.

Location, Location, Location!

Many families want to be within a few blocks of the local public school, but they prefer not to have their backyards adjacent to the school playground.

Next, think about where the house is located on its block. Is it on a corner, or on the interior row? Is it next to a high-rise building or a three- or six-flat building? Are there many homes just like it on the block? Does the block have a nice residential feel or is it mixed residential/commercial? If you're considering a townhouse, start by asking yourself about the townhouse's location in relation to shopping and service retailers, such as a dry cleaner. If the townhouse is located within a subdivision, compare its location with the premium location within that subdivision.

For example, is it better to be located on the perimeter, or is an interior location better? Are end units more prized, or are middle units preferred? Are you close to the entrance of the subdivision, or do you have to drive several blocks to get there? Do you have to walk far to the garbage drop-off or mail pick-up spot? The location questions for a townhouse apply for condominiums and coops as well. If your condo or co-op is located in a high-rise building you also need to consider where the unit is located in the building. If one side of the building has a fabulous view and another faces a windowless brick wall, you can bet that units with the full view will be more prized than units with a peek-around or no view. Which is more important to you, the lower cost or the better view? If there are two views -- say, a water view vs. an urban view, an east view (sunrise) vs. a west view (sunset), or a high-floor vs. a low-floor perspective --remember that a unit with the best view in a building will generally appreciate faster than a unit with only a so-so view, even if the so-so has more amenities.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.
  




www.JulieWyss.com   | Julie@JulieWyss.com   | 408.687.2026

Monday, September 29, 2014

The Wyss Report ~ Understanding Your Credit Score

Understanding Your Credit Score


What Is A Credit Score?
When lenders evaluate a loan application, a process called underwriting, they try to evaluate your ability and willingness to repay the loan. They judge the borrower’s ability to repay by reviewing the income and stability of past earnings. This practice helps the lender to determine if the borrower can afford the loan payments. The review of past credit history is used to judge the willingness of the borrower to repay the loan.

Lenders want their evaluation to be as accurate, objective and consistent as possible. To help achieve this goal, home mortgage lenders use credit scores to assist in the underwriting process. Credit scores are numerical values that rank individuals according to their credit history at a given point in time. A credit score is based on past payment history, the amount of available credit, and other factors. According to Fannie Mae and Freddie Mac, two large investors in mortgage loans, credit scores have proven to be very good predictors of whether a borrower will repay his or her loan.

Credit scores are just one of many factors considered in the underwriting process. The lender will review the many components that make up the financial situation of a borrower. Even when a credit score is low, there are other factors that could overcome the negative credit issues and satisfy other underwriting criteria.

What is a FICO Score?
"FICO" scores are a type of credit score developed by Fair Isaac & Company. FICO scores use credit bureau information to obtain a score which indicates how likely someone is to pay their loan payments on time. FICO scores range from approximately 350 to 900. The higher the score, the lower the probability of default on the loan.

How Can Credit Scores Affect the Price of the Loan?
Just as credit scores are one factor in determining loan qualification, they may also be a factor in determining the price of the loan. The price of a loan means the interest rate and the points charged by the lender. The price charged for a loan will be higher or lower depending on various factors.
Credit scores are used in determining the price of a loan because they are believed to be good predictors of a borrower’s ability and willingness to repay the loan. Therefore, applicants with lower credit scores may pay higher prices for their loans because of the higher risk of default and loss on the loan. Many home loans are sold to investors, and investors will pay a more favorable price for loans they feel have a low risk of default.


There are many other factors relating to an individual borrower’s situation that may also affect the price of a loan, often even more than credit scores. These include the type of property securing the loan, the amount of the borrower’s equity in the property, the value of the property compared to property value in the area, the lender’s cost to make the loan and the type of loan selected. For example, a loan secured by a single family residence may have a lower price than a loan secured by a condominium because condominiums may be more difficult to sell than single family residences. Similarly, the price of a loan for which the borrower has made a 20% down payment may be less than a loan for which the borrower has made a 5% down payment because the first borrower has more equity in the property and, thus, a greater incentive to make the payments of the loan.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


Monday, September 15, 2014

Visiting Open Homes

An open house can be an opportunity for you to get information about homes and the housing market. Open houses are a common real estate practice because they give an agent the opportunity to market the home and to meet prospective buyers.

Here are some questions you may want to ask:
Are you the listing agent for this house? Busy agents sometimes arrange for a colleague or assistant to conduct the open house. Don’t assume the person showing the home is knowledgeable about the house or has met the sellers.

How long has the home been on the market? Well-priced homes in good condition generally sell in a short period of time. Unless the local market is weak, you will want to know why a particular home is not selling. Are there hidden defects? Is it overpriced? Are the sellers requiring something that may seem unreasonable as a condition of the sale?

Have the sellers received any offers? If the sellers rejected offers that were too low or had contingencies or conditions, you should find out before you experience the same.

Is any furniture or fixturing being sold with the house? If you’re thinking of buying the home, there is no better time to ask whether the seller would be interested in including the patio furniture or the dining room chandelier.

Are there any special costs attached to the property? Is there a homeowner’s association that has dues or fees? Are there particular tax assessments? Are there any natural hazard issues to be aware of? Are there any hidden costs of owning the home?

How does this house compare to others on this street? The local agent may be able to speak about recent sales in the neighborhood as well as some interior ideas seen in other homes.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


Monday, September 1, 2014

What You Need To Know

The homebuying process is one of discovery. Throughout, you will receive crucial information on the condition of the property – from its physical attributes to the condition of its title. Piece by piece, you will learn what you need to know to make an informed purchase. Following is an explanation of the most significant parts of the puzzle.

Transfer Disclosure Statement
The seller of your property is required by law to furnish you with a "Real Estate Transfer Disclosure Statement,” (TDS), in which the seller will make known to you important disclosures about that property, including any known existing conditions, any hazards or nuisances. For example, if the property drains improperly or if there are cracks in the chimney and the seller knows about it, he or she is required to let you know via the TDS.

In the TDS, the seller’s agent and the buyer’s agent are also obligated to inspect the property and to provide results regarding any known existing conditions, any hazards or nuisances. If the TDS is delivered to you after execution of the offer to purchase, you have three days if the form is delivered to you in person or five days if it is delivered to you by mail, to use it to terminate the contract if you are not satisfied with its contents.

Home Inspection Report
Just as important as the TDS is the home inspection report. While the TDS documents the property’s condition, to the knowledge of the seller, a home inspection will provide you with the additional insight of a construction expert.

As a result, I advise anyone buying a home to first have it inspected by a professional home inspector who is:

  • a licensed general contractor
  • a member of a recognized home inspection trade group
  • has professional liability insurance
Your home inspector will provide you with a written report, which will advise you of the physical condition of the property as determined from the inspection of accessible areas. Generally, the cost is approximately $300-$500.

The report also will identify areas that could not be inspected and may recommend additional inspections by other experts in areas including roofs, foundations, soils, drainage or pools. Less usual, but also recommended from time to time, are inspections for health-related risks such as radon gas, asbestos or problems with water or waste disposal systems. While additional inspections will cost more money, they definitely are worth it if they uncover an expensive defect in the property.

A general inspector will focus on the structure, construction, and mechanical systems of the house, and will make you aware only of repairs that are needed. Generally, an inspector checks (and gives estimated prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, heating and cooling systems, water source and quality, the foundation, doors, windows, ceilings, walls, floors, and roof.

The inspector does not evaluate whether or not you're getting good value for your money.

Usually, there will be an inspection clause in the contract. Sometimes, the seller will provide a report of a home inspection aid for by the seller. If conditions or defects are disclosed in the report you can:

  • Negotiate for the seller to fix the problems prior to close of escrow,
  • Receive a credit from the seller for an amount to make the repairs; or
  • Cancel the contract if your and the seller cannot agree on the repairs or their costs.

It’s not required that you attend the inspection, but it's a good idea and I strongly recommend that you do, since generally you will learn a great deal about your property. The inspection also provides a great opportunity to hear an objective opinion on the home you would like to purchase and it is a good time to ask general, maintenance questions of an expert.

Pest Control Inspection Report
While you are in escrow, you should have the property inspected by a licensed pest control professional. While termites or other pest infestations are not common, pest control operators also are trained to look for dry rot, usually caused where wood comes into continuous contact with water. Dry rot can be serious and should be fixed immediately. If any condition is discovered in a pest control report, it needs to be corrected and the property re-inspected by a certified pest control inspector, before you close the sale of the home. Pest control reports generally cost around $200-$300.

Smoke Detector and Water Heater
During the escrow process, sellers are required to provide for you evidence that they have equipped the home with smoke detectors, and that water heaters are braced, anchored, or strapped to resist falling in an earthquake.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


Monday, August 18, 2014

What Can I Afford?

There is a rule of thumb that says that if you have the capacity to repay the mortgage, you can afford a single-family house that costs up to two and one-half times your annual gross income. (Annual gross income is the amount you make before taxes are deducted.) Like other rules of thumb, this is a general idea of how large a mortgage you can afford. But, because it is so simple, it doesn't take into account all the information that will help you feel comfortable with your mortgage payments.

If you are buying a house with someone else (spouse, parent, adult child, partner/companion, brother or sister or other relative), you should consider your co-purchaser's earnings and existing debts as well. Remember, if you apply for a loan with somebody else, you and your coborrower are both legally responsible for repayment of the mortgage.

Your buying power depends on how much you have available for the down payment and how much a financial institution will agree to lend you.

Your down payment
If you are a first-time home buyer, the price you can afford to pay for a house may well be limited by your ability to come up with the required down payment and closing costs. If you haven't accumulated much savings, you may want to set aside funds for a down payment on a regular basis from your paycheck. Monies in your checking and savings accounts, mutual funds, stocks and bonds, the cash value of your life insurance policy, and gifts from parents or other relatives may all be suitable sources for a down payment.

Private Mortgage Insurance

Depending on the lender and loan type, you may be able to get a mortgage with as little as 3 percent or 5 percent down. However, putting less than 20 percent down often means you will be required to purchase private mortgage insurance. Private Mortgage Insurance (PMI) helps protect the lending institution in case you fail to make payments on your mortgage.

Avoiding PMI
It is possible to get financing with 0-10% down and not pay PMI (Private Mortgage Insurance). This is why 80-10-10 financing was created. It is called 80-10-10 because a lender provides a traditional 80% first mortgage, a 10% second mortgage, and makes a cash down payment equal to 10% of the home’s purchase price. The same principle applies if the borrower can only afford to make a 5% down payment: 80-15-5 financing is also available.

Your closing costs
In addition to the down payment, you will also need to consider closing costs. The closing is the final step during which ownership of the house is transferred to you. The purpose of the closing is to make sure the property is ready and able to be transferred from the seller to you.

Closing costs generally range from 3 percent to 6 percent of the amount of the mortgage. So, if you were to buy a $100,000 house with a 5 percent ($5,000) down payment, you could expect to pay between $2,850 and $5,700 on your $95,000 mortgage. Sometimes, you can negotiate with the seller of a property to pay some of your closing costs, which will reduce the amount of money you will need to bring to closing.

How much a financial institution will lend you
Apart from having available funds for a down payment and closing costs, the other major factor limiting how expensive a house you can buy will be how much you can borrow.

When you apply for a mortgage, the lender will consider both your earnings and your existing debts in determining the size of your loan. Lenders generally use the following two qualifying guidelines to determine what size mortgage you are eligible for:

The amount of money you owe for mortgage payments, property taxes, insurance, and condominium or co-op fee, if applicable, should total no more than 28 percent of your monthly gross (before-tax) income. This is called the Housing Expense Ratio. The amount of money you owe for the above items plus other long-term debts should total no more than 36 percent of your monthly gross income. This is called the total Debt-to-Income Ratio.

Basically, lenders are saying that a household should spend no more than about one-fourth of its income (up to 28 percent) on housing and no more than about one-third of its income (up to 36 percent) on total indebtedness (housing plus other debts). Lenders feel that if they follow these guidelines, homeowners will be able to pay off their mortgages fairly comfortably.

These lender ratios are flexible guidelines. If you have a consistent record of paying rent that is very close in amount to your proposed monthly mortgage payments or if you make a large down payment, you may be able to use somewhat higher ratios. Some lenders offer special loans for low- and moderate-income home buyers that allow them to use as much as 33 percent of their gross monthly income for housing expenses and 38 percent for total debt.

Don’t Despair, There is a Loan For You
When you go to apply for a mortgage, the lender will use all the relevant data -- your income, your existing debts, the purchase price of the house, your down payment, the interest rate on the loan, and the cost of property taxes and insurance -- and calculate whether you qualify to borrow the amount of money you need to buy the house.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.



Thursday, August 14, 2014

Zillow’s going coast-to-coast shining the spotlight on some of the best agents in cities across the country

A few days ago, I received an email to the Zillow Pros blog. Much to my surprise, when I clicked the link, I found Zillow had done a feature on me! Wow!

Below is the blog, or you can also click here to see it on Zillow.

Top Real Estate Agent: Julie Wyss, San Jose, CA
DATE:AUGUST 12, 2014 | CATEGORY:REAL ESTATE PROS | AUTHOR:ALENA PILICHOWSKI

Zillow’s going coast-to-coast shining the spotlight on some of the best agents in cities across the country. These Zillow Premier Agents are successful in their community and have used Zillow to help grow their business.

Today’s San Jose, CA agent uses her entrepreneurial spirit and understanding of the unique Bay Area housing market to get the best deals for buyers, sellers and real estate investors alike. And, in return for their trust and business, she hosts biannual parties for her clients and vendors as a way to show her appreciation.


Introducing:

Name: Julie Wyss

Brokerage: Keller Williams Los Gatos Bay Area Estates

Years in business: 13

Years as a Zillow Premier Agent: 4

Favorite home style: Mediterranean

We asked Julie what makes her successful. Here’s what she had to say:

Zillow: Why are you successful as a real estate agent?
Julie: I have a team of very talented professionals providing the ultimate level of service and seamless support for every transaction. I earn client trust by demonstrating commitment and high values, communicating completely and clearly, and making transactions excitingly enjoyable. I am passionate about achieving the best possible price for both my buyers and my sellers.

Zillow: Who or what inspired you to work in real estate?
Julie: I’ve been an entrepreneur for many years, and I also worked in the mortgage business. I’m exceptionally driven and detail-oriented, understand the Bay Area housing market, and generally love helping people. All of these things led me to the real estate industry.

Zillow: What is the best part of your job?
Julie: I love working with both buyers and sellers in the Bay Area because each listing is a new challenge, and it’s always rewarding to help my clients get the best possible price for their property. The “residential matchmaking” process is exciting as well; helping buyers find a home that is just perfect for them. I also have a few real estate investors I work closely with. Finding them that next “diamond in the rough” is great fun!

Twice a year, I hold appreciation events to thank all of my clients and vendors. I thoroughly enjoy being able to hold parties in honor of all of these wonderful people.

Zillow: What are three pieces of advice you have for success on Zillow?
Julie:

1. Follow up with all valid leads.
2. Be sure to get reviews.
3. Contribute to the Zillow platform to boost your visibility by boosting theirs.[Julie Wyss picnic]Hosting appreciation events for her clients is one of Julie Wyss’ favorite parts of her job as a real estate agent.

Zillow: What real estate time-saving tips do you have?
Julie: Find capable, talented people to be a part of your team. Let them manage certain aspects of transactions (marketing, project and document management, etc.) so you, as the agent, can focus on bringing in new business.

Zillow: How do you manage your to-do list?
Julie: I use Evernote to keep track of individual listings and I use checklists for both buyer and seller transactions.

Zillow: When you’re not selling real estate, what do you enjoy in your free time?
Julie: I enjoy hiking, mountain biking, and generally staying fit. I also enjoy great restaurants, wine tasting, traveling, and spending time with my family and friends. Most of all, I love having a happy home life with my husband and three children.

Zillow: How do you stay active in the local community?
Julie: I stay active in the local community by participating in local trail running events, supporting local schools, and hosting music festivals.

To learn from top agents, be sure to attend one of the free Zillow Agent Events, coming to a city near you. Know someone who deserves to be in the spotlight? Tweet @ZillowForPros with your nomination. View past pros featured in the Agent Spotlight here.

If you have a need for a real estate professional, please contact me. I would also appreciate your vote of confidence by passing my name to anyone you may know who would benefit from my services.


                                       
                 408.687.2026 |  Julie@JulieWyss.com | www.JulieWyss.com