Brian Ripp ~ Your Bay Area & Fremont Real Estate & Financial Agent

How important is property location? Very.  When considering a house purchase, it’s always wise to weigh how property values may rise – or fall – before making an investment.  Generally speaking, property values tend to rise in neighborhoods where there is a transit route that cuts commute time.  What’s more, houses located within the jurisdiction of a good school district have higher property values than those served by less desirable schools.  Despite this, a house’s value can be adversely affected if it is situated directly across the street from a school.

Location within a community can affect property value as well.  A house that is within walking distance of public transportation or a shopping area is oftentimes more valuable.  But if it’s too close to either, it may lower in value.  Similarly, a house near a busy freeway or heavily traveled road is generally lower in value.  Within subdivisions, cul-de-sacs tend to be quiet, private and more desirable locales.  Thus, corner lots often sell for less due to their increased exposure.

information from the CRS “Your Home” newsletter

Even as many homeowners struggle to make mortgage payments and foreclosures weigh down the housing market, 70 percent of Americans still view homeownership as part of the American Dream, according to a recent Trulia survey. More than three out of four homeowners (78 percent) say their homes are the best investment they ever made. Only 20 percent say they feel trapped in their “underwater” homes, while 14 percent say they would walk away from their homes if they could.

The survey also finds that members of the Millenial generation have gained an appreciation of homeownership. More than one in four (26 percent) of this group say their views of homeownership have become more positive over the past six months, while 15 percent developed more negative views.

Great article from my CRS MemberConnect on-line newsletter

U.S. homeowners and renters have positive views about homeownership and the financial and non-financial benefits it provides, according to a new NAR survey conducted by Harris Interactive. A large majority of homeowners (87 percent) and 64 percent of renters agree or strongly agree that owning a home provides a healthy and stable environment for raising a family. More than three-fourths of homeowners (77 percent) and 55 percent of renters believe homeownership helps them meet long-term financial goals, while 70 percent of homeowners and 48 percent of renters believe it helps them realize the American Dream.

Nearly all homeowners (95 percent) and 72 percent of renters say that over a period of years, it makes more sense to own a home than rent. If they had to move in the next six months, 82 percent of homeowners and 50 percent of renters say they would prefer to buy a house. A majority of current homeowners (88 percent) say their ownership experience has been positive or very positive, while only 51 percent of renters have had positive experiences with renting.

More than six out of 10 renters say they are at least somewhat likely to purchase a home in the future, and 24 percent are extremely likely to do so. Nearly three-fourths of young adult renters (74 percent) say they are likely to buy a home sometime in the future, while 43 percent of renters plan to purchase a home in the next three to five years. Many renters cite several obstacles to homeownership, however, including having enough money for a down payment and closing costs, finding a home that is affordable and job security

Home buyer credit extension heads to Obama Congress passed a bill this week extending the deadline to close escrow and qualify for the federal home buyers tax credit. President Obama is expected to sign the bill extending the deadline to Sept. 30, 2010, instead of its original June 30 deadline.

KEEP THIS IN MIND

 • The bill extends the deadline to close escrow for home buyers who entered into a home purchase contract by the April 30 deadline. First-time buyers may be eligible to receive up to $8,000 and qualified existing homeowners may receive up to $6,500 if the home buyer closes escrow by Sept. 30.

• Home buyers entering into sales contracts May 1 or later are not eligible for the federal tax credit, but they may qualify for the California home buyer tax credit.

• The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® worked closely with members of Congress to extend the deadline. Estimates from NAR show nearly 180,000 home buyers nationwide would have missed out on the tax credit if the deadline was not extended, including nearly 17,700 home buyers in California.

• Many of the home buyers who would have missed out on the tax credit are in the midst of purchasing a short sale or foreclosure, which generally take longer to close due to the amount of paperwork involved in the transaction.

You know that when you are seeking a mortgage you should shop around for the best rate.  But because interest rates fluctuate, it is a good idea to consider locking your rate.  A rate lock, also called a “lock-in”, is a lender’s guarantee that you will get a specific interest rate and number of points if you purchase a home within a certain period of time.

If you do not complete your home purchase or refinancing agreement before the lock expires and interest rates happen to rise, you will pay the higher rate.  If interest rates happen to drop during the lock period, however, you cannot take advantage of them unless you rewrite the lock and pay an additional cost.

Before locking in a rate, keep these tips in mind:

• Get your guaranteed rate lock in writing.
• Lock in as many of the costs as you can, including the interest rate and points.
• Shop around.  Examine both the terms of the contract and its cost.  Some lenders charge an up-front fee, while others offer the service at no cost.

Governor Schwarzenegger today signed AB 183 providing $200 million for home buyer tax credits.  The bill allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.

Eligible taxpayers who close escrow on qualified principal residences between May 1, 2010 and December, 31, 2010, or who close escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit.

This credit is equal to the lesser of 5 percent of the purchase price or $10,000, taken in equal installments over three consecutive years. Under the bill, purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).  Buyers also must be at least 18 years old and be unrelated to the seller.  First-time buyers are defined as those who have not owned a home in the past three years.

 If you are interested in purchasing a new home, you’ll need to research your financing options.  One major part of financing is the annual percentage rate (APR).  As you enter into a deal, you will likely know your area’s prime interest rate, but you also need to learn about the lender’s APR.

 The APR is the final rate the lender charges you annually.  After adding on any loan fees that are involved and points that will be charged, the final rate will usually be higher than the prime interest rate.

 When applying for a mortgage, the lender must notify you about the APR within three days of receiving your application.  The APR may change before final settlement, but there are limits on how much it can change.

 So while shopping for a mortgage, make sure you know the annual percentage rate, as well as what you will have to pay for points, application fees and mortgage insurance.

 Being fully informed is the only way you will be able to make the best decision.

Foreclosures and bank REOs are pulling a new wave of novice investors into the market, some of whom are just a little clueless.

They see the price and they say, wow! I can buy that house and turn it into a rental.  But they don’t understand the local market, they don’t understand landlording, and don’t even necessarily visit the property.

 What are some of the key rules for freshman class investors?

      Number one: Due diligence is never optional. You’ve got to understand the local market – and that includes not just where prices are headed, but specific market demand for rental real estate in this price segment, and even the local government’s plans for the area where you’re thinking of buying.

      Number two: Buy with a written plan – that’s right, just like the large professional investors use, with an entry strategy and an exit strategy. How long are you going to hold onto the property, how much will it earn you during your period of holding?

      And what’s the endgame – a sale to another investor? Conversion to condos? Tear it down and build something that’s closer to the underlying real estate’s highest and best use?

      Write it all down, that way you can analyze it better.

      Number three: Calculate the actual costs of the property in advance – not just the bargain basement price, but how much you’ll need to fix it and feed it – the management costs, rental commissions, vacancy costs, taxes, to name just a few.

If you don’t know these things up front you are flying blind. And there are few good surprises in real estate.

Brian Ripp, CRS, GRI, Broker – your Bay Area Realtor

www.BrianRipp.com  serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.

Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp

 Many Americans believe that a lack of money for a down payment and closing costs is the biggest obstacle to homeownership, according to National Association of Realtors (NAR’s) 2009 National Housing Pulse Survey.  Job security is also a major concern.  Two-thirds of those surveyed think layoffs and unemployment are a big problem, and 8 out of 10 think those issues are a barrier to homeownership.

While three-fourths of Americans say declining property prices have made homes more affordable, 8 out of 10 say it’s harder to a home in their area today than it was a year ago.  Nearly half (44%) attribute their inability to sell to the large number of homes for sale in their market.

But respondents do expect to see home prices stabilize in the near future.  Nearly 7 out of 10 expect local home prices to stay the same over the next three months, while only 18% expect to see further declines, the survey finds.

Brian Ripp, CRS, GRI, Broker – your Bay Area Realtor

www.BrianRipp.com  serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.

Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp

The evening news is beginning to sound more and more like the children’s fable, Chicken Little – who proclaims “the sky is falling!”  With unemployment on the rise and an uncertain economy, buying a house may be the last thing on your mind.  But if you’ve been waiting to purchase a home, now may be the perfect time.  Here’s why:

* It’s actually more affordable now.  According to the National Association of REALTORS, the housing affordability index, which measures home prices, mortgage interest rates and family income, is more favorable now than any other time since NAR started the index 1970.

* You get a break on taxes.  As part of the American Recovery and Reinvestment Act, first-time buyers (anyone who has not bought or owned a home in the past three years) can take advantage of a tax credit up to $8,000.

* Big selection and big discounts.  There is a large inventory of homes on the market, so you have a variety from which to choose.  Many builders and home sellers are also offering incentives to help move inventory.  Not only are home prices low, but mortgage rates are lower than they’ve been in years.

* Price of ownership.  Want to paint your bedroom midnight blue? Go ahead.  In your own home, you get to make the decorating decisions that reflect your personal sense of style.

Brian Ripp, CRS, GRI, Broker – your Bay Area Realtor

www.BrianRipp.com  serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.

Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp