Kevin Williamson Homes for Sale Moreno Valley

The last couple of months have been frustrating for a majority of my buyers. The issue that we are running into is that there are not enough quality homes on the market. I know a lot of you might be thinking that there are a ton of properties in your neighborhood for sale or that are vacant. The key word is quality.

Most of my first time buyers are getting an FHA loan (which requires 3% down payment). A home must qualify for FHA financing, meaning if the home is in bad shape the FHA appraiser will not approve the home unless the work is done. Most sellers (banks) list homes low so they don't have to do the work requested by the FHA appraiser. So the homes that are in good condition and can get FHA approval go quickly, because there are so many buyers looking for that type of home. I have a couple of clients that I have written well over 10-15 offers, and we are still looking for a home. My challenge is how to get these qualified clients into a home in their price range, in a decent area, and in decent condition.

The solution is the FHA 203K loan. At the end of this entry I am going to put the link to the HUD site. How this works is my clients find a home in a good area that needs work. FHA will loan them the money to fix these properties up and attach the "fix up" money onto the loan. Let's say my clients are approved to $200,000. They find a home in the area they want for $175,000, but it needs a lot of work done to it. The property has sat on the market because a majority of the buyers can't buy the property because it won't go FHA, and the bank is not willing to accept the low ball offers that are coming from investors.

So I go in with my buyers and we make an offer at asking price, ($175,000) with our FHA 203K loan. Then my buyers get 2 bids from general contractors to repair anything that needs to be repaired. Also, the buyers can choose flooring, countertops, paint, fixtures, and almost anything else they want for the home. So let's say the bids are around $25,000. An appraiser comes in and figures when the work is completed that the home which is now worth $175,000 will be worth $200,000. The lender will accept the $200,000 appraisal and lend the buyer the money to do the work. So the buyer has a loan for $200,000 and is now able to use $25,000 to fix up their home how they want it.

These types of loans take longer than the typical 45 day FHA loan. This loan can take up to 90 days, because of all of the inspections and contractor bids. For most of my buyers this is a great way to get a great home for a great price. This goes along with the saying, ‘buy the worst home in the best area.'

Below is the link to the HUD website that explains the loan in more detail. If you or someone you know is looking to buy a home send me an email or just give me a call.

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

A couple of days ago I read an article from the msnmoney.com report. It was titled Buyers: Should you wait for the market bottom? By Melinda Fulmer. I thought it was interesting to see a report from a major news source that was actually positive news on the market. In the body of the article the writer gave 5 reasons to buy right now. The reasons are:

1. Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don't like apartments, the small penalty you pay for missing the bottom may not mean much.

2. You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you'll probably ride out any downturn and come out ahead on price.

3. Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can't: the mortgage-interest deduction on your taxes. If you rent, this next tax season look at what you are paying in taxes and if you find yourself paying a huge amount call me and I will show you how owning a home can save you thousands in taxes.

4. You've found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.

5. You've built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.

With each of the buyers that I am working with each one of them fits into at least 2 of these reasons. Most people who have been waiting have figured out that with the taxes they will be saving and the rising cost of rents then it is actually cheaper to purchase a home then to continue to rent. I have been pleasantly surprise these last couple of weeks because more buyers and investors have been calling looking to get the buying process started. Most of these individuals are ready to buy and are willing to take a small hit if their home equity goes down.

If you have any questions regarding the home buying process check out my Free Reports page, it is full of helpful tips to walk you through the whole process.

Sincerely Kevin Williamson local REALTOR http://www.williamsonteam.net/

With interest rates at historic lows, house prices favorable, and the housing supply through the roof, this is the trifecta for home buyers. The last couple of years the housing market has in reality taken a dive. Buyers have run for the hills to wait out this mortgage mess. The main questions is has it hit bottom yet. Most key economists and politicians have realized that the market has hit rock bottom. Builders of new homes have slowed their activity thereby allowing their inventory to reduce. Congress and the President are actively talking about a stimulus program. (Of course, it doesn't hurt to have elections later this year.) Although consumer sentiment is currently negative, this will change. As soon as potential homebuyers understand that the overbuilding frenzy of the past decade has stopped and the recent, short-term sudden decline in home values has ceased, they will realize that this IS the best time to buy a new or existing home!

Some future buyers might still be skittish. But, investors have been calling my office in the last couple of weeks asking about what homes could rent for, what do they need to put down, and can a home rent for more than the mortgage is? The average 4 bedroom home in Riverside is renting for $1795 a month. Most lenders are asking for 5-10% down on a home. There are a lot of homes that are in decent areas in decent condition in between $200,000-$250,000. I was doing some quick stats to find out if an investor bought a home for $250,000 and put 10% down ($25K), at an interest rate of 6% for a 30 year fixed loan their payment would be $1,348. If the average rent is $1795 then that would be a $447 a month in profit. I was pretty conservative on these numbers. The potential for a long term investment is there. The days of buying and flipping a home are long gone but the potential for a long term investment is still going strong.

I have a question to pose. Where do you think all of these individuals are going who are losing their homes? They have not lost their jobs. A very small percentage of them are experiencing some kind of dire situation. All of these people need a place to live. They are moving into rentals. The rental market is the strongest it has ever been. There are many people who can't afford a $2500 mortgage but can comfortably afford an $1800 rent.

Sincerely Kevin Williamson local REALTOR http://www.williamsonteam.net/