Antonio & Alexia Cardenas "The Realtors In Motion"

Despite the difficulties in obtaining financing for a home purchase, there are great rewards for those who dare step into home ownership. You will need a couple of qualified people to help you navigate through this obstacle course: A Lender and a Professional Realtor. Open your eyes to today's opportunities! Here are 7 proven strategies to help you navigate to a successful home purchase.

• Begin by gathering all your financial documents first. You will need among others: current pay stubs, copies of tax records from the last two years, recent bank statements for all your accounts, copies of Divorce decrees if applicable. If you have funds in CD's or 401Ks or other income, you will need to bring copies of those documents too.

• The next step is to talk to a lender about your finances. Find out what you qualify for, how much money you need to have for a down payment plus closing costs. You can do this by simply asking your lender to do a pre-qualification for a loan. After this meeting you should know what your price range is and how much your monthly payments will be.

• Make a list of what is important to you and your family when is comes to housing. Do you really need to have 4 bedrooms? is a pool an absolute necessity? Keep in mind that the First Home is not exactly your Dream Home. Buy below your maximum qualifications if you can, that will leave you room to save money by applying a small amount each month to the mortgage payments to reduce the principal amount borrowed.

• Meet and interview a local, Professional Realtor. Choose a person that specializes in the area that your are interested in. You can do a lot of research on your own online, but a professional Realtor's help is absolutely necessary. Remember this: Realtor's commissions are paid for by the home seller. There is no cost to you when you buy a home. Use his/her knowledge and expertise... for Free!

• There will be other professional trades people that will get involved in a typical real estate transaction. your Realtor will assist you here and on your behalf, he/she will contact home, roof, termite and other inspectors. The lender will take care of having the house appraisal done for you.

• Once you have made an offer on a house, you will make a cash deposit into a title insurance company. This neutral company will not only run an escrow for you, it will also ensure the title of the house in your name after escrow closes and you become the new owner of the house.

• Read and understand all documents handed to you and the time elements involved during the transaction. The more you know the better it will be for you. if you take these steps in order, once you have picked the right house and made and offer that has been accepted, you will have about 30 to 40 days before you can get the house. If the house, however, is in a short sale, it might take months before you can close the escrow and call that home your own.

There are plenty of reasons to buy your first house. Beginning with pride of ownership, appreciation, mortgage interest deductions, property tax deductions, capital gains exclusion and build up of equity just to name a few. The cycle of real estate will continue, just as when prices went up and then come down, we will see in the near future this trend reversed. Buying a house in the long run is far better than renting.

The CA Residential Purchase Agreement is the the only document that a lender will accept as the basics for granting a home loan. Home buyers, specially first time home buyers, are reluctant to sign such document on the spot, after all, with the required Buyers Inspection Advisory and the Disclosure Regarding Real Estate Relationships, those are 14 pages of gibberish mambo jumbo stuff that is not easy to understand when read for the first time.

At the height of the market, we lost a great home because the first time buyer took 2 days to read the contract and another 3 hours for me to clarify the questions he had when he read it. By the time we presented the offer, another buyer's offer had been accepted. I could not blame the buyer for not signing on the spot. For this type of purchase, as a consumer, I probably would have done the same.

That is when I decided to actually write the offer earlier and even before I show the first house to buyer looking to buy a home. Once we tour the houses for the first time, I give the buyer the entire 14 pages of an offer written on the best house we saw. By previewing first, I would know which house to write the contract for. Since I do not show houses unless the buyer is pre-approved, I also know the finances, I write down the exact numbers for a down payment and even calculate an estimated buyer's closing costs.

Having the buyers have the contract on the first tour of houses, with real numbers, and sending them home to read those documents is a huge time saver for both of us. I tell them to assume that we just bought this house, and that these are exactly the documents that we will use when presenting an offer. I ask them to read those pages, and make notes on them to ask me when we see each other again. By reading the contract without any pressure for time, they will be ready when the time comes to sign an offer. I do make a point on subsequent meetings to ask about the contract.

Yes, this might sound like putting the cart in front of the horse. But we accomplish so much, the buyer's confidence on the process is key for the entire transaction to start and finish on time. A well informed and educated consumer is also a very happy Home Buyer. This type of home buyer makes the lender, the seller, their Realtors and the other 30+ people who somehow get involved in a typical real estate transaction very happy too!

Taking the steps in this order takes the fear out of actually purchasing a home, the knowledge, understanding and familiarity might avoid the infamous "Buyers Remorse" for which I also have a prepared medicine. After the offer is accepted, I give the buyers colorful M&M's in a prescription bottle. I tell them to take 2 pills when they feel scared or uneasy about their purchase, if the feeling is too intense to double the dose, that the color of the M&M's does not matter.

But if they feel real bad about what they bought, to call me immediately. If the buyer is not 100% into it, I want them out of the transaction as early as possible. If you are looking to buy a house right now, ask your Realtor for those documents and familiarize yourself with them.

Dear Mr. and Mrs. kaiser. Is has been a pleasure working with you. Now that the house has been sold, and you have settled in your new home, I have one last request for you before I close this file once and for all.

In my business, I depend on a good reputation, but no matter how hard I work, nobody will know it until somebody else points that out. Most of my work unfortunately is done behind the scenes, because of that, a good letter of recommendation from a recent client is a very valuable tool, that I can provide to people considering hiring me for their real estate needs.

I would like to ask you, if you would consider giving me such a letter. After all, there has been 3 different transactions within your family in which I have been involved as the listing Realtor. If you think I have done a good job for you and your family, would you mind writing me such a letter?

Of course, I am assuming you were happy with my overall services. But there is that possibility, albeit a remote one in my opinion, that I did not measured up to your expectations. It would be even far more valuable to me to know that. If that is the case, I will ask you to please share that with me, and give me your opinion as to why I do not deserve such a letter.

Customer satisfaction is my goal 100% of the time. Your opinion of my work is of the outmost importance to me. I will be forever grateful, if you would take a few minutes of your time to share your thoughts about my work in writing with me.

Sincerely Yours

Antonio

In our last closing, our colleague, the listing agent went for a minor surgery and... did not come back! As the selling agents, we were left wondering for days who would take over and finish the transaction. We had sent signed documents via email that could not be retrieved for days. We understand the broker of record is actually the responsible party, but I wonder, what would happen when the broker is the listing agent... and he dies in the middle of the transaction, who would take over then?

The fact is that we all will go sometime, and even though, we do not like to think about it, we must have a system in place that could allow somebody else to step in and take over, at least on the business part. An assistant is good, but when dealing with clients, (like in our case) there apparently were conversations between the seller and her Realtor that altered the transaction. Seller implied a promise from his dead Realtor to her, that his broker had to actually pay for. A promise of free rent for 15 days! no, there was nothing in writing about that. But there was no way to verify that.

Stop and think for a minute... If you die right now... could someone sit on your desk and know what were you doing? What were you thinking? Do you have your passwords written somewhere where a trusted person can have access to them if needed? If there is a deadline (no point intended,) that will go unnoticed and because of that your client could be harmed?

As I write this post, I can think of the myriad of passwords that I use for almost everything, my computer actually reminds me of some of them, which could be helpful for someone taking over my desk. They will need a passord to get into my computer! But the fact is, it will take weeks for another person to know where and where things are in my little desk. and that is only for my business life! Yikes, I now remember that I do have a personal life that includes bank accounts, social security numbers and of course more passwords.

If you have a system that could help in a situation like this one, I really would like to know, you would think that a husband and wife team would have an advantage, yes we do, but I think it needs to be more organized, and maybe one day, do something similar to a fire drill: Honey, I just died! what would you do? Show me!

I believe that when we are born, we are given a secret number that is tattooed somewhere in each one of us, and the almighty plays a big Bingo Machine up there, that when it spits our number out! we just drop dead. Period, no request, no permission granted, nothing. By the way, how is your business today?

In my 26+ years in real estate, I thought I had seen it all... well, not exactly all, here is a new one for me. I have been very adamant about NOT taking a listing that is not priced properly. Overpriced listings are bad for everybody, for the seller, the home buyer, the appraiser, the Realtors, even the neighborhood! Why is it that sellers want yesterday's prices? haven't they read the real estate news? The market has dropped... a lot!

About 3 months ago, I was called to put a house on the market, I did my usual research, took a good look at the house, reviewed the comparable sales with the owners and help them secure a stagger, and even a carpet outfit to replace a worn out carpet in the hallway. My suggestion, based on comparable sales, and my knowledge of the neighborhood, (I live 4 blocks away from this home) was to price this home at about $650,000. The sellers were not happy at all. They wanted to list it at $775,000! what a big difference!

I looked at my research again, and could not find a justification for their price. I knew that I will never have comparable sales for the appraisal. I offered to list it at $675,000 with a proviso that we reduce the price after 3 open houses, the difference was too big for them to overcome, my standard speech for a situation like this one was given: "... I am sorry, I rather turn you down, than let you down..." I cannot work with your price. They told me, they will think about it...

The very next day, I received a beautiful plant delivered to my house with a note of thanks. They informed me that they were going to go with another Realtor, and thank me for my efforts. 3 days later, the house was listed on the MLS at $775,000. The other Realtor had open houses almost every weekend, after 30 days the price went down to $750,000, another 3 weeks later to $725,000 5 weeks later the price dropped again to $699,950 and then again to $675,000, then it went pending. Last week it closed escrow at $640,000!

Who dropped the ball in this scenario? the other Realtor did get paid. I upheld my high values and did not get paid, the other guy spent time and money, but got the job done. Then, I realized, that the seller does have the right to try and get the best possible price for his home... Even if it is an unrealistic price to begin with.! Sellers, are at a disadvantage when playing real estate, if the seller does not get the best price, he cannot go back and fix it. The buyer can realized he is overpaying and pull out of escrow before is too late, the seller cannot accept a higher offer once is in escrow.

If this would have been an isolated incident, I would have not even writen this post. But earlier this year, I had a similar situation where I was called to sell a house and my price based on comparables told me the house was worth $630,000 tops, I always look at how I will provide the right 3 comparable sales to the appraiser. I did not have them here either, I also refused to list it at their high price. The seller had another agent list it for $675,000 and it sold in ONE day! The kicker? an all cash buyer come and close escrow in 7 days... yes, this seller was lucky, because there are not too many all cash buyers ready to overpay for a house anymore.

As Realtors, we are paid for our knowledge and experience, but overpriced listings and no comparable sales are a bad and very expensive proposition. Appraisers are on the firing line, and we have lost weeks of previewing, showing houses, writing contracts and then after being in escrow for weeks, the appraisal comes and shuts down the entire transaction and sends everyone back to square one. Does anyone out there have the magic formula? I would like to know.