Interest Rates Fall A Bit But.....

This past week interest rates dropped a little bit. Also several banks have changed the rules on 10% down loans. So the big question I heard is "Do I buy now or wait?"

I have been saying for over two years "Buy Now". Why? In simple terms straight line 3% inflation tells us that homes are still slightly underpriced in many areas. Across the country with 20% down you can buy a home and rent it for more than the mortgage payment.

If you are thinking of selling and moving, now is a great time so you can lock in lower tax rates. If you wait for your house to sell for a higher price, You will be buying at a higher price and locking in higher taxes for as long as you live in your new house. Higher taxes are never good.

Looking at the buying situation you see a few things. One aspect is that most people can't save enough money to buy a home. Our National practice of "keeping up with the Joneses" has made it difficult to save. This is creating an opportunity for those you have the money and credit to grab some real estate bargains.

So how can I keep saying this for two years straight? Simply put the prices still haven't caught up and even though two years ago was a better time to buy, this is still a great time to buy real estate. Am I biased because I am a real estate agent? No, I am also buying myself. There are just too many deals for me to grab so I'm trying to help as many of my friends as I can.

Even if you can't afford to buy investment properties in Southern California, I have programs available to pick up turnkey investment properties with 20% down and positive cash flow at the close of escrow across the country. These properties have already been cleaned up, rented out and property management placed. We are trying to make it as easy as buying stock. Just like people want Coca-Cola they want a clean safe house to live in and as an investor you can provide that.

If you want to buy or sell in Southern California give me a call and I'll be glad to help or find someone in your area who can. If you want to invest and have positive cash flow today give me a call.

Scott Bourquin

BRE# 01911988

714-594-SELL (7355)

What Is The Difference In APR and APY?

What is the difference between APR and APY?  In the simplest terms, the APR is the "Rate" you pay on paper, the APY is the actual "Yield" after expenses for the Loan Originator.  Basically, the bigger the difference between the APR and APY, the more costs that are built into the loan, and the more profit for the bank.

This can be built into the loan or fees you pay up front that make the yield higher for the investor or loan broker.  This is why shopping a loan is so important.  If you aren't sure about the differences in loans ask your agent or accountant.

For instance a VA loan will normally have a higher APY because there is a "funding fee" that is standard with every loan.  That funding fee is either paid up front or rolled into the loan.  Rolling it into the loan means you owe more money than the bank pays the seller.  For instance if you bought a house for $200,000 and had a 1% funding fee, the loan would actually be for $202,000 because the 1% fee is added to the loan.  This is "rolling it in".

Orange County Posts Lowest Inventory of Homes in 3 years

The Orange County Association of Realtors has published a report saying that 2013 has the lowest number of new listings in the last three years.  My neighborhood is a perfect example.

When I bought my home two years ago, there was at least one if not two, three or four signs planted in the front yards on every street.  This year you have to go several blocks to find a single home for sale.  What gives?

There are several things going on.  First is uncertainty with the economy.  Simply put, people are still hesitant to sell and move up.  The average time in a home is increasing.  Next the slight rise in home values has slowed the foreclosure and short sale market just a bit.  One of the agents in our office is still moving a noticeable number of short sales, but he is putting a lot of miles on his car to do it now.

Loans are also harder to come by as VA and FHA loan limits were reduced.  This increased the number of homes requiring a traditional 20% or 30% down payment.

So what does this mean to you?  If you are thinking of selling, it means you will likely get a much more reasonable price in a reasonable amount of time this year than you would have since 2006.  If you are considering selling, call me and we can talk more about what is happening.

If you are thinking of moving up, now might be the right time.  All indications are that home loans won't get much lower interest rates for many years, and locking in your property taxes at the lower values will pay off if you stay in your next home for any amount of time.  

If you are trying to buy, you are in a different boat.  The "good deals" go very fast.  Waterfronts in Huntington Harbor under $2 Million were plentiful two years ago and average days on market was nearly 300.  Now, if they aren't a tear down, they sell in days when priced right.  I have several buyers who have cash that we can't find a deal for.  A couple of homes that I felt were a little overpriced and have been on the market over two years have just gone into escrow.  It is a tough time to be a buyer, especially an investor buyer.

Newport Beach, Costa Mesa, Seal Beach, Garden Grove and Fountain Valley are all seeing the same trends as Huntington Beach.  This isn't just a waterfront property issue, it is across all of Orange County.

As a Realtor, our jobs are changing yet again.  There has been some major changes to the laws, lending and paperwork, creating more work for us.  What little we might save on advertising because a property sells quicker is spent advertising to find listings.  Agents are all over each other trying to get the next listing.

At the same time buyers agents have to work a lot harder to find a property that fits their clients needs.  Gone are the days of 30 or 40 homes fitting the size, price and location a buyer wants.  It might take several months now of looking to find even one that fits the buyers wish list.  This week one came up that was close for an out of town buyer and before I could get them in the house, the seller had accepted an offer.

If you are thinking of buying or selling a home along the coast in Orange County, please give me a call.  If you know someone who is interested in buying or selling a home, please pass on my name and number.

Scott Bourquin
Keller-Williams
www.socalbeachrealtor.com
dre# 0191198
714-594-SELL (7355)

Starting Real Estate License School

For as long as I can remember I have been interested in Real Estate. It fascinated me that a house could double in value in just 5 years, or that an empty piece of dirt could be turned into a multi-million dollar location with the right building.

In the early 90's I sat down and mapped out a plan to own 15 rental homes and be retired.  Youth and my wanderlust got the better of me and I still haven't hit 15 rentals.

Fortunately, I decided to sell all of my investment properties in 2002 through 2004 so I wasn't hit by the bubble bursting, and lived pretty nicely for the next few years.  Still a little young to understand how to retire, I spent all the money, and started over about a year ago.

Back then I bought every TV infomercial "Get Rich  In Real Estate" program I could find.  The common thread to all of the programs was simple.  You had to work.  That work was hours and hours of digging for deals.  I chose a different method which worked very well.  I bought a house, lived in it while renting a room out.  After I had enough money for another house I would rent out the house I was living in and move to another.  

When I got married, my wife had a house and that became a rental.  Our program was much slower but worked very nicely until we decided to sell everything and move out of state.  That is a story for another day.

Nearly 20 years later, my life has come full circle. We are back on the west coast, living a split life in Southern California and the Reno-Tahoe area of Nevada.  Last week my wife finished her California Real Estate License by passing her state exam.  She is now an agent in Huntington Beach California.

Her interest in real estate started  to peak while shopping for the house we live in now.  Agent after agent would tell us "Deals like that don't exist here" or "You don't know this market." After a year of acting like investors instead of grabbing the first home we liked, we ended up in the second home I ever saw after being told, "That house won't happen, what else do you want to see?" more than once by the agent we were trying to work with.

As part of my SEO and Marketing work, My brother Roy and I met Dean Graziosi, the TV Real Estate Guru at a marketing conference.  I came home with his books and a great conversation under my belt.  Yes, Dean is a real person and walks the walk.  Telling my wife about my conversation with Dean pushed my wife over the edge.

Scott Bourquin - Dean Graziosi - Roy Bourquin

Instead of listening to the agent and following his recommendations, we set out on our own, and followed the escrow of every house we liked.  We knew that 50% of short sales don't close, and ours was no exception.  Almost a year to the day, the house fell out of escrow and I scooped up a pretty good deal, right where I wanted to be.

My wife is hooked, and we are back in Real Estate, at least as owners together, and now she as an agent.  One of the things Kelly learned in her Real Estate License course was that I really couldn't legally be of any help to her without a real estate license.  She convinced me to get my license as well.

Instead of selecting the online school she chose, Allied, I picked another one.  Now that I have finished the first class, Allied was a much better program and a better deal.  Fortunately I don't need to take the electives since they were included in my business degree from San Jose State University, so I will have fewer classes to complete with the school I chose.  My advice if you want a license, don't pick the lowest price and read the fine print.

If you are pursuing real estate as a career or as an investor, keep in touch.  I'll let you know how it goes for me right here.

What Kind Of Real Estate Agent Do You Want?

If you are buying or selling a home there are basically two kinds of agents, a "listing" agent and a "selling" agent. These might sound like the same thing but there are some big differences that you should know about.  More importantly if you are in the market for a home, you should know how to interview an agent.

Real Estate Agents come from all walks of life.  Kelly, my wife, was a teacher for 18 years and had been working in retail part time for the past eight years.  She also has an MBA and 15 years of experience as a real estate investor.  So with a resume like that you might wonder why she got her license to become a real estate agent. 

The answer is simple.  After helping people for years buy and sell home and watch agents make all the money, she decided to get paid for her efforts.  Besides, she likes home shopping and is pretty good at it.

The Right Agent can help find the Right House

A listing agent is the person that you sign a contract with to "list" your home.  They put the sign out front, do a lot of paperwork for you and get your house listed on the MLS so people shopping for homes know it is available.  Many "listing" agents do advertising above and beyond just the sign and the MLS.  

There is your first question to ask if you are selling a home: "What advertising will you do for my home?"

The "selling" agent is the person who actually brings in the buyer for your home.  Many people call the selling agent a "buyers" agent.  I did until I started taking classes to get my own real estate license.  

The MLS is not the only source of buyers.  Larger national companies have relocation contracts where businesses send buyers who are in a time limited position directly to them.  Local companies don't have that advantage.

In California, an agent has a responsibility to their client.  With the booming market up until 2006 many agents have forgotten this aspect of their job.  When an agent is the "listing" agent and also the "selling" agent that is called "dual agency".  This is a tough place to be, since the agent is supposed to put both the seller and the buyers interests above their own.  

California doesn't allow agents to act as an intermediary between the buyer and seller.  If they have dual agency they "represent" both.  In an open market, if you don't like the buyers offer that the listing agent brings you, you are welcome to wait for another offer, including one from a "selling" agent.  

The second question for your agent is: "Do you primarily serve sellers or buyers, and what does your office specialize in?"

This leads directly to the third question: "How often is one of your listings sold by someone in your office?" and I don't mean another office with the same name.  You want to know if their office is really finding buyers or just planting signs to get a check.

Another question I would want to know is "How many homes have you purchased or sold for yourself"  There is no faster learning curve than to buy a home, rent it and later sell it.  The best agents are also investors.

Today many of the "best" agents are part of a "group".  If you sign with an agent, you should know if they will show up or an "assistant".   Many people find out later that they never again see they person whose name is on the sign in front of their home.

Finally if you are selling your home do some homework.  There are some "legal" yet misleading tricks agents use to get their name out there like putting up open house signs that go no where, and putting a sign in the ground after a sale to give the impression the listing agent lost the sale.

Anybody can list a house, promise a higher price or offer a lower commission.  What you want is an agent that is genuinely working in your best interests.  You want an agent that knows how to get a home ready to sell, how to sell it and has an office with buyers waiting.  Even in a buyers market like we have right now homes are selling.