From the monthly archives:

September 2005

Buying Aliso Viejo Houses under market value.

by Vincent Bindi on September 12, 2005

I know… everyone wants to buy a house in Aliso Viejo at below market. Due to strong demand for housing it’s not easy to do, but here are some tips and strategies you can use for buying that illusive Aliso Viejo house under market value.

The various scenarios in which you might find a house for sale below market are: Fixer Uppers, rental houses, houses in Probate, houses that have been on the market for awhile, houses in foreclosure and pre-foreclosure, and relocation sellers.

Fixer uppers, or houses with gaudy decor are a great way to acquire a house at below market. Before you buy, make sure you do your financial homework. Calculate the cost of the house repairs or renovation, and subtract that figure from the market value of the other houses in the neighborhood that are in fixed up condition. Then have your agent make an offer that is 5% or so below that calculated price.

Rental houses in which the landlord is from out of town can sometimes be a good way to pick up a house under market. Sometimes you’ll find that out of area landlords wound up with a rental house by default years ago and are not very experienced at property management. After several years of heart and head aches, and the third tenant in two years just moved out of the house and left it in disrepair, the landlord has had it and wants out. It’s your buying opportunity.

Houses in probate may also be in need of repair, but you have the extra advantage from the ‘penny’s from heaven’ syndrome. There may be multiple heirs who do not get along, or they may be from out of the area or state. Often times, the heirs simply want the house sold quickly, in it’s ‘As Is’ condition, and be done with it. Make sure your agent knows the in’s and out’s of Probate real estate procedures before buying.

Houses in foreclosure in Aliso Viejo do not come up very often, but when they do, they are a great way to buy below market. There are actually three times at which you can buy. One, the house is not in technical foreclosure yet, but the owner is behind on payments and needs to sell now. Two, the owner has procrastinated, and the bank has begun foreclosure proceedings, and the owner is now even more motivated to sell now. Third, the foreclosure auction took place, and now the bank owns the Aliso Viejo house in what is commonly called an REO property. In either scenario, you are dealing with a motivated seller, which is always to your advantage when buying.

Houses for sale in which the owner is relocating to another state, usually produces a motivated seller. They seller doesn’t have much time, and they are usually consumed with the details of the new job, learning about new neighborhoods, schools and finding a replacement home, etc. A quick offer, with a short closing period and few contingencies will sometimes enable you to buy the house for below market.

Finally, if the house has been setting on the market for sale in Aliso Viejo for 70 days or more with no offers, usually means that the house is a bit overpriced for what it is. In this situation, the seller may become desperate and will jump at the first offer that comes in even if it is a below market price.

The most efficient way to buy a house for sale as described above, is to search the Aliso Viejo MLS. You can do so by visiting our website:   Aliso Viejo Real Estate.

Buying Mission Viejo Fixer Upper Homes

by Vincent Bindi on September 9, 2005

If done correctly, buying a fixer upper in Mission Viejo can be a rewarding experience. But buying a fixer upper is not for everyone. We recommend that fixer uppers are best bought by people who have an interest or skill in doing some of the renovation work themselves, for it is hard to find a cost effective contractor to handle all of the miscellaneous repair odds and ends that you will often find in a Fixer Upper home. Here is our step by step guide to buying a Fixer Upper in Mission Viejo.

1. What is a Fixer Upper home ? – A fixer upper is simply a neglected and/or poorly maintained home that sells for below the market value in the neighborhood. The three main sources of Fixer Uppers in Mission Viejo are a.) rental homes where the tenant damaged the property and the landlord is sick and tired of repairs and decides to sell. b.) older homes owned by an elderly person who has not made repairs to the home for many years. This property could also be in Probate. c.) a home where the owner has come upon hard financial times and has neglected the property for a while. This type of property may also be in foreclosure.

2. Where to find fixer-uppers? – Although you can find a fixer upper in most any community, the odds are most of the Fixer Uppers you’ll come across will be in older moderately priced neighborhoods in Mission Viejo. Fixer uppers can be found in the local newspapers such at the Orange County Register, and the Orange County Penny Saver. You can also find fixer uppers listed for sale by a Realtor and these can be found online in the Multiple Listing Service (MLS). Finally, you can drive by different residential streets on the way to work or shopping and keep an eye out for homes that have been terribly neglected and in bad condition, called the blemish on the block (B.O.B.) and write the owner a letter.

3. Are Fixer Uppers a good value ? – Sometimes… like any other investment you have to do your homework to calculate the potential net profit. To do this, you first need to figure out what the average house of that size in that neighborhood of Mission Viejo sells for in good condition. Then you need to estimate the cost of repairs. Be conservative here, for many new fixer upper buyers underestimate the cost of repairs. You also need to calculate the costs to purchase (ie: title insurance, escrow, loan costs etc), and if your are planning to sell immediately after repairs, you need to include the cost of sales and the interest payments. If your estimates yield a net profit of $15,000 or more, then go for it.

4. What type of home should I buy ? – A detached home is usually a little bit better option than a Condo, for you do not need the permission of the Association for repairs. A 3 bedroom 2 bath is better than a 2 bedroom, 1bath. Also, if you are relatively new to this, a so called ‘cosmetic’ fixer is preferable. A cosmetic fixer is a home that may need new carpet, paint, misc light or plumbing fixtures, some broke windows or doors etc. Unless you’re an experienced contractor it’s a good idea to stay away from properties that have major mold issues, large cracks in the foundation, hillside or soils movement, etc. The general idea is to find the worst cosmetic fixer in an otherwise nice neighborhood.

5.) How do I finance the Purchase ? – Today, there are many options that did not exist 10 year ago. You’ll need two sums of money. One sum of cash will be for the purchase costs which will be title, escrow and the down payment. This number can vary widely from $5,000 to $100,000 primarily dependent upon how much you want to put down. The second sum of cash needed will be for renovation costs, which can also vary widely from $5,000 to $50,000. Plus you’ll most likely need a new loan as a first trust deed to purchase. Many lenders today will allow the purchase of a cosmetic fixer with low down payment, but not always. Sometimes, the appraiser will require that a particular item be repaired prior to funding which could kill the deal… So it’s a good idea to interview several lenders and let them know what you are trying to accomplish before you purchase. There are also other sources of financing such as a low cost line of credit loan on your personal residence, the U.S. Department of Housing and Urban Development’s Section 203 (K) rehabilitation loan program which can advance you money for repairs. Another program is the Federal Housing Administration’s Title 1 FHA loan program where you can possibly  borrow based upon future value.

6. What kind of return is there on remodeling jobs? Paint and carpet are usually offer the best return on remodeling dollars. Remodeling Magazine produces an annual “Cost vs. Value Report” that can help to answer this question. Most recently, the highest remodeling paybacks have come from updating kitchens and baths, home-office additions and extra amenities in older homes. While home offices are a relatively new remodeling trend, for example, you could expect to recoup 58 percent of the cost of adding a home office, according to the survey. Bottom line, is if you buy in a middle income neighborhood of Mission Viejo, keep the repairs simple and don’t over do it.

7. Do building codes come into play? It depends on upon who you are and the amount and type of work. If you are simply painting, installing new carpet, and fixing some broker doors, windows and faucets, you usually do not need a permit in Mission Viejo. If you are doing more extensive work such as a room addition, kitchen or bath remodel, etc. than you probably do need a permit from the city of Mission Viejo. Building codes are established by local authorities to set out minimum public-safety standards for building design, construction, quality, use and occupancy, location and maintenance. There are specialized codes for plumbing, electrical and fire, which usually involve separate inspections and inspectors. All buildings must be issued a building permit and a certificate of occupancy before it can be used. During construction, housing inspectors must make checks at key points. Codes are usually enforced by denying permits, occupancy certificates and by imposing fines. Building codes also cover most remodeling projects. If you are buying a house that has been previously significantly remodeled, ask for proof of the permits involved before you purchase to avoid future liability for fines.

If you would like to search for fixer upper homes in Mission Viejo that are listed for sale, then please visit our website: Mission Viejo Real Estate

San Clemente Houses for Sale Shopping Tips

by Vincent Bindi on September 6, 2005

Finding a San Clemente house for sale for a great value can sometimes be a trying experience. First, you have to find out about all of the houses for sale in your price range in a timely manner – next, you need to preview the inside of these homes – the, after you’ve have selected a few candidates, you need to analyze to see what’s a fair price for each house – Finally, you formulate your offer to purchase…. and by the time that’s all completed, the really good homes with a great value, are usually sold… So what do you do? Follow our 5 step program to house buying success, as follows…

1.) First – Get with a mortgage lender and obtain pre-qualification letter. We usually recommend mortgage brokers over banks for often times a mortgage broker will have a wider selection of loan programs to choose from as compared to a bank. This step is very important for shopping for a house to buy is challenging enough, and not being confident with regard to your price range makes it even more difficult. The pre-qualification letter (pre-qual), can usually be done in an hour or two, and will tell you how much of house you can afford and what your monthly payments and closing costs will be… valuable information. Shop around for lenders before you give them permission to run your credit, for you don’t want to many inquiries on your credit report at this stage.

2.) I know you have probably heard it before, but is true – Find yourself a good tech savvy Buyers Agent. The services of a good Buyer”s Agent are essentially free to you for the Seller has already signed a contract to pay a commission to the agents who sell their home. So whether you deal with the listing agent, a brand new rookie agent, or a seasoned and professional Buyers Agent, there are no extra costs to you the Buyer! Dealing with the listing agent directly is not such a good idea, for the listing agents fiduciary responsibility and loyalty is first and foremost with the Seller. That leaves you at a negotiating and contractual disadvantage. Also, many listing agents specialize in working with sellers, and many of them don’t have the time, interest nor demeanor to work effectively and patiently with home buyers. Working with a newbie agent with less than 2 years experience f0r the purchase of a $800K house is not such a good idea when you can work with a seasoned professional for the same NO cost! How do you find such a seasoned professional tech savvy Buyers Agent ? – by searching on the Internet or referrals from friends and co-workers.

3.) Once you’ve selected and met with your Buyers Agent, have them set you up on an email alert home finding service that checks the Multiple Listing Service (MLS) every day. When a new listing comes on the market that meets you criteria, it will send you and your Agent an email notifying you of this brand new listing, and the email will contain many details about the house for sale.

4.) When you’re ready, set an appointment with your Buyer’s Agent and go look at all of the houses for sale that meet your needs, wants, price range, etc. In today’s market, that list of houses for sale won’t be to big for the inventory has been low in San Clemente for many months. So in one or two afternoons, you can see every house listed for sale. If you didn’t find a house you like, then start using the email alert service (above), and check your email on a daily basis to see if a new listing pops up that is worth seeing. When a new listing arrives, it’s usually a very good ides to hop in the car and have your buyers Agent show it to you as soon as possible. After a month or so, if you haven’t found a house that strikes you interest, it’s probably time to modify your search parameters… ie; maybe look for slightly smaller houses, look in a few more cities, bump up the price a little bit, etc. etc.

5.) Once you and your agent have found a house (or two) that meet your needs and wants, get together with your agent and formulate an offer to purchase. Here an experienced Buyers agent will be very valuable in getting you the best deal possible, and assuring you a smooth, and timely contract closing (Escrow) process.

If you would like to view online all San Clemente Houses listed for Sale, please visit our website: San Clemente MLS Homes for Sale   

Mission Viejo Condo sales statistics

by Vincent Bindi on September 4, 2005

Currently, there are 154 Condos for sale in Mission Viejo, including the area of Ladera Ranch. The average asking price for a Condo in Mission Viejo is $516,500 and the Median Price is $514,900. The lowest priced Condo unit is $289,900 and the highest price is $825,000. The average days that these Condos have been on the market for sale is 37 days.

There are 90 Condos sold in Escrow in Mission Viejo and the Median asking price is $499,900. The lowest priced Condo is $289,900 and the highest asking price sold in escrow is $699,900. The average Days on Market during the sales process was 42 days.

For Condos that have sold and closed escrow in the past 30 days, the Median price sold was $499,000 and the Average price sold and closed is $497,200. The average days on market before these Condos sold was 31 days. In the past 30 days, the lowest priced Condo sold in Mission Viejo was $269,900, for a 1 bedroom 1 bath 450 SqFt. and the highest price was $850,000 for a Lake Front 2 bedroom 2 bath 1,448 SqFt Condo.

The final statistic that we employ is the Months of Inventory. The lower the months of inventory, the stronger the real estate market (a sellers market). Currently, the months of inventory for Condos in Mission Viejo is 2.5 months, which is a Sellers market.

If you would like to see all Condos listed for sale in the Mission Viejo MLS, just visit our website: Mission Viejo Condos for Sale

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