Comb Over Anyone?
August 29th, 2007 Categories: In The News Calabasas
My Grandfather had a comb over long before The Donald made it famous. He was a Serbian immigrant and actually was quite handsome for an old guy; well that’s what all the old ladies in his town thought anyway. I’ll never forget the first time I saw his comb over blowing in the wind…it was long (past his shoulders). My sister and I could not contain ourselves and we started giggling uncontrollably. My Grandfather, being the suave ladies man, calmly folded the hair fringe over his bald spot without missing a beat in the conversation and winked at us coyly.
It was much easier for my Grandfather to cover up that shiny bald head of his than for us to cover up what’s happening with mortgages right now. In Calabasas, CA where the average home sold for $1,260,000 last month we have a different sort of problem than the media is whining about right now. First some background. I did a little research to see exactly how much of this foreclosure hype is actually affecting our city. I pulled all of the Notice of Defaults filed in Calabasas. As of August 12, there were only ten. A notice of default is usually filed when a homeowner has missed more than two mortgage payments. Most of the time, the mortgage is brought current or the home is sold and the house never goes in to foreclosure. There are only three homes in actual foreclosure in Calabasas as I write this article, two of them are condos and one is a $3,750,000 home.
The foreclosure problems that are plaguing the rest of the country and CA don’t see to be affecting us right now. But we’re not exempt, Calabasas has its own problems when it comes to the mortgage situation. Since our average home price is so high, buyers generally end up applying for stated or no doc loans. Consider that it takes $300,000 of income with 20% down to qualify for a $1,500,000 purchase price. That means you need to have 20% or $450,000 down plus closing costs (approximately 3%). Believe it or not, most people don’t have a problem with the down payment because most buyers in this price range are move up. This means they’re selling a house to buy a larger house and they have the equity from their old home. The real problem is qualifying for the mortgage now that the mortgage qualification parameters have changed. Just a few months ago a buyer with good credit and 20% down would get approved for a mortgage with no tax returns or pay stubs with no problem. My experience has been that people in this income bracket may not always be able to document their income or may not want to provide tax returns especially when they’re self employed.
The mortgage credit crunch poses new problems for both sellers and buyers in Calabasas because of these stricter underwriting guidelines. The interest rates are still at a historical low but available mortgage products are now the issue. Here are some tips regarding mortgages to consider if you are contemplating buying or selling a house in Calabasas now.
If you are selling your home.
1. Work with your Realtor to determine who your target buyer is and what sort of income they will need to purchase your home.
2. Offer incentives targeted directly to this type of buyer that would make qualifying for a mortgage easier.
3. Make sure that your Realtor has a good relationship with a lender that can assist in making your home affordable using today’s mortgage products.
4. Its important to remember that buyers buy a monthly mortgage payment. It’s vital that you know what this payment is when your home marketing plan is developed.
If you are buying a home.
1. Make sure that you meet with a reputable lender before you start looking for a home. It’s important that you have your credit report and all necessary documentation checked before shopping so you know exactly which mortgage product will fit.
2. Please don’t choose your lender randomly. Now more than ever, it’s imperative that you work with a lender that has a track record and is reputable. You Realtor should be able to provide you with personal references of several lenders that they have worked with in the past.
3. Make sure that you hire a Realtor that is very experienced in a buyer’s market. There are several things that can be written in to a purchase agreement that will protect your down payment should mortgage issues arise during the transaction. Stay tuned for my upcoming podcast about the CA purchase agreement and how to use it to your advantage in a buyers market.
I work primarily with home buyers and sellers in Calabasas CA and understand the unique challenges that our micro climate has. I see the two major problems with marketing a home in Calabasas right now, as the media hype and the loss of some no documentation mortgage products.
There is always more than one way to skin a cat. With over 20 years of experience in the real estate industry I look forward to helping you solve your real estate challenges. Please call or email me to discuss your specific needs.
This entry was posted on Wednesday, August 29th, 2007 at 8:31 pm and is filed under In The News Calabasas. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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