Another closing at Tampico!

I recently closed a townhome on Tampico, and I’m so happy to have helped Tyler and Yana. They relocated about a year ago and decided to rent in San Francisco for a year and get a feel for the area. Tyler works down in Pleasanton and their San Francisco rent recently went up. They were very motivated to move back into home ownership.

We met one day over coffee and talked about the market, what they were looking for, timing, and the area they were most interested in. They loved Walnut Creek with Broadway Plaza, all the restaurants and overall vib. Since I had a previous appointment, we looked over some open houses in Walnut Creek and they decided to go look at a few. He called me later that day and said they really like a home on Tampico and wanted more information.

This home had been bought in July by an investor who flipped it. Timing is everything and the seller had the unfortunate experience of a soft second half of 2018. There had been a handful of price reductions until January where it was listed at $699,000, down from $775,000 – an opportunity for a buyer! It took a few days to get the financing and all the details, so about three days later we submitted an offer less than asking. In the beginning of January, the market again began to shift, this time upwards, and another offer was submitted and countered to $715,000. Their offer was accepted and then we started the inspections. They ended up with a $5,000 credit and some things that HOA needs to fix. Overall, it was a very smooth process and they are excited to be living in Walnut Creek with a yard for their dog and a nicely updated home! Congratulations!!!!

5 reasons why this winter is the best time to buy

Jay Vorhees at JVM Lending put together an interesting blog post recently, and I want to share that with you below. Essentially, he finds five reasons why this current winter season is the best time to take advantage of the real estate market and buy a house! Enjoy:

Most of our agent-readers well know why winter can be a great time to buy from a real estate perspective. I am nonetheless repeating a few of the obvious reasons while also illuminating a few less-obvious mortgage-related reasons.

1. Rates Hit Six Week Low! While rates have been climbing for most of the year, they hit a six week low last week in response to the oil glut and signs of a softer economy. Given that the Fed will likely continue to push rates up next year, this brief rate-reduction gives buyers a short-term opportunity to lock in a relatively low rate.

2. Lender Incentives. Many lenders are offering extra incentives to borrowers right now simply to maximize loan volume during a slower time of the year. This includes JVM of course, as we are offering a $500 closing cost credit to any buyer who gets into contract from now until January 31st. This does not apply to borrowers who are already in contract and locked.

3. Motivated Sellers. If someone is willing to go to the trouble to sell their home during the holidays/winter, they are usually more motivated to sell and willing to negotiate.

4. Fewer Buyers/Less Competition. There are fewer buyers and a lot less competition for homes. Many buyers pull out of the market in the winter b/c they don’t want to take the time to house-hunt during the holiday season or they don’t want to buy in the middle of the school year (if they have kids).

5. Seeing Properties at Their Worst. My neighbor has drop-dead gorgeous crape myrtle and Japanese maple trees all over his yard. In the spring and summer, his yard is an oasis of color. In the winter, however, his yard looks like a war zone. Buyers get to see homes at their worst in the winter, avoiding unpleasant surprises and knowing that their dream home will only look that much better, come spring.

The internet conveniently has numerous articles backing up my points above, in case any readers don’t want to take my word for it. Here are two: The Best Time of the Year to Buy Property from Financial Samurai; and Mortgage Rates Pull Back from Freddie Mac’s website.

Are millennials looking for homes or glorified dog houses?

Everyone loves dogs! I love my dog! You love your dogs, too! It seems that millennials especially like their dogs, as a recent Time article explained that “space for a dog” is the third-most common reason cited by millennials for buying a home in today’s market.

What really struck me about the article is this: “space for a dog” is listed ahead of “children” or “marriage” as reasons for purchasing a home. It came in only behind “more living space” and “building equity.”

Now, isn’t that interesting? We know millennials are getting married later and having fewer children than previous generations, and the housing market has become so expensive across the county that it prices out people who have spent money on marriages and providing for children, but it’s still surprising to see it behind a reason like “space for a dog.”

The rental market prices have also skyrocketed, which makes me think that millennials would rather pay a mortgage in some cases and have their own home with ample room for their four-legged friends, than pay a monthly rent in properties with strict pet policies.

I guess you can always buy a home first, let your dog break it in, and then bring in a partner and children! Whatever works! It’s just funny to see the difference between their generation and mine, and why they pursue home-buying.

Tax returns and your loan approval!

Our friend Jay Vorhees at JVM Lending came up with another relatable blog recently: Tax Transcripts and 4506-T forms. It generally explains how those forms work, and reminded me of an experience of my own. First, a summary of Jay’s blog:

Every time a lender gets a loan from a borrower, they also have to get the last two years of tax returns. This is why borrowers sign IRS Form 4506-T as part of their disclosures. It formally authorizes lenders to request tax transcripts, which then show the filer’s status and income information.

Lenders are required to request transcripts from the IRS before a borrower can (borrowers can only request them directly if the IRS reject’s a lender’s request). If there is a minor error between the 4506-T and the tax return, this rejection may occur, so it happens pretty often.

That covers the basics of how the 4506-T form works and the role it plays in a real estate transaction. It’s a more subtle part of the process, but can cause huge headaches when done incorrectly. Take, for example, my experience with a property at Madeira in Pleasant Hill last year.

I represented the seller, and the buyer had their lender in Oakland, with a Bank out of L.A. Unbeknownst to us, the bank was being bought out and the new bank was called Bank of Hope – yes, really. But it turned out to be the Bank of Hopelessness.

Processes changed, the lender in Oakland was let go and nobody knew what they were doing. Communication was terrible. One of the balls that got dropped was getting the tax returns. We closed almost two weeks late and the only way this ended up closing at all is by the processor who I had been speaking with regarding other issues. They actually went down to the IRS office and got the tax returns. She went beyond what is required (and probably got tired of our phone calls), but my seller is an attorney and also made multiple phone calls as they had already purchased a new home that was about to close.

This is one of the best reasons to get fully underwritten before you start to write offers. If all the documentation is in upfront, there won’t be any surprises or delays once you get into contract. Selecting the right lender can be the difference between smooth sailing and dark nightmares.

Congratulations to Mckenzie!

I recently closed a home for my client, Mckenzie. She currently lives in the city and will be moving to Clayton. Thus, we met at the Legion of Honor to see the Monet exhibit, celebrate her closing and give her the house key, as seen below.

The tenant doesn’t leave for another six weeks so this was a great way to celebrate and she was very happy to have closed! The process became a bit stressful as the family wanted to use their local bank in the valley, and the parents were co-signing. However, this bank was primarily an AG bank and did not close on very many condos.

Buyers rarely understand at the onset what a difference a great lender can make and the lasting experience everyone involved will have. If it is a great experience, the impression is minimal, but when it is not so great, it can become one of your worst nightmares. This ultimately ended well because of the family’s relationship with the local bank, yet, we still needed an eight-day loan contingency extension (but only closed four days late).

If you want to be the next client who buys or sells a property with me, I will help you navigate the process to a successful close! Just reach out at www.kristinlanham.com or call me direct at (925) 899-7123.

The VA loan is the best loan going!

With Memorial Day around the corner and a time to honor and remember all the brave heroes who served to hold our flag high, I thought it would be a great time to mention the benefits of a VA loan and what is currently happening in that arena.

There’s a bill in Congress that eliminates loan limits for the VA. The current VA limit for Contra Costa is $636,150, so eliminating the limit will help our vets who qualify for more to still be able to purchase with their VA benefits. I specialize in working with VA buyers and sellers, and have a strong passion for it given my family’s history in service.

There is also a rebate available of up to $2,500 in Contra Costa County for qualified buyers with approved lenders. I can connect you with a qualified lender. The VA loan is the best loan around – low rates, nothing down, 25% of the loan is backed by the federal government, lowest loan foreclosure rate, plus many additional changes over the years to help make a VA offer be accepted such as the seller no longer has to pay for the pest inspection.

Did you also know, you are eligible for a VA loan after 90 days active duty in wartime (we are still considered in wartime which started with the Gulf War)? You are eligible after two years of service if no longer on active duty and six years of service in the National Guard or Reserves.

If you’re a veteran looking to buy or sell in the Bay Area or know somebody who is, please give me a call so we can get the ball rolling on helping you land a rebate and get your VA loan accepted!

10 ways to improve your credit score

Last Tuesday, we wrote about how important it is to have high credit scores to purchase a home. Today, we’ll outline a summary of the main points from this list of 10 ways to improve your credit score from Inman.com.

If your score is lower than you’d like, these are good suggestions for how to help hike it back up, especially if you’re thinking about buying a new home:

1. Always pay on time

No lender likes to lend money to an individual who has a repeated record of missing his or her payments. Not to mention it will end up with a lower FICO score.

2. Keep your credit owed within limits

A good ratio is not having your unsecured credit outstanding above 50 percent of your annual salary. If you have $10,000 as your limit, then it is wise to restrict your statement amount to $5,000.

3. Always pay your bills on time, in full

This is one of the most important tips to improve credit score: On-time payments improve your credit score tremendously.

4. Use two credit cards if you are a definite credit card spender

This is good and bad advice at the same time. FICO does not consider spending money on two credit cards as one. But if you have two credit cards, you can keep your usage percentage in control.

5. Maintain a good mix of good and bad loans — AKA, a healthy credit mix

Home loans and business loans are considered good loans. Personal loans and credit are considered bad loans.

6. Pay high-interest loans and small loans first

It is a prudent decision to pay your home loans over longer periods. Pay off your personal loans, credit cards and private loans first, as they tend to have a higher interest. Home loans, on the other hand, are just 9 percent to 11 percent, but they build an asset.

7. Close your unwanted savings accounts

Many people tend to abandon their savings accounts without closing them. If you have less than your Minimum Average Balance (MAB), it will start to affect your credit score. Also, when you finish a loan, it’s imperative to get the loan closure certificate.

8. Check your credit reports regularly

Credit reports can be availed for a minimal cost. You can obtain them from the official FICO site. Just pay online and check your credit score at least once in a year, so that you can seek clarification on any mistake and have it sorted.

9. Monitor your co-signed joint accounts properly

In instances of co-signing a loan or maintaining a joint credit account, be careful when dealing with someone outside your close family.

10. Negotiate if you cannot pay on time

People often know that they would not be able to pay their bills in advance. If you know you will not be able to pay on time, negotiate with your bank. Banks will be willing to extend your loan period and reduce the EMI if they see a genuine customer.

How to Ensure a Smooth Home Purchase

If you’re planning on purchasing a home this year, you’ll will want a transaction as smooth as possible. That’s what us agents are for! We want to help you find the perfect home and then ensure the process becomes as pain-free as possible. You don’t realize how important this is until you have the transaction from Hell!

Taken from a Better Homes and Garden’s article and repurposed with some of my insights, here are five tips for a smooth home purchase:

Tip 1: Communicate with Your Agent

You spend a lot of time with your agent in a finite window, so, you should work with a real estate agent you are comfortable with. They should be straight up and express everything you want and need in your new home. By communicating your desires from the beginning, your agent won’t waste time showing you homes that don’t fit your criteria. If you know you want an updated kitchen or two baths, make that clear. It is also a process; sometimes what you want and what your budget can afford creates a discovery process, but when it comes to finding that perfect home, clear communication is key. And if you run into any problems along the way, be sure to speak with your agent to iron out any issues.

Tip 2: Be Reasonable with Expectations

If you’re searching for a three-bedroom home located in a certain neighborhood that has the right schools, and your agent shows you a property with a color you don’t like that only has 1.5 baths, don’t simply write off the home. When searching for the home of your dreams, you may have to give something up or make some changes once you move in. No home will be perfect and, again, it is a process to find that out.

Tip 3: Don’t be Discouraged

Don’t expect to find your dream home overnight. Buyers often get frustrated because nothing pops up in their price range for two weeks or they have written five offers and none of them were accepted, but remember, it is a process. And, this is the Bay Area! Buyers usually course correct, change their expectations, get a quick education on the market and – voila! – the universe unfolds, the right house pops up and your offer is accepted! Woo-hoo! Now the rubber hits the road and you are in contract!

Tip 4: Play the Money Game

If you offer $375,000 on a home that’s listed at $400,000 and the seller refuses to budge, be prepared to negotiate. Wait!!! This is the Bay Area! When you offer $650,000 on a home listed for $620,000 and you are one of nine offers, you need to have some wiggle room for a counter offer. Before making an offer, discuss your strategy with your agent as he or she will be able to tell you whether your offer is fair or not. It’s also important to check out comps in the neighborhood so that you can make a reasonable offer from the get-go. Don’t forget how important a good lender is and the reputation they have with other agents. This may make the difference in your offer getting accepted over the other eight.

Tip 5: Get Your Mortgage Pre-Approved

This could be the smartest thing you do all year. By having a mortgage approved before you even begin looking at houses, you’ll be ready to make an offer as soon as you find the home of your dreams. Not all lenders are equal, and a good lender may give you the upper hand over other buyers who may be interested in the same house. Can they closer faster than 30 days? Do they get all the paperwork upfront and desktop underwrite you so there are no surprises? Are they responsive to your calls?

If you have any interest in purchasing a home this summer, and are looking for an agent who can guide you through the process smoothly, I am at your service and I have a great lender or two to refer!

Celebration of Closing on a Home!!!

One of the greatest joys of my job is presenting my clients with the key to their new home or telling a seller their home is SOLD. Below are some pictures of celebrating with my happy clients as they receive those keys, sign their loan documents and enjoy their congratulatory “let’s celebrate” baskets after closing!