When buying a home, it’s important to have a budget and make sure you plan for certain homebuying expenses. Saving for a down payment is the main cost that comes to mind for many, but budgeting for the closing costs required to get a mortgage is just as important.

What Are Closing Costs?

According to Trulia:

“When you close on a home, several fees are due. They typically range from 2% to 5% of the total cost of the home, and can include title insurance, origination fees, underwriting fees, document preparation fees, and more.”

For example, for someone buying a $300,000 home, they could potentially have between $6,000 and $15,000 in closing fees. If you’re in the market for a home above this price range, your closing costs could be greater. As mentioned above, closing costs are typically between 2% and 5% of your purchase price. 

Trulia gives more great advice, explaining:

“There will be lots of paperwork in front of you on closing day, and not enough time to read them all. Work closely with your real estate agent, lender, and attorney, if you have one, to get all the documents you need ahead of time.

The most important thing to read is the closing disclosure, which shows your loan terms, final closing costs, and any outstanding fees. You’ll get this form about three days before closing since, once you (the borrower) sign it, there’s a three-day waiting period before you can sign the mortgage loan docs. If you have any questions about the numbers or what any of the mortgage terms mean, this is the time to ask—your real estate agent is a great resource for getting you all the answers you need.”

As home prices are rising and more buyers are finding themselves competing in bidding wars, it’s more important than ever to make sure your plan includes budgeting for closing costs. Let’s connect to be sure you have everything you need to land your dream home.

It's no surprise that 2021 is the year of the seller when it comes to the housing market.

Here’s a look at what’s driving this sellers’ advantage and why there’s so much opportunity for homeowners who are ready to move this season.

>>Historically Low Inventory
Even with a slight rise in the number of houses for sale this spring, inventory remains near an all-time low. High buyer interest is creating an imbalance between supply and demand, but as the small uptick in inventory shows, sellers are beginning to reenter the market. Selling your house now enables you to maximize on buyer demand and get the most attention for your house – before more listings come to the market later this year.

>>Frequent Bidding Wars
As a result of the supply and demand imbalance, homebuyers are entering bidding wars at an accelerating rate. NAR reports the average number of bids received on the most recently closed sales is 4.8 offers. As buyers face tough competition while searching for homes to purchase, they’re more likely to be flexible in their negotiations. This gives a seller the opportunity to choose the best buyer for their needs and be selective. Working with your trusted agent is the best way to determine how to navigate the negotiation process when selling your house.

>>Days on the Market
In today’s market, sellers aren’t waiting very long to find a buyer for their house, either. NAR reports, “Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. 83% of the homes sold in March 2021 were on the market for less than a month.”

Click here to contact Team Gaeta Today.

Right now, the housing market is full of outstanding opportunities for both buyers and sellers. Whether you’re thinking of buying your first home, moving up to a bigger one, or selling so you can downsize this spring, there are perks today that are powering big moves for people across the country.⁠

⁠The Biggest Perk for Buyers: Low Mortgage Rates⁠

⁠Today’s most compelling buyer incentive is low mortgage interest rates. The 30-year fixed rate is now averaging just over 3%. While that’s slightly higher than the record-lows from 2020 and earlier this year, it’s still way lower than historic norms, making purchasing a home an ongoing perk for hopeful buyers. Low mortgage rates are a plus for buyers right now, but experts forecast we’ll see them continue to rise as the year goes on. If you’re ready to purchase a home, it’s wise to get started on the process soon so you can secure today’s comparatively low rate.⁠

⁠The Biggest Perk for Sellers: Low Inventory⁠

⁠Today, there are simply not enough houses on the market for the number of buyers looking to purchase them, and it’s creating a serious sellers’ market. Buyers are eager to purchase, and because of the shortage of inventory available, they’re often entering bidding wars. This is one of the factors keeping home prices strong and giving sellers leverage in the negotiation process.⁠

⁠Homeowners who are in a position to sell shouldn’t wait to make their move. There’s a light at the end of the tunnel for today’s inventory shortage, so listing this spring will get your house on the market when conditions are most favorable.⁠

⁠

When you’re buying a home, there’s something called a contingency to be aware of. A contingency clause means that certain requirements must be met for the contract to be binding. If the terms of the contingency aren’t met, then the contract might end.

Sometimes these are described as if-then scenarios. For example, if you sell your home, then you’ll buy someone else’s.

When you find a home you want to buy, it usually starts with a purchase offer that you make to the seller. When the seller eventually accepts your offer, the contingencies may be attached to that offer. Contingencies are included in your real estate contract. 

The following are some of the most common contingencies.

Selling Your Current Home

One common contingency is that your offer might be based on whether or not you successfully sell your current home.

This is called a chain of sale clause.

These clauses are usually based on a certain time frame, which might be 30 or 60 days. Then, after that time, if your home doesn’t sell, your contract ends.

If you’re buying a home in a down market, then this might be more feasible. If you’re trying to buy a house in a hot or competitive market, this is going to make it hard for you compared to other buyers.

Appraisals

An appraisal contingency is a protection for you as a buyer. It’s meant as a way to make sure the property is valued at a specific, minimum amount. If the property you want to buy doesn’t appraise for at least what’s specified, you can terminate the contract. In many cases, you can also get your earnest money back.

Inspections

It’s always recommended that you have a professional inspector check out a property before you buy it. The appraisal is different from this. An appraisal is a value that’s for the lender and is required for underwriting. An appraisal doesn’t look at the physical condition of a home as much as factors that play a specific role in its value.

An inspector is going to go over things like mechanical systems and structural elements of a home and identify anything that needs to be replaced or perhaps repaired.

You might use these as part of your negotiations.

Contracts might stipulate that the repairs be made by the seller if they’re found, or again, you could renegotiate based on what an inspector finds.

If you’re looking for a home in a hot market, you might agree not to have an inspection at all.

Financing

With a financing contingency, also sometimes called a mortgage contingency, you have the time to obtain the financing you’ll need to purchase a home. If you can’t get financing, then this leaves you the ability to get out of your contract and still get your earnest money.

With a financial contingency, usually, the contract will outline a certain number of days that you as a buyer have to get financing. Then, you have up to that date to terminate or extend your contract.

Otherwise, the contingency is considered automatically waived, and you have to buy the property even without a loan.

What’s important to realize is that yes, if you’re buying a home, contingencies can be an important way to protect yourself. At the same time, you need to be smart in how you use them because too many contingencies can cause your offer to be rejected. If you’re buying in a competitive market, sellers aren’t going to want to deal with a laundry list of contingencies. Even if you can’t raise your offer in a multiple offer situation, what you can do is eliminate contingencies to make yourself a more attractive buyer.

Contact Team Gaeta today with any questions you have!

The housing market keeps moving along. The only thing that could take it off course is the lack of inventory for sale. The National Association of Realtors (NAR) reports that there were 410,000 fewer single-family homes for sale this March than in March of 2020. The key to continued success in the residential housing market is for more listings to come on the market. However, many homeowners are concerned that selling their homes could be challenging for several reasons.

Recently, Homes.com released the findings of a survey that identified these concerns, as well as what it will take for homeowners to feel comfortable selling their houses. Here are the four major homeowner concerns and a quick explanation of what’s happening in the housing market today.

1. Homeowners don’t know if they’ll be able to secure their next home before selling.

In negotiations, leverage is the power that one side may have to influence the other side while moving closer to their negotiating position. A party’s leverage is based on the ability to award benefits or eliminate costs on the other side.

In today’s market, buyers have compelling reasons to purchase a home now:

• To own a home of their own
• To buy before prices continue to appreciate
• To secure a mortgage at a historically low rate, while they last

These buyer needs give the seller tremendous leverage. Most already realize this leverage enables the homeowner to sell at a good price. However, this leverage may also be used to negotiate time to find their next home. The homeowner could sell their home to the buyer at today’s price, which will enable the purchaser to take advantage of current mortgage rates. In return, the buyer might lease the house back to the seller for a pre-determined length of time while the seller finds a new home or has one built.

This gives the buyer what they want while also giving the seller what they need. It’s a true win-win negotiation.

2. Homeowners don’t know if their current home will sell for the asking price or top market price.

This is the perfect time to maximize profits while selling a house. NAR just released a study showing that bidding wars are at an all-time high. The study reveals that when comparing the first quarter of last year to the first quarter of this year, the number of offers on homes for sale doubled from an average of 2.4 to 4.8 offers.

Whenever there’s a bidding war, the price of the item for sale escalates. Bloomberg recently reported:

“For the first time ever, the average U.S. home is selling for above its list price.”

If a seller is looking for a top-dollar sale, there is no better time to sell than right now.

3. Homeowners don’t know if they will get an offer without their home requiring work or updates.

Again, leverage is the greatest strength a seller has in this market. Due to the lack of homes for sale, many buyers are more willing to take on home improvement projects themselves in order to get the home they’re after.

A recent post on whether or not to renovate before selling notes:

“It may be wise to let future homeowners remodel the bathroom or the kitchen to make design decisions that are best for their specific taste and lifestyle. As a seller, your dollars and time might be better spent working on small cosmetic updates, like refreshing some paint and power washing the exterior. Instead of over-investing in your home with upgrades that the buyers may change anyway, work with a real estate professional to determine the key projects that will maximize your listing, without overdoing it.”

If a seller is worried about doing work or updates on their home, they must realize that today’s historically low inventory likely renders these projects less critical to the sale of the house.

4. Homeowners don’t know if they can have a quick closing process.

When speed is important, there are two points sellers should look at:

• The time it takes to find a buyer for the home
• The time it takes to close the transaction

In the latest Existing Home Sales Report, NAR explains:

“Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. Eighty-three percent of the homes sold in March 2021 were on the market for less than a month.”

Eighteen days is fast, and it’s a new record. Here are the days the average house is on the market in each state: Regarding the time it will take to close the transaction, all-cash sales accounted for 23% of all home purchase transactions in March. All-cash sales can usually be closed in thirty days.

If a mortgage is necessary, the most recent Origination Insight Report from Ellie Mae shows:

“Time to close all loans decreased in March. The average time to close a purchase fell to 51 days, down from 53 the month prior.”

If you’re looking for a quick closing process, there’s never been a market in which the two-step process (finding a buyer and closing the deal) has taken less time.

 Selling your house can be daunting, especially in a fast-paced market. However, the fact that we’re in such a strong sellers’ market clearly eliminates many common concerns. Connect today with Team Gaeta so you can learn more about the opportunities for homeowners who are ready to sell.

At some point as a homeowner, you will be asking yourself if you should invest in a remodel or just move on to a new one. Families expand, lifestyles change, and weighing the options can be complicated. In some cases, the decision may be made for you. Anyone planning to buy a home in 2021 should be prepared for stiff competition.

Tight supply conditions and strong demand have made the housing market highly competitive and fast-paced. Quick sales and multiple offers are the norm for many, if not most, U.S. cities.

Your decision will ultimately depend on the housing market along with the budget, location, and needs. These important factors play a crucial role in your decision to start over in a new place or transform your existing home. It’s a good idea to write a list of the pros and cons to weigh your options better.

Here are a few ideas to ponder as you do:

Budget – What is your budget for renovations, and will it add comparable value to your home? If the renovations are close to or more than the purchase of a new home, you may consider the alternative option.

Location - Your local real estate market, and even your specific neighborhood, can make a difference when it comes to deciding whether to sell or renovate. If you live in a hot real estate market, it may make more sense to sell. Here are a few ways to gauge the state of your market:

• Research the area: Recent comps should help shed light on what you can expect to sell your house for.
• Assess your home’s marketability or appeal to buyers: Does your home need a lot of work before listing? A home in good condition usually sells faster than a fixer-upper, even in a seller's market.
• Speak with an agent: An experienced local agent can give you an expert opinion on what your home would sell for.
• Consider the neighborhood you’re moving into: If your home has gained lots of value but you want to move to a new house in the same neighborhood, keep in mind that those homes have gone up in value, too, so your equity might not go as far as you think.

Needs vs Wants - Include a list of your absolute must-have needs in your home along with your wants. How does this list measure up to the other pros and cons you put together?

Current Market - As we stated earlier, the market is strong right now so, this decision could be made solely on the potential financial profit. However, when the market becomes flat or somewhat stagnant, you may look more at improving your home to increase its value for a future sale.

Deciding whether you should renovate your current home or buy a new one isn’t easy. If you would like to discuss your future real estate plans more, let’s connect! Team Gaeta is always available to lend our professional experience to help you and your family!

So you’re ready to sell your house and you’re wondering, Should I do For Sale by Owner? After all, maybe you’re already a pro at selling used stuff like furniture, treadmills, and your grandmother’s antique vase.

But is selling something as expensive as a house as easy as planting a sign in your yard and waiting for buyers to stroll in?

In a sellers’ market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with a trusted real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today’s market as an opportunity to FSBO. Let’s unpack why that’s a big mistake and may actually cost you more in the long run.

According to the Profile of Home Buyers and Sellers published by the National Association of Realtors (NAR), 41% of homeowners who tried to sell their house as an FSBO did so to avoid paying a commission or fee. In reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when you sell with the help of an agent.

The NAR report explains:

“FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 in 2020 (up from $200,000 in 2019), and still far lower than the median selling price of all homes at $242,300. Agent-assisted homes sold for a median of $295,000…Sellers who began as an FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.”

That’s a lot of money to risk losing when you FSBO – far more than what you’d save on commission or other fees. Despite the advantages sellers have in today’s market, it’s still crucial to have the support of an expert to guide you through the process. Real estate professionals are trained negotiators with a ton of housing market insights that average homeowners may never have. An agent’s expertise can alleviate much of the stress of selling your house and help you close the best possible deal when you do.

Bottom Line

All in all, your home-selling experience is going to be way smoother and you’ll walk away with more money if you use a real estate agent instead of going the FSBO route.

If you want to make more money and save yourself a load of hassle, sell your house with a real estate agent. Click here to get in touch with Team Gaeta and let us know your real estate needs.

“Buyers decide in the first eight seconds of seeing a home if they're interested in buying it. Get out of your car, walk in their shoes and see what they see within the first eight seconds” -Barbara Corcoran

If you research how to sell a home, you will certainly be told to focus on curb appeal.

A new study looking at the impact of curb appeal found that the attractiveness

of a home can boost its value by 7% or more. A potential sale is toast if a

buyer won’t even get out of his agent’s car because the exterior of your home

turns him off. So open your front door and step outside. Look at your home.

Does it make you want to enter? Does the house welcome you?

If not, start with the front door. Make it urge people to

turn the handle and come inside. Paint it and consider adding a seasonal wreath

or other minor decoration. Repair door handles or replace if necessary.

Clean the glass in the front door and the windows. Remove any

personalization from the door like ‘Welcome to the Smiths’.

Clear the sidewalks and mow the lawn, trim shrubs and low hanging

tree branches. Paint faded window trim and plant some colorful flowers if the

season allows. Make sure visitors can clearly read your house number.

Make it "appealing"!

If you have any questions on curb appeal or any other real estate-related questions, click here to reach out to Team Gaeta, we are here for you!

As a long-time Diamond Bar resident and trusted real estate source, my team and I are thrilled to share some local insights on interior design influencers; KNA Design Firm.

The Los Angeles-based KNA Design firm has 35 years of experience, unmatched resources, and handpicked staff of talented designers. They subscribe to no prevailing style.

“We honestly believe in developing concepts that are unique to their program, owner, inhabitants, and context”. KNA Design’s strength, creativity, innovation, and industry leadership have been their guiding principles. They look to design interior experiences of great distinction that are skillfully executed to ensure consumer expectations are met, exceeded, and ideally redefined.

Complementing KNA’s award-winning design talent is sound technical expertise, as well as a practical approach to project management. During each phase of the project, from initial concept, through design development, to final installation, KNA seeks to distinguish its work through rigorous attention to detail, high standards, and meticulous follow-through. Supported by exceptional project management teams, KNA ensures that each project is completed on time and within budget. After a successful closing, many of our customers ask about local vendor referrals.

No matter the request, Team Gaeta is here for you every step of the way, even after closing. Click here to contact one of our seasoned real estate advisors today. 

Are Appraisals Needed On All Real Estate Transactions? 

It's not uncommon in today's market for banks/lenders waive the appraisal on a real estate purchase/sale transaction. There are some variables in place when this happens as not all transactions are created equal. 

Let's play out a scenario when a lender will waive the appraisal on a transaction. If, you're purchasing a home and you are putting a down payment of 20% or larger, the lender will do an internal analysis of the property to make sure the make sure the property value of the home is at or above your agreed purchase price. If they feel it is, there is a good chance they are going to waive the appraisal completely. 

If you re purchasing a home with FHA financing or anything less that the 20% down, there is a good chance the appraisal will not be waive. There are some exceptions to this rule with some conventional programs. 

There are some exceptions to these rules, both Fannie Mae and Freddie Mac which secure financing on conventional loan programs offer special financing occasionally where appraisal is waived on certain products.

To find out if your new purchase is going to offer a waiver of appraisal, we suggest you ask your loan provider up front and see if you qualify. 

We hope you found this information helpful.