List Price-to-Sales-Price-Ratios

Ask your agent for a trend report covering the last three months. Analyze the prices of the homes as they were listed and compare them to the prices that have sold. Ask questions such as; Are homes selling over list price or under? If there’s any under the list price, by which percentage?
If a majority of the homes are selling at 2% under list price, for example, that percentage could indicate the price the seller will or should accept.

Median Home Prices

The median home price in Southern California is increasing, according to recent statistics. In February, 2010 the median price of $275,000 in the six-county Southland region was up from $250,000 a year ago.
Prices in San Bernardino County remained depressed compared with February 2009, although they remained the same when compared with January. The county's median price was $150,000 for the month, 2percent lower than the previous February.

All other Southern California counties showed gains. Riverside County was up 3.7percent over February 2009. Expect this to be a trend accelerate as affordability excels and interest rates remain at record lows.

FHA 90 Day Rule

If you are planning a Fix-n-Flip, you will certainly want to remember the 1-2-3 Rule.

(1) The eligibility of a property for a mortgage insured by FHA is dependent on the time that has elapsed between the date the seller acquired the property (based upon the date of settlement) and the date of execution of the sales contract that will result in the FHA mortgage insurance (the re-sale date). The mortgagee shall obtain documentation verifying compliance with the time restrictions described in this paragraph and must submit this documentation to HUD as part of the application for mortgage insurance, in accordance with §203.255(b).
(2) Re-selling occurring 90 days or less following acquisition. If the re-sale date is 90 days or less following the date of acquisition by the seller, the property is not eligible for a mortgage to be insured by FHA.
(3) Re-sales occurring between 91 days and 180 days following acquisition. (i) If the re-sale date is between 91 days and 180 days following acquisition by the seller, the property is generally eligible for a mortgage insured by FHA.

Multiple Offers

How you write a winning offer depends on your marketplace and whether it is a seller's or buyer's market. Objective Real Estate agents expertise and understanding of today’s market will help you write a competitive offer.

Before Making a Home Offer

It is helpful to find out why the seller is selling. This will help in making the decision on which price is best to offer.

How Much the Seller Paid

In many cases the price the seller originally paid for the home has little significance on today's market; however, if the seller purchased during the “depressed market”, with little appreciation since, the asking price should be closer to the seller's purchase price.

Determine the Seller's Mortgage Balance

If the seller is in default and willing to participate in a short sale, the seller is unlikely to accept an offer for less than the mortgage, plus closing costs.
If the seller has an excessively high mortgage balance, and the property is vacant, you can assume the seller is making those mortgage payments out-of-pocket, probably paying on two homes. This can be advantageous to the buyer, since the seller will be motivated to sell quickly.
If the mortgage balance is very low, the seller may not be motivated to immediately sell, and can afford to wait out the market to get list price.

Examine Comparable Sales

When analyzing comparable sales, only compare the properties that are similar in configuration, age and location for the homes you are interested in purchasing. Use the data from the most recently sold sales, and don't look beyond six months because appraisers won't.

Analyze List Price-to-Sales-Price-Ratios

Ask your agent for a trend report covering the last six months. Look up the prices of the homes as they were listed and compare them to the prices that have sold. Ask how much is the gap? Are homes selling over list price or under? If under the list price, by which percentage?
If many homes are selling at 2% under list price, for example, that percentage could indicate the price the seller will or should accept.

Square-Foot Cost Averages

Typically smaller homes are priced higher per square foot and larger homes are priced less per square foot. It is not customary to take the average square-foot cost and multiply it by the square footage of the home you want to buy. Researching the trends to determine if the square-foot cost averages are on the rise or declining.

History and DOM (Days on Market)

The Days on Market or DOM, is significant for the amount of days the home has been on the market. This information is an essential tool, because if a home has been on the market longer than 30 days, the sellers might be more motivated to wheel and deal.
During the closing process, try not to become emotionally attached to the home before your offer to purchase is accepted. Prepare yourself for counter offers. Keep several other homes in mind in case your offer is rejected.

Standard Sale

Today’s Real Estate Market encompasses many different types of sales. Standard sales involve two principles, the buyer and seller. Once an offer is extended, time frames are usually within days, not weeks. When purchasing a standard sale, transactions are pretty easygoing and they can usually close within days, especially if the buyer is purchasing with cash.
Understand the Process from Contract to Closing
Most real estate professionals are familiar with the real estate contract and how it is negotiated and generated. Most people who have participated in a transaction are familiar with the closing. The common uncertainty is what happens between contract and closing.

Title search

After the contract is submitted to the title company:

Title company’s personnel create a guaranty file and a special number for that file.
A receipt for the earnest money is sent to the buyer, seller and the real estate brokers.
The file is sent to the title company.
Taxes are ordered from a tax service.
There's a search of various data banks (title data being the principal joint plant operation in Harris and surrounding counties).
A run sheet is generated and sent to copy processors, who make copies of the documents that are needed for the title examination.
The file is then given to a title examiner who reads all of the documents that are in the chain of title.
After the examination of the title, a title commitment is produced by the examiner. This sets out the owner, the property description (Schedule A), any exceptions to title such as restrictions (Schedule B) and matters which need to be cured or addressed prior to closing (Schedule C).
Schedule C is where problems to the title are set out. If there are prior liens which have not been released, there is a missing deed or some prior owner has an abstract of judgment or federal tax lien, Schedule C is where it is listed. Also, if some prior owner is deceased or divorced, this information is included.

Why Buy?

The economy has many Americans asking the famous question, “Why should I buy a home?”
Here are some advantages to owning your own home. A home is a place that belongs to you. At this point in time you are probably prepared to settle down. Maybe you need more room in which to raise a family. Or, perhaps you want more space than you get in an apartment.

Financial benefits of buying a home

Steady Payments

Buying a home can be an excellent investment for a number of different reasons. First and foremost, rent normally increases yearly while the principal and interest portions of “fixed-rate” mortgage payments remain unaffected throughout the entire repayment period. (That is 30 years for a 30-year fixed-rate mortgage).

Increased Value

Houses can increase in value, or “appreciate” over a period of time. This increase in value is as good as money deposited in the bank to the homeowner.

Scheduled Savings

When you buy a home, your monthly mortgage payments build “equity”, an ownership interest in the property that you can borrow against or convert into cash by selling the house. Renters must keep on paying rent, without the chance to build equity, the entire time they rent.

Tax Incentives

Home owners are able to take advantage of significant tax breaks, which are not offered to renters. Interest paid on a home mortgage is usually deductible. This may save you a considerable amount each year in federal income taxes.