erealestatemonterey.com

An REO is a property that has gone thru the foreclosure process, that means property owned by a bank.  There are a number of properties in Seaside, California that are bank owned properties.  Some (but not all) of the banks want to sell these properties quickly.  There are now houses that sold for say $650,000 a few years ago that are now listed for less than $400,000.  Some of these properties need a great deal of work, some only need minor repairs and improvements. 

The nicer of these homes are going into escrow at a pretty fast rate now.  When the price on these foreclosure properties dips under the $400,000 mark then they start selling.  It’s scary to buy a home when all the news is negative.  The cover of Business Week features a house melting - “the Real Estate Meltdown”!  Your family and friends may tell you that you are crazy to think about buying now and try to talk you out of it. 

But if you want a house because you want to own your own home, if you are going to stay put for at least 3 yrs and preferably 5 yrs then now may be the time to start looking!  Many people gave up all hope of owning a home on the Monterey Peninsula.  But a small part of the market has turned back the clock on prices.  Check out the affordable homes page of my web site and think about it.

I have to confess to a dark, secret, guilty pleasure - I have started watching several of the TV “reality shows” where people flip that house!  But sometimes I feel like I am watching comedy central instead! I owned a Property Management Company on the Monterey Peninsula so we handled alot of remodels, house maintenance, repairs, etc.  It was not an easy process. But since we paid very quickly and were a source of continuing business we got the best of the contractors! 

I have been in the Real Estate Industry for over 25 yrs. now. I shake my head in frustration when I see one of the TV flippers buying a house without bothering to get a structural pest control report.  I also groan or sometimes laugh aloud at some of the budgets they just pluck out of the air.  A guesstimate is not an estimate.  Most older homes are going to need new plumbing, new electrical and a new heater.

One of my pet peeves in regards to these shows is that until recently they did not even mention selling costs!  In the current challenging market in most areas, you are going to need to figure in a Real Estate commission.  There are other costs such as Title Insurance which the seller pays in the Monterey area.  A rough estimate for Selling costs aside from any Real Estate Commissions is 2% of the selling price. 

My other pet peeve is that all the houses are beautifully staged and there is no charge!  Well, I guess if you are on tv, there are stagers who will do it for free. But for those sellers not lucky enough to be featured the cost to stage a vacant home is staggering.  I just finished taking the ASP (Accreditated Staging Professional) course from Barb Schwarz.  Renting furniture starts at about $1,000 per month - and that’s only a small amount of furniture.  Then there is the cost for the staging professional.

Buying a home - to live in, at the right price - if you are going to live in it at least 3 yrs and 5 yrs is better, can still be a good investment!  I think “flipping” is now a flop and a thing of the past, and I’m glad. 

Good credit makes a major difference in your ability to buy a home and how much your monthly payments will be.  In most cases it takes 7 yrs for negative information to be deleted from your credit report.  Bankrupty takes even longer - 10 years.  What things affect your credit score?  Your bill paying history is very important.  If possible sign up for a minimum payment to be paid on your card automatically.  Credit cards give you very little time to make your payment these days and love to charge those late fees.  This can drop your score considerably.

Also important is how many credit cards you have and what kind, how long you have had the credit. Too high a balance can affect your score. And of course collections will lower your score considerably.

If you are getting ready to buy a home it is best to postpone any major purchases such as buying a car.  Avoid any large purchases on your credit cards also.  And it’s good to check your credit in advance for any inaccuracies. It is best to challenge they thru the credit reporting agency rather than the specific company.