Buying a home in today's market may seem extremely challenging with stiff competition and rising home prices, but I have been successful at helping my buyer clients get their offers accepted by following these simple steps. 

Connect With a Mortgage Broker or Home Loan Professional ASAP 

• This will help you determine your best financing option at price limit 
• Obtain a written pre-approval letter before you begin home shopping - you cannot submit an offer without a lender's pre-approval letter

Study Where You Want To & Realistically Can Live

• Learn exactly what neighborhood(s) you can afford and envision yourself living there
• Understand accurate price points in your desired areas

Be Prepared to Submit Several Offers Before Achieving Acceptance

• Do not feel bad if your offer does not get accepted on the 1st try - keep trying
• I recently submitted an offer for a client and 20 other offers were submitted - we were not accepted, but we are now in escrow on another home so perseverance pays off

Act Fast

• Be ready to view the home and submit your offer ASAP after the home appears on the market
• If accepted you will have more time to view the home during the inspection period

Make Your Offer Great

• A seller cannot deny a great offer and a fast moving buyer - that is what they want
• It would be an honor to sit down with you, share what qualities and terms look advantageous to the seller, and help enhance your offer 

Remember, buying a home is a process and your hard work and preparation will pay off!! Let me know if there is anyway I can help you and your family with your real estate needs. 

• Interest rates to increase to 4.5% (According to real estate organization Buffini & Company)

• Number of home sales in California to increase 1% & the price median to increase 4.2% (according to the California Association of Realtors) 

• Lack of Affordability and Inventory Continues - Same inventory as 1994, but 63 million more people (Buffini & Company)

• Boomers are not moving

• US GDP to increase 2.3% (California Association of Realtors)

As I work with home buyers and sellers I realize many people do not completely understand the home buying/selling process. Hopefully, the topics below will help clarify this process to set you up for future success with real estate transactions.

Let's start with the basics. What is an escrow?

When a seller accepts a buyer's offer, the listing agent agent "opens" an escrow account with a 3rd party escrow company. An escrow company organizes and collects necessary funds and documentation to legally complete a real estate transaction. This is an essential part of each transaction because escrow companies will correctly distribute funds or fees to each party and ensure you have signed the required documents.

This is what people are referring to when they state, "My house is in escrow." They are indicating their house is not sold, but in the process of being sold. No home is officially sold until the buyer's funds have transferred to the seller and the sale is recorded.

The length of escrow is simply chosen by the buyers and sellers and represents the time from when an offer is accepted until closing. There is no right or wrong length of time to be in escrow - an escrow can be 10 days or 90 days, but many of my clients choose 30, 45, or 60 day escrows depending on the situation of the involved parties. When receiving a home loan on a property, make sure your lender clearly indicates how long they need to fund your loan so you can work within this escrow time frame when submitting offers. Most lenders need 30-45 days to work through the details of your loan.

What are contingencies?

Contingencies are items within a contract that need to be completed before a sale can be finalized. I find it helpful to use "contingency" in a sentence to fully understand it's meaning - "The sale of the home is contingent on the buyers selling their home first." Both buyers and sellers can have contingencies and popular high priority contingencies in a residential purchase agreement may include the inspection, appraisal, loan, and sale of another property contingencies. There are many other contingencies and time periods in real estate agreements, but these areas are usually the top concerns for both buyers and sellers.

In the standard purchase agreement, the buyer and seller have a specific number of days to complete each contingencies before the agreement can be cancelled. The contingency time periods can be chosen and there is no perfect number, but if a buyer decides to use the default number of days in the contract, the time periods for the contingencies listed above would include a 17 day inspection period, 17 day appraisal period, and a 21 day loan period. All time periods in a contract are based off the date of acceptance which represents Day 1 and the time period continues each day following the acceptance date, including weekends, until you have reached your close date (30 day escrow for example). If the buyer fails to release these contingencies in the number of days in the agreement, the seller can cancel the agreement with the correctly signed documents.

However, if a buyer learns about a major issue with the home during their inspection period and decides not to move forward with the home purchase, they can back out of the agreement and receive their refundable deposit. Contingencies are meant to protect both the buyer and seller so that all parties understand they must perform within this time frame.

Keeping track these time periods, contingencies, coordinating inspections, and fully explaining disclosure documents are just a few important aspects of every real estate transaction that I provide to my clients during the escrow process.

I hope you found this information to be informative and helpful as you approach your next home purchase or sale. 

This week I had the privilege to hear Warren Buffett's right hand man, Gino Blefari, speak at my office in Palos Verdes. Gino is the CEO of the Berkshire Hathaway Home Services Franchise division and is a frequent flyer traveling to the many Berkshire Hathaway brokerages across the country. I was please to learn that Berkshire Hathaway is the second largest real estate company in the country and soon to be the largest. 

Gino spoke about the successes and challenges throughout his career, but his incredible persistence was inspiring. He shared 7 principles that have helped shape the way he conducts business and his personal life and I want to share them with you.

1. Play Full Out - Gino described giving everything you have to your career, personal life or any task at hand. You do not want to look back on life and think you could have done better. Obviously a balance is very necessary but fully investing yourself into the important aspect of your life will lead you down a successful path.
2. Have A Good Morning Routine - His morning routine consists of a daily dose of MEDS (Meditation/Prayer, Exercise, Diet & Sleep) with each being essential to his productivity and energy level. I have a similar morning routine that keeps me energized throughout the day, although like many I sometimes lack a balanced diet and enough sleep.
3. Be Humble - Gino quoted a bible verse and shared how our humbleness is so important as we strive to serve others. It is very easy in this world to get caught up in our egos, but realizing we all have issues and have sinned is definitely humbling. He immediately gained my respect when he discussed this topic. "When pride comes, then comes disgrace, but with humility comes wisdom" Proverbs 11:2
4. Build A Great Team - We cannot walk through life alone and surrounding ourselves with supportive and motivated colleagues/friends is essential to our own well being and the success of our work.
5. Provide Extraordinary Service - Going above and beyond is one thing, but giving clients and others the best service and experience of their life is a whole different level. This is what I strive for in life and my work.
6. Read - Gino encouraged the realtors in the room to continually be reading about real estate and leadership materials that will make us better service providers. Currently, I am reading "7 Men" by Eric Metaxas and Boundaries by Dr. Henry Cloud and Dr. John Townsend and I highly recommend both. 
7. Continuous Improvement - Always striving to improve is a quality that many leaders and successful professionals have in common. We will never be perfect so continuously improving is a constant cycle.

We can all learn from others so I hope enjoyed a few words of wisdom from the man at the top of my company.

This is a question I am asked often and understanding the closing costs you will pay when buying a home is very important. Closing costs can vary greatly, but there are certain fixed costs you will want to take into consideration for your budget.

Don't Be Caught Off Guard - These expected closing costs will be helpful to know to ensure you save enough money in addition to your down payment.

Below is example of expected closing costs associated with the purchase of an $800,000 home. The escrow and title fees will change with the purchase price of the home and the companies you use, but the other costs are more or less constant and will help give you a ballpark estimate. Remember these are the bare minimum expenses and other fees may be included.

$800,000 - Purchase Price of Your Dream Home

$2,200 - Escrow Fees - Purchase Price of Your Dream Home - 2.50 per $1,000 + $200 = the amount each side will pay. Depending on the transaction, the escrow fees can be paid for by the buyer, seller or split 50/50 (This is what my preferred escrow company charges)

$1,150 - Title Insurance Policy - varies with the purchase price

$500 - Home Warranty - optional, but recommended and can be paid for by buyer/seller - warranty packages vary

$400 - General Inspection - optional, but highly recommended

$80 - Certified Termite Inspection and Report - optional, but recommended

$1,000 - Other unexpected costs, recording fees

$5,330 - Estimated Total Closing Costs

Other fees that are usually paid for by the seller in today's market, but may be paid for by a buyer.

$75 - Natural Hazard Disclosure

$880 - City/County Transfer Taxes - Varies from 1.1 per $1,000 to 4.4 per $1,000 in the LA area

In real estate, all terms are negotiable and can be paid for by the seller or buyer, but the above expenses are commonly paid for by the buyer. These numbers are not to be taken as fact, but rather as a minimum rough estimate of what you will likely be expected to pay.

Great News: Buyers Do Not Pay for Realtor Commissions

Many people are surprised when I share this with them. The sellers pay for this expense and the commissions are built into the sales price - usually 2.5-3% or the sales price per representing side. As someone who works in real estate full time, I am amazed when home buyers do not seek the help of a realtor. Realtors help in so many ways to get your offer accepted and they will help you navigate strategies and the escrow process. The commission rates are predetermined by the listing agent and the sellers so whichever home you choose, you do not choose the commission rate.

All these terms are areas for negotiating and a buyer's willingness to pay for specific expenses looks really good in the eyes of the seller - there are many strategic angles to make your offer look the best. Let me know your thoughts on closing costs and if you have any questions.

It is no secret there is a shortage of housing inventory across the nation, especially in Southern California. I meet buyers every week who think they can view a house on Saturday and buy it the same day. Unfortunately, they are not the only person looking to buy this home and in today's competitive market you need to differentiate yourself to ensure your offer gets accepted.

1) Be Prepared

Buying a house is one of the biggest financial decisions you will ever make so preparing yourself to make the best decision possible. Ensure you are in the right place financially and emotionally to move.

The best buyers are those who are the most motivated and want to move. If you are just browsing and plan to move when you find a good deal, you will be beat out by those that are prepared and motivated to put their best foot forward right now. This may sound tough, but it's the truth.

Being prepared will help you select the most suitable home for your family and living situation rather than settling for the first home you come across on a whim.

2) Get Pre-Approved

Do not begin looking or shopping for a home without this golden letter from a lender. If you just so happen to find the home of your dreams without approval for a home loan, you will not be able to submit an offer and you may not qualify for a loan on this home.

Today's market is extremely competitive and most selling agents will not review offers without a pre-approval letter. This magical letter will also let you know what you can afford. After receiving your pre-approval you will have an understanding of your purchase price limit not to exceed.

For example, concrete numbers such as a 4.25% interest rate and a $750,000 home loan approval will help you determine the home price you can afford and keep you expectations in check.

3) Know where you want to live and where you can live

Everyone knows where they want to live, right? Narrow in on the neighborhood(s) of your dreams within your budget and pre-approval limit. Do not pretend you can live on the bluffs of Malibu if you cannot afford a home in this area. Many people expect to receive more than they can afford and they are ultimately disappointed. Remember HGTV is fun to watch, but the real world home prices may vary.

Learn the high and low prices of closed homes in your favorite neighborhood. Then you will know the range of home values and what you are working with.

4) Listen to you realtor and mortgage advisor

Unless you have bought or sold a home in the past year and handled the paperwork yourself, the transaction process has changed. Even if you sold your home last week, your transaction will be completely different than your next door neighbors.

Realtors and mortgage advisors dedicate their lives to understanding how best to achieve success for their clients. With most homes for sale in Southern California receiving multiple offers, there is a high level of communication strategy to achieve acceptance with a buyer's offer. Lean on your realtor and mortgage advisor because chances are this is not their first rodeo.

I know what it takes to differentiate your offer from the next and separate you from the average buyer's offer. There is certainly a formula of specific criteria needed to submit an offer on a home, but going above and beyond to make my clients' offers look outstanding and reaching acceptance is one of my favorite parts of my job.

As you know homes sell for various reasons and whether you are buying or selling these factors are critical to understand. These factors will help you determine the best price for you.

Many people think realtors choose the sales price of a home. Wrong! The market determines the price based on a qualified buyer's willingness and ability to purchase. No matter if you price your home too high or too low the market will let you know by providing multiple buyer offers shortly after listing your home or no buyer offers.

Beyond the obvious of great curb appeal and location, what really sells a home? Selling a home is determined by several factors within our control and outside our control relative to a buyer's desire to purchase.

Selling Factors Outside Our Control

1. Economy - the current state of the economy, consumer confidence, unemployment...etc. has a direct effect on the ability to sell or purchase a home
2. Location - every neighborhood has it's own real estate market and the location within a specific neighborhood is a critical factor in pricing
3. Competition - the number of nearby homes on the market will increase or decrease the demand for a home
4. Buyer's Financing - buyer's can finance a home by paying cash or obtaining a variety of different loans

Selling Factors Within Our Control

1. Company & Agent You Choose - selecting a trustworthy and knowledgeable realtor is crutial to the success of your transaction
2. Condition - ensure your home is clean, presentable and clutter is not within view - less is better
3. Accessibility - allowing other agents and buyers to frequently show and view your home is key, even if you are living there
4. Incentive - providing a competative commission for the buyer's agent will give the agent a great reason to show your home - if you offer a low commission, realtors are not likely to show your home
5. Pricing - the single most important factor - all the other factors determine and lead to selecting an accurate price 

Whether you decide to buy or sell your home, educate yourself on these factors and understand how each can play a major role in your transaction. Focus on the factors that are within your control and you will be in a great position.

The first quarter of 2017 has not been surprising. Post election we saw an immediate hike in interest rates and as predicted the FED is hinting at another hike this March with many sources certain this will take place. With a change in rates, real estate purchases are directly affected and if rates increase dramatically, sales could take a big hit. However, if rates increase to predicted levels, the low inventory will continue to lead to high demand among willing and able buyers.

According to the National Association of Realtors Chief Economist, Lawrence Yun, higher interest rates are likely in our future, but the speed of the increase in rates is uncertain. In Robert Freedman’s article Still Room to Grow in the March edition of REALTOR Magazine, he shares, “Yun is forecasting the average 30-year fixed-rate mortgage to rise from about 3.9 percent at the end of 2016 to about 4.4 percent in 2017.”

With a likely rise in interest rates this year, we need to keep a long-term real estate perspective. Real estate investments are more often than not long term with the average length of home ownership in California at 10 years. Within these 10 years, interest rates are likely to fluctuate. Remember back in 2007 when 30-year fixed mortgage rates hovered around 6.5 percent? Or 7.5 percent in 1997? Or 10 percent in 1987? In the course of an average length of home ownership rates will fluctuate. With many economists agreeing that 2017 year-end rates will finish in the mid 4 percent range and the FED alluding to a coming rate hike, we need to prepare and stay one step ahead. As rates change, be sure to stay current and discuss your financing with a trusted lender to ensure you are aware with the latest rate trends.